LEASES

3 Months Ended

Mar. 31, 2022

As of March 31, 2022, the Company has non-cancelable operating leases for its offices and certain office equipment. The Company has the right to renew the term of the Lake Forest lease for one period of five years, provided that written notice is made to the Landlord no later than twelve months prior to the expiration of the initial term of the lease which is on December 31, 2023. In connection with the Zyla Merger, the Company assumed an operating lease for offices in Wayne, Pennsylvania, which terminated in February 2022.

Prior to the Company’s corporate headquarters relocation in 2018, the Company had leased its previous corporate office in Newark, California (the Newark lease) which will terminate at the end of November 2022 and will not be renewed. The Newark lease is currently partially subleased through the lease term. Operating lease costs and sublease income related to the Newark facility are accounted for in Other gain (loss) in the Condensed Consolidated Statements of Comprehensive Income. For the three months ended March 31, 2022, the Company recognized a gain of $0.6 million from the early termination and settlement of a Newark facility sublease.

The following table reflects lease expense and income for the three months ended March 31, 2022 and 2021 (in thousands):


		Three Months Ended March 31,
	Financial Statement Classification	2022		2021
Operating lease cost	Selling, general and administrative expenses	$	40	$	111
Operating lease cost	Other gain	148		148
Total lease cost		$	188	$	259

Sublease Income	Other gain	$	775	$	347

The following table reflects supplemental cash flow information related to leases for the three months ended March 31, 2022 and 2021 (in thousands):


	Three Months Ended March 31,
	2022		2021
Cash paid for amounts included in measurement of liabilities:
Operating cash flows from operating leases	$	530	$	766

The following table reflects supplemental balance sheet information related to leases as of March 31, 2022 and December 31, 2021 (in thousands):


	Financial Statement Classification	March 31, 2022		December 31, 2021


Liabilities
Current operating lease liabilities	Other current liabilities	$	1,487	$	1,978
Noncurrent operating lease liabilities	Other long-term liabilities	303		397
Total lease liabilities		$	1,790	$	2,375

LEASES

The following table reflects lease expense and income for the three months ended March 31, 2022 and 2021 (in thousands):


		Three Months Ended March 31,
	Financial Statement Classification	2022		2021
Operating lease cost	Selling, general and administrative expenses	$	40	$	111
Operating lease cost	Other gain	148		148
Total lease cost		$	188	$	259

Sublease Income	Other gain	$	775	$	347

The following table reflects supplemental cash flow information related to leases for the three months ended March 31, 2022 and 2021 (in thousands):


	Three Months Ended March 31,
	2022		2021
Cash paid for amounts included in measurement of liabilities:
Operating cash flows from operating leases	$	530	$	766

The following table reflects supplemental balance sheet information related to leases as of March 31, 2022 and December 31, 2021 (in thousands):


	Financial Statement Classification	March 31, 2022		December 31, 2021


Liabilities
Current operating lease liabilities	Other current liabilities	$	1,487	$	1,978
Noncurrent operating lease liabilities	Other long-term liabilities	303		397
Total lease liabilities		$	1,790	$	2,375