LEASES

3 Months Ended

Mar. 31, 2026

11. LEASES

The Company leases office space and certain equipment under operating and finance leases. All leases have remaining lease terms of one to seven years. Office lease agreements include both lease and non-lease components, which are accounted for separately. Finance leases contain options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless the Company is reasonably certain to exercise the purchase option.

In September 2021, the Company entered into a lease agreement for product testing and lab space in Redmond, Washington which commenced in November 2021. In addition to base rent, the Company pays additional rent comprised of a proportionate share of any operating expenses, real estate taxes, and management fees. The lease, which expires in July 2032, includes an option to extend the term for one ten-year renewal period.

In September 2021, the Company entered into a lease agreement for office space in Redmond, Washington which commenced in December 2022. In addition to base rent, the Company will pay additional rent comprised of a proportionate share of any operating expenses, real estate taxes, and management fees. The lease, which expires in December 2032, contains an option to extend the term for one ten-year renewal period. On April 21, 2025, the Company signed an agreement with a third party to sublease a portion of this office space. The sublease commenced on July 15, 2025 and provides monthly rent of $0.1 million. The sublease expires on April 1, 2030 and contains one 32-month extension option.

In December 2023, the Company entered into a lease agreement for office space in Hamburg, Germany which commenced in November 2024. The lease, which expires in October 2029, includes an option to extend the term for two three-year renewal periods.

In September 2025, the Company entered into a lease agreement for an airplane runway strip in Warrenton, Virginia which commenced in October 2025. In addition to base rent, the Company pays additional rent comprised of a proportionate share of any operating expenses and real estate taxes. The lease, which expires in September 2026, includes an option to extend the term for two one-year renewal periods.

In November 2025, the Company entered into a lease agreement for office space in Chantilly, Virginia which commenced in January 2026. In addition to base rent, the Company pays additional rent comprised of a proportionate share of any operating expenses. The lease, which expires in February 2028, includes an option to extend the term for one five-year renewal period.

In February 2026, the Company assumed a lease agreement for office space in Colorado Springs, Colorado from Luminar (see Note 4. Business Combinations). In addition to base rent, the Company pays additional rent comprised of a proportionate share of operating expenses. The lease, which expires on May 31, 2028, includes an option to extend the term for one three-year renewal period.

Also in February 2026, the Company assumed a lease agreement on office and lab space in Orlando, Florida from Luminar. Subsequent to the date of these financial statements, on April 8, 2026, the Company extended the lease. The lease extension is scheduled to commence on July 1, 2026. In addition to base rent, the Company pays additional rent comprised of a proportionate share of operating expenses. The lease, which expires on July 30, 2029, includes an option to extend the term for one three-year renewal period.

The components of lease expense are as follows:

SCHEDULE OF COMPONENTS OF LEASE EXPENSE


	Three Months Ended
	March 31,
(in thousands)	2026			2025
Operating lease expense	$	1,132		$	859
Finance lease expense:
Amortization of leased assets		3			2
Interest on lease liabilities		-			1
Total finance lease expense		3			3
Sublease income		(135	)		-
Total lease expense	$	1,000		$	862

Supplemental cash flow information related to leases was as follows:


	Three Months Ended
	March 31,
(in thousands)	2026		2025
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	1,086	$	554
Operating cash flows from finance leases		3		2

Supplemental balance sheet information related to leases was as follows:

	March 31,			December 31,
(in thousands)	2026			2025
Operating leases
Operating lease right-of-use assets	$	17,929		$	14,075

Current portion of operating lease liabilities		4,985			3,481
Operating lease liabilities, net of current portion		16,259			14,034
Total operating lease liabilities	$	21,244		$	17,515

Finance leases
Property and equipment, at cost	$	159		$	157
Accumulated depreciation		(125	)		(120	)
Property and equipment, net	$	34		$	37

Weighted Average Remaining Lease Term
Operating leases		5.0 years			5.7 years
Finance leases		2.2 years			2.3 years

Weighted Average Discount Rate
Operating leases		5.7	%		4.9	%
Finance leases		5.5	%		5.5	%

As of March 31, 2025, maturities of lease liabilities were as follows:

(in thousands)	Operating			Finance
Years Ended December 31,	Leases			Leases
2026 (remainder of the year)	$	3,931		$	12
2027		5,166			15
2028		5,009			7
2029		4,092			5
2030		2,225			-
Thereafter		3,682			-
Total minimum lease payments		24,105			39
Less: amount representing interest		(2,861	)		(5	)
Present value of lease liabilities	$	21,244		$	34