LEASES

9 Months Ended

Sep. 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 September 30, 2022 and 2021, the Company incurred rent expense of $1.3 million and $0.7 million, respectively, for its medical office suites. For the nine months ended September 30, 2022 and 2021, the Company incurred rent expense of $3.4 million and $2.4 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 $91,000 and $22,000 for the three months ended September 30, 2022 and 2021, respectively, and $254,000 and $66,000 for the nine months ended September 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 nine months ended September 30, 2022 and 2021 (in 000’s):


	September 30, 2022		September 30, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	3,797	$	2,366
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	10,404	$	3,651

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 nine months ended September 30, 2022)	$	1,200
2023	4,979
2024	5,352
2025	5,457
2026	5,057
Thereafter	9,602
Total lease payments	31,647
Less: imputed interest	(6,889)
Total lease obligations	$	24,758