Leases

9 Months Ended

Sep. 30, 2022

Leases

Leases

11. Leases

On February 1, 2021 the Company downsized its office space and modified its existing lease with Wickfield Phoenix LLC. The new lease period was for 48 months, commencing on February 1, 2021 and ending on January 31, 2025 with a monthly rent payment of $12 for the first two months and escalating to $31 over the lease period. The carrying value of the right of use asset was $1,258 upon modification using the Company's incremental borrowing rate of 3.95%. During the period ending March 31, 2021 the Company recorded a gain on right-of-use asset of $24 in the consolidated statements of comprehensive loss.

On September 15, 2021, the Company entered into an additional lease with Wickfield Phoenix LLC for warehousing space. The new lease period is for 41 months, commencing on September 15, 2021, and ending on January 31, 2025, with a monthly rent payment of $5 for the first month and escalating to $10 over the lease period. The Company recorded a right-of-use asset and corresponding lease liability for $366 using the Company's incremental borrowing rate of 3.95%.

On April 1, 2022, the Company entered into an agreement with ULF Northfield Business Center LLC to lease 12,400 square feet of office and warehouse space. The lease period is for 61 months beginning on April 1, 2022, with a monthly rent payment of $9 for the first twelve months and escalating to $11 per month over the lease period. The Company recorded a right-of-use asset and corresponding lease liability for $546 using the Company's incremental borrowing rate of 3.95%.

On July 1, 2022, the Company, as part of the Revo Squared Purchase, assumed an agreement with Lebow 1031 Legacy, LLC to lease 4,626 square feet of office space. The remaining lease period assumed at the time of the agreement is for 18 months beginning on July 1, 2022 and lasting through December of 2023. The lease has a monthly rent payment of $4 per month over the lease period. The Company recorded a right-of-use asset and corresponding lease liability for $67 using the Company's incremental borrowing rate of 7.00%.

During the three and nine months ended September 30, 2022, the Company recognized $268 and $598 in rent expense inclusive of common area maintenance (CAM) charges, insurance, and tax with $15 and $48 recorded in research and development expenses and $253 and $550 recorded in general and administrative expense in the consolidated statements of comprehensive loss.

During the three and nine months ended September 30, 2021, the Company recognized $94 and $271 in rent expense inclusive of common area maintenance (CAM) charges, insurance, and tax with $32 and $69 recorded in research and development expenses and $62 and $202 recorded in general and administrative expense in the consolidated statements of comprehensive loss.

	September 30,		December 31,
	2022		2021
Right-of-use asset
Cost
Aggregate lease commitments	$	2,455	$	1,779
Less: impact of present value		(218)		(155)
Balance	$	2,237	$	1,624
Reduction in right-of-use asset
Straight line amortization		761		346
Interest		(91)		(42)
Balance	$	670	$	304
Net book value as at:
Balance	$	1,567	$	1,320
Lease liabilities
Additions	$	2,260	$	1,647
Payments		(715)		(310)
Interest		91		42
Total lease liabilities	$	1,636	$	1,379
Current portion of lease liabilities		578		415
Long term portion of lease liabilities		1,058		964
Total lease liabilities	$	1,636	$	1,379

Total remaining undiscounted lease liabilities related to the above lease are as follows:

2022 Remainder	$	155
2023		638
2024		609
2025		165
2026		129
2027		44
Total	$	1,740