The Company leases office space under operating leases with expirations ranging from March 2025 to March 2028, 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.

During the six months ended June 30, 2024, the Company has not entered into any new leases 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)
2024 (remaining six months)	$	532
2025		1,008
2026		938
2027		480
2028		122
Total future minimum lease payments		3,080
Less: Imputed Interest		(332	)
Present value of operating lease liabilities	$	2,748
Less: Current portion		983
Long-term operating lease liabilities	$	1,765

Weighted average remaining lease term in years		2.98
Weighted average discount rate		8.19	%

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 June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(in thousands)
Rent expense	$	316	$	381	$	672	$	767
Variable lease costs		1		32		1		64
Total	$	317	$	413	$	673	$	831


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(in thousands)
Cost of sales	$	50	$	68	$	130	$	138
General and administrative		267		345		543		693
Total	$	317	$	413	$	673	$	831

Cash paid for operating leases	$	328	$	382	$	698	$	758