LEASES
The Company has operating leases for real estate and a finance lease for data center equipment. The operating and finance leases contain options to extend or terminate the leases. However, these were not included in the original accounting treatment of the leases as the Company is not reasonably certain to exercise these options.
During the years ended December 31, 2025 and 2024, the Company did not enter into any new operating or finance lease agreements.
The components of lease cost reflected on the Consolidated Statements of Operations were as follows (in thousands):
| | | | | | | | | | | | | |
| Year Ended December 31, |
| 2025 | | 2024 | | |
| Finance lease cost: | | | | | |
| Amortization of ROU assets | $ | 136 | | | $ | 136 | | | |
| Interest on lease liabilities | 13 | | | 24 | | | |
| Total finance lease cost | 149 | | | 160 | | | |
| Operating lease cost | 1,064 | | | 1,069 | | | |
| Short-term lease cost | 423 | | | 524 | | | |
| Total lease cost | $ | 1,636 | | | $ | 1,753 | | | |
| | | | | |
Other information related to leases was as follows (in thousands, except percentages or as noted within):
| | | | | | | | | | | |
| As of December 31, |
| 2025 | | 2024 |
| Finance lease ROU asset (included within Lease right-of-use assets) | $ | 91 | | | $ | 227 | |
| Operating lease ROU asset (included within Lease right-of-use assets) | $ | 4,639 | | | $ | 5,214 | |
| Weighted average remaining lease term (in years): | | | |
| Finance leases | 0.67 | | 1.67 |
| Operating leases | 7.48 | | 8.32 |
| Weighted average discount rate: | | | |
| Finance leases | 8.10 | % | | 8.10 | % |
| Operating leases | 8.30 | % | | 8.30 | % |
| | | |
Supplemental cash flow information related to leases was as follows (in thousands):
| | | | | | | | | | | | | |
| Year Ended December 31, |
| 2025 | | 2024 | | |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | | |
| Operating cash flows from operating leases | $ | 1,079 | | | $ | 516 | | | |
| Operating cash flows from finance leases | $ | 13 | | | $ | 24 | | | |
| Financing cash flows from finance leases | $ | 140 | | | $ | 129 | | | |
| | | | | |
Maturities of lease liabilities as of December 31, 2025 were as follows (in thousands):
| | | | | | | | | | | | | | |
| For the year ending: | | Finance leases | | Operating leases |
| 2026 | | $ | 102 | | | $ | 1,018 | |
| 2027 | | — | | | 1,033 | |
| 2028 | | — | | | 1,063 | |
| 2029 | | — | | | 1,095 | |
| 2030 | | — | | | 842 | |
| Thereafter | | — | | | 2,562 | |
| Total future lease payments | | 102 | | | 7,613 | |
| Less: imputed interest | | (2) | | | (1,974) | |
| Less: lease liabilities, current | | (100) | | | (578) | |
| Lease liabilities, non-current | | $ | — | | | $ | 5,061 | |
| | | | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.