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LEASES
 12 Months Ended
Dec. 31, 2024
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, 2024, 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:

 

SCHEDULE OF COMPONENTS OF LEASE EXPENSE

Lease Cost  2024   2023 
Operating lease cost  $2,318   $2,290 
Finance lease interest cost   25    39 
Finance lease amortization expense   451    727 
Total lease cost  $2,794   $3,056 

 

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

 

   Balance Sheets Location  2024   2023 
Assets             
Operating lease assets  Operating lease assets  $8,139   $6,917 
Finance lease assets  Property, plant and equipment   411    636 
Total leased assets     $8,550   $7,553 
              
Liabilities             
Current             
Current operating lease liabilities  Current portion of operating lease obligations  $1,175   $1,033 
Current finance lease liabilities  Current portion of finance lease obligations   143    356 
Noncurrent             
Long-term operating lease liabilities  Long term operating lease liabilities, net   7,773    6,763 
Long term finance lease liabilities  Long term finance lease obligations, net   311    209 
Total lease liabilities     $9,402   $8,361 

 

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

 

SCHEDULE OF SUPPLEMENTAL CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS INFORMATION

   2024   2023 
Operating Leases          
Cash paid for amounts included in the measurement of lease liabilities  $1,821   $1,792 
Operating lease assets obtained in exchange for lease obligations  $2,336   $261 

 

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 
  

Operating

Leases

  

Finance

Leases

   Total 
2025  $1,842   $165   $2,007 
2026   1,857    168    2,025 
2027   1,570    60    1,630 
2028   1569    60    1,629 
2029   986    44    1,030 
Thereafter   4,670    -    4,670 
Total lease payments  $12,494   $497   $12,991 
Less: interest   (3,546)   (43)   (3,589)
Present value of lease liabilities  $8,948   $454   $9,402 

 

 

The lease term and discount rate as of December 31, 2024 were as follows:

 

SCHEDULE OF LEASE TERM AND DISCOUNT RATE

Weighted-average remaining lease term (years)    
Operating leases   7.7 
Finance leases   3.4 
Weighted-average discount rate     
Operating leases   7.7%
Finance leases   5.7%