The Company determines if an arrangement is a lease at inception. The guidance in ASC 842 defines a lease as a contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration. Operating lease ROU assets and lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. The Company’s leases do not provide an implicit rate. The Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. Additionally, the portfolio approach is used in determining the discount rate used to present value lease payments. The ROU asset includes any lease payments made and excludes lease incentives and initial direct costs incurred.

The Company is party to operating leases for office and production facilities and equipment under agreements that expire at various dates through fiscal 2028. The Company elected the package of practical expedients permitted under the lease standard. In electing the practical expedient package, the Company is not required to reassess whether an existing or expired contract is or contains a lease, reassess the lease classification for expired or existing leases nor reassess the initial direct costs for leases that commenced before the adoption of ASC 842. The Company also elected the short-term lease exemption such that the lease standard was applied to leases greater than one year in duration. Leases with an initial term of twelve months or less are not recorded on the balance sheet. The Company recognizes lease expense for these leases on a straight-line basis over the lease term.

The tables below show the operating lease ROU assets and liabilities as of September 30, 2024, and the balances as of December 31, 2024, including the changes during the periods.


	Operating lease ROU assets
Operating lease ROU assets as of September 30, 2024	$	3,110
Less amortization of operating lease ROU assets		(192	)
Effect of exchange rate on operating lease ROU assets		(20	)
Operating lease ROU assets as of December 31, 2024	$	2,898


	Operating lease liabilities
Operating lease liabilities at September 30, 2024	$	4,290
Less lease principal payments on operating lease liabilities		(255	)
Effect of exchange rate on operating lease liabilities		(21	)
Operating lease liabilities as of December 31, 2024		4,014
Less non-current portion		(2,989	)
Current portion as of December 31, 2024	$	1,025

As of December 31, 2024, the Company’s operating leases have a weighted-average remaining lease term of 3.6 years and a weighted-average incremental borrowing rate of 4.16%. The maturities of the operating lease liabilities are as follows:


Fiscal year ending September 30,
2025 (remaining nine months)	$	872
2026		1,193
2027		1,215
2028		1,047
2029		—
Thereafter		—
Total undiscounted operating lease payments		4,327
Less imputed interest		(313	)
Present value of operating lease liabilities	$	4,014

For the three months ended December 31, 2024 and 2023, total lease expense under operating leases was approximately $235 and $245, respectively. The Company recorded $7 and $5 in short-term lease expense during the three months ended December 31, 2024 and 2023, respectively.