Leases
The Company leases office space located in West Chester, Pennsylvania that serves as the Company's headquarters. The initial term expires on September 1, 2027. Base rent over the initial term is approximately $2.4 million, and the Company is also responsible for its share of the landlord's operating expenses.
The Company leased office space in Scotch Plains, New Jersey under an agreement classified as an operating lease, which commenced on May 1, 2022 and was due to expire on April 30, 2025. In September 2024, the Company terminated the agreement effective November 30, 2024. No termination fees were incurred.
The Company entered into a fleet program to provide vehicles for its sales force. The vehicles are leased for a term of 52 months and classified as finance leases. During the year ended December 31, 2025, the Company recognized a right-of-use asset of $0.3 million and a lease liability of $0.3 million related to these finance leases. During the year ended December 31, 2024, a total of 57 vehicle leases were terminated and the lessor sold those vehicles at auction. The Company recognized an impairment of the right-of-use asset based on estimated fair value of the vehicles of $0.3 million and a loss on termination of leases of $19,000 for the year ended December 31, 2024. The Company reduced lease liability by $1.5 million and right-of-use assets by $1.6 million related to the terminated leases for the year ended December 31, 2024.
The components of lease expense are as follows (in thousands):
| | | | | | | | | | | |
| For the Year Ended December 31, |
| 2025 | | 2024 |
| Finance lease cost: | | | |
| Amortization right-of-use assets | $ | 352 | | | $ | 619 | |
| Interest on lease liabilities | 77 | | | 179 | |
| Operating lease: | | | |
| Operating lease costs | $ | 341 | | | $ | 387 | |
Maturities of the Company's operating leases, excluding short-term leases, as of December 31, 2025 are as follows (in thousands):
| | | | | | | | | | | |
| Operating | | Finance |
| 2026 | $ | 366 | | | $ | 468 | |
| 2027 | 246 | | | 413 | |
| 2028 | — | | | 211 | |
| 2029 | — | | | 61 | |
| Thereafter | — | | | 2 | |
| Total lease payments | 612 | | | 1,155 | |
| Less imputed interest | (29) | | | (107) | |
| Lease liability | $ | 583 | | | $ | 1,048 | |
The weighted average remaining lease term and discount rates for the Company's leases as of December 31, 2025 are as follows:
| | | | | | | | | | | |
| Operating | | Finance |
| Weighted average remaining lease term (years) | 1.67 | | 2.74 |
| Weighted average discount rate | 6.25 | % | | 7.73 | % |