In the normal course of business, we lease office space, primarily for our corporate administration and international sales administration offices, in commercial office complexes that are conducive to these functions. During fiscal 2025, we entered into a new lease agreement for leased headquarters space following the termination of our previous campus lease, which was accounted for as a financing obligation (Note 7). We also rent warehousing and distribution facilities that are designed to provide secure storage and efficient distribution of our training products, books, and accessories, and certain office equipment. These leases are classified as operating leases. Operating lease assets and liabilities are recognized at the commencement date based on the present value of the lease payments over the lease term. Since most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Leases with an initial term of 12 months or less are not recorded on the balance sheet and we do not have significant amounts of variable lease payments.

Some of our operating leases contain renewal options that may be exercised at our discretion after the completion of the base rental term. At August 31, 2025, we had operating leases with remaining terms ranging from less than one year to approximately 11 years. The amounts of assets and liabilities (in thousands) and other information related to our operating leases follows:



AUGUST 31,		2025			2024
Assets:
Operating lease right of use assets	Other long-term assets	$	6,933		$	1,140

Liabilities:
Current:
Operating lease liabilities	Accrued liabilities	$	657		$	509
Long-Term:
Operating lease liabilities	Other long-term liabilities		6,339			631
		$	6,996		$	1,140

Weighted Average Remaining Lease Term:
Operating leases (years)			9.9			2.4

Weighted Average Discount Rate:
Operating leases			6.9	%		6.7	%

We obtained $6.3 million, $1.1 million, and $0.6 million of right-of-use operating lease assets in exchange for operating lease liabilities during the fiscal years ended August 31, 2025, 2024, and 2023. During fiscal 2025, we paid $0.5 million of cash for amounts included in lease liabilities as reported in cash flows from operating activities. Amounts paid for lease liabilities in prior years were immaterial.

Future minimum lease payments under our operating leases at August 31, 2025, are as follows (in thousands):



YEAR ENDING
AUGUST 31,
2026	$	689
2027		1,110
2028		887
2029		907
2030		932
Thereafter		5,468
Total operating lease payments		9,993
Less imputed interest		(2,997)
Present value of operating lease liabilities	$	6,996

We recognize lease expense on a straight-line basis over the life of the lease agreement. Total lease expense, which consisted entirely of fixed payments, totaled $1.3 million, $1.1 million, and $1.2 million for the fiscal years ended August 31, 2025, 2024, and 2023.