LEASES
As discussed in “Note (2) Summary of Significant Accounting Policies; (l) Leases,” we account for our leases in accordance with the guidance in ASC 842. We lease our offices, warehouse facilities and certain equipment under non-cancellable operating leases that expire at various dates through 2032. Total operating lease and short-term lease costs for the years ended December 31, 2025 and 2024, respectively, were as follows:
| | | | | | | | | | | | | | |
| | Years Ended |
| | December 31, |
| (in thousands) | | 2025 | | 2024 |
| Operating lease cost | | $ | 2,626 | | | $ | 1,878 | |
| Short-term lease cost | | 6 | | | 14 | |
The following is additional information about our leases:
| | | | | | | | | | | |
| December 31, |
| 2025 | | 2024 |
| Range of remaining lease terms (in years) | 0.2 to 6.2 | | 0.5 to 7.2 |
| Weighted average remaining lease term (in years) | 5.0 | | 5.8 |
| Weighted average discount rate | 6.7% | | 6.6% |
Maturities of lease liabilities at December 31, 2025 are as follows:
| | | | | | | | |
| (in thousands) | | |
| 2026 | | $ | 2,627 | |
| 2027 | | 2,379 | |
| 2028 | | 1,734 | |
| 2029 | | 1,608 | |
| 2030 | | 1,286 | |
| Thereafter | | 1,337 | |
| Total lease payments | | $ | 10,971 | |
| Less imputed interest | | (1,471) | |
| Total present value of lease liabilities | | $ | 9,500 | |
Cash Flow Information
| | | | | | | | | | | | | | |
| | Years Ended |
| | December 31, |
| (in thousands) | | 2025 | | 2024 |
| Amortization of ROU assets | | $ | 2,230 | | | $ | 1,463 | |
| ROU assets obtained in exchange for operating lease obligations | | 277 | | | 5,696 | |
As disclosed in “Note (3) Acquisition,” on March 12, 2024, we acquired the stock of Alfamation™, and as such, we assumed several leases. In addition, we also entered into the related-party Alfamation Lease Agreement with the former owner of Alfamation™ who will continue to serve as the managing director of Alfamation™ under our ownership, for the seller-owned facility where Alfamation™ has its principal operations. The leased premises include warehouse and office space totaling approximately 52 thousand square feet. The semi-annual lease payments are €0.1 million. The impact of the assumption and execution of these leases was a non-cash increase in our ROU assets and operating lease liabilities of approximately $1.7 million at the date of the acquisition.
As further disclosed in “Note (16) Restructuring,” we consolidated all Videology operations from the Netherlands into our facility located in Mansfield, Massachusetts as of December 31, 2025. This action resulted in an immaterial non-cash impairment of the ROU asset for the Netherlands facility.
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.