Operating Leases

6 Months Ended

Jun. 30, 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 stated lease term began 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 June 30, 2022, and as a result there are no new lease liabilities during the six-month period then ended.

For each of the three months ended June 30, 2022 and 2021, the Company recorded operating lease costs of $0.5 million, including variable operating lease costs of $0.1 million. For each of the six months ended June 30, 2022 and 2021, the Company recorded operating lease costs of $0.9 million, including variable operating lease costs of $0.1 million.

For each of the six months ended June 30, 2022 and 2021, operating cash flows used for operating leases were $0.8 million. As of June 30, 2022, the weighted average remaining lease term and weighted average discount rate was 3.2 years and 4.0%, respectively.

Future minimum lease payments under the Company's non-cancelable operating leases with an initial lease term in excess of one year subsequent to June 30, 2022 are as follows (in thousands):


The remainder of 2022	$	788
2023	1,598
2024	1,638
2025	1,114


Gross lease payments	5,138
Less: imputed interest	(324)
Present value of net future minimum lease payments	$	4,814

As of June 30, 2022, the present value of net future minimum lease payments of $4.8 million is recorded as operating lease liabilities: (i) $1.4 million within current liabilities; and (ii) $3.4 million within long-term liabilities on the condensed consolidated balance sheet.