The Company has operating leases for real estate (primarily its operating facilities) and certain equipment with various expiration dates. The Company also has finance leases for certain equipment. The Company leases a portion of two multi-tenant buildings in Winston-Salem, North Carolina, under lease agreements held with certain third parties.

For the three months ended June 30, 2026 and 2025, the Company’s rent expense was $319,000 and $298,000, respectively. For the six months ended June 30, 2026 and 2025, the Company’s rent expense was $674,000 and $619,000, respectively. Cash paid for operating leases during the six months ended June 30, 2026 was $709,000.

The following table summarizes the classification of operating and finance lease assets and obligations in the Company's Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025 (in thousands):


	June 30, 2026		December 31, 2025
Operating leases:
Right of use assets	$	3,146	$	3,590

Operating lease liabilities, current	$	1,112	$	1,054
Operating lease liabilities, noncurrent		2,344		2,905
Total operating lease liabilities	$	3,456	$	3,959

Finance leases:
Right of use assets	$	65	$	74

Finance lease liabilities, current	$	17	$	17
Finance lease liabilities, noncurrent		50		60
Total finance lease liabilities	$	67	$	77

Maturities of lease liabilities for the Company’s operating and finance leases are as follows as of June 30, 2026 (in thousands):


	Operating Leases			Finance Leases			Total
2026 (remaining six months)	$	719		$	11		$	730
2027		1,292			22			1,314
2028		1,075			22			1,097
2029		457			22			479
2030		420			—			420
Thereafter		251			—			251
Total lease payments		4,214			77			4,291
Less: imputed interest		(758	)		(10	)		(768	)
Present value of lease liabilities	$	3,456		$	67		$	3,523

The weighted average remaining lease term for operating and finance leases is 3.6 and 3.5 years, respectively. The weighted average discount rate for operating leases is 11.0% and 5.6% for finance leases.

The Company leases a portion of its facilities in Winston-Salem, North Carolina under agreements that are classified as operating leases. In addition to the rental payments, tenants pay a fixed rate for their pro rata share of real estate taxes, insurance and other facility operating expenses. These amounts are recognized as revenues on a straight-line basis over the term of the related leases. For leasing revenues where collectability is not considered probable, lease income is recognized on a cash basis and all previously recognized tenant accounts receivables, including straight-line rent, are fully reserved in the period in which the lease income is determined not to be probable of collection. These lease agreements terminate between 2026 and 2029.

The leasing revenue for the three months ended June 30, 2026 and 2025 was $150,000 and $221,000, respectively. The leasing revenue for the six months ended June 30, 2026 and 2025 was $376,000 and $451,000, respectively. Future minimum lease payments under non-cancelable operating leases as of June 30, 2026 excluding the effect of straight-line rent and variable rental payments are as follows (in thousands):


	Total
2026 (remaining six months)	$	242
2027		495
2028		289
2029		13
2030		—
Thereafter		—
Total	$	1,039