Quarterly report pursuant to Section 13 or 15(d)

Leases

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Leases
3 Months Ended
Mar. 31, 2024
Leases [Abstract]  
Leases

NOTE 10—LEASES

The Company enters into operating leases primarily for real estate, office equipment, and fleet vehicles. Lease terms generally range from one to five years, and often include options to renew for one year. The Company leases its corporate headquarters pursuant to a lease that expires on December 31, 2025 and leases a manufacturing facility located in Corona, California, which expires on June 30, 2025. The Company also leases additional office space and certain office equipment under various operating lease arrangements.

On January 22, 2020, the Company entered into a five-year real property lease agreement for an approximately 11,000 square foot facility in Corona, California for its manufacturing operations. The lease commenced on July 1, 2020. On December 10, 2021, the Company entered into a lease for an additional 15,000 square feet at its facility. This additional lease commenced on February 1, 2022 and expires on June 30, 2025.

On February 4, 2020, the Company also entered into a 66-month real property lease agreement for office space of approximately 12,000 square feet of office space in Lake Forest, California. The lease commenced on July 1, 2020. On May 26, 2022, the Company entered into an additional lease at this location to expand the leased space by an additional 8,000 square feet for an additional training facility and model dental office. The lease commenced on March 8, 2023 and expires December 31, 2025.

Information related to the Company’s right-of-use assets and related liabilities were as follows (in thousands):

 

 

Three Months Ended

 

 

March 31,

 

 

2024

 

 

2023

 

Cash paid for operating lease liabilities

$

77

 

 

$

68

 

Right-of-use assets obtained in exchange for new operating
   lease obligations

$

 

 

$

464

 

Weighted-average remaining lease term

1.6 years

 

 

2.5 years

 

Weighted-average discount rate

 

12.3

%

 

 

12.3

%

 

Lease expense consists of payments for real property, office copiers, and IT equipment. The Company recognizes payments for non-lease components such as common area maintenance in the period incurred. As of March 31, 2024, the Company had no significant leases that had not commenced.

The Company allocates lease cost amongst lease and non-lease components. The Company excludes short-term leases (those with lease terms of less than one year at inception) from the measurement of lease liabilities or right-of-use assets.

Maturities of lease liabilities as of March 31, 2024 for leases that have commenced are as follows (in thousands):

 

 

 

March 31,

 

2024

 

$

982

 

2025

 

 

613

 

2026

 

 

2

 

2027

 

 

 

2028 and thereafter

 

 

 

Total future minimum lease obligations

 

 

1,597

 

Less imputed interest

 

 

(151

)

Total lease liabilities

 

$

1,446

 

 

 

 

Current operating lease liabilities, included in
   accrued liabilities

 

$

904

 

Non current lease liabilities

 

 

542

 

Total lease liabilities

 

$

1,446

 

 

As of March 31, 2024, right-of-use assets were $1.3 million and lease liabilities were $1.4 million.

Rent expense totaled $0.3 million for the three months ended March 31, 2024 and 2023.

Future minimum rental commitments under lease agreements, as of March 31, 2024, with non-cancelable terms greater than one year for each of the years ending December 31 are as follows (in thousands):

 

 

 

 

Year Ended

 

 

 

 

December 31,

 

Remainder of 2024

 

 

$

778

 

2025

 

 

 

816

 

2026

 

 

 

3

 

2027

 

 

 

 

2028 and thereafter

 

 

 

 

Total future minimum lease obligations

 

 

 

1,597

 

Less imputed interest

 

 

 

(151

)

Total lease liabilities

 

 

$

1,446