LEASES

9 Months Ended

Sep. 30, 2024

Leases [Abstract]

LEASES

NOTE 5. LEASES

We have operating leases for certain manufacturing sites, office space, and equipment. Most leases include the option to renew, with renewal terms that can extend the lease term from one to five years or more. Right-of-use lease assets and lease liabilities are recognized at the commencement date based on the present value of the remaining lease payments over the lease term which includes renewal periods we are reasonably certain to exercise. Our leases do not contain any material residual value guarantees or material restrictive covenants. We amended our operating leases for part of our manufacturing facility in China and our corporate office in Maple Grove, Minnesota during the first nine months of 2024 which extended the lease through August of 2033 with monthly lease payments of $14 to $18. As of September 30, 2024, we have a lease commitment of approximately $400 for a finance lease that will commence in the fourth quarter of 2024.

The components of lease expense were as follows:

	Three Months Ended September 30,
Lease Cost	2024		2023
Operating lease cost	$	569	$	576
Finance lease interest cost		6		9
Finance lease amortization expense		265		182
Total lease cost	$	840	$	767

	Nine Months Ended September 30,
Lease Cost	2024		2023
Operating lease cost	$	1,746	$	1,735
Finance lease interest cost		18		32
Finance lease amortization expense		394		546
Total lease cost	$	2,158	$	2,313

Supplemental condensed consolidated balance sheet information related to leases was as follows:

	Balance Sheet Location	September 30, 2024		December 31, 2023
Assets
Finance lease assets	Property and equipment, net	$	485	$	636
Operating lease assets	Operating lease assets, net		8,034		6,917
Total leased assets		$	8,519	$	7,553
Liabilities
Current
Current finance lease liabilities	Current portion of finance lease obligations	$	175	$	356
Current operating lease liabilities	Current portion of operating lease obligations		1,174		1,033
Noncurrent
Long-term finance lease liabilities	Long-term finance lease liabilities, net of current portion		340		209
Long-term operating lease liabilities	Long-term operating lease obligations, net of current portion		7,689		6,763
Total lease liabilities		$	9,378	$	8,361

Supplemental condensed consolidated statement of cash flows information for the nine months ended September 30, 2024 related to leases was as follows:

	September 30,		September 30,
	2024		2023
Operating Leases
Cash paid for amounts included in the measurement of lease liabilities	$	468	$	1,381
Property acquired under operating lease	$	1,923	$	-

Future payments of lease liabilities as of September 30, 2024 were as follows:

	Operating Leases			Finance Leases			Total
2024	$	469		$	70		$	539
2025		1,809			165			1,974
2026		1,774			168			1,942
2027		1,472			60			1,532
2028		1,469			60			1,529
Thereafter		5,505			44			5,549
Total lease payments	$	12,498		$	567		$	13,065
Less: imputed interest		(3,635	)		(52	)		(3,687	)
Present value of lease liabilities	$	8,863		$	515		$	9,378

The lease term and discount rate as of September 30, 2024 were as follows:

Weighted-average remaining lease term (years)
Operating leases	7.9
Finance leases	3.4
Weighted-average discount rate
Operating leases	7.8	%
Finance leases	5.7	%