XML 34 R20.htm IDEA: XBRL DOCUMENT v3.22.4
LEASES
 12 Months Ended
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 $0.3 million is included in Consolidated Balance Sheet.
The following table summarizes our operating and finance lease assets and liabilities as of December 31, 2022 and 2021 (in thousands):
December 31,
Balance sheet line item classification20222021
Assets
Operating lease assetsRight-of-use assets and other noncurrent assets$—$167
Finance lease assetsProperty and equipment, net of accumulated depreciation6485
Total lease assets$64$252
Liabilities
Current
OperatingCurrent portion of operating lease obligations$114$275
FinanceCurrent portion of finance lease obligation (includes related parties)1917
Noncurrent
OperatingLong-term portion of operating lease obligation141255
FinanceLong-term portion of finance lease obligations4264
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,
20222021
Operating lease cost
Cost of sales$142 $155 
Operating lease costSelling, general and administrative expenses215 202 
Finance lease cost:
Amortization of leased assets
Depreciation expense21 19 
Interest on lease liabilities
Interest expense9 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 
2024125 42 167 
202521 — 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
20222021
Weighted-average remaining lease term (years)
Operating leases
2.22.6
Finance leases
1.12.1
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, 2022December 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 $0.3 million is included in Consolidated Balance Sheet.
The following table summarizes our operating and finance lease assets and liabilities as of December 31, 2022 and 2021 (in thousands):
December 31,
Balance sheet line item classification20222021
Assets
Operating lease assetsRight-of-use assets and other noncurrent assets$—$167
Finance lease assetsProperty and equipment, net of accumulated depreciation6485
Total lease assets$64$252
Liabilities
Current
OperatingCurrent portion of operating lease obligations$114$275
FinanceCurrent portion of finance lease obligation (includes related parties)1917
Noncurrent
OperatingLong-term portion of operating lease obligation141255
FinanceLong-term portion of finance lease obligations4264
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,
20222021
Operating lease cost
Cost of sales$142 $155 
Operating lease costSelling, general and administrative expenses215 202 
Finance lease cost:
Amortization of leased assets
Depreciation expense21 19 
Interest on lease liabilities
Interest expense9 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 
2024125 42 167 
202521 — 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
20222021
Weighted-average remaining lease term (years)
Operating leases
2.22.6
Finance leases
1.12.1
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, 2022December 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