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Note K - Leases

6 Months Ended

Jun. 30, 2025

Note K – Leases

We have operating leases for office, manufacturing and distribution facilities as well as for certain equipment. Our leases have remaining lease terms of 1 year to 4 years. As of June 30, 2025, the Company has not entered into any lease arrangements classified as a finance lease.

We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities and operating lease liabilities on our consolidated balance sheet. The Company has elected an accounting policy to not recognize short-term leases (one year or less) on the balance sheet. The Company also elected the package of practical expedients which applies to leases that commenced before the adoption date. By electing the package of practical expedients, the Company did not need to reassess the following; whether any existing contracts are or contain leases, the lease classification for any existing leases and initial direct costs for any existing leases.

ROU assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. When the implicit rate of the lease is not provided or cannot be determined, we use our incremental borrowing rate based on the information available at the commencement date to determine the present value of future payments. Lease terms may include options to extend or terminate the lease and are recognized in the presentation of the ROU assets and operating lease liabilities when it is reasonably certain that we will exercise those options. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

Components of lease expense and other information is as follows:

	Three Months Ended				Six Months Ended
All Amounts in Thousands	June 30, 2025		June 30, 2024		June 30, 2025		June 30, 2024

Lease Expense
Operating Lease Cost	$	153	$	376	$	286	$	751
Short-term Lease Cost		314		382		542		739
Variable Lease Cost		58		143		100		308
Total Operating Lease Cost	$	525	$	901	$	928	$	1,798

Operating Lease – Operating Cash Flows	$	155	$	260	$	291	$	515
New ROU Assets – Operating Leases	$	487	$	52	$	487	$	52

Other information about lease amounts recognized in our consolidated condensed financial statements are summarized as follows:

	Six Months Ended
All Amounts in Thousands	June 30, 2025			June 30, 2024

Weighted Average Remaining Lease Term – Operating Leases (in years)	3.20			7.67
Weighted Average Discount Rate – Operating Leases		6.61	%		5.19	%

Future minimum lease payments under non-cancellable leases as of June 30, 2025 were as follows:

All Amounts in Thousands

Remainder of Year 1	$	298
Year 2		557
Year 3		449
Year 4		179
Year 5		112
Thereafter		41
Total future minimum lease payments		1,636
Less imputed interest		(167	)
Total	$	1,469

Reported as of June 30, 2025
Current operating lease liabilities		496
Long-term operating lease liabilities		973
Total	$	1,469