Leases

9 Months Ended

Sep. 30, 2021

Leases [Abstract]

Leases

Leases

The Company is a party to certain operating and finance leases for vehicles, office space and storage facilities. The Company’s operating leases consist of office space, as well as storage facilities and finance leases consist of automobiles. The Company’s leases generally have remaining terms of one to ten years, some of which include options to renew the leases for up to five years. The Company leases space for operations in the United States, Australia, Belgium, France, Japan and Spain. In addition to the above facility leases, the Company also routinely leases automobiles for certain sales and field service employees under finance leases.

The Company determines if a contract contains a lease at inception. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent the right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, the Company estimates the incremental secured borrowing rates corresponding to the maturities of the leases. The Company based the rate estimates on prevailing financial market conditions, credit analysis, and management judgment.

The Company recognizes expense for these leases on a straight-line basis over the lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce the Company’s right-of-use (“ROU”) asset related to the lease. These are amortized through the ROU asset as reductions of expense over the lease term.

Supplemental balance sheet information related to leases was as follows (in thousands):

Leases	Classification	September 30, 2021		December 31, 2020
Assets
Right-of-use assets	Operating lease assets	$	15,269	$	17,076
Finance lease	Property and equipment, net	377		467
Total leased assets		$	15,646	$	17,543

Liabilities	Classification	September 30, 2021		December 31, 2020
Operating lease liabilities
Operating lease liabilities, current	Operating lease liabilities	$	2,394	$	2,260
Operating lease liabilities, non-current	Operating lease liabilities, net of current portion	14,117		15,950
Total Operating lease liabilities		$	16,511	$	18,210
Finance lease liabilities
Finance lease liabilities, current	Accrued liabilities	$	497	$	370
Finance lease liabilities, non-current	Other long-term liabilities	333		242
Total Finance lease liabilities		$	830	$	612

Lease costs during the three and nine months ended September 30, 2021 and 2020 (in thousands):

		Three Months Ended September 30,				Nine Months Ended September 30,
Lease costs	Classification	2021		2020		2021		2020
Finance lease cost	Amortization expense	$	103	$	121	$	340	$	545
Finance lease cost	Interest for finance lease	$	12	$	14	$	40	$	49
Operating lease cost	Operating lease expense	$	882	$	752	$	2,641	$	2,208

Cash paid for amounts included in the measurement of lease liabilities during the nine months ended September 30, 2021 and 2020 was as follows (in thousands):

		Nine Months Ended September 30,
Cash paid for amounts included in the measurement of lease liabilities	Classification	2021		2020
Operating cash flow	Finance lease	$	38	$	49
Financing cash flow	Finance lease	$	314	$	513
Operating cash flow	Operating lease	$	2,324	$	1,987

Facility leases

Maturities of facility leases were as follows as of September 30, 2021 (in thousands):

As of September 30, 2021	Amount
Remainder of 2021	$	771
2022	3,135
2023	3,173
2024	2,877
2025	2,875
2026 and thereafter	6,308
Total lease payments	19,139
Less: imputed interest	2,628
Present value of lease liabilities	$	16,511

Vehicle Leases

As of September 30, 2021, the Company was committed to minimum lease payments for vehicles leased under long-term non-cancelable finance leases as follows (in thousands):

As of September 30, 2021	Amount
Remainder of 2021	$	130
2022	453
2023	199
2024	132
2025	9
Total lease payments	923
Less: imputed interest	93
Present value of lease liabilities	$	830

Weighted-average remaining lease term and discount rate, as of September 30, 2021, were as follows:

Lease Term and Discount Rate	September 30, 2021
Weighted-average remaining lease term (years)
Operating leases	6.0
Finance leases	1.7
Weighted-average discount rate
Operating leases	4.8	%
Finance leases	6.5	%

Lessor Information related to the Company’s system leasing

During fiscal year ended December 31, 2020, the Company entered into leasing transactions, in which the Company is the lessor, offered through the Company's membership program. The Company's leases for equipment rentals were all accounted for as operating leases during the second and third quarters of 2020.

During the fourth quarter ended December 31, 2020, certain of the membership program agreements were amended, granting the customers the exclusive right and option to purchase the leased system from the Company, at any time during the period of 12 months from signing the amended agreement. For contracts signed under the amended membership agreement, the Company classified and accounted for the arrangements as sales-type leases as of December 31, 2020, as the Company determined it is reasonably certain that the customer will exercise the purchase option.

For the sales-type leases, the net investment of the Company’s lease receivable is measured at the commencement date and is included in the condensed consolidated balance sheets as a component of other current assets and prepaid expenses. As of December 31, 2020, the Company recorded $0.7 million of revenue for the sales-type leases in the condensed consolidated statement of operations and the related lease receivable in other current assets of the condensed consolidated balance sheet. There was no revenue recognized from the sales-type lease arrangement for the three and nine months ended September 30, 2021 and 2020, respectively. During the three and nine months ended September 30, 2021, the Company received a full payment of $0.1 million and $0.3 million from a customer who exercised a purchase option. As of September 30, 2021, the lease receivable balance included in other current assets of the condensed consolidated balance sheet was $0.4 million

Equipment lease revenue for operating lease agreements is recognized over the life of the lease. The amount of operating lease income included in Product revenue in the accompanying condensed consolidated statements of operations for the nine months ended September 30, 2021 was $0.1 million.

Leases

Leases

The Company is a party to certain operating and finance leases for vehicles, office space and storage facilities. The Company’s operating leases consist of office space, as well as storage facilities and finance leases consist of automobiles. The Company’s leases generally have remaining terms of one to ten years, some of which include options to renew the leases for up to five years. The Company leases space for operations in the United States, Australia, Belgium, France, Japan and Spain. In addition to the above facility leases, the Company also routinely leases automobiles for certain sales and field service employees under finance leases.

The Company determines if a contract contains a lease at inception. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent the right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, the Company estimates the incremental secured borrowing rates corresponding to the maturities of the leases. The Company based the rate estimates on prevailing financial market conditions, credit analysis, and management judgment.

The Company recognizes expense for these leases on a straight-line basis over the lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce the Company’s right-of-use (“ROU”) asset related to the lease. These are amortized through the ROU asset as reductions of expense over the lease term.

Supplemental balance sheet information related to leases was as follows (in thousands):

Leases	Classification	September 30, 2021		December 31, 2020
Assets
Right-of-use assets	Operating lease assets	$	15,269	$	17,076
Finance lease	Property and equipment, net	377		467
Total leased assets		$	15,646	$	17,543

Liabilities	Classification	September 30, 2021		December 31, 2020
Operating lease liabilities
Operating lease liabilities, current	Operating lease liabilities	$	2,394	$	2,260
Operating lease liabilities, non-current	Operating lease liabilities, net of current portion	14,117		15,950
Total Operating lease liabilities		$	16,511	$	18,210
Finance lease liabilities
Finance lease liabilities, current	Accrued liabilities	$	497	$	370
Finance lease liabilities, non-current	Other long-term liabilities	333		242
Total Finance lease liabilities		$	830	$	612

Lease costs during the three and nine months ended September 30, 2021 and 2020 (in thousands):

		Three Months Ended September 30,				Nine Months Ended September 30,
Lease costs	Classification	2021		2020		2021		2020
Finance lease cost	Amortization expense	$	103	$	121	$	340	$	545
Finance lease cost	Interest for finance lease	$	12	$	14	$	40	$	49
Operating lease cost	Operating lease expense	$	882	$	752	$	2,641	$	2,208

Cash paid for amounts included in the measurement of lease liabilities during the nine months ended September 30, 2021 and 2020 was as follows (in thousands):

		Nine Months Ended September 30,
Cash paid for amounts included in the measurement of lease liabilities	Classification	2021		2020
Operating cash flow	Finance lease	$	38	$	49
Financing cash flow	Finance lease	$	314	$	513
Operating cash flow	Operating lease	$	2,324	$	1,987

Facility leases

Maturities of facility leases were as follows as of September 30, 2021 (in thousands):

As of September 30, 2021	Amount
Remainder of 2021	$	771
2022	3,135
2023	3,173
2024	2,877
2025	2,875
2026 and thereafter	6,308
Total lease payments	19,139
Less: imputed interest	2,628
Present value of lease liabilities	$	16,511

Vehicle Leases

As of September 30, 2021, the Company was committed to minimum lease payments for vehicles leased under long-term non-cancelable finance leases as follows (in thousands):

As of September 30, 2021	Amount
Remainder of 2021	$	130
2022	453
2023	199
2024	132
2025	9
Total lease payments	923
Less: imputed interest	93
Present value of lease liabilities	$	830

Weighted-average remaining lease term and discount rate, as of September 30, 2021, were as follows:

Lease Term and Discount Rate	September 30, 2021
Weighted-average remaining lease term (years)
Operating leases	6.0
Finance leases	1.7
Weighted-average discount rate
Operating leases	4.8	%
Finance leases	6.5	%

Lessor Information related to the Company’s system leasing

During fiscal year ended December 31, 2020, the Company entered into leasing transactions, in which the Company is the lessor, offered through the Company's membership program. The Company's leases for equipment rentals were all accounted for as operating leases during the second and third quarters of 2020.

During the fourth quarter ended December 31, 2020, certain of the membership program agreements were amended, granting the customers the exclusive right and option to purchase the leased system from the Company, at any time during the period of 12 months from signing the amended agreement. For contracts signed under the amended membership agreement, the Company classified and accounted for the arrangements as sales-type leases as of December 31, 2020, as the Company determined it is reasonably certain that the customer will exercise the purchase option.

For the sales-type leases, the net investment of the Company’s lease receivable is measured at the commencement date and is included in the condensed consolidated balance sheets as a component of other current assets and prepaid expenses. As of December 31, 2020, the Company recorded $0.7 million of revenue for the sales-type leases in the condensed consolidated statement of operations and the related lease receivable in other current assets of the condensed consolidated balance sheet. There was no revenue recognized from the sales-type lease arrangement for the three and nine months ended September 30, 2021 and 2020, respectively. During the three and nine months ended September 30, 2021, the Company received a full payment of $0.1 million and $0.3 million from a customer who exercised a purchase option. As of September 30, 2021, the lease receivable balance included in other current assets of the condensed consolidated balance sheet was $0.4 million

Equipment lease revenue for operating lease agreements is recognized over the life of the lease. The amount of operating lease income included in Product revenue in the accompanying condensed consolidated statements of operations for the nine months ended September 30, 2021 was $0.1 million.

Leases

Leases

The Company is a party to certain operating and finance leases for vehicles, office space and storage facilities. The Company’s operating leases consist of office space, as well as storage facilities and finance leases consist of automobiles. The Company’s leases generally have remaining terms of one to ten years, some of which include options to renew the leases for up to five years. The Company leases space for operations in the United States, Australia, Belgium, France, Japan and Spain. In addition to the above facility leases, the Company also routinely leases automobiles for certain sales and field service employees under finance leases.

The Company determines if a contract contains a lease at inception. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent the right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, the Company estimates the incremental secured borrowing rates corresponding to the maturities of the leases. The Company based the rate estimates on prevailing financial market conditions, credit analysis, and management judgment.

The Company recognizes expense for these leases on a straight-line basis over the lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce the Company’s right-of-use (“ROU”) asset related to the lease. These are amortized through the ROU asset as reductions of expense over the lease term.

Supplemental balance sheet information related to leases was as follows (in thousands):

Leases	Classification	September 30, 2021		December 31, 2020
Assets
Right-of-use assets	Operating lease assets	$	15,269	$	17,076
Finance lease	Property and equipment, net	377		467
Total leased assets		$	15,646	$	17,543

Liabilities	Classification	September 30, 2021		December 31, 2020
Operating lease liabilities
Operating lease liabilities, current	Operating lease liabilities	$	2,394	$	2,260
Operating lease liabilities, non-current	Operating lease liabilities, net of current portion	14,117		15,950
Total Operating lease liabilities		$	16,511	$	18,210
Finance lease liabilities
Finance lease liabilities, current	Accrued liabilities	$	497	$	370
Finance lease liabilities, non-current	Other long-term liabilities	333		242
Total Finance lease liabilities		$	830	$	612

Lease costs during the three and nine months ended September 30, 2021 and 2020 (in thousands):

		Three Months Ended September 30,				Nine Months Ended September 30,
Lease costs	Classification	2021		2020		2021		2020
Finance lease cost	Amortization expense	$	103	$	121	$	340	$	545
Finance lease cost	Interest for finance lease	$	12	$	14	$	40	$	49
Operating lease cost	Operating lease expense	$	882	$	752	$	2,641	$	2,208

Cash paid for amounts included in the measurement of lease liabilities during the nine months ended September 30, 2021 and 2020 was as follows (in thousands):

		Nine Months Ended September 30,
Cash paid for amounts included in the measurement of lease liabilities	Classification	2021		2020
Operating cash flow	Finance lease	$	38	$	49
Financing cash flow	Finance lease	$	314	$	513
Operating cash flow	Operating lease	$	2,324	$	1,987

Facility leases

Maturities of facility leases were as follows as of September 30, 2021 (in thousands):

As of September 30, 2021	Amount
Remainder of 2021	$	771
2022	3,135
2023	3,173
2024	2,877
2025	2,875
2026 and thereafter	6,308
Total lease payments	19,139
Less: imputed interest	2,628
Present value of lease liabilities	$	16,511

Vehicle Leases

As of September 30, 2021, the Company was committed to minimum lease payments for vehicles leased under long-term non-cancelable finance leases as follows (in thousands):

As of September 30, 2021	Amount
Remainder of 2021	$	130
2022	453
2023	199
2024	132
2025	9
Total lease payments	923
Less: imputed interest	93
Present value of lease liabilities	$	830

Weighted-average remaining lease term and discount rate, as of September 30, 2021, were as follows:

Lease Term and Discount Rate	September 30, 2021
Weighted-average remaining lease term (years)
Operating leases	6.0
Finance leases	1.7
Weighted-average discount rate
Operating leases	4.8	%
Finance leases	6.5	%

Lessor Information related to the Company’s system leasing

During fiscal year ended December 31, 2020, the Company entered into leasing transactions, in which the Company is the lessor, offered through the Company's membership program. The Company's leases for equipment rentals were all accounted for as operating leases during the second and third quarters of 2020.

During the fourth quarter ended December 31, 2020, certain of the membership program agreements were amended, granting the customers the exclusive right and option to purchase the leased system from the Company, at any time during the period of 12 months from signing the amended agreement. For contracts signed under the amended membership agreement, the Company classified and accounted for the arrangements as sales-type leases as of December 31, 2020, as the Company determined it is reasonably certain that the customer will exercise the purchase option.

For the sales-type leases, the net investment of the Company’s lease receivable is measured at the commencement date and is included in the condensed consolidated balance sheets as a component of other current assets and prepaid expenses. As of December 31, 2020, the Company recorded $0.7 million of revenue for the sales-type leases in the condensed consolidated statement of operations and the related lease receivable in other current assets of the condensed consolidated balance sheet. There was no revenue recognized from the sales-type lease arrangement for the three and nine months ended September 30, 2021 and 2020, respectively. During the three and nine months ended September 30, 2021, the Company received a full payment of $0.1 million and $0.3 million from a customer who exercised a purchase option. As of September 30, 2021, the lease receivable balance included in other current assets of the condensed consolidated balance sheet was $0.4 million

Equipment lease revenue for operating lease agreements is recognized over the life of the lease. The amount of operating lease income included in Product revenue in the accompanying condensed consolidated statements of operations for the nine months ended September 30, 2021 was $0.1 million.