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Note 12 - Leases

12 Months Ended

Dec. 31, 2024

12. Leases

We lease datacenters, corporate offices, antenna towers and fiber-optic cables under operating leases. The Company does not have any leases classified as finance leases.

Our leases have remaining lease terms of 1 year to 20 years, some of which may include options to extend the leases for up to 5 years, and some of which may include options to terminate the leases within 1 year.

The components of lease expense were as follows (Dollar amounts in thousands of U.S. dollars):

	*Year Ended*		*Year Ended*
	*December 31, 2024*		*December 31, 2023*
Operating lease expense (leases with a total term greater than 12 months)	$	7,134	$	5,710
Short-term lease expense (leases with a total term of 12 months or less)		34		196
Variable lease expense		2,343		1,878
Total lease expense	$	9,511	$	7,784

Lease expense is presented in general and administrative expenses and direct cost of revenues within our consolidated statements of operations and comprehensive income (loss).

Variable lease payments are determined based on specific terms and conditions outlined in the lease agreements. These may include payments for utilities, which are based on actual usage, and maintenance costs, which are determined based on expenses incurred.

Information related to leases was as follows (Dollar amounts in thousands of U.S. dollars):

	*Year Ended*		*Year Ended*
Supplemental cashflow information:	*December 31, 2024*		*December 31, 2023*
Operating lease - operating cash flows (fixed payments)	$	7,623	$	6,088
Operating lease - operating cash flows (liability reduction)	$	5,940	$	5,170
New right of use assets - operating leases	$	14,206	$	11,388

Supplemental balance sheet information related to leases:	*December 31, 2024*			*December 31, 2023*
Incremental borrowing rate		8.09	%		6.92	%
Weighted average remaining lease term	14.60 yrs			10.57 yrs

Maturity of lease liability as of December 31, 2024 (Dollar amounts in thousands of U.S. dollars):

	*December 31, 2024*
2025	$	7,225
2026		5,429
2027		3,880
2028		3,097
2029		3,026
Thereafter		32,669
Total future lease payments		55,326
Less: interest		24,277
Total	$	31,049

Operating lease payments include payments under the non-cancellable term, without any additional amounts related to options to extend lease terms that are not reasonably certain of being exercised.

As of December 31, 2024, we have not entered into any lease agreements that have not yet commenced, and therefore are not included in the lease liability.

The Company has elected to use the single exchange rate approach when accounting for lease modifications. Under the single exchange rate approach, the entire right of use asset is revalued at the date of modification in the Company’s functional currency provided the re-measurement is not considered a separate contract or if the re-measurement is related to change the lease term or assessment of a lessee option to purchase the underlying asset being exercised.