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Note 12 - Commitments | 9 Months Ended
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Jul. 31, 2023
Notes to Financial Statements |
Commitments Disclosure [Text Block] | Note 12 – Commitments We have operating leases for corporate offices, manufacturing facilities, and certain storage units. Our leases have remaining lease terms of one year to three years, some of which include options to extend the leases for up to five years. A portion of our operating leases are leased from K&K Unlimited, a company controlled by Darren Clark, the former owner and current President of Cables Unlimited, to whom we make rent payments totaling $16,000 per month. We also have other operating leases for certain equipment. The components of our facilities and equipment operating lease expenses for the periods ended July 31, 2023 and 2022 were as follows (in thousands):
|  | Three Months Ended July 31, |  |  | Nine Months Ended July 31, |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
Operating lease cost |  | $ | 663 |  |  | $ | 477 |  |  | $ | 2,129 |  |  | $ | 1,048 |
Other information related to leases was as follows (in thousands):
|  | July 31, 2023 |  |  | October 31, 2022 |
Supplemental Cash Flows Information |  |  |  |  |  |  |  |
ROU assets obtained in exchange for lease obligations: |  |  |  |  |  |  |  |
Operating leases |  | $ | 281 |  |  | $ | 13,352 |
Weighted Average Remaining Lease Term |  |  |  |  |  |  |  |
Operating leases (in months) |  |  | 110.12 |  |  |  | 113.72 |
Weighted Average Discount Rate |  |  |  |  |  |  |  |
Operating leases |  |  | 3.77 | % |  |  | 3.75 | %
Future minimum lease payments under non-cancellable leases as of July 31, 2023 were as follows:
Year ending October 31, |  | Operating Leases |
2023 (excluding nine months ended July 31, 2023) |  | $ | 551 |
2024 |  |  | 2,036 |
2025 |  |  | 1,796 |
2026 |  |  | 1,835 |
2027 |  |  | 1,874 |
Thereafter |  |  | 10,619 |
Total future minimum lease payments |  |  | 18,711 |
Less imputed interest |  |  | (3,017 | )
Total |  | $ | 15,694 |
Reported as of July 31, 2023 |  | Operating Leases |
Other current liabilities |  | $ | 1,418 |
Operating lease liabilities |  |  | 14,276 |
Total |  | $ | 15,694 |
As of July 31, 2023, operating lease ROU asset was $12.0 million and operating lease liability totaled $15.7 million, of which $1.4 million is classified as current. There were no finance leases as of July 31, 2023. On July 11, 2023, we entered into a Third Amendment to Lease (the “Amendment”) with Sorrento West Properties (the “Lessor”), amending that certain AIRCRE Standard Industrial/Commercial Single-Tenant Lease - Net, dated as of December 28, 2021, between the Company and Lessor, under which we lease from Lessor industrial and commercial space located at 16868 Via Del Campo Court, San Diego, California (the “Premises”). The Amendment provides for an increase in tenant improvements by an additional $1,000,000 (the “Additional TIA”) and requires funding of the Additional TIA beginning October 1, 2023, provided certain conditions are met as further set forth in the Amendment. The primary purpose of the Additional TIA is to cover the costs and expenses for the construction, fit-out and furnishing of the adjacent vacant office spaces located at the Premises, which will be subject to the Managed Client Agreement with RGN-MCA San Diego II, LLC (the “Managed Client Agreement”) and managed services arrangement, as previously disclosed. In consideration for the Additional TIA, the Amendment provides for an increase in monthly base rent, effective commencing as of October 1, 2023. The conditions set forth in the Amendment include a finalized build-out budget. The budget for the construction, fit-out and furnishings of the vacant office for RGN-MCA San Diego II, LLC has not been finalized, and we have a right to terminate the Managed Client Agreement should the budget exceed an amount agreed upon. Therefore, we have not reflected this Amendment in our financials as of July 31, 2023, or included it in our disclosure tables.

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- Definition The entire disclosure for significant arrangements with third parties, which includes operating lease arrangements and arrangements in which the entity has agreed to expend funds to procure goods or services, or has agreed to commit resources to supply goods or services, and operating lease arrangements. Descriptions may include identification of the specific goods and services, period of time covered, minimum quantities and amounts, and cancellation rights. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 440 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//440/tableOfContent + Details
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