Leases

3 Months Ended

Mar. 31, 2023

Note 5 - Leases

We lease three facilities in Los Angeles, California providing office space and one facility in City of Industry, California, providing warehouse space. These leases expire between 2023 and 2024. We currently occupy the warehouse space in City of Industry; however, we do not occupy any of the office space in Los Angeles. We have a sublease in place for one of the Los Angeles, California office spaces. With the exception of these spaces described above, we currently operate out of remote employment sites with a remote office located at 25587 Conifer Road, Suite 105-231, Conifer, Colorado 80433.

Lease expenses, net of common charges, for the three months ended March 31, 2023 and 2022, were $46,000 and $139,000, respectively. Sublease proceeds for the three months ended March 31, 2023 and 2022, were $16,000 and $66,000, respectively.

The following provides balance sheet information related to leases as of March 31, 2023 and December 31, 2022 (in thousands):



		March 31, 2023		December 31, 2022
Assets
	Operating lease, right-of-use asset, net	$	99	$	142

Liabilities
	Current portion of operating lease liabilities	$	139	$	219
	Operating lease liabilities, net of current portion	—		17
	Total operating lease liabilities	$	139	$	236

During the three months ended March 31, 2023 and 2022, payments of $100,000 and $173,000 were made on leases, respectively. The following table summarizes the future undiscounted cash payments reconciled to the lease liability (in thousands):


Remaining Lease Payments
2023	$	125
2024	17
Total lease payments	142
Effect of discounting	(3)
Total lease liability	$	139

The following table provides a reconciliation of activity for our right-of-use (“ROU”) assets and lease liabilities (in thousands):


	Right-of-Use Asset		Operating Lease Liabilities
Balance at December 31, 2021	$	659	$	728
Additions	11		11

Non-cash lease expense and payments	(349)		(503)
Impairment charges	(179)		—
Balance at December 31, 2022	142		236
Additions	—		—
Terminations and modifications	$	—	$	—
Non-cash lease expense and payments	(43)		(97)
Impairment charges	—		—
Balance at March 31, 2023	$	99	$	139

The ROU assets and lease liabilities are recorded on the Company’s Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022.