LEASES

9 Months Ended

Sep. 30, 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 eight 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 Loss, rent expense is included in operating expenses under general and administrative expenses. The components of the rent expense for the three and nine months ended September 30, 2023 and 2022 are as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Operating lease cost	$	481	$	610	$	1,896	$	1,759
Sublease income	(5)		(15)		(13)		(84)
Net rent expense	$	476	$	595	$	1,883	$	1,675

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 10% and 8% as of September 30, 2023 and December 31, 2022, respectively. The weighted average remaining lease term is five years as of September 30, 2023 and December 31, 2022.

Supplemental cash flow information related to operating leases for the nine months ended September 30 are as follows (in thousands):


	Nine Months Ended September 30,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	1,998	$	1,561
Non-cash operating activities:
Operating lease assets obtained or removed in exchange for new, modified or terminated operating lease liabilities	$	(473)	$	2,221

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


2023	$	551
2024	1,883
2025	1,649
2026	1,194
2027	1,001
2028	993
Thereafter	743
Total minimum lease payments	8,014
Less: imputed interest	(1,548)
Total lease liabilities	$	6,466