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Leases

9 Months Ended

Sep. 30, 2022

Note 10 — Leases

Leases

The determination if any arrangement contained a lease at its inception was done based on whether or not the Company has the right to control the asset during the contract period. The lease term was determined assuming the exercise of options that were reasonably certain to occur. Leases with a lease term of 12 months or less at inception were not reflected in the Company’s balance sheet and those lease costs are expensed on a straight-line basis over the respective term. Leases with a term greater than 12 months were reflected as non-current right-of-use assets and current and non-current lease liabilities in the Company’s consolidated balance sheets.

As the implicit interest rate in its leases was generally not known, the Company’s used its incremental borrowing rate as the discount rate for purposes of determining the present value of its lease liabilities. At September 30, 2022 and December 31, 2021, the Company’s weighted-average discount rate utilized for its leases was 7.27% and 7.16%, respectively.

When a contract contained lease and non-lease elements, both were accounted as a single lease component.

The Company had several non-cancelable finance leases for machinery and equipment. The Company’s finance leases have remaining lease terms of one year to five years.

The Company had several non-cancelable operating leases for corporate offices, warehouses, showrooms, research and development facilities and vehicles. The Company’s leases have remaining lease terms of one year to five years, some of which include options to extend. Some leases include payment for communal area maintenance associated with the property.

Additional information on the Company’s operating and financing lease activity is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2022		2021		2022		2021
Operating lease cost	$	293	$	100	$	828	$	184
Finance lease cost:
Amortization of right-of-use assets		54		44		148		134
Interest on lease liabilities		7		10		26		32
Total lease cost	$	354	$	154	$	1,002	$	350

(In thousands)	Balance Sheet Location	September 30, 2022			December 31, 2021
Assets
Right-of-use assets, net	Right-of-use, net	$	2,470		$	1,479
Finance lease assets	Property and equipment, net		304			380
Total lease assets		$	2,774		$	1,859

Liabilities
Current:
Operating	Operating lease liabilities, current	$	822		$	814
Financing	Accrued expenses and other current liabilities		153			156
Non-current:
Operating	Operating lease liabilities, non-current		1,744			704
Financing	Other non-current liabilities		187			293
Total lease liabilities		$	2,906		$	1,967
Weighted-average remaining lease term – operating leases			3.68 years			3.11 years
Weighted-average remaining lease term – finance leases			2.50 years			2.36 years
Weighted-average discount rate – operating leases			6.70	%		8.03	%
Weighted-average discount rate – finance leases			7.84	%		6.29	%

Maturities of operating and finance lease liabilities as of September 30, 2022 are as follows:

Years ending December 31 (In thousands),	Operating Lease			Finance Lease

Remaining 2022	$	227		$	37
2023		921			182
2024		614			91
2025		493			51
2026		461			15
Thereafter		200			—
Total minimum lease payments		2,916			376
Less imputed interest		(350	)		(36	)
Total lease liabilities	$	2,566		$	340