Leases

6 Months Ended

Jun. 30, 2023

Leases

Leases

Note 10 – Leases

The Company leases its two facilities and certain equipment. Fixed rent generally escalates each year, and the Company is responsible for a portion of the landlords’ operating expenses such as property tax, insurance, and common area maintenance.

The Company’s facility in Louisville, Colorado, is under a noncancelable operating lease with a maturity date in September 2029. In 2022, the Company amended the lease to incorporate a prior subleased space into the base lease and extend the term of the lease. The Company has the right to renew this lease for an additional five-year period.

On September 1, 2021, the Company entered into an industrial operating lease agreement for its facility in Thornton, Colorado, with the initial term through March 31, 2029. Under this operating lease, the Company has one option to renew for five years, which has been included in the calculation of lease liabilities and right-of-use assets at the adoption date of the lease accounting standard on January 1, 2022, as the exercise of the option was reasonably certain. As the renewal rent has not been negotiated, the Company used an estimated rent rate which approximated the fair market rent at adoption of ASC 842 on January 1, 2022 for the extension period.

The Company has certain equipment leases classified as finance leases as of June 30, 2023.

The Company’s leases do not have any contingent rent payments and do not contain residual value guarantees.

The components of lease expense are as follows:

	Three Months Ended		Six Months Ended
	June 30, 2023		June 30, 2023
Finance lease costs:
Amortization of right-of-use assets	$	47	$	91
Interest on lease liabilities		13		25
Operating lease costs		290		580
Total lease expense	$	350	$	696

The components of cash flow information related to leases are as follows:

	Three Months Ended		Six Months Ended
	June 30, 2023		June 30, 2023
Operating outgoing cash flows – finance lease	$	14	$	26
Financing outgoing cash flows – finance lease		74		141
Operating outgoing cash flows – operating lease		283		567
Right-of-use assets obtained in exchange for new finance lease liabilities:		79		89
Right-of-use assets obtained in exchange for new operating lease liabilities:		—		—

	June 30, 2023
Finance lease
Weighted-average remaining lease term – finance lease (in years)	2.98
Weighted-average discount rate – finance lease	6.2	%
Operating lease
Weighted-average remaining lease term – operating lease (in years)	9.71
Weighted-average discount rate – operating lease	6.9	%

As of June 30, 2023, future minimum payments during the next five years and thereafter are as follows:

Fiscal year	Finance Lease		Operating Lease
2023 (remaining six months)	$	174	$	571
2024		349		1,173
2025		234		1,210
2026		109		1,248
2027		37		1,288
2028		16		1,329
Thereafter		—		5,244
Total		919		12,063
Less present value discount		77		3,158
Total lease liabilities	$	842	$	8,905