v3.25.4
Leases, Lease Commitments and Contingencies
 12 Months Ended
Dec. 31, 2025
Leases [Abstract]  
Leases, Lease Commitments and Contingencies Leases, Lease Commitments and Contingencies
The Company has a lease for its headquarters location in Redwood City, California, which consists of approximately 24,591 square feet of office space (the “existing premises”) and was scheduled to expire on July 31, 2025 (the “Office Lease”). The Company leases additional facilities in Redwood City, California, under a sublease agreement, which consist of approximately 25,254 square feet of office space (the “expansion premises”) and was scheduled to expire on September 30, 2024 (the “Sublease”).
In the second quarter of 2024, the Company entered into a third amendment to Sublease (the “Third Amendment to Sublease”) to extend the lease term of the expansion premises through May 31, 2028. The Third Amendment to Sublease contains a rent-free period between November 1, 2024 and February 28, 2025, after which rent is approximately $0.1 million per month and is subject to an annual increase of approximately 3%.
The Company also entered into a third amendment to Office Lease (the “Third Amendment to Office Lease”) to extend the lease term of the existing premises through July 31, 2035. The Third Amendment to Office Lease contains a rent-free period, as further described below, after which rent is approximately $0.1 million per month and is subject to an annual increase of approximately 3.5%. Additionally, under the Third Amendment to Office Lease, the Company and the landlord have agreed to expand the existing premises to include the expansion premises, effective as of June 1, 2028, through July 31, 2035 (conterminous with the existing premises as referenced above). Commencing on June 1, 2028, the monthly base rent for the expansion premises will be $0.1 million per month and is subject to an annual increase of approximately 3.5%.
Under the Third Amendment to Office Lease, the Company has two options to extend the lease term on the leased premises for a period of five years, respectively. The Company did not include the renewal options in the lease terms for calculating lease liability, as it was not reasonably certain that the Company will exercise these renewal options. The amendments were accounted for as modifications that resulted in additional right of use assets in exchange for lease liabilities of $16.3 million.
In the fourth quarter of 2024, the Company entered into an amendment to the Third Amendment to Office Lease, which modified the rent-free period from the original dates of August 1, 2025 through November 30, 2025, to a new period from October 1, 2024 through December 31, 2024. There was no change to the other terms of the lease agreement that would materially impact the consolidated financial statements. The amendment was accounted for as a modification that resulted in additional right of use assets in exchange for lease liabilities of $0.4 million.
In the fourth quarter of 2024, the Company entered into a five-year lease for a new office facility in Switzerland. The lease commenced in the first quarter of 2025, with total future minimum rent payments of $0.5 million. The Company recognized right of use assets in exchange for lease liabilities of $0.4 million related to this new lease in the first quarter of 2025.
As of December 31, 2025, the Company has leases on 21 vehicles with an average lease term of 3.0 years.
Operating lease cost consists of the following (in thousands):
Years Ended December 31,
20252024
Operating lease cost
$3,291 $3,111 
Short-term lease cost
33 40 
Variable lease cost
495 714 
Total lease cost
$3,819 $3,865 
The following table summarizes a maturity analysis of the Company’s lease liabilities showing the aggregate lease payments as of December 31, 2025 (in thousands):
Fiscal Year Ending December 31,Amount
2026$3,001 
20273,023 
20282,934 
20292,948 
20302,941 
Thereafter
14,840 
Total minimum lease payments
$29,687 
Less: Amount of lease payments representing interest
10,418 
Present value of future minimum lease payments
$19,269 
Reported as:
Current lease liabilities
$1,210 
Long-term lease liabilities
18,059 
Total lease liabilities$19,269 
The following table summarizes additional information related to the Company’s operating leases (in thousands, except weighted average data):
December 31,
20252024
Right of use asset
$18,028$18,545
Weighted average remaining lease term (years)9.3110.46
Weighted average discount rate9.9 %9.9 %
The following table summarizes other supplemental information related to the Company’s operating leases (in thousands):
Years Ended December 31,
20252024
Cash paid for amounts included in the measurement of lease liabilities included in cash flows used in operating activities
$2,817 $3,133 
Right-of-use assets obtained in exchange for lease liabilities
$925 $17,016 
Contingencies
From time to time, the Company may be a party to various litigation claims in the normal course of business. Legal fees and other costs associated with such actions are expensed as incurred. The Company assesses, in conjunction with legal counsel, the need to record a liability for litigation and contingencies. Accrual estimates are recorded when and if it is determinable that such a liability for litigation and contingencies are both probable and reasonably estimable.
In December 2022, the Company received a civil investigative demand (“CID”) from the U.S. Department of Justice (“US DOJ”), in connection with an investigation under the False Claims Act. The CID requested information and documents regarding our relationships with certain health care providers, medical practices, and hospitals in connection with the sales and marketing of the Zephyr Valves and related products and services. Subsequently, on or about January 27, 2025 the DOJ filed on behalf of itself and certain states attorneys general, a Notice of Election to Decline Intervention in and to unseal the underlying action that was the basis of the CID, filed by an individual (the “Relator”) in U.S. District Court for the Northern District of California (the “Qui Tam Action”). In December 2025, the Company entered into a settlement agreement with the Relator, with approval by the US DOJ and the various states’ attorneys general who were parties to the Qui Tam Action. The Qui Tam Action was dismissed on December 22, 2025.
Leases, Lease Commitments and Contingencies Leases, Lease Commitments and Contingencies
The Company has a lease for its headquarters location in Redwood City, California, which consists of approximately 24,591 square feet of office space (the “existing premises”) and was scheduled to expire on July 31, 2025 (the “Office Lease”). The Company leases additional facilities in Redwood City, California, under a sublease agreement, which consist of approximately 25,254 square feet of office space (the “expansion premises”) and was scheduled to expire on September 30, 2024 (the “Sublease”).
In the second quarter of 2024, the Company entered into a third amendment to Sublease (the “Third Amendment to Sublease”) to extend the lease term of the expansion premises through May 31, 2028. The Third Amendment to Sublease contains a rent-free period between November 1, 2024 and February 28, 2025, after which rent is approximately $0.1 million per month and is subject to an annual increase of approximately 3%.
The Company also entered into a third amendment to Office Lease (the “Third Amendment to Office Lease”) to extend the lease term of the existing premises through July 31, 2035. The Third Amendment to Office Lease contains a rent-free period, as further described below, after which rent is approximately $0.1 million per month and is subject to an annual increase of approximately 3.5%. Additionally, under the Third Amendment to Office Lease, the Company and the landlord have agreed to expand the existing premises to include the expansion premises, effective as of June 1, 2028, through July 31, 2035 (conterminous with the existing premises as referenced above). Commencing on June 1, 2028, the monthly base rent for the expansion premises will be $0.1 million per month and is subject to an annual increase of approximately 3.5%.
Under the Third Amendment to Office Lease, the Company has two options to extend the lease term on the leased premises for a period of five years, respectively. The Company did not include the renewal options in the lease terms for calculating lease liability, as it was not reasonably certain that the Company will exercise these renewal options. The amendments were accounted for as modifications that resulted in additional right of use assets in exchange for lease liabilities of $16.3 million.
In the fourth quarter of 2024, the Company entered into an amendment to the Third Amendment to Office Lease, which modified the rent-free period from the original dates of August 1, 2025 through November 30, 2025, to a new period from October 1, 2024 through December 31, 2024. There was no change to the other terms of the lease agreement that would materially impact the consolidated financial statements. The amendment was accounted for as a modification that resulted in additional right of use assets in exchange for lease liabilities of $0.4 million.
In the fourth quarter of 2024, the Company entered into a five-year lease for a new office facility in Switzerland. The lease commenced in the first quarter of 2025, with total future minimum rent payments of $0.5 million. The Company recognized right of use assets in exchange for lease liabilities of $0.4 million related to this new lease in the first quarter of 2025.
As of December 31, 2025, the Company has leases on 21 vehicles with an average lease term of 3.0 years.
Operating lease cost consists of the following (in thousands):
Years Ended December 31,
20252024
Operating lease cost
$3,291 $3,111 
Short-term lease cost
33 40 
Variable lease cost
495 714 
Total lease cost
$3,819 $3,865 
The following table summarizes a maturity analysis of the Company’s lease liabilities showing the aggregate lease payments as of December 31, 2025 (in thousands):
Fiscal Year Ending December 31,Amount
2026$3,001 
20273,023 
20282,934 
20292,948 
20302,941 
Thereafter
14,840 
Total minimum lease payments
$29,687 
Less: Amount of lease payments representing interest
10,418 
Present value of future minimum lease payments
$19,269 
Reported as:
Current lease liabilities
$1,210 
Long-term lease liabilities
18,059 
Total lease liabilities$19,269 
The following table summarizes additional information related to the Company’s operating leases (in thousands, except weighted average data):
December 31,
20252024
Right of use asset
$18,028$18,545
Weighted average remaining lease term (years)9.3110.46
Weighted average discount rate9.9 %9.9 %
The following table summarizes other supplemental information related to the Company’s operating leases (in thousands):
Years Ended December 31,
20252024
Cash paid for amounts included in the measurement of lease liabilities included in cash flows used in operating activities
$2,817 $3,133 
Right-of-use assets obtained in exchange for lease liabilities
$925 $17,016 
Contingencies
From time to time, the Company may be a party to various litigation claims in the normal course of business. Legal fees and other costs associated with such actions are expensed as incurred. The Company assesses, in conjunction with legal counsel, the need to record a liability for litigation and contingencies. Accrual estimates are recorded when and if it is determinable that such a liability for litigation and contingencies are both probable and reasonably estimable.
In December 2022, the Company received a civil investigative demand (“CID”) from the U.S. Department of Justice (“US DOJ”), in connection with an investigation under the False Claims Act. The CID requested information and documents regarding our relationships with certain health care providers, medical practices, and hospitals in connection with the sales and marketing of the Zephyr Valves and related products and services. Subsequently, on or about January 27, 2025 the DOJ filed on behalf of itself and certain states attorneys general, a Notice of Election to Decline Intervention in and to unseal the underlying action that was the basis of the CID, filed by an individual (the “Relator”) in U.S. District Court for the Northern District of California (the “Qui Tam Action”). In December 2025, the Company entered into a settlement agreement with the Relator, with approval by the US DOJ and the various states’ attorneys general who were parties to the Qui Tam Action. The Qui Tam Action was dismissed on December 22, 2025.