Commitments and Contingencies

6 Months Ended

Jun. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

The Company discounts its lease payments using its incremental borrowing rate as of the commencement of the lease. The Company has determined a weighted-average discount rate of 7% as of June 30, 2022 and December 31, 2021.

The operating lease right-of-use asset and operating lease liability as of June 30, 2022 and December 31, 2021 are as follows:

	June 30, 2022		December 31, 2021
Operating lease right-of-use assets	$	6,431,000	$	6,691,000
Operating lease liability
Current	1,757,000		1,467,000
Non-current	5,075,000		5,288,000
Total operating lease liability	$	6,832,000	$	6,755,000

For the three and six months ended June 30, 2022, the Company recorded $0.5 million and $1.0 million, respectively, in expense related to operating leases, including amortized tenant improvement allowances. For the three and six months ended June 30, 2021, the Company recorded $0.3 million and $0.5 million respectively, in expense related to operating leases, including amortized tenant improvement allowances.

The finance lease right-of-use asset and finance lease liability as of June 30, 2022 and December 31, 2021 are as follows:

	June 30, 2022		December 31, 2021
Finance lease right-of-use assets	$	3,810,000	$	3,926,000
Finance lease liability
Current	292,000		299,000
Non-current	3,632,000		3,642,000
Total finance lease liability	$	3,924,000	$	3,941,000

For the three and six months ended June 30, 2022, the Company recorded $0.1 million and $0.3 million, respectively, in expense related to its finance lease. The Company did not hold a finance lease as of June 30, 2021.

The future minimum payments under non-cancellable operating and finance leases as of June 30, 2022, are as follows:

	Operating Leases		Finance Lease
Remainder of 2022	$	1,036,000	$	158,000
2023	2,149,000		322,000
2024	2,219,000		330,000
2025	2,305,000		338,000
2026	232,000		347,000
Thereafter	—		5,949,000
Total future lease payments	7,941,000		7,444,000
Less: imputed interest	(1,109,000)		(3,520,000)
Total lease liabilities	$	6,832,000	$	3,924,000

Litigation

From time to time, the Company may be subject to potential liabilities under various claims and legal actions that are pending or may be asserted. These matters arise in the ordinary course and conduct of the business. The Company regularly assesses contingencies to determine the degree of probability and range of possible loss for potential accrual in the financial statements. An estimated loss contingency is accrued in the financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Based on the Company’s assessment, it currently does not have any material loss exposure as it is not a defendant in any claims or legal actions.

Contingent Consideration

See Note 9 to our condensed consolidated financial statements for a discussion of the contingent consideration liability.