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LEASES

12 Months Ended

Dec. 31, 2025

NOTE 13: LEASES

The Company recognizes leases with a duration greater than 12 months on the balance sheet with a Right-Of-Use (“ROU”) asset and liability at the present value of lease payments over the term. Renewal options are factored into the determination of lease payments when appropriate. There are no residual value guarantees on the existing leases. The Company estimates its incremental borrowing rate, at lease commencement, to determine the present value of lease payments, since most of the Company’s leases do not provide an implicit rate of return. ROU assets exclude lessor incentives received. The Company’s lease population consists primarily of office equipment.

The Company does not have any finance leases. As of December 31, 2024, the Company had no operating leases that had not yet commenced.

Lease position:

The table below presents the assets and liabilities related to operating leases recorded on the balance sheet:


				December 31,
(in thousands)		Classification on Consolidated Balance Sheet		2025			2024
Assets:
Operating lease right-of-use assets		Other assets		$	152		$	219

Liabilities:
Current portion of operating lease liabilities		Accrued expenses and other liabilities		$	83		$	79
Long-term operating lease liabilities		Other long-term liabilities			70			141
Total lease liabilities				$	153		$	220

Lease Costs:

The components of lease expense are included in selling, general and administrative expenses in the Consolidated Statements of Operations as disclosed below:


(in thousands)	2025		2024		2023
Operating lease cost	$	89	$	89	$	93
Short-term lease cost		—		—		—
Variable lease cost		11		11		3
Total lease cost	$	100	$	100	$	96

Other information:


As of December 31,	2025			2024
Cash paid for amounts included in the measurement of operating lease liabilities (in thousands)	$	80		$	77
ROU assets obtained in exchange for operating lease liabilities (in thousands)		(13)			—
Weighted average remaining lease term — operating leases (years)		2.0			2.7
Weighted average discount rate — operating leases		4.87	%		4.87	%

Lease Commitments:

Maturity of lease liabilities - Operating Leases:


(in thousands)
As of December 31,	2025
2026	$	89
2027		88
2028		58
2029		9
2030		3
Thereafter		1
Total lease payments		248
Less: Amounts representing interest		(95)
Present value of lease liabilities	$	153

The Company recorded rental income of $60 thousand in 2025 and $240 thousand in both 2024 and 2023 that is recorded as part of selling, general and administrative expenses on the Consolidated Statements of Operations.

During 2023, the Company entered into a lease agreement related to a warehouse as a lessor that qualified to be a sales type lease. As part of this transaction, the Company recognized a gain of approximately $1.8 million which has been reported as part of Gain on disposition of assets, net on the Consolidated Statement of Operations.