XML 28 R16.htm IDEA: XBRL DOCUMENT

Leases

3 Months Ended

Mar. 31, 2024

10. Leases.

The Company is party to leasing contracts in which the Company is the lessee. These lease contracts are classified as either operating or finance leases. The Company’s lease contracts include land, buildings, and equipment. Remaining lease terms range from 1 to 15 years with various term extension options available. The Company includes optional extension periods and early termination options in its lease term if it is reasonably likely that the Company will exercise an option to extend or terminate early.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term, at the later of the commencement date or business combination date. Because most of the Company’s leases do not provide an implicit rate of return, the discount rate is based on the collateralized borrowing rate of the Company, on a portfolio basis.

The balances for operating and finance leases where the Company is the lessee are presented as follows within the condensed consolidated balance sheets:

	March 31,
	2024
Operating lease:
Operating lease right-of-use assets, net	$	34,060,000

Current portion of operating lease obligations		958,000
Operating lease obligations, net of current portion		33,245,000
Total operating lease liabilities	$	34,203,000

Finance lease:
Finance lease right-of-use assets, net	$	22,000

Current portion of finance lease obligations		13,000
Finance lease obligations, net of current portion		7,000
Total finance lease liabilities	$	20,000

The Company is party to an operating lease agreement with Horti-Group for land and greenhouses in King George, Virginia, United States. The lease commenced on July 1, 2021 and, including a renewal option the Company expects to exercise, ends on December 31, 2038. The Company recognized the following related party balances in the condensed consolidated balance sheets:

	March 31,
	2024
Operating lease right-of-use assets, net	$	33,292,000

Current portion of operating lease obligations		789,000
Operating lease obligations, net of current portion		32,640,000
Total operating lease liabilities	$	33,429,000

The components of lease expense are as follows within our condensed consolidated statements of operations and comprehensive income (loss):

	Three Months Ended March 31,
	2024		2023
Operating lease expense:
Operating lease cost	$	449,000	$	1,000
Short-term and variable lease cost		86,000		-
Finance lease expense:
Amortization of leased assets		1,000		-
Total lease expense	$	536,000	$	1,000

The weighted average remaining lease term and weighted average discount rate is as follows:

	March 31,
	2024
Weighted average remaining lease term (years)
Finance leases		1.61
Operating leases		14.60
Weighted average discount rate applied
Finance leases		3.95	%
Operating leases		8.22	%

Supplemental cash flow information related to leases where the Company is the lessee is as follows:

	Three Months Ended March 31,
	2024		2023
Operating cash outflows from operating leases	$	306,000	$	1,000
Financing cash outflows from finance leases		1,000		-
Leased assets obtained in excha nge for operating lease liabilities		34,289,000		-
Leased assets obtained in exchange for finance lease liabilities		22,000		-

As of March 31, 2024, the maturities of the operating and finance lease liabilities are as follows:

	Operating			Finance
	Leases			Leases
Remainder of 2024	$	922,000		$	4,000
2025		3,723,000			14,000
2026		3,796,000			5,000
2027		3,872,000			-
2028		3,876,000			-
2029		3,798,000			-
Thereafter		39,994,000			-
Total minimum lease payments	$	59,981,000		$	23,000
Less: imputed interest		(25,778,000	)		(3,000	)
Total: present value of lease liabilities	$	34,203,000		$	20,000
Less: current portion		(958,000	)		(13,000	)
Long-term portion of lease liabilities	$	33,245,000		$	7,000