LEASES

9 Months Ended

Jun. 30, 2022

LEASES

LEASES

13.         LEASES

The Company records a 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 condensed consolidated 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:

	June 30, 2022		September 30, 2021
Operating ROU assets, net	$	29,116	$	8,358
Current portion of operating lease liabilities		6,151		1,959
Long-term operating lease liabilities		22,901		6,554
Total operating lease liabilities	$	29,052	$	8,513
Finance ROU assets, net	$	51	$	60
Current portion of finance lease liabilities		21		24
Long-term finance lease liabilities		33		39
Total finance lease liabilities	$	54	$	63

During the three and nine months ended June 30, 2022, the Company had operating lease amortization of $2,421 and $4,989, respectively, and had finance lease amortization of $6 and $18, 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 nine months ended June 30, 2022 and June 30, 2021 were:

	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Operating lease costs:
Fixed operating lease costs	$	2,187	$	292	$	5,882	$	736
Short-term lease costs		11		32		56		66
Lease income		(566)		(159)		(1,732)		(477)
Finance lease costs:
Amortization of ROU asset expense		6		25		18		97
Interest on finance lease liability		1		46		2		183
Total lease cost	$	1,639	$	236	$	4,226	$	605

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:

	Nine Months Ended		Nine Months Ended
	June 30,		June 30,
	2022		2021
Cash flows included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,205	$	4,927
Operating cash flows from finance leases		5		18
Finance cash flows from finance leases		1		2
Non-cash lease activity:
ROU assets obtained in exchange for new operating lease liabilities	$	7,658	$	25,747
Right-of-use assets obtained in exchange for new finance lease liabilities		—		9

The weighted average remaining lease term and discount rate for the Company’s operating and finance leases as of June 30, 2022 and June 30, 2021 were:

	June 30, 2022		June 30, 2021
Weighted-average remaining lease term (in years)
Operating lease	5.60		4.91
Finance lease	2.79		3.43
Weighted-average discount rate (in percentages)
Operating lease	5.45	%	4.46	%
Finance lease	4.86	%	4.86	%

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

As of June 30, 2022, maturities of operating and finance lease liabilities for each of the following five fiscal years and a total thereafter were as follows:

	Operating Leases		Finance Leases
2022 (remainder of fiscal year)	$	1,145	$	6
2023		7,558		21
2024		6,547		21
2025		5,737		8
2026		4,902		1
Thereafter		8,087		—
Total minimum future lease payments		33,976		57
Less interest		(4,924)		(3)
Total lease liability		29,052		54