Note 10 - Leases

6 Months Ended

Jun. 30, 2025

Lessee Operating and Finance Leases [Text Block]

NOTE 10 — LEASES

The Company leases certain facilities and equipment. The leases are accounted for under Accounting Standard Update 2016-02, Leases (“Topic 842”), and the Company elected to apply each available practical expedient. The discount rates used for the leases are based on an interest rate yield curve developed for the leases in the Company’s lease portfolio.

The Company has elected to apply the short-term lease exception to all leases of one year or less. During the six months ended June 30, 2025 and 2024, the Company had additional operating leases that resulted in right-of-use assets obtained in exchange for lease obligations in the amount of $0 and $29, respectively. During the six months ended June 30, 2025 and 2024, the Company had additional finance leases associated with property, plant, and equipment of $0 and $880, respectively.

Some of the Company’s facility leases include options to renew. The exercise of the renewal options is typically at the Company’s discretion. The Company regularly evaluates the renewal options and includes them in the lease term when the Company is reasonably certain to exercise them.

As part of the Manitowoc Purchase Agreement described in Note 4 “Assets Held for Sale”, the Company entered into a lease termination agreement with the landlord of the Manitowoc facility and paid a termination fee of $98. In conjunction with the lease termination, the Company reduced the operating lease right-of-use assets and related operating lease obligations to zero. Additionally, the Company recognized a gain in the amount of $238, which represents the difference between the operating lease right-of-use assets of $3,903 and the operating lease obligations of $4,141. The gain, related termination fee, and related closing costs incurred through June 30, 2025 are included in the “Selling, general, and administrative” line item of the Company’s condensed consolidated statements of operations as of June 30, 2025.

As part of the Manitowoc Purchase Agreement, the Buyer entered into a new lease agreement with the landlord for the Manitowoc facility and the Company entered into a sublease with the Buyer. The term of the sublease commenced on June 4, 2025, and expires on the earlier of (i) midnight on August 31, 2025, (ii) the date that the Company vacates the facility, or (iii) the termination of the Manitowoc Purchase Agreement. As the term of the sublease is less than one year, the Company has elected to not record the related operating lease right-of-use assets and operating lease liabilities on the Company’s condensed consolidated balance sheets as of June 30, 2025 and has elected to expense such costs.

In the event that the Buyer’s lease is terminated prior to the closing of the sale, the Company’s leases will be automatically reinstated as of the termination date and the sublease will be terminated as of the termination date. The Company believes that there is low likelihood for the Buyer’s lease to be terminated prior to the closing of the sale.

Quantitative information regarding the Company’s leases is as follows:

	*Three Months Ended June 30,*						*Six Months Ended June 30,*
	*2025*			*2024*			*2025*			*2024*
Components of lease cost
Finance lease cost components:
Amortization of finance lease assets	$	294		$	370		$	621		$	728
Interest on finance lease liabilities		105			121			218			228
Total finance lease costs		399			491			839			956
Operating lease cost components:
Operating lease cost		660			703			1,401			1,345
Short-term lease cost		183			54			371			100
Variable lease cost (1)		95			384			372			753
Sublease income		(98	)		(49	)		(219	)		(99	)
Total operating lease costs		840			1,092			1,925			2,099

Total lease cost	$	1,239		$	1,583		$	2,764		$	3,055

Supplemental cash flow information related to our operating leases is as follows for the six months ended June 30, 2025 and 2024:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflow from operating leases							$	1,733		$	1,679

Weighted-average remaining lease term-finance leases at end of period (in years)								2.7			2.8
Weighted-average remaining lease term-operating leases at end of period (in years)								6.1			6.6
Weighted-average discount rate-finance leases at end of period								6.0	%		5.4	%
Weighted-average discount rate-operating leases at end of period								9.1	%		8.9	%

(1)

Variable lease costs consist primarily of taxes, insurance, utilities, and common area or other maintenance costs for the Company’s leased facilities and equipment.

As of June 30, 2025, future minimum lease payments under finance leases and operating leases were as follows:

	*Finance*			*Operating*
	*Leases*			*Leases*			*Total*
2025	$	1,686		$	1,308		$	2,994
2026		1,508			2,618			4,126
2027		1,212			2,321			3,533
2028		952			2,323			3,275
2029		526			2,350			2,876
2030 and thereafter		—			4,618			4,618
Total lease payments		5,884			15,538			21,422
Less—portion representing interest		(566	)		(3,782	)		(4,348	)
Present value of lease obligations		5,318			11,756			17,074
Less—current portion of lease obligations		(2,229	)		(1,606	)		(3,835	)
Long-term portion of lease obligations	$	3,089		$	10,150		$	13,239