Leases, Right-of-Use Assets and Related Liabilities

3 Months Ended

Mar. 31, 2024

Leases [Abstract]

Leases, Right-of-Use Assets and Related Liabilities

7. 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, and two operating lease contracts for additional office space in Albuquerque, New Mexico, and San Diego, California, which expire in 2025. These leases contain options to extend the leases, which management does not reasonably expect to exercise, so they are not included in the length of the terms.

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 a gas upgrade facility with related equipment and pipelines to condition raw biogas from cow manure provided by the farmers. 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):

	Three Months Ended March 31,
	2024			2023
Other Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	23		$	23
Operating cash flows from operating leases	$	71		$	74
Finance cash flows from finance leases	$	2		$	2
Right-of-use asset obtained in exchange for new operating lease liabilities	$	35		$	—
Weighted-average remaining lease term, finance lease (months)		303			308
Weighted-average remaining lease term, operating leases (months)		54			61
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	$	339	$	28
2025		411		25
2026		367		25
2027		335		26
2028		345		25
2029 and thereafter		—		523
Total		1,797		652
Less: amounts representing present value discounts		211		441
Total lease liabilities		1,586		211
Less: current portion		364		25
Non-current portion	$	1,222	$	186

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, and two operating lease contracts for additional office space in Albuquerque, New Mexico, and San Diego, California, which expire in 2025. These leases contain options to extend the leases, which management does not reasonably expect to exercise, so they are not included in the length of the terms.

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 a gas upgrade facility with related equipment and pipelines to condition raw biogas from cow manure provided by the farmers. 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):

	Three Months Ended March 31,
	2024			2023
Other Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	23		$	23
Operating cash flows from operating leases	$	71		$	74
Finance cash flows from finance leases	$	2		$	2
Right-of-use asset obtained in exchange for new operating lease liabilities	$	35		$	—
Weighted-average remaining lease term, finance lease (months)		303			308
Weighted-average remaining lease term, operating leases (months)		54			61
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	$	339	$	28
2025		411		25
2026		367		25
2027		335		26
2028		345		25
2029 and thereafter		—		523
Total		1,797		652
Less: amounts representing present value discounts		211		441
Total lease liabilities		1,586		211
Less: current portion		364		25
Non-current portion	$	1,222	$	186