LEASES

9 Months Ended

Sep. 30, 2024

LEASES

LEASES

(10) LEASES

We have operating leases for office space with remaining lease terms ranging from 1 month to 8 years. As most of the leases do not provide an implicit rate, we calculated the right-of-use assets and lease liabilities using our secured incremental borrowing rate at the lease commencement date. Imputed interest on our operating leases was $0.3 million as of September 30, 2024.

During the nine months ended September 30, 2024, we entered into four finance leases that were accounted for as failed sale-leaseback transactions. Finance lease assets are included in finance lease right-of-use assets on the condensed consolidated balance sheets and the associated finance lease liabilities are reflected within current portion of lease financing and long-term lease financing on the condensed consolidated balance sheets, as applicable. Depreciation on our finance lease assets was $1.5 million and $3.7 million for the three and nine months ended September 30, 2024. Interest expense on our finance lease liability was $0.4 million and $1.1 million during the three and nine months ended September 30, 2024, respectively. Imputed interest on our future remaining finance lease liability was $1.8 million as of September 30, 2024. We had deferred financing fees of $0.2 and $0.1 million at September 30, 2024 and December 31, 2023, respectively, in connection with entry into the finance leases. These deferred financing fees will be amortized on a straight-line basis over the term of the finance leases. We did not have finance leases during the three and nine months ended September 30, 2023.

The following information relates to our leases (dollar amounts in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Operating lease information:
Operating cash outflows from operating leases	$	38		$	52		$	142		$	156
Weighted average remaining lease term in years		8.0			8.75			8.0			8.75
Weighted average discount rate		9.8	%		6.0	%		9.8	%		6.0	%
Finance lease information:
Financing cash outflows from finance leases	$	1,440			—		$	4,105			—
Proceeds from sale and leaseback arrangement	$	—			—		$	3,783			—
Weighted average remaining lease term in years		2.39			—			2.39			—
Weighted average discount rate		9.09	%		—			9.09	%		—

Future minimum lease payments under non-cancellable leases as of September 30, 2024, were as follows:

	Operating Leases		Finance Leases
	(In thousands)
2024	$	—	$	1,872
2025		108		7,490
2026		121		7,331
2027		125		749
2028		129		—
Thereafter		494		—
Total minimum lease payments	$	977	$	17,442
Less imputed interest and deferred finance fees		(320)		(1,960)
Total lease liability	$	657	$	15,482

The following are reflected within the indicated condensed consolidated balance sheet line items:

		For the Nine Months Ended September 30,		For the Year Ended December 31,
		2024		2023
		(In thousands)
Operating lease assets	Buildings and equipment	$	657	$	712
Operating lease liabilities:
Current operating lease liabilities	Accounts payable and accrued liabilities	$	-	$	58
Non-current operating lease liabilities	Other long-term liabilities		657		654
Total operating lease liability		$	657	$	712
Finance lease assets	Finance lease right-of-use assets	$	19,869	$	12,346
Finance lease liabilities:
Current finance lease liabilities	Current portion of lease financing	$	6,248	$	3,933
Non-current finance lease liabilities	Long-term lease financing		9,234		8,157
Total finance lease liabilities		$	15,482	$	12,090