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LEASES

9 Months Ended

Sep. 30, 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 West Chester, Pennsylvania, which was consummated effective January 2024, with its lease terminating in February 2030, which provides warehousing and storage, quality control, distribution, and corporate offices. The Company also leases two facilities in Houston, Texas. Each provides manufacturing, stocking, and sales operations. One facility is newly leased, which was consummated effective June 2024, with its lease terminating in July 2029. The other Houston facility’s lease terminates in October 2024. Other facility leases include a facility in Malvern, Pennsylvania, with a lease term ending in December 2024, which provides warehousing, and a corporate office facility in Middletown, Connecticut, with its lease terminating in June 2027.

In the U.K., the Company leases a facility in Banbury, Oxfordshire, which provides manufacturing, warehousing, and other operational functions. The lease terminates in March 2036.

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

As of September 30, 2024, the Company recorded right-of-use assets of $5,319,000, and a lease liability of $5,655,000, of which $755,000 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 8.06 years and 3.67% as of September 30, 2024.

Rent expense for operating leases was $272,000 and $679,000 for the three and nine months ended September 30, 2024 and $112,000 and $355,000 for the three and nine months ended September 30, 2023.

Future minimum lease payments, under non-cancelable leases as of September 30, 2024, are as follows:

Twelve Months Ending September 30,	Operating Leases
		(in thousands)
2025	$	946
2026		913
2027		877
2028		804
2029		791
Thereafter		2,036
Total Future Minimum Lease Payments		6,367
Less: Interest		712
Lease Liability		5,655
Less: Current Portion of Lease Liability		755
Lease Liability – Net of Current Portion	$	4,900