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Note 4 - Lease Commitments

12 Months Ended

Dec. 31, 2024

4. Lease commitments

At the inception of a contract, the Company determines whether the contract is or contains a lease based on the facts and circumstances present. Operating leases with terms greater than one year are recognized on the consolidated balance sheets as Operating lease right-of-use assets, Current portion of operating lease liability, and Operating lease liability, net. Financing leases with terms greater than one year are recognized on the consolidated balance sheets as Property and equipment, net, Accrued expenses and other current liabilities, and Other non-current liabilities. The Company has elected not to recognize leases with terms of one year or less on the consolidated balance sheets.

Lease obligations and their corresponding assets are recorded based on the present value of lease payments over the expected lease term. As the interest rate implicit in lease contracts is typically not readily determinable, the Company utilizes an appropriate incremental borrowing rate, which is the rate incurred to borrow an amount equal to the applicable lease payments on a collateralized basis, over a similar term, and in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. The components of a lease are split into three categories: lease components, non-lease components and non-components; however, the Company has elected to combine lease and non-lease components into a single component. Rent expense associated with operating leases is recognized over the expected term on a straight-line basis. In connection with financing leases, depreciation of the underlying asset is recognized over the expected term on a straight-line basis and interest expense is recognized as incurred.

The Company is party to several noncancelable operating and financing lease agreements that have original lease periods expiring between 2024 and 2025. Although certain leases include options to renew, the Company does not assume renewals in the determination of the lease term unless the renewals are deemed to be reasonably assured at lease commencement. The Company's lease agreements do not contain any material residual value guarantees, nor material restrictive covenants. Effective October 10, 2018, the Company entered into a seven-year operating lease agreement for approximately 42,685 square feet of office space in New York City (the "Company Headquarters"). In connection with this lease agreement, the Company is required to establish and maintain a $1,255 cash collateral account, which has been recorded in restricted cash on the consolidated balance sheets as of December 31, 2024. Additionally, the Company obtained the right to use certain furniture, fixtures, and office equipment already installed in the new office space, which the Company has treated as a capital lease.

For the year ended December 31, 2024 and 2023, the components of lease costs are as follows:

	*Year Ended December 31,*
(In thousands)	*2024*		*2023*
Operating leases:
Rent expense	$	2,028	$	2,193
Financing lease:
Leased furniture, fixtures, and office equipment depreciation expense		—		49
Interest expense		11		19
Short-term leases:
Rent expense		371		244
Total lease costs	$	2,410	$	2,505

As of December 31, 2024 and 2023, the weighted average lease-term and discount rate of the Company's leases are as follows:

	*December 31, 2024*
	*Operating Leases*			*Financing Lease*
Weighted average remaining lease-term (in years)		0.9			0.9
Weighted average discount rate		5.0	%		5.0	%

As of December 31, 2024, scheduled future maturities of the Company's lease liabilities are as follows:

(In thousands)	*December 31, 2024*
Year	*Operating Leases*			*Financing Lease*
Total 2025 undiscounted cash flows		1,888			143
Less: imputed interest		(43	)		(3	)
Present value of lease liabilities	$	1,845		$	140

For the year ended December 31, 2024 and 2023, supplemental cash flow information related to leases is as follows:

	*Year Ended December 31,*
(In thousands)	*2024*		*2023*
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used for operating leases	$	2,265	$	2,424
Operating cash flows used for financing lease	$	11	$	19
Lease liabilities related to the acquisition of right-of-use assets:
Operating leases	$	—	$	—