6. LEASES

The Company leases administrative facilities and laboratory equipment through operating lease agreements. In addition, we rent various equipment used in our diagnostic lab and in our administrative offices through finance lease arrangements. Our operating leases include both lease (e.g., fixed payments including rent) and non-lease components (e.g., common area or other maintenance costs). The facility leases include one or more options to renew, from 1 to 5 years or more. The exercise of lease renewal options is typically at our sole discretion, therefore, the renewals to extend the lease terms are not included in our right-of-use (“ROU”) assets and lease liabilities as they are not reasonably certain of exercise.  We regularly evaluate the renewal options and, when they are reasonably certain of exercise, we include the renewal period in our lease term.  As our leases do not provide an implicit rate, we use our collateralized incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments.

Operating leases result in the recognition of ROU assets and lease liabilities on the balance sheet. ROU assets represent our right to use the leased asset for the lease term and lease liabilities represent our obligation to make lease payments. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Lease expense is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The primary leases we enter into with initial terms of 12 months or less are for equipment.

The Company also recognizes ROU assets from finance leases in connection with its HemeScreen Reagent Rental (“HSRR”) program and from finance leases for laboratory equipment. For certain customers in the HSRR program, the Company leases diagnostic testing equipment and then subleases the equipment to the customer.  Finance lease ROU assets and finance lease liabilities are recognized at the lease commencement date, and at the sublease commencement date the finance lease ROU asset is derecognized and is recorded as cost of sales in the condensed consolidated statements

of operations. There were no derecognized finance lease ROU assets for the three months ended
March 31, 2026 and 2025, respectively.

The balance sheet presentation of our operating and finance leases is as follows:

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As of March 31, 2026, the estimated future minimum lease payments, excluding non-lease components, are as follows:

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Other information as of March 31, 2026 and December 31, 2025 is as follows:

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During each of the three months ended March 31, 2026 and 2025, operating cash flows from operating leases were $0.1 million, and operating lease ROU assets obtained in exchange for operating lease liabilities were zero and $1.2 million, respectively.

During the three months ended March 31, 2026 and 2025, there were no finance lease ROU assets obtained in exchange for finance lease liabilities.

Operating Lease Costs

Operating lease costs were approximately $0.1 million and $0.1 million during the three months ended March 31, 2026 and 2025, respectively. These costs are primarily related to long-term operating leases for the Company’s facilities and laboratory equipment. Short-term and variable lease costs were less than $0.1 million for the three months ended March 31, 2026 and 2025, respectively.

Finance Lease Costs

Finance lease amortization and interest expenses are included in the condensed consolidated statements of operations for the three months ended March 31, 2026 and 2025 and the balances within these accounts are less than $0.1 million, respectively.