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Leases

6 Months Ended

Jun. 30, 2022

Note 3 - Leases

The Company entered into a lease for corporate office space, effective June 1, 2022. As of June 30, 2022, the Company has two operating leases for corporate office space and two finance leases for office equipment and furniture located in one of the corporate office spaces. In addition, the Company has auxiliary corporate office space that it rents on a month-to-month basis; this rental is accounted for as an operating lease with the same term as the Company’s main office.

The components of lease expense are as follows:

	Three months ended				Six months ended
(in thousands)	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Operating lease expense	$	141	$	93	$	234	$	186

Finance lease cost
Amortization of right-to-use assets	$	20	$	21	$	41	$	41
Interest on lease liabilities	$	1	$	2	$	2	$	5
Total finance lease cost	$	21	$	23	$	43	$	46

Supplemental cash flow information related to leases are as follows:

Cash flow information:

	Six months ended
(in thousands)	June 30, 2022		June 30, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flow use from operating leases	$	239	$	188
Operating cash flow use from finance leases	$	2	$	5
Financing cash flow use from finance leases	$	45	$	42

Non-cash activity:
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	2,605	$	-
Finance Leases	$	-	$	-

Weighted average remaining lease terms are as follows at June 30, 2022:

Weighted average remaining lease term:
Operating leases		5.0 years
Finance Leases		0.5 year

As the interest rate implicit in the leases was not readily determinable at the time that the leases were evaluated, the Company used its incremental borrowing rate based on the information available in determining the present value of lease payments. The Company’s incremental borrowing rate was based on the term of the lease, the economic environment of the lease and reflect the rate the Company would have had to pay to borrow on a secured basis. Below is information on the weighted average discount rates used at the time that the leases were evaluated:

Weighted average discount rates:
Operating leases		4.8%
Finance Leases		8.0%

Maturities of lease liabilities are as follows:

(in thousands) Year ending December 31,	Operating Leases			Finance Leases
2022 (excluding six months ended June 30, 2022)	$	113		$	17
2023		606			5
2024		618			-
2025		630			-
2026		643			-
2027		380			-
Total lease payments	$	2,990		$	22
Less imputed interest		(363	)		(1	)
Present value of lease liabilities	$	2,627		$	21