The Company has existing operating and finance leases for corporate offices and facilities, vehicles and certain equipment. The Company’s leases have remaining terms of less than one year to 15 years, some of which include options to extend the lease term. For purposes of calculating lease liabilities, lease terms include options to extend the lease when it is reasonably certain that the Company will exercise such options.

The components of lease expense were as follows:


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2026		2025		2026		2025
Finance lease expense:
Amortization of right-of-use assets	$	408	$	443	$	816	$	748
Interest on lease liabilities		85		118		178		245
Operating lease expense		906		387		1,733		795
Total lease expense	$	1,399	$	948	$	2,727	$	1,788

Amortization of right-of-use assets was recorded within research and development, and selling, general, and administrative expenses, interest on lease liabilities was recorded within interest expense, and operating lease expense was recorded within research and development, and selling, general, and administrative expenses, each in the unaudited condensed consolidated statements of net loss.

Operating and finance lease right-of-use assets and liabilities as of June 30, 2026 and December 31, 2025 were as follows:


	June 30,		December 31,
	2026		2025
Assets:
Operating lease right-of-use assets	$	18,869	$	13,938
Finance lease right-of-use assets	$	2,919	$	3,735

Liabilities:
Current:
Operating lease liabilities	$	3,053	$	1,161
Finance lease liabilities	$	1,066	$	1,056
Non-current:
Operating lease liabilities	$	20,818	$	15,832
Finance lease liabilities	$	1,462	$	2,004

As most of the Company’s operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on information available at the commencement date in determining the present value of lease payments.

The Company leases various equipment through purchase and leaseback agreements with terms between five and seven years. The purchase and leaseback agreements provide an option for Firefly to purchase the equipment for nominal consideration that the Company is reasonably certain to exercise. The purchase and leaseback agreements were evaluated under the sale and leaseback guidance in ASC 842-40, Leases – Sale and Leaseback Transactions. Due to the purchase option, the transactions were accounted for as failed sales and leasebacks, and the Company has accounted for the purchase and leaseback agreements as financings.

As a result, the Company has reflected the manufacturing equipment on its unaudited condensed consolidated balance sheets in property and equipment, net, and recognizes depreciation expense over its estimated useful life. During the three months ended June 30, 2026, the Company recorded an initial financing liability of $2.3 million related to a new failed sale and leaseback agreement in notes payable. As of June 30, 2026, the Company’s notes payable, current and non-current, related to failed sales and leasebacks were $6.6 million and $19.5 million, respectively. As of December 31, 2025, the Company’s related notes payable, current and non-current, were $6.0 million and $21.1 million, respectively. The Company does not recognize rent expense related to these purchase and leaseback agreements. Instead, periodic lease payments are recognized as interest expense and reductions of the principal balance of the financing liability.

For the three months ended June 30, 2026, payments of $1.8 million were made under the purchase and leaseback agreements in addition to interest expense of $0.5 million. For the six months ended June 30, 2026, payments of $3.4 million were made under the purchase and leaseback agreements in addition to interest expense of $1.0 million.

For the three months ended June 30, 2025, payments of $1.4 million were made under the purchase and leaseback agreements in including interest expense of $0.6 million, and during the six months ended June 30, 2025 payments of $2.7 million were made under the purchase and leaseback agreements, including interest expense of $1.2 million.