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LEASES

12 Months Ended

Dec. 31, 2023

11.

LEASES

On September 1, 2020, the Company entered into a five-year operating lease with two one-year options to extend the term of the lease. At this time, it is not reasonably certain that the Company will extend the term of the lease and, therefore, the renewal periods have been excluded from the right-of-use (“ROU”) asset. As part of the All Cell acquisition, the Company assumed a facility lease located in Broadview, Illinois, and recorded $0.2 million in right-of-use asset and lease liability. The lease term ended on August 31, 2023 and contains clauses for annual rent escalation. The present values of the lease payment streams were calculated using an effective borrowing rate of 10%. The Company remained in the facility on a month-to-month lease and then entered into a five-year lease extension effective February 1, 2024. As part of the Amiga acquisition, the Company assumed a lease for a small office and a few other small leases in Belgrade, Serbia, which have an indefinite term and may be terminated at any time with 30 days notice. Because of the short term and small value, these leases were not capitalized. The weighted average remaining lease term is 3.3 years.

During the twelve months ended December 31, 2023 and 2022, cash paid for amounts included in the measurement of operating lease liabilities was $0.8 million and $0.6 million, respectively. Operating lease cost for the twelve months ended December 31, 2023 and 2022 were $0.8 million and $0.8 million, respectively.

As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate to discount the lease payments to present value. The estimated incremental borrowing rate is derived from information available at the lease commencement date. The future minimum rental commitments for our operating leases is as follows (in thousands):

Schedule of minimum lease payments
2024	$	1,029
2025		820
2026		364
2027		377
2028		390
Total undiscounted future minimum payments		2,980
Less imputed interest		(489	)
Total lease liability	$	2,491