Leases
The components of lease expense and supplemental cash flow information are as follows (in thousands):
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| | | Years ended December 31, |
| | | | | 2025 | | 2024 |
| Operating lease expense | | | | | $ | 1,518 | | | $ | 2,703 | |
| Finance lease expense: | | | | | | | |
| Amortization of assets | | | | | 108 | | | 15 | |
| Interest on lease liabilities | | | | | 27 | | | 1 | |
| Total finance lease expense | | | | | 135 | | | 16 | |
| Short-term lease expense | | | | | 2,048 | | | 1,383 | |
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| Total lease expense | | | | | $ | 3,701 | | | $ | 4,102 | |
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| Cash paid for amounts included in the measurement of lease liabilities: | | | | | | | |
| Operating cash flows from operating leases | | | | | $ | 2,337 | | | $ | 5,399 | |
| Operating cash flows from finance leases | | | | | 134 | | | 30 | |
| Financing cash flows from finance leases | | | | | 27 | | | 1 | |
Maturities of lease liabilities as of December 31, 2025 are as follows (in thousands):
| | | | | | | | | | | | | | |
| Years ending December 31, | | Operating Leases | | Finance Leases |
| 2026 | | $ | 1,810 | | | $ | 180 | |
| 2027 | | 1,863 | | | 180 | |
| 2028 | | 1,729 | | | 57 | |
| 2029 | | 1,641 | | | — | |
| Thereafter | | 1,407 | | | — | |
| Total lease payments | | $ | 8,450 | | | $ | 417 | |
| Less: Interest | | (1,591) | | | (40) | |
| Present value of lease liabilities | | $ | 6,859 | | | $ | 377 | |
Supplemental balance sheet information related to leases is as follows (in thousands):
| | | | | | | | | | | | | |
| December 31, 2025 | | December 31, 2024 | | |
| Operating Leases | | | | | |
| Operating lease right-of-use assets | $ | 2,718 | | | $ | 3,326 | | | |
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| Current portion of operating lease liabilities | 1,251 | | | 1,486 | | | |
| Long-term operating lease liabilities | 5,608 | | | 6,514 | | | |
| Total operating lease liabilities | $ | 6,859 | | | $ | 8,000 | | | |
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| Finance Leases | | | | | |
| Finance lease right-of-use assets | $ | 365 | | | $ | — | | | |
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| Current portion of finance lease liabilities | $ | 153 | | | $ | — | | | |
| Long-term finance lease liabilities | 224 | | | — | | | |
| Total finance lease liabilities | $ | 377 | | | $ | — | | | |
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| Weighted Average Remaining Lease Term | | | | | |
| Operating leases | 4.6 years | | 5.4 years | | |
| Finance leases | 2.4 years | | — | | | |
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| Weighted Average Discount Rate | | | | | |
| Operating leases | 9.4 | % | | 9.4 | % | | |
| Finance leases | 9.5 | % | | — | % | | |
Lease Agreement Income
The Company recorded income from the Lease Agreement (see Note 3, “Asset Acquisition”) of $16.1 million during the year ended December 31, 2025. At December 31, 2025, the minimum future lease income related to the Lease Agreement is as follows (in thousands):
| | | | | | |
| Years ending December 31, | | Lease Agreement Income |
| 2026 | | 27,375 | |
| 2027 | | 27,375 | |
| 2028 | | 27,375 | |
| 2029 | | 27,375 | |
Thereafter (1) | | 9,125 | |
Total rental income (through April 2030) | | $ | 118,625 | |
(1)Excludes rental income for the sixth year of the Lease Agreement as rental rates in year six will be determined based on prevailing market rates.
Sublease Income
On April 1, 2023, the Company entered into an agreement to sublease its office and lab space in Houston, Texas beginning September 1, 2023 and continuing through October 30, 2030. The Company recorded rental income from the sublease of $0.7 million and $0.7 million for the years ended December 31, 2025 and 2024, respectively, which is included in the Company’s statement of operations in Other income (expense), net. Rental income from the sublease offsets the monthly rental expense from the Company’s lease of the facility. Sublease rental income for future years is as follows (in thousands):
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| Years ending December 31, | | Sublease Income |
| 2026 | | $ | 767 | |
| 2027 | | 767 | |
| 2028 | | 767 | |
| 2029 | | 767 | |
| Thereafter | | 639 | |
| Total rental income | | $ | 3,707 | |
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.