Leases
Operating Leases
The Company leases office space facilities and a research and development laboratory under non-cancelable operating leases with varying expirations extending through fiscal year 2029. The lease agreements provide for renewal options and rent escalation over the lease term as well as require the Company to pay maintenance, insurance and property taxes.
In March 2025, the Company amended its existing lease in Longmont, Colorado. In accordance with ASC 842, the amended lease agreement is considered to be modified and subject to lease modification guidance. The right-of-use (ROU) asset and lease liability related to the agreement were remeasured based on the change in the lease conditions such as rent payment and the discount rate as of the modification date lease terms. The modification resulted in the increase of approximately $1.1 million to the related lease liability and ROU asset. The amended lease now extends through October 31, 2030.
As of December 31, 2025 and 2024, the Company had ROU assets of $2.2 million and $1.7 million, respectively, and corresponding operating lease liabilities of $2.8 million and $2.6 million, respectively.
The components of operating lease expense for the years indicated are as follows:
| | | | | | | | | | | |
| Year Ended December 31, |
| (In thousands) | 2025 | | 2024 |
| Operating leases | | | |
| Operating lease expense | $ | 897 | | | $ | 886 | |
| Variable lease expense (1) | 415 | | | 411 | |
| Operating lease expense | 1,312 | | | 1,297 | |
| Short-term lease rent expense | 18 | | | 17 | |
| Total expense | $ | 1,330 | | | $ | 1,314 | |
1) Variable lease costs, including property taxes and insurance and common area maintenance fees, are classified in cost of services in the Company's Consolidated Statements of Operations. As of December 31, 2025, the weighted average remaining lease term for operating leases is 3.4 years and the weighted average discount rate used to determine the operating lease liabilities is 7.7%.
Future minimum lease payments under operating leases as of December 31, 2025 are as follows:
| | | | | | | | |
| (In thousands) | | |
| Year | | Amount |
| 2026 | | $ | 1,183 | |
| 2027 | | 782 | |
| 2028 | | 657 | |
| 2029 | | 338 | |
| 2030 | | 263 | |
| | |
| Total | | 3,223 | |
| Less: Present value discount | | (406) | |
| Present value of total operating lease liabilities | | 2,817 | |
| Less: Current portion | | (1,002) | |
| Long-term obligations under operating leases | | $ | 1,815 | |
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.