18. LEASES
Octave is the lessee under certain lease agreements further described below.
Lessee information
Octave is the lessee in operating leases for corporate offices. Leases in effect at December 31, 2025, have remaining lease terms ranging from under 2 years to 8 years. Certain of these leases include early termination provisions which Octave does not include in the determination of its lease liabilities and right-of-use assets unless exercise is considered reasonably certain.
Lease costs are included in operating expenses on the Consolidated Statement of Total Comprehensive Income (Loss). The components of lease costs, net of sub-lessor income, is as follows:
| | | | | | | | | | | | | | | | | | | | | | |
| Year Ended December 31, | | | | 2025 | | 2024 | | 2023 |
| Operating lease cost | | | | $ | 9,118 | | | $ | 4,247 | | | $ | 3,904 | |
| Short-term lease cost | | | | 16 | | | — | | | 52 | |
| Variable lease cost | | | | 356 | | | 437 | | | 404 | |
| Sublease income | | | | 407 | | | (1,086) | | | (1,124) | |
| Total lease cost | | | | $ | 9,897 | | | $ | 3,598 | | | $ | 3,236 | |
Octave is required to make variable lease payments under certain leases which primarily relates to variable costs of the lessor, such as taxes, insurance, maintenance and electricity.
During 2025, Octave terminated an operating lease for office space and incurred a termination payment of $6,481, which is included within operating lease cost. Additionally, costs related to a separate operating lease for office space was transferred to AAC prior to completion of sale, lease cost prior to transfer are included within table above.
Supplemental information related to leases is as follows:
| | | | | | | | | | | | | | | | | | | | |
| Year Ended December 31, | | 2025 | | 2024 | | 2023 |
| Cash paid for amounts included in the measurement of operating lease liabilities | | $ | 11,060 | | | $ | 4,432 | | | $ | 4,155 | |
| Right-of-use assets obtained in exchange for operating lease liabilities (non-cash) | | 8,761 | | | 2,256 | | | 714 | |
Supplemental balance sheet information related to leases is as follows:
| | | | | | | | | | | | | | |
| December 31, | | 2025 | | 2024 |
| Operating leases: | | | | |
| Operating lease right of use assets | | $ | 9,192 | | | $ | 18,107 | |
| Operating lease liabilities | | 9,854 | | | 21,543 | |
| Weighted average remaining lease term: | | | | |
| Operating leases | | 4.6 years | | 5.1 years |
| Weighted average discount rate: | | | | |
| Operating leases | | 6.3 | % | | 7.8 | % |
Operating lease right of use assets and operating lease liabilities are included in Other assets and Other liabilities, respectively, on the consolidated balance sheet.
Future undiscounted lease payments, gross of sublease receipts, to be made are as follows:
| | | | | | | | |
| As of December 31, 2025 | | Operating
Leases |
| 2026 | | $ | 2,523 | |
| 2027 | | 2,667 | |
| 2028 | | 2,589 | |
| 2029 | | 2,096 | |
| 2030 | | 1,004 | |
| Thereafter | | 463 | |
| Total lease payments | | 11,342 | |
| Less: imputed interest | | (1,488) | |
| Total | | $ | 9,854 | |