Operating Lease Agreements — The Company has several operating leases with third parties, primarily for land, plant and office spaces in Taiwan, including cancellable and noncancelable leases that expire at various dates between December 2024 and December 2040. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. For lease agreements entered into or reassessed after the adoption of Topic 842, the Company did not combine lease and non-lease components.

Most leases do not include options to renew. The exercise of lease renewal options has to be agreed by the lessors. The depreciable life of assets and leasehold improvements are limited by the term of leases, unless there is a transfer of title or purchase option reasonably certain of exercise. Lease expense is recognized on a straight-line basis over the term of the lease. Lease expense related to these noncancelable operating leases were $166 thousand for both the years ended August 31, 2023 and 2022.

Balance sheet information related to the Company’s leases is presented below:


	August 31,
	2023		2022
Assets
Operating lease right of use assets	$	1,371	$	1,578
Liabilities
Operating lease liabilities, current portion	$	139	$	143
Operating lease liabilities, less current portion		1,232		1,435
Total	$	1,371	$	1,578

The following provides details of the Company’s lease expenses:


	August 31,
	2023		2022
Operating lease expenses	$	166	$	166

Other information related to leases is presented below:


	August 31,
	2023			2022
Cash Paid for amounts Included In Measurement of Liabilities:
Operating cash flows from operating leases	$	166		$	166
Weighted Average Remaining Lease Term:
Operating leases	15.9 years			16.27 years
Weighted Average Discount Rate
Operating leases		1.76	%		1.76	%

As most of the Company’s leases do not provide an implicit rate, the Company uses its average borrowing rate from non-related parties of 1.76% based on the information available at commencement date in determining the present value of lease payments.

The aggregate future noncancelable minimum rental payments for the Company’s operating leases as of August 31, 2023 consist of the following (in thousands):


	Operating
Years Ending August 31,	Leases
2024	$	162
2025		122
2026		91
2027		91
2028		91
Thereafter		1,011
Total future minimum lease payments, undiscounted		1,568
Less: Imputed interest		197
Present value of future minimum lease payments	$	1,371

Purchase Obligations — The Company had purchase commitments for inventory, property, plant and equipment in the amount of $116 thousand and $121 thousand as of August 31, 2023 and 2022, respectively.

Litigation — The Company is directly or indirectly involved from time to time in various claims or legal proceedings arising in the ordinary course of business. The Company recognizes a liability when it is probable that a loss has been incurred and the amount is reasonably estimable. There is significant judgment required in assessing both the likelihood of an unfavorable outcome and whether the amount of loss, if any, can be reasonably estimated.

As of August 31, 2023, there was no pending litigation that could have a material impact on the Company’s financial position, results of operations or cash flows.