Property and Equipment, net

12 Months Ended

Dec. 31, 2020

Property and Equipment, net

Property and Equipment, net

Note 8.    Property and Equipment, net

The following table summarizes the Company’s property and equipment (in thousands):

	December 31,		December 31,
	2020		2019
Furniture and office equipment	$	315	$	441
Vehicle		229		62
Leasehold improvements		246		243
Total property and equipment		790		746
Less: accumulated depreciation		(460)		(368)
Property and equipment, net		330		378
Fintech Village
Land		2,750		3,043
Building		—		309
Assets retirement obligations - environmental remediation		4,500		6,496
Capitalized direct development cost		—		2,713
Construction in progress (Fintech Village)		7,250		12,561
Property and Equipment, net	$	7,580	$	12,939

The Company recorded depreciation expense of $0.1 million and $0.1 million in the years ended December 31, 2020 and 2019, respectively.

Global Headquarters for Technology and Innovation in Connecticut (“Fintech Village”)

On October 10, 2018, the Company purchased a 58-acre former University of Connecticut campus in West Hartford from the State of Connecticut for $5.2 million in cash and also assumed responsibility of the environmental remediation. The Company obtained a surety bond in favor of the University of Connecticut and the State of Connecticut (the “Seller”) in connection with the Company’s environmental remediation obligations. The Company initially recorded asset retirement obligations in the amount of $8.0 million, which was the estimate performed by the Seller and at a discount to the purchase price, therefore, the Company considered it a reasonable estimate of fair value of its asset retirement obligation pursuant to ASC 410. The Company will assess asset retirement obligations periodically as assessment and remediation efforts progress or as additional technical or legal information becomes available.

The following table summarizes the activity in the asset retirement obligation for the year ended December 31, 2020 (in thousands):

	January 1,		Liabilities		Remediation		Accretion				December 31,
	2020		Incurred		Performed		Expense		Revisions		2020
Asset retirement obligation	$	5,094	$	—	$	(441)	$	—	$	—	$	4,653

The Company capitalized direct costs incurred on Fintech Village and the capitalized cost is recorded as part of Construction in progress. Capitalized costs were $0 million and $2.7 million as of December 31, 2020 and 2019, respectively, and are primarily related to legal and architect costs.

In the year ended December 31, 2020, the Company impaired the remaining building with a carrying amount of $0.3 million and land with a carrying amount of $0.3 million and the related asset retirement cost with a carrying amount of $2 million and the capitalized architect costs with a carrying amount of $2.7 million.

In the year ended December 31, 2019, the Company impaired buildings with a carrying amount of $2.3 million, which were subsequently demolished, and impaired related asset retirement costs of $1.5 million.

In connection with the acquisition, the Company also entered into an Assistance Agreement by and between the State of Connecticut, acting by the Department of Economic and Community Development (the “Assistance Agreement,”) pursuant to which the State of Connecticut may provide up to $10.0 million of financial assistance (the “Funding”) which in such case shall be evidenced by a promissory note, provided, however, that the aggregate principal of the funding shall not exceed 50% of the cost of the project. The Company will provide security for its obligation to repay the Funding to the State of Connecticut in the form of a first position mortgage. The Company agrees that in exchange for the Funding it will provide a minimum number of jobs at a minimum annual amount of compensation by December 31, 2021. Failure of the Company to do so will subject it to certain cash penalties for each employee below the minimum employment threshold. If the Company meets the employment obligations it is eligible for forgiveness of up to $10.0 million of the Funding. The Company will agree to certain covenants with respect to the Funding and such Funding may become immediately due and payable upon the occurrence of certain standard events of default. There were no borrowings from the Funding as of December 31, 2020 and 2019.