XML 32 R12.htm IDEA: XBRL DOCUMENT

Leases

12 Months Ended

Dec. 31, 2020

5. LEASES

On January 1, 2019, the Company adopted ASC 842 using the modified retrospective approach. On January 1, 2019, the Company recorded a $228 thousand right-of-use asset and a $252 thousand lease liability representing the present value of minimum payment obligations associated with its Denver office operating lease, which has non-cancellable terms in excess of one year. We do not have any financing leases. The Company has elected the following practical expedients available under ASC 842 (i) excluding from the 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 years ended December 31, 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 consolidated balance sheets at December 31, 2020 and 2019:

	December 31, 2020		December 31, 2019
	(in thousands)
Right of use asset balance
Operating lease	$	127	$	179
Lease liability balance
Short-term operating lease	$	65	$	58
Long-term operating lease		78		142
	$	143	$	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, Texas office lease, which has a lease term of one year. Beginning in March 2020, the Company subleased its Denver, Colorado office and recognized sublease income.

	December 31,
	2020			2019
	(in thousands)
Operating lease cost	$	74			68
Short-term lease cost		22			15
Sublease income		(41	)		-
Total lease costs	$	55		$	83

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.

	December 31,
	2020			2019
	(in thousands)
Weighted average lease term (years)		2.1			3.1
Weighted average discount rate		8.75	%		8.75	%

The future minimum lease commitments as of December 31, 2020 are presented in the table below. Such commitments are reflected at undiscounted values and are reconciled to the discounted present value on the consolidated balance sheet as follows:

	December 31, 2020
	(in thousands)
2021		75
2022		76
2023		6
Total lease payments	$	157
Less: imputed interest		(14	)
Total lease liability	$	143

As discussed in Note 3- Real Estate Held for Sale, the Company owns a 14-acre tract in Riverton, Wyoming with a two-story, 30,400 square foot office building. The Company recognized a loss on real estate held for sale related to the building and land during the year ended December 31, 2020 of $1,054 thousand, of which $651 thousand related to the building and land subject to the operating leases. The building is not depreciated while it is held for sale. The net capitalized cost of the building and the land subject to operating leases at December 31, 2020 and 2019 are as follows:

	December 31,
	2020			2019
	(in thousands)
Building subject to operating leases	$	4,654		$	4,654
Land		380			380
Less: accumulated depreciation		(3,658	)		(3,599	)
Loss on leased 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 December 31, 2020 are presented in the table below. Such maturities are reflected at undiscounted values to be received on an annual basis.

	December 31, 2020
	(in thousands)
2021		161
2022		165
2023		169
2024		163
Remaining through June 2029		695
Total lease maturities	$	1,353

The Company recognized, as a component of Rental and other loss, the following operating lease income related to its Riverton, Wyoming office building for the years ended December 31, 2020 and 2019:

	Year Ended December 31,
	2020			2019
	(in thousands)
Operating lease income	$	213		$	207
Operating lease expense		(181	)		(157	)
Depreciation		(59	)		(122	)
Rental property loss, net	$	(27	)	$	(72	)