LEASES

6 Months Ended

Jun. 30, 2022

Finance Leases

On April 1, 2022, the Company entered into one finance lease and the balance of finance lease right-of-use lease assets is $44.4 million at June 30, 2022. The associated amortization expenses for the three months ended June 30, 2022 and 2021 were $0.8 million and $1.1 thousand, respectively, and are included in depreciation and amortization on the unaudited consolidated statements of operations. The associated interest expense for the three months ended June 30, 2022 and 2021 were $0.8 million and $14 thousand, respectively, and are included in interest expense on the unaudited consolidated statements of operations. The associated amortization expenses for the six months ended June 30, 2022 and 2021 were $0.8 million and $2.2 thousand, respectively, and are included in depreciation and amortization on the unaudited consolidated statements of operations. The associated interest expense for the six months ended June 30, 2022 and 2021 were $1.4 million and $23 thousand, respectively, and are included in interest expense on the unaudited consolidated statements of operations. Please see “Note 6. Financing Arrangements” for more details.

Operating Leases

Operating leases are included in operating lease right-of-use lease assets, and operating current and long-term lease liabilities on the consolidated balance sheets. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Variable lease expense is recognized in the period in which the obligation for those payments is incurred. Lease expense for equipment is included in cost of revenues and other rents are included in selling, general and administrative expense on the unaudited consolidated statements of operations and are reported net of lease income. Lease income is not material to the results of operations for the three and six months ended June 30, 2022 and 2021. Total operating lease costs for both the three months ended June 30, 2022 and 2021 were $0.25 million and $0.2 million, respectively. Total operating lease costs for both the six months ended June 30, 2022 and 2021 were $0.5 million and $0.4 million, respectively.

Cash Flows

Cash paid for amounts included in operating lease liabilities was $0.5 million and $0.4 million during the six months ended June 30, 2022 and 2021, and is included in operating cash flows. Cash paid for amounts included in finance lease was $107 thousand and $134 thousand during the six months ended June 30, 2022 and 2021, respectively, and is included in financing cash flows.

Maturities of our lease liabilities for all operating leases are as follows as of June 30, 2022 (in thousands):


June 30, 2022
	Facilities		Equipment		Plant		Total
Year 1	$	244	$	8	$	702	$	954
Year 2	105		7		701		813
Year 3	47		6		701		754
Year 4	11		—		701		712
Year 5	—		—		701		701
Thereafter	—		—		3,331		3,331
Total lease payments	407		21		6,837		7,265
Less: interest	(33)		(1)		(2,462)		(2,496)
Present value of operating lease liabilities	$	374	$	20	$	4,375	$	4,769

The weighted average remaining lease terms and discount rates for all of our operating leases were as follows as of June 30, 2022:


Remaining lease term and discount rate:	June 30, 2022
Weighted average remaining lease terms (years)
Lease facilities	1.62
Lease equipment	2.84
Lease plant	9.37

Weighted average discount rate
Lease facilities	9.16	%
Lease equipment	8.00	%
Lease plant	9.37	%

The plant lease has multiple 5-year extension options for a total of 20 years. The extension option has been included in the lease right-of-use asset and lease obligation.

The Company will reassess the lease terms and purchase options when there is a significant change in circumstances or when the Company elects to exercise an option that had previously been determined that it was not reasonably certain to do so.

LEASES