arcee-ai/sec-data-full · Datasets at Hugging Face

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operating lease liabilities $ 169 $ 203 Non-current
operating lease liabilities $ 129 $ 169 Total
operating lease liabilities $ 298 $ 372 The
depreciable lives of operating lease assets and leasehold improvements are limited by the expected lease term. The
Company’s leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the
discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate
the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term
of a lease within a particular currency environment. The Company used incremental borrowing rates as of January 1, 2019 for operating
leases that commenced prior to that date. The
Company’s weighted average remaining lease term and weighted average discount rate for operating leases as of March 31, 2022 March 31, 2022 Weighted
average remaining lease term (years) 1.75 Weighted
average discount rate 5.9 % 29 Zion
Oil & Gas, Inc. Consolidated
Condensed Notes to Financial Statements (Unaudited) Note
5 - Right of use leases assets and leases obligations (cont’d) The
table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under non-cancellable
operating leases with terms of more than one year to the total operating lease liabilities recognized on the condensed balance sheets
as of March 31, 2022: US$
thousands 2022 142 2023 158 2024 13 2025 - 2026 - Thereafter - Total
undiscounted future minimum lease payments 313 L
portion representing imputed interest ( 15 ) Total
undiscounted future minimum lease payments 298 Operating
lease costs were $ 68,000 and $ 63,000 for the three months ended March 31, 2022, and 2021, respectively. Operating lease costs are
included within general and administrative expenses on the statements of income. Cash
paid for amounts included in the measurement of operating lease liabilities was $ 72,000 and $ 71,000 for the three months ended
March 31, 2022, and 2021, respectively, and this amount is included in operating activities in the statements of cash flows. Right-of-use
assets obtained in exchange for new operating lease liabilities were $ nil and $ nil for the three months ended March
31, 2022, and 2021, respectively. 30 Zion
Oil & Gas, Inc. Consolidated
Condensed Notes to Financial Statements (Unaudited) Note
6 - Commitments and Contingencies A.
Securities and Exchange Commission (“SEC”) Investigation As
previously disclosed by the Company, on June 21, 2018, the Fort Worth Regional Office of the SEC informed Zion that it was conducting
a formal, non-public investigation and asked that we provide certain information and documents in connection with its investigation.
Since that date, we have fully cooperated with the SEC on an on-going basis in connection with its investigation. Investigations of this
nature are inherently uncertain and their results cannot be predicted with certainty. Regardless of the outcome, an SEC investigation
could have an adverse impact on us because of legal costs, diversion of management resources, and other factors. The investigation could
also result in reputational harm to Zion and may have a material adverse effect on Zion’s current and future business and exploratory
activities and its ability to raise capital to continue our oil and gas exploratory activities. B.
Litigation From
time to time, the Company may be subject to routine litigation, claims or disputes in the ordinary course of business. The Company defends
itself vigorously in all such matters. However, we cannot predict the outcome or effect of any of the potential litigation, claims or
disputes. The
Company is not subject to any litigation at the present time. C.
Recent Market Conditions – Coronavirus Pandemic During
March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain
of coronavirus (“COVID-19”). The pandemic has significantly impacted the economic conditions in the United States and Israel,
as federal, state and local governments react to the public health crisis, creating significant uncertainties in the United States, Israel
and world economies. In the interest of public health and safety, jurisdictions (international, national, state and local) where we have
operations, restricted travel and required workforces to work from home. As of the date of this report, many of our employees are working
from home. However, while there are various uncertainties to navigate, the Company’s business activities are continuing. The situation
is rapidly changing and additional impacts to the business may arise that we are not aware of currently. We cannot predict whether, when
or the manner in which the conditions surrounding COVID-19 will change including the timing of lifting any restrictions or work from
home arrangements. The
full extent of COVID-19’s impact on our operations and financial performance depends on future developments that are uncertain
and unpredictable, including the duration and spread of the pandemic, its impact on capital and financial markets and any new information
that may emerge concerning the severity of the virus, its spread to other regions as well as the actions taken to contain it, among others. D.
Environmental and Onshore Licensing Regulatory Matters The
Company is engaged in oil and gas exploration and production and may become subject to certain liabilities as they relate to environmental
clean-up of well sites or other environmental restoration procedures and other obligations as they relate to the drilling of oil and
gas wells or the operation thereof. Various guidelines have been published in Israel by the State of Israel’s Petroleum Commissioner
and Energy and Environmental Ministries as it pertains to oil and gas activities. Mention of these older guidelines was included in previous
Zion filings. The
Company believes that these regulations will result in an increase in the expenditures associated with obtaining new exploration rights
and drilling new wells. The Company expects that an additional financial burden could occur as a result of requiring cash reserves that
could otherwise be used for operational purposes. In addition, these regulations are likely to continue to increase the time needed to
obtain all of the necessary authorizations and approvals to drill and production test exploration wells. As
of March 31, 2022, and December 31, 2021, the Company accrued $ nil and $ nil for license regulatory matters. E.
Bank Guarantees As
of March 31, 2022, the Company provided Israeli-required bank guarantees to various governmental bodies (approximately $ 1,186,000 )
and others (approximately $ 82,000 ) with respect to its drilling operation in an aggregate amount of approximately $ 1,268,000 . The
(cash) funds backing these guarantees are held in restricted interest-bearing accounts in Israel and are reported on the
Company’s balance sheets as fixed short-term bank deposits – restricted. 31 Zion
Oil & Gas, Inc. Consolidated
Condensed Notes to Financial Statements (Unaudited) Note
6 - Commitments and Contingencies (cont’d) F.
Risks Market
risk is a broad term for the risk of economic loss due to adverse changes in the fair value of a financial instrument. These changes
may be the result of various factors, including interest rates, foreign exchange rates, commodity prices and/or equity prices. In the
normal course of doing business, we are exposed to the risks associated with foreign currency exchange rates and changes in interest
rates. Foreign
Currency Exchange Rate Risks. A portion of our expenses, primarily labor expenses and certain supplier contracts, are denominated
in New Israeli Shekels (“NIS”). As a result, we have significant exposure to the risk of fluctuating exchange rates with
the U.S. Dollar (“USD”), our primary reporting currency. During the period January 1, 2022 through March 31, 2022, the USD
has fluctuated by approximately 2.1% against the NIS (the USD strengthened relative to the NIS). By contrast, during the period January
1, 2021 through December 31, 2021, the USD fluctuated by approximately 3.3% against the NIS (the USD weakened relative to the NIS). Continued
strengthening of the US dollar against the NIS will result in lower operating costs from NIS denominated expenses. To date, we have not
hedged any of our currency exchange rate risks, but we may do so in the future. Interest
Rate Risk. Our exposure to market risk relates to our cash and investments. We maintain an investment portfolio of short-term bank
deposits and money market funds. The securities in our investment portfolio are not leveraged, and are, due to their very short-term
nature, subject to minimal interest rate risk. We currently do not hedge interest rate exposure. Because of the short-term maturities
of our investments, we do not believe that a change in market interest rates would have a significant negative impact on the value of
our investment portfolio except for reduced income in a low interest rate environment. At March 31, 2022, we had cash, cash equivalents
and short-term bank deposits of approximately $ 9,490,000 . The weighted average annual interest rate related to our cash and cash equivalents
for the three months ended March 31, 2022, exclusive of funds at US banks that earn no interest, was approximately 0.52 %. The
primary objective of our investment activities is to preserve principal while at the same time maximizing yields without significantly
increasing risk. To achieve this objective, we invest our excess cash in short-term bank deposits and money market funds that may invest
in high quality debt instruments. Note
7 - Subsequent Events (i) Approximately $2,585,000 was collected through the Company’s DSPP program during the period April 1 through May 6, 2022. (ii) On April 1, 2022, the Company granted options under the 2021
Omnibus Incentive Plan to one board member, to purchase 25,000 shares of Common Stock at an exercise price of $ 0.1128 per share. The

operating lease liabilities $ 169 $ 203 Non-current

operating lease liabilities $ 129 $ 169 Total

operating lease liabilities $ 298 $ 372 The

depreciable lives of operating lease assets and leasehold improvements are limited by the expected lease term. The

Company’s leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the

discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate

the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term

of a lease within a particular currency environment. The Company used incremental borrowing rates as of January 1, 2019 for operating

leases that commenced prior to that date. The

Company’s weighted average remaining lease term and weighted average discount rate for operating leases as of March 31, 2022 March 31, 2022 Weighted

average remaining lease term (years) 1.75 Weighted

average discount rate 5.9 % 29 Zion

Oil & Gas, Inc. Consolidated

Condensed Notes to Financial Statements (Unaudited) Note

5 - Right of use leases assets and leases obligations (cont’d) The

table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under non-cancellable

operating leases with terms of more than one year to the total operating lease liabilities recognized on the condensed balance sheets

as of March 31, 2022: US$

thousands 2022 142 2023 158 2024 13 2025 - 2026 - Thereafter - Total

undiscounted future minimum lease payments 313 L

portion representing imputed interest ( 15 ) Total

undiscounted future minimum lease payments 298 Operating

lease costs were $ 68,000 and $ 63,000 for the three months ended March 31, 2022, and 2021, respectively. Operating lease costs are

included within general and administrative expenses on the statements of income. Cash

paid for amounts included in the measurement of operating lease liabilities was $ 72,000 and $ 71,000 for the three months ended

March 31, 2022, and 2021, respectively, and this amount is included in operating activities in the statements of cash flows. Right-of-use

assets obtained in exchange for new operating lease liabilities were $ nil and $ nil for the three months ended March

31, 2022, and 2021, respectively. 30 Zion

Oil & Gas, Inc. Consolidated

Condensed Notes to Financial Statements (Unaudited) Note

6 - Commitments and Contingencies A.

Securities and Exchange Commission (“SEC”) Investigation As

previously disclosed by the Company, on June 21, 2018, the Fort Worth Regional Office of the SEC informed Zion that it was conducting

a formal, non-public investigation and asked that we provide certain information and documents in connection with its investigation.

Since that date, we have fully cooperated with the SEC on an on-going basis in connection with its investigation. Investigations of this

nature are inherently uncertain and their results cannot be predicted with certainty. Regardless of the outcome, an SEC investigation

could have an adverse impact on us because of legal costs, diversion of management resources, and other factors. The investigation could

also result in reputational harm to Zion and may have a material adverse effect on Zion’s current and future business and exploratory

activities and its ability to raise capital to continue our oil and gas exploratory activities. B.

Litigation From

time to time, the Company may be subject to routine litigation, claims or disputes in the ordinary course of business. The Company defends

itself vigorously in all such matters. However, we cannot predict the outcome or effect of any of the potential litigation, claims or

disputes. The

Company is not subject to any litigation at the present time. C.

Recent Market Conditions – Coronavirus Pandemic During

March 2020, a global pandemic was declared by the World Health Organization related to the rapidly growing outbreak of a novel strain

of coronavirus (“COVID-19”). The pandemic has significantly impacted the economic conditions in the United States and Israel,

as federal, state and local governments react to the public health crisis, creating significant uncertainties in the United States, Israel

and world economies. In the interest of public health and safety, jurisdictions (international, national, state and local) where we have

operations, restricted travel and required workforces to work from home. As of the date of this report, many of our employees are working

from home. However, while there are various uncertainties to navigate, the Company’s business activities are continuing. The situation

is rapidly changing and additional impacts to the business may arise that we are not aware of currently. We cannot predict whether, when

or the manner in which the conditions surrounding COVID-19 will change including the timing of lifting any restrictions or work from

home arrangements. The

full extent of COVID-19’s impact on our operations and financial performance depends on future developments that are uncertain

and unpredictable, including the duration and spread of the pandemic, its impact on capital and financial markets and any new information

that may emerge concerning the severity of the virus, its spread to other regions as well as the actions taken to contain it, among others. D.

Environmental and Onshore Licensing Regulatory Matters The

Company is engaged in oil and gas exploration and production and may become subject to certain liabilities as they relate to environmental

clean-up of well sites or other environmental restoration procedures and other obligations as they relate to the drilling of oil and

gas wells or the operation thereof. Various guidelines have been published in Israel by the State of Israel’s Petroleum Commissioner

and Energy and Environmental Ministries as it pertains to oil and gas activities. Mention of these older guidelines was included in previous

Zion filings. The

Company believes that these regulations will result in an increase in the expenditures associated with obtaining new exploration rights

and drilling new wells. The Company expects that an additional financial burden could occur as a result of requiring cash reserves that

could otherwise be used for operational purposes. In addition, these regulations are likely to continue to increase the time needed to

obtain all of the necessary authorizations and approvals to drill and production test exploration wells. As

of March 31, 2022, and December 31, 2021, the Company accrued $ nil and $ nil for license regulatory matters. E.

Bank Guarantees As

of March 31, 2022, the Company provided Israeli-required bank guarantees to various governmental bodies (approximately $ 1,186,000 )

and others (approximately $ 82,000 ) with respect to its drilling operation in an aggregate amount of approximately $ 1,268,000 . The

(cash) funds backing these guarantees are held in restricted interest-bearing accounts in Israel and are reported on the

Company’s balance sheets as fixed short-term bank deposits – restricted. 31 Zion

Oil & Gas, Inc. Consolidated

Condensed Notes to Financial Statements (Unaudited) Note

6 - Commitments and Contingencies (cont’d) F.

Risks Market

risk is a broad term for the risk of economic loss due to adverse changes in the fair value of a financial instrument. These changes

may be the result of various factors, including interest rates, foreign exchange rates, commodity prices and/or equity prices. In the

normal course of doing business, we are exposed to the risks associated with foreign currency exchange rates and changes in interest

rates. Foreign

Currency Exchange Rate Risks. A portion of our expenses, primarily labor expenses and certain supplier contracts, are denominated

in New Israeli Shekels (“NIS”). As a result, we have significant exposure to the risk of fluctuating exchange rates with

the U.S. Dollar (“USD”), our primary reporting currency. During the period January 1, 2022 through March 31, 2022, the USD

has fluctuated by approximately 2.1% against the NIS (the USD strengthened relative to the NIS). By contrast, during the period January

1, 2021 through December 31, 2021, the USD fluctuated by approximately 3.3% against the NIS (the USD weakened relative to the NIS). Continued

strengthening of the US dollar against the NIS will result in lower operating costs from NIS denominated expenses. To date, we have not

hedged any of our currency exchange rate risks, but we may do so in the future. Interest

Rate Risk. Our exposure to market risk relates to our cash and investments. We maintain an investment portfolio of short-term bank

deposits and money market funds. The securities in our investment portfolio are not leveraged, and are, due to their very short-term

nature, subject to minimal interest rate risk. We currently do not hedge interest rate exposure. Because of the short-term maturities

of our investments, we do not believe that a change in market interest rates would have a significant negative impact on the value of

our investment portfolio except for reduced income in a low interest rate environment. At March 31, 2022, we had cash, cash equivalents

and short-term bank deposits of approximately $ 9,490,000 . The weighted average annual interest rate related to our cash and cash equivalents

for the three months ended March 31, 2022, exclusive of funds at US banks that earn no interest, was approximately 0.52 %. The

primary objective of our investment activities is to preserve principal while at the same time maximizing yields without significantly

increasing risk. To achieve this objective, we invest our excess cash in short-term bank deposits and money market funds that may invest

in high quality debt instruments. Note

7 - Subsequent Events (i) Approximately $2,585,000 was collected through the Company’s DSPP program during the period April 1 through May 6, 2022. (ii) On April 1, 2022, the Company granted options under the 2021

Omnibus Incentive Plan to one board member, to purchase 25,000 shares of Common Stock at an exercise price of $ 0.1128 per share. The