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LEASES

12 Months Ended

Dec. 31, 2021

5. LEASES

During the year ended December 31, 2021, the Company acquired right-of-use assets and operating lease liability of $82 thousand associated with entering into a non-cancellable, long-term lease agreement for office space in Houston, Texas. 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, 2021 and 2020:

SCHEDULE OF CONSOLIDATED BALANCE SHEET

	2021		2020
	December 31,
	2021		2020
	(in thousands)
Right of use asset balance
Operating lease	$	120	$	127
Lease liability
Short-term operating lease		114		65
Long-term operating lease		19		78
Total operating leases	$	133	$	143

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, prior to February 2021, when the Company entered into a new 25-month lease for its Houston office. Beginning in March 2020, the Company subleased its Denver, Colorado office and recognizes sublease income as a reduction of rent expense. Following are the amounts recognized as components of rental expense for the years ended December 31, 2021 and 2020:

SCHEDULE OF LEASE COSTS

	2021			2020
	December 31,
	2021			2020
	(in thousands)
Operating lease cost	$	125			74
Short-term lease cost		9			22
Sublease income		(64	)		(41	)
Total lease costs	$	70		$	55

The Company’s Denver and Houston office operating leases do not contain implicit interest rates that can be readily determined; therefore, the Company used the incremental borrowing rates in effect at the time the Company entered into the leases.

SCHEDULE OF WEIGHTED AVERAGE LEASE

	As of December 31,
	2021			2020

Weighted average lease term (years)		1.1			2.1
Weighted average discount rate		9.26	%		8.75	%

	December 31, 2021
	(in thousands)
2022		122
2023		18
Total lease payments	$	140
Less: imputed interest		(7	)
Total lease liability	$	133

As discussed in Note 3- Real Estate Held for Sale, the Company owned a 14-acre tract in Riverton, Wyoming with a two-story, 30,400 square foot office building, which was sold in August 2021. During the year ended December 31, 2021, the Company recognized a $151 thousand loss on the sale of the building and land. The Company recognized a loss during the year ended December 31, 2020 of $651 thousand related to the building and land subject to the operating leases. The building was not depreciated while held for sale.

The Company recognized, as a component of rental property income (loss), the following operating lease income and expenses related to its Riverton, Wyoming office building for the years ended December 31, 2021 and 2020:

SCHEDULE OF LOSS ON RENTAL PROPERTY

	2021			2020
	Year Ended December 31,
	2021			2020
	(in thousands)
Operating lease income	$	131		$	213
Operating lease expense		(123	)		(181	)
Depreciation		-			(59	)
Rental property income (loss), net	$	8		$	(27	)