Leases

6 Months Ended

Jun. 30, 2022

Leases [Abstract]

Leases

Leases

On January 1, 2021, the Company adopted ASU 2016-02, Leases (“Topic 842”), and the related amendments (collectively “ASC 842”). The Company elected the modified retrospective approach, under which results and disclosures for periods before January 1, 2021 were not adjusted for the new standard and the cumulative effect of the change in accounting, is recognized through accumulated deficit at the date of adoption.

Lessee

The Company leases machinery, manufacturing facilities, office space, land, and equipment under both operating and finance leases. Lease assets and lease liabilities as of June 30, 2022 and December 31, 2021 were as follows:

	Classification on Balance Sheet	June 30, 2022		December 31, 2021
Assets
ROU - operating lease assets	Operating lease right-of-use asset, net	$	4,772	$	3,468
Finance lease assets	Property, plant and equipment, net	89		28
Total lease assets		$	4,861	$	3,496
	Classification on Balance Sheet	June 30, 2022		December 31, 2021
Liabilities
Current
Operating lease liability	Operating lease liability, current portion	$	1,013	$	1,084
Finance lease liability	Other current liabilities	13		8
Non-Current
Operating lease liability	Operating lease liability, long-term	4,705		3,224
Finance lease liability	Other liabilities	76		17
Total lease liabilities		$	5,807	$	4,333

Operating lease costs for the three months ended June 30, 2022 and 2021 were $352 and $280, and for the six months ended June 30, 2022 and 2021 were $677 and $473, respectively. As of June 30, 2022, the weighted average remaining term (in years) for the operating lease was 4.31 years and the weighted average discount rate was 10.4%. The weighted average remaining term (in years) for the finance lease was 4.71 years and the weighted average discount rate was 22.7%.

Future maturity of lease liability are as follows:

	Operating Lease		Financing Lease		Total
Remainder of 2022	$	730	$	15	$	745
2023	1,538		31		1,569
2024	1,617		31		1,648
2025	1,701		31		1,732
2026	1,420		25		1,445
Later years	—		12		12
Total minimum lease payments	$	7,006	$	145	$	7,151
Less amounts representing interest	1,288		56		1,344
Present value of minimum lease payments	$	5,718	$	89	$	5,807

Lessor

The Company leases battery energy storage systems to one customer with a 20-year term through sales-type leases. Leases offered by the Company include purchase options during the lease term with a bargain purchase option at the end of the term. At the time of accepting a lease that qualifies as a sales-type lease, the Company records the gross amount of lease payments receivable, estimated residual value of the leased equipment and unearned finance income. The unearned finance income is recognized interest income over the lease term using the interest method.

For the three and six months ended June 30, 2022, the Company recognized revenue of $128 and $1,166 from the sales-type lease, respectively. No revenue was recognized from the sales-type lease for the three and six months ended June 30, 2021. Net sales-type lease receivables of $1,438 and $347, net of unearned finance income are recorded under other assets on the condensed consolidated balance sheets as of June 30, 2022 and December 31, 2021, respectively.

Leases

Leases

On January 1, 2021, the Company adopted ASU 2016-02, Leases (“Topic 842”), and the related amendments (collectively “ASC 842”). The Company elected the modified retrospective approach, under which results and disclosures for periods before January 1, 2021 were not adjusted for the new standard and the cumulative effect of the change in accounting, is recognized through accumulated deficit at the date of adoption.

Lessee

The Company leases machinery, manufacturing facilities, office space, land, and equipment under both operating and finance leases. Lease assets and lease liabilities as of June 30, 2022 and December 31, 2021 were as follows:

	Classification on Balance Sheet	June 30, 2022		December 31, 2021
Assets
ROU - operating lease assets	Operating lease right-of-use asset, net	$	4,772	$	3,468
Finance lease assets	Property, plant and equipment, net	89		28
Total lease assets		$	4,861	$	3,496
	Classification on Balance Sheet	June 30, 2022		December 31, 2021
Liabilities
Current
Operating lease liability	Operating lease liability, current portion	$	1,013	$	1,084
Finance lease liability	Other current liabilities	13		8
Non-Current
Operating lease liability	Operating lease liability, long-term	4,705		3,224
Finance lease liability	Other liabilities	76		17
Total lease liabilities		$	5,807	$	4,333

Operating lease costs for the three months ended June 30, 2022 and 2021 were $352 and $280, and for the six months ended June 30, 2022 and 2021 were $677 and $473, respectively. As of June 30, 2022, the weighted average remaining term (in years) for the operating lease was 4.31 years and the weighted average discount rate was 10.4%. The weighted average remaining term (in years) for the finance lease was 4.71 years and the weighted average discount rate was 22.7%.

Future maturity of lease liability are as follows:

	Operating Lease		Financing Lease		Total
Remainder of 2022	$	730	$	15	$	745
2023	1,538		31		1,569
2024	1,617		31		1,648
2025	1,701		31		1,732
2026	1,420		25		1,445
Later years	—		12		12
Total minimum lease payments	$	7,006	$	145	$	7,151
Less amounts representing interest	1,288		56		1,344
Present value of minimum lease payments	$	5,718	$	89	$	5,807

Lessor

The Company leases battery energy storage systems to one customer with a 20-year term through sales-type leases. Leases offered by the Company include purchase options during the lease term with a bargain purchase option at the end of the term. At the time of accepting a lease that qualifies as a sales-type lease, the Company records the gross amount of lease payments receivable, estimated residual value of the leased equipment and unearned finance income. The unearned finance income is recognized interest income over the lease term using the interest method.

For the three and six months ended June 30, 2022, the Company recognized revenue of $128 and $1,166 from the sales-type lease, respectively. No revenue was recognized from the sales-type lease for the three and six months ended June 30, 2021. Net sales-type lease receivables of $1,438 and $347, net of unearned finance income are recorded under other assets on the condensed consolidated balance sheets as of June 30, 2022 and December 31, 2021, respectively.