Operating Leases

3 Months Ended

Mar. 31, 2023

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 September 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.

For the three months ended March 31, 2023 and 2022, the Company recorded operating lease costs of $0.6 million and $0.4 million, respectively, including variable operating lease costs of $0.1 million in each period.

For the three months ended March 31, 2023 and 2022, operating cash flows used for operating leases were $0.5 million and $0.4 million, respectively. As of March 31, 2023, the weighted average remaining lease term and weighted average discount rate was 2.9 years and 4.8%, 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 March 31, 2023 are as follows (in thousands):


The remainder of 2023	$	1,412
2024	1,924
2025	1,408
2026	303
2027	259
Gross lease payments	5,306
Less: imputed interest	(402)
Present value of net future minimum lease payments	$	4,904

As of March 31, 2023, the present value of net future minimum lease payments of $4.9 million is recorded as operating lease liabilities: (i) $1.7 million within current liabilities; and (ii) $3.2 million within long-term liabilities on the condensed consolidated balance sheet.