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Leases
 6 Months Ended
Jun. 30, 2026
Leases [Abstract]  
Leases Leases
The Company determines if an arrangement is or contains a lease at inception, which is the date on which the terms of the contract are agreed to, and the agreement creates enforceable rights and obligations. Under ASC 842, a contract is or contains a lease when (i) explicitly or implicitly identified assets have been deployed in the contract and (ii) the customer obtains substantially all of the economic benefits from the use of that underlying asset and directs how and for what purpose the asset is used during the term of the contract. The Company also considers whether its service arrangements include the right to control the use of an asset.
The Company made an accounting policy election not to recognize right-of-use (“ROU”) assets and lease liabilities for leases with a term of 12 months or less. For all other leases, the Company recognizes ROU assets and lease liabilities based on the present value of lease payments over the lease term at the commencement date of the lease. Lease payments may include fixed rent escalation clauses or payments that depend on an index (such as the consumer price index). Subsequent changes to an index and any other periodic market-rate adjustments to base rent are recorded in variable lease expense in the period incurred. The ROU assets also include any initial direct costs incurred and lease payments made at or before the commencement date and are reduced by any lease incentives.

The Company has made an accounting policy election to account for lease and non-lease components in its contracts as single lease components for all asset classes. The non-lease components typically represent additional services transferred to the Company, such as common area maintenance for real estate, which are variable in nature and recorded in variable lease expense in the period incurred.

The Company uses its incremental borrowing rate which is the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term and amount in a similar economic environment to determine the
present value of lease payments as the Company’s leases do not have a readily determinable implicit discount rate. Judgment is applied in assessing factors such as Company specific credit risk, lease term, nature, and quality of the underlying collateral, currency, and economic environment in determining the incremental borrowing rate to apply to each lease. Although the Company has entered into new debt arrangements with different interest rates, such changes do not impact the incremental borrowing rates applied to existing leases, as those rates are established at lease commencement and are not subsequently updated unless a lease is modified or remeasured.
The Company leases office and manufacturing space under operating lease agreements that have initial terms ranging from approximately 8 to 10 years. The Company leases furniture under a financing lease agreement that has an initial term of approximately 8 years. The furniture financing lease agreement is immaterial to the Company’s condensed consolidated financial statements. Some leases include one or more options to renew, generally at the Company’s sole discretion, with renewal terms that can extend the lease term by up to 5 years. In addition, certain leases contain termination options, where the rights to terminate are held by either the Company, the lessor, or both parties. Options to extend a lease are included in the lease term when it is reasonably certain that the Company will exercise the option. Options to terminate a lease are excluded from the lease term when it is reasonably certain that the Company will not exercise the option. The Company’s leases generally do not contain any material restrictive covenants or residual value guarantees.
Supplemental cash flow information related to leases is as follows (in thousands):
Six Months Ended June 30,
20262025
Cash paid for amounts included in measurement of lease liabilities:
Operating cash outflows - payments on operating leases$696 $680 
Operating cash outflows - payments on financing leases$19 $24 
Financing cash outflows - payments on financing leases$18 $14 
Supplemental balance sheet information related to the Company’s operating and financing leases is as follows (in thousands):
June 30, 2026December 31, 2025
Operating Leases:
Operating lease assets$3,455 $3,981 
Operating lease liabilities, short-term$1,286 $1,246 
Operating lease liabilities, long-term2,885 3,539 
Total operating lease liabilities$4,171 $4,785 
Financing Leases:
Office furniture and fixtures$386 $386 
Accumulated depreciation(276)(257)
Net property, plant and equipment$110 $129 
Lease liabilities, short-term$56 $53 
Lease liabilities, long-term112 134 
Total financing lease liabilities$168 $187 
Weighted-average remaining lease term - operating leases (in years):3.043.54
Weighted-average remaining lease term - financing leases (in years):3.003.50
Weighted-average discount rate - operating leases:3.8 %3.8 %
Weighted-average discount rate - financing leases:12.0 %12.0 %
The components of lease expense were as follows (in thousands):
Three Months Ended June 30,
Six Months Ended June 30,
2026202520262025
Operating lease cost$305 $305 609 609 
Financing lease cost - amortization of right-of-use asset9 9 18 18 
Financing lease cost - interest on lease liability9 12 19 24 
Variable lease cost221 206 419 409 
Total lease cost$544 $532 1,065 1,060 
Operating lease cost is recognized on a straight-line basis over the lease term. Total rent expense, including the Company’s share of the lessors’ operating expenses, was $0.5 million for each of the three months ended June 30, 2026 and 2025, and was $1.0 million for each of the six months ended June 30, 2026 and 2025. Financing lease cost includes asset amortization on a straight-line basis over the lease term and interest accretion calculated using the effective interest method. Total financing lease asset depreciation and interest expense was less than $0.1 million for each of the three and six months ended June 30, 2026 and 2025.
Maturities of the Company’s operating lease liabilities as of June 30, 2026 were as follows (in thousands):
Operating Lease Maturities
2026 (excluding the six months ended June 30)$705 
20271,435 
20281,469 
2029804 
Total lease payments$4,413 
Less imputed interest(242)
Total present value of lease liabilities$4,171 
Maturities of the Company’s financing lease liability as of June 30, 2026 were as follows (in thousands):
Financing Lease Maturities
2026 (excluding the six months ended June 30)$37 
202775 
202875 
202937 
Total lease payments$224 
Less imputed interest(56)
Total present value of lease liabilities$168 
Leases Leases
The Company determines if an arrangement is or contains a lease at inception, which is the date on which the terms of the contract are agreed to, and the agreement creates enforceable rights and obligations. Under ASC 842, a contract is or contains a lease when (i) explicitly or implicitly identified assets have been deployed in the contract and (ii) the customer obtains substantially all of the economic benefits from the use of that underlying asset and directs how and for what purpose the asset is used during the term of the contract. The Company also considers whether its service arrangements include the right to control the use of an asset.
The Company made an accounting policy election not to recognize right-of-use (“ROU”) assets and lease liabilities for leases with a term of 12 months or less. For all other leases, the Company recognizes ROU assets and lease liabilities based on the present value of lease payments over the lease term at the commencement date of the lease. Lease payments may include fixed rent escalation clauses or payments that depend on an index (such as the consumer price index). Subsequent changes to an index and any other periodic market-rate adjustments to base rent are recorded in variable lease expense in the period incurred. The ROU assets also include any initial direct costs incurred and lease payments made at or before the commencement date and are reduced by any lease incentives.

The Company has made an accounting policy election to account for lease and non-lease components in its contracts as single lease components for all asset classes. The non-lease components typically represent additional services transferred to the Company, such as common area maintenance for real estate, which are variable in nature and recorded in variable lease expense in the period incurred.

The Company uses its incremental borrowing rate which is the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term and amount in a similar economic environment to determine the
present value of lease payments as the Company’s leases do not have a readily determinable implicit discount rate. Judgment is applied in assessing factors such as Company specific credit risk, lease term, nature, and quality of the underlying collateral, currency, and economic environment in determining the incremental borrowing rate to apply to each lease. Although the Company has entered into new debt arrangements with different interest rates, such changes do not impact the incremental borrowing rates applied to existing leases, as those rates are established at lease commencement and are not subsequently updated unless a lease is modified or remeasured.
The Company leases office and manufacturing space under operating lease agreements that have initial terms ranging from approximately 8 to 10 years. The Company leases furniture under a financing lease agreement that has an initial term of approximately 8 years. The furniture financing lease agreement is immaterial to the Company’s condensed consolidated financial statements. Some leases include one or more options to renew, generally at the Company’s sole discretion, with renewal terms that can extend the lease term by up to 5 years. In addition, certain leases contain termination options, where the rights to terminate are held by either the Company, the lessor, or both parties. Options to extend a lease are included in the lease term when it is reasonably certain that the Company will exercise the option. Options to terminate a lease are excluded from the lease term when it is reasonably certain that the Company will not exercise the option. The Company’s leases generally do not contain any material restrictive covenants or residual value guarantees.
Supplemental cash flow information related to leases is as follows (in thousands):
Six Months Ended June 30,
20262025
Cash paid for amounts included in measurement of lease liabilities:
Operating cash outflows - payments on operating leases$696 $680 
Operating cash outflows - payments on financing leases$19 $24 
Financing cash outflows - payments on financing leases$18 $14 
Supplemental balance sheet information related to the Company’s operating and financing leases is as follows (in thousands):
June 30, 2026December 31, 2025
Operating Leases:
Operating lease assets$3,455 $3,981 
Operating lease liabilities, short-term$1,286 $1,246 
Operating lease liabilities, long-term2,885 3,539 
Total operating lease liabilities$4,171 $4,785 
Financing Leases:
Office furniture and fixtures$386 $386 
Accumulated depreciation(276)(257)
Net property, plant and equipment$110 $129 
Lease liabilities, short-term$56 $53 
Lease liabilities, long-term112 134 
Total financing lease liabilities$168 $187 
Weighted-average remaining lease term - operating leases (in years):3.043.54
Weighted-average remaining lease term - financing leases (in years):3.003.50
Weighted-average discount rate - operating leases:3.8 %3.8 %
Weighted-average discount rate - financing leases:12.0 %12.0 %
The components of lease expense were as follows (in thousands):
Three Months Ended June 30,
Six Months Ended June 30,
2026202520262025
Operating lease cost$305 $305 609 609 
Financing lease cost - amortization of right-of-use asset9 9 18 18 
Financing lease cost - interest on lease liability9 12 19 24 
Variable lease cost221 206 419 409 
Total lease cost$544 $532 1,065 1,060 
Operating lease cost is recognized on a straight-line basis over the lease term. Total rent expense, including the Company’s share of the lessors’ operating expenses, was $0.5 million for each of the three months ended June 30, 2026 and 2025, and was $1.0 million for each of the six months ended June 30, 2026 and 2025. Financing lease cost includes asset amortization on a straight-line basis over the lease term and interest accretion calculated using the effective interest method. Total financing lease asset depreciation and interest expense was less than $0.1 million for each of the three and six months ended June 30, 2026 and 2025.
Maturities of the Company’s operating lease liabilities as of June 30, 2026 were as follows (in thousands):
Operating Lease Maturities
2026 (excluding the six months ended June 30)$705 
20271,435 
20281,469 
2029804 
Total lease payments$4,413 
Less imputed interest(242)
Total present value of lease liabilities$4,171 
Maturities of the Company’s financing lease liability as of June 30, 2026 were as follows (in thousands):
Financing Lease Maturities
2026 (excluding the six months ended June 30)$37 
202775 
202875 
202937 
Total lease payments$224 
Less imputed interest(56)
Total present value of lease liabilities$168