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LEASES
 9 Months Ended
Sep. 30, 2024
Leases [Abstract]  
LEASES LEASES
The Company leases certain equipment, manufacturing, warehouse and office space under non-cancellable operating leases with expirations through 2027 under which it is responsible for related maintenance, taxes and insurance. As of March 25, 2022, the terms of our real estate operating lease have been modified beginning July 1, 2022 and extended through 2027.

Effective July 1, 2024, our warehouse and office lease was amended to reduce the rentable square feet from 62,335 square feet to 29,692 square feet and the rent expenses were decreased in proportion to the reduction in rentable square. The Company recorded this as a lease modification in accordance with ASC 842 Leases (“ASC 842”)and recorded a reduction to the right of use asset and lease liability of approximately $395 thousand using an incremental borrowing rate of approximately 13.64%. The Company recognized a gain on the lease modification of $63 thousand which was recorded as other income in the Statement of Operations.

Prior to the lease modification, the present value of the lease obligations for the lease was calculated using an incremental borrowing rate of 16.96%, which was the Company’s blended borrowing rates (including interest, annual facility fees, collateral management fees, bank fees and other miscellaneous lender fees) on its revolving lines of credit with Crossroads Financial Group, LLC (as described below in Note 6, “Debt”) and Factors Southwest L.L.C. (as described below in Note 6, “Debt”). The weighted average remaining lease term for the operating leases is 2.8 years.

Components of the operating lease costs recognized in net loss were as follows (in thousands):
Three months ended September 30,Nine months ended September 30,
 2024202320242023
Operating lease cost (income)
Lease cost72 122 267 354 
Total lease cost, net$72 $122 $267 $354 
Supplemental balance sheet information related to the Company’s operating and finance leases as of September 30, 2024 and December 31, 2023 are as follows (in thousands):
 September 30, 2024December 31, 2023
Operating Leases
Operating lease right-of-use assets$408 $899 
Operating lease liabilities$441 $1,021 
The maturities of lease liabilities under operating leases by years at September 30, 2024 are as follows (in thousands):
Operating Leases
October 2024 to September 2025$197 
October 2025 to September 2026185 
October 2026 to September 2027141 
Total future undiscounted lease payments523 
Less: interest82 
Present Value of Lease Liabilities$441 
Supplemental cash flow information related to leases for the three and nine months ended September 30, 2024 and 2023, was as follows (in thousands):
Three months ended September 30,Nine months ended September 30,
 2023202220232022
Supplemental cash flow information 
Cash paid, net, for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$94 $97 $281 $286 
LEASES LEASES
The Company leases certain equipment, manufacturing, warehouse and office space under non-cancellable operating leases with expirations through 2027 under which it is responsible for related maintenance, taxes and insurance. As of March 25, 2022, the terms of our real estate operating lease have been modified beginning July 1, 2022 and extended through 2027.

Effective July 1, 2024, our warehouse and office lease was amended to reduce the rentable square feet from 62,335 square feet to 29,692 square feet and the rent expenses were decreased in proportion to the reduction in rentable square. The Company recorded this as a lease modification in accordance with ASC 842 Leases (“ASC 842”)and recorded a reduction to the right of use asset and lease liability of approximately $395 thousand using an incremental borrowing rate of approximately 13.64%. The Company recognized a gain on the lease modification of $63 thousand which was recorded as other income in the Statement of Operations.

Prior to the lease modification, the present value of the lease obligations for the lease was calculated using an incremental borrowing rate of 16.96%, which was the Company’s blended borrowing rates (including interest, annual facility fees, collateral management fees, bank fees and other miscellaneous lender fees) on its revolving lines of credit with Crossroads Financial Group, LLC (as described below in Note 6, “Debt”) and Factors Southwest L.L.C. (as described below in Note 6, “Debt”). The weighted average remaining lease term for the operating leases is 2.8 years.

Components of the operating lease costs recognized in net loss were as follows (in thousands):
Three months ended September 30,Nine months ended September 30,
 2024202320242023
Operating lease cost (income)
Lease cost72 122 267 354 
Total lease cost, net$72 $122 $267 $354 
Supplemental balance sheet information related to the Company’s operating and finance leases as of September 30, 2024 and December 31, 2023 are as follows (in thousands):
 September 30, 2024December 31, 2023
Operating Leases
Operating lease right-of-use assets$408 $899 
Operating lease liabilities$441 $1,021 
The maturities of lease liabilities under operating leases by years at September 30, 2024 are as follows (in thousands):
Operating Leases
October 2024 to September 2025$197 
October 2025 to September 2026185 
October 2026 to September 2027141 
Total future undiscounted lease payments523 
Less: interest82 
Present Value of Lease Liabilities$441 
Supplemental cash flow information related to leases for the three and nine months ended September 30, 2024 and 2023, was as follows (in thousands):
Three months ended September 30,Nine months ended September 30,
 2023202220232022
Supplemental cash flow information 
Cash paid, net, for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$94 $97 $281 $286