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Note 12 - Leases

6 Months Ended

Jun. 30, 2024

12. LEASES

The Company leases office space and certain computers and related equipment. From time to time, the Company subleases office space to other tenants. Under the requirements of ASC 842, the Company determines if an arrangement is a lease at the inception date of the contract. Then, the Company measures the lease liability using an incremental borrowing rate that was calculated for each operating lease based on the term of the lease, the U.S. Treasury term interest rate, and an estimated spread to borrow on a secured basis.

Rent expense is recognized on a straight-line basis over the lease term and is included in business development, occupancy, and equipment expense.

As of June 30, 2024, all of the leases to which the Company was a party were operating leases. The weighted average remaining term of the leases was 4.7 years. The weighted average discount rate for the leases was 4.77%.

Maturities of operating lease liability payments consisted of the following.

FUTURE MATURITY OF LEASE LIABILITIES

(Dollars in Thousands)

	June 30, 2024
2024 - remaining	$	973
2025		1,804
2026		1,516
2027		1,517
2028		1,525
Thereafter		725
Total		8,060
Less imputed interest		864
Lease obligation	$	7,196

During the six months ended June 30, 2024 and 2023, total cash payments of $1,206 and $1,223, respectively, were recorded as a reduction in the operating lease obligation. No cash payments were made to acquire right of use assets.

For the three and six months ended June 30, 2024, rent expense, net of sublease income of $23 and $46, respectively, was $648 and $1,282, respectively. For the three and six months ended June 30, 2023, rent expense, net of sublease income of $22 and $48, respectively, was $634 and $1,264, respectively.

In December 2023, the Company executed a second amendment (“Second Lease Amendment”) to its original lease agreement for the Company’s offices located at 3 Columbus Circle, New York, New York. The Second Lease Amendment provides for the Company to lease additional office space on the premises, while surrendering other areas of the premises that are currently occupied by the Company. The Second Lease Amendment provides for the landlord, at its sole cost and expense and without charge to the Company, to perform certain improvements to the premises. The Second Lease Amendment will become effective on the date upon which the landlord delivers to the Company the additional office space with the landlord’s improvements thereon substantially completed, which is anticipated to be prior to December 31, 2024. The cash flow payments and related lease liability pertaining to the Second Lease Amendment are not included in the table and amounts presented above.

In April 2024, the Company entered into a new office lease agreement for JVB’s operations in Boca Raton, Florida. It is anticipated that this lease will commence in September 2024 and will replace JVB’s existing lease that expired in June 2024. The cash flow and related lease liability pertaining to the new lease agreement are not included in the table and amounts presented above.