Operating Lease

9 Months Ended

Sep. 30, 2024

On July 31, 2024, the Company entered into a 10-year extension of its lease through March 31, 2035, for office space of approximately 37,829 square feet at a single location.

As of September 30, 2024, the carrying value of the right-of-use asset, which is included in property and equipment on the consolidated balance sheets, was approximately $3.5 million. As of September 30, 2024, the carrying value of the lease liability was approximately $6.4 million.

The carrying value of the lease liability includes both principal and accrued interest on lease payments that are due in the current and future periods. Lease liability is measured at the present value of the remaining lease payments, discounted using the discount rate determined at the lease commencement date. Interest expense on lease liability is recognized in the consolidated income statements over the lease term.

As of September 30, 2024, the weighted average discount rate applied to the Company’s lease liability was 6.5%, reflective of the Company’s incremental borrowing rate. The determination of the incremental borrowing rate involves judgement, including assumptions about the Company’s credit risk, economic conditions, and the lease-specific circumstances such as lease term and asset class. Changes in these assumptions could have a material impact on the measurement of the Company’s lease liability.

The following table summarizes the total lease and operating expenses for the three-month and nine-month periods ended September 30, 2024 and 2023:


	September 30, 2024		September 30, 2023
Three Months Ended	$	246,089	$	234,336
Nine Months Ended	$	682,755	$	674,749

The following table provides a maturity analysis of the Company’s operating lease liability, based on undiscounted cash flows, as of September 30, 2024:


	September 30, 2024
2024	$	156,045
2025	723,480
2026	773,603
2027	796,868
2028	820,889
2029 and Thereafter	5,715,394
Total undiscounted operating lease payments	8,986,279
Less: Imputed interest	(2,597,478)
Present value of operating lease liability	$	6,388,801