Leases

9 Months Ended

May 31, 2022

Leases

Leases

Note 8 — Leases

The Company accounts for leases in accordance to ASU 2016-02, “Leases (Topic 842).” At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present in the arrangement. Leases with a term greater than one year are recognized on the balance sheet as right-of-use (ROU) assets and short-term and long-term lease liabilities, as applicable. The Company does not have any financing leases that are material in nature.

Operating lease liabilities and their corresponding right-of-use assets are initially recorded based on the present value of lease payments over the expected remaining lease term. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rate to discount lease payments, which reflects the fixed rate at which the Company believes it could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment.

The Company has elected not to recognize leases with an original term of one year or less on the balance sheet. The Company typically only includes an initial lease term in its assessment of a lease arrangement. Options to renew a lease are not included in the Company’s assessment unless there is reasonable certainty that the Company will renew.

The following table presents the right-of-use asset and short-term and long-term lease liabilities amounts recorded on the condensed consolidated balance sheet as of May 31, 2022 and August 31, 2021:

	May 31,		August 31,
	2022		2021
Assets
Operating lease right-of-use asset	$	9,078	$	9,312
Liabilities
Current (accrued expenses)	$	1,466	$	1,515
Operating lease long-term liabilities		7,060		7,202
Total lease liability	$	8,526	$	8,717

Lease cost

The components of lease costs for the three and nine months ended May 31, 2022 and 2021 are as follows:

	Three Months Ended May 31,				Nine Months Ended May 31,
	2022		2021		2022		2021
Operating lease cost (a)	$	790	$	911	$	2,451	$	2,833

(a) Includes short-term leases and variable lease costs (e.g. common area maintenance), which are immaterial.

Maturity of lease liability

The maturity of the Company's lease liabilities at May 31, 2022 was as follows:

	Future Operating
Year ending August 31,	Lease Payments
2022 (remaining 3 months)		427
2023		1,677
2024		1,602
2025		1,444
2026		1,182
2027 and thereafter		3,002
Less: Interest		(808)
Present value of lease liabilities	$	8,526

The weighted average remaining lease term and discount rates are as follows:

	May 31,			August 31,
	2022			2021
Lease Term and Discount Rate
Weighted average remaining lease term (years)
Operating leases		6.7			6.8
Weighted average discount rate (percentage)
Operating leases		2.8	%		3.1	%

Other Information

Supplemental cash flow information related to leases is as follows:

	Nine Months Ended May 31,
	2022		2021
Operating cash outflows from operating leases	$	1,311	$	1,797
Total cash paid for amounts included in the measurement of lease liabilities	$	1,311	$	1,797