The Company leases office space under operating leases with expirations ranging from March 2025 to December 2026, some of which include rent escalations or an option to extend the lease for up to three years per renewal. The exercise of lease renewal options is at the sole discretion of the Company.

As of March 31, 2023, the Company has not entered into any leases that have not yet commenced that would entitle the Company to significant rights or create additional obligations.

The Company determines whether a contract is or contains a lease at the inception of the contract. A contract will be deemed to be or contain a lease if the contract conveys the right to control and direct the use of identified property, plant, or equipment for a period of time in exchange for consideration. The Company generally must also have the right to obtain substantially all of the economic benefits from the use of the property, plant, and equipment.

The Company has elected the practical expedient to not separate its lease component from non-lease component for its real estate leases. The Company has elected the practical expedient not to apply the lease recognition requirements to short-term leases with an initial term of 12 months or less.

The Company uses either its incremental borrowing rate or the implicit rate in the lease agreement as the basis to calculate the present value of future lease payments at lease commencement. The incremental borrowing rate represents the rate the Company would have to pay to borrow funds on a collateralized basis over a similar term and in a similar economic environment.

Future minimum lease payments under these leases are as follows:


	Lease Amounts
	(in thousands)
2023 (remaining nine months)	$	999
2024		1,555
2025		1,010
2026		645
Total future minimum lease payments		4,209
Less: Imputed Interest		(493	)
Present value of operating lease liabilities	$	3,716
Less: Current portion		1,246
Long-term operating lease liabilities	$	2,470

Weighted average remaining lease term in years		2.99
Weighted average discount rate		8.79	%

Variable operating lease expenses consist primarily of real estate taxes and insurance. The components of lease expense and related cash flows were as follows:


	Three Months Ended March 31,
	2023		2022
	(in thousands)
Rent expense	$	386	$	317
Variable lease costs		32		26
Total	$	418	$	343

Cash paid for operating leases	$	376	$	313


	Three Months Ended March 31,
	2023		2022
	(in thousands)
Cost of sales	$	70	$	58
Selling, general and administrative		348		285
Total	$	418	$	343