Note 10. Leases

The Company determines if an arrangement contains a lease at contract inception based on its ability to control a physically distinct asset in exchange for consideration. If the arrangement contains a lease, the Company then determines the classification of the lease as either operating or finance. For the three months ended March 31, 2026, and the year ended  December 31, 2025, the Company only had operating leases.

For operating leases, right-of-use (“ROU”) assets and lease liabilities are initially recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The present values of future lease payments are discounted using the interest rate implicit in the lease if it is readily determinable. As most leases do not provide an implicit rate, the Company applies an incremental borrowing rate based on the information available at commencement date to determine the present value of future lease payments over the lease term. The Company benchmarked itself against other companies with similar credit ratings and of comparable quality to derive an incremental borrowing rate. Lease expense is recognized on a straight-line basis over the lease term in the condensed consolidated statements of operations.

The Company elected to utilize the short-term lease exemption to exclude recognition of ROU assets and lease liabilities from the condensed consolidated balance sheet for leases with an initial term of 12 months or less, with payments instead being expensed on a straight-line basis over the lease term. If a lease includes options to extend the lease term, the Company does not assume the option will be exercised in its initial lease term assessment unless there is reasonable certainty that the Company will renew based on an assessment of economic factors present as of the lease commencement date. The Company monitors its plans to renew its material lease each reporting period.

The Company enters into contracts that contain both lease and non-lease components. Non-lease components include costs that do not provide a right-to-use a leased asset but instead provide a service such as maintenance costs. The Company has elected to account for the lease and non-lease components together as a single component for all classes of underlying assets. Variable costs associated with the lease, such as maintenance and utilities, are not included in the measurement of ROU assets and liabilities. Variable costs are expensed when the events determining the amount of variable consideration to be paid have occurred.

FLYTE Leases

In connection with the acquisition of FLYTE, the Company assumed or entered into certain operating leases related to FLYTE’s aviation operations, including hangar, office space and aircraft leases. The Company evaluated each assumed or newly executed lease arrangement upon acquisition or commencement and recognized operating lease right-of-use-assets and operating lease liabilities for leases with remaining terms greater than 12 months. For leases acquired in connection with the FLYTE acquisition, the Company measured the lease liabilities as if the acquired leases were new leases of the Company at the acquisition date, using the Company’s incremental borrowing rate when the rate implicit in the lease was not readily determinable. The FLYTE lease agreements generally require fixed monthly payments, payable in advance, and do not include residual value guarantees or purchase options that the Company is reasonably certain to exercise.

Hangar and Office Space Lease

In connection with the acquisition of FLYTE, the Company assumed a lease for hangar and office space with Stratosphere Development Co LLC DBA Republic Jet Center. The leased space is used to support FLYTE’s aviation operations, including hangar and office use. The lease commenced on  August 18, 2021, and was amended on August 27, 2024, with a remaining lease term of 17 months. The lease does not contain a purchase option or residual value guarantee. The Company did not include any renewal option in the lease term because the Company was not reasonably certain to exercise any renewal option as of the lease commencement date.

Aircraft Leases

In connection with the acquisition of FLYTE, the Company assumed two aircraft leases with SEG Jets LLC and entered into one additional aircraft lease with SEG Jets LLC in March 2026. The aircraft leases commenced on September 9, 2025, February 11, 2026, and March 16, 2026, and have remaining lease terms ranging from 18 months to 24 months. The aircraft leases do not transfer ownership of the aircraft to the Company, do not contain purchase options that the Company is reasonably certain to exercise, and do not contain residual value guarantees. The Company did not include renewal options in the lease terms because the Company was not reasonably certain to exercise any renewal options as of the respective lease commencement dates.

South Carolina Office Lease Agreement

On September 27, 2022, Old Catheter entered into a lease agreement for office space located in Fort Mill, South Carolina. The space is used for office and general use. The lease term began on October 1, 2022 for 38 months, and included two months of free rent from the commencement date of the lease. The original lease agreement contains two distinct 36-month renewal periods, which require 180 days’ notice of the Company's intention to exercise. In June 2025, the Company notified the landlord of its intent to exercise its option to extend the lease for an additional 36-month period through the end of December 1, 2028. Accordingly, the Company remeasured the lease liability on the basis of the revised lease payments and lease term, such that the first extension option of 36 months has been included in operating right-of-use-assets and operating lease liabilities in the condensed consolidated balance sheet as of March 31, 2026. 

As of March 31, 2026, the Company does not intend to exercise the second extension option and the second option is therefore excluded from operating right-of-use assets and operating lease liabilities in the condensed consolidated balance sheet as of March 31, 2026.

New Jersey Office Lease Agreement

On December 7, 2022, Old Catheter entered into a lease agreement for office space located in Augusta, New Jersey. The space is used for office and general use. The lease term began on January 1, 2023 for 24 months. The lease contained one 24-month renewal period, which required 9 months’ notice of the Company’s intent to exercise. In March 2024, the Company notified the landlord of its intent to extend the lease for a 12-month period. In April 2024, a lease extension agreement was entered into extending the lease through December 31, 2025. 

On July 8 2025, the Company entered into a second lease extension agreement to extend the lease for an additional 24-month period through the end of December 31, 2027. Accordingly, the Company remeasured the lease liability on the basis of the revised lease payments and lease term, such that the extension option of 24 months has been included in operating right-of-use-assets and operating lease liabilities in the condensed consolidated balance sheet as of March 31, 2026.

Park City Office Lease Agreement

On March 19, 2023, the Company entered into a lease agreement for office space located in Park City, Utah. The space is used for office and general use. The lease term began on May 1, 2023 for 36 months. The lease contains one 36-month renewal period, which requires 180 days’ notice of the Company's intention to exercise.

On March 4, 2026, the Company entered into the first amendment to the lease, which extended the lease termination date from April 30, 2026 to April 30, 2027. The lease contains one 36-month renewal period, which requires 180 days’ notice of the Company's intention to exercise.  As of March 31, 2026, the Company does not intend to exercise the 36-month renewal option and the option is therefore excluded from operating right-of-use assets and operating lease liabilities in the condensed consolidated balance sheet as of March 31, 2026.

The following tables present supplemental condensed consolidated balance sheet information related to operating leases for the three months ended March 31, 2026 and 2025 (in thousands):

Future minimum lease payments for all lease obligations for the following five fiscal years and thereafter are as follows (in thousands):

Operating lease right-of-use assets and lease liabilities were recorded in the condensed consolidated balance sheets as follows (in thousands):