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Leases

9 Months Ended

Sep. 30, 2024

6. Leases

The Company is party to operating leases for real estate, and for certain equipment with a term of 12 months or less. The Company is currently not a party to any finance leases.

Lease expense (net of sublease income of approximately $0.2 and $0.5 million for the current quarter and current nine months, respectively) included in selling, general and administrative expenses on the Company’s unaudited condensed consolidated statements of operations was approximately $0.3 million for the current quarter, approximately $0.4 million for the prior year quarter, approximately $0.7 million for the current nine months, and approximately $1.2 million for the prior year nine months.

Cash paid for amounts included in the measurement of operating lease liabilities was approximately $0.4 million in both the current quarter and prior year quarter, and approximately $1.2 million in both the current nine months and prior year nine months.

As of September 30, 2024, the Company’s real estate leases have a weighted-average remaining lease term of approximately 4.82 years, and the lease liabilities are measured using a weighted-average discount rate of 7.78%.

1333 Broadway Lease

The Company has an operating lease for offices located at 1333 Broadway, 10th floor, New York, New York, which commenced on March 1, 2016 and expires on October 30, 2027. The average annual fixed rent over the term of this lease is approximately $1.3 million per year, and the lease requires the Company to pay additional rents related to increases in certain taxes and other costs on the property.

On January 26, 2024, the Company (as sublessor) entered into an agreement for the sublease of the offices located at 1333 Broadway to a third-party subtenant through October 30, 2027. The average annual fixed rent over the term of the sublease is approximately $0.8 million per year. As a result of entering into the sublease, the Company recognized non-cash impairment charges of approximately $3.1 million during the current nine months related to the right-of-use asset. Also in connection with entering into the sublease, the Company recognized a non-cash impairment charge of approximately $0.4 million during the current nine months related to leasehold improvement assets at this location.

As of September 30, 2024, the Company’s lease of 1333 Broadway has a remaining lease term of approximately 3.08 years.

550 Seventh Avenue Lease

Effective February 29, 2024, the Company entered into an operating lease for new corporate offices located at 550 Seventh Avenue, 11th floor, New York, New York. This lease commenced in April 2024 and expires in April 2031. The average annual lease cost over the term of this lease is approximately $0.5 million per year.

Upon commencement of the lease during the current quarter, the Company recognized a right-of-use asset and corresponding lease liability related to this lease of approximately $2.6 million; the discount rate used for the measurement of this right-of-use asset and lease liability was based on the Company’s incremental borrowing rate of 9.60%.

As of September 30, 2024, the Company’s lease of 550 Seventh Avenue has a remaining minimum lease term of approximately 7.58 years.

Future Lease Obligations

As of September 30, 2024, the maturities of future lease obligations were as follows:


	Amount
Year	(in thousands)
2024 (October 1 through December 31)	$	388
2025		1,926
2026		2,060
2027		1,841
2028		570
Thereafter		2,005
Total lease payments		8,790
Less: Discount		1,724
Present value of lease liabilities		7,066
Current portion of lease liabilities		1,433
Non-current portion of lease liabilities	$	5,633