The Company rents certain office facilities under noncancelable operating leases. As of September 30, 2026, approximately 100,000 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 3.1 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 5.4 years with a weighted average of 3.3 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:


	September 30, 2026		December 31, 2025
	(in thousands)
Assets:
Long-term operating lease right-of-use assets	$	2,880	$	2,534
Liabilities:
Short-term operating lease liability	$	1,151	$	1,283
Long-term operating lease liability		1,601		1,138
Total Liabilities	$	2,752	$	2,421

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


	Amount as of September 30, 2026
	(in thousands)
2026 (for remainder of year)	$	377
2027		1,049
2028		633
2029		441
2030		238
Thereafter		286
Total	$	3,024
Less: Imputed interest		(272	)
Present value of operating lease liabilities	$	2,752

The weighted average discount rate used to calculate the present value of future lease payments was 5.8%.

We recognize rent expense for these leases on a straight-line basis over the lease term. Rental expense for the three and nine months ended September 30, 2026 totaled $0.5 million and $1.4 million respectively. Rental expense for the three and nine months ended September 30, 2025 totaled $0.4 million and $1.2 million respectively.

Cash paid for lease liabilities for the three and nine months ended September 30, 2026 totaled $0.2 million and $1.1 million, respectively. Total cash paid for lease liabilities for the three and nine months ended September 30, 2025 totaled $0.4 million and $1.1 million, respectively.

During the three and nine months ended September 30, 2026, the Company obtained right-of-use assets in exchange for operating lease liabilities of $1.0 million and $1.4 million, respectively, which were non-cash transactions. The three-month amount relates to the Company's new Dallas, Texas office lease for approximately 5,895 square feet of office space, which commenced in the third quarter of 2026. No right-of-use assets were obtained in exchange for lease liabilities during the three and nine months ended September 30, 2025.

The Company has begun evaluating options to exit its Pittsburgh, Pennsylvania office lease and to lease space in the area that better meets its current space needs. No decision has been made.