7. Operating leases, right-of-use assets and lease liabilities

The Company leases or subleases facilities under operating lease agreements that expire at various dates through 2031. Some of these arrangements contain renewal options and require the Company to pay taxes, insurance and maintenance costs. Operating lease right-of-use assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term. Right-of-use assets also include adjustments related to deferred lease payments and lease incentives. Renewal options were not included in the right-of-use asset and operating lease liability calculation. As of September 30, 2026, there were no finance leases.

During the three months ended September 30, 2026, the Company ceased use of the Sydney, Australia leased office space and recorded an impairment of approximately $0.6 million to reduce the related right-of-use ("ROU") asset to the estimated fair value, determined using a discounted cash flow analysis of projected sublease income. The charge was recorded within Restructuring Charges on the condensed consolidated statement of operations.

Operating lease expense was $0.6 million and $0.4 million for the three months ended September 30, 2026 and 2025, respectively, and was $1.6 million and $1.0 million for the nine months ended September 30, 2026 and 2025, respectively.