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Note 11 - Leases

9 Months Ended

Sep. 30, 2025

Note 11. Leases

The Company accounts for its leasing arrangements in accordance with ASU Topic 842, Leases. The Company leases manufacturing and office facilities and equipment under operating leases and determines if an arrangement is a lease at inception. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term.

As most of its leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company has lease agreements with lease and non-lease components, which are accounted for separately.

The Company leases approximately 54,000 square feet (not in thousands) of industrial space in West Melbourne, Florida, under a non-cancellable operating lease. The lease has an expiration date of June 30, 2027. The lease terms include an option to extend the lease agreement for an additional five (5) year term commencing July 1, 2027 and terminating at midnight June 30, 2032. Annual rental, maintenance, and tax expenses for the facility are approximately $610.

In February 2020, the Company entered into a lease for 6,857 square feet (not in thousands) of office space at Sawgrass Technology Park, 1619 NW 136th Avenue in Sunrise, Florida, for a period of 64 months commencing July 1, 2020 (the “Sawgrass Lease”). In September 2025, the Company entered into an amendment to the Sawgrass Lease to lease an additional 1,514 square feet (not in thousands) of office space and to extend the lease term an additional 62 months, commencing on the date construction on the additional leased area is completed (the “Sawgrass Amendment”). Pursuant to the Sawgrass Amendment, the annual rental, maintenance, and tax expenses for the facility will be approximately $180 for the first year of the extended term and will increase approximately 3.0% for each subsequent 12-month period.

Lease costs consisted of the following:

	*Three Months Ended*				*Nine Months Ended*
	*September 30, 2025*		September 30, 2024		*September 30, 2025*		September 30, 2024
Operating lease cost	$	134	$	136	$	406	$	406
Variable lease cost		34		33		100		100
Total lease cost	$	168	$	169	$	506	$	506

Note 11. Leases (continued)

Supplemental cash flow information related to leases was as follows:

	*Three Months Ended*				*Nine Months Ended*
	*September 30, 2025*		September 30, 2024		*September 30, 2025*		September 30, 2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows (fixed payments)	$	157	$	155	$	467	$	455
Operating cash flows (liability reduction)	$	144	$	135	$	424	$	390

ROU assets obtained in exchange for lease obligations:
Operating leases	$	—	$	4	$	—	$	27

Other information related to operating leases was as follows:

	*September 30, 2025*
Weighted average remaining lease term (in years)		1.73
Weighted average discount rate		5.50	%

Maturity of lease liabilities as of September 30, 2025, were as follows:

	*September 30, 2025*
Remaining three months of 2025	$	158
2026		486
2027		249
2028		5
2029		3
Total payments		901
Less: imputed interest		(40	)
Total present value of lease liabilities	$	861