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LEASES

9 Months Ended

Sep. 30, 2024

7. LEASES

We have lease agreements for equipment and facilities under long-term, non-cancelable leases. We determine if an arrangement is a lease at inception by evaluating whether the arrangement conveys the right to use an identified asset and whether we obtain substantially all of the economic benefits from and have the ability to direct the use of the asset. Our lease agreements generally do not contain any material residual value guarantees or material restrictive covenants.

Operating leases are included in operating lease right-of-use assets, current operating lease liabilities, and long-term operating lease liabilities in our condensed consolidated balance sheets. Operating lease right-of-use assets and corresponding operating lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term, plus payments made prior to lease commencement and any initial direct costs. Operating lease expense for operating lease assets is recognized on a straight-line basis over the lease term. As most of our leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

We also have elected to apply a practical expedient for short-term leases whereby we do not recognize a lease liability or a right-of-use asset for leases with a term of 12 months or less. The Company recognizes short-term leases on a straight-line basis and does not record a related right-of-use asset or lease obligation for such contracts. Our leases have remaining lease terms that expire at various dates through 2029. Some of our lease terms may include options to extend or terminate the lease, and the Company includes those leases when it is reasonably certain we will exercise that option.

The following table summarizes the components of lease cost:


		Three Months Ended				Nine Months Ended
		September 30				September 30
(in thousands)		2024		2023		2024		2023
Lease Cost
Finance lease cost:
Amortization of right-of-use assets	$		—	$	—	$	—	$	15
Interest on lease obligation			—		—		—		3
Total finance lease cost			—		—		—		18
Total long-term operating lease cost			92		91		278		271
Total short-term operating lease cost			196		85		578		253
Total lease cost	$		288	$	176	$	856	$	542

The following table summarizes supplemental cash flow information related to leases:

Three Months Ended

Nine Months Ended

September 30

(in thousands)

2024

2023

2024

2023

Other Information

Cash paid for amounts included in the measurement of lease obligation:

Operating cash flows from operating leases

278

271⁽¹⁾

(1) The operating cash flows from operating leases for the nine months ended September 30, 2023, as presented in the corresponding table in Note 8 (Commitments and Contingencies) to the Condensed Consolidated Financial Statements in the Company’s Form 10-Q for the quarter ended September 30, 2023, was incorrectly stated as $455, and the correct amount of $271 is reflected in this table. This correction has no impact on the unaudited condensed consolidated financial statements as of, and for the three and nine months ended, September 30, 2023 in the Company’s Form 10-Q for the quarter ended September 30, 2023.

The following table presents other lease information related to the Company’s leases:


	September 30,		December 31,
	2024		2023
Weighted average remaining lease term (years)
Operating leases	2.1		2.7

Weighted average discount rate
Operating leases	3.6	%	3.5	%

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


(in thousands)	Operating Lease Obligations
Remaining fiscal 2024	$	91
2025		317
2026		143
2027		30
2028		25
Thereafter		11
Total lease payments		617
Less imputed interest		(22)
Lease obligation at September 30, 2024	$	595

Related Party Leases

The Company’s subsidiary in the United Kingdom leased facilities used for manufacturing and office space from a related party with related lease costs during the three months ended September 30, 2024 and 2023 of $0.1 million and $0.1 million, respectively, and related lease costs during the nine months ended September 30, 2024 and 2023 of $0.1 million and $0.2 million, respectively. The Company’s French subsidiary leased a fleet of vehicles from a related party with related lease costs of $0.1 million and $0.1 million during the three months ended September 30, 2024 and 2023, respectively, and related lease costs of $0.1 million and $0.2 million during the nine months ended September 30, 2024 and 2023, respectively.