Company: OCC
Filing Date: 2025-06-05
Form Type: 10-Q
Source: 0001437749-25-019494
Chunk: 72

Company: OPTICAL CABLE CORP
Filing Date: 2025-06-05
Form: 10-Q
Item: Item 8
Chunk 72
---
. The lease term expires in November 2029.

OCC leases printers that are used in the Roanoke, Virginia manufacturing facility. The lease term expires on August 22, 2026. The right-of-use asset is being amortized on a straight line basis over seven years. When the lease term ends, title of the printers 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 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 $1,903,095 and $1,872,206 were included in other assets at April 30, 2025 and October 31, 2024, respectively. Operating lease liabilities of $429,255 and $1,528,598 were included in accounts payable and accrued expenses, and other noncurrent liabilities, respectively, at April 30, 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 six months ended April 30, 2025 totaled $154,266 and $309,659, respectively. Operating lease expense recognized during the three months and six months ended April 30, 2024 totaled $109,144 and $218,288, respectively.

The weighted average remaining lease term was 52.3 months and the weighted average discount rate was 9.4% as of April 30, 2025.

10

OPTICAL