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Leases

9 Months Ended

Sep. 30, 2021

Leases [Abstract]

Leases

LeasesOn July 30, 2021, the Company terminated its office lease with Millenium-Windfall Partners, Ltd for a fixed settlement of $0.4 million, payable in 43 monthly payments. In accordance with the termination, the Company was released from all future rights and obligations under the lease. In accordance with the termination of the lease, the Company recorded an impairment charge of $0.4 million related to its remaining right-of-use asset for this lease for the three and nine months ended September 30,

2021. The Company also remeasured the lease obligation as of July 30, 2021 and the remaining obligation of $0.4 million under the termination settlement is included in the Company's liabilities at September 30, 2021. The table below summarizes the supplemental balance sheet information related to lease assets and lease liabilities as of September 30, 2021 and December 31, 2020 (in thousands):

			Classification						September 30, 2021						December 31, 2020
Assets
Operating lease assets			Right-of-use assets						$	128					$	786
Finance lease assets			Property and equipment, net of accumulated depreciation						90						6,781
Total lease assets									$	218					$	7,567
Liabilities
Current
Operating			Current portion of operating lease obligations						$	206					$	362
Finance			Current portion of finance lease obligation						16						—
Finance			Current portion of finance lease obligation - related parties						—						648
Noncurrent
Operating			Long-term portion of operating lease obligation						314						490
Finance			Long-term portion of finance lease obligations						68						—
Total lease liabilities									$	604					$	1,500

The table below summarizes the components of lease expense for the three and nine months ended September 30, 2021 and 2020 (in thousands, unaudited):

Lease Cost						Classification						Three Months Ended September 30,												Nine Months Ended September 30,
												2021						2020						2021						2020
Operating lease cost						Cost of sales						$	39					$	42					$	116					$	122
Operating lease cost						Selling, general and administrative expenses						75						4						198						185
Finance lease cost
Amortization of leased assets						Depreciation						5						294						14						879
Interest on lease liabilities						Interest expense						2						104						17						400
Net lease cost												$	121					$	444					$	345					$	1,586

On January 25, 2021, the Company entered into three finance lease agreements for vehicles. Under the terms of the lease agreements, the Company has total monthly principal and interest payments of $2 thousand for a 36-month period at an annual rate of 10.7%. The leases include purchase options, which are reasonably certain to occur.

In December 2019, the Company refinanced its lease agreement with a subsidiary of The Modern Group, Ltd. (“The Modern Group”) for equipment purchases totaling approximately $3.2 million. Under the terms of the lease agreement, the Company exercised its purchase option and the remaining outstanding lease obligation of approximately $648 thousand became due on January 25, 2021. These assets are included in the Company's property, plant and equipment, net on the Condensed Consolidated Balance Sheets and the purchase had no effect on the net book value of these assets.

The schedule below presents the future minimum lease payments for our operating and finance lease obligations at September 30, 2021 (in thousands):

			Operating Leases						Finance Leases						Total
Remainder 2021			$	85					$	6					$	91
2022			181						25						206
2023			147						25						172
2024			131						41						172
2025			21						—						21
Thereafter			—						—						—
Total lease payments			565						97						662
Less: Interest			(45)						(13)						(58)
Present value of lease liabilities			$	520					$	84					$	604

Lease term and discount rates for our operating and finance lease obligations are as follows:

						September 30, 2021
Weighted-average remaining lease term (years)
Operating leases						2.7
Finance leases						2.3
Weighted-average discount rate
Operating leases						7.2%
Finance leases						10.7%

The table below summarizes the supplemental cash flow information related to leases for the nine months ended September 30, 2021 and 2020 (in thousands):

						September 30, 2021						September 30, 2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases						$	250					$	287
Financing cash flows from finance leases						668						2,640
Interest paid						35						400
Noncash activities from right-of-use assets obtained in exchange for lease obligations:
Operating leases						$	—					$	1,163

Leases

LeasesOn July 30, 2021, the Company terminated its office lease with Millenium-Windfall Partners, Ltd for a fixed settlement of $0.4 million, payable in 43 monthly payments. In accordance with the termination, the Company was released from all future rights and obligations under the lease. In accordance with the termination of the lease, the Company recorded an impairment charge of $0.4 million related to its remaining right-of-use asset for this lease for the three and nine months ended September 30,

2021. The Company also remeasured the lease obligation as of July 30, 2021 and the remaining obligation of $0.4 million under the termination settlement is included in the Company's liabilities at September 30, 2021. The table below summarizes the supplemental balance sheet information related to lease assets and lease liabilities as of September 30, 2021 and December 31, 2020 (in thousands):

			Classification						September 30, 2021						December 31, 2020
Assets
Operating lease assets			Right-of-use assets						$	128					$	786
Finance lease assets			Property and equipment, net of accumulated depreciation						90						6,781
Total lease assets									$	218					$	7,567
Liabilities
Current
Operating			Current portion of operating lease obligations						$	206					$	362
Finance			Current portion of finance lease obligation						16						—
Finance			Current portion of finance lease obligation - related parties						—						648
Noncurrent
Operating			Long-term portion of operating lease obligation						314						490
Finance			Long-term portion of finance lease obligations						68						—
Total lease liabilities									$	604					$	1,500

The table below summarizes the components of lease expense for the three and nine months ended September 30, 2021 and 2020 (in thousands, unaudited):

Lease Cost						Classification						Three Months Ended September 30,												Nine Months Ended September 30,
												2021						2020						2021						2020
Operating lease cost						Cost of sales						$	39					$	42					$	116					$	122
Operating lease cost						Selling, general and administrative expenses						75						4						198						185
Finance lease cost
Amortization of leased assets						Depreciation						5						294						14						879
Interest on lease liabilities						Interest expense						2						104						17						400
Net lease cost												$	121					$	444					$	345					$	1,586

On January 25, 2021, the Company entered into three finance lease agreements for vehicles. Under the terms of the lease agreements, the Company has total monthly principal and interest payments of $2 thousand for a 36-month period at an annual rate of 10.7%. The leases include purchase options, which are reasonably certain to occur.

In December 2019, the Company refinanced its lease agreement with a subsidiary of The Modern Group, Ltd. (“The Modern Group”) for equipment purchases totaling approximately $3.2 million. Under the terms of the lease agreement, the Company exercised its purchase option and the remaining outstanding lease obligation of approximately $648 thousand became due on January 25, 2021. These assets are included in the Company's property, plant and equipment, net on the Condensed Consolidated Balance Sheets and the purchase had no effect on the net book value of these assets.

The schedule below presents the future minimum lease payments for our operating and finance lease obligations at September 30, 2021 (in thousands):

			Operating Leases						Finance Leases						Total
Remainder 2021			$	85					$	6					$	91
2022			181						25						206
2023			147						25						172
2024			131						41						172
2025			21						—						21
Thereafter			—						—						—
Total lease payments			565						97						662
Less: Interest			(45)						(13)						(58)
Present value of lease liabilities			$	520					$	84					$	604

Lease term and discount rates for our operating and finance lease obligations are as follows:

						September 30, 2021
Weighted-average remaining lease term (years)
Operating leases						2.7
Finance leases						2.3
Weighted-average discount rate
Operating leases						7.2%
Finance leases						10.7%

The table below summarizes the supplemental cash flow information related to leases for the nine months ended September 30, 2021 and 2020 (in thousands):

						September 30, 2021						September 30, 2020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases						$	250					$	287
Financing cash flows from finance leases						668						2,640
Interest paid						35						400
Noncash activities from right-of-use assets obtained in exchange for lease obligations:
Operating leases						$	—					$	1,163

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- References

No definition available.

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X

- Definition

The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 842
-SubTopic 20
-URI http://asc.fasb.org/subtopic&trid=77888251

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X

- Definition

The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 842
-SubTopic 20
-URI http://asc.fasb.org/subtopic&trid=77888251

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