15. Leases

Operating lease expense was $1.0 million and $1.0 million for the years ended December 31, 2025 and 2024, respectively, and is reported as “Cost of sales,” “Engineering, design and product development expense,” “Selling and marketing expense,” and “General and administrative expense” in the Consolidated Statements of Operations.  Operating costs include short-term lease costs.

On November 3, 2025, the Company entered into a third amendment to its corporate headquarters lease in Hamden, Connecticut, extending the lease term from November 1, 2025 through December 31, 2029 and reducing the area of the leased premises from approximately 11,000 square feet to 3,630 square feet.

The following information represents supplemental disclosure for the statement of cash flows related to operating leases (in thousands):

   
Years Ended December 31,
 
 
2025
   
2024
 
Operating cash outflows from leases
 
$
1,073
   
$
1,022
 

The following summarizes additional information related to our leases:

   
Years Ended December 31,
 
 
2025
   
2024
 
Weighted average remaining lease term (in years)
   
2.3
     
1.2
 
Weighted average discount rate
   
9.1
%
   
7.7
%

The maturity of the Company’s operating lease liabilities are as follows (in thousands):

 
December 31, 2025
 
2026
 
$
376
 
2027
   
82
 
2028     82  
Thereafter
    82  
Total undiscounted lease payments
   
622
 
Less imputed interest
   
61
 
Total lease liabilities
 
$
561
 

For details regarding the new lease agreement for a new facility in Las Vegas, Nevada, see Note 18 – Subsequent events.

Historical Timeline

Fiscal YearFiled
2025Mar 12, 2026Showing above
2024Mar 24, 2025
2023Mar 13, 2024
2022Mar 28, 2023
2021Mar 24, 2022
2020Mar 12, 2021
2019Mar 16, 2020

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.