Note 9 - Leases

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

9. Leases

The Company leases an approximately 28,000 square foot facility located in Rancho Cordova, California for its corporate offices and in-house manufacturing. The lease was renewed in the first quarter of 2019 and is accounted for as an operating lease. The lease expires in May 2024.

Operating Leases

Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, we use the Company’s cost of capital based on existing debt instruments. Our material leases typically contain rent escalations over the lease term. We recognize expense for these leases on a straight-line basis over the lease term.

The following summarizes the Company’s operating leases as of December 31:

	2023			2022
Right-of-use operating lease assets, net	$	122,000		$	372,000
Current lease liability (included in other current liabilities)		131,000			267,000
Non-current lease liability		-			131,000
Weighted average remaining lease term		0.4			1.4
Discount rate		22	%		22	%

Maturities of lease liabilities by year for our operating leases are as follows:

Total lease payments for 2024	$	139,000
Less: imputed interest		(8,000	)
Present value of operating lease liabilities	$	131,000

Statement of Cash Flows

In January 2019, the Company signed an amendment to its Rancho Cordova, California lease. The amendment was accounted for as a modification and resulted in a right-of-use asset of $966,000 being recognized as a non-cash addition on the date of the amendment. Cash paid for amounts included in the measurement of operating lease liabilities in cash flows from operating activities were $329,000 and $319,000 for the years ended December 31, 2023 and 2022, respectively.

Finance Leases

Finance leases are included in equipment and other current and non-current liabilities on the consolidated balance sheet. The amortization and interest expense are included in general and administrative expense and interest expense, respectively on the statement of operations. These leases were not material for the years ended December 31, 2023 and 2022.