Leases

12 Months Ended

Dec. 31, 2024

Leases

Leases

12. Leases.

The Company is party to leasing contracts in which the Company is the lessee. These lease contracts are classified as either operating or finance leases. The Company’s lease contracts include land, buildings, and equipment. Remaining lease terms range from 1 to 15 years with various term extension options available. The Company includes optional extension periods and early termination options in its lease term if it is reasonably likely that the Company will exercise an option to extend or terminate early.

Operating lease right of use (“ROU”) assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term, at the later of the commencement date or business combination date. Because most of the Company’s leases do not provide an implicit rate of return, the discount rate is based on the collateralized borrowing rate of the Company, on a portfolio basis.

As of December 31, 2024 and 2023, the Company leased space from a related party under a non-cancelable operating lease for its corporate headquarters. The lease has monthly payments of $375 through September 30, 2025. The lease does not include a renewal option.

The weighted average remaining lease term and weighted average discount rate is as follows at:

	December 31, 2024
Weighted average remaining lease term (years)
Finance leases	4.2
Operating leases	13.9
Weighted average discount rate applied
Finance leases	5.5	%
Operating leases	8.2	%

The components of lease expense from continuing operations are as follows within our consolidated statements of operations and comprehensive income (loss):

	Year Ended
	December 31, 2024
Operating lease expense:
Operating lease cost	$	3,608,000
Short-term variable lease cost		374,000
Finance lease expense:
Finance lease cost - amortization		8,000
Finance lease cost - interest		2,000
Total lease expense	$	3,992,000

The components of lease expense from continuing operations and discontinued operations are as follows within our consolidated statements of operations and comprehensive income (loss):

	Year Ended
	December 31, 2023
Operating lease expense:
Related party lease	$	3,000
Other		14,000
Total lease expense	$	17,000
Lease expense from discontinued operations	$	14,000

Supplemental cash flow information related to leases where the Company is the lessee is as follows:

	Year Ended
	December 31, 2024
Operating cash flows from operating leases	$	2,330,000
Operating cash flows from finance leases		2,000
Financing cash flows from finance leases		16,000
Leased assets obtained in exchange for operating lease liabilities		34,289,000
Leased assets obtained in exchange for finance lease liabilities		84,000

As of December 31, 2024, the maturities of the operating and finance lease liabilities are as follows:

Year ending December 31,	Operating Leases		Finance Leases
2025	$	3,754,000	$	24,000
2026		3,826,000		13,000
2027		3,902,000		13,000
2028		3,804,000		13,000
2029		3,827,000		9,000
Thereafter		38,081,000		—
Total Lease Payments		57,194,000		72,000
Less discount to PV		(23,710,000)		(7,000)
Lease liability balance	$	33,484,000	$	65,000