The Company adopted ASC 842 on January 1, 2022 and included below is the Company's accounting policy for lessee accounting.

The Company leases office facilities, ground station facilities, and office equipment. At the inception of a contract, the Company determines whether the contract is or contains a lease. Leases are classified as operating or finance leases at the commencement date of the lease. Operating leases with a term greater than one year are recognized on the condensed consolidated balance sheet as right-of-use (ROU) assets and lease liabilities, which are reported as separate line items. Lease liabilities are classified between current and long-term liabilities based on the portion of the total payments that are due in the next twelve months that are attributed to principal payments. The Company does not currently have any leases that are classified as finance leases. The Company has elected the short-term leases practical expedient which allows any leases with a term of 12 months or less to be considered short-term and thus will not have an ROU asset or lease liability recognized on the balance sheet in respect of such leases.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at lease commencement date. As these leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate incurred to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment. The operating lease ROU asset also includes any lease payments made in advance of lease expense and excludes lease incentives and initial direct costs incurred. Lease terms may include options to extend or terminate the leases, which the Company does not include in its minimum lease terms unless the options are reasonably certain to be exercised. The majority of office facilities leases have an initial non-cancelable term of one to ten years with several renewal options that can extend the lease term from three to ten years. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. ROU assets are subject to evaluation for impairment of disposal on a basis consistent with other long-lived assets. The amortization period for the ROU asset is from the lease commencement date to the earlier of the end of the lease term or the end of the useful life of the asset.

The Company has lease agreements with lease and non-lease components which the Company has elected to account for as a single lease component. The Company's lease agreements do not contain any material residual value guarantees.

Lease expenses as of the three and six months ended June 30, 2022 was $849 and $1,719, respectively. The variable lease expenses and short-term lease expenses were $50 and $80 for the three and six months ended June 30, 2022, respectively.

The majority of our ROU assets and lease liabilities, approximately 80%, relate to office facilities leases, with the remaining amounts representing primarily ground station leases.

Operating cash flows paid included in the measurement of operating lease liabilities for the six months ended June 30, 2022 was $617 and was included in net cash used in operating activities in the condensed consolidated statements of cash flows. Supplemental noncash information on lease liabilities arising from obtaining right-of-use assets for the six months ended June 30, 2022 was $1,139.

Information as of December 31, 2021 under historical lease accounting guidance:

Although we have adopted ASC 842 using the modified retrospective approach, prior periods presented in the Company's condensed consolidated financial statements continue to be in accordance with the former lease standard, ASC 840 Leases. These disclosures include:

Under the previous lease standard, the Company leases office facilities and sites for its ground stations under noncancelable operating leases. As of December 31, 2021, these leases expire at various dates through 2029. Rent expense, including ground station leases, for the three and six months ended June 30, 2021 was $819 and $1,479, respectively.