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Leases | 6 Months Ended
--- | ---
Jun. 30, 2023
Leases [Abstract] |
Leases | Leases The Company has entered into leases for commercial office spaces and vehicles. These leases are not unilaterally cancellable by the Company, are legally enforceable, and specify fixed or minimum amounts. The leases expire at various dates through 2031 and provide for renewal options. In the normal course of business, it is expected that these leases will be renewed or replaced by leases on other properties. The leases provide for increases in future minimum annual rental payments based on defined increases in the Consumer Price Index, subject to certain minimum increases. Also, the agreements generally require the Company to pay real estate taxes, insurance, and repairs. Supplemental unaudited condensed consolidated balance sheet information related to leases is as follows:
|  | Classification |  | June 30, 2023 |  | December 31, 2022
Operating lease assets |  | Right-of-use operating lease assets |  | $ | 5,076,837 |  |  | 5,305,881 |
Finance lease assets |  | Property, plant and equipment, net |  | 15,918 |  |  | 18,467 |
Total lease assets |  |  |  | $ | 5,092,755 |  |  | $ | 5,324,348 |
Operating lease liabilities - current |  | Operating lease liabilities - current |  | $ | 856,635 |  |  | 824,326 |
Operating lease liabilities - noncurrent |  | Operating lease liabilities - noncurrent |  | 4,867,157 |  |  | 5,090,170 |
Finance lease liabilities - current |  | Other liabilities |  | 7,318 |  |  | 7,184 |
Finance lease liabilities - noncurrent |  | Other long-term liabilities |  | 10,513 |  |  | 12,959 |
Total lease liabilities |  |  |  | $ | 5,741,623 |  |  | $ | 5,934,639 |
The components of lease expense are as follows:
|  |  |  | Three Months Ended June 30, |  | Three Months Ended June 30, |  | Six Months Ended June 30, |  | Six Months Ended June 30,
|  | Classification |  | 2023 |  | 2022 |  | 2023 |  | 2022
Operating lease expense |  | Selling, general and administrative |  | $ | 228,633 |  |  | $ | 164,076 |  |  | $ | 457,267 |  |  | $ | 340,597 |
Finance lease expense: |  |  |  |  |  |  |  |  |  |
Amortization of finance lease assets |  | Selling, general and administrative |  | 1,432 |  |  | 1,451 |  |  | 2,855 |  |  | 7,391 |
Interest on finance lease liabilities |  | Interest income, net |  | 464 |  |  | 599 |  |  | 957 |  |  | 1,238 |
Total lease expense |  |  |  | $ | 230,529 |  |  | $ | 166,126 |  |  | $ | 461,079 |  |  | $ | 349,226 |
|  | Operating Lease |  | Finance Lease
Maturities of lease liabilities are as follows: |  | June 30, 2023 |  | June 30, 2023
2023 |  | $ | 441,493 |  |  | $ | 3,659 |
2024 |  | 892,212 |  |  | 7,318 |
2025 |  | 893,046 |  |  | 7,318 |
2026 |  | 921,273 |  |  | 1,830 |
2027 |  | 946,683 |  |  | — |
Thereafter |  | 3,798,553 |  |  | — |
Total lease payments |  | 7,893,260 |  |  | 20,125 |
Less: interest |  | (2,169,468) |  |  | (2,295) |
Total lease obligations |  | $ | 5,723,792 |  |  | $ | 17,830 |
Lease term and discount rate:
|  | June 30, 2023 |  | December 31, 2022
Weighted-average remaining lease terms (in years): |  |  |  |
Operating lease |  | 8.3 |  | 9.0
Finance lease |  | 2.8 |  | 3.3
Weighted-average discount rate: |  |  |  |
Operating lease |  | 7.8% |  | 7.8%
Finance lease |  | 7.8% |  | 7.8%
Other Information:
|  |  |  | Six Months Ended June 30, |  | Six Months Ended June 30,
|  |  |  | 2023 |  | 2022
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |
Operating cash flows - operating leases |  |  |  | $ | 229,044 |  |  | $ | 80,869 |
Operating cash flows - finance leases |  |  |  | $ | 4,686 |  |  | $ | 1,238 |
Financing cash flows - finance leases |  |  |  | $ | 4,480 |  |  | $ | 4,425 |
Leased assets obtained in exchange for new finance lease liabilities |  |  |  | $ | 15,918 |  |  | $ | 20,827 |
Leased assets obtained in exchange for new operating lease liabilities |  |  |  | $ | — |  |  | $ | — |
Sublease In April 2022, the Company entered into a sublease agreement with certain local San Diego companies to sublease a portion of the Company's 4,811 square foot expansion. The term of the sublease is six months to twelve months with fixed base rental income ranging from $2,250 to $14,500 per month. The sublease has no option for renewal or extension at the end of the sublease term. Sublease income are as follows:
|  |  |  | Three Months Ended June 30, |  | Three Months Ended June 30, |  | Six Months Ended June 30, |  | Six Months Ended June 30,
|  | Classification |  | 2023 |  | 2022 |  | 2023 |  | 2022
Sublease lease income |  | Other, net |  | $ | 101,915 |  |  | $ | 20,125 |  |  | $ | 231,685 |  |  | $ | 20,125 |
Lessor In February 2022, the Company entered into a 10 year master services agreement ("MSA") with a certain school district for FaaS to electrify their school bus fleet. A statement of work (“SOW”) for engineering, procurement and construction ("EPC") was also executed in conjunction with the MSA. As part of this SOW, the Company will provide electric vehicle supply equipment ("EVSE") and related warranties, infrastructure engineering and construction, installation of EVSE, and subscription services to Nuvve’s V2G GIVe platform. The MSA has both lease and non-lease components. The lease component is the EVSE and non-lease components are the EPCs. The Company accounted for the lease components as a sale-type lease with the investment in lease of $117,436 and $97,054 at June 30, 2023 and December 31, 2022, respectively. Lease income are as follows:
|  |  |  |  | Three Months Ended June 30, |  | Three Months Ended June 30, |  | Six Months Ended June 30, |  | Six Months Ended June 30,
|  | Classification |  |  | 2023 |  | 2022 |  | 2023 |  | 2022
Lease income |  | Products and services |  |  | $ | 24,027 |  |  | $ | — |  |  | $ | 24,027 |  |  | $ | — |
Interest income |  | Products and services |  |  | 3,835 |  |  |  |  | 6,430 |  |  | — |
Total lease income |  |  |  |  | $ | 27,862 |  |  | $ | — |  |  | $ | 30,457 |  |  | $ | — |
Leases | Leases The Company has entered into leases for commercial office spaces and vehicles. These leases are not unilaterally cancellable by the Company, are legally enforceable, and specify fixed or minimum amounts. The leases expire at various dates through 2031 and provide for renewal options. In the normal course of business, it is expected that these leases will be renewed or replaced by leases on other properties. The leases provide for increases in future minimum annual rental payments based on defined increases in the Consumer Price Index, subject to certain minimum increases. Also, the agreements generally require the Company to pay real estate taxes, insurance, and repairs. Supplemental unaudited condensed consolidated balance sheet information related to leases is as follows:
|  | Classification |  | June 30, 2023 |  | December 31, 2022
Operating lease assets |  | Right-of-use operating lease assets |  | $ | 5,076,837 |  |  | 5,305,881 |
Finance lease assets |  | Property, plant and equipment, net |  | 15,918 |  |  | 18,467 |
Total lease assets |  |  |  | $ | 5,092,755 |  |  | $ | 5,324,348 |
Operating lease liabilities - current |  | Operating lease liabilities - current |  | $ | 856,635 |  |  | 824,326 |
Operating lease liabilities - noncurrent |  | Operating lease liabilities - noncurrent |  | 4,867,157 |  |  | 5,090,170 |
Finance lease liabilities - current |  | Other liabilities |  | 7,318 |  |  | 7,184 |
Finance lease liabilities - noncurrent |  | Other long-term liabilities |  | 10,513 |  |  | 12,959 |
Total lease liabilities |  |  |  | $ | 5,741,623 |  |  | $ | 5,934,639 |
The components of lease expense are as follows:
|  |  |  | Three Months Ended June 30, |  | Three Months Ended June 30, |  | Six Months Ended June 30, |  | Six Months Ended June 30,
|  | Classification |  | 2023 |  | 2022 |  | 2023 |  | 2022
Operating lease expense |  | Selling, general and administrative |  | $ | 228,633 |  |  | $ | 164,076 |  |  | $ | 457,267 |  |  | $ | 340,597 |
Finance lease expense: |  |  |  |  |  |  |  |  |  |
Amortization of finance lease assets |  | Selling, general and administrative |  | 1,432 |  |  | 1,451 |  |  | 2,855 |  |  | 7,391 |
Interest on finance lease liabilities |  | Interest income, net |  | 464 |  |  | 599 |  |  | 957 |  |  | 1,238 |
Total lease expense |  |  |  | $ | 230,529 |  |  | $ | 166,126 |  |  | $ | 461,079 |  |  | $ | 349,226 |
|  | Operating Lease |  | Finance Lease
Maturities of lease liabilities are as follows: |  | June 30, 2023 |  | June 30, 2023
2023 |  | $ | 441,493 |  |  | $ | 3,659 |
2024 |  | 892,212 |  |  | 7,318 |
2025 |  | 893,046 |  |  | 7,318 |
2026 |  | 921,273 |  |  | 1,830 |
2027 |  | 946,683 |  |  | — |
Thereafter |  | 3,798,553 |  |  | — |
Total lease payments |  | 7,893,260 |  |  | 20,125 |
Less: interest |  | (2,169,468) |  |  | (2,295) |
Total lease obligations |  | $ | 5,723,792 |  |  | $ | 17,830 |
Lease term and discount rate:
|  | June 30, 2023 |  | December 31, 2022
Weighted-average remaining lease terms (in years): |  |  |  |
Operating lease |  | 8.3 |  | 9.0
Finance lease |  | 2.8 |  | 3.3
Weighted-average discount rate: |  |  |  |
Operating lease |  | 7.8% |  | 7.8%
Finance lease |  | 7.8% |  | 7.8%
Other Information:
|  |  |  | Six Months Ended June 30, |  | Six Months Ended June 30,
|  |  |  | 2023 |  | 2022
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |
Operating cash flows - operating leases |  |  |  | $ | 229,044 |  |  | $ | 80,869 |
Operating cash flows - finance leases |  |  |  | $ | 4,686 |  |  | $ | 1,238 |
Financing cash flows - finance leases |  |  |  | $ | 4,480 |  |  | $ | 4,425 |
Leased assets obtained in exchange for new finance lease liabilities |  |  |  | $ | 15,918 |  |  | $ | 20,827 |
Leased assets obtained in exchange for new operating lease liabilities |  |  |  | $ | — |  |  | $ | — |
Sublease In April 2022, the Company entered into a sublease agreement with certain local San Diego companies to sublease a portion of the Company's 4,811 square foot expansion. The term of the sublease is six months to twelve months with fixed base rental income ranging from $2,250 to $14,500 per month. The sublease has no option for renewal or extension at the end of the sublease term. Sublease income are as follows:
|  |  |  | Three Months Ended June 30, |  | Three Months Ended June 30, |  | Six Months Ended June 30, |  | Six Months Ended June 30,
|  | Classification |  | 2023 |  | 2022 |  | 2023 |  | 2022
Sublease lease income |  | Other, net |  | $ | 101,915 |  |  | $ | 20,125 |  |  | $ | 231,685 |  |  | $ | 20,125 |
Lessor In February 2022, the Company entered into a 10 year master services agreement ("MSA") with a certain school district for FaaS to electrify their school bus fleet. A statement of work (“SOW”) for engineering, procurement and construction ("EPC") was also executed in conjunction with the MSA. As part of this SOW, the Company will provide electric vehicle supply equipment ("EVSE") and related warranties, infrastructure engineering and construction, installation of EVSE, and subscription services to Nuvve’s V2G GIVe platform. The MSA has both lease and non-lease components. The lease component is the EVSE and non-lease components are the EPCs. The Company accounted for the lease components as a sale-type lease with the investment in lease of $117,436 and $97,054 at June 30, 2023 and December 31, 2022, respectively. Lease income are as follows:
|  |  |  |  | Three Months Ended June 30, |  | Three Months Ended June 30, |  | Six Months Ended June 30, |  | Six Months Ended June 30,
|  | Classification |  |  | 2023 |  | 2022 |  | 2023 |  | 2022
Lease income |  | Products and services |  |  | $ | 24,027 |  |  | $ | — |  |  | $ | 24,027 |  |  | $ | — |
Interest income |  | Products and services |  |  | 3,835 |  |  |  |  | 6,430 |  |  | — |
Total lease income |  |  |  |  | $ | 27,862 |  |  | $ | — |  |  | $ | 30,457 |  |  | $ | — |

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- 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 -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-20/tableOfContent + Details
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- 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 -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-20/tableOfContent + Details
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