Quarterly report [Sections 13 or 15(d)]

OPERATING LEASES

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OPERATING LEASES
 3 Months Ended
Mar. 31, 2025
Operating Leases  
OPERATING LEASES

NOTE 5 – OPERATING LEASES

 

The Company has two operating lease agreements for its warehouse and office facilities. The first lease expired February 28, 2024, and was extended beginning March 1, 2024 to February 28, 2026. The second lease expired August 31, 2024, and was extended beginning September 1, 2024 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 in 2024.

 

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: 

 

    Three Months Ended
March 31, 2025		   Three Months Ended
March 31, 2024
Lease Cost (in thousands)   (Unaudited)   (Unaudited)
Operating lease cost   $ 325       282  
Operating lease cost (of which $43 is included in general and administration and $281 is included in cost of sales in the Company’s statement of operations for the three months ended March 31, 2025, and $37 and $245 for the same period in 2024, respectively)   $ 325     $ 282  
                 
Other Information                
Weighted average remaining lease term – operating leases (in years)     2.2       2.2  
Average discount rate – operating leases     6.13 %     6.13 %

 

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

   

    At
March 31, 2025		   At
December 31, 2024
Operating leases (in thousands)   (Unaudited)    
Long-term right-of-use assets, net of accumulated amortization of $2,233 and $1,931, respectively   $ 1,343     $ 1,645  
                 
Current portion of operating lease liabilities   $ 1,339     $ 1,382  
Noncurrent portion of operating lease liabilities     197       474  
Total operating lease liabilities   $ 1,536     $ 1,856  

 

 

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

   

Year Ending   Operating Leases
2025 (remaining 9 months)     1,104  
2026     496  
Total lease payments     1,600  
Less: Imputed interest/present value discount     (64 )
Present value of lease liabilities   $ 1,536  

 

Rent expense for the three months ended March 31, 2025 and 2024 was $391 and $399, respectively.