Company: AWX
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0001437749-25-025765
Chunk: 10

Company: AVALON HOLDINGS CORP
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 1
Chunk 10
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 the Company did not record any new operating lease right-of-use assets or corresponding obligations under operating leases.

Leased property and associated obligations under operating leases at June 30, 2025 and December 31, 2024 consists of the following (in thousands):

                                                               June 30,                 December 31,             
                                                               2025                     2024                     
 ─────────────────────────────────────────────────────────────────────────────────────────────────────────────────
  Operating lease right-of-use assets                          $             1,269      $                 1,383  
  Current portion of obligations under operating leases        $               364      $                   365  
  Long-term portion of obligations under operating leases                      905                        1,018  
  Total obligations under operating leases                     $             1,269      $                 1,383  

The weighted average discount rate on operating leases was6.7% and6.6% at June 30, 2025 and December 31, 2024.

Finance Leases

In November 2003, Avalon entered into a long-term agreement with Squaw Creek Country Club to lease and operate its golf course and related facilities. The lease has an initial term of ten(10) years with four(4) consecutive ten(10) year renewal term options unilaterally exercisable by Avalon. Under the lease, Avalon is obligated to pay $15,000in annual rent and make leasehold improvements of $150,000per year. Amounts expended by Avalon for leasehold improvements during a given year in excess of $150,000will be carried forward and applied to future leasehold improvement obligations. Based upon the amount of leasehold improvements already made, Avalon expects to exercise all its remaining renewal options. At June 30, 2025 there were approximately28.3years remaining on the golf course and related facilities finance lease. At December 31, 2024 there were approximately28.8years remaining on the golf course and related facilities finance lease. The net asset value of finance leases, excluding leasehold improvements was $1.2million and $0.8million at June 30, 2025 and December 31, 2024, respectively.

In addition, the Company also entered into lease agreements for a vehicle, golf course maintenance equipment and the captive landfill operations entered into lease agreements for equipment which were determined to be finance leases. At June 30, 2025, the vehicles, golf course maintenance equipment and restaurant equipment