The Company and its subsidiaries are lessees under various operating leases for certain office space, manufacturing facilities and equipment. The Company’s leases have established fixed payment terms which are subject to annual rent increases throughout the term of each lease agreement. The Company’s lease agreements have varying non-cancellable rental periods which include options for the Company to extend portions of its lease terms and have similar terms in which they may terminate the lease prior to the end date but must provide advanced notice.

The Company recognizes right-of-use assets and lease liabilities associated with lease agreements with an initial term of 12 months or greater, while lease agreements with an initial term of 12 months or less are not recorded in the Company's audited Consolidated Balance Sheets. When reasonably certain that renewal options will be exercised, the Company includes lease payments associated with such options, including those that are exercisable at its discretion, in the measurement of its operating leases assets and liabilities.

On November 13, 2018, AST LLC entered into both an Economic Development Agreement (the “EDA”) and a sublease agreement with Midland Development Corporation. The premise of the EDA was to create jobs in the Midland, Texas area, as well as to have AST LLC improve the land, office and hangar spaces at the leased facility located at the Midland International Air & Space Port in Midland, Texas. The term of the lease commenced on November 21, 2018 and extends through November 20, 2033. Pursuant to the agreement, the base rental payments for the first five years will be abated, provided that the Company prepays the rent in each period and achieves an increasing level of financial commitments, measured annually on March 31st of each of the first five years of the lease. The Company can qualify for an additional five years (years six through ten of the term) of abatements which are contingent upon the Company achieving its commitments through the first five years of the lease and maintaining or exceeding those year five commitment levels in years six through year ten of the term. These commitments include 1) the total number of full-time jobs and the related annual payroll costs and 2) cumulative capital investments in personal property and improvements to the existing land/structures. The Company recognizes the lease reimbursements as an offset to rent expense for the related reimbursable month when the contingency is probable of being resolved.

The table below sets forth information regarding the Company’s lease agreements with an initial term of greater than 12 months (dollars in thousands):


	Year ended December 31,
	2022			2021
Operating lease right-of-use assets, net	$	7,671		$	7,991
Operating lease liabilities	$	7,768		$	8,159
Weighted-average remaining lease term (in years)		9.3			9.7
Weighted-average discount rate(1)		13.1	%		13.4	%

(1)

As the Company’s leases do not provide an implicit rate, the Company derives its incremental borrowing rate from information available at commencement date in determining the present value of future lease payments. To estimate incremental borrowing rates, the Company considers various factors, including the lowest grade of debt available in the marketplace for the same term as the associated lease(s).

The Company generally recognizes lease costs associated with its operating leases on a straight-line basis over the lease term. The table below sets forth information regarding the Company's lease costs, which are included as general and administrative expenses in the Company's audited Consolidated Statements of Operations for the periods presented (in thousands):


	Year ended December 31,
	2022		2021
Short-term operating lease expense	$	1,191	$	440
Operating lease expense		939		563
Total lease expense	$	2,130	$	1,003

As of December 31, 2022, the maturities of the Company’s operating lease liabilities were as follows (in thousands):


2023	$	1,632
2024		1,543
2025		1,546
2026		1,563
2027		1,348
Thereafter		6,011
Total lease payments		13,643
Less effects of discounting		(5,875	)
Present value of lease liabilities	$	7,768

The above operating lease payments exclude $9.9 million of required minimum lease payments for lease agreements executed but not commenced, as the Company has not received control of the leased property as of December 31, 2022. Included in the Company's audited Consolidated Statements of Cash Flows under operating activities for the years ended December 31, 2022 and 2021 was $0.8 million and $0.5 million, respectively, of cash paid for amounts included in the measurement of lease liabilities.