10. COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Company leases office space pursuant to operating leases that are subject to specific escalation clauses. Rent expense charged to operations for the three months ended March 31, 2020 and 2019 amounted to $1,595 and $1,529, respectively. The Company received sub-lease income from sub-tenants during the three months ended March 31, 2020 and 2019 of $38 and $32, respectively. Therefore, for the three months ended March 31, 2020 and 2019, net rent expense amounted to 1,557 and $1,497, respectively, and is included in general and administrative expenses in the Condensed Consolidated Statements of Operations.

As security for performance under the leases, the Company is required to maintain letters of credit in favor of the landlord totaling $506 as of March 31, 2020 and December 31, 2019.  Furthermore, the Company maintains an $80 letter of credit in favor of its Boston landlord. Both are collateralized by the Company’s revolving credit facility with City National Bank.

In March 2014, the Company entered into a lease agreement for additional office space in Richmond, VA.  The lease commenced on May 1, 2014 and expired July 31, 2019. The lease is subject to escalation clauses and provides for a rent-free period of three months.  Monthly rent expense is $5.  The Company paid a refundable security deposit of $3.  In September 2016, the Company entered into Lease Amendment Number One (“Amendment Number One”) to expand its space and extend its lease.  This expansion was to occur on or about October 1, 2017, and the lease was extended to November 30, 2024.  The lease was further amended on January 16, 2018 (“Amendment Number Two”) to update the expansion date to January 12, 2018 and to extend the term of the lease to November 30, 2028.  The amended lease provides for a rent credit of $40.  Monthly rent expense under the amended lease is $10.

In June 2015, the Company entered into a lease agreement for office space in Charlottesville, VA.  The lease commenced on June 30, 2015 and expired on June 30, 2018.  On June 6, 2019, the Company extended this lease for three years, with the new term beginning on July 1, 2019 and expiring on June 30, 2022.  Monthly rent expense is $2.  The Company paid a refundable security deposit of $2.

In connection with the Jamison Acquisition, the Company assumed lease agreements for office space in Bedminster and Princeton, NJ.  The Bedminster lease, as extended, expires on March 31, 2022.  Monthly rent expense on this lease is $11.  The Princeton lease, as extended, expired on April 30, 2016.  Monthly rent expense on this lease was $5.  Both leases are subject to escalation clauses, and the Bedminster lease provided for a rent-free period of four months.

In December 2015, the Company extended its lease related to its New York City office space.  The amended lease commenced on October 1, 2017 and expires on September 30, 2028.  The lease is subject to escalation clauses, and provided for a rent-free period of twelve months and for tenant improvements of up to $2,080.  Monthly rent under this extension is $446.

In January 2016, the Company entered into a lease agreement for office space in Princeton, NJ.  The lease commenced April 23, 2016 and expires on August 31, 2022.  This lease replaces the Princeton lease discussed above that expired on April 30, 2016.  Monthly rent expense on this lease is $6.  The lease is subject to escalation clauses, and provides for a rent-free period of five months.

With the Cappiccille Acquisition, the Company assumed a lease agreement for office space in Livingston, NJ.  The lease was month-to-month.  Monthly rent expense was $2.  This lease was terminated in January 2019.

In January 2018, the Company extended its lease related to its Boston, MA office space.  The amended lease commenced on January 1, 2018 and expires on April 30, 2023.  The lease provides for a rent-free period of one month.  Monthly rent under this extension is $33.

With the Neosho Acquisition, the Company assumed a lease agreement for office space in La Jolla, CA.  The lease expired on January 31, 2020.  Monthly rent expense was $3.  On November 5, 2019, the Company entered into a lease agreement for office space in San Diego, CA.  The lease commenced on February 1, 2020 and expires on June 30, 2025.  The lease is subject to escalation clauses and provides for a rent-free period of four months and for tenant improvements of up to $27.  Monthly rent expense under this lease is $12.

With the Cortina Acquisition, the Company assumed a lease agreement for office space in Milwaukee, WI.  The lease expires December 31, 2020.  Monthly rent expense is $12.

The components of lease expense for the three months ended March 31, 2020 and 2019 were as follows:

Future minimum lease payments and rentals under lease agreements for office space are as follows:

The Company has finance leases for the following office equipment: (i) a five-year finance lease agreement for two copiers totaling $152 with monthly minimum lease payments of $3, which began on February 1,2017 and continue through January 31, 2022, (ii) a three-year lease agreement for four copiers totaling $72 with monthly minimum payments of $2, which began on July 1, 2017 and continue through June 30, 2020, (iii) a three-year lease agreement for one copier totaling $11 with monthly minimum payments of $0.3, which began on March 1, 2018 and continue through February 28, 2021, (iv) a three-year lease agreement for one copier totaling $13 with monthly minimum payments of $0.4, which began on March 1, 2019 and continue through February 28, 2022, (v) a 39-month lease agreement for one copier totaling $12 with monthly minimum lease payments of $0.4, which began on March 1, 2019 and continue through May 31, 2022, (vi) a lease agreement for one copier that was assumed as part of the Cortina Acquisition with monthly minimum lease payments of $1, which began on July 1, 2019 and continue through November 30, 2021 and (vii)  a three year lease agreement for two copiers totaling $51 with monthly minimum lease payments of $1, which began on August 1, 2019 and continue through July 31, 2022  The aggregate principal balance of finance leases was $160 and $196 as of March 31, 2020 and December 31, 2019, respectively.

The assets relating to finance leases that are included in equipment as of March 31, 2020 and December 31, 2019 are as follows:

Depreciation expense relating to finance lease assets was $31 and $31 for the three months ended March 31, 2020 and 2019, respectively.     

Future minimum lease payments under finance leases are as follows: