Leases

9 Months Ended

Sep. 30, 2024

The Company rents certain office facilities and equipment under noncancelable operating leases. As of September 30, 2024, approximately 93,000 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 4.4 years. Several leases have an option to renew, at our sole discretion, for an additional term. Our present lease terms range from 1.9 to 5.0 years with a weighted average of 3.3 years. Leases with an initial term of twelve months or less are not recorded on the balance sheet.

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


	September 30, 2024		December 31, 2023
	(in thousands)
Assets:
Long-term operating lease right-of-use assets	$	4,147	$	5,106

Liabilities:
Short-term operating lease liability	$	1,257	$	1,236
Long-term operating lease liability		2,857		3,843

Total liabilities	$	4,114	$	5,079

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


	Amount as of September 30, 2024
	(in thousands)
2024 (for remainder of year)	$	359
2025		1,466
2026		1,464
2027		786
2028		259
Thereafter		196

Total	$	4,530
Less: Imputed interest		(416	)

Present value of operating lease liabilities	$	4,114

The weighted average discount rate used to calculate the present value of future lease payments was 5.5%.

We recognize rent expense for these leases on a straight-line basis over the lease term. Rental expense for the three and nine months ended September 30, 2024 totaled $0.4 million and $1.1 million, respectively. Rental expense for the three and nine months ended September 30, 2023 totaled $0.4 million and $1.2 million, respectively.

Total cash paid for lease liabilities for the three and nine months ended September 30, 2024 totaled $0.4 million and $1.1 million, respectively. Total cash paid for lease liabilities for the three and nine months ended September 30, 2023 totaled $0.4 million and $1.2 million,

respectively.

There were no new leases entered into during the three and nine months ended September 30, 2024. New leases entered into during the three and nine months ended September 30, 2023 totaled $1.7 million and $1.7 million, respectively. New leases are considered

non-cash

transactions.