5E Advanced Materials, Inc. Leases Disclosure
6. Leases
We lease offices in Hesperia, CA and Houston, TX under operating lease agreements, which expire in February 2024 and December 2024, respectively. In June 2022, we entered into a three-year operating lease for the field office we have been utilizing in Newberry Springs, CA. Previously, the field office was leased on a month-to-month basis and was classified as a short-term lease. Other operating leases include lodging for employees working in the field.
A summary of our leases including short-term leases follows.
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Weighted |
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Average |
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Weighted |
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Remaining |
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Average |
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Cash Paid for Rent |
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Rent Expense |
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Lease |
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Lease Term |
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Discount |
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Year ended, |
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Inception |
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(in years) |
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Rate |
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2023 |
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2022 |
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2023 |
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2022 |
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Operating leases |
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(in thousands) |
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Office space |
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2021 - 2022 |
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1.5 |
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1.80% |
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$ |
165 |
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$ |
92 |
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$ |
165 |
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$ |
93 |
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Other operating leases |
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2021 |
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0.0 |
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0.07% |
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3 |
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32 |
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3 |
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32 |
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Total operating leases |
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168 |
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124 |
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168 |
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125 |
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Short term leases |
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N/A |
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N/A |
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N/A |
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15 |
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57 |
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15 |
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57 |
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Total for all leases |
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$ |
183 |
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$ |
181 |
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$ |
183 |
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$ |
182 |
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Reported rent expense: |
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Project expenses |
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$ |
60 |
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$ |
57 |
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General and administrative |
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123 |
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125 |
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Future minimum annual lease payments under our existing lease agreements are as follows.
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(in thousands) |
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Fiscal year 2024 |
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$ |
140 |
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Fiscal year 2025 |
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74 |
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Total |
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214 |
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Less imputed interest |
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(4 |
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Net lease liability |
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210 |
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Current portion |
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136 |
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Long-term portion |
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$ |
74 |
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2023 | Aug 30, 2023 | Showing above |
| 2022 | Sep 28, 2022 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.