Operating Leases
The Company has commitments under operating leases for office, laboratory, and manufacturing space in Malvern, Pennsylvania and other locations. The Company's corporate headquarters, located in Malvern, Pennsylvania, lease has an initial term of approximately seven years and includes options to extend the lease for up to 10 years, which the Company has not elected to account for since it is not reasonably certain that the Company will exercise such option. The Company's current GMP facility, located in Malvern, Pennsylvania, lease has an initial term of seven years and includes an option to extend the lease for up to five years, which the Company has elected to account for since it is reasonably certain that the Company will exercise such option. The Company leases two other general use facilities, within the United States, which have initial terms of two to three years and contain no option to extend.
The components of lease expense were as follows (in thousands):
| | | | | | | | | | | |
| Year ended December 31, |
| 2025 | | 2024 |
| Operating lease cost | $ | 1,379 | | | $ | 893 | |
| Variable lease cost | 480 | | | 355 | |
| Total lease cost | $ | 1,859 | | | $ | 1,248 | |
Supplemental balance sheet information related to leases was as follows (in thousands):
| | | | | | | | | | | |
| As of December 31, |
| 2025 | | 2024 |
| Right-of-use assets, net | $ | 4,092 | | | $ | 3,613 | |
| | | |
| Current lease obligations | $ | 858 | | | $ | 519 | |
| Non-current lease obligations | 3,494 | | | 3,313 | |
| Total lease liabilities | $ | 4,352 | | | $ | 3,832 | |
Supplemental information related to leases was as follows:
| | | | | | | | | | | |
| Year ended December 31, |
| 2025 | | 2024 |
Cash paid for amounts included in the measurement of operating lease liabilities included in operating cash flows | $ | 1,168 | | $ | 814 |
| Weighted-average remaining lease terms (years) | 5.1 | | 5.9 |
| Weighted-average discount rate | 10.3 | % | | 9.4 | % |
Future minimum base rent payments are approximately as follows (in thousands):
| | | | | |
| For the years ending December 31, | Amount |
| 2026 | $ | 1,247 | |
| 2027 | 1,184 | |
| 2028 | 1,203 | |
| 2029 | 973 | |
| 2030 | 384 | |
| Thereafter | 661 | |
| Total | $ | 5,652 | |
| Less: present value adjustment | (1,300) | |
| Present value of minimum lease payments | $ | 4,352 | |
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.