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Note 8 - Leases

12 Months Ended

Dec. 31, 2024

8. Leases

The Company accounts for its leasing arrangements in accordance with Topic 842, “Leases”. The Company leases manufacturing and office facilities and equipment under operating leases and determines if an arrangement is a lease at inception. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term.

As most of its leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company has lease agreements with lease and non-lease components, which are accounted for separately.

The Company leases approximately 54,000 square feet (not in thousands) of industrial space in West Melbourne, Florida, under a non-cancellable operating lease. The lease has the expiration date of June 30, 2027. The lease includes an option for one additional extension period of five (5) years commencing July 1, 2027 and terminating at midnight June 30, 2032. Rental, maintenance and tax expenses for this facility were approximately $625 and $596 in 2024 and 2023, respectively.

In February 2020, the Company entered into a lease for 6,857 square feet (not in thousands) of office space at Sawgrass Technology Park, 1619 NW 136th Avenue in Sunrise, Florida, for a period of 64 months commencing July 1, 2020. Annual rental, maintenance and tax expenses for the facility were approximately $224 and $212 in 2024 and 2023, respectively.

Lease costs consist of the following:

	*December 31,*
	*2024*		2023
Operating lease cost	$	543	$	542
Variable lease cost		133		132
Total lease cost	$	676	$	674

Supplemental cash flow information related to leases was as follows:

	*December 31,*
	*2024*		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows (fixed payments)	$	611	$	595
Operating cash flows (liability reduction)		528		485

Other information related to operating leases was as follows:

	*December 31,*
	*2024*
Weighted average remaining lease term (in years)		2.36
Weighted average discount rate		5.50	%

Maturity of operating lease liabilities as of December 31, 2024 were as follows:

	*Year ending*
	*December 31,*
2025	$	625
2026		486
2027		249
2028		5
2029		3
Thereafter		—
Total payments		1,368
Less: imputed interest		(83	)
Total liability	$	1,285