Annual report [Section 13 and 15(d), not S-K Item 405]

OPERATING LEASES

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OPERATING LEASES
 12 Months Ended
Dec. 31, 2024
Operating Leases  
OPERATING LEASES

NOTE 6 – OPERATING LEASES

 

At December 31, 2024, the Company has two operating leases for its warehouse and office facilities. The first lease expired February 28, 2023 and was extended beginning March 1, 2023 to February 28, 2026. The second lease expired August 31, 2023, and was extended beginning September 1, 2023 to August 31, 2026. The aggregate monthly lease payments range from $89 (year one), to $111 (year two), to $125 (year three), with an aggregate commitment of $3,896. The lease amendments to the two operating leases were considered new lease agreements and as a result, the Company recognized operating lease right-of-use assets and related operating lease liabilities of approximately $3,578 upon commencement of the new terms.

 

The Company also has a third lease on a month-to-month basis and is charged $25 per month.

 

The components of rent expense and supplemental cash flow information related to leases for the period are as follows:

 

 

    Years Ended December 31,  
    2024     2023  
Lease Cost (in thousands)                
Operating lease cost   $ 1,250     $ 1,123  
                 
Operating lease cost (of which $124 is included in general and administration and $1,126 is included in cost of sales in the Company’s statement of operations for the year ended December 31, 2024, and $145 is included in general and administration and $978 is included in cost of sales in the Company’s statement of operations for the year ended December 31, 2023)   $ 1,250     $ 1,123  
                 
Other Information                
Weighted average remaining lease term – operating leases (in years)     1.4       2.4  
Average discount rate – operating leases     6.13 %     5.13 %

 

The supplemental balance sheet information related to leases for the period is as follows:

   

   

At
December 31, 2024

    

At

December 31, 2023

  
Operating leases (in thousands)                
                 
Long-term right-of-use assets, net of accumulated amortization of $1,931 and $760, respectively   $ 1,645     $ 2,818  
                 
Current portion of operating lease liabilities   $ 1,382     $ 1,124  
Noncurrent portion of operating lease liabilities     474       1,856  
Total operating lease liabilities   $ 1,856     $ 2,980  

  

 

Maturities of the Company’s lease liabilities are as follows:

   

Year Ending (in thousands)   Operating Leases  
2025   $ 1,446  
2026     496  
Total lease payments     1,942  
Less: Imputed interest/present value discount     (86 )
Present value of lease liabilities   $ 1,856  

 

Rent expense for the years ended December 31, 2024 and 2023 was $1,618 and $1,423, respectively (including short-term and other rentals).