Leases
The Company has operating leases for office space and determines if an arrangement is a lease at contract inception. Lease assets and lease liabilities are recognized based on the present value of lease payments over the lease term at the commencement date. The Company does not separate lease and non-lease components. Leases with a term of 12 months or less at commencement are not recorded on the consolidated balance sheets. Lease expense for these arrangements is recognized on a straight-line bases over the lease term. The Company’s leases have remaining lease terms of less than one year and up to approximately three years, and some which include options to terminate the leases within one year.
The components of operating lease expense were as follows (in thousands):
| | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2025 | | 2024 |
| Operating lease cost | | $ | 747 | | | $ | 330 | |
| Short-term lease cost | | 127 | | | 177 | |
| Variable lease cost | | 36 | | | 39 | |
| Less: sublease income | | (144) | | | (128) | |
| Total lease costs | | $ | 766 | | | $ | 418 | |
Supplemental cash flow information related to leases was as follows (in thousands):
| | | | | | | | | | | |
| Year Ended December 31, |
| 2025 | | 2024 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | |
| Operating cash flows from operating leases | $ | 860 | | | $ | 405 | |
| Operating cash flows from short-term leases | 127 | | | 225 | |
| Operating cash flows from variable lease costs | 36 | | | 39 | |
| | | |
| Right-of-use assets obtained in exchange for lease liabilities: | | | |
| Operating leases | 1,115 | | | 419 | |
Supplemental balance sheet information related to operating leases was as follows (in thousands, except weighted average remaining lease term and weighted average discount rate):
| | | | | | | | | | | | | | |
| | December 31, |
| | 2025 | | 2024 |
| Operating lease right-of-use assets | | $ | 1,212 | | | $ | 657 | |
| Total operating lease right-of-use assets | | $ | 1,212 | | | $ | 657 | |
| | | | |
| Current portion of operating lease liabilities | | $ | 419 | | | $ | 420 | |
| Operating lease liabilities, less current portion | | 859 | | | 372 | |
| Total operating lease liabilities | | $ | 1,278 | | | $ | 792 | |
| | | | |
| Weighted average remaining lease term | | 3 | | 3 |
| | | | |
| Weighted average discount rate | | 13.0 | % | | 9.9 | % |
Maturities on lease liabilities were as follows (in thousands):
| | | | | |
| Year Ending December 31, | |
| 2026 | $ | 552 | |
| 2027 | 542 | |
| 2028 | 393 | |
| 2029 | 39 | |
| Total lease payments | 1,526 | |
| Less: future interest expense | (248) | |
| Lease liabilities | $ | 1,278 | |
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.