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Note 6 - Leases

12 Months Ended

Dec. 31, 2022

We currently lease approximately 33,800 square feet of office space for general and administrative purposes in Houston, Texas under a lease agreement that expires on December 31, 2023. We also lease approximately 2,500 square feet of office space for marketing purposes in Singapore under a lease agreement that expires on October 31, 2025.

On March 6, 2019, Rio Grande entered into a lease agreement (the “Rio Grande Site Lease”) with the Brownsville Navigation District of Cameron County, Texas (“BND”) pursuant to which it has agreed to lease approximately 984 acres of land situated in Brownsville, Cameron County, Texas for the purposes of constructing, operating, and maintaining the Terminal and gas treatment and gas pipeline facilities.

The initial term of the Rio Grande Site Lease is for 30 years (the “Primary Term”), which will commence on the date specified in a written notice by Rio Grande to BND (the “Effective Date Notice”), if given, confirming that Rio Grande or a Rio Grande affiliate has made a positive FID for the first phase of the Terminal. Rio Grande has the option to renew and extend the term of the Rio Grande Site Lease beyond the Primary Term for up to two consecutive renewal periods of ten years each provided that Rio Grande has not caused an event of default under the Rio Grande Site Lease. Under the Rio Grande Site Lease, the Effective Date Notice was to be delivered no later than November 6, 2019 (the “Outside Effective Date”) unless Rio Grande was unable to deliver the Effective Date Notice prior to the Outside Effective Date due to reasons unrelated to its own acts or omissions or its inability to secure one or more of the required permits for the Terminal. In such a case, the Outside Effective Date would be automatically extended on a month-to-month basis (the “Effective Date Notice Extension Period”).

On April 20, 2022, Rio Grande and the BND amended the Rio Grande Site Lease (the “Rio Grande Site Lease Amendment”) to extend the effective date for commencing the Rio Grande Site Lease to May 6, 2023 (the “Effective Date”). The Rio Grande Site Lease Amendment further provides that Rio Grande has the right, exercisable in its sole discretion, to extend the Effective Date to May 6, 2024 by providing the BND with written notice of its election no later than the close of business on the Effective Date.

Operating lease right-of-use assets are as follows (in thousands):

		*December 31,*		*December 31,*
		*2022*		*2021*
Office leases	$	1,474	$	590
Total operating lease right-of-use assets, net	$	1,474	$	590

Operating lease liabilities are as follows (in thousands):

		*December 31,*		*December 31,*
		*2022*		*2021*
Office leases	$	1,093	$	596
Total current lease liabilities		1,093		596
Non-current office leases		465		—
Total lease liabilities	$	1,558	$	596

Operating lease expense is as follows (in thousands):

		*December 31,*		*December 31,*
		*2022*		*2021*
Office leases	$	887	$	627
Total operating lease expense		887		627
Short-term lease expense		232		278
Total lease expense	$	1,119	$	905

Maturity of operating lease liabilities as of December 31, 2022 are as follows (in thousands):

2023	$	1,300
2024		273
2025		250
2026		—
2027		—
Thereafter		—
Total undiscounted lease payments		1,823
Discount to present value		(265	)
Present value of lease liabilities	$	1,558

Other information related to our operating leases as of December 31, 2022 is as follows (in thousands):

		*December 31,*		*December 31,*
		*2022*		*2021*
Cash paid for amounts included in the measurement of operating lease liabilities:
Cash flows from operating activities	$	678	$	624
Noncash right-of-use assets recorded for operating lease liabilities:
In exchange for new operating lease liabilities during the period		1,640		712