9. Leases

Our leases are primarily related to office space and certain equipment. The leases are classified as operating leases, for which we recorded a right of use asset.

Lease Costs

Fixed cost operating lease expense for the three months ended March 31, 2026 was $157 thousand, including $82 thousand reflected within “Cost of revenue” in our condensed consolidated statements of operations, as it related to assets used in directly servicing customer contracts. Fixed cost operating lease expense for the three months ended March 31, 2025 was $178 thousand.

Cash paid for operating leases approximated operating lease expense and non-cash right of use asset amortization for the three months ended March 31, 2026 and 2025.

In January 2026, we entered into a sublease agreement for our office space located in The Colony, Texas. The sublease agreement is effective through December 31, 2027, at which time our lease for the space will terminate. The sublease agreement is accounted for as an operating lease, and we recognized sublease income as an offset to operating lease expense on a straight-line basis over the term of the sublease agreement. Rental income for the subleased property approximated the rental expense for the office space for the three months ended March 31, 2026.

In March 2026, we entered into a new office lease effective as of May 2026 which expires August 2031. The office space is located in Irving, Texas, and is comprised of approximately 4,000 square feet, resulting in a smaller space for the Company largely due to our current hybrid work environment. The lease will be accounted for as an operating lease, and rent expense will be recognized on a straight-line basis over the term of the lease.

Balance Sheet Classification