XML 22 R11.htm IDEA: XBRL DOCUMENT

Commitments and Contingencies

3 Months Ended

Mar. 31, 2022

Commitments and Contingencies

Commitments And Contingencies

5. Commitments and Contingencies

Leases

We have identified assets as the corporate office, warehouse, monitoring equipment and laboratory facilities over which we have control and obtain economic benefits fully. We classified these identified assets as operating leases after assessing the terms under classification guidance. We have entered into several leases for trailers and carbon units with purchase option at the end of the term. We have concluded that it is reasonably certain that we would exercise the purchase option at the end of the term, hence the leases were classified as finance leases. All of our leases have remaining term of less than a year to 6.5 years.

We made an accounting policy election to keep leases with an initial term of 12 months or less off of the balance sheet. We will recognize those lease payments in the Consolidated Statements of Operations as we incur the expenses.

When discount rates implicit in leases cannot be readily determined, the Company uses the applicable incremental borrowing rate at lease commencement to perform lease classification tests on lease components and measure lease liabilities and right-of-use (“ROU”) assets. The incremental borrowing rate used by the Company was based on weighted average baseline rates commensurate with the Company’s secured borrowing rate over a similar term. At each reporting period, when there is a new lease initiated, the rates established for that quarter will be used.

On December 14, 2021, we entered into a real estate purchase agreements and lease disposition and development agreement with the City of Riverbank. We plan to utilize the purchased and leased properties, located at 5300 Claus Road in the city of Riverbank, California, for the construction of the Carbon Zero 1 Facility. The lease commences in the second quarter of 2022 and the Company will evaluate and assess the lease upon commencement.

The components of lease expense and sublease income were as follows:

		Three Months ended March 31,
		2022				2021
Operating lease cost
Operating lease expense		$	189			$	204
Short term lease expense			27				39
Variable lease expense			23				33
Total operating lease cost		$	239			$	276

Finance lease cost
Amortization of right-of-use assets		$	63			$	55
Interest on lease liabilities			19				21
Total finance lease cost		$	82			$	76

Cash paid for amounts included in the measurement of lease liabilities:

		Three Months ended March 31,
		2022				2021
Operating cash flows used in operating leases		$	164			$	167
Operating cash flows used in finance leases			19				21
Financing cash flows used in finance leases			132				124

Supplemental non-cash flow information related to ROU asset and lease liabilities was as follows for the three months ended March 31, 2022 and 2021:

		Three Months ended March 31,
		2022				2021
Operating leases
Accretion of the lease liability		$	87			$	99
Amortization of right-of-use assets			103				105

Weighted Average Remaining Lease Term
Operating leases						6.1 years
Finance leases						2.1 years

Weighted Average Discount Rate
Operating leases							14.0	%
Finance leases							6.2	%

Supplemental balance sheet information related to leases was as follows:

		March 31, 2022				December 31, 2021
Operating leases
Operating lease right-of-use assets		$	2,359			$	2,462

Current portion of operating lease liability			245				260
Long term operating lease liability			2,256				2,318
Total operating lease liabilities			2,501				2,578

Finance leases
Property and equipment, at cost		$	2,317			$	2,317
Accumulated depreciation			(439	)			(376	)
Property and equipment, net			1,878				1,941

Other current liability			560				550
Other long term liabilities			596				720
Total finance lease liabilities			1,156				1,270

Maturities of operating lease liabilities were as follows:

Year ended March 31,		Operating leases				Finance leases

2023		$	573			$	611
2024			577				528
2025			595				77
2026			612				14
2027			631				-
There after			760				-
Total lease payments			3,748				1,230
Less imputed interest			(1,247	)			(74	)
Total lease liability		$	2,501			$	1,156

Property taxes

On March 3, 2022, the Company paid $6.1 million to Stanislaus County for property taxes past due.

Legal Proceedings

On August 31, 2016, the Company filed a lawsuit in Santa Clara County Superior Court against defendant EdenIQ, Inc. (“EdenIQ”). The lawsuit was based on EdenIQ’s wrongful termination of a merger agreement that would have effectuated the merger of EdenIQ into a new entity that would be primarily owned by Aemetis. On July 24, 2019, the court awarded EdenIQ a portion of the fees and costs it had sought in the amount of approximately $6.2 million and the Company recorded these fees based on the court order. On May 6, 2022 the parties settled the dispute for $4.8 million by entering into a settlement agreement.