COMMITMENTS AND CONTINGENCIES |
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| Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COMMITMENTS AND CONTINGENCIES |
8.
COMMITMENTS AND CONTINGENCIES
Operating Lease Commitment On August 21, 2017, the Company entered into a lease agreement (“August 2017 Lease Agreement”), which has been subsequently amended on February 26, 2019 (“February 2019 Lease Agreement”) and October 25, 2019 (“October 2019 Lease Amendment”) for commercial lease of office space, pursuant to which the Company has agreed to lease an aggregate total of 63,256 square feet of office space (“Total Premises”). The term of the lease is through November 30, 2026. Per the terms of the August 2017 Lease Agreement and the February 2019 Lease Agreement, the landlord agreed to reimburse the Company for approximately $2,071,000 of leasehold improvements. The reimbursements have been deferred and will be recognized as a reduction of rent expense over the term of the lease. Additionally, the August 2017 Lease Agreement and the February 2019 Lease Agreement required a standby irrevocable letter of credit of $769,900, which will be reduced, if the Company is not in default under the agreement on the third and fourth anniversary of the commencement date and have unencumbered funds in excess of $50,000,000. As of December 31, 2023, the Company has an unsecured letter of credit for $669,900 in connection with the lease agreements. The following table contains a summary of the lease costs recognized under ASC 842 and other information pertaining to the Company’s operating leases for the year ended December 31, 2023 and 2022:
Total rent expense for the years ended December 31, 2023 and 2022 was $1,700,005 and $1,652,563, respectively. Rent expense for the years ended December 31, 2023 and 2022 was offset by $226,153 and $220,531, respectively, of sublease income.
Pursuant to the terms of the Company’s non-cancelable lease agreements in effect at December 31, 2023, the following table summarizes the Company’s maturities of operating lease liabilities as of December 31, 2023:
Sublease Commitment
Effective August 26, 2021, the Company entered into a sublease agreement with a third party to sublease 12,112 square feet of the 30,023 square feet currently being leased under one of its two existing lease agreements. The sublease commenced on October 1, 2021 and was scheduled to end on October 31, 2026, however, it is in the process of being terminated early. The Company notes sublease income of $226,153 and $220,531 was recognized and offset against rent expense for the years ended December 31, 2023 and 2022, respectively.
Undiscounted sublease cash inflows have been summarized in the following table:
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