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Leases
 9 Months Ended
Sep. 30, 2025
Leases  
Leases

Note 6: Leases

 

Leasing activity generally consists of office leases. In March 2019, a lease was signed to move the corporate headquarters to Raleigh, North Carolina. The lease had a lease commencement date of October 2, 2019 and expires December 31, 2027. Minimum lease payments are $2,997,000, not including a tenant improvement allowance of $488,000, which is included in fixed assets as of September 30, 2025 and December 31, 2024. The Company recognized a ROU asset and corresponding lease liability of $2,596,000, which represents the present value of minimum lease payments discounted at 3.77%, the Company’s incremental borrowing rate at lease inception. 

 

Lease liabilities totaled $804,000 as of September 30, 2025. The current portion of this liability of $396,000 is included in Accrued expenses on the Consolidated balance sheets and the long-term portion of $408,000 is included in Lease liabilities on the Consolidated balance sheets. Rent expense consists of both operating lease expense from amortization of our ROU assets as well as variable lease expense which consists of non-lease components of office leases (i.e. common area maintenance) or rent expense associated with short-term leases. The components of lease expense were as follows (in thousands): 

                    
   For the Three Months Ended   For the Nine Months Ended 
   September 30,   September 30,   September 30,   September 30, 
   2025   2024   2025   2024 
Lease expense                    
Operating lease expense  $76   $76   $228   $228 
Variable lease expense   17    18    48    50 
Total lease expense  $93   $94   $276   $278 

 

The weighted-average remaining non-cancelable lease term for our operating leases was 2.25 years as of September 30, 2025. As of September 30, 2025, the weighted-average discount rate used to determine the lease liability was 3.77%. The future minimum lease payments to be made under non-cancelable operating leases on September 30, 2025, are as follows (in thousands):

     
Year Ended December 31:    
2025  $100 
2026   401 
2027   412 
Total lease payments   913 
Present value adjustment   (109)
Lease liability  $804 

 

We have performed an evaluation of our other contracts with customers and suppliers in accordance with Topic 842 and have determined that, except for the leases described above, none of our contracts contain a lease.