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Leases

6 Months Ended

Jun. 30, 2023

4. Leases

Solitario accounts for its leases in accordance with ASC 842. Solitario leases one facility, its Wheat Ridge, Colorado office, that has a term of more than one year. Solitario has no other material operating lease costs. During the six months ended June 30, 2023, Solitario entered into an extension of the lease as a new lease for the same facility (both the prior lease and new lease are referred to as the “WR Lease”) and recorded a net increase in the related asset and liability of $87,000. The WR Lease is classified as an operating lease and has a term of 32 months at June 30, 2023, with no renewal option. At June 30, 2023 and December 31, 2022, the right-of-use office lease asset for the WR Lease is classified as other long-term assets and the related liability as current and long-term operating lease liabilities in the condensed consolidated balance sheet. The amortization of right of use lease asset expense is recognized over the lease term, with variable lease payments recognized in the period those payments are incurred.

During the three and six months ended June 30, 2023, cash lease payments of $11,000 and $22,000, respectively, were made on the WR Lease. During the three and six months ended June 30, 2022, cash lease payments of $8,000 and $18,000, respectively, were made on the WR Lease. During the three and six months ended June 30, 2023, Solitario recognized $9,000 and $19,000, respectively, of non-cash amortization of right of use lease asset expense for the WR Lease included in general and administrative expense. During the three and six months ended June 30, 2022, Solitario recognized $10,000 and $20,000, respectively, of non-cash amortization of right of use lease asset expense for the WR Lease included in general and administrative expense. These cash payments, less imputed interest for each period, reduced the related liability on the WR Lease. The discount rate within the WR Lease is not determinable and Solitario has applied a discount rate of 7% based upon Solitario’s estimate of its cost of capital to determine the asset and liability upon the extension of the WR lease during 2023.

The maturities of Solitario’s lease liability for its WR Lease are as follows at June 30, 2023:

Future lease payments (in thousands)

Remaining payments 2023	$	14
2024		44
2025		45
2026		8
Total lease payments		111
Less amount of payments representing interest		(10	)
Present value of lease payments	$	101

Supplemental cash flow information related to our operating lease was as follows for the three and six months ended June 30, 2023 and 2022:

(in thousands)	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash outflows from the WR Lease payments	$	11	$	8	$	22	$	18
Non-cash amounts related to the WR lease
Leased assets recorded in exchange for new operating lease liabilities	$	87	$	-	$	87	$	-