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LEASES

9 Months Ended

Sep. 30, 2023

NOTE 12 – LEASES

Leases

The Company leases office space in the United States under operating lease agreements. The Company also entered into an arrangement with Applied Blockchain for the use of energized cryptocurrency mining facilities under which the Company pays for electricity per megawatt based on usage. The Company has determined that it has embedded operating leases at two of the facilities governed by this arrangement that commenced in January and March 2023, and has elected not to separate lease and non-lease components. Payments made for these two operating leases are entirely variable and are based on usage of electricity, and the Company therefore does not record a right-of-use asset or lease liability associated with the leases. Variable lease cost during the nine months ended September 30, 2023 are disclosed in the table below. Office space and mining facilities comprise the Company’s material underlying asset classes under operating lease agreements. The Company has no material finance leases.

As of September 30, 2023, the Company’s right-of-use (“ROU”) assets and total lease liabilities were $501 and $538, respectively. As of December 31, 2022, the Company’s ROU assets and total lease liabilities were $1,276 and $1,343, respectively. The Company has amortized right-of-use assets totaling $57 and $79 for the three months ended September 30, 2023 and 2022, respectively. The Company has amortized right-of-use assets totaling $224 and $178 for the nine months ended September 30, 2023 and 2022, respectively.

Operating lease costs are recorded on a straight-line basis within operating expenses. The Company’s total lease expense is comprised of the following:

	2023		2022		2023		2022
	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2023		2022		2023		2022
Operating leases
Operating lease cost	$	65	$	114	$	250	$	214
Operating lease expense		65		114		250		214
Short-term lease rent expense		8		7		28		22
Variable lease cost		26,263		—		46,201		—
Total rent expense	$	26,336	$	121	$	46,479	$	236

Additional information regarding the Company’s leasing activities as a lessee is as follows:

	For the Nine Months Ended September 30,
	2023			2022
Operating cash flows from operating leases	$	319		$	261
Weighted-average remaining lease term – operating leases		3.3			3.9
Weighted-average discount rate – operating leases		5	%		5	%

Year	Amount
2023 (remaining)	$	66
2024		166
2025		143
2026		147
2027		63
Thereafter		—
Total	$	585