Substantially all of the Company’s leases are classified as operating leases. The majority of the Company’s leases are for office and manufacturing space, along with several automobiles and certain equipment. Leases with initial terms of less than twelve months are not recorded on the balance sheet. Expense for these leases is recognized on a straight-line basis over the lease term. The Company’s leases have remaining terms of less than one year to just over 11 years. The majority of the Company’s leases do not have options to renew, although several have renewal terms to extend the lease for one five-year term, and one lease contains two five-year renewal options. None of the renewal options are included in determining the term of the lease, used for calculating the associated lease liabilities. None of the Company’s leases include variable payments, residual value guarantees or restrictive covenants. A number of the Company’s leases for office and manufacturing space include provisions for common area maintenance (“CAM”). The Company accounts for CAM separately from lease payments, and therefore costs for CAM are not included in the determination of lease liabilities. The Company is a party to one arrangement as the lessor, for its facility located in Sunnyvale, California, with a third party. The lessee under this lease has one option to renew the lease for a term of five years.

As of December 31, 2023, the balance of right of use (“ROU”) assets was approximately $7,390,000, and the balances of short-term and long-term lease liabilities were approximately $1,864,000 and $6,364,000, respectively. For the year ended December 31, 2023, the Company recorded operating lease cost, including short-term lease cost, of approximately $2,138,000 ($2,130,000 in 2022). The ROU assets are included in “Property, plant and equipment, net” in the accompanying Consolidated Balance Sheets.

The maturities of the Company’s lease liabilities are as follows (in thousands):


2024	$	1,959
2025		1,821
2026		1,208
2027		837
2028 and beyond		3,881
Total lease payments	$	9,706
Less: Imputed interest		1,478
Present value of lease liabilities	$	8,228

As of December 31, 2023, the weighted-average remaining lease term was 6.8 years and the weighted-average discount rate was 4.22% for the Company’s operating leases. The Company developed the discount rates used based on a Secured Overnight Financing Rate (“SOFR”) over a term approximating the term of the related lease, plus an additional interest factor, which was generally 1.25%.

For the years ended December 31, 2023 and December 31, 2022, the Company paid approximately $2,096,000 and $2,183,000, respectively, for amounts included in the measurement of lease liabilities through operating cash flows. The Company obtained approximately $1,180,000 and $2,941,000 in ROU assets in exchange for $1,165,000 and $3,040,000 of new operating lease liabilities for the years ended December 31, 2023 and December 31, 2022, respectively.

The maturities of the lease payments to be received by the Company under the lease agreement for its leased facility in California are as follows (in thousands):



2024	$	402
Total lease payments to be received	$	402

The Company recorded net lease income under this lease of approximately $792,000 for each of the years ended December 31, 2023, 2022, and 2021.