Leases

3 Months Ended

Mar. 31, 2024

5. Leases

In connection with the sale of a portion of our corporate campus as further discussed in Note 4, we leased the property pursuant to a master lease for an initial term extending through September 30, 2030, with two five-year extensions. The extension options are not recognized as part of the right-of-use asset and lease liability. We record the right to use the underlying asset for the operating lease term as an asset and our obligation to make lease payments as a liability, based on the present value of the lease payments over the initial lease term. At March 31, 2024, the weighted average remaining lease term was 6.50 years and the weighted average discount rate was 3.75%.

Because the rate implicit in the lease is not readily determinable, we used our incremental borrowing rate to determine the present value of lease payments. Information related to our right-of-use asset and related lease liability were as follows:


	March 31,		December 31,
(in thousands)	2024		2023
Operating right-of-use asset, net	$	6,082	$	6,288

Operating lease liability, current portion	$	795	$	780
Operating lease liability, net of current portion		5,503		5,708
	$	6,298	$	6,488

Operating lease expense is recognized on a straight-line basis over the lease term. Our operating lease expense was $265 and $266 for the three months ended March 31, 2024 and 2023, respectively. At March 31, 2024, and for the subsequent years ended December 31, future maturity is as follows:


(in thousands)
2024 (remaining)	$	757
2025		1,035
2026		1,064
2027		1,093
2028		1,123
Thereafter		2,037
Future lease payments, gross		7,109
Less: Imputed interest		(811	)
Operating lease liability	$	6,298