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Leases

12 Months Ended

Dec. 31, 2024

Leases

The Company has leases mainly consisting of the corporate office. This kind of lease typically has an original lease term of one to three years. Future renewal options that are not likely to be executed as of the consolidated balance sheet date are excluded from right-of-use assets and related lease liabilities. The lease is automatically renewed at a cost increase of 2% on an annual basis, unless we provide written notice nine months prior to the respective expiration dates.

Operating lease right of-use assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company has entered into various short-term operating leases with an initial term of twelve months or less. These leases are not recorded on the Company's Consolidated Balance Sheets. All operating lease expense is recognized on a straight-line basis over the lease term. Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments. For finance leases, the implicit rate is used, since it is readily available.

The components of lease expense were as follows (in thousands):

	Years ended December 31,
	2024		2023
Finance lease cost:
Amortization of leased assets	$	6	$	6
Interest on lease liabilities		1		1
Operating lease cost		31		330
Short-term lease cost		418	$	98
Total lease cost	$	456		435

The Company made cash payments regarding operating leases of $27,000 and $0 for the years ended December 31, 2024 and 2023, respectively. The Company made cash payments regarding finance leases of $18,000 and $96,000 for the years ended December 31, 2024 and 2023, respectively.

The following table shows right-of-use assets and lease liabilities:

	December 31,
(in thousands)	2024		2023
Right-of-use assets:
Operating leases	$	634	$	-
Finance leases		21		23
Total right-of-use assets	$	655	$	23

Lease liabilities:
Current portion of operating lease obligations	$	225	$	-
Operating lease obligations, net of current portion		319		-
Current portion of finance lease obligations		2		8
Finance lease obligations, net of current portion		-		2
Total lease liabilities	$	546	$	10

Lease liability maturities are as follows:

(in thousands)	Operating Leases			Finance Leases		Total
2025	$	249			2	$	251
2026		328			-		328
Total		577			2		579
Less: Imputed interest		(33	)		-		(33	)
Total lease liabilities	$	544			2	$	546

Lease liabilities, current	$	225		$	2	$	227
Lease liabilities, non-current		319			-		319
Total lease liabilities	$	544		$	2	$	546

The weighted-average remaining lease term related to the Company’s operating lease liabilities as of December 31, 2024 and December 31, 2023 was 1.9 years and 0.8 years, respectively. The discount rate related to the Company’s operating lease liabilities as of December 31, 2024 and December 31, 2023 was 5.0% for each of the years.

The weighted-average remaining lease term related to the Company’s finance lease liabilities as of December 31, 2024 and December 31, 2023 was 0.2 years and 1.3 years, respectively. The discount rate related to the Company’s operating lease liabilities as of December 31, 2024 and December 31, 2023 was 3.0% and 2.6%, respectively.