Leases

6 Months Ended

Jun. 30, 2024

The Company has operating leases for administrative offices in the United States (Colorado) and Germany.

As part of the XTI Merger, the Company acquired right-of-use assets and lease liabilities related to an operating lease for an office space (the IntraNav office) located in Frankfurt, Germany. This lease expires on January 6, 2025 and the current lease rate is $9,227 (€8,612) per month.

As part of the XTI Merger, the Company acquired right-of-use assets and lease liabilities related to an operating lease for an office space (the Inpixon GmbH office) located in Berlin, Germany. This lease expires on May 31, 2026 and the current lease rate is $7,929 (€7,400) per month.

On January 1, 2024, the Company entered into a lease agreement for its new corporate office location in Englewood, Colorado. This lease expires on January 31, 2028 and the current lease rate is $8,966 per month.

The Company has no other operating or financing leases with terms greater than 12 months.

Right-of-use assets are summarized below (in thousands):


	As of June 30, 2024		As of December 31, 2023
Englewood, CO Office	$	394	$	—
Berlin, Germany Office	196		—
Frankfurt, Germany Office	89		—
Less accumulated amortization	(96)		—
Right-of-use asset, net	$	583	$	—

Lease expense for operating leases recorded in the balance sheet is included in operating costs and expenses and is based on the future minimum lease payments recognized on a straight-line basis over the term of the lease plus any variable lease costs. Operating lease expenses, inclusive of short-term and variable lease expenses, recognized in our condensed consolidated statement of income for the three months ended June 30, 2024 and 2023 was approximately $101,000 and $1,000, respectively, and for the six months ended June 30, 2024 and 2023 was approximately $144,000 and $2,000, respectively.

Lease liability is summarized below (in thousands):


	As of June 30, 2024		As of December 31, 2023
Total lease liability	$	594	$	—
Less: short term portion	(235)		—
Long term portion	$	359	$	—

Maturity analysis under the lease agreement is as follows (in thousands):


Six months ending December 31, 2024	$	157
Year ending December 31, 2025	220
Year ending December 31, 2026	159
Year ending December 31, 2027	124
Year ending December 31, 2028	10
Year ending December 31, 2029 and thereafter	—
Total	$	670
Less: Present value discount	(76)
Lease liability	$	594

Operating lease liabilities are based on the net present value of the remaining lease payments over the remaining lease term. In determining the present value of lease payments, the Company used its incremental borrowing rate based on the information available at the date of adoption of ASC 842, "Leases" ("ASC 842"). As of June 30, 2024, the weighted average remaining lease term is 2.8 years and the weighted average discount rate used to determine the operating lease liabilities was 6.7%.