LEASES

12 Months Ended

Dec. 31, 2023

NOTE 7 - 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 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 years ended December 31, 2023 and 2022, are as follows (in thousands):


	2023		2022
Operating lease cost	$	2,397	$	2,326
Sublease income	(18)		(89)
Net rent expense	$	2,379	$	2,237

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 December 31, 2023 and December 31, 2022, respectively. The weighted average remaining lease term is five years as of December 31, 2023 and December 31, 2022.

Supplemental cash flow information related to operating leases for the years ended December 31, 2023 and 2022 are as follows (in thousands):


	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	2,556	$	2,326
Non-cash operating activities:
Operating lease assets obtained or removed in exchange for new, modified or terminated operating lease liabilities	$	(546)	$	1,317

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


2024	$	2,003
2025	1,679
2026	1,217
2027	1,000
2028	995
Thereafter	835
Total minimum lease payments	7,729
Less: imputed interest	(1,601)
Total lease liabilities	$	6,128