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Leases

6 Months Ended

Jun. 30, 2023

6. Leases

The Company has an operating lease for its corporate offices and operations facility, as well as certain equipment with a term of 12 months or less. As of June 30, 2023, the Company’s real estate lease has a remaining lease term of approximately 4.3 years, and the lease liability is measured using a discount rate of 6.25%.

Lease expense included in selling, general and administrative expenses on the Company’s unaudited condensed consolidated statements of operations was approximately $0.4 million for both the current quarter and prior year quarter, approximately $0.8 million for the current six months, and approximately $0.7 million for the prior year six months.

Cash paid for amounts included in the measurement of operating lease liabilities was approximately $0.4 million in both the current quarter and prior year quarter, approximately $0.8 million in the current six months, and approximately $1.0 million in the prior year six months.

Also, the Company was previously a party to an operating lease for its former retail store location, which was closed in 2022. During the three months ended June 30, 2023, the Company successfully negotiated a settlement with the lessor resulting in the termination of this lease. Under the settlement agreement, the Company paid $0.07 million to the lessor in May 2023, and agreed to make two subsequent payments of approximately $0.11 million each to the lessor on or before July 31, 2023 and October 31, 2023. The Company recognized a liability of $0.23 million for these remaining payments as part of “accounts payable, accrued expenses and other current liabilities” on the condensed consolidated balance sheet as of June 30, 2023. The Company recognized a gain of $0.44 million from this settlement transaction, which is classified within “other expense (income), including non-cash expenses” in the condensed consolidated statements of operations for the three and six months ended June 30, 2023.

As of June 30, 2023, the maturities of lease obligations were as follows:


($ in thousands)
2023 (July 1 through December 31)	$	776
2024		1,552
2025		1,552
2026		1,552
2027		1,294
Thereafter		-
Total lease payments		6,726
Less: Discount		847
Present value of lease liabilities		5,879
Current portion of lease liabilities		1,219
Non-current portion of lease liabilities	$	4,660