Note 13. Leases

Office Leases

We have long-term operating leases for office, industrial and laboratory space in Westminster, California, Oak Ridge, Tennessee, and Alberta, Canada. Payments made under operating leases are charged to the condensed consolidated statement of operations and comprehensive loss on a straight-line basis over the term of the operating lease agreement. Short-term leases less than one-year are not included in our analysis. For the three and six months ended June 30, 2026, rental expense totaled $102,000 and $210,000 and for the three months ended June 30, 2025, rental expense totaled $92,000.  The lease of our Westminster facility expires  August 2027.  The lease for Clyra Medical expires August 2030.  The lease of our Canadian facility is less than one year. None of our leases have additional terms related to the payments or mechanics of the lease. The leases have no additional payment terms such as common area maintenance payments, tax sharing payments or other allocable expenses. Likewise, the leases do not contain other terms and conditions of use, such as variable lease payments, residual value guaranties or other restrictive financial terms. Since there is no explicit interest rate in our leases, management used its incremental borrowing rate, which is estimated to be 18% to determine lease liability.  As of June 30, 2026, the weighted average remaining lease term for our operating leases was five years and the total remaining operating lease payments were $1,495,000. 

Future minimum lease payments under noncancelable leases, reconciled to the Company’s discounted operating lease liabilities are as follows: