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LEASES

9 Months Ended

Sep. 30, 2022

7. LEASES

In the U.S., the Company owns its two main operating facilities located in Exton, Pennsylvania. In addition to the owned facilities, the Company also has operations in other locations that are leased, as well as other leased assets. In conjunction with the guidance for leases, as defined by the FASB with ASU 2016-02, Leases (Topic 842), the Company has described the existing leases, which are all classified as operating leases, pursuant to the below.

In the U.S., the Company leases a facility in Houston, Texas, which currently provides manufacturing, stocking, and sales operations, with the lease term running through October 2024 and a facility in Malvern, Pennsylvania, which was consummated, effective January 1, 2022, with a 3-year term ending in December 2024, that provides warehousing. Additionally, the Company extended its operating lease agreement for its corporate office space in Middletown, Connecticut, with the lease term ending in June 2027.

In the U.K., the Company leases a facility in Banbury, England, which serves manufacturing, warehousing, and other operational functions. The lease in Banbury has a 15-year term ending in March 2036.

In addition to property rentals, the Company also has lease agreements in place for various fleet vehicles and equipment with various lease terms.

On September 30, 2022, the Company has recorded right-of-use assets of $3,095,000, and a lease liability of $3,099,000, of which $431,000 is reported as a current liability. On December 31, 2021, the Company had recorded right-of-use assets of $3,374,000, and a lease liability of $3,373,000, of which $383,000 was reported as a current liability. The respective weighted average remaining lease term and discount rate are approximately 11.01 years and 1.05% as of September 30, 2022.

Rent expense for the operating leases was approximately $119,000 and $384,000 for the three and nine months ended September 30, 2022 and $108,000 and $312,000 for the three and nine months ended September 30, 2021.

Future minimum lease payments, inclusive of interest, under non-cancelable leases as of September 30, 2022 are as follows:

Twelve Months Ending September 30,	Operating Leases
		(in thousands)

2023	$	431
2024		411
2025		270
2026		240
2027		226
Thereafter		1,521
Total Minimum Lease Payments	$	3,099