Note 7. Leases

The Company leases office space, warehouse and manufacturing space, and equipment. The Company’s lease agreements have remaining lease terms of one year to 12 years, and some of these leases have renewal and termination options exercisable at the Company’s election. Terms and conditions to extend or terminate such leases are recognized as part of the right-of-use assets and lease liabilities where reasonably certain to be exercised. All of the Company’s leases are operating leases.

The components of lease expense and other information related to leases were as follows (in thousands):
 

 

 

For the Year Ended December 31,

 

 

 

2025

 

 

2024

 

Operating lease expense

 

$

2,735

 

 

$

2,981

 

Variable lease expense

 

 

453

 

 

 

434

 

Total lease expense

 

$

3,188

 

 

$

3,415

 

Cash paid for amounts included in the measurement of the lease liabilities was $2.6 million and $2.8 million in the years ended December 31, 2025 and 2024, respectively. The weighted-average discount rate was 5.0% and the weighted-average remaining lease term was 7.2 years as of December 31, 2025.

Maturities of operating lease liabilities at December 31, 2025, were as follows (in thousands):

 

 

 

Amount

 

2026

 

$

2,586

 

2027

 

 

2,649

 

2028

 

 

2,702

 

2029

 

 

2,700

 

2030

 

 

2,500

 

Thereafter

 

 

5,222

 

Total lease payments

 

 

18,359

 

Less: imputed interest

 

 

(3,213

)

Present value of lease liabilities

 

 

15,146

 

Less: current portion

 

 

(1,876

)

Lease liabilities less current portion

 

$

13,270

 

Historical Timeline

Fiscal YearFiled
2025Mar 2, 2026Showing above
2024Mar 7, 2025
2022Mar 30, 2023

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.