The Company has existing operating and finance leases for corporate offices and facilities, vehicles and certain equipment. The Company's leases have remaining lease terms of less than one year to 16 years, some of which include options to extend the lease term. For purposes of calculating lease liabilities, lease terms include options to extend the lease when it is reasonable certain that the Company will exercise such options.

The components of lease expense were as follows:


	For the Three Months Ended March 31,
	2026		2025
Finance lease expense:
Amortization of right-of-use assets	$	408	$	305
Interest on lease liabilities		93		127
Operating lease expense		826		408
Total lease expense	$	1,327	$	840

Amortization of right-of-use assets was recorded within research and development, and selling, general, and administrative expenses, interest on lease liabilities was recorded within interest income, interest expense, and operating lease expense was recorded within research and development, and selling, general, and administrative expenses, each in the unaudited condensed consolidated statements of net loss.

On October 24, 2025, the Company signed a new office building lease, which commenced on March 1, 2026. The term of the lease is seven years. Upon lease commencement the Company recognized an initial lease liability of $2.8 million and a right-of-use asset of $4.5 million in accordance with ASC 842.

Operating and finance lease right-of-use assets and liabilities as of March 31, 2026 and December 31, 2025 were as follows:


	March 31,		December 31,
	2026		2025
Assets:
Operating lease right-of-use assets	$	18,481	$	13,938
Finance lease right-of-use assets	$	3,327	$	3,735

Liabilities:
Current:
Operating lease liabilities	$	2,051	$	1,161
Finance lease liabilities	$	1,065	$	1,056
Non-current:
Operating lease liabilities	$	21,341	$	15,832
Finance lease liabilities	$	1,733	$	2,004

As most of the Company’s operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on information available at the commencement date in determining the present value of lease payments.

The Company leases various equipment through purchase and leaseback agreements with terms between five and seven years. The purchase and leaseback agreements provide an option for Firefly to purchase the equipment for nominal consideration that the Company is reasonably certain to exercise. The purchase and leaseback agreements were evaluated under the sale and leaseback guidance in ASC 842-40, Leases – Sale and Leaseback Transactions. Due to the purchase option, the transactions were accounted for as failed sales and leasebacks, and the Company has accounted for the purchase and leaseback agreements as financings.

As a result, the Company continues to reflect the manufacturing equipment on its unaudited condensed consolidated balance sheets in property and equipment, net, and continues to recognize depreciation expense over its estimated useful life. In 2024, the Company recorded an initial financing liability of $34.7 million, net of transaction costs, in notes payable. As of March 31, 2026, the Company’s related notes payable, current and non-current, were $6.1 million and $19.5 million, respectively. As of December 31, 2025, the Company’s related notes payable, current and non-current, were $6.0 million and $21.1 million, respectively. The Company does not recognize rent expense related to these purchase and leaseback agreements. Instead, periodic lease payments are recognized as interest expense and reductions of the principal balance of the finance liability.

For the three months ended March 31, 2026, payments of $1.4 million were made under the purchase and leaseback agreements in addition to interest expense of $0.5 million.

For the three months ended March 31, 2025, payments of $1.3 million were made under the purchase and leaseback agreements in addition to interest expense of $0.6 million.