Note 10 ‑ Commitments

Lease Agreements

We lease facilities under non-cancellable operating leases. The leases expire at various dates through fiscal 2023 and frequently include renewal provisions for varying periods of time, provisions which require us to pay taxes, insurance and maintenance costs, and provisions for minimum rent increases. Minimum leases payments, including scheduled rent increases are recognized as rent expenses on a straight-line basis over the term of the lease.

The rate implicit in each lease is not readily determinable, and we therefore use our incremental borrowing rate to determine the present value of the lease payments. The weighted average incremental borrowing rate used to determine the initial value of right-of-use (ROU) assets and lease liabilities during each of the years ended December 31, 2020 and 2019 was 6.75%.

Right-of-use assets for operating leases are periodically reduced by impairment losses. We use the long-lived assets impairment guidance in ASC Subtopic 360-10, Property, Plant and Equipment – Overall, to determine whether a ROU asset is impaired, and if so, the amount of the impairment loss to recognize. As of December 31, 2020 and 2019, we have not recognized any impairment losses for our ROU assets.

We monitor for events or changes in circumstances that require a reassessment of one of our leases. When a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding ROU asset unless doing so would reduce the carrying amount of the ROU asset to an amount less than zero. In that case, the amount of the adjustment that would result in a negative ROU asset balance is recorded in profit or loss.

In June 2020, the Company entered into a sublease agreement to lease 4,351 square feet of space located in Irvine, California for $5,439 per month with 3 percent annual increases. The lease term began July 1, 2020 and ends May 31, 2023. The space is used for executive offices, sales, finance and administration.

The Company leases a 14,476 square-foot manufacturing facility and administrative office in Shenzhen, China. In May 2020, the Company renewed this lease for the period June 1, 2020 through May 31, 2022 for approximately $7,300 per month through May 31, 2021 and increasing to approximately $7,800 per month through May 31, 2022.

The Company leases a 4,544 square-foot engineering and admininstrative office in Singapore for approximately $9,700 per month. This lease term ends July 2021.

The Company leases a 3,000 square-foot distribution facility in Hong Kong for approximately $2,000 per month. This lease term ends April 2021.

The Company leases a 500 square-foot sales office in Tokyo, Japan for approximately $900 per month. This lease term ends November 2022.

As of December 31, 2020, the Company had current and long-term lease liabilities of $219 thousand and $140 thousand, respectively, and right-of-use assets of $334 thousand. As of December 31, 2019, the Company had current and long-term lease liabilities of $154 thousand and $66 thousand, respectively, and right of use assets of $203 thousand. Future imputed interest as of December 31, 2020 totaled $22 thousand. The weighted average remaining lease term of the Company’s leases as of December 31, 2020 is 1.45 years.

Future minimum lease payments under non-cancellable operating leases that have remaining non-cancellable lease terms in excess of one year are as follows:


Years ending December 31,	(in thousands)
2021	$	236
2022		117
2023		29
2024		—
2025		—
Thereafter		—
Total undiscounted future non-cancelable minimum lease payments		382
Less: imputed interest		(22)
Present value of lease liabilities	$	359

Rent expense for the years ended ended December 31, 2020 and 2019 was $263 thousand and $283 thousand, respectively.