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Leases
 9 Months Ended
Sep. 30, 2021
Leases  
Leases

4. Leases

 

At the inception of an arrangement, the Company determines if an arrangement is, or contains, a lease based on facts and circumstances present in that arrangement. Lease classifications, recognition, and measurement are then determined at the lease commencement date.

 

The Company’s operating lease right-of-use (“ROU”) assets and operating lease liabilities represent primarily leases for office and building spaces used to conduct our business. Finance leases consist primarily of processing and transport equipment used by our facilities’ operations. The Company’s finance leases also included a building with land utilized for our waste treatment operations which included a purchase option. During the third quarter of 2021, the Company concluded that it was more likely than not that it would not exercise this purchase option but will continue to lease the property. Accordingly, a reassessment of this lease was performed which resulted in reclassification of this lease to an operating lease.

 

 

The components of lease cost for the Company’s leases for the three and nine months ended September 30, 2021 and 2020 were as follows (in thousands):

 

                 
   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
   2021   2020   2021   2020 
                 
Operating Leases:                    
Lease cost  $115   $114   $341   $342 
                     
Finance Leases:                    
Amortization of ROU assets   53    109    170    161 
Interest on lease liability   50    47    85    97 
Finance Leases   103    156    255    258 
                     
Short-term lease rent expense   4    3    10    7 
                     
Total lease cost  $222   $273   $606   $607 

 

The weighted average remaining lease term and the weighted average discount rate for operating and finance leases at September 30, 2021 were:

 

   Operating Leases   Finance Leases 
Weighted average remaining lease terms (years)   7.1    2.6 
           
Weighted average discount rate   7.6%   4.6%

 

The following table reconciles the undiscounted cash flows for the operating and finance leases at September 30, 2021 to the operating and finance lease liabilities recorded on the balance sheet (in thousands):

 

    Operating Leases    Finance Leases 
2021 (Remaining)   $132    $64 
2022    576     271 
2023    560     150 
2024    420     146 
2025    327     146 
2025 and thereafter    1,260     341 
Total undiscounted lease payments    3,275     1,118 
Less: Imputed interest    (754)    (85)
Present value of lease payments   $2,521    $1,033 
             
Current portion of operating lease obligations   $387    $— 
Long-term operating lease obligations, less current portion   $2,134    $— 
Current portion of finance lease obligations   $—    $257 
Long-term finance lease obligations, less current portion   $—    $776 

 

 

Supplemental cash flow and other information related to our leases were as follows for the three and nine months ended September 30, 2021 and 2020 (in thousands):

 

                     
   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
   2021   2020   2021   2020 
Cash paid for amounts included in the measurement of lease liabilities:                    
Operating cash flow used in operating leases  $103   $111   $307   $331 
Operating cash flow used in finance leases  $50   $47   $85   $97 
Financing cash flow used in finance leases  $76   $182   $281   $411 
                     
ROU assets obtained in exchange for lease obligations for:                    
Finance liabilities  $323   $751   $323   $874 
Operating liabilities  $184    —   $350   $— 
                     
Reduction to ROU assets resulting from reassessment for:                    
Finance liabilities  $(364)  $—   $(364)  $—