Leases

12 Months Ended

Dec. 31, 2023

The Company rents certain office facilities and equipment under noncancelable operating leases. As of December 31, 2023, approximately 96,000 square feet of office space is utilized for our sales and recruiting offices, delivery centers, and corporate headquarters. All of our leases are classified as operating leases. The average initial lease term is 4.3 years. Several leases have an option to renew, at our sole discretion, for an additional term. Our present lease terms range from less than one year to 5.8 years with a weighted average of 4.0 years. Leases with an initial term of twelve months or less are not recorded on the balance sheet.

Leases Right-of-use (“ROU”)

assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Since most of the Company’s leases do not have an implicit borrowing rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Our leases may include options allowing us in our sole discretion to extend or terminate the lease, and when it is reasonably certain that we will exercise those options, we will include those periods in our

lease term. Variable costs, such as payments for insurance and tax payments, are expensed when the obligation for those payments is incurred.

The following table summarizes the balance sheet classification of the lease assets and related lease liabilities:


	December 31, 2023		December 31, 2022
	(in thousands)
Assets:
Long-term operating lease right-of-use assets	$	5,106	$	3,886

Liabilities:
Short-term operating lease liability	$	1,236	$	1,504
Long-term operating lease liability		3,843		2,294

Total Liabilities	$	5,079	$	3,798

Future minimum rental payments for office facilities and equipment under the Company’s noncancelable operating leases are as follows:


	Amount as of December 31, 2023
	(in thousands)
2024	$	1,474
2025		1,477
2026		1,477
2027		791
2028		259
Thereafter		196

Total	$	5,674
Less: Imputed interest		(595	)

Present value of operating lease liabilities	$	5,079

The weighted average discount rate used to calculate the present value of future lease payments was 5.4%.

We recognize rent expense for these leases on a straight-line basis over the lease term. Rental expense for the years ended December 31, 2023, 2022 and 2021 totaled $1.7 million, $1.7 million and $1.8 million, respectively.

Total cash paid for lease liabilities for the years ended December 31, 2023, 2022 and 2021 totaled $1.6 million, $1.7 million and $1.5 million, respectively.

New leases entered into during the years ended December 31, 2023, 2022 and 2021 totaled $2.7 million, $0.5 million and $3.1 million, respectively. In 2023, the Company renegotiated and extended a 39,875 square feet office space lease in Noida, India through August 30, 2027 and a 11,495 square feet office space lease in Moon Township, Pennsylvania

through

September 29, 2029. New leases are considered

non-cash

transactions.