The Company has operating leases for office and warehouse space and equipment under various arrangements which provide the right to use the underlying asset and require lease payments for the lease term. The Company’s lease portfolio consists of operating leases which expire at various dates through 2026.

Certain of the Company’s lease arrangements contain renewal provisions, exercisable at the Company's option. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Company determines if an arrangement is an operating lease at inception. Leases with an initial term of 12 months or less are not recorded on the Balance Sheet. All other leases are recorded on the balance sheet with right-of-use (“ROU”) assets representing the right to use the underlying asset for the lease term and lease liabilities representing the obligation to make lease payments arising from the lease.

ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term and include options to extend or terminate the lease when they are reasonably certain to be exercised. As most of our leases do not provide an implicit rate, the present value of lease payments is determined primarily using our incremental borrowing rate based on the information available at the lease commencement date. The incremental borrowing rate is the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term on an amount equal to the lease payments in a similar economic environment. Lease agreements with lease and non-lease components are generally accounted for as a single lease component. The Company’s operating lease expense is recognized on a straight-line basis over the lease term. Operating lease cost was $1.1 million for the twelve-months ended December 31, 2020. For the twelve months ended December 31, 2020, $0.4 million was included in cost of goods sold and $0.7 million was included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.

Twelve months ended

December 31, 2020

Operating lease cost

1,186

Operating lease - cash flow

1,087

	December 31, 2020
Weighted-average remaining lease term	4.0 years
Weighted-average discount rate		5	%

Future minimum lease payments under non-cancellable leases as of December 31, 2020:

2021	$	916
2022		690
2023		569
2024		309
2025		220
Thereafter		75
Total future minimum lease payments	$	2,779
Less : imputed interest		(252	)
Less : present value of lease liabilities - current		(873	)
Present value of lease liabilities - non-current	$	1,654