Leases
As Lessee:
The Company has historically entered into a number of lease agreements under which the Company is the lessee for equipment and office leases.
The components of the Company’s operating lease costs consisted of the following (in thousands):
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| | Years Ended December 31, |
| | 2025 | | 2024 | | |
| Operating lease cost | | $ | 1,989 | | | $ | 1,910 | | | |
| Variable lease cost | | 460 | | | 359 | | | |
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| Total lease cost | | $ | 2,449 | | | $ | 2,269 | | | |
Lease costs for the years ended December 31, 2025 and 2024 of approximately $2.4 million and $2.3 million, respectively, were recorded to G&A expenses. Expense related to short-term leases, which are not recorded on the Company's consolidated balance sheets, was $0.8 million and nil for the fiscal years ended December 31, 2025, and 2024, respectively.
Supplemental cash flow information and non-cash activity related to the Company’s leases are as follows (in thousands):
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| | Years Ended December 31, |
| | 2025 | | 2024 | | |
| Cash paid for amounts included in the measurement of lease liabilities and right of use assets: | | | | | | |
| Operating cash flow from operating leases | | $ | 2,025 | | | $ | 1,863 | | | |
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| Right of use assets obtained in exchange for lease obligations: | | | | | | |
| Operating leases | | $ | 37 | | | $ | 250 | | | |
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| Increases to right of use assets resulting from lease modifications: | | | | | | |
| Operating leases | | $ | 344 | | | $ | — | | | |
Weighted average remaining lease terms and discount rates for the Company’s operating leases are as follows:
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| | 2025 | | 2024 |
| | Years | | Years |
| Weighted average remaining lease term: | | 4.5 | | 5.3 |
| | Rate | | Rate |
| Weighted average discount rate: | | 7.7% | | 7.9% |
Future maturities of lease liabilities as of December 31, 2025 are as follows (in thousands):
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| | Operating Leases | | |
| 2026 | | $ | 1,903 | | | |
| 2027 | | 1,627 | | | |
| 2028 | | 1,504 | | | |
| 2029 | | 1,396 | | | |
| 2030 | | 818 | | | |
| Thereafter | | 273 | | | |
| Total undiscounted lease payments | | 7,521 | | | |
| Less: Imputed interest | | (2,706) | | | |
| Total lease liabilities | | $ | 4,815 | | | |
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The long-term portion of the lease liabilities included in the amounts above is $3.4 million with the remainder included in other current liabilities in the Consolidated Balance Sheets.
As Lessor
We lease medical equipment to customers, often in conjunction with arrangements to provide consumable medical products. Certain of our equipment leases are classified as sales-type leases and the remainder are operating leases. The terms of the related contracts, including the proportion of fixed versus variable payments and any options, varies by customer. The Company elected the “combining lease and non-lease components” practical expedient for all qualifying non-lease components.
The components of the Company’s lease revenues consisted of the following (in thousands):
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| | Years Ended December 31, |
| | 2025 | | 2024 | | |
Net operating lease revenue | | $ | 30,006 | | | $ | 27,843 | | | |
| Sales-type lease revenue | | 350 | | | 717 | | | |
| Total lease revenue | | $ | 30,356 | | | $ | 28,560 | | | |
The components of our net investment in sales-type leases as of December 31, 2025 and 2024 were (in thousands):
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| 2025 | | 2024 |
| Lease receivable | $ | 1,905 | | | $ | 1,934 | |
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| Net investment in leases | $ | 1,905 | | | $ | 1,934 | |
Our net investment in sales-type leases is classified as follows in the accompanying consolidated balance sheets as of December 31, 2025 and 2024 (in thousands):
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| 2025 | | 2024 |
| Accounts receivable, net | $ | 563 | | | $ | 1,207 | |
| Other assets | 1,342 | | | 727 | |
| Total | $ | 1,905 | | | $ | 1,934 | |
Future maturities of sales-type leases as of December 31, 2025 are as follows (in thousands):
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| | Sales-Type Leases | | |
| 2026 | | $ | 807 | | | |
| 2027 | | 658 | | | |
| 2028 | | 562 | | | |
| 2029 | | 408 | | | |
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| Total undiscounted lease payments | | 2,435 | | | |
| Less: Imputed interest | | (530) | | | |
| Total lease receivables | | $ | 1,905 | | | |
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