Leases

3 Months Ended

Dec. 31, 2021

LEASES

The Company’s leases consist primarily of real estate leases throughout the markets in which the Company operates. At contract inception, the Company determines whether an arrangement is or contains a lease, and for each identified lease, evaluates the classification as operating or financing. The Company had no finance leases as of December 31, 2021. Leased assets and obligations are recognized at the lease commencement date based on the present value of fixed lease payments to be made over the term of the lease. Renewal and termination options are factored into determination of the lease term only if the option is reasonably certain to be exercised. The weighted-average remaining lease term at December 31, 2021 and 2020 was five and five years, respectively. The Company had no significant short-term leases during the three months ended December 31, 2021 and 2020.

The Company’s leases do not provide a readily determinable implicit interest rate and the Company uses its incremental borrowing rate to measure the lease liability and corresponding right-of-use asset. The incremental borrowing rates were determined based on a portfolio approach considering the Company’s current secured borrowing rate adjusted for market conditions and the length of the lease term. The weighted-average discount rate used in the measurement of our lease liabilities was 6.7% and 6.8% as of December 31, 2021 and 2020, respectively.

Operating lease cost is recognized on a straight-line basis over the lease term. Operating lease costs for the three months ended December 31, 2021 and December 31, 2020 were $1,491 and $854, respectively which are included in selling, general and administrative expenses in the condensed consolidated statements of operations.

Total operating lease costs for the three months ended December 31, 2021 and December 31, 2020 include variable lease costs of approximately $38 and $1, respectively, which are primarily comprised of costs of maintenance and utilities and changes in rates, and are determined based on the actual costs incurred during the period. Variable payments are expensed in the period incurred and not included in the measurement of lease assets and liabilities.

Short-term rent expense for the three months ended December 31, 2021 and December 31, 2020 was $47 and $58, respectively, and are included in selling, general and administrative expenses in the condensed consolidated statements of operations.

As of December 31, 2021, maturities of lease liabilities are as follows:


Years ending September 30:
2022 (nine months remaining)	$	4,329
2023	5,345
2024	4,550
2025	3,835
2026	3,136
Thereafter	3,456
Total future minimum lease payments (undiscounted)(1)	24,651
Less: present value discount	(3,593)
Present value of lease liability	$	21,058

__________________________1.Total future minimum lease payments excludes payments of $60 for leases designated as short-term leases, which are excluded from the Company's right-of-use assets. These payments will be made within the next twelve months.