The Company leases its facilities under operating leases which expire at various dates through 2038. Most of the Company’s leases include one or more options to renew. The Company’s leases do not provide an implicit rate, and the rates implicit in our leases are not readily determinable. Therefore, the Company uses its incremental borrowing rate as the discount rate when measuring operating lease assets and liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease.

The table below reconciles the undiscounted future minimum lease payments under these operating leases to the total operating lease liabilities recognized on the consolidated balance sheet as of June 30, 2026 (in thousands):


Year
2026 (remaining six months)	$	2,323
2027	4,706
2028	4,282
2029	3,683
2030	3,128
Thereafter	19,774
Total minimum payments	37,896
Less: imputed interest	(14,507)
Present value of operating lease liabilities	23,389
Less: current portion included in other current liabilities	(2,287)
Long-term operating lease liabilities	$	21,102

The payments above include approximately $3.6 million related to options to extend operating leases that are reasonably certain of being exercised.

In conjunction with the acquisition of NHanced, the Company assumed two leases where the prior owner, and now a current employee of the Company, is the lessor. Monthly rent under these leases is $48.7 thousand with three percent annual increases. Of the total minimum payments presented in the table above, $6.7 million relates to these assumed leases.


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Operating lease cost	$	689	$	162	$	1,134	$	305
Short term lease cost	26		10		42		20
Total lease cost	$	715	$	172	$	1,176	$	325

Cash payments for operating leases	$	621	$	162	$	1,070	$	305
Lease assets obtained in exchange for new operating lease liabilities	$	5,579	$	776	$	5,579	$	776


	June 30, 2026		December 31, 2025
Weighted average remaining lease term in years	9.16		3.30
Weighted average discount rate	10.75	%	10.00	%