11. Commitments and Contingencies

Operating Leases

As of March 31, 2016 and December 31, 2015, the Company has several non-cancelable operating leases (as lessor and as lessee), primarily associated with sale/leaseback transactions that are partially secured by restricted cash (see also note 1) as summarized below. These leases expire over the next six years. Minimum rent payments under operating leases are recognized on a straight‑line basis over the term of the lease. Leases where the Company is the lessor contain termination clauses with associated penalties, the amount of which cause the likelihood of cancelation to be remote.

Future minimum lease payments under non-cancelable operating leases (with initial or remaining lease terms in excess of one year) as of March 31, 2016 are (in thousands):


	As Lessor		As Lessee
Remainder of 2016	$	9,380	$	9,029
2017		12,507		12,036
2018		12,507		11,811
2019		12,507		10,622
2020		11,351		9,488
Thereafter		7,441		5,876
Total future minimum lease payments	$	65,693	$	58,862

Rental expense for all operating leases was $3.0 million and $0.9 million for three months ended March 31, 2016 and 2015, respectively.

At March 31, 2016 and December 31, 2015, prepaid rent and security deposits associated with sale/leaseback transactions were $12.1 million, and are included in other assets on the consolidated balance sheets.

Finance Obligations

During the year ended December 31, 2015, the Company received cash for future services to be performed associated with certain sale/leaseback transactions and recorded the balance as a finance obligation. The outstanding balance of this obligation at March 31, 2016 and December 31, 2015 is $14.5 million and $15.1 million, respectively. The amount is amortized using the effective interest method.

In 2013, the Company completed a sale-leaseback transaction of its property in Latham, New York, for an aggregate sale price of $4.5 million. Although the property was sold and the Company has no legal ownership of the facility, the Company was prohibited from recording the transaction as a sale because of continuing involvement with the property. Accordingly, the sale has been accounted for as a financing transaction, which requires the Company to continue reporting the building as an asset and to record a financing obligation for the sale price. Liabilities relating to this agreement of $2.4 million and $2.5 million have been recorded as a finance obligation, in the accompanying unaudited interim consolidated balance sheets as of March 31, 2016 and December 31, 2015, respectively.

Restricted Cash

The Company has entered into sale/leaseback agreements associated with its products and services. In connection with these agreements, cash of $46.8 million is required to be restricted as security and will be released over the lease term. Included in the $46.8 million are security deposits backing letters of credit, as disclosed in the Operating Leases section above.

The Company also has letters of credit in the aggregate amount of $1.0 million associated with an agreement to provide hydrogen infrastructure and hydrogen to a customer at its distribution center and with a finance obligation from the sale/leaseback of its building. Cash collateralizing these letters of credit is also considered restricted cash.

Litigation

Legal matters are defended and handled in the ordinary course of business. The Company has established accruals for matters for which management considers a loss to be probable and reasonably estimable. It is the opinion of management that facts known at the present time do not indicate that such litigation, after taking into account insurance coverage and the aforementioned accruals, will have a material adverse impact on our results of operations, financial position, or cash flows.

Concentrations of credit risk

Concentrations of credit risk with respect to receivables exist due to the limited number of select customers with whom the Company has initial commercial sales arrangements. To mitigate credit risk, the Company performs appropriate evaluation of a prospective customer’s financial condition.

At March 31, 2016, two customers comprise approximately 42.6% of the total accounts receivable balance, with each customer individually representing 22.0% and 20.6% of total accounts receivable, respectively. At December 31, 2015, two customers comprise approximately 50.9% of the total accounts receivable balance, with each customer individually representing 38.5% and 12.4% of total accounts receivable, respectively.

For the three months ended March 31, 2016, 47.7% of total consolidated revenues were associated with Walmart. For the three months ended March 31, 2015, 63.5% of total consolidated revenues were associated with Walmart.