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Operating Leases

6 Months Ended

Jun. 30, 2023

6. Operating Leases

The Company has various lease agreements for its offices and service delivery centers. These lease agreements are for terms ranging from two to eleven years and, in most cases, provide for annual escalations ranging from 1.75% to 10%. The Company has determined that the risks and benefits related to the leased properties are retained by the lessors. Accordingly, these are accounted for as operating leases. Lease agreements with a term of less than one year are treated as short-term leases and are accounted for separately as shown in the table below.

Most of the lease agreements are renewable at the mutual consent of the parties to the contract.

The table below summarizes the amounts recognized in the condensed consolidated financial statements related to operating leases for the periods presented (in thousands):


	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Rent expense for long-term operating leases	$	312	$	337	$	621	$	713
Rent expense for short-term operating leases		83		144		178		261
Total rent expense	$	395	$	481	$	799	$	974

The following table presents the maturity profile of the Company’s operating lease liabilities based on the contractual undiscounted payments with a reconciliation of these amounts to the remaining net present value of the operating lease liability reported in the condensed consolidated balance sheet as of June 30, 2023 (in thousands):


Year	Amount
2023	$	513
2024		932
2025		956
2026		970
2027		926
2028 and thereafter		1,553
Total lease payments		5,850
Less: Interest		(1,440)
Net present value of lease liabilities	$	4,410

Current portion	$	582
Long-term portion		3,828
Total	$	4,410

The weighted average remaining lease terms and discount rates for all of the Company’s operating leases as of June 30, 2023 were as follows:


Weighted-average lease term remaining (in months)	47
Weighted-average discount rate	9.13	%