Leases, Right-of-Use Assets and Related Liabilities

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Leases, Right-of-Use Assets and Related Liabilities

9. Leases, Right-of-Use Assets and Related Liabilities

The Company is party to an operating lease contract for the Company’s office and research facility in Englewood, Colorado, which expires in January 2029. The lease contains an option to extend the lease which management does not reasonably expect to exercise, so it is not included in the length of the term. The Company also has one production line piece of equipment with an operating lease that expires in 2024.

The Company has four finance leases for land under arrangements related to NW Iowa RNG. Under these contracts, the Company leases land from dairy farmers on which it has built three anaerobic digesters, and related equipment and pipelines to condition raw biogas from cow manure provided by the farmers. The partially conditioned biogas is transported from the three digester sites to a central gas upgrade system located at the fourth site that upgrades the biogas to pipeline-quality RNG for sale. These leases expire at various dates between 2031 and 2050. The Company accounts for lease components separately from non-lease components for the Company’s dairy lease asset class. The total consideration in the lease agreement is allocated to the lease and non-lease components based on their relative standalone selling prices.

The following tables present the (i) other quantitative information and (ii) future minimum payments under non-cancelable financing and operating leases as they relate to the Company’s leases (in thousands), except for weighted averages:

	Years Ended December 31,
	2023			2022
Other Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	22		$	30
Operating cash flows from operating leases		330			928
Finance cash flows from finance leases		2			2
Right-of-use asset obtained in exchange for new operating lease liabilities		199			—
Weighted-average remaining lease term, finance lease (months)		307			311
Weighted-average remaining lease term, operating leases (months)		61			65
Weighted-average discount rate - finance leases (1)		12	%		12	%
Weighted-average discount rate - operating leases (1)		6	%		5	%

(1) Our leases do not provide an implicit interest rate, and we calculate the lease liability at lease commencement as the present value of unpaid lease payments using our estimated incremental borrowing rate. The incremental borrowing rate represents the rate of interest that we would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term and is determined using a portfolio approach based on information available at the commencement date of the lease.

Year Ending December 31,	Operating Leases		Finance Leases
2024	$	617	$	50
2025		398		27
2026		367		25
2027		335		26
2028		345		26
2029 and thereafter		—		523
Total		2,062		677
Less: amounts representing present value discounts		231		445
Total lease liabilities		1,831		232
Less: current portion		532		45
Non-current portion	$	1,299	$	187

Leases, Right-of-Use Assets and Related Liabilities

The Company is party to an operating lease contract for the Company’s office and research facility in Englewood, Colorado, which expires in January 2029. The lease contains an option to extend the lease which management does not reasonably expect to exercise, so it is not included in the length of the term. The Company also has one production line piece of equipment with an operating lease that expires in 2024.

The Company has four finance leases for land under arrangements related to NW Iowa RNG. Under these contracts, the Company leases land from dairy farmers on which it has built three anaerobic digesters, and related equipment and pipelines to condition raw biogas from cow manure provided by the farmers. The partially conditioned biogas is transported from the three digester sites to a central gas upgrade system located at the fourth site that upgrades the biogas to pipeline-quality RNG for sale. These leases expire at various dates between 2031 and 2050. The Company accounts for lease components separately from non-lease components for the Company’s dairy lease asset class. The total consideration in the lease agreement is allocated to the lease and non-lease components based on their relative standalone selling prices.

The following tables present the (i) other quantitative information and (ii) future minimum payments under non-cancelable financing and operating leases as they relate to the Company’s leases (in thousands), except for weighted averages:

	Years Ended December 31,
	2023			2022
Other Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	22		$	30
Operating cash flows from operating leases		330			928
Finance cash flows from finance leases		2			2
Right-of-use asset obtained in exchange for new operating lease liabilities		199			—
Weighted-average remaining lease term, finance lease (months)		307			311
Weighted-average remaining lease term, operating leases (months)		61			65
Weighted-average discount rate - finance leases (1)		12	%		12	%
Weighted-average discount rate - operating leases (1)		6	%		5	%

(1) Our leases do not provide an implicit interest rate, and we calculate the lease liability at lease commencement as the present value of unpaid lease payments using our estimated incremental borrowing rate. The incremental borrowing rate represents the rate of interest that we would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term and is determined using a portfolio approach based on information available at the commencement date of the lease.

Year Ending December 31,	Operating Leases		Finance Leases
2024	$	617	$	50
2025		398		27
2026		367		25
2027		335		26
2028		345		26
2029 and thereafter		—		523
Total		2,062		677
Less: amounts representing present value discounts		231		445
Total lease liabilities		1,831		232
Less: current portion		532		45
Non-current portion	$	1,299	$	187