The Company accounts for its leases under ASC 842 Leases (“ASC 842”). The Company has elected to apply the short-term measurement and recognition exemption in which the right-of-use (“ROU”) assets and lease liabilities are not recognized for short-term leases.

The following table summarizes the Company’s ROU assets and lease liabilities (in thousands):


		December 31,
	Location on the Consolidated Balance Sheets	2024		2023
ROU Assets	Other assets	$	16,384	$	22,085

Lease liabilities, current portion	Other current liabilities	5,600		5,744
Lease liabilities, long-term portion	Other long-term liabilities	15,128		19,475
Total lease liabilities		$	20,728	$	25,219

The components of lease cost related to the Company’s operating leases were as follows (in thousands):


	Year Ended December 31,
	2024		2023		2022
Operating lease expense	$	8,262	$	8,188	$	7,701
Variable lease expense	1,838		1,501		1,089
Short-term lease expense	48		86		327
Total lease expense	$	10,148	$	9,775	$	9,117

Future minimum operating lease payments as of December 31, 2024, are as follows (in thousands):


	Operating Leases
2025	$	5,156
2026	3,035
2027	2,968
2028	2,983
2029	3,047
Thereafter	11,268
Total lease payments	28,457
Less: Imputed lease interest	(7,729)
Total lease liabilities	$	20,728


	Year Ended December 31,
	2024		2023		2022
Weighted average remaining lease-term	6.0 years		5.7 years		4.2 years
Weighted average discount rate	8.3	%	7.9	%	5.4	%

Supplemental cash flow and other information related to operating leases are as follows (in thousands):


	Year Ended December 31,
	2024		2023		2022
Operating cash flows from operating leases	$	7,042	$	7,911	$	5,380
Non cash investing activities:
Lease liabilities arising from obtaining right-of-use assets	$	849	$	10,562	$	12,558

In May 2024, the Company entered into a triple net lease (“NNN term lease”) with GDC Sunshine LLC (“Lessor”) for 13 1/2 years (162 full calendar months) for a new manufacturing and office facility in Bernaillo County, New Mexico. The NNN term lease agreement allows for an extension of one consecutive period of 10 years. The new facility that is mixed use and built for general purposes will be approximately 216,000 square feet when constructed.

The NNN term lease commences upon the earliest of several events, including the Lessor’s completion of the construction of the building, which is currently expected to occur in the fourth quarter of 2025 and will be accounted for as a finance lease.

Under the construction agreement with the Lessor, the Company contributed approximately $11.3 million to the construction costs of the facility during October 2024. Future minimum lease payments under the NNN term lease, assuming the Company executes the renewal option, are estimated to be $105.0 million at December 31, 2024, payable over the expected lease term beginning with the commencement date.

In connection with this NNN term lease and the Company’s planned acquisition of machinery and equipment related to the new facility, the Lessor and the Company entered into a series of transactions with Bernalillo County (the “County”) related to a tax abatement plan. These transactions had no net impact to the

consolidated financial statements of the Company. The tax abatement plan provides for the effective elimination of 75% of the real property taxes and 100% of the personal property taxes payable to the County by the Company and the Lessor during the term of the NNN term lease, and the abatement of 100% of the sales and use taxes that would be incurred by the Company and the Lessor related to the purchase and use of machinery and equipment.