The Company determines whether an arrangement is a lease at inception. The Company has operating and financing leases for certain land, office facilities and certain equipment. The leases have remaining lease terms of approximately two years to twenty-two years. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Lease expense for these leases is recognized on a straight-line basis over the lease term. For the three months ended March 31, 2026 and March 31, 2025, total lease costs are comprised of the following:


(Dollars in thousands)	Three Months Ended March 31,
	2026		2025

Operating lease cost	$	21	$	18



Finance lease costs
Amortization of right of use assets	21		—
Interest on lease liabilities	28		—
Total finance lease costs	49		—

Total net lease cost	$	70	$	18

Short-term leases are leases having a term of twelve months or less. The Company recognizes short-term leases on a straight-line basis and does not record a related asset or liability for such leases.


	Three Months Ended March 31, 2026

Weighted Average Remaining Lease Term (in years):
Operating leases	4.83
Financing leases	21.08

Weighted Average Discount Rate:
Operating leases	9.63	%
Financing leases	11.35	%


(Dollars in thousands)	Three Months Ended March 31, 2026		Three Months Ended March 31, 2025

Supplemental Cash Flows Information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	21	$	21
Financing cash flows from financing leases	$	56	$	—

Non-Cash Activity Right-of-use assets obtained or adjusted in exchange for lease obligations:
Operating leases	$	—	$	—
Financing leases	$	(430)	$	—

Maturities of noncancellable operating and financing lease liabilities are as follows for the quarter ending March 31:


(Dollars in thousands)
	2026		2026		2026
	Operating leases		Financing leases		Total
2026 (remainder of year)	$	62	$	169	$	231
2027	82		225		307
2028	29		225		254
2029	29		225		254
2030	29		225		254
Thereafter	59		3,656		3,715
Total lease payments	290		4,725		5,015
Less: imputed interest	(46)		(2,928)		(2,974)
Total lease obligations	244		1,797		2,041
Less: current obligations	(62)		(22)		(84)
Long-term lease obligations	$	182	$	1,775	$	1,957

As of March 31, 2026, there were no additional operating or financing lease commitments that had not yet commenced.

As of March 31, 2026, the Company was contractually committed for approximately $8.2 million of capital expenditures, primarily related to infrastructure builds, equipment procurement, and labor associated with the Company’s Project Kati datacenters. These capital expenditures are expected to occur over the current year.

The Company has a potential contingency associated with an agreement with SLC of up to $250 thousand which would be reduced by a proportion of funding received from SLC up to the $45.0 million aggregate contribution cap. The Company considers the probability of a payment for the contingency to be remote.

We are subject to legal proceedings, claims and liabilities which arise in the ordinary course of business. When applicable, we accrue for losses associated with legal claims when such losses are probable and can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. Legal fees are charged to expense as they are incurred.