Note 10 - Lease Obligations |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes to Financial Statements | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lessee, Operating Leases [Text Block] |
10. Lease Obligations
The Company's operating lease agreement for its headquarters and manufacturing facility in San Rafael, California (the "San Rafael Lease") commenced in
July 2022 and expires in
November
2026, and it provides the Company with the option to renew for an additional
-year period at the prevailing market rate at the time of extension.
The San Rafael Lease constitutes an operating lease under ASC 842 and the Company estimates the lease term as July 2022 through November 2026. The option to extend for a -year period lacks significant economic incentives and disincentives, which would make exercise reasonably certain. Fixed lease payments for identified lease components over the identified term were discounted at the Company's estimated incremental borrowing rate as of the date of contract execution and are reflected in the condensed consolidated balance sheets under the captions Lease liabilities, current and Lease liabilities, and the corresponding right of use asset is reflected in the condensed consolidated balance sheets under the caption Right-of-use assets. Non-lease components, such as common area maintenance costs, are excluded from the lease liability calculation and expensed as incurred. The Company records a straight-line monthly rent expense for the San Rafael Lease equal to the sum of all fixed lease payments divided by the number of months in the lease term.
The Company's operating lease agreement for its service and manufacturing facility in Brecksville, Ohio (the "Ohio Lease") commenced in
June 2024 and expires in
July 2027, and it provides the Company with the option to renew for an additional
-year period at the prevailing market rate at the time of extension. In
July 2024, the Company relocated from its Macedonia, Ohio facility to the new Brecksville, Ohio facility.
The Company has determined that the Ohio Lease constitutes an operating lease under ASC
842 and estimates the lease term as
July 2024 through
July
2027. The option to extend for a
three-year period lacks significant economic incentives and disincentives, which would make exercise reasonably certain. Fixed lease payments for identified lease components over the identified term were discounted at the Company's estimated incremental borrowing rate as of the date of contract execution and are reflected in the condensed consolidated balance sheets under the captions Lease liabilities, current and Lease liabilities, and the corresponding right of use asset is reflected in the condensed consolidated balance sheets under the caption Right-of-use assets. Non-lease components, such as operating costs, are excluded from the lease liability calculation and expensed as incurred. The Company records a straight-line monthly rent expense for the Ohio Lease equal to the sum of all fixed lease payments divided by the number of months in the lease term.
In
March 2025, the Company entered into an operating lease agreement for its new distribution and service facility in Ratingen, Germany (the "Ratingen Lease"), which commenced in
May 2025 and expires in
April 2030. In
May 2025, the Company moved its administrative office from Hamburg, Germany, which serves EMEA, to this new facility.
The Ratingen Lease constitutes a lease under ASC
842, and the Company estimates the lease term as
May 2025 through
April
2030. Fixed lease payments for identified lease components over the identified term were discounted at the Company's estimated incremental borrowing rate and are reflected in the condensed consolidated balance sheets under the captions Lease liabilities, current and Lease liabilities, and the corresponding right of use asset is reflected in the condensed consolidated balance sheets under the caption Right-of-use assets. Non-lease components, such as common area maintenance costs, are excluded from the lease liability calculation and expensed as incurred. The Company records a straight-line monthly rent expense for this lease equal to the sum of all fixed lease payments divided by the number of months in the lease term.
The Company's operating lease agreement for the former office in Hamburg, Germany (the "Hamburg Lease") commenced in May 2022 and expired in June 2025.
The Hamburg Lease constituted a lease under ASC 842, and the Company estimated the lease term as May 2022 through June 2025. Fixed lease payments for identified lease components over the identified term were discounted at the Company's estimated incremental borrowing rate and are reflected in the condensed consolidated balance sheets under the captions Lease liabilities, current and Lease liabilities, and the corresponding right of use asset is reflected in the condensed consolidated balance sheets under the caption Right-of-use assets. Non-lease components, such as common area maintenance costs, were excluded from the lease liability calculation and expensed as incurred. The Company recorded a straight-line monthly rent expense for this lease equal to the sum of all fixed lease payments divided by the number of months in the lease term.
The Company’s future lease payments as of June 30, 2025, which are presented as Lease liabilities, current and Lease liabilities on the Company’s condensed consolidated balance sheets are as follows:
Lease expense under the Company’s operating leases was $159 and $135 for the three months ended June 30, 2025 and 2024, respectively, and $317 and $271 for the six months ended June 30, 2025 and 2024, respectively.
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