OPERATING LEASE
The Company previously had an operating lease for its principal executive office in Bridgewater, New Jersey. As of December 31, 2025, the Company had no remaining lease commitments.
In November 2022, the Company signed a Sublease Agreement (the “Sublease”) to sublease approximately 5,755 square feet of office space (the “Leased Premises”) in Bridgewater, New Jersey through September 30, 2023. Following the termination of the Sublease, the Company signed a Lease Agreement (the “Master Lease”) to lease the Leased Premises through September 30, 2025. The Company recorded a right of use asset of $0.2 million and liability of $0.3 million at the commencement date of the Master Lease on October 1, 2023. The Master Lease was subsequently extended to October 31, 2025, and the Company vacated the premises and terminated the lease effective November 1, 2025. Since November 1, 2025, the Company operates on a fully remote model with co-working space rented on a month-to-month basis as required.
The components of lease expense are as follows:
| | | | | | | | | | | |
| Year ended December 31, |
| (in thousands) | 2025 | | 2024 |
| Operating lease expense | $ | 95 | | | $ | 126 | |
| Short-term lease expense | 13 | | | — | |
| Variable lease expense | 10 | | | 10 | |
| Total lease expense | $ | 118 | | | $ | 136 | |
Variable lease expense primarily consists of utility and other common area maintenance ("CAM") charges. Lease expense is included within general and administrative expenses on the consolidated statements of operations and comprehensive loss.
Supplemental operating cash flows information is as follows:
| | | | | | | | | | | |
| Year ended December 31, |
| (in thousands) | 2025 | | 2024 |
| Operating leases | $ | 112 | | $ | 126 |
Supplemental consolidated balance sheet information related to leases is as follows:
| | | | | | | |
| (in thousands) | | | December 31, 2024 |
| Operating lease right-of-use assets | | | $ | 93 |
| Operating lease liabilities | | | $ | 99 |
| Weighted average remaining lease term | | | 0.75 |
| Weighted average discount rate | | | 8.00 | % |
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.