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LEASES

3 Months Ended

Mar. 31, 2024

8. 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 FASB ASC Topic 842, Leases, 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, a facility in Malvern, Pennsylvania, with a term ending in December 2024, that provides warehousing, and a facility in West Chester, Pennsylvania which was consummated effective January 2024, with a term ending February 2030, that provides warehousing and storage, quality control, distribution, and corporate office space. Additionally, the Company has an 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.

As of March 31, 2024, the Company recorded right-of-use assets of $4,622,000, and a lease liability of $4,684,000, of which $387,000 is reported as a current liability. On December 31, 2023, the Company recorded right-of-use assets of $2,940,000, and a lease liability of $2,946,000, of which $454,000 was reported as a current liability. The respective weighted average remaining lease term and discount rate are approximately 9.06 years and 3.04% as of March 31, 2024.

Rent expense for operating leases was $194,000 and $122,000 for the three months ended March 31, 2024 and 2023, respectively.

Future minimum lease payments, under non-cancelable leases as of March 31, 2024, are as follows:

Twelve Months Ending March 31,	Operating Leases
		(in thousands)
2025	$	534
2026		673
2027		662
2028		604
2029		597
Thereafter		2,261
Total Future Minimum Lease Payments		5,331
Less: Interest		647
Lease Liability		4,684
Less: Current Portion of Lease Liability		387
Lease Liability – Net of Current Portion	$	4,297