Note 11 – Leases

The Company has operating leases for its office, manufacturing and warehouse space, and office equipment. The Company’s leases have remaining lease terms of less than two years to less than six years. Certain of our lease agreements include variable lease payments for common area maintenance, real estate taxes, and insurance or based on usage for certain equipment leases. For one of our office space leases, the Company entered into a sublease, for which it received sublease income. Sublease income was recognized as a reduction to operating lease costs as the sublease is outside of the Company’s normal business operations. This lease, and the related sublease, terminated on October 31, 2023 and will not be renewed. The Company does not have any leases that have not yet commenced as of June 30, 2024.

The components of the Company’s lease cost were as follows for the three and nine months ended June 30, 2024 and 2023:

The Company paid cash of $797,000 and $777,000 for amounts included in the measurement of operating lease liabilities during the nine months ended June 30, 2024 and 2023, respectively.

The Company’s operating lease right-of-use assets and the related lease liabilities are presented as separate line items on the accompanying unaudited condensed consolidated balance sheets as of June 30, 2024 and September 30, 2023.

Other information related to the Company’s leases as of June 30, 2024 and September 30, 2023 was as follows:

The Company’s lease agreements do not provide a readily determinable implicit rate. Therefore, the Company estimates its incremental borrowing rate based on information available at lease commencement in order to discount lease payments to present value.