Note 8 - Commitments and Contingencies

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

8. Commitments and Contingencies

Leases

The Company determines if an arrangement is a lease at inception of the contract. The Company has operating leases for buildings, primarily for office space, manufacturing and distribution, as well as automobiles and printing equipment. As of December 31, 2023, the Company had the following building and facility leases capitalized on the balance sheet:

	Location (leases)	Purpose	Approx. Sq. Ft.	Expiration
Americas
	Burlington, MA (4)	Corporate headquarters and manufacturing	96,476	December 2034
	North Brunswick, NJ (1)	Artegraft biologic business	16,732	October 2029
	Burlington, MA (1)	US distribution	12,878	December 2030
	Fox River Grove, IL (3)	RestoreFlow allografts business	11,765	November 2025
	Vaughn, Canada	Canada sales office and distribution	3,192	February 2026
	Chandler, Arizona	US sales office	2,058	August 2025
Europe, Middle East and Africa
	Sulzbach, Germany	European headquarters and distribution	21,410	June 2031
	Milan,Italy	Italy sales office and distribution	5,705	July 2027
	Hereford, England	United Kingdom sales office and distribution	3,575	October 2029
	Madrid, Spain	Spain sales office	2,260	June 2029
Asia Pacific
	Singapore	Asia Pacific headquarters and distribution	1,270	June 2024
	Tokyo, Japan	Japan sales office and distribution	4,236	July 2025
	Bangkok, Thailand	Thailand sales office and distribution	2,810	August 2026
	Seoul, Korea	Korea sales office and distribution	2,300	April 2027
	Shanghai, China	China sales office and distribution	1,152	August 2024
	Ballarat, Australia	Supply facility	Up to 350 acres	December 2030

Operating lease right-of-use (ROU) assets and operating lease liabilities are recognized based on the present value of the future lease minimum payments over the lease term at commencement date. Many of the lease agreements contain renewal or termination clauses that are factored into the determination of the lease term if it is reasonably certain that these options would be exercised. The Company recognizes lease expense for these leases on a straight-line basis over the lease term.

None of our noncancelable lease payments include non-lease components such as maintenance contracts; we generally reimburse the landlord for direct operating costs associated with the leased space. We have no subleases, and there are no residual value guarantees associated with, or restrictive covenants imposed by, any of our leases. There were no assets held under capital leases as of December 31, 2023. We elected the package of practical expedients that allow us to omit leases with initial terms of 12 months or less from our balance sheet, which are expensed on a straight-line basis over the life of the lease.

The interest rate implicit in lease agreements is typically not readily determinable, and as such the Company used the incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The incremental borrowing rate is defined as the interest the Company would pay to borrow on a collateralized basis.

Additional information with respect to our leases is as follows:

	Year ended			Year ended
	December 31,			December 31,
	2023			2022
	(in thousands)			(in thousands)
Lease cost
Operating lease cost	$	2,420		$	2,203
Short-term lease cost		378			632
Total lease cost	$	2,798		$	2,835
Other information
Cash paid for amounts included in the measurement of operating lease liabilities	$	3,139		$	2,878
Right-of-use assets obtained in exchange for new operating lease liabilities	$	4,813		$	2,766
Weighted average remaining lease term - operating leases (in years)		7.3			7.1
Weighted average discount rate - operating leases		6.57	%		4.93	%

As of December 31, 2023, the minimum noncancelable operating lease rental commitments with initial or remaining terms of more than one year are as follows:

Year ending December 31,
2024	$	3,622
2025		3,364
2026		2,699
2027		2,503
2028		2,469
Thereafter		10,906
Adjustment to net present value as of December 31, 2023		(6,468	)
Minimum noncancelable lease liability	$	19,095

Purchase Commitments

As part of our normal course of business, we have commitments to purchase approximately $5.1 million of inventory through 2024. These purchases are to be used in the normal course of business and do not represent excess commitments or loss contracts.