Annual report pursuant to Section 13 and 15(d)

Equipment on Lease, Net

v3.23.1
Equipment on Lease, Net
 12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
Equipment on Lease, Net Equipment on Lease, Net
The equipment leased to customers had a cost basis of $10.6 million and accumulated depreciation of $1.5 million as of December 31, 2022. The total depreciation expense was $1.7 million and included in cost of revenue for the year ended December 31, 2022.
The equipment leased to customers had a cost basis of $9.3 million and accumulated depreciation of $0.9 million as of December 31, 2021. The total depreciation expense was $0.7 million and included in cost of revenue for the year ended December 31, 2021.
The equipment on lease initial lease terms are generally for 12 months and the Company has considered the possibility of renewals when determining the length of the contract and the expectation is that customers will not exercise any renewal or purchase options at the end of the lease. The Company has evaluated our customer history on renewals, returns and purchase options and have determined the operating lease period of 12 months is appropriate.
As noted above, we are unsure of when the customer will return or renew leased equipment. Additionally, lessees do not provide residual value guarantees on equipment on lease. The future lease payments expected in 2023 are $1.9 million.
Lease payments consisted of the following:
December 31,
2022 2021
(In thousands)
Equipment on lease payments 3,483  1,556 
Equipment on lease variable payments 678  33 
Total lease payments $ 4,161  $ 1,589 
The Company entered into debt secured by certain leased equipment to customers. See Note 10, Long-term Debt, for a description of these financing arrangements.