Fixed Assets

12 Months Ended

Dec. 31, 2022

Fixed Assets

Fixed Assets

Note 3 – Fixed Assets

Fixed Assets

Fixed assets are summarized as follows:

	December 31,
(in thousands)	2022		2021
Machinery and equipment	$	390	$	722
Office furniture and equipment		177		218
Leasehold improvements		192		192
		759		1,132
Accumulated depreciation and amortization		(697)		(1,055)
		62		77
Operating lease ROU assets, net		322		453
Total	$	384	$	530

Depreciation and amortization expense for the years ended 2022 and 2021 totaled $24 thousand and $38 thousand, respectively.

Leases

The Company leases office space in Seattle, Washington, Tulsa, Oklahoma and Beijing, China. During June 2022, the Company entered into a new lease agreement for its Beijing office space for a period of one year with monthly rent at approximately $2

thousand. We classified this lease as an operating lease since it is more likely than not the lease will be renewed at the end of its term. Prior to entering into this new lease agreement, the monthly rent for the old Beijing office space was approximately $5 thousand, equating to an annual total short term lease expense of $23 thousand prior to termination in June 2022.

The Seattle, Tulsa, and Beijing leases are classified as operating leases, with remaining terms ranging from five months to six years; contractual language requires renewal negotiations to occur at or near termination. These leases are normal and customary for office space, in that, contractual guarantees exist requiring the lessee to return the premises to its original functional state. The Company accrued an estimated cost of $55 thousand and $32 thousand in 2022 and 2021, respectively, for a total of approximately $87 thousand, to prepare for the restoration of the Seattle office. The Company plans to exit the Seattle lease on or before contract termination as part of our headquarters move from Seattle to Tulsa. In preparation for this move, the Company entered into the Tulsa operating lease agreement in April 2021.

The Seattle and Tulsa leases contain fixed annual lease payments that increase annually by factors that range between 2% to 3%. The Seattle, Tulsa, and Beijing total monthly minimum rent is approximately $22 thousand. Operating lease costs for the years ended December 31, 2022 and 2021 were $186 thousand and $257 thousand, respectively.

Supplemental balance sheet information related to operating leases is as follows:

		December 31,			December 31,
(in thousands)		2022			2021
Operating lease ROU assets, net	$	322		$	453
Lease Liabilities:
Current lease liabilities	$	133		$	205
Long term lease liabilities		226			350
Total lease liabilities	$	359		$	555
Weighted average remaining lease term (in years):		2.6
Weighted average discount rate:		5.5	%

Supplemental cash flow information related to leases is as follows:

	For the Year Ended
		2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases	$	251	$	218
Non-cash impact of new leases and lease modifications
New operating lease liabilities	$	25	$	320
Impairment of operating lease ROU assets	$	—	$	63

Minimum future payments under the Company’s lease liabilities as of December 31, 2022 are as follows:

	Discounted		Payments
	lease		due under
(in thousands)	liability		lease
	payments		agreements
2023	$	134	$	148
2024		54		65
2025		59		65
2026		62		67
2027		50		51
Total	$	359	$	396

At December 31, 2022, $37 thousand of our future minimum lease payments represents interest.