Leases

9 Months Ended

Sep. 30, 2022

Lessee Disclosure [Abstract]

LEASES

NOTE 14 – LEASES

The Company determines whether contractual arrangements contain a lease by evaluating whether those arrangements either implicitly or explicitly identify an asset, whether the Company has the right to obtain substantially all of the economic benefits from use of the asset throughout the term of the arrangement, and whether the Company has the right to direct the use of the asset.

The Company has entered into various operating leases primarily for office space, vehicles and office equipment. The office space leases generally have fixed payments with expiration dates ranging from 2022 to 2026, some of which have options to extend the leases from 5 to 10 years and some have options to terminate at the Company’s discretion. The Company’s vehicle and office equipment leases generally have fixed payments with expiration dates ranging from 2022 to 2026. Renewal options are included in the lease term if it is reasonably certain that the Company will exercise those options. Periods for which the Company is reasonably certain not to exercise termination options are also included in the lease term. For leases with a term of 12 months or less, the Company has made an accounting policy election to not recognize right-of-use (ROU) assets or lease liabilities for qualifying leases. For these leases, the Company recognizes lease expense on a straight-line basis over the lease term.

The Company has certain agreements with lease and non-lease components, such as office space leases, which are combined as a single lease component based on the Company’s practical expedient election. The Company’s real estate leases require that it pay maintenance in addition to rent. Additionally, the real estate leases generally require payment of real estate taxes and insurance. Maintenance, real estate taxes, and insurance payments are generally variable and based on actual costs incurred by the lessor. Therefore, these amounts are not included in the consideration of the contract when determining the ROU asset and lease liability.

Discount Rate

The discount rate for a lease is the rate implicit in the lease unless that rate cannot be readily determined. In that case, the Company is required to use its incremental borrowing rate, which is the rate the Registrants would have to pay to borrow, on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. The Company determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased. The Company uses the secured rate which corresponds with the term of the applicable lease.

The following table provides the components of lease cost for the Company’s operating leases for the three months ended September 30 (in thousands):

	2022
Lease cost:
Operating lease cost	$	3,598
Short-term lease cost		195
Total lease cost	$	3,793

The following table provides other key information related to the Company’s operating leases at September 30 (in thousands):

	2022
Cash paid for amounts included in the measurement of lease liabilities	$	-
Operating cash flows from operating leases		3,589
Right-of-use asset obtained in exchange for new operating lease liabilities	$	3,589

The following table provides the total future minimum rental payments for operating leases, as well as a reconciliation of these undiscounted cash flows to the lease liabilities recognized on the Balance Sheets as of September 30, 2022 (in thousands).

	Operating Leases
2022 (three months remaining)	$	3,489
2023		12,244
2024		8,085
2025		4,128
2026		2,695
Thereafter		3,818
Total	$	34,459
Less: Present value discount		(3,426	)
Lease liability	$	31,033
Weighted-average discount rate		5.44	%
Weighted-average remaining lease term (in years)		3.65
Current lease liabilities (included in other current liabilities)	$	11,578
Non-current lease liabilities (included in other long-term liabilities)	$	19,455
Right-of-use assets (included in other long-term assets)	$	29,480