LEASES
The Company has a non-cancelable operating lease through December 31, 2030 for its corporate office, which is located in Lake Forest, Illinois. Additionally, in connection with the Spectrum Merger, the Company assumed leases for two facilities (whose terms ended in the third quarter of 2025) and certain office equipment (which term ends in the third quarter of 2026) for which Spectrum had previously been the lessee.
The following table reflects lease expense for the years ended December 31, 2025 and 2024 (in thousands):
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| | | Year ended December 31, |
| Financial Statement Classification | | 2025 | | 2024 |
| Operating lease cost | Selling, general and administrative expenses | | $ | 241 | | | $ | 256 | |
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The following table reflects supplemental cash flow information related to leases for the years ended December 31, 2025 and 2024 (in thousands): | | | | | | | | | | | | | | |
| | Year ended December 31, |
| | 2025 | | 2024 |
| Cash paid for amounts included in measurement of liabilities: | | | | |
| Operating cash flows used in operating leases | | $ | 412 | | | $ | 1,058 | |
The following table reflects supplemental balance sheet information related to leases as of December 31, 2025 and 2024 (in thousands):
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| | | December 31, |
| Financial Statement Classification | | 2025 | | 2024 |
| Assets | | | | | |
| Operating lease right-of-use assets | Other long-term assets | | $ | 971 | | | $ | 1,125 | |
| Liabilities | | | | | |
| Current operating lease liabilities | Other current liabilities | | $ | 240 | | | $ | 331 | |
| Noncurrent operating lease liabilities | Other long-term liabilities | | 889 | | | 1,122 | |
| Total lease liabilities | | | $ | 1,129 | | | $ | 1,453 | |
The following table reflects other operating lease information as of December 31, 2025 and 2024:
| | | | | | | | | | | | | | |
| | December 31, |
| | 2025 | | 2024 |
| Weighted-average remaining lease term (years) | | 4.7 | | 5.2 |
| Weighted-average discount rate | | 7.2 | % | | 6.8 | % |
The following table reflects future minimum lease payments under the Company’s non-cancelable operating leases as of December 31, 2025 (in thousands):
| | | | | | | | |
| | Lease Payments |
| 2026 | | $ | 307 | |
| 2027 | | 243 | |
| 2028 | | 253 | |
| 2029 | | 263 | |
| 2030 | | 274 | |
| Total lease payments | | $ | 1,340 | |
| Less: Interest | | 211 | |
| Present value of lease liabilities | | $ | 1,129 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.