RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES

12 Months Ended

Dec. 31, 2023

RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES

RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES

NOTE 6. – RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES

The Company leases a manufacturing facility in Mocksville, North Carolina and an inventory storage facility in Winston-Salem, North Carolina.

On January 1, 2023, the Company signed the lease agreement for the inventory storage facility. The lease has an initial monthly base rent of $15 (escalating 3.0% annually after the first year), an initial term of 36 months – with two twenty-four-month optional renewal options at the Company’s discretion.

On March 31, 2023, the Company extended the lease terms for its manufacturing facility. As a result of this lease modification, the Company re-measured the lease liability and adjusted the ROU asset on the modification dates.

The following table summarizes the Company’s discount rate and remaining lease terms as of December 31, 2023:

Weighted average remaining lease term in years	5.9
Weighted average discount rate	9.0	%

Future minimum lease payments as of December 31, 2023 are as follows:

2024	$	396
2025		403
2026		422
2027		430
2028		449
Thereafter		414
Total lease payments		2,514
Less: imputed interest		(585)
Present value of lease liabilities		1,929
Less: current portion of lease liabilities		(231)
Total long-term lease liabilities	$	1,698

Operating lease costs for the year ended December 31, 2023 and 2022, were $475 and $288, respectively.

Supplemental cash flow information for leases for fiscal years 2023 and 2022 are comprised of the following:

	December 31,		December 31,
	2023		2022
Cash paid for operating leases	$	436	$	276
Assets acquired under operating leases	$	1,602	$	—