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LEASES

12 Months Ended

Dec. 31, 2024

NOTE 14: LEASES

The Company recognizes leases with a duration greater than 12 months on the balance sheet with a Right-Of-Use (“ROU”) asset and liability at the present value of lease payments over the term. Renewal options are factored into the determination of lease payments when appropriate. There are no residual value guarantees on the existing leases. The Company estimates its incremental borrowing rate, at lease commencement, to determine the present value of lease payments, since most of the Company’s leases do not provide an implicit rate of return. ROU assets exclude lessor incentives received. The Company’s lease population consists primarily of office equipment.

The Company does not have any finance leases. As of December 31, 2024, the Company had no operating leases that had not yet commenced.

Lease position:

The table below presents the assets and liabilities related to operating leases recorded on the balance sheet:


		December 31,
(in thousands)	Classification on Consolidated Balance Sheet	2024		2023
Assets:
Operating lease right-of-use assets	Other assets	$	219	$	295

Liabilities:
Current portion of operating lease liabilities	Accrued expenses and other liabilities	$	79	$	77
Long-term operating lease liabilities	Other long-term liabilities		141		220
Total lease liabilities		$	220	$	297

Lease Costs:

The components of lease expense are included in selling, general and administrative expenses in the Consolidated Statements of Operations as disclosed below:


(in thousands)	2024		2023		2022
Operating lease cost	$	89	$	93	$	59
Short-term lease cost		—		—		—
Variable lease cost		11		3		—
Total lease cost	$	100	$	96	$	59

Other information:


As of December 31,	2024			2023
Cash paid for amounts included in the measurement of operating lease liabilities (in thousands)	$	77		$	77
ROU assets obtained in exchange for operating lease liabilities (in thousands)		—			127
Weighted average remaining lease term — operating leases (years)		2.7			3.7
Weighted average discount rate — operating leases		4.87	%		4.85	%

Lease Commitments:

Maturity of lease liabilities - Operating Leases:


(in thousands)
As of December 31,	2024
2025	$	88
2026		85
2027		55
2028		6
2029		—
Total lease payments		234
Less: Amounts representing interest		(14)
Present value of lease liabilities	$	220

The Company is party to an operating lease as the lessor for certain real estate leased to a third party with an initial term of 36 months that was renewed in 2023 for an additional 36 months. The lease requires fixed monthly payments and does not contain clauses for future rental escalations or renewal options. There are no terms and conditions under which the lessee has the option to

purchase this asset. As of December 31, 2024, projected future lease income on this lease totaled $60 thousand scheduled to be received in 2025. The Company recorded rental income of $240 thousand in 2024, $240 thousand in 2023 and $239 thousand in 2022 that is recorded as part of selling, general and administrative expenses on the Consolidated Statements of Operations.

During 2023, the Company entered into a lease agreement related to a warehouse as a lessor that qualified to be a sales type lease. As part of this transaction, the Company recognized a gain of approximately $1.8 million which has been reported as part of Gain on disposition of assets, net on the Consolidated Statement of Operations.