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LEASES

3 Months Ended

Mar. 31, 2022

NOTE 13. LEASES

The Company leases office and laboratory space under non-cancelable operating leases listed below. These lease agreements have remaining terms between one to five years and contain various clauses for renewal at the Company’s option.

	●	An operating lease for 5,789 square feet of office space in Carlsbad, California, which commenced in January 2022 and will expire in July 2027.

	●	An operating lease for 35,326 square feet of lab, warehouse and office space in Ledgewood, New Jersey that expires in July 2026, with an option to extend the term for two additional five-year periods. This includes an amendment that was made effective July 2020 that extended the term of the original lease and added 1,400 of additional square footage to the lease and another amendment entered into in May 2021 that extended the term of the lease to July 2027 and added 8,900 square feet of space.

	●	An operating lease for 5,500 square feet of office space in Nashville, Tennessee that expires in December 2024, with an option to extend the term for two additional five-year periods.

At March 31, 2022, the weighted average incremental borrowing rate and the weighted average remaining lease term for the operating leases held by the Company were 6.34% and 13.45 years, respectively.

During the three months ended March 31, 2022 and 2021, cash paid for amounts included for the operating lease liabilities was $166,000 and $251,000, respectively, and the Company recorded operating lease expense of $238,000 and $261,000, included in selling, general and administrative expenses, respectively.

Future lease payments under operating leases as of March 31, 2022 were as follows:

	Operating Leases
Remainder of 2022	$	655,000
2023		944,000
2024		970,000
2025		796,000
2026		810,000
Thereafter		6,648,000
Total minimum lease payments		10,823,000
Less: amount representing interest payments		(3,555,000	)
Total operating lease liabilities		7,268,000
Less: current portion, operating lease liabilities		(445,000	)
Operating lease liabilities, net of current portion	$	6,823,000

The Company also has a finance lease that is included in its lease accounting but is not considered significant.

Future lease payments under the non-cancelable finance lease as of March 31, 2022 were as follows:

	Finance Lease
Remainder of 2022	$	6,000
2023		9,000
2024		1,000
Total minimum lease payments		16,000
Less: amount representing interest payments		(1,000	)
Present value of future minimum lease payments		15,000
Less: current portion, finance lease obligation		(8,000	)
Finance lease obligation, net of current portion	$	7,000

At March 31, 2022, the incremental borrowing rate and the remaining lease term for the finance lease held by the Company were 6.36% and 1.83 years, respectively.

For the three months ended March 31, 2022 and 2021, depreciation expense related to the equipment held under the finance lease obligation was $2,000 and $2,000, respectively.

For the three months ended March 31, 2022 and 2021, cash paid and expense recognized for interest expense related to the finance lease obligation was $0 and $1,000, respectively.