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Leases | 9 Months Ended
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Sep. 30, 2023
Leases [Abstract] |
Leases | 7. Leases We have operating leases for our manufacturing facility, and finance leases for equipment. Our leases have remaining lease terms of two months to three years. One of our primary operating leases includes options to extend the lease for one to three years and the other primary lease includes an option to annually extend. These operating leases also include options to terminate the leases within one year. Future renewal options that are not likely to be executed as of the balance sheet date are excluded from right-of-use assets and related lease liabilities. Our operating leases represent building leases for our Stockholm corporate offices and our Kungsbacka manufacturing facility. Our Stockholm corporate office lease has a remaining lease term of under one year and both of our leases are automatically renewed at a cost increase of 2% on an annual basis, unless we provide written notice nine months prior to the respective expiration dates. We report operating lease right-of-use assets, as well as current and noncurrent operating lease obligations on our consolidated balance sheets for the right to use those buildings in our business. Our finance leases represent manufacturing equipment; we report the manufacturing equipment, as well as current and noncurrent finance lease obligations on our condensed consolidated balance sheets for our manufacturing equipment. Generally, interest rates are stated in our leases for equipment. When no interest rate is stated in a lease, however, we review the interest rates implicit in our recent finance leases to estimate our incremental borrowing rate. We determine the rate implicit in a lease by using the most recent finance lease rate, or other method we think most closely represents our incremental borrowing rate. The components of lease expense were as follows (in thousands):
|  | Three months ended September 30, |  |  | Nine months ended September 30, |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
Operating lease cost (1) |  | $ | 135 |  |  | $ | 135 |  |  | $ | 391 |  |  | $ | 453 |
Finance lease cost: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amortization of leased assets |  |  | 4 |  |  |  | 5 |  |  |  | 12 |  |  |  | 62 |
Interest on lease liabilities |  |  | 2 |  |  |  | - |  |  |  | 6 |  |  |  | 6 |
Total finance lease cost |  |  | 6 |  |  |  | 5 |  |  |  | 18 |  |  |  | 68 |
(1) | Includes short-term lease costs of $117,000 and $335,000 and $30,000 and $111,000 for the three and nine months ended September 30, 2023 and 2022, respectively.
Supplemental cash flow information related to leases was as follows (in thousands):
|  | Three months ended September 30, |  |  | Nine months ended September 30, |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
Cash paid for amounts included in leases: |  |  |  |  |  |  |  |  |  |  |  |
Operating cash flows from operating leases |  | $ | (16 | ) |  | $ | (3 | ) |  | $ | (49 | ) |  | $ | (297 | )
Operating cash flows from finance leases |  |  | (2 | ) |  |  | - |  |  |  | (6 | ) |  |  | (6 | )
Financing cash flows from finance leases |  |  | (25 | ) |  |  | (36 | ) |  |  | (77 | ) |  |  | (135 | )
Right-of-use assets obtained in exchange for lease obligations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Operating leases |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Supplemental balance sheet information related to leases was as follows (in thousands):
|  | September 30, 2023 |  |  | December 31, 2022 |
Operating leases |  |  |  |  |  |
Operating lease right-of-use assets |  | $ | 66 |  |  | $ | 118 |
Current portion of operating lease obligations |  | $ | 66 |  |  | $ | 83 |
Operating lease liabilities, net of current portion |  |  | - |  |  |  | 35 |
Total operating lease liabilities |  | $ | 66 |  |  | $ | 118 |
Finance leases |  |  |  |  |  |  |  |
Property and equipment, at cost |  | $ | 2,503 |  |  | $ | 2,622 |
Accumulated depreciation |  |  | (2,304 | ) |  |  | (2,418 | )
Property and equipment, net |  | $ | 199 |  |  | $ | 204 |
Current portion of finance lease obligations |  | $ | 35 |  |  | $ | 95 |
Finance lease liabilities, net of current portion |  |  | 24 |  |  |  | 46 |
Total finance lease liabilities |  | $ | 59 |  |  | $ | 141 |
|  | September 30, 2023 |  |  | December 31, 2022 |
Weighted Average Remaining Lease Term |  |  |  |  |  |
Operating leases |  |  | 1.0 years |  |  |  | 1.8 years |
Finance leases |  |  | 1.4 years |  |  |  | 1.5 years |
Weighted Average Discount Rate: |  |  |  |  |  |  |  |
Operating leases (2) |  |  | 5 | % |  |  | 5 | %
Finance leases |  |  | 3 | % |  |  | 2 | %
(2) | Upon adoption of the new lease standard, discount rates used for existing leases were established at January 1, 2019.
A summary of future minimum payments under non-cancellable operating lease commitments as of September 30, 2023 is as follows (in thousands):
Year ending December 31, |  | Total |
2023 (remaining months) |  |  | 17 |
2024 |  |  | 51 |
|  |  | 68 |
Less imputed interest |  |  | (2 | )
Total lease liabilities |  | $ | 66 |
Less current portion |  |  | (66 | )
|  | $ | - |
The following is a schedule of minimum future rentals on the non-cancellable finance leases as of September 30, 2023 (in thousands):
Year ending December 31, |  | Total |
2023 (remaining months) |  |  | 12 |
2024 |  |  | 31 |
2025 |  |  | 18 |
Total minimum payments required: |  |  | 61 |
Less amount representing interest: |  |  | (2 | )
Present value of net minimum lease payments: |  |  | 59 |
Less current portion |  |  | (35 | )
|  | $ | 24 |

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-20/tableOfContent + Details
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