LEASES

9 Months Ended

Sep. 30, 2025

Leases

LEASES

NOTE 2: LEASES

The Company leases land, buildings, and certain equipment under non-cancellable operating leases. We lease office, indoor manufacturing, warehouse, and operating space in Houston, Texas and Macaé, Brazil, and lease storage space in Mobile, Alabama to house our 3,400 metric ton and 3,500 metric ton carousel systems. We classify our leases related to certain office furniture and computer equipment as finance leases. The Company elects to apply the short-term lease exception; therefore, the Company will not record an right of use (“ROU”) asset or corresponding lease liability for leases with an initial term of twelve months or less that is not reasonably certain of being renewed and instead will recognize a single lease cost allocated over the lease term, generally on a straight-line basis. The Company elects to apply the practical expedient to not separate lease components from non-lease components and instead account for both as a single lease component for all asset classes.

Most leases include one or more options to renew, with renewal terms that can extend the lease term on a monthly, annual or longer basis. The exercise of lease renewal options is at the Company’s sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements is limited by the expected lease term unless there is a transfer of title or purchase option that is reasonably certain of being exercised.

The Company elects to not capitalize any lease in which the estimated value of the underlying asset at the commencement date is less than the Company’s capitalization threshold. A lease would need to qualify for the low value exception based on various criteria.

As of September 30, 2025, the Company does not have any subleases.

The following tables present information about our operating and finance leases:

	Classification	September 30, 2025		December 31, 2024
Assets
Operating	Right-of-use operating lease assets	$	6,000	$	5,383
Finance	Right-of-use finance lease assets		58		29
Total lease assets		$	6,058	$	5,412
Liabilities
Current
Operating	Current operating lease liabilities	$	887	$	537
Finance	Current finance lease liabilities		20		12
Non-current
Operating	Operating lease liability, long-term		5,914		5,600
Finance	Finance lease liability, long-term		31		12
Total lease liabilities		$	6,852	$	6,161

The components of our lease expense were as follows:

		Three Months Ended September 30,				Nine Months Ended September 30,
	Classification	2025		2024		2025		2024
Finance lease costs
Amortization of ROU assets	Selling, general and administrative	$	3	$	22	$	9	$	66
Interest on lease liabilities	Other (income) expense, net		1		1		2		4
Operating lease expense	Cost of sales		285		189		794		567
Operating lease expense	Selling, general and administrative		54		55		163		164
Short term lease expense	Cost of sales		253		122		535		280
Total lease expense		$	596	$	389	$	1,503	$	1,081

The lease term and discount rate for our operating and finance leases were as follows:

	September 30, 2025			December 31, 2024
Weighted-average remaining lease terms (years)
Operating leases		6.5			8.7
Finance leases		4.0			1.7
Weighted-average discount rates
Operating leases		7.41	%		7.97	%
Finance leases		4.48	%		7.44	%

Present value of lease liabilities:

	Operating Leases			Finance Leases
October 1, 2025 - September 30, 2026	$	1,363		$	22
October 1, 2026 - September 30, 2027		1,384			9
October 1, 2027 - September 30, 2028		1,381			9
October 1, 2028 - September 30, 2029		1,177			9
Thereafter		3,383			6
Total lease payments		8,688			55
Less: Interest		(1,887	)		(4	)
Present value of lease liabilities	$	6,801		$	51