Leases

9 Months Ended

Sep. 30, 2023

Note 5 - Leases

We lease one facility in City of Industry, California, providing warehouse space. This lease expires in February 2024. 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 including common charges and net of sublet proceeds, for the three months ended September 30, 2023 and 2022, were $35,000 and $92,000, respectively. Lease expenses, including common charges and net of sublet proceeds, for the nine months ended September 30, 2023 and 2022, were $123,000 and $307,000, respectively. Sublease proceeds for the three months ended September 30, 2023 and 2022, were zero and $15,000, respectively. Sublease proceeds for the nine months ended September 30, 2023 and 2022, were $27,000 and $125,000, respectively.

The following provides balance sheet information related to leases as of September 30, 2023 and December 31, 2022 (in thousands):



		September 30, 2023		December 31, 2022
Assets
	Operating lease, right-of-use asset, net	$	41	$	142

Liabilities
	Current portion of operating lease liabilities	$	43	$	219
	Operating lease liabilities, net of current portion	—		17
	Total operating lease liabilities	$	43	$	236

During the three months ended September 30, 2023 and 2022, payments of $26,000 and $110,000 were made on leases, respectively. During the nine months ended September 30, 2023 and 2022, payments of $199,000 and $408,000 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	$	26
2024	17
Total lease payments	43
Effect of discounting(1)	—
Total lease liability	$	43

(1) The effect of discounting is less than $1,000 due to the term remaining on the lease.

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


Non-cash lease expense and payments	(101)		(193)

Balance at September 30, 2023	$	41	$	43

The ROU assets and lease liabilities are recorded on the Company’s Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022.