LEASES

12 Months Ended

Dec. 31, 2025

Leases

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. As of December 31, 2025, we do not have material lease commitments that have not commenced. We have financing leases for certain property and equipment used in the normal course of business.

The components of lease expense were as follows for the years ended December 31:

Lease Cost	2025		2024
Operating lease cost	$	2,364	$	2,318
Finance lease interest cost		42		25
Finance lease amortization expense		212		451
Total lease cost	$	2,618	$	2,794

Supplemental balance sheets information related to leases was as follows as of December 31:

	Balance Sheets Location	2025		2024
Assets
Operating lease assets	Operating lease assets	$	7,016	$	8,139
Finance lease assets	Property, plant and equipment		714		411
Total leased assets		$	7,730	$	8,550
Liabilities
Current
Current operating lease liabilities	Current portion of operating lease obligations	$	1,332	$	1,175
Current finance lease liabilities	Current portion of finance lease obligations		274		143
Noncurrent
Long-term operating lease liabilities	Long-term operating lease liabilities, net		6,476		7,773
Long-term finance lease liabilities	Long-term finance lease obligations, net		626		311
Total lease liabilities		$	8,708	$	9,402

Supplemental cash flow information related to leases was as follows for the years ended December 31:

	2025		2024
Operating Leases
Cash paid for amounts included in the measurement of lease liabilities	$	1,806	$	1,821
Operating lease assets obtained in exchange for lease obligations	$	-	$	2,336

The operating lease assets obtained in exchange for lease obligations in the year ended December 31, 2024 was largely due to the renewal of our lease in Maple Grove and Milaca, Minnesota, as well as leasing of additional space in our Suzhou, China facility.

Future maturities of lease liabilities were as follows:

	Operating Leases			Finance Leases			Total
2026	$	1,873		$	320		$	2,193
2027		1,580			211			1,791
2028		1,569			211			1,780
2029		979			196			1,175
2030		900			76			976
Thereafter		3,769			-			3,769
Total lease payments	$	10,670		$	1,014		$	11,684
Less: interest		(2,862	)		(114	)		(2,976	)
Present value of lease liabilities	$	7,808		$	900		$	8,708

The lease term and discount rate as of December 31, 2025 were as follows:

Weighted-average remaining lease term (years)
Operating leases	7.1
Finance leases	4.0
Weighted-average discount rate
Operating leases	8.1	%
Finance leases	6.7	%