LEASES

6 Months Ended

Jun. 30, 2025

Leases

LEASES

10. LEASES

The Company leases office space and certain equipment under operating and finance leases. All leases have remaining lease terms of less than seven years. Office lease agreements include both lease and non-lease components, which are accounted for separately. Finance leases contain options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless the Company is reasonably certain to exercise the purchase option.

In September 2021, the Company entered into a lease agreement for product testing and lab space in Redmond, Washington which commenced in November 2021. In addition to base rent, the Company pays additional rent comprised of a proportionate share of any operating expenses, real estate taxes, and management fees. The lease, which expires in July 2032, includes an option to extend the term for one ten-year renewal period.

In September 2021, the Company entered into a lease agreement for office space in Redmond, Washington which commenced in December 2022. In addition to base rent, the Company will pay additional rent comprised of a proportionate share of any operating expenses, real estate taxes, and management fees. The lease, which expires in December 2032, contains an option to extend the term for one ten-year renewal period. On April 21, 2025, the Company signed an agreement with a third party to sublease a portion of this office space. The sublease commenced on July 15, 2025 and provides monthly rent of $0.1 million. The sublease expires on April 1, 2030 and contains one 32-month extension option.

In April 2022, the Company entered into a lease agreement for product testing for engineering and development activities in Nuremberg, Germany which commenced in May 2022. In June 2024, the Company abandoned the space prior to its expiration of November 2027.

In September 2022, the Company entered into a lease agreement for office space in Nuremberg, Germany which commenced in November 2022. In June 2024, the Company entered into an early termination agreement to decrease the expiration from April 2027 to April 2025, resulting in an insignificant early termination fee.

In December 2023, the Company entered into a lease agreement for office space in Hamburg, Germany which commenced in November 2024. The lease, which expires in October 2029, includes an option to extend the term for two three-year renewal periods.

The components of lease expense are as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands)	2025		2024		2025		2024
Operating lease expense	$	867	$	668	$	1,742	$	1,333
Finance lease expense:
Amortization of leased assets		3		-		5		-
Interest on lease liabilities		-		-		1		-
Total finance lease expense		3		-		6		-
Total lease expense	$	870	$	668	$	1,748	$	1,333

Supplemental cash flow information related to leases is as follows:

	Six Months Ended
	June 30,
(in thousands)	2025		2024
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	1,097	$	1,299
Operating cash flows from finance leases		6		-

Supplemental balance sheet information related to leases is as follows:

	June 30,			December 31,
(in thousands)	2025			2024
Operating leases
Operating lease right-of-use assets	$	16,123		$	16,746
Operating lease liabilities, current		3,462			2,682
Operating lease liabilities, net of current portion		15,186			15,954
Total operating lease liabilities	$	18,648		$	18,636
Finance leases
Property and equipment, at cost	$	154		$	112
Accumulated depreciation		(117	)		(112	)
Property and equipment, net	$	37		$	-
Weighted Average Remaining Lease Term
Operating leases		6.2 years			6.8 years
Finance leases		3.7 years			n/a
Weighted Average Discount Rate
Operating leases		4.9	%		4.9	%
Finance leases		5.5	%		n/a

As of June 30, 2025, maturities of lease liabilities are as follows:

(in thousands)	Operating			Finance
Years Ended December 31,	Leases			Leases
2025 (remainder of year)	$	1,796		$	7
2026		3,485			14
2027		3,498			14
2028		3,470			7
2029		3,250			5
Thereafter		5,716			-
Total minimum lease payments		21,215			47
Less: amount representing interest		(2,567	)		(4	)
Present value of capital lease liabilities	$	18,648		$	43