Operating Leases

12 Months Ended

Dec. 31, 2021

Note 8—Operating Leases

The Company leases a 23,000 square foot facility located in Eden Prairie, Minnesota for office and manufacturing space under a non-cancelable operating lease that expires in March 2027. In November 2021, the Company entered into a fourth amendment to the lease, extending the term of the lease from March 31, 2022 to March 31, 2027. This facility serves as our corporate headquarters and houses substantially all our functional areas. Monthly rent and common area maintenance charges, including estimated property tax for our headquarters total approximately $29,000. The lease contains provisions for annual inflationary adjustments. Rent expense is being recorded on a straight-line basis over the term of the lease. Beginning on April 1, 2022, the annual base rent is $10.50 per square foot, subject to annual increases of $0.32 to $0.34 per square foot.

The cost components of the Company’s operating lease were as follows for the year ended December 31:

(in thousands)
	2021		2020
Operating lease cost	$	219	$	213
Variable lease cost		123		114
Total	$	342	$	327

Variable lease costs consist primarily of taxes, insurance, and common area or other maintenance costs for our leased office and manufacturing space.

Maturities of our lease liability for the Company’s operating lease are as follows as of December 31:

(in thousands)	2021
2022	$	213
2023		249
2024		257
2025		264
2026		272
2027		69
Total lease payments		1,324
Less: Interest		(201	)
Present value of lease liability	$	1,123

As of December 31, 2021, and 2020, the remaining lease terms were 5.25 and 1.25 years, respectively, and discount rates were 7.5% for each year. For the years ended December 31, 2021, and 2020, the operating cash outflows from the Company’s operating lease for office and manufacturing space were $219,000 and $213,000, respectively.