Leases, Right-to-Use Assets and Related Liabilities

The contracts for the Company are comprised of facility and equipment leases necessary to conduct the Company's day-to-day operations for which the Company maintains control of right-to-use assets and incurs the related liabilities. Right-of-use assets totaling

$1.7

million are included in "Deposits and other assets," and

$1.9

million of lease liabilities are included in "Other long-term liabilities" in the Consolidated Balance Sheets, respectively, as of

March 31, 2021.

The Company has

two

lease agreements that qualify as “operating” based on the terms and conditions at the commencement date for each lease. The

first

lease is for the Company's office and research facility in Englewood, Colorado, which expires in

January 2029,

and includes monthly charges for common area and maintenance charges. The

second

lease is for equipment. All other leases qualified for the short-term scope exemption.

The Company recognizes rent expense on its operating leases on a straight-line basis.

The Company began leasing its grain bins in Luverne, Minnesota in

October 2020

through a short-term operating lease agreement which expires in

July 2021.

Rental income for the

three

months ended

March 31, 2021

totaled

$0.1

million.

The following table presents the (a) costs by lease category and (b) other quantitative information relating to the Company's leases (dollars in thousands):

	Three Months Ended March 31,
	2021			2020
Lease Cost
Financing lease cost	$	11		$	1
Operating lease cost		61			471
Short-Term lease cost		132			80
Variable lease cost (1)		39			32

Total lease cost	$	243		$	584

(1) Represents amounts incurred in excess of minimum payments for common area maintenance and present value discounts

	Three Months Ended March 31,
	2021			2020
Other Information
Cash paid for the measurement of lease liabilities:
Operating cash flows from finance lease	$	6		$	1
Operating cash flows from operating leases		61			471
Finance cash flows from finance lease		7			—
Right-to-use asset obtained in exchange for new financing lease liability		—			13
Right-to-use asset obtained in exchange for new operating lease liability		1,562
Weighted-average remaining lease term, financing lease (months)		221			59
Weighted-average remaining lease term, operating leases (months)		94			18
Weighted-average discount rate - financing lease (2)		13	%		21	%
Weighted-average discount rate - operating leases (3)		5	%		12	%

(2) The discount rate used for the finance lease was based on the rate implicit in the lease.
(3) The discount rate used for operating leases is based on our implicit borrowing rate at the date the Company entered into the lease.

The table below shows the future minimum payments under non-cancelable financing and operating leases at

March 31, 2021 (

in thousands):

Year Ending December 31,	Operating Leases			Financing Leases

2021 (remaining)	$	103		$	25
2022		24			26
2023		297			26
2024		305			26
2025		1,042			22
2026 and thereafter		1,030			301
Total		2,801			426
Less: Amounts representing present value discounts		(1,138	)	(263		)

Total lease liabilities	$	1,663		$	163

March 29, 2021,

Gevo signed a

first

amendment to a land lease agreement in northwest Iowa dated

January 7, 2020.

The lease term is for

years after the digester facility becomes operational, estimated to occur in

December 2021.