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LEASES | 12 Months Ended
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Dec. 31, 2022
Leases [Abstract] |
LEASES | LEASES Our lease portfolio primarily consists of operating leases for certain facilities and office spaces, and financing leases for equipment. Our leases have remaining terms of 1 year to 3 years and may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Operating lease assets also include any upfront lease payments made and exclude lease incentives and initial direct cost incurred. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Lease termination and impairment of ROU lease asset On July 30, 2021, the Company terminated its office lease with Millenium-Windfall Partners, Ltd for a fixed settlement of $0.4 million, payable in 43 monthly payments. In accordance with the termination, the Company was released from all future rights and obligations under the lease. In accordance with the termination of the lease, the Company recorded an impairment charge of $0.4 million related to its remaining right-of-use asset for this lease during the third quarter 2021 which is included within selling, general and administrative expenses of the Company's Consolidated Statement of Operations for the year-ended December 31, 2021. The Company also remeasured the lease obligation as of July 30, 2021 and the remaining obligation of $0.4 million under the termination settlement was included in the Company's liabilities at December 31, 2021. At December 31, 2022, the remaining obligation of $0.3 million is included in Consolidated Balance Sheet. The following table summarizes our operating and finance lease assets and liabilities as of December 31, 2022 and 2021 (in thousands):
|  |  | December 31,
| Balance sheet line item classification |  | 2022 |  | 2021
Assets |  |  |  |  |
Operating lease assets | Right-of-use assets and other noncurrent assets |  | $ | — |  | $ | 167
Finance lease assets | Property and equipment, net of accumulated depreciation |  | 64 |  | 85
Total lease assets |  |  | $ | 64 |  | $ | 252
Liabilities |  |  |  |  |
Current |  |  |  |  |
Operating | Current portion of operating lease obligations |  | $ | 114 |  | $ | 275
Finance | Current portion of finance lease obligation (includes related parties) |  | 19 |  | 17
Noncurrent |  |  |  |  |
Operating | Long-term portion of operating lease obligation |  | 141 |  | 255
Finance | Long-term portion of finance lease obligations |  | 42 |  | 64
Total lease liabilities |  |  | $ | 316 |  | $ | 611
The following table summarizes the components of lease expense for the year ended December 31, 2022 and 2021 (in thousands):
Lease Cost |  | Classification |  | Year Ended December 31,
| 2022 |  | 2021
Operating lease cost |  | Cost of sales |  | $ | 142 |  |  | $ | 155 |
Operating lease cost |  | Selling, general and administrative expenses |  | 215 |  |  | 202 |
Finance lease cost: |  |  |  |  |  |
Amortization of leased assets |  | Depreciation expense |  | 21 |  |  | 19 |
Interest on lease liabilities |  | Interest expense |  | 9 |  |  | 18 |
Net lease cost |  |  |  | $ | 387 |  |  | $ | 394 |
Other The Company leases certain buildings and facilities, including office space in Houston, Texas; Monterrey, Mexico; storage sites for commercial trailers in Herber, California; Christmas, Florida and Hudson, Colorado; and certain equipment under non-cancellable operating leases expiring at various dates through January 2024. Leases which are less than twelve months and have no cancellation penalties are not recorded on the Consolidated Balance Sheets. Office rent expense totaled approximately $216 thousand and $202 thousand for the years ended December 31, 2022 and 2021, respectively. The following schedule presents the future minimum lease payments for our operating and finance lease obligations at December 31, 2022 (in thousands):
| Operating Leases |  | Finance Leases |  | Total
2023 | $ | 126 |  |  | $ | 25 |  |  | $ | 151 |
2024 | 125 |  |  | 42 |  |  | 167 |
2025 | 21 |  |  | — |  |  | 21 |
2026 and Thereafter | — |  |  | — |  |  | — |
Total lease payments | 272 |  |  | 67 |  |  | 339 |
Less: Interest | (17) |  |  | (6) |  |  | (23) |
Present value of lease liabilities | $ | 255 |  |  | $ | 61 |  |  | $ | 316 |
Lease term and discount rates for our operating and finance lease obligations are as follows:
|  | December 31,
Lease Term and Discount Rate |  | 2022 |  | 2021
Weighted-average remaining lease term (years) |  |  |  |
Operating leases |  | 2.2 |  | 2.6
Finance leases |  | 1.1 |  | 2.1
Weighted-average discount rate |  |  |  |
Operating leases |  | 5.8% |  | 6.0%
Finance leases |  | 10.7% |  | 10.7%
The following table summarizes the supplemental cash flow information related to leases as of December 31, 2022 and 2021(in thousands):
Other information |  | December 31, 2022 |  | December 31, 2021
Cash paid for amounts included in the measurement of lease liabilities |  |  |  |
Operating cash flows from operating leases |  | $ | 274 |  |  | $ | 168 |
Financing cash flows from finance leases |  | 19 |  |  | 671 |
Interest paid |  | 9 |  |  | 18 |
Noncash activities from right-of-use assets obtained in exchange for lease obligations: |  |  |  |
Operating leases |  | $ | — |  |  | $ | 104 |
LEASES | LEASES Our lease portfolio primarily consists of operating leases for certain facilities and office spaces, and financing leases for equipment. Our leases have remaining terms of 1 year to 3 years and may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Operating lease assets also include any upfront lease payments made and exclude lease incentives and initial direct cost incurred. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Lease termination and impairment of ROU lease asset On July 30, 2021, the Company terminated its office lease with Millenium-Windfall Partners, Ltd for a fixed settlement of $0.4 million, payable in 43 monthly payments. In accordance with the termination, the Company was released from all future rights and obligations under the lease. In accordance with the termination of the lease, the Company recorded an impairment charge of $0.4 million related to its remaining right-of-use asset for this lease during the third quarter 2021 which is included within selling, general and administrative expenses of the Company's Consolidated Statement of Operations for the year-ended December 31, 2021. The Company also remeasured the lease obligation as of July 30, 2021 and the remaining obligation of $0.4 million under the termination settlement was included in the Company's liabilities at December 31, 2021. At December 31, 2022, the remaining obligation of $0.3 million is included in Consolidated Balance Sheet. The following table summarizes our operating and finance lease assets and liabilities as of December 31, 2022 and 2021 (in thousands):
|  |  | December 31,
| Balance sheet line item classification |  | 2022 |  | 2021
Assets |  |  |  |  |
Operating lease assets | Right-of-use assets and other noncurrent assets |  | $ | — |  | $ | 167
Finance lease assets | Property and equipment, net of accumulated depreciation |  | 64 |  | 85
Total lease assets |  |  | $ | 64 |  | $ | 252
Liabilities |  |  |  |  |
Current |  |  |  |  |
Operating | Current portion of operating lease obligations |  | $ | 114 |  | $ | 275
Finance | Current portion of finance lease obligation (includes related parties) |  | 19 |  | 17
Noncurrent |  |  |  |  |
Operating | Long-term portion of operating lease obligation |  | 141 |  | 255
Finance | Long-term portion of finance lease obligations |  | 42 |  | 64
Total lease liabilities |  |  | $ | 316 |  | $ | 611
The following table summarizes the components of lease expense for the year ended December 31, 2022 and 2021 (in thousands):
Lease Cost |  | Classification |  | Year Ended December 31,
| 2022 |  | 2021
Operating lease cost |  | Cost of sales |  | $ | 142 |  |  | $ | 155 |
Operating lease cost |  | Selling, general and administrative expenses |  | 215 |  |  | 202 |
Finance lease cost: |  |  |  |  |  |
Amortization of leased assets |  | Depreciation expense |  | 21 |  |  | 19 |
Interest on lease liabilities |  | Interest expense |  | 9 |  |  | 18 |
Net lease cost |  |  |  | $ | 387 |  |  | $ | 394 |
Other The Company leases certain buildings and facilities, including office space in Houston, Texas; Monterrey, Mexico; storage sites for commercial trailers in Herber, California; Christmas, Florida and Hudson, Colorado; and certain equipment under non-cancellable operating leases expiring at various dates through January 2024. Leases which are less than twelve months and have no cancellation penalties are not recorded on the Consolidated Balance Sheets. Office rent expense totaled approximately $216 thousand and $202 thousand for the years ended December 31, 2022 and 2021, respectively. The following schedule presents the future minimum lease payments for our operating and finance lease obligations at December 31, 2022 (in thousands):
| Operating Leases |  | Finance Leases |  | Total
2023 | $ | 126 |  |  | $ | 25 |  |  | $ | 151 |
2024 | 125 |  |  | 42 |  |  | 167 |
2025 | 21 |  |  | — |  |  | 21 |
2026 and Thereafter | — |  |  | — |  |  | — |
Total lease payments | 272 |  |  | 67 |  |  | 339 |
Less: Interest | (17) |  |  | (6) |  |  | (23) |
Present value of lease liabilities | $ | 255 |  |  | $ | 61 |  |  | $ | 316 |
Lease term and discount rates for our operating and finance lease obligations are as follows:
|  | December 31,
Lease Term and Discount Rate |  | 2022 |  | 2021
Weighted-average remaining lease term (years) |  |  |  |
Operating leases |  | 2.2 |  | 2.6
Finance leases |  | 1.1 |  | 2.1
Weighted-average discount rate |  |  |  |
Operating leases |  | 5.8% |  | 6.0%
Finance leases |  | 10.7% |  | 10.7%
The following table summarizes the supplemental cash flow information related to leases as of December 31, 2022 and 2021(in thousands):
Other information |  | December 31, 2022 |  | December 31, 2021
Cash paid for amounts included in the measurement of lease liabilities |  |  |  |
Operating cash flows from operating leases |  | $ | 274 |  |  | $ | 168 |
Financing cash flows from finance leases |  | 19 |  |  | 671 |
Interest paid |  | 9 |  |  | 18 |
Noncash activities from right-of-use assets obtained in exchange for lease obligations: |  |  |  |
Operating leases |  | $ | — |  |  | $ | 104 |

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- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=77888251 + Details
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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=77888251 + Details
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