The Company has operating and finance leases for facilities and certain equipment. Leases with an initial term of 12 months or less are not recorded on the condensed consolidated balance sheets. Lease expense for operating leases is recognized on a straight-line basis over the lease term. The Company does not combine lease and non-lease components in the recognition of lease expense.

As of March 31, 2024 the Company held four leases for office, manufacturing and warehouse facilities in Aliso Viejo, California. The four leases are for approximately 137,000 square feet in the aggregate. For one such operating lease, the lessor provided $900,000 in tenant allowances.

On April 4, 2022, the Company entered into a thirty-four-month sublease agreement for a portion of the 5 Columbia Building, in Aliso Viejo, CA. The sublease commencement date was June 13, 2022 and will expire on March 31, 2025. The base rent receivable is $11,410 per month. On January 4, 2023 the Company entered into a second amendment to the sublease agreement adjusting the base rent receivable to $5,319 per month.

On April 18, 2024, the Company entered into a new lease, and amendments to two existing leases, for three of its facilities comprising the Company’s headquarters, manufacturing, research and development and administrative offices in Aliso Viejo, California, as described in further detail below.

On April 18, 2024, the Company entered into a Standard Industrial/Commercial Single-Tenant Lease – Net (the “125 Columbia Lease”) with BML Management, LLC, for an approximately 26,825 square foot industrial and research and development facility in Aliso Viejo, California. The 125 Columbia Lease commences on June 1, 2024 and will end on January 31, 2031. The Company has two options to extend the term of the 125 Columbia Lease, with each option to extend being for a term of 60 months, commencing when the prior term expires. The base rent is initially $41,579 per month, payable on the first day of each month commencing on June 1, 2024, subject to adjustment as set forth in the 125 Columbia Lease.

On April 18, 2024, the Company entered into Lease Amendment #2 to that certain Lease Agreement dated January 10, 2018, as amended on April 5, 2022, with Clifford D. Downs, for the property located at 5 Columbia in Aliso Viejo, California (the “5 Columbia Amendment”). Pursuant to the 5 Columbia Amendment, the term of the lease was extended 70 months, beginning on April 1, 2025 and ending on January 31, 2031. The parties agreed to the base rent rate payable over the 70 month term as set forth in the 5 Columbia Amendment. The base rent is initially $30,701 per month and includes fixed rent escalations beginning on April 1, 2027. The Company has two options to extend the term of the lease, with each option to extend being for a term of 60 months, commencing when the prior term expires.

On April 18, 2024, the Company entered into a Fifth Amendment to that certain Commercial Lease Agreement, dated August 31, 2015, as amended November 23, 2015, December 22, 2015, January 18, 2016, and November 12, 2016, with Accuride International Inc., for the property located at 100 Columbia in Aliso Viejo, California (the “100 Columbia Amendment”). Pursuant to the 100 Columbia Amendment, the term of the lease was extended 76 months, beginning on October 1, 2024 and ending on January 31, 2031. The parties agreed to the base rent rate payable over the 76-month term as set forth in the 100 Columbia Amendment. The base rent is initially $64,843 per month and includes fixed rent escalations beginning on October 1, 2025. The Company has two options to extend the term of the lease at the end of the current term, with each option to extend being for a 5 year term.

Under these lease agreements, the Company is required to pay approximately $10.8 million in future minimum lease payments of which $0.2 million will be paid in 2024, $1.4 million will be paid in 2025, $1.6 million will be paid in 2026, $1.8 million will be paid in both 2027 and 2028, and $4.0 million will be paid thereafter.

The following table presents the lease balances within the Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 (in thousands):


		March 31,		December 31,
Leases	Classification	2024		2023

Assets
Operating	Operating leases right-of-use assets	$	2,052	$	2,444
Finance	Property and equipment, net		140		156
Total lease assets			2,192		2,600
Liabilities
Current
Operating	Lease liabilities		1,590		1,764
Finance	Lease liabilities		24		37
Noncurrent
Operating	Long-term lease liabilities		788		1,093
Finance	Long-term lease liabilities		120		118
Total lease liabilities		$	2,522	$	3,012

For the three months ended March 31, 2024 and 2023, the components of operating and finance lease expenses were as follows (in thousands):


		Three months ended March 31,
Lease Cost	Classification	2024		2023

Operating lease cost	Cost of sales	$	4	$	3
	Research and development		25		37
	Selling, general and administrative		439		449

Finance lease cost	Research and development		17		34
	Selling, general and administrative		7		9

Finance lease cost	Interest expense		5		4

Maturities of the Company’s operating and finance lease liabilities as of March 31, 2024 were as follows (in thousands):


	Operating			Finance
Year Ended December 31,	Leases			Leases
2024 (remainder)	$	1,422		$	32
2025		1,054			43
2026		90			43
2027		11			43
2028		10			36
2029		—			—
Total lease payments		2,587			197
Less: imputed interest		(209	)		(53	)
Total lease liabilities	$	2,378		$	144

The weighted average remaining lease term and weighted average discount rate used to determine lease liabilities related to the Company’s operating and finance leases as of March 31, 2024 and December 31, 2023 were:


	March 31,			December 31,
Lease Term and Discount Rate	2024			2023
Weighted average remaining lease term (years)
Operating leases		1.51			1.69
Finance leases		4.60			4.37
Weighted average discount rate
Operating leases		10.4	%		10.4	%
Finance leases		14.4	%		14.0	%