7. Leases

Office Space – The Company leases office space in Fort Worth, Texas for managerial offices. This lease requires monthly payments of $2 thousand and is month-to-month. Lease expense for this facility totaled $24 thousand for 2022 and $22 thousand for 2021.

Hemp Processing Operating Facility – The Company leases its operating facility in Kentucky from Oz Capital, LLC, a related party, under a lease expiring May 31, 2024. The lease provides for monthly payments of $10 thousand. Oz Capital, LLC is responsible for all taxes and maintenance under the lease. Lease expense for this facility totaled $123 thousand for 2022 and $119 thousand for 2021. A right-of-use asset and lease liability is recorded for this lease. As the lease does not provide an implicit rate, the Company used its estimated incremental borrowing rate of 10% in determining the present value of the lease payments.

Future Bitcoin Mining Premises – In 2022, the Company entered a five-year commercial lease for land and premises in Arkansas. We expect to use these premises as a future Bitcoin mining location because of its favorable power rates and land availability. The lease commences once the Company begins receiving power for its operations conducted at the location. The monthly rent will vary from a minimum of $1 thousand per megawatt of power usage monthly up to $4 thousand per megawatt monthly depending on the average power usage over a trailing 90-day period and the price of bitcoin. We anticipate commencing operations at the leased premises in 2023.