Leases

6 Months Ended

Jun. 30, 2021

Leases

Leases

On May 1, 2020, the Company took possession of premises in Qingdao, China in furtherance of a larger public/private initiative to promote EV business in the region and reduce the reliance on traditional combustion engines. The premises are indirectly and

partially owned by local governmental entities, and were provided to the Company at no charge. The Company, pursuant to the underlying lease, has use of the premises until November 30, 2034.  See Note 1 for the Company’s accounting for this lease.

As of June 30, 2021, the Company’s operating lease right of use assets and operating lease liabilities are $5.6 million and $5.6 million, respectively. The weighted-average remaining lease term is 3.8 years and the weighted-average discount rate is 3.5%.

As of December 31, 2020, the Company’s operating lease right of use assets and operating lease liabilities were $0.2 million and $0.1 million, respectively.

The following table summarizes the components of lease expense (inclusive of the Qingdao property lease) (in thousands) (as restated):

	Three Months Ended				Six Months Ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
Operating lease cost	$	279	$	399	$	448	$	856
Short-term lease cost		170		107		259		197
Sublease income		—		(32)		—		(64)
Total	$	449	$	474	$	707	$	989

The following table summarizes supplemental information related to leases (inclusive of the Qingdao property lease) (in thousands) (as restated):

	Three Months Ended				Six Months Ended
	June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	311	$	293	$	476	$	846
Right of use assets obtained in exchange for new operating lease liabilities		2,955		—		4,718		322

The additional right of use assets were acquired in the Timios, WAVE, US Hybrid and Solectrac acquisitions. The facilities acquired are primarily office buildings and warehouses in U.S. locations where they conduct business.

The following table summarizes the maturity of operating lease liabilities (inclusive of the Qingdao property lease) (in thousands):

	Leased Property
Years ending December 31	Costs
2021 (excluding the six months ended June 30, 2021)	$	917
2022		1,768
2023		1,694
2024		772
2025		378
2026 and thereafter		478
Total lease payments		6,007
Less: interest		(436)
Total	$	5,571

In the three months ended March 31, 2020 the Company ceased to use the premises underlying one lease and vacated the real estate. As a result, the Company recorded an impairment loss related to the right of use asset of $0.9 million. In the three months ended June 30, 2020, the Company completed negotiations with the landlord to settle the remaining operating lease liability of $0.9 million by issuing a promissory note for $0.1 million, bearing an annual interest rate of 4.0%, and which is due and payable on December 31, 2021. The Company recorded a gain of $0.8 million for the settlement of the operating lease liability in the three months ending June 30, 2020.

In the three months ended June 30, 2020 the Company ceased to use the premises for its New York City headquarters at 55 Broadway, which are subject to two leases, and vacated the real estate. As a result, the Company recorded an impairment loss related to the right of use asset of $5.3 million. The Company has an operating use liability of $5.8 million with respect to these leases. The Company continues to negotiate with the landlord concerning the termination of these leases.