Annual report pursuant to Section 13 and 15(d)

Note 6 - Leases

Note 6 - Leases
12 Months Ended
Dec. 31, 2023
Notes to Financial Statements  
Lessee, Operating Leases [Text Block]

6.     LEASES


The Company leases 7,300 square feet of corporate office space in Hong Kong with a term expiring in June 2026, and 4,900 square feet of corporate office space in Rolling Hills Estates, California with a term expiring in September 2030. To help further develop the market for its products in North America, the Company leases 1,600 square feet of retail space in each of Rowland Heights, California and Richmond, British Columbia, and 2,000 square feet of retail space in Metuchen, New Jersey. The Rowland Heights, Richmond and Metuchen locations have terms expiring in November 2025, February 2027, and December 2028, respectively.


The Company leases seven branch offices throughout China, and additional office space in Peru, Japan, Taiwan, South Korea, Malaysia, Thailand, India, and the Cayman Islands. The Company contracts with third parties for fulfillment and distribution operations in all of its international markets. None of the Company’s third-party logistics contracts contain a lease, as the Company does not have the right to access the warehouses or move its inventories at will.


The components of lease cost were as follows (in thousands):



Year Ended December 31,






Operating leases

  $ 1,298     $ 1,286  

Short-term leases

    150       161  

Total lease cost

  $ 1,448     $ 1,447  


Cash paid for amounts included in the measurement of operating leases liabilities was $1.3 million for each of 2023 and 2022.


The weighted-average remaining lease term and discount rate related to operating leases as of December 31, 2023 were as follows:


Weighted-average remaining lease term (in years)


Weighted-average discount rate

    4.5 %


As most of the Company’s leases do not provide an implicit rate, the Company used its incremental borrowing rate, or the rate of each of its subsidiaries if available, based on the information available at the lease commencement date to determine the present value of lease payments.


The annual scheduled lease payments of the Company's operating lease liabilities as of December 31, 2023 were as follows (in thousands):



  $ 1,182  











Total lease payments

  $ 3,779  

Less: imputed interest

    (315 )

Present value of lease liabilities

  $ 3,464  


For all asset classes, the Company elected not to recognize assets or liabilities at the acquisition date for leases that, at the acquisition date, have a remaining lease term of 12 months or less. Additionally, for all asset classes, the Company choose not to separate nonlease components from lease components and instead account for the combined lease and nonlease components associated with that lease component as a single lease component.