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LEASES

12 Months Ended

Dec. 31, 2022

NOTE 14: LEASES

The Company recognizes leases with a duration greater than 12 months on the balance sheet with a Right-Of-Use (“ROU”) asset and liability at the present value of lease payments over the term. Renewal options are factored into the determination of lease payments when appropriate. There are no residual value guarantees on the existing leases. The Company estimates its incremental borrowing rate, at lease commencement, to determine the present value of lease payments, since most of the Company’s leases do not provide an implicit rate of return. ROU assets exclude lessor incentives received. The Company’s lease population consists primarily of office equipment. During the year ended December 31, 2022, the Company entered into new leases or modified existing leases that resulted in an increase of ROU assets in exchange for operating lease liabilities as disclosed below.

The Company does not have any finance leases. As of December 31, 2022, the Company had no operating leases that had not yet commenced.

Lease position:

The table below presents the assets and liabilities related to operating leases recorded on the balance sheet:


		December 31,
(in thousands)	Classification on Consolidated Balance Sheet	2022		2021
Assets:
Operating lease right-of-use assets	Other assets	$	239	$	72

Liabilities:
Current portion of operating lease liabilities	Accrued expenses and other liabilities	$	57	$	54
Long-term operating lease liabilities	Other long-term liabilities		180		17
Total lease liabilities		$	237	$	71

Lease Costs:

The components of lease expense are included in selling, general and administrative expenses in the consolidated statements of operations as disclosed below:


(in thousands)	2022		2021
Operating lease cost	$	59	$	55
Short-term lease cost		—		—
Total lease cost	$	59	$	55

Other information:


As of December 31,	2022			2021
Cash paid for amounts included in the measurement of operating lease liabilities (in thousands)	$	55		$	52
ROU assets obtained in exchange for operating lease liabilities (in thousands)		222			—
Weighted average remaining lease term — operating leases (years)		4.2			1.6
Weighted average discount rate — operating leases		4.97	%		3.40	%

Lease Commitments:

Maturity of lease liabilities - Operating Leases:


As of December 31,	2022		2021
(in thousands)
2022	$	—	$	55
2023		68		13
2024		58		3
2025		56		1
2026		55		—
2027		26		—
Total lease payments		263		72
Less: Amounts representing interest		(26)		(1)
Present value of lease liabilities	$	237	$	71

The Company is party to an operating lease as the lessor for certain real estate leased to a third party with an initial term of 36 months that was renewed in 2022 for an additional 36 months. The lease requires fixed monthly payments and does not contain clauses for future rent escalations or renewal options. There are no terms and conditions under which the lessee has the option to purchase this asset. As of December 31, 2022, projected future lease income on this lease totaled $540,000 scheduled to be received as follows: 2023 — $240,000, 2024 — $240,000 and 2025 — $60,000. The Company recorded rental income of $239,000 during 2022, $236,000 during 2021 and $236,000 in 2020 that is classified as part of selling, general and administrative expenses on the consolidated statements of operations.