As detailed in Note 1 under the heading “—Merger with MedAmerica Properties Inc.,” there are two Mergers that have not been completed. The Company will issue an aggregate of 1,317,055 shares of common stock and 573,529 OP units as consideration for the additional Mergers. Until the closing of the remaining Mergers, the Company will continue to manage these two properties and earn management fees.

At the inception of a lease and over its term, the Company evaluates each lease to determine the proper lease classification. Certain of these leases provide the Company with the contractual right to use and economically benefit from all of the space specified in the lease. Therefore, the Company has determined that they should be evaluated as lease arrangements. As of December 31, 2021, the Company was obligated under operating lease agreements consisting primarily of the Company’s office leases and equipment leases. The majority of the Company’s office leases contain provisions for specified annual increases over the rents of the prior year and are computed based on a specified annual increase over the prior year’s rent, generally 4.0%. The Company’s office leases have initial terms ranging from 3 to 7 years.

In accordance with the adoption of ASC 842 Leases, the Company recorded right-of-use assets (included in Other assets, net on the consolidated balance sheet) and related lease liabilities (included in Accounts payable and accrued expenses on the consolidated balance sheet) for these leases. As of December 31, 2021, the Company’s weighted average remaining lease term is approximately 2.8 years and the weighted average discount rate used to calculate the Company’s lease liability is approximately 5.5%. The Company has not recognized a right-of-use asset and lease liability for leases with terms of 12 months or less and without an option to purchase the underlying asset.

In calculating the right-of-use assets and related lease liabilities, the Company’s lease payments are typically discounted at its incremental borrowing rate because the interest rate implicit in the lease cannot be readily determined in the absence of key inputs which are typically not reported by our lessors. Judgment was used to estimate the secured borrowing rate associated with our leases and reflects the lease term specific to each lease.

The Company remeasures its lease liabilities monthly at the present value of the future lease payments using the discount rate determined at lease commencement. Rent expense relating to the operating leases, including straight-line rent, was approximately $0.5 million for the years ended December 31, 2021 and 2020, and is recorded in general and administrative in our statements of operations.

The Company’s future minimum lease payments for its operating leases as of December 31, 2021 were as follows:


(in thousands)
For the year ending:
2022	$	500
2023		411
2024		11
2025		10
2026		9
Thereafter		70
Total undiscounted future minimum lease payments		1,011
Discount		(81	)
Operating lease liabilities	$	930

The Company continues to monitor and address risks related to the COVID-19 pandemic. Certain tenants experiencing economic difficulties during the pandemic have previously sought rent relief, which had been provided on a case-by-case basis primarily in the form of rent deferrals and, in more limited cases, in the form of rent abatements. Since April 2020, the Company has entered into lease modifications that deferred approximately $0.6 million and waived approximately $0.3 million of contractual revenue for rent that pertained to April 2020 through December 2020; in 2021, the Company had only one lease modification related to COVID-19, which was approximately $16,000 related to contractual rent owed February 2021 through April 2021. Approximately $0.3 million of the total deferred rent from all lease modifications since April 2020 remained outstanding and to be billed as of December 31, 2021 and has a weighted average payback period of approximately 26 months. As of April 15, 2022, the Company has given rent deferrals to 36 tenants (approximately 12.0% of the Company's total tenants) with eight tenants still on a payment plan. All but four tenants are compliant with their plan.

However, even as conditions improve and governmental restrictions are lifted, the ability of the Company's tenants to successfully operate their businesses and pay rent may continue to be impacted by economic conditions resulting from COVID-19 or public perception of the risk of COVID-19, which could adversely affect foot traffic to tenants' businesses and tenants' ability to adequately staff their businesses. The extent of the COVID-19 pandemic's effect on the Company's future operational and financial performance, financial condition and liquidity will depend on future developments, including the duration and intensity of the pandemic, the effectiveness, including the deployment, of COVID-19 vaccines and treatments, the duration of government measures to mitigate the pandemic and how quickly and to what extent normal economic and operating conditions can resume, all of which are uncertain and difficult to predict.

On March 27, 2020, the CARES Act was signed into law, which, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions, and technical corrections to tax depreciation methods for qualified improvement property. The tax changes under the CARES Act are immaterial to the Company.

It also appropriated funds for the SBA PPP loans that are forgivable in certain situations to promote continued employment, as well as Economic Injury Disaster Loans to provide liquidity to small businesses harmed by COVID-19. The Company received funds under the PPP as described in Note 6 under the heading (“—PPP Loans”). During 2021, the Company received forgiveness for the entire balance of the PPP loans and recognized a $1.5 million gain on debt extinguishment in the consolidated statements of operations. Additionally, the Company has utilized the deferred payment of the employer portions of social security taxes that would otherwise be due from March 27, 2020 through December 31, 2020, without penalty or interest charges, totaling approximately $0.2 million.

From time to time, the Company or its properties may be subject to claims and suits in the ordinary course of business. The Company’s lessees and borrowers have indemnified, and are obligated to continue to indemnify, the Company against all liabilities arising from the operations of the properties and are further obligated to indemnify it against environmental or title problems affecting the real estate underlying such facilities. The Company is not aware of any pending or threatened litigation that, if resolved against the Company, would have a material adverse effect on its consolidated financial condition, results of operations or cash flows.