Annual report pursuant to Section 13 and 15(d)

Operating Lease

Operating Lease
12 Months Ended
Dec. 31, 2021
Operating Lease  
Operating Lease


3. Operating Lease


The Company leases certain corporate office space under an operating lease agreement. We determine if an arrangement is a lease at inception. Lease assets are presented as operating lease right-of-use assets and the related liabilities are presented as lease liabilities in our consolidated balance sheets.


Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Generally, the implicit rate of interest in lease arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease ROU asset includes any lease payments made and excludes lease incentives.


The components of lease expense and supplemental cash flow information related to leases for the period are as follows:

    December 31,  
Lease costs:        
Operating lease (included in general and administrative in the Company’s consolidated statement of operations)   $ 30,000  
Other information:        
Cash paid for amounts included in the measurement of lease liabilities   $ 21,000  
Weighted average remaining lease term – operating leases (in years)     3.4  
Average discount rate – operating leases     4%  
The supplemental balance sheet information related to leases for the period is as follows:        
Long-term right-of-use assets   $ 143,000  
Short-term operating lease liabilities   $ 38,000  
Long-term operating lease liabilities     106,000  
Total operating lease liabilities   $ 144,000  


Maturity of the Company’s lease liabilities are as follows:

Year Ending December 31:   Lease  
2022   $ 43,000  
2023     45,000  
2024     46,000  
2025     19,000  
2026 and thereafter      
Total lease payments     153,000  
Less: Imputed interest/present value     (9,000 )
Present value of lease liabilities   $ 144,000