Note 10 - Leases

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

(10)     LEASES

We determine if an arrangement is an operating or finance lease at the inception of each contract. If the contract is classified as an operating lease, we record a right-of-use (“ROU”) asset and corresponding liability reflecting the total remaining present value of fixed lease payments over the expected term of the lease agreement. The expected term of the lease may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. If our lease does not provide an implicit rate in the contract, we use our incremental borrowing rate when calculating the present value. We have 2 operating leases for office space and processing facilities with remaining lease terms ranging from less than one year to approximately five years. As most of the leases do not provide an implicit rate, we calculate the ROU assets and lease liabilities using our secured incremental borrowing rate at the lease commencement date. At December 31, 2023 and 2022, respectively, we had approximately $0.7 and $0.2 million of ROU operating lease assets recorded within buildings and equipment on the consolidated balance sheets. Operating lease expense associated with ROU assets is recognized on a monthly basis over the lease term in operating costs on the consolidated statements of operation.

We entered into three finance leases during 2023, which are accounted for as failed sale-leaseback transactions. Finance lease assets are included in finance lease right-of-use assets on the consolidated balance sheets and the associated finance lease liabilities are reflected within current portion of lease financing and long-term lease financing on the consolidated balance sheets as applicable. Depreciation on our finance lease assets was $2.3 million for the year ended December 31, 2023. Imputed interest expense on our lease liabilities was $0.1 million for the year ended December 31, 2023. We deferred financing fees of $0.1 million in connection with entry into the finance leases. These deferred financing fees will be amortized on a straight-line basis over the term of the finance leases. For the year ended December 31, 2023, the amortization of finance lease deferred financing fees was immaterial. 

Information related to leases was as follows as of December 31 (in thousands): 

	December 31,
	2023			2022
Operating lease information:
Operating cash outflows from operating leases	$	208		$	218
Weighted average remaining lease term in years		8.50			1.30
Weighted average discount rate		9.5	%		6.0	%
Finance lease information:
Financing cash outflows from finance leases	$	—		$	—
Proceeds from sale and leaseback arrangement		11,082			—
Weighted average remaining lease term in years		3.00			—
Weighted average discount rate		8.5	%		—	%

We recognized the following costs related to our leases in our consolidated balance sheets:

	Classification on Consolidated Balance Sheets	December 31,
		2023		2022
		(in thousands)
Operating lease assets	Buildings and equipment	$	712	$	230
Operating lease liabilities:
Current operating lease liabilities	Accounts payable and accrued liabilities	$	58	$	173
Non-current operating lease liabilities	Other long-term liabilities	$	654	$	57
Total operating lease liabilities		$	712	$	230
Finance lease assets	Finance lease right-of-use assets	$	12,346	$	—
Finance lease liabilities:
Current finance lease liabilities	Current portion of lease financing	$	3,933	$	—
Non-current finance lease liabilities	Long-term lease financing	$	8,157	$	—
Total finance lease liabilities		$	12,090	$	—

Future minimum lease payments under non-cancellable leases as of December 31, 2023, were as follows:

Year	Operating Leases			Finance Leases
	(in thousands)
2024	$	58		$	4,947
2025		118			4,645
2026		122			4,333
2027		125			—
2028		129			—
Thereafter		483			—
Total minimum lease payments	$	1,035		$	13,925
Less imputed interest and deferred finance fees		(323	)		(1,835	)
Total lease liability	$	712		$	12,090