Leases

6 Months Ended

Jun. 30, 2024

Leases

Leases

6. Leases

The Company has no finance leases and one operating lease for its corporate headquarters in Princeton, NJ. The current lease commenced on December 1, 2021 and terminates on March 31, 2025. The lease provides the Company with an option to extend the lease for an additional five years. Under the terms of the lease, the Company pays base annual rent subject to a fixed dollar amount increase each year, a fixed monthly charge for electricity, and other normal operating expenses such as taxes, repairs, and maintenance. The Company evaluates renewal options at lease inception and on an ongoing basis and includes renewal options that it is reasonably certain to exercise in its expected lease terms when classifying leases and measuring lease liabilities. The lease does not require variable lease payments, residual value guarantees, or restrictive covenants.

The lease does not provide an implicit rate, therefore the Company used its incremental borrowing rate as the discount rate when measuring the operating lease liability. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease.

Operating lease expense was $89,000 for each of the three months ended June 30, 2024 and 2023. Operating lease expense was $178,000 for each of the six months ended June 30, 2024 and 2023. Operating cash flows used for operating leases during the six months ended June 30, 2024 and 2023 were approximately $177,000 and $154,000 respectively. As of June 30, 2024, the weighted average remaining lease term was 0.75 years, and the weighted average discount rate was 11.8%.

Future minimum lease payments under non-cancellable leases as of June 30, 2024 were as follows (in thousands):

2024	$	199
2025		101
Total	$	300
Less: Interest		(11)
Present value of lease liability	$	289