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Leases | 12 Months Ended
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Dec. 31, 2024
Leases [Abstract] |
Leases | Note 7 – Leases The Company leases office and warehouse space primarily in four locations: Del Mar, CA; Hayward, CA; San Diego, CA and Edwardsville, IL. As each contract does not meet any of the criteria for financing lease classification, the Company has determined that each lease arrangement should be classified as an operating lease. On August 12, 2022, the Company entered into an agreement (the “Lease”) with Liberty Industrial Park, LLC (“Landlord”) pursuant to which the Company leases 6,627 square feet of industrial space in San Diego, California from Landlord. The Lease has a commencement date of September 1, 2022. The Lease provides for an initial monthly base rent of $11,266, which increases on an annual basis to $13,180 per month in the final year. In addition, the Company is obligated to pay its share of maintenance costs of common areas. On June 1, 2023, the Company amended its Edwardsville office building lease with David Ludwig, extending the term of the agreement to May 31, 2027 and setting rent amounts for the new term. It provides for an initial monthly base rent of $9,412, which increases on an annual basis to $9,914 per month in the final year. On September 23, 2024, the Company amended its Del Mar office lease with OF 09 Hacienda, LLC, extending the term of the agreement by 24 months to February 28, 2027 and setting rent amounts for the new term. The amended Del Mar office lease provides for an initial monthly base rent of $14,660 beginning March 1, 2025 and increases on an annual basis to $15,099 per month in the final year. The right-of-use assets and lease liabilities for each location are as follows (in thousands):
|  | December 31, |  |  | December 31, |
Right-of-use assets: |  | 2024 |  |  | 2023 |
Del Mar, CA |  | $ | 357 |  |  | $ | 186 |
Hayward, CA |  |  | 1,236 |  |  |  | 1,525 |
San Diego, CA |  |  | 357 |  |  |  | 477 |
Edwardsville, IL |  |  | 258 |  |  |  | 351 |
Total right-of-use assets |  | $ | 2,208 |  |  | $ | 2,539 |
|  | December 31, |  |  | December 31, |
Lease liabilities: |  | 2024 |  |  | 2023 |
Del Mar, CA |  | $ | 364 |  |  | $ | 203 |
Hayward, CA |  |  | 1,311 |  |  |  | 1,594 |
San Diego, CA |  |  | 381 |  |  |  | 498 |
Edwardsville, IL |  |  | 261 |  |  |  | 353 |
Total lease liabilities |  | $ | 2,317 |  |  | $ | 2,648 |
The Company’s leases generally do not provide an implicit rate, and, therefore, the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment. The Company used its incremental borrowing rate as of January 1, 2019 for operating leases that commenced prior to that date. As of January 1, 2019, the Company’s incremental borrowing rate was 5.25%. For leases commencing after January 1, 2019 the Company uses its incremental borrowing rate at time of commencement. On September 1, 2022, June 1, 2023, and September 23, 2024, the Company’s incremental borrowing rate was 5.50%, 7.25%, and 6.25%, respectively. The weighted average remaining lease term for operating leases is 3.2 years and the weighted average discount rate is 5.50% as of December 31, 2024. The weighted average remaining lease term for operating leases was 4.1 years and the weighted average discount rate was 5.35% as of December 31, 2023. Lease expense for leases determined to be operating leases is recognized on a straight-line basis over the lease term. For both 2024 and 2023, lease expense was approximately $0.8 million. Cash paid for operating leases in 2024 and 2023 was $0.9 million and $0.8 million, respectively. The Company had no short-term or variable leases in 2024 or 2023. The lease expense for each location are as follows (in thousands):
|  | December 31, |  |  | December 31, |
|  | 2024 |  |  | 2023 |
Del Mar, CA |  | $ | 160 |  |  | $ | 163 |
Hayward, CA |  |  | 361 |  |  |  | 361 |
San Diego, CA |  |  | 144 |  |  |  | 144 |
Edwardsville, IL |  |  | 116 |  |  |  | 113 |
Total |  | $ | 781 |  |  | $ | 781 |
As of December 31, 2024, undiscounted future minimum lease payments related to leases that have initial or remaining lease terms in excess of one year are as follows (in thousands):
2025 |  | $ | 807 |
2026 |  |  | 829 |
2027 |  |  | 573 |
2028 |  |  | 299 |
Total undiscounted future minimum lease payments |  |  | 2,508 |
Less imputed interest |  |  | (191 | )
Present value of lease liabilities |  | $ | 2,317 |

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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