Leases

12 Months Ended

Dec. 31, 2023

12. Leases

On January 1, 2019, the Company adopted Leases (Topic 842) using the modified retrospective method applied to all leases existing at the date of initial application. The Company elected the practical expedients to not reassess whether any existing contracts are or contain leases, not reassess the lease classification for any existing leases, and not reassess initial direct costs for any existing leases, upon the adoption of Leases (Topic 842).

The Company leases its corporate headquarters of 21,020 rentable square feet in accordance with a non-cancellable 89-month operating lease agreement as amended and effective in January 2017, with an option to extend for an additional 60 months. On September 20, 2023, the Company entered into an amendment to its corporate headquarters lease agreement to exercise the extension option for an additional 60 months through June 30, 2029 (the "Amended Lease"), with an option to further extend for an additional 60 months. The Company also leases an additional office space of 6,003 rentable square feet in accordance with a non-cancellable 90-month operating lease agreement entered into in April 2017, with an option to extend for an additional 60 months. The extension option is not included in the determination of the lease term as it is not reasonably certain to be exercised.

For the years ended December 31, 2023 and 2022, a summary of the Company’s lease information is shown below:


	Year Ended December 31,
(In thousands)	2023			2022
Lease cost:
Operating lease costs	$	699		$	672
Other information:
Cash paid for operating leases	$	765		$	743
Right-of-use assets obtained in exchange for operating lease liabilities(1)	$	1,919		$	-
Weighted average discount rate for operating leases(2)		10	%		-

(1)

The Amended Lease resulted in an addition of $1,919 to right-of-use assets and operating lease liabilities, as of September 20, 2023 (the "Remeasurement Date").

(2)

The Company used 10.0%, its estimated incremental borrowing rate for similar secured assets, as the discount rate for the Amended Lease to determine the present value of the lease payments because the implicit rate is not readily determinable. The discount rate was calculated on the basis of information available as of the Remeasurement Date. The Company used 8.0%, its estimated incremental borrowing rate for similar secured assets calculated on the basis of information available as of January 1, 2019, the initial application date, as the discount rate for the leases that existed prior to the Remeasurement Date, to determine the present value of the lease payments.

As of December 31, 2023 and 2022, the weighted average remaining operating lease term was 4.9 years and 1.9 years, respectively.

As of December 31, 2023, scheduled future maturities and present value of the operating lease liabilities are as follows:


(In thousands)
Year	December 31, 2023
2024		790
2025		580
2026		519
2027		535
2028		551
2029 and thereafter		279
Total maturities	$	3,254
Present value included in condensed consolidated balance sheet:
Current portion of operating lease liabilities	$	569
Noncurrent operating lease liabilities		1,999
Total operating lease liabilities	$	2,568
Difference between the maturities and the present value of operating lease liabilities	$	686