Long-Term Licensing Agreement

12 Months Ended

Dec. 31, 2023

Contractors [Abstract]

Long-Term Licensing Agreement

17.LONG-TERM LICENSING AGREEMENT

During 2018, the Company entered into a licensing agreement with a third party to obtain a perpetual software license (“Licensing Agreement”) for a database structure, tools, and historical data used within the Company’s software. The Company has included the present value of the future payments required as a long-term licensing agreement within the accompanying consolidated balance sheets. The present value of the future payments was computed using an effective annual interest rate of 6.25%, and the Licensing Agreement requires the Company to make quarterly principal and interest installment payments of approximately $1.2 million through December 2031.

The present value of the future cash flows upon execution of the agreement was $45.6 million, which included an original discount of $23.2 million. At December 31, 2023, the remaining liability, net of the discount was $30.8 million, with $3.1 million classified as current. At December 31, 2022, the remaining liability, net of the discount was $33.6 million, with $2.9 million classified as current.

The discount was recorded to a contra liability account and is being amortized to interest expense over the term of the agreement using the effective interest method. During the years ended December 31, 2023, 2022 and 2021, the Company recognized $2.0 million, $2.2 million and $2.4 million, respectively, in interest expense related to the Licensing Agreement. The unamortized discount as of December 31, 2023 and 2022 was $8.6 million and $10.6 million, respectively.

Principal amounts due in each of the next five years and thereafter for the Licensing Agreement as of December 31, 2023, are as follows (in thousands):

Years Ending December 31:
2024	$	3,061
2025		3,257
2026		3,466
2027		3,689
2028		3,926
Thereafter		13,354
Total	$	30,753