LEASES

12 Months Ended

Dec. 31, 2023

In February 2016, the FASB issued ASU No. 2016-02 - Leases (“ASC 842”) related to the accounting for leases. ASC 842 establishes a right-of-use (“ROU”) model, that requires a lessee to record a ROU asset and a lease liability on the Consolidated Balance Sheets for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the expense recognition in the Consolidated Statements of Comprehensive Income (Loss). Effective January 1, 2019, the Company adopted ASC 842. The Company determines if an arrangement contains a lease at inception based on whether or not the Company has the right to control the asset during the contract period and other facts and circumstances.

The Company leases office space in the United States under operating lease agreements. The Company also entered into an arrangement with Applied Blockchain for the use of energized cryptocurrency mining facilities under which the Company pays for electricity per megawatt based on usage. The Company has determined that it has embedded operating leases at two of the facilities governed by this arrangement that commenced in January and March 2023, and has elected not to separate lease and non-lease components. Payments made for these two operating leases are entirely variable and are based on usage of electricity, and the Company therefore does not record a ROU asset or lease liability associated with the leases. Variable lease cost during the year ended December 31, 2023 are disclosed

in the table below. Office space and mining facilities comprise the Company’s material underlying asset class under operating lease agreements. The Company has no material finance leases.

As of December 31, 2023, the Company’s ROU assets and total lease liabilities were $0.4 million and $0.5 million, respectively. As of December 31, 2022, the Company’s ROU assets and total lease liabilities were $1.3 million and $1.3 million, respectively. The Company has amortized the right-of-use assets totaling $0.3 million and $0.1 million for the year ended December 31, 2023 and 2022, respectively.

Operating lease costs are recorded on a straight-line basis within operating expenses. The Company’s total lease expense is comprised of the following:


	For the year ended December 31,
(in thousands)		2023		2022		2021
Operating leases
Operating lease cost		$	315	$	327	$	—
Operating lease expense		315		327		—
Short-term lease rent expense		36		29		31
Variable lease cost		80,108		—		—
Total rent expense		$	80,459	$	356	$	31

Additional information regarding the Company’s leasing activities is as follows:


	For the year ended December 31,
	2023			2022			2021
Operating cash flows from operating leases	$	(32)		$	67		$	—
Weighted-average remaining lease term – operating leases	3.2			3.9			0
Weighted-average discount rate – operating leases	5		%	5		%	—		%

The following table presents the Company’s future minimum operating lease payments as of December 31, 2023:


Year	Amount (in thousands)
2024	$	166
2025	143
2026	147
2027	63
2028	—
Thereafter	—
Total	519
Less: Imputed interest	(41)
Present value of lease liability	$	478