LEASES

3 Months Ended

Mar. 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 March 31, 2025, we have $563 of future lease commitments under the above noted interim funding agreement which will be converted into finance leases when all of the underlying equipment is received and operational in 2025. We have financing leases for certain property and equipment used in the normal course of business.

The components of lease expense were as follows:

	Three Months Ended March 31,
Lease Cost	2025		2024
Operating lease cost	$	565	$	596
Finance lease interest cost		6		7
Finance lease amortization expense		42		131
Total lease cost	$	613	$	734

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

	Balance Sheet Location	March 31, 2025		December 31, 2024
Assets
Finance lease assets	Property, plant and equipment	$	369	$	411
Operating lease assets	Operating lease assets		7,831		8,139
Total leased assets		$	8,200	$	8,550
Liabilities
Current
Current operating lease liabilities	Current portion of operating lease obligations	$	1,187	$	1,175
Current finance lease liabilities	Current portion of finance lease obligations		121		143
Noncurrent
Long-term operating lease liabilities	Long term operating lease liabilities, net		7,462		7,773
Long term finance lease liabilities	Long term finance lease obligations, net		281		311
Total lease liabilities		$	9,051	$	9,402

Supplemental condensed consolidated statements of cash flows information for the three months ended March 31, 2025 and 2024 related to leases was as follows:

	March 31,		March 31,
	2025		2024
Operating Leases
Cash paid for amounts included in the measurement of lease liabilities	$	433	$	459
Property acquired under operating lease	$	-	$	719

Future annual payments of lease liabilities as of March 31, 2025 were as follows:

	Operating Leases			Finance Leases			Total
Remainder of 2025	$	1,368		$	141		$	1,509
2026		1,859			149			2,008
2027		1,570			60			1,630
2028		1,569			60			1,629
2029		986			44			1,030
Thereafter		4,670			-			4,670
Total lease payments	$	12,022		$	454		$	12,476
Less: imputed interest		(3,373	)		(52	)		(3,425	)
Present value of lease liabilities	$	8,649		$	402		$	9,051

The lease term and discount rate as of March 31, 2025 and 2024 were as follows:

Weighted-average remaining lease term (years)	March 31, 2025			March 31, 2024
Operating leases		7.6			7.9
Finance leases		3.3			1.7
Weighted-average discount rate
Operating leases		7.8	%		8.1	%
Finance leases		5.7	%		5.3	%