Annual report pursuant to Section 13 and 15(d)

Note 9 - Operating Lease

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Note 9 - Operating Lease
12 Months Ended
Dec. 31, 2023
Notes to Financial Statements  
Lessee, Operating Leases [Text Block]

9.

Operating Lease

 

In June 2022, we entered into an agreement to lease approximately 6,000 square feet of office space in Minneapolis, Minnesota, near our former office space. The lease commencement date was September 1, 2022, has a term of 65 months expiring on January 31, 2028 and includes an incentive of five months of full rent abatement. This incentive is subject to repayment if we default in performance of any material obligations under the lease prior to the 48th month of the lease and the landlord terminates the lease. Upon lease commencement, the Company recognized an operating lease right-of-use asset and a corresponding operating lease obligation of $446,000, respectively.

 

Our operating lease costs were $104,000 and $78,000 for the years ended December 31, 2023 and 2022, respectively. Our variable lease costs were $92,000 and $25,000 for the years ended December 31, 2023 and 2022, respectively. Variable lease costs consist primarily of common area maintenance costs, insurance and taxes which are paid based upon actual costs incurred by the lessor.

 

Maturities of our operating lease obligation are as follows as of December 31, 2023 (in thousands):

 

2024

    109  

2025

    113  

2026

    116  

2027

    119  

2028

    10  

Total lease payments

  $ 467  

Less interest portion

    (71 )

Present value of lease obligation

  $ 396  

 

Former office lease

 

We leased certain office space under a non-cancelable operating lease that terminated on August 31, 2022, and we did not renew it. This lease included lease (e.g., fixed rent) and non-lease components (e.g., common-area and other maintenance costs). The right-of-use asset for this lease was fully amortized as of August 31, 2022.