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Leases

12 Months Ended

Dec. 31, 2022

5. Leases

We lease 23,890 square feet of office space in Minneapolis, Minnesota, which houses our principal executive offices and our manufacturing facility. We lease this space under an operating lease agreement that commenced December 1, 2008 and expires July 31, 2024. We intend to add new facilities as we grow, and we believe that suitable additional or substitute space will be available as needed to accommodate any such expansion of our operations. Our operating lease agreement includes an option to renew for one additional period of five years. The exercise of the lease renewal option is at our sole discretion and was not included in the lease term for the calculation of the ROU asset and lease liability upon adoption of ASC 842 on January 1, 2022, as it is not reasonably certain of exercise.

In addition to base rent, we will also pay our proportionate share of operating expenses, as defined in the lease. These payments will be made monthly and will be adjusted annually to reflect actual charges incurred for operating expenses, such as common area maintenance, taxes and insurance.

The following table presents the lease balances within the consolidated balance sheets:


	December 31,
(in thousands)	2022
Right-of-use assets:
Operating lease right-of-use asset	$	334
Operating lease liabilities:
Accrued expenses		222
Operating lease liability, non-current portion		117
Total operating lease liabilities	$	339

Maturities of our lease liability for our operating lease are as follows as of December 31, 2022:


	December 31,
(in thousands)	2022
2023		234
2024		119
Total undiscounted lease payments		353
Less: imputed interest		(14)
Present value of lease liability	$	339

As of December 31, 2022, the remaining lease term was 1.5 years, and the discount rate was 5.0%. The operating cash outflows from our operating lease were $0.4 million for the year ended December 31, 2022.

As disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, the minimum lease payments under all operating leases as of December 31, 2021 were as follows for the years ending:


(in thousands)
December 31, 2022	$	227
December 31, 2023		234
December 31, 2024		138
	$	599

Prior to January 1, 2022, we recorded operating lease rent expense under ASC 840 on a straight-line basis over the period of the lease. Rent expense for the year ended December 31, 2021 was $0.4 million.