Operating Leases

3 Months Ended

Mar. 31, 2022

In January 2020, the Company entered into a 63-month non-cancelable lease for 302,880 square feet of warehouse space in New Albany, Ohio. The lease commenced on June 1, 2020. Total minimum lease payments are $7.9 million, net of rent abatement for an initial three-month period and with an annual escalation of 2.5%. The Company has the option to extend the lease term for a period of five years. The Company utilizes the reasonably certain threshold criteria in determining which options it will exercise.

In January 2022, the Company entered into a 62-month non-cancelable lease for 24,465 square feet of warehouse, distribution, and pharmacy space in Gilbert, Arizona. The lease commenced on May 1, 2022. Total minimum lease payments are $1.5 million, net of rent abatement for an initial two-month period and with annual escalation of 3.0%. The Company has the option to extend the lease term for a period of five years. The Company had not been given access to the facility as of March 31, 2022, and as a result there are no new lease liabilities during the quarter.

For each of the three months ended March 31, 2022 and 2021, the Company recorded operating lease costs of $0.4 million, including variable operating lease costs of $0.1 million.

Supplemental information related to the Company’s non-cancelable operating leases was as follows for the three months ended March 31, 2022 and 2021 (in thousands):


	Three Months Ended March 31,
	2022		2021
Operating cash flows used for operating lease	$	384	$	375
Operating lease liability arising from adoption of ASC 842	$	—	$	6,756
Weighted average remaining lease term	3.4 years		4.4 years
Weighted average discount rate	4.0%		4.0%

Future minimum lease payments under the Company's non-cancelable operating leases with an initial lease term in excess of one year subsequent to March 31, 2022 are as follows (in thousands):


The remainder of 2022	$	1,175
2023	1,598
2024	1,638
2025	1,114


Gross lease payments	5,525
Less: imputed interest	(374)
Present value of net future minimum lease payments	$	5,151

As of March 31, 2022, the present value of net future minimum lease payments of $5.2 million is recorded as operating lease liabilities: (i) $1.4 million within current liabilities; and (ii) $3.8 million within long-term liabilities on the condensed consolidated balance sheet.