Note 10 - Leases

6 Months Ended

Jun. 30, 2024

(10)

LEASES

We have operating leases for office space and processing facilities with remaining lease terms ranging from 1 month to 8 years. As most of the leases do not provide an implicit rate, we calculated the right-of-use assets and lease liabilities using our secured incremental borrowing rate at the lease commencement date. Imputed interest on our operating leases were $0.3 million and $0.3 million for the three and six months ended June 30, 2024.

During the six months ended June 30, 2024, we entered into four finance leases that were accounted for as failed sale-leaseback transactions. Finance lease assets are included in finance lease right-of-use assets on the condensed consolidated balance sheets and the associated finance lease liabilities are reflected within current portion of lease financing and long-term lease financing on the condensed consolidated balance sheets, as applicable. Depreciation on our finance lease assets was $1.1 million and $2.2 million for the three and six months ended June 30, 2024 . Imputed interest on our finance leases was $0.1 million and $2.0 million for the three and six months ended June 30, 2024 . We deferred financing fees of $0.2 and $0.1 million at June 30, 2024 and December 31, 2023, respectively, in connection with entry into the finance leases. These deferred financing fees will be amortized on a straight-line basis over the term of the finance leases. We did not have finance leases during the three and six months ended June 30, 2023.

The following information relates to our leases (dollar amounts in thousands):

	*Three Months Ended June 30,*						*Six Months Ended June 30,*
	*2024*			*2023*			*2024*			*2023*
Operating lease information:
Operating cash outflows from operating leases	$	52		$	52		$	104		$	104
Weighted average remaining lease term in years		7.6			0.95			7.6			0.95
Weighted average discount rate		10.5	%		6.0	%		10.5	%		6.0	%
Finance lease information:
Financing cash outflows from finance leases	$	1,427			—		$	2,665			—
Proceeds from sale and leaseback arrangement	$	1,856			—		$	3,783			—
Weighted average remaining lease term in years		2.64			—			2.64			—
Weighted average discount rate		8.5	%		—			8.5	%		—

Future minimum lease payments under non-cancellable leases as of June 30, 2024, were as follows:

	*Operating*			*Finance*
	*Leases*			*Leases*
	(In thousands)
2024	$	8		$	3,745
2025		118			7,490
2026		122			7,177
2027		125			662
2028		129			—
Thereafter		483			—
Total minimum lease payments	$	985		$	19,074
Less imputed interest and deferred finance fees		(347	)		(2,171	)
Total lease liability	$	638		$	16,903

The following are reflected within the indicated condensed consolidated balance sheet line items:

		*For the Six Months Ended June 30,*		*For the Year Ended December 31,*
		*2024*		*2023*
		(In thousands)

Operating lease assets	Buildings and equipment	$	638	$	712
Operating lease liabilities:
Current operating lease liabilities	Accounts payable and accrued liabilities	$	8	$	58
Non-current operating lease liabilities	Other long-term liabilities		630		654
Total operating lease liability		$	638	$	712

Finance lease assets	Finance lease right-of-use assets	$	19,869	$	12,346
Finance lease liabilities:
Current finance lease liabilities	Current portion of lease financing	$	6,204	$	3,933
Non-current finance lease liabilities	Long-term lease financing		10,699		8,157
Total finance lease liabilities		$	16,903	$	12,090