LEASES

3 Months Ended

Mar. 31, 2023

LEASES

LEASES

NOTE 6 – LEASES

The Company has entered into various operating leases for certain offices, support locations and vehicles with terms extending through February 2028. Generally, these leases have initial lease terms of five years or less. Many of the leases have one or more lease renewal options. The exercise of lease renewal options is at the Company’s sole discretion. The Company does not consider the exercise of any lease renewal options reasonably certain. Certain of the Company’s lease agreements contain early termination options. No renewal options or early termination options have been included in the calculation of the operating right-of-use assets or operating lease liabilities. Certain of the Company’s lease agreements provide for periodic adjustments to rental payments for inflation. As the majority of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate at the commencement date in determining the present value of lease payments. The incremental borrowing rate is based on the term of the lease. In connection with the adoption of ASC 842, the Company used incremental borrowing rates on January 1, 2022 for operating leases that commenced prior to that date. Leases with an initial term of 12 months or less are not recorded on the balance sheet. For these short-term leases, lease expense is recognized on a straight-line basis over the lease term. At March 31, 2023, the Company had no leases classified as finance leases. The Company is currently not a lessor in any lease arrangement.

Our corporate headquarters is located at 2750 Premiere Parkway, Duluth, GA, 30097 in an office space of approximately 12,000 square feet, for which we pay approximately $23,000 per month as rent pursuant to a rental agreement. Our corporate headquarters house our administrative offices. The Company leases warehouse space in Lawrenceville, Georgia, for approximately $13,000 per month. We also maintain offices in Scottsdale, Arizona and Utica, New York in the U.S., and in Dartford, London, Leeds and Livingston and Belfast in the United Kingdom. for sales, marketing, technical support and service staff. In addition, we also maintain sales, marketing and technical support offices in Apeldoorn, Netherlands, Anzegem, Belgium, Helsinki, Finland, Oskarshamn Kalmar, Sweden, and Düsseldorf, Germany

Operating lease expense was $564 thousand and $469 thousand for the three months ended March 31, 2023 and March 31, 2022, respectively. Variable lease costs and short-term lease cost were not material for the three months ended March 31, 2023 and March 31, 2022. Cash paid for amounts included in the measurement of lease liabilities was $621 thousand and $423 thousand for the three months ended March 31, 2023 and March 31, 2022, respectively.

Future maturities of the Company's operating lease liabilities are summarized as follows (in thousands):

Fiscal year ended,

2023	$	1,522
2024		1,341
2025		1,106
2026		742
2027		246
Thereafter		6
		4,963
Less imputed interest		(906)
Total	$	4,057

The following is supplemental lease information at March 31, 2023:

Weighted-average remaining lease term (years)	3.1
Weighted-average discount rate	15.5	%