Leases

12 Months Ended

Dec. 31, 2021

The Company determines if an arrangement is a lease at inception by assessing whether it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company’s leases are primarily related to property leases for its field offices. The Company's leases have remaining lease terms of one to eight years. Renewal and termination options are included in the lease term when it is reasonably certain that the Company will exercise the option.

The Company's lease agreements do not contain any contingent rental payments, material residual guarantees or material restrictive covenants.

Right of use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As substantially all of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate, which is based on a fully collateralized loan over the lease term, to determine the present value of lease payments. The Company has no finance leases. The following table reflects the amounts related to leases that are recorded on our consolidated balance sheets as of December 31, 2021 and 2020:


	Classification on Consolidated	December 31,
	Balance Sheets	2021			2020
		($ in thousands)
Operating lease assets	Right of use assets-operating leases	$	285		$	483

Current lease liabilities	Current operating leases	$	68		$	198
Noncurrent lease liabilities	Long-term operating leases	217			285
Total lease liabilities		$	285		$	483

Weighted average remaining lease term in years		6.6			1.5
Implicit Rate		3.4		%	3.2		%

Operating lease costs are recognized on a straight-line basis over the lease term. Total operating lease costs for the year ended December 31, 2021 was approximately $556,000.


	December 31,
	2021		2020
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities
Operating lease cost (1) (2)	$	556	$	550

(1) Lease costs are classified on the Consolidated Statements of Operations in cost of sales, cost of compressors and selling, general and administrative expenses.

(2) Includes costs of $346,000 for leases with terms of 12 months or less and $210,000 for leases with terms greater than 12 months for the year ended December 31, 2021. Includes costs of $333,000 for leases with terms of 12 months or less and $217,000 for leases with terms greater than 12 months for the year ended December 31, 2020.

The following table shows the future maturities of lease liabilities:


Years Ending December 31,	Lease Liabilities
	(in thousands)
2022	$	77
2023	38
2024	38
2025	38
2026	38
Thereafter	92
Total lease payments	321
Less: Imputed interest	(36)
Total	$	285

Rent expense under such leases was $210,000 and $217,000 for the years ended December 31, 2021 and 2020, respectively.