Leases

9 Months Ended

Sep. 30, 2022

(13) Leases

The Company leases real estate facilities under non-cancelable operating leases with various expiration dates through fiscal year 2024. The Company adopted Topic 842 as of January 1, 2022, using the modified retrospective approach.

In July 2022, the Company extended the lease agreement for its corporate headquarters located in Sunnyvale, CA for an additional one-year term. Either party may terminate the agreement by providing six months' notice.

At September 30, 2022, the operating lease ROU asset and lease liability balances were $1.1 million and $1.1 million, respectively. The ROU asset balance was recorded in other long-term assets and the lease liability was recorded in other current liabilities and other long-term liabilities on the condensed consolidated balance sheet.

For the three and nine months ended September 30, 2022, the Company recorded operating lease costs of $0.2 million and $0.5 million, respectively. The Company's variable lease costs were $0.1 million for the nine months ended September 30, 2022, and are generally comprised of maintenance, taxes, insurance and operating expenses not included in the measurement of the lease liability. Variable lease costs for the three months ended September 30, 2022 were not material. All lease costs are recorded in general and administrative expense and cost of goods sold on the condensed consolidated statements of operations.

The following table presents supplemental cash flow information related to leases (in thousands):


	Three Months Ended September 30, 2022		Nine Months Ended September 30, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	217	$	573
Lease assets obtained in exchange for lease obligations:
Operating leases	$	1,113	$	1,113

The following table presents the remaining cash flows of the Company’s operating lease liabilities as of September 30, 2022 (in thousands):


	Operating Leases
2022 (remaining three months)	$	305
2023		825
2024		34
Total undiscounted lease payments	$	1,164
Less: imputed interest		(45	)
Total lease liabilities	$	1,119

The following table presents the weighted average remaining lease term and interest rate as of September 30, 2022:

ASC 840 Disclosures

The Company elected the modified retrospective transition method, which applies ASC 842 as of the effective date on January 1, 2022. Prior to the adoption of ASC 842, the Company applied ASC 840 to its lease transactions.

The following table presents the future minimum lease commitments under the Company’s operating leases as of December 31, 2021, as previously disclosed (in thousands):


	Operating Leases		Lease Termination Agreement
2022	$	459	$	293
2023		4		49
Total minimum payments	$	463	$	342

Rent expense was $0.1 million and $0.5 million, respectively, for the three and nine months ended September 30, 2021.

Operating Leases

Weighted average remaining lease term (in years)

Weighted average discount rate