The Company rents certain office facilities under noncancelable operating leases. As of June 30, 2026, approximately 94,000 square feet of office space is utilized for our sales and recruiting offices, delivery centers, and corporate headquarters. All of our leases are classified as operating leases. The average initial lease term is 2.9 years. Several leases have an option to renew, at our sole discretion, for an additional term. Our present lease terms range from less than one year to 3.3 years with a weighted average of 2.1 years. Leases with an initial term of twelve months or less are not recorded on the balance sheet.

The following table summarizes the balance sheet classification of the lease assets and related lease liabilities:


	June 30, 2026		December 31, 2025
	(in thousands)
Assets:
Long-term operating lease right-of-use assets	$	2,255	$	2,534
Liabilities:
Short-term operating lease liability	$	1,274	$	1,283
Long-term operating lease liability		851		1,138
Total Liabilities	$	2,125	$	2,421

Future minimum rental payments for office facilities and equipment under the Company’s noncancelable operating leases are as follows:


	Amount as of June 30, 2026
	(in thousands)
2026 (for remainder of year)	$	750
2027		892
2028		410
2029		209
Total	$	2,261
Less: Imputed interest		(136	)
Present value of operating lease liabilities	$	2,125

The weighted average discount rate used to calculate the present value of future lease payments was 5.9%.

We recognize rent expense for these leases on a straight-line basis over the lease term. Rental expense for the three and six months ended June 30, 2026 totaled $0.5 million and $0.9 million respectively. Rental expense for the three and six months ended June 30, 2025 totaled $0.4 million and $0.8 million respectively.

Cash paid for lease liabilities for the three and six months ended June 30, 2026 totaled $0.5 million and $0.9 million, respectively. Total cash paid for lease liabilities for the three and six months ended June 30, 2025 totaled $0.3 million and $0.7 million, respectively.

On March 5, 2026, the Company entered into a lease agreement (the “Lease”) with EPC-CW15, LLC (the “Landlord”) for approximately 5,895 square feet of office space located at 3300 Olympus Boulevard, Suite 560, Dallas, Texas 75019 (the “Property”). The Lease is expected to commence on August 24, 2026 (or such later date as specified in the Lease) and has an initial term of five

years following a five-month rent abatement period, unless earlier terminated in accordance with its terms. The Company has the option to renew the Lease for one additional five-year period.