Leases

9 Months Ended

Sep. 30, 2023

Leases

Leases

4. Leases

At the inception of an arrangement, the Company determines if an arrangement is, or contains, a lease based on facts and circumstances present in that arrangement. Lease classifications, recognition, and measurement are then determined at the lease commencement date.

The Company’s operating lease right-of-use (“ROU”) assets and operating lease liabilities include primarily leases for office and warehouse spaces used to conduct our business. The Company’s operating leases also include the lease of a building with land utilized for our waste treatment operations which includes a purchase option. Finance leases consist primarily of processing and transport equipment used by our facilities’ operations.

The components of lease cost for the Company’s leases for the three and nine months ended September 30, 2023 and 2022 were as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Operating Leases:
Lease cost	$	157	$	157	$	470	$	471
Finance Leases:
Amortization of ROU assets		39		42		115		133
Interest on lease liability		9		9		22		30
		48		51		137		163
Short-term lease rent expense		-		-		1		7
Total lease cost	$	205	$	208	$	608	$	641

The weighted average remaining lease term and the weighted average discount rate for operating and finance leases at September 30, 2023 were:

	Operating Leases			Finance Leases
Weighted average remaining lease terms (years)		5.7			3.2
Weighted average discount rate		7.5	%		7.0	%

The following table reconciles the undiscounted cash flows for the operating and finance leases at September 30, 2023 to the operating and finance lease liabilities recorded on the balance sheet (in thousands):

	Operating Leases			Finance Leases
2023 (remaining)	$	147		$	65
2024		519			260
2025		433			239
2026		415			85
2027		406			50
2028 and thereafter		749			28
Total undiscounted lease payments		2,669			727
Less: Imputed interest		(513	)		(81	)
Present value of lease payments	$	2,156		$	646
Current portion of operating lease obligations	$	412		$	-
Long-term operating lease obligations, less current portion	$	1,744		$	-
Current portion of finance lease obligations	$	-		$	223
Long-term finance lease obligations, less current portion	$	-		$	423

Supplemental cash flow and other information related to our leases were as follows for the three and nine months ended September 30, 2023 and 2022 (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flow used in operating leases	$	145	$	144	$	435	$	430
Operating cash flow used in finance leases	$	9	$	9	$	22	$	30
Financing cash flow used in finance leases	$	54	$	103	$	135	$	821
ROU assets obtained in exchange for lease obligations for:
Finance liabilities	$	154	$	-	$	311	$	147
Operating liabilities	$	484		-	$	484	$	-