Operating Leases

9 Months Ended

Sep. 30, 2024

The Company has various operating leases for manufacturing, fulfillment, and corporate facilities with lease periods expiring between fiscal years 2025 and 2027, not including renewal options the Company is reasonably certain to exercise. The operating lease agreements provide for rental payments on a graduated basis and for options to renew, which could increase future minimum lease payments, if exercised. The Company utilizes the reasonably certain threshold criteria in determining which options it will exercise. In the first quarter of 2024, a reassessment was triggered due to signing a lease for a new facility which is in close proximity to and also acts as an operational expansion of an existing facility, as well as investment in leasehold improvements in the existing facility. This resulted in the remeasurement of the lease liability and an adjustment of $0.9 million to the carrying amount of the corresponding right-of-use (“ROU”) asset for the existing facility. In the fourth quarter of 2023, a reassessment of another of the Company’s leased facilities was triggered due to significant leasehold improvements. This resulted in the remeasurement of the lease liability and an adjustment of $5.7 million to the carrying amount of the corresponding ROU asset.

For the three months ended September 30, 2024 and 2023, the Company recorded operating lease costs of $0.8 million and $0.6 million, respectively, including variable operating lease costs of $0.2 million and $0.1 million, respectively. For the nine months ended September 30, 2024 and 2023, the Company recorded operating lease costs of $2.2 million and $1.7 million, respectively, including variable operating lease costs of $0.4 million and $0.3 million, respectively.

For the nine months ended September 30, 2024 and 2023, operating cash flows used for operating leases were $1.8 million and $1.4 million, respectively. As of September 30, 2024, the weighted average remaining lease term and weighted average discount rate, including for renewal options the Company is reasonably certain to exercise, was 5.8 years and 8.8%, respectively.

Future minimum lease payments, including for renewal options the Company is reasonably certain to exercise, under the Company's non-cancelable operating leases subsequent to September 30, 2024 are as follows (in thousands):


The remainder of 2024	$	675
2025	2,741
2026	2,768
2027	2,331
2028	2,015
2029 and thereafter	4,049
Gross lease payments	14,579
Less: imputed interest	(3,221)
Present value of net future minimum lease payments	$	11,358