Leases

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

Leases

LeasesOn 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 September 30, 2022 and December 31, 2021 were as follows:

	Classification on Balance Sheet	September 30, 2022		December 31, 2021
Assets
ROU operating lease assets	Operating lease right-of-use asset, net	$	4,546	$	3,468
Finance lease assets	Property, plant and equipment, net	163		28
Total lease assets		$	4,709	$	3,496
	Classification on Balance Sheet	September 30, 2022		December 31, 2021
Liabilities
Current
Operating lease liability	Operating lease liability, current	$	1,067	$	1,084
Finance lease liability	Other current liabilities	31		8
Long-term
Operating lease liability	Operating lease liability, long-term	4,426		3,224
Finance lease liability	Other liabilities	134		17
Total lease liabilities		$	5,658	$	4,333

Operating lease costs for the three months ended September 30, 2022 and 2021 were $352 and $279, respectively, and for the nine months ended September 30, 2022 and 2021 were $1,029 and $752, respectively. As of September 30, 2022, the weighted average remaining term for the operating leases was 4.06 years and the weighted average discount rate was 10.4%. The weighted average remaining term for the finance leases was 4.18 years and the weighted average discount rate was 19.9%.

Future minimum lease payments are as follows:

	Operating Leases		Financing Leases		Total
Remainder of 2022	$	378	$	15	$	393
2023	1,538		60		1,598
2024	1,617		60		1,677
2025	1,701		55		1,756
2026	1,420		35		1,455
Later years	—		19		19
Total minimum lease payments	$	6,654	$	244	$	6,898
Less amounts representing interest	1,161		79		1,240
Present value of minimum lease payments	$	5,493	$	165	$	5,658

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 nine months ended September 30, 2022, the Company recognized revenue of $— and $1,166 from the sales-type lease, respectively. No revenue was recognized from the sales-type lease for the three and nine months ended September 30, 2021. Net sales-type lease receivables of $1,456 and $347, net of unearned finance income, are recorded under other assets on the condensed consolidated balance sheets as of September 30, 2022 and December 31, 2021, respectively.

Leases

LeasesOn 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 September 30, 2022 and December 31, 2021 were as follows:

	Classification on Balance Sheet	September 30, 2022		December 31, 2021
Assets
ROU operating lease assets	Operating lease right-of-use asset, net	$	4,546	$	3,468
Finance lease assets	Property, plant and equipment, net	163		28
Total lease assets		$	4,709	$	3,496
	Classification on Balance Sheet	September 30, 2022		December 31, 2021
Liabilities
Current
Operating lease liability	Operating lease liability, current	$	1,067	$	1,084
Finance lease liability	Other current liabilities	31		8
Long-term
Operating lease liability	Operating lease liability, long-term	4,426		3,224
Finance lease liability	Other liabilities	134		17
Total lease liabilities		$	5,658	$	4,333

Operating lease costs for the three months ended September 30, 2022 and 2021 were $352 and $279, respectively, and for the nine months ended September 30, 2022 and 2021 were $1,029 and $752, respectively. As of September 30, 2022, the weighted average remaining term for the operating leases was 4.06 years and the weighted average discount rate was 10.4%. The weighted average remaining term for the finance leases was 4.18 years and the weighted average discount rate was 19.9%.

Future minimum lease payments are as follows:

	Operating Leases		Financing Leases		Total
Remainder of 2022	$	378	$	15	$	393
2023	1,538		60		1,598
2024	1,617		60		1,677
2025	1,701		55		1,756
2026	1,420		35		1,455
Later years	—		19		19
Total minimum lease payments	$	6,654	$	244	$	6,898
Less amounts representing interest	1,161		79		1,240
Present value of minimum lease payments	$	5,493	$	165	$	5,658

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 nine months ended September 30, 2022, the Company recognized revenue of $— and $1,166 from the sales-type lease, respectively. No revenue was recognized from the sales-type lease for the three and nine months ended September 30, 2021. Net sales-type lease receivables of $1,456 and $347, net of unearned finance income, are recorded under other assets on the condensed consolidated balance sheets as of September 30, 2022 and December 31, 2021, respectively.

Leases

LeasesOn 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 September 30, 2022 and December 31, 2021 were as follows:

	Classification on Balance Sheet	September 30, 2022		December 31, 2021
Assets
ROU operating lease assets	Operating lease right-of-use asset, net	$	4,546	$	3,468
Finance lease assets	Property, plant and equipment, net	163		28
Total lease assets		$	4,709	$	3,496
	Classification on Balance Sheet	September 30, 2022		December 31, 2021
Liabilities
Current
Operating lease liability	Operating lease liability, current	$	1,067	$	1,084
Finance lease liability	Other current liabilities	31		8
Long-term
Operating lease liability	Operating lease liability, long-term	4,426		3,224
Finance lease liability	Other liabilities	134		17
Total lease liabilities		$	5,658	$	4,333

Operating lease costs for the three months ended September 30, 2022 and 2021 were $352 and $279, respectively, and for the nine months ended September 30, 2022 and 2021 were $1,029 and $752, respectively. As of September 30, 2022, the weighted average remaining term for the operating leases was 4.06 years and the weighted average discount rate was 10.4%. The weighted average remaining term for the finance leases was 4.18 years and the weighted average discount rate was 19.9%.

Future minimum lease payments are as follows:

	Operating Leases		Financing Leases		Total
Remainder of 2022	$	378	$	15	$	393
2023	1,538		60		1,598
2024	1,617		60		1,677
2025	1,701		55		1,756
2026	1,420		35		1,455
Later years	—		19		19
Total minimum lease payments	$	6,654	$	244	$	6,898
Less amounts representing interest	1,161		79		1,240
Present value of minimum lease payments	$	5,493	$	165	$	5,658

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 nine months ended September 30, 2022, the Company recognized revenue of $— and $1,166 from the sales-type lease, respectively. No revenue was recognized from the sales-type lease for the three and nine months ended September 30, 2021. Net sales-type lease receivables of $1,456 and $347, net of unearned finance income, are recorded under other assets on the condensed consolidated balance sheets as of September 30, 2022 and December 31, 2021, respectively.