Leases

12 Months Ended

Dec. 31, 2023

Leases [Line Items]

Lessee, Operating Leases [Text Block]

13.  Leases

Certain premises are occupied under operating leases that expire at varying dates through 2028.  Certain of these leases provide for the payment of real estate taxes and other occupancy costs.  On December 1, 2021, the Company entered into a lease for an office and manufacturing facility in Des Moines, Iowa.  The lease was for a five-year lease period at an initial annual rental of approximately $140,000.  On June 21, 2016, the Company entered into a lease for a manufacturing facility in Hazelwood, Missouri for a seven-year lease period at an initial annual rental of approximately $317,000.  In April 2023, the Company exercised its 5-year renewal option at its Hazelwood, MO facility.  In connection with the renewal, the Company remeasured its lease liability, which increased the ROU asset and lease liability by $1.6 million on the remeasurement date.  Operating lease expense aggregated $483,000 and $477,000 for the years ended December 31, 2023 and 2022, respectively.

The Company has no finance leases as of December 31, 2023.  Our leases include both lease (e.g., fixed payments including rent) and non-lease components (e.g., common area or other maintenance costs). The facility leases include one or more options to renew.  The exercise of lease renewal options is typically at our sole discretion, therefore, the renewals to extend the lease terms are not included in our ROU assets or lease liabilities as they are not reasonably certain of exercise.  We regularly evaluate the renewal options and, when they are reasonably certain of exercise, we include the renewal period in our lease term.

Operating leases result in the recognition of ROU assets and lease liabilities on the Consolidated Balance Sheets.  ROU assets represent our right to use the leased asset for the lease term and lease liabilities represent our obligation to make lease payments.  Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.  As most of our leases do not provide an implicit rate, we use our estimated incremental borrowing rate at the commencement date to determine the present value of lease payments.  Most real estate leases include one or more options to renew, with renewal terms that can extend the lease term from 1 to 5 years or more.  Operating lease expense is recognized on a straight-line basis over the lease term.  Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets.  The primary leases we enter into with initial terms of 12 months or less are for equipment.

Supplemental information regarding leases:

In thousands, unless otherwise noted	2023
Balance Sheet:
ROU assets	$	1,971
Current lease liabilities		352
Non-current lease liabilities		1,644
Total lease liabilities		1,996
Weighted average remaining lease term (years)		4.4
Weighted average discount rate		10.4%
Future minimum lease payments:
2024		545
2025		560
2026		577
2027		451
2028		414
Thereafter		-
Total		2,547
Less: Imputed interest		551
Total lease liabilities		1,996
Less: Current lease liabilities		352
Long-term lease liabilities	$	1,644

Supplemental cash flow information regarding leases:

In thousands	2023
Operating cash flow information:
Cash paid for amounts included in the measurement    of lease liabilities	$	471
Non-cash activity:
ROU assets obtained in exchange for lease    liabilities		1,601

Total operating lease expense was $483,000 for the year ended December 31, 2023.  There was no short-term lease expense for the year ended December 31, 2023.  Total operating lease expense was $477,000 for the year ended December 31, 2022.  There was no short-term lease expense for the year ended December 31, 2022.