Leases

12 Months Ended

Dec. 31, 2024

Operating Leases

The Company leases office space facilities and a research and development laboratory under non-cancelable operating leases with varying expirations extending through fiscal year 2029. The lease agreements provide for renewal options and rent escalation over the lease term as well as require the Company to pay maintenance, insurance and property taxes.

On October 11, 2023, the Company amended its existing office space lease in Los Angeles, California. In accordance with Accounting Standards Codification (ASC) 842, the amended lease agreement is considered modified and subject to lease modification guidance. The right-of-use (ROU) asset and lease liability related to the lease agreement were remeasured based on the change in the lease conditions, which included rent abatement totaling approximately $355,000. The reassessed value of the ROU asset and lease liability as of the modification date was $1.0 million and $1.2 million, respectively. The lease term remained unchanged and extends through March 31, 2027 and provides one option to extend for an additional five years.

As of December 31, 2024 and 2023, the Company had ROU assets of $1.7 million and $2.4 million, respectively, and corresponding operating lease liabilities of $2.6 million and $3.3 million, respectively.

The components of operating lease expense for the years indicated are as follows:


	Year Ended December 31,
(In thousands)	2024		2023
Operating leases
Operating lease expense	$	886	$	905
Variable lease expense (1)	411		293
Operating lease expense	1,297		1,198
Short-term lease rent expense	17		16
Total expense	$	1,314	$	1,214

1) Variable lease costs, including property taxes and insurance and common area maintenance fees, are classified in cost of services in the Company's Consolidated Statements of Operations.

As of December 31, 2024, the weighted average remaining lease term for operating leases is 3.3 years and the weighted average discount rate used to determine the operating lease liabilities is 7.1%.

Future minimum lease payments under operating leases as of December 31, 2024 are as follows:


(In thousands)
Year	Amount
2025	$	1,135
2026	901
2027	491
2028	357
2029	30
Thereafter	—
Total	2,914
Less: Present value discount	(275)
Present value of total operating lease liabilities	2,639
Less: Current portion	(982)
Long-term obligations under operating leases	$	1,657