|12 Months Ended|
Dec. 31, 2022
We lease four corporate offices located in Austin, Texas; Irvine, California; San Diego, California; and Miami, Florida and a warehouse facility in Round Rock, Texas for our Lyte operations. As of December 31, 2022, the earliest lease agreement currently ends in June 2023 with the latest terminating in September 2027.
On March 15, 2022, we entered into a lease agreement, in which we lease approximately 21,830 square feet in Round Rock, Texas, which we intend to use as manufacturing and warehouse space for our Lyte computer division. The term of the lease is five years and commenced in July 2022. The lease provides for initial base rent payments of approximately $27 per month, subject to escalations. In addition, we are responsible for payments equal to our proportionate share of operating expenses, which is currently estimated to be approximately $7 per month, which is also subject to adjustment to actual costs and expenses according to provisions of the lease. During the third quarter of 2022, we recorded a right-of-use asset and corresponding lease liability of $1,545.
On June 3, 2022, we entered into a lease agreement pursuant to which we lease approximately 7,458 square feet in Austin, Texas, which we intend to use as professional office space for our corporate headquarters. The lease commenced on June 10, 2022 and has a term of sixty-four (64) months, with an option to renew the lease for an additional five-year term at the conclusion of the initial term. The lease provides for rent abatement until September 30, 2022. Beginning on October 1, 2022, initial base rent payments are approximately $28 per month, subject to escalations contained therein. In addition, we will be responsible for payments equal to our proportionate share of operating expenses, which is currently estimated to be approximately $9 per month, plus electrical and janitorial services, which are to be contracted and paid separately by us. As a result of entering into this lease agreement, we recorded a right-of-use asset and corresponding lease liability of $1,508 on the commencement date noted above.
The weighted-average remaining lease term for our operating leases as of December 31, 2022 and 2021 was 3.98 years and 3.14 years, respectively. As our leases generally do not include an implicit rate, we compute our incremental borrowing rate based on information available at the lease commencement date applying a rate to each lease. This approach requires significant judgment. We used incremental borrowing rates that match the duration of the remaining lease terms of our operating leases on a fully collateralized basis at the time we enter into the lease to initially measure our lease liability. The weighted average
incremental borrowing rate used to measure our lease liability was 9.80% and 19.13% at December 31, 2022 and 2021, respectively.
We recognize lease expense on a straight-line basis over the lease term with variable lease expense recognized in the period in which the costs are incurred. The components of lease expense are included in general and administrative expense in our consolidated statement of operations and comprehensive loss. Rent expense under operating leases totaled $1,102 and $809 for the years ended December 31, 2022 and 2021, respectively.
Future minimum annual lease payments under the Company’s operating leases are as follows:In 2021, we entered into two sublease agreements for our Miami, Florida and Irvine, California office spaces, in which the subtenants will pay us monthly base rent, subject to escalations throughout the term of the sublease. The sublease agreements terminate on June 30, 2023 and March 31, 2025, respectively. We recognized an impairment of our right-of-use assets related to the subleases of $77 and $51 in our consolidated statement of operations and comprehensive loss for the year ended December 31, 2022 and 2021, respectively. We recognized sublease income of $300 and $154 for the year ended December 31, 2022 and December 31, 2021, respectively.
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.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef