LeasesThe Company leases office space and research and development space in Sacramento, California and Sarnia, Ontario under non-cancelable lease agreements and leases various office equipment, and warehouse space. The Company’s operating leases have remaining lease terms of one to eight years.
The components of lease cost and cash flow information were as follows for the years ended:
| | | | | | | | | | | | | |
| (in thousands) | December 31, 2025 | | December 31, 2024 | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| Operating lease cost | $ | 665 | | | $ | 790 | | | |
| Variable lease cost | 128 | | | 188 | | | |
| Total lease cost | $ | 793 | | | $ | 978 | | | |
| | | | | | | | | | | | | |
| (in thousands) | December 31, 2025 | | December 31, 2024 | | |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | | |
| Operating cash flows from operating leases | $ | 607 | | | $ | 668 | | | |
| | | | | |
| | | | | |
| Operating lease ROU assets obtained in exchange for lease obligations | $ | — | | | $ | — | | | |
Other information related to operating leases is as follows as of:
| | | | | | | | | | | | | |
| December 31, 2025 | | December 31, 2024 | | |
| Weighted average remaining lease term (in years) | 8.00 | | 8.86 | | |
| Weighted average discount rate | 7.4 | % | | 7.4 | % | | |
Maturities of operating lease liabilities as of December 31, 2025 were as follows:
| | | | | | | |
| (in thousands) | December 31 | | |
| 2026 | $ | 577 | | | |
| 2027 | 595 | | | |
| 2028 | 612 | | | |
| 2029 | 631 | | | |
| 2030 | 650 | | | |
| Thereafter | 2,068 | | | |
| Total lease payments | 5,133 | | | |
| Less: imputed interest | (1,294) | | | |
| Less: operating lease liabilities, current | (306) | | | |
| Operating lease liabilities, non-current | $ | 3,533 | | | |
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.