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LEASES
6 Months Ended
Mar. 31, 2022
LEASES  
LEASES

12.         LEASES

The Company records an ROU asset and lease liability for substantially all leases for which it is a lessee, in accordance with ASU 842. Leases with an initial term of 12 months or less are not recorded on the balance sheet.  The Company recognizes lease expense for the leases on a straight-line basis over the lease term. At inception of a contract, the Company considers all relevant facts and circumstances to assess whether or not the contract represents a lease by determining whether or not the contract conveys the right to control the use of an identified asset, either explicit or implicit, for a period of time in exchange for consideration.

The Company has various operating and finance leases for facilities and equipment. Facilities leases provide office, laboratory, warehouse, or land that the Company uses to conduct its operations.  Facilities leases range in duration from two to ten years, with either renewal options for additional terms as the initial lease term expires, or purchase options.  Facilities leases are considered as either operating or financing leases.

Equipment leases provide for office equipment, laboratory equipment or services the Company uses to conduct its operations.  Equipment leases range in duration from 30 to 60 months, with either subsequent annual renewals, additional terms as the initial lease term expires, or purchase options.

ROU lease assets and lease liabilities that are reported in the Company’s condensed consolidated balance sheets are as follows:

As of

As of

    

March 31, 2022

    

September 30, 2021

Operating ROU assets, net

$

23,795

$

8,358

Current portion of operating lease liabilities

5,356

 

1,959

Long-term operating lease liabilities

18,613

 

6,554

Total operating lease liabilities

$

23,969

$

8,513

Finance ROU assets, net

$

57

$

60

Current portion of finance lease liabilities

23

 

24

Long-term finance lease liabilities

37

 

39

Total finance lease liabilities

$

60

$

63

During the three and six months ended March 31, 2022, the Company had operating lease amortization of $1,486 and $2,568, respectively, and had finance lease amortization of $6 and $12, respectively. Finance lease interest recorded in the three and six months ended March 31, 2022 was $0 and $1, respectively.

Lease expense for lease payments is recognized on a straight-line basis over the lease term. The components of lease expense related to the Company’s leases for the three and six months ended March 31, 2022 and March 31, 2021 were:

    

Three Months Ended

    

Six Months Ended

March 31, 

March 31, 

2022

2021

    

2022

2021

Operating lease costs:

 

  

  

Fixed operating lease costs

$

1,120

$

242

$

2,203

$

474

Short-term lease costs

19

 

42

 

44

52

Variable lease costs

Lease income

(988)

 

(159)

 

(1,165)

(318)

Finance lease costs:

 

 

Amortization of ROU asset expense

6

 

35

 

12

72

Interest on finance lease liability

 

68

 

1

137

Total lease cost

$

157

$

228

$

1,095

$

417

The Company serves as lessor to a lessee in five facilities. The gross rental income and underlying lease expense are presented net in the Company’s condensed consolidated statement of operations.

Supplemental cash flow information related to leases was as follows:

Three Months Ended

Six Months Ended

    

March 31, 

    

March 31, 

2022

2022

Cash flows included in the measurement of lease liabilities:

 

  

Operating cash flows from operating leases

$

1,626

$

2,722

Operating cash flows from finance leases

 

1

Finance cash flows from finance leases

7

 

13

Non-cash lease activity:

 

ROU assets obtained in exchange for new operating lease liabilities

$

1,055

$

18,091

Right-of-use assets obtained in exchange for new finance lease liabilities

10

10

The weighted average remaining lease term and discount rate for the Company’s operating and finance leases as of March 31, 2022 and March 31, 2021 were:

As of

As of

March 31, 2022

March 31, 2021

Weighted-average remaining lease term (in years)

 

 

 

Operating lease

 

6.11

 

4.49

 

Finance lease

 

2.96

 

0.37

 

Weighted-average discount rate (in percentages)

 

 

 

Operating lease

 

5.01

%

5.24

%

Finance lease

 

4.86

%

5.82

%

Lease duration was determined utilizing renewal options that the Company is reasonably certain to execute.

As of March 31, 2022, maturities of operating and finance lease liabilities for each of the following five years and a total thereafter were as follows:

    

Operating Leases

    

Finance Leases

2022 (remainder of fiscal year)

$

3,230

$

13

2023

 

5,519

 

21

2024

 

4,658

 

21

2025

 

3,863

 

8

2026

 

3,207

 

1

Thereafter

 

7,144

 

Total minimum future lease payments

 

27,621

 

64

Less interest

 

(3,652)

 

(4)

Total lease liability

 

23,969

 

60