LEASES

3 Months Ended

Mar. 31, 2023

NOTE 8 - LEASES

We have entered into office space lease agreements, which qualify as operating leases under ASU No. 2016-02, “Leases (Topic 842)”. Under such leases, the lessors receive annual minimum (base) rent. The leases have original terms (excluding extension options) ranging from one year to ten years. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

We record base rent expense under the straight-line method over the term of the lease. In the accompanying Condensed Consolidated Statements of Comprehensive Income (Loss), rent expense is included in operating expenses under general and administrative expenses. The components of the rent expense for the three months ended March 31, 2023 and 2022 are as follows (in thousands):


	Three Months Ended March 31,
	2023		2022
Operating lease cost	$	531	$	557
Sublease income	(5)		(11)
Net rent expense	$	526	$	546

For purposes of calculating the operating lease assets and lease liabilities, extension options are not included in the lease term unless it is reasonably certain we will exercise the option, or the lessor has the sole ability to exercise the option. The weighted average discount rate of our operating leases is 8% as of March 31, 2023 and December 31, 2022, respectively. The weighted average remaining lease term is five years and five years as of March 31, 2023 and December 31, 2022, respectively.

Supplemental cash flow information related to operating leases for the three months ended March 31 are as follows (in thousands):


	Three Months Ended March 31,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	494	$	476
Non-cash operating activities:
Operating lease assets obtained in exchange for new operating lease liabilities	$	—	$	—

Future minimum commitments over the life of all operating leases, which exclude variable rent payments, are as follows (in thousands):


2023	$	1,759
2024	2,154
2025	1,765
2026	1,313
2027	1,121
2028	1,075
Thereafter	567
Total minimum lease payments	9,754
Less: imputed interest	(1,985)
Total lease liabilities	$	7,769