The Company has made certain assumptions and judgments when applying ASC 842 including the adoption of the package of practical expedients available for transition. The practical expedients allowed the Company to not reassess (i) whether expired or existing contracts contained leases, (ii) lease classification for expired or existing leases and (iii) previously capitalized initial direct costs. The Company also elected not to recognize right-of-use assets and lease liabilities for short-term leases (leases with a term of twelve months or less).

Operating lease arrangements primarily consist of office and warehouse leases expiring at various years through 2028. The facility leases have original lease terms of two to seven years and contain options to extend the lease up to 5 years or terminate the lease. Options to extend are included in leased right-of-use assets and lease liabilities in the condensed consolidated balance sheet when the Company is reasonably certain it will renew the underlying leases. The Company has elected to apply a collateralized incremental borrowing rate to facility leases on the original lease term in calculating the present value of future lease payments.

As of June 30, 2026 and December 31, 2025, the weighted average discount rate for operating leases was 6.33% and the weighted average remaining lease term for operating leases was 2.0 and 2.4 years, respectively.

The Company has entered into various short-term operating leases for office and warehouse space, with an initial term of twelve months or less. These short-term leases are not recorded on the Company’s condensed consolidated balance sheets. The components of lease expense and other information for the three and six months ended June 30, 2026 and 2025 were as follows.


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in thousands)				(in thousands)
Operating lease costs	$	35	$	84	$	72	$	166
Variable lease costs		1		33		13		69
Short-term lease costs		20		10		26		20
Total lease costs		56		127		111		255
Other information:
Cash paid for amounts included in the measurement of operating lease liability	$	36	$	117	$	85	$	235

The following represents the Company’s minimum annual rental payments under operating leases for each of the next five years and thereafter:


Fiscal Year Ending December 31,	Operating
	(in thousands)
2026 (remaining)		73
2027		147
2028		67
Total future minimum lease payments		287
Less: imputed interest		(23	)
Present value of operating lease liability	$	264

Current portion of lease liability		130
Non-current portion of lease liability		134
Present value of operating lease liability	$	264