LEASES

6 Months Ended

Jun. 30, 2024

LEASES:

The Company has entered into operating leases primarily for commercial buildings. These leases have remaining terms which range from 0.3 to 5.3 years. As of June 30, 2024, no operating lease agreements contain economic penalties for the Company to extend the lease, and it is not reasonably certain the Company will exercise these extension options. Additionally, these operating lease agreements do not contain material residual value guarantees or material restrictive covenants. As of June 30, 2024, all leases recorded on the Company’s consolidated balance sheets were operating leases.

The Company has made the accounting policy election to use certain ongoing practical expedients made available by ASC 842 to: (i) not separate lease components from non-lease components for real estate; and (ii) exclude leases with an initial term of 12 months or less (“short-term” leases) from the consolidated balance sheets and will recognize related lease payments in the consolidated statements of operations on a straight-line basis over the lease term. For leases that do not have a readily determinable implicit rate, the Company uses its estimated secured incremental borrowing rate based on the information available at the lease commencement date to determine the present value of lease payments.

Rent expense, including short-term lease cost, was $0.6 million and $1.4 million for the three and six months ended June 30, 2024, respectively. Rent expense, including short-term lease cost, was $0.5 million and $1.0 million for the three and six months ended June 30, 2023, respectively. In addition to rent payments, the Company’s leases include real estate taxes, common area maintenance, utilities, and management fees, which are not fixed. The Company accounts for these costs as variable payments and does not include such costs as a lease component. Total variable expense was $0.1 million and $0.2 million for three and six months ended June 30, 2024 and not material for the three and six months ended June 30, 2023.

Information related to the Company right-of-use assets and related operating lease liabilities were as follows (in thousands):


	Six Months Ended June 30,
	2024		2023
Cash paid for operating lease liabilities	$	1,122	$	933
Operating lease cost	$	1,178	$	930
Non-cash right-of-use assets obtained in exchange for new operating lease obligations	$	530	$	560
Weighted-average remaining lease term in years	4.42		4.83
Weight-average discount rate	3.45% - 9.25%		4.25% - 8.25%


Maturities of lease liabilities are as follows (in thousands):
Remainder of fiscal year 2024	$	1,109
Fiscal year 2025	2,063
Fiscal year 2026	1,960
Fiscal year 2027	1,841
Fiscal year 2028	1,687
Thereafter	436
	9,096
Less imputed interest	924
Total lease liabilities	$	8,172