OPERATING LEASES

12 Months Ended

Dec. 31, 2024

The Company leases office space in various locations in Alabama, Pennsylvania, and Mississippi. These leases have terms expiring from 2025 through 2030 but do contain optional extension terms. Leases with an initial term of 12 months or less are not recorded on the balance sheet. We recognize lease expense on a straight-line basis over the lease term.

On April 30, 2023, the company terminated its lease agreement for approximately 12,500 square feet of office space in Plymouth, Minnesota. Pursuant to a Termination of Lease Agreement dated April 18, 2023, the Company paid $1.1 million to the landlord as consideration for the early termination. In connection with the lease termination, the Company derecognized the assets and liabilities associated with the operating lease and recorded a $0.1 million loss on the disposal of leasehold improvement.

Supplemental balance sheet information related to operating leases is as follows:


(In thousands)	December 31, 2024
Operating lease assets:
Operating lease assets	$	3,092
Operating lease liabilities:
Other accrued liabilities	944
Operating lease liabilities, net of current portion	2,293
Total operating lease liabilities	$	3,237
Weighted average remaining lease term in years	3.60
Weighted average discount rate	4.1%

Because our leases do not provide a readily determinable implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of lease payments. The incremental borrowing rate is the estimated rate incurred to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment. We used the incremental borrowing rate on January 1, 2019, for operating leases that commenced prior to that date.

The future minimum lease payments payable under these operating leases subsequent to December 31, 2024 are as follows:


(In thousands)
2025	$	1,058
2026	1,020
2027	709
2028	462
2029	231
Thereafter	—
Total lease payments	3,480
Less imputed interest	(243)
Total	$	3,237

Total rent expense for the years ended December 31, 2024, 2023, and 2022 was $1.8 million, $1.8 million, and $2.2 million, respectively.

Total cash paid for amounts included in the measurement of lease liabilities within operating cash flows from operating leases for the year ended December 31, 2024, 2023, and 2022 was $1.8 million, $1.8 million, and $2.2 million, respectively.