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| LEASES |
NOTE 11—LEASES
During the three months ended March 31, 2026, the Company committed to a plan to vacate three leased facilities in connection with the 2026 Reorganization Plan discussed in Note 3—Segment Reporting. The Company expects to vacate these leases during the three months ended June 30, 2026.
Upon approval of the 2026 Reorganization Plan, the Company determined that the remaining useful lives of the related ROU assets were shortened to reflect the revised period over which the assets are expected to provide economic benefit. Accordingly, the Company revised the amortization period of the ROU assets to end on the expected vacate dates. Although the Company intends to cease use of the leased properties as of those dates, the Company remains contractually obligated for lease payments through the end of the respective lease terms, unless and until a replacement tenant is identified.
Subsequent to March 31, 2026, the Company executed a lease termination agreement for one of the three facilities, effective April 30, 2026. In connection with the termination, the Company derecognized the remaining lease liability and right-of-use asset associated with the premises and settled its remaining obligations under the lease. As a result of this transaction, the Company expects to recognize a net gain of $0.6 million during the three months ended June 30, 2026, which will be reflected in restructuring and related expenses. The remaining two facilities are expected to be vacated during the three months ended June 30, 2026, and the Company remains contractually obligated for lease payments at those locations through the end of their respective lease terms unless replacement tenants are identified.
The Company's operating leases primarily consist of real estate leases such as offices. During the three months ended March 31, 2026 and 2025, operating lease expense was $1.5 million and $1.0 million, respectively. Included in operating lease expense for the three months ended March 31, 2026 is approximately $0.3 million of accelerated amortization of ROU assets related to the three facilities identified to be vacated under the 2026 Reorganization Plan. This accelerated amortization is non-cash and is reflected in “Restructuring and related” in the Condensed Consolidated Statements of Operations.
The Company does not have any finance leases. Total variable and short-term lease payments were immaterial for all periods presented. As of March 31, 2026, the Company did not have any material additional operating leases that have not yet commenced.
Supplemental balance sheet information related to operating leases are as follows:
Operating lease liability maturities:
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