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Leases | 6 Months Ended
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Jun. 30, 2020
Leases [Abstract] |
Leases | 5. LEASES On January 1, 2019, the Company adopted ASC 842 using the modified retrospective approach and recorded a $228 thousand right-of-use asset and a $252 thousand lease liability representing the present value of minimum payment obligations associated with the Company’s Denver office operating lease, which has non-cancellable terms in excess of one year. The Company does not have any financing leases. The Company has elected the following practical expedients available under ASC 842: (i) excluding from the condensed consolidated balance sheet leases with terms that are less than one year, (ii) for agreements that contain both lease and non-lease components, combining these components together and accounting for them as a single lease, (iii) the package of practical expedients, which allows the Company to avoid reassessing contracts that commenced prior to adoption that were properly evaluated under legacy GAAP, and (iv) the policy election that eliminates the need for adjusting prior period comparable financial statements prepared under legacy lease accounting guidance. As such, there was no required cumulative effect adjustment to accumulated deficit at January 1, 2019. During the three and six months ended June 30, 2020 and 2019, the Company did not acquire any right-of-use assets or incur any lease liabilities. The Company’s right-of-use assets and lease liabilities are recognized at their discounted present value under the following captions in the unaudited condensed consolidated balance sheet at June 30, 2020 and December 31, 2019:
|  | June 30, 2020 |  |  | December 31, 2019 |
|  | (in thousands) |
Right of use asset balance |  |  |  |  |  |  |  |
Operating lease |  | $ | 154 |  |  | $ | 179 |
Lease liability balance |  |  |  |  |  |  |  |
Short-term operating lease |  | $ | 61 |  |  | $ | 58 |
Long-term operating lease |  |  | 112 |  |  |  | 142 |
|  | $ | 173 |  |  | $ | 200 |
The Company recognizes lease expense on a straight-line basis excluding short-term and variable lease payments, which are recognized as incurred. Short-term lease costs represent payments for our Houston office lease, which has a lease term of one year. Beginning in March 2020, the Company subleased its Denver office and recognized sublease income.
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |
|  | (in thousands) |
Operating lease cost |  | $ | 17 |  |  | $ | 17 |  |  | $ | 34 |  |  | $ | 34 |
Short-term lease cost |  |  | 6 |  |  |  | 4 |  |  |  | 10 |  |  |  | 8 |
Sublease income |  |  | (11 | ) |  |  | - |  |  |  | (16 | ) |  |  | - |
Total lease costs |  | $ | 12 |  |  | $ | 21 |  |  | $ | 28 |  |  | $ | 42 |
The Company’s Denver office operating lease does not contain an implicit interest rate that can be readily determined. Therefore, the Company used the incremental borrowing rate of 8.75% as established under the Company’s prior credit facility as the discount rate.
|  | June 30, |
|  | 2020 |  |  | 2019 |
|  | (in thousands) |
Weighted average lease term (years) |  |  | 2.6 |  |  |  | 3.6 |
Weighted average discount rate |  |  | 8.75 | % |  |  | 8.75 | %
The future minimum lease commitments as of June 30, 2020 are presented in the table below. Such commitments are reflected at undiscounted values and are reconciled to the discounted present value on the unaudited condensed consolidated balance sheet as follows:
|  | Amount |
Remainder of 2020 |  | $ | 37 |
2021 |  |  | 74 |
2022 |  |  | 76 |
2023 |  |  | 6 |
Total lease payments |  |  | 193 |
Less: imputed interest |  |  | (20 | )
Total lease liability |  | $ | 173 |
The Company owns a 14-acre tract in Riverton, Wyoming with a two-story, 30,400 square foot office building, which served as the Company’s corporate headquarters until it relocated to Denver, Colorado in 2015. Currently, the building’s eight office suites are rented to non-affiliates and government agencies under operating leases with varying terms from month-to-month to twelve years. The building is included in real estate held for sale on our condensed consolidated balance sheet. The Company recognized a loss on real estate held for sale related to the building and land during the three months ended June 30, 2020 of $651 thousand. The building will not be depreciated while it is held for sale. The net capitalized cost of the building and the land subject to operating leases at June 30, 2020 and December 31, 2019 is as follows:
|  | June 30, 2020 |  |  | December 31, 2019 |
|  | (in thousands) |
Building subject to operating leases |  | $ | 4,654 |  |  | $ | 4,654 |
Land |  |  | 380 |  |  |  | 380 |
Less: accumulated depreciation |  |  | (3,658 | ) |  |  | (3,599 | )
Loss on real estate held for sale |  |  | (651 | ) |  |  | - |
Building subject to operating leases, net |  | $ | 725 |  |  | $ | 1,435 |
The future lease maturities of the Company’s operating leases as of June 30, 2020 are presented in the table below. Such maturities are reflected at undiscounted values to be received on an annual basis.
|  | Amount |
|  | (in thousands) |
Remainder of 2020 |  | $ | 80 |
2021 |  |  | 161 |
2022 |  |  | 165 |
2023 |  |  | 169 |
2024 |  |  | 163 |
Remaining through June 2029 |  |  | 695 |
Total lease maturities |  | $ | 1,433 |
The Company recognized the following loss on rental property related to its Riverton, Wyoming office building for the three and six months ended June 30, 2020 and 2019:
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |
|  | (in thousands) |
Operating lease income |  | $ | 54 |  |  | $ | 48 |  |  | $ | 110 |  |  | $ | 96 |
Operating lease expense |  |  | (43 | ) |  |  | (25 | ) |  |  | (86 | ) |  |  | (66 | )
Depreciation |  |  | (29 | ) |  |  | (31 | ) |  |  | (59 | ) |  |  | (53 | )
Rental property loss, net |  | $ | (18 | ) |  | $ | (8 | ) |  | $ | (35 | ) |  | $ | (23 | )

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- References No definition available. + Details
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- Definition The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing. + References Reference 1: http://fasb.org/us-gaap/role/ref/otherTransitionRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 + Details
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