LEASES

6 Months Ended

Jun. 30, 2022

NOTE 5 – LEASES

The Company’s operating leases are primarily for real estate, including medical office suites and corporate offices. For the three months ended June 30, 2022 and 2021, the Company incurred rent expense of $1.0 million and $0.8 million, respectively, for its medical office suites. For the six months ended June 30, 2022 and 2021, the Company incurred rent expense of $2.0 million and $1.6 million, respectively, related to its medical office suites. The Company’s rent expense related to its medical office suites is classified in cost of services within the Company’s condensed consolidated statements of operations. The Company incurred rent expense of $119,000 and $27,000 for the three months ended June 30, 2022 and 2021, respectively, and $164,000 and $49,000 for the six months ended June 30, 2022 and 2021, respectively, related to the corporate offices which is classified in selling, general and administrative expenses. The Company currently does not have any finance leases.

Real estate lease agreements typically have initial terms of five to ten years and may include one or more options to renew. The useful life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The Company’s lease agreements do not contain any material residual value guarantees, restrictions or covenants.

The following table presents supplemental cash flow information for the six months ended June 30, 2022 and 2021 (in 000’s):


	June 30, 2022		June 30, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	2,026	$	1,494
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	6,138	$	—

Future minimum rental payments under all non-cancellable operating lease agreements for the succeeding five years are as follows, excluding common area maintenance charges that may be required by the agreements (in 000’s):


Year ended December 31,

2022 (excluding the six months ended June 30, 2022)	$	2,291
2023	4,865
2024	4,865
2025	4,855
2026	4,451
Thereafter	6,546
Total lease payments	27,873
Less: imputed interest	(5,746)
Total lease obligations	$	22,127