Company: OCC
Filing Date: 2025-09-11
Form Type: 10-Q
Source: 0001437749-25-028857
Chunk: 21

Company: OPTICAL CABLE CORP
Filing Date: 2025-09-11
Form: 10-Q
Item: Item 1
Chunk 21
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 lease term ends, title of the test equipment will transfer to the Company and the remaining net book value of the right-of-use asset will be classified as property and equipment.

The Company’s lease contracts may include options to extend or terminate the leases. The Company exercises judgment to determine the term of those leases when such options are present and include such options in the calculation of the lease term when it is reasonably certain that it will exercise those options.

The Company includes contract lease components in its determination of lease payments, while non-lease components of the contracts, such as taxes, insurance, and common area maintenance, are expensed as incurred. At commencement, right-of-use assets and lease liabilities are measured at the present value of future lease payments over the lease term. The Company uses either the rate implicit in the lease, where available, or its incremental borrowing rate based on information available at the time of lease commencement to measure the present value of future payments.

Operating lease expense is recognized on a straight-line basis over the lease term. Short-term leases with an initial term of 12 months or less are expensed as incurred. The Company’s short-term leases have month-to-month terms.

Operating lease right-of-use assets of $1,795,891 and $1,872,206 were included in other assets at July 31, 2025 and October 31, 2024, respectively. Operating lease liabilities of $411,273 and $1,444,593 were included in accounts payable and accrued expenses, and other noncurrent liabilities, respectively, at July 31, 2025. Operating lease liabilities of $376,965 and $1,525,423 were included in accounts payable and accrued expenses, and other noncurrent liabilities, respectively, at October 31, 2024. Operating lease expense recognized during the three months and nine months ended July 31, 2025 totaled $153,107 and $462,766, respectively. Operating lease expense recognized during the three months and nine months ended July 31, 2024 totaled $109,143 and $327,431, respectively.

The weighted average remaining lease term for the operating leases was 49.9 months and the weighted average discount rate was 9.5% as of July 31, 2025.

For the three months and nine months ended July 31, 2025, cash paid for operating lease liabilities totaled $147,390 and $432,529, respectively. For the three months and nine months ended July 31,