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Lease Commitments
 12 Months Ended
Dec. 31, 2024
Commitments and Contingencies Disclosure [Abstract]  
Lease Commitments

(6) Lease Commitments

 

The Company’s operating lease portfolio is comprised of operating leases for office, warehouse space and equipment. Certain of the Company’s leases include one or more options to renew or terminate the lease at the Company’s discretion. The Company regularly evaluates the renewal and termination options and when they are reasonably certain of exercise, includes the renewal or termination option in our lease term. The Company has one sublease of currently unused floorspace that is month-to-month.

 

The discount rates used for leases accounted for under ASC 842 are based on an interest rate yield curve developed for the leases in the Company’s portfolio.

 

On September 1st of 2024 the facility located at 1319 Marquette Drive in Romeoville was extended through January 31, 2028. Additionally, on that same day, the facility located at 453 Commerce St in Burr Ridge was extended for one year. The present value of future lease payments associated with these extensions resulted in the addition of a ROU asset and lease liability totaling $1,019.

 

The office leases contain variable lease payments which consist primarily of taxes, insurance, and common area or other maintenance costs, which are paid based on actual costs incurred by the lessor. The Company has elected to utilize the available practical expedient to combine lease and non-lease components for building leases.

 

Quantitative information regarding the Company’s leases is as follows:

 

         
   Twelve Months Ended December 31, 2024   Twelve Months Ended December 31, 2023 
Components of lease cost          
Operating lease cost components:          
Operating lease cost   1,944    1,881 
Variable lease cost   684    581 
Short-term lease cost   334    112 
Sub-lease income   (511)   (786)
 Total operating lease costs   2,451    1,788 
Total lease cost  $2,451   $1,788 

 

 

Supplemental cash flow information related to leases is as follows for the years ended December 31, 2024 and 2023:

 

   2024   2023 
Cash paid for amounts included in the measurement of lease liabilities:          
Operating cash outflow from operating leases  $2,115   $172 
           
Lease liabilities arising from obtaining right-of-use assets  $1,019   $182 
Weighted-average remaining lease term-operating leases (in years)   6.8    7.9 
Weighted-average discount rate-operating leases   7.6%   7.1%

 

The future maturities of the Company’s operating leases as of December 31, 2024 are as follows:

 

2025   $1,975 
2026    1,909 
2027    1,965 
2028    1,587 
2029    1,591 
Thereafter    4,021 
Total payments   $13,048 
Less amounts representing interest    (2,752)
Total minimum payments required   $10,296 

 

The Company subleases a portion of a leased industrial building that is used primarily for the storage of furniture, equipment and displays used for retail sales. The arrangement is not with a related party.

 

Payments received by the Company for this sublease are comprised of two components, which include base rent and Common Area Maintenance (CAM) charges. While the base rent is fixed, the CAM charges are indexed directly to the Master Lease and are expected to be adjusted periodically as actual costs are incurred. However, the executed sublease agreement specifically itemizes these costs with a provision that informs the sublessee that the CAM charges will be adjusted (up or down) based on actual amounts once this information becomes known. As such, the nature of the charges is more closely representative of a fixed payment (an “in-substance fixed” charge) with the adjustments occurring simply to “true up” the listed CAM charges once actual charges from the head lessor become known. As sublessor, the Company has elected the practical expedient to not separate lease and nonlease components in disclosing future undiscounted cashflows and treats the combined components as a single lease component.

 

As sublessor, the Company is subletting to one tenant on a month-to-month arrangement.