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Leases

12 Months Ended

Dec. 31, 2023

9. LEASES

On January 1, 2022, we adopted Accounting Standards Update (“ASU”) 2016-02 and all subsequent amendments, collectively codified in ASC Topic 842, “Leases” (“Topic 842”). The guidance requires modified retrospective adoption, either at the beginning of the earliest period presented or at the beginning of the period of adoption. We elected to apply the guidance at the beginning of the period of adoption and recorded right-of-use (ROU) leased assets of $14,302. In conjunction with this, we recorded lease liabilities, which had been discounted at our incremental borrowing rates, of $15,933. The adoption of ASC 842 had no effect on retained earnings.

The Company leases its office facility under a noncancelable operating lease agreement that expires in March 2032. The operating lease includes variable lease payments, which are primarily related to common area maintenance and taxes. Lease expense for the years ended December 31, 2023 and 2022 was $2,137 and $2,210, respectively.

A summary of the components of lease costs for the Company under ASC 842 for the years ended December 31, 2023 and 2022 were as follows:

	December 31,
Lease costs	2023		2022
Operating lease costs	$	2,137	$	2,210
Variable lease costs		530		504
Total lease costs	$	2,667	$	2,714

Supplemental disclosure of cash flow information related to leases for the years ended December 31, 2023 and 2022 was as follows:

	December 31,
	2023		2022

Cash paid	$	2,162	$	1,644
Cash received	$	—	$	(1,200	)
Total cash paid for amounts included in the measurement of operating lease liabilities (operating cash flows)	$	2,162	$	444

The weighted-average remaining lease term and discount rate were as follows:

	December 31,
	2023			2022

Weighted-average remaining lease term (in years)		8.3			9.3
Weighted-average discount rate		8.74	%		8.74	%

The following table presents the maturity of the Company’s operating lease liabilities as of December 31, 2023:

Years Ended December 31,
2024		2,286
2025		2,358
2026		2,430
2027		2,502
2028		2,574
Thereafter		8,856
Total future minimum lease payments	$	21,006
Less imputed interest		(6,174	)
Carrying value of lease liabilities	$	14,832