LEASES

12 Months Ended

Dec. 31, 2024

The Company has entered into operating leases primarily for commercial buildings. As of December 31, 2024 no operating lease agreements contain economic penalties for the Company to extend the lease, and it is not reasonably certain the Company will exercise these extension options. Additionally, these operating lease agreements do not contain material residual value guarantees or material restrictive covenants. As of December 31, 2024, all leases recorded on the Company’s Consolidated Balance Sheets were operating leases.

The Company has made the accounting policy election to use certain ongoing practical expedients made available by ASC 842 to: (i) not separate lease components from nonlease components for real estate; and (ii) exclude leases with an initial term of 12 months or less (“short-term” leases) from the Consolidated Balance Sheets and will recognize related lease payments in the consolidated statements of operations on a straight-line basis over the lease term. For leases that do not have a readily determinable implicit rate, the Company uses its estimated secured incremental borrowing rate based on the information available at the lease commencement date to determine the present value of lease payments.

Rent expense, including short-term lease cost, was $2.6 million and $2.7 million for the fiscal years ended December 31, 2024 and 2023, respectively. In addition to rent payments, the Company’s leases include real estate taxes, common area maintenance, utilities, and management fees, which are not fixed. The Company accounts for these costs as variable payments and does not include such costs as a lease component. Total variable expense was $0.3 million and $0.1 million for the fiscal years ended December 31, 2024 and 2023, respectively.

Information related to the Company right-of-use assets and related operating lease liabilities were as follows (in thousands):


	Fiscal Years Ended
	December 31, 2024		December 31, 2023
Cash paid for operating lease liabilities	$	2,288	$	1,919
Operating lease cost	$	2,323	$	2,036
Non-cash right-of-use assets obtained in exchange for new operating lease obligations	$	650	$	3,230
Weighted-average remaining lease term	4.02		4.88
Weight-average discount rate	4.93%		5.08%


Maturities of lease liabilities (in thousands) due in the 12-month period ending December 31,
2025	$	2,078
2026	2,010
2027	1,842
2028	1,687
2029	440
	8,057
Less imputed interest	737
Total lease liabilities	$	7,320