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LEASES

3 Months Ended

Mar. 31, 2023

4. LEASES

The Company’s right-of-use assets and lease liabilities are recognized at their discounted present value under the following captions in the condensed consolidated balance sheets at March 31, 2023 and December 31, 2022:

SCHEDULE OF CONSOLIDATED BALANCE SHEET

	March 31, 2023		December 31, 2022
	(in thousands)
Right of use asset balance
Operating lease	$	813	$	868
Lease liability balance
Short-term operating lease	$	174	$	189
Long-term operating lease		750		794
Total operating leases	$	924	$	983

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 cost represents payments for office leases with original terms less than one year. Beginning in March 2020, the Company subleased its Denver, Colorado office and recognized sublease income as a reduction of rent expense. The term of the sublease was through the term of the Company’s Denver office lease, which terminated on January 31, 2023. Following are the amounts recognized as components of rental expense for the three months ended March 31, 2023 and 2022:

SCHEDULE OF LEASE COSTS

	2023		2022
	Three Months ended March 31,
	2023		2022
	(in thousands)
Operating lease cost	$	65	$	31
Short-term lease cost		269		2
Sublease income		-		(16	)
Total lease costs	$	334	$	17

The Company’s Houston office operating lease does 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 March 31,
	2023			2022
	(in thousands)
Weighted average lease term (years)		4.7			0.9
Weighted average discount rate		4.25	%		9.26	%

Maturity of operating lease liabilities with terms of one year or more as of March 31, 2023 are presented in the following table:

	March 31, 2023
	(in thousands)
2023	$	156
2024		213
2025		218
2026		224
2027		210
Total lease payments	$	1,021
Less: imputed interest		(97	)
Total lease liability	$	924