This discussion includes forward-looking statements. Please refer to " Cautionary Statement Regarding Forward-Looking Statements " of this annual report on Form 10-K for important information about these types of statements and " Risk Factors ", above. Additionally, please refer to the " Glossary of Oil and Natural Gas Terms " of this annual report on Form 10-K for oil and natural gas industry terminology used herein.





45







Recent Developments

On February 11, 2021, we sold 1,131,500 shares of our common stock in an underwritten offering at a public offering price of $5.10 per share (the "Offering"). The Offering closed on February 17, 2021. The net proceeds to us from the Offering, after deducting the underwriting discounts and commissions and Offering expenses, were $5.3 million. We intend to use the net proceeds from this offering for general corporate purposes, capital expenditures, working capital, and potential acquisitions of oil and gas properties.

On March 4, 2021 we entered into a Debt Conversion Agreement with APEG II. Pursuant to the Debt Conversion Agreement, APEG II converted a total of approximately $413,000, representing the principal of the Secured Promissory Note of $375,000 and accrued interest of approximately $38,000 into 97,962 unregistered shares of our common stock. The number of shares was based on a conversion price of $4.21 per share, a 9.9% discount to the ten-day volume weighted average price of our common stock for the ten days immediately preceding the signing of the Debt Conversion Agreement (the "VWAP Discount Price").

Also, on March 4, 2021, APEG II entered into a Subscription Agreement with us, whereby APEG II subscribed to purchase 90,846 unregistered shares of our common stock for an aggregate of approximately $383,000 based on the VWAP Discount Price. The $383,000 subscription price was paid by way of forgiveness by APEG II of the same amount of funds owed by us for reimbursement of APEG II's legal costs in connection with certain shareholder derivative actions brought by APEG against us and our former Chief Executive Officer in Colorado and Texas, which were dismissed in May 2020 and August, respectively.

On March 9, 2021, we entered into a commodity derivative contract to hedge the price of 100 barrels of crude oil per day from March 1 to December 31, 2021at $61.90 based on the calendar month average of WTI Crude Oil.

Impacts of COVID-19 Pandemic and Effect on Economic Environment

In early March 2020, there was a global outbreak of COVID-19 that has resulted in a drastic decline in global demand of certain mineral and energy products including crude oil. As a result of the lower demand caused by the COVID-19 pandemic and the oversupply of crude oil, spot and future prices of crude oil fell to historic lows during the second quarter of 2020 and only recently recovered to pre-COVID-19 levels. Operators in North Dakota's Williston Basin responded by significantly decreasing drilling and completion activity and shutting in or curtailing production from a significant number of producing wells. Operators' decisions on these matters are changing rapidly and it is difficult to predict the future effects on the Company's business. Lower oil and natural gas prices not only decrease our revenues, but an extended decline in oil or gas prices may materially and adversely affect our future business, financial position, cash flows, results of operations, liquidity, ability to finance planned capital expenditures and the oil and natural gas reserves that we can economically produce.

Additionally, the outbreak of COVID-19 and decreases in commodity prices resulting from oversupply, government-imposed travel restrictions, and other constraints on economic activity have caused a significant decrease in the demand for oil and has created disruptions and volatility in the global marketplace for oil and gas beginning in the first quarter of 2020, which negatively affected our results of operations and cash flows. These conditions persisted throughout 2020 and continue to negatively affect our results of operations and cash flows. While demand and commodity prices have shown signs of recovery, they are not back to pre-pandemic levels, and financial results may continue to be depressed in future quarters. The extent to which the COVID-19 pandemic impacts our business going forward will depend on numerous evolving factors we cannot reliably predict, including the duration and scope of the pandemic; governmental, business, and individuals' actions in response to the pandemic; and the impact on economic activity including the possibility of recession or financial market instability. These factors may adversely impact the supply and demand for oil and gas and our ability to produce and transport oil and gas and perform operations at and on our properties. This uncertainty also affects management's accounting estimates and assumptions, which could result in greater variability in a variety of areas that depend on these estimates and assumptions, including investments, receivables, and forward-looking guidance.





46

Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements in conformity with GAAP requires us to make assumptions and estimates that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the disclosure of contingent assets and liabilities at the date of our financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates under different assumptions or conditions. A summary of our significant accounting policies is detailed in

Note 1 - Organization, Operations and Significant Accounting Policies in Item 8 of this annual report on Form 10-K under " Financial Statements and Supplementary Data ". We have outlined below those policies identified as being critical to the understanding of our business and results of operations and that require the application of significant management judgment.

Oil and Natural Gas Reserve Estimates. Our estimates of proved reserves are based on quantities of oil and natural gas reserves which current engineering data indicates are recoverable from known reservoirs under existing economic and operating conditions. Estimates of proved reserves are critical estimates in determining our depreciation, depletion and amortization expense ("DD&A") and our full cost ceiling limitation ("Full Cost Ceiling"). Future cash inflows are determined by applying oil and natural gas prices, as adjusted for transportation, quality and basis differentials to the estimated quantities of proved reserves remaining to be produced as of the end of that period. Future production and development costs are based on costs existing at the effective date of the report. Expected cash flows are discounted to present value using a prescribed discount rate of 10% per annum.

Estimates of proved reserves are inherently imprecise because of uncertainties in projecting rates of production and timing of developmental expenditures, interpretations of geological, geophysical, engineering and production data and the quality and quantity of available data. Changing economic conditions also may affect our estimates of proved reserves due to changes in developmental costs and changes in commodity prices that may impact reservoir economics. We utilize independent reserve engineers to estimate our proved reserves at the end of each fiscal quarter during the year.

Oil and Natural Gas Properties. We follow the full cost method in accounting for our oil and natural gas properties. Under the full cost method, all costs associated with the acquisition, exploration and development of oil and natural gas properties are capitalized and accumulated in a country-wide cost center. This includes any internal costs that are directly related to development and exploration activities, but does not include any costs related to production, general corporate overhead or similar activities. Proceeds received from property disposals are credited against accumulated cost except when the sale represents a significant disposal of reserves, in which case a gain or loss is recognized.

The sum of net capitalized costs and estimated future development and dismantlement costs for each cost center are amortized using the equivalent unit-of-production method, based on proved oil and natural gas reserves. The capitalized costs are amortized over the life of the reserves associated with the assets, with the DD&A recognized in the period that the reserves are produced. DD&A is calculated by dividing the period's production volumes by the estimated volume of reserves associated with the investment and multiplying the calculated percentage by the sum of the capitalized investment and estimated future development costs associated with the investment. Changes in our reserve estimates will therefore result in changes in our DD&A per unit. Costs associated with production and general corporate activities are expensed in the period incurred.

Exploratory wells in progress are excluded from the DD&A calculation until the outcome of the well is determined. Similarly, unproved property costs are initially excluded from the DD&A calculation. Unproved property costs not subject to the DD&A calculation consist primarily of leasehold and seismic costs related to unproved areas. Unproved property costs are transferred into the amortization base on an ongoing basis as the properties are evaluated and proved reserves are established or impairment is determined. Unproved oil and natural gas properties are assessed quarterly for impairment to determine whether we are still actively pursuing the project and whether the project has been proven either to have economic quantities of reserves or that economic quantities of reserves do not exist.

Under the full cost method of accounting, capitalized oil and natural gas property costs less accumulated DD&A and net of deferred income taxes may not exceed the Full Cost Ceiling. The Full Cost Ceiling is equal to the present value, discounted at 10%, of estimated future net revenues from proved oil and natural gas reserves plus the unimpaired cost of unproved properties not subject to amortization, plus the lower of cost or fair value of unproved properties that are subject to amortization. When net capitalized costs exceed the Full Cost Ceiling, an impairment is recognized.





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Joint Interest Operations. The majority of our properties are operated by other companies. Therefore, we rely to a large extent on the operator of the property to provide us with timely and accurate information about the operations of the properties. Revenue statements and joint interest billings from the operators serve as our primary source of information to record revenue, operating expenses and capital expenditures for our properties on a monthly basis. Many of our properties are subject to complex participation and operating agreements where our working interests and net revenue interests are subject to change upon the occurrence of certain events, such as the achievement of "payout." These calculations may be subject to error and differences of interpretation which can cause uncertainties about the proper amount that should be recorded in our accounting records. When these issues arise, we make every effort to work with the operators to resolve the issues promptly.

Acquisitions. The Company accounts for acquisitions as business combinations if the acquired assets meet the definition of a business. If substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar assets, the acquisition is not considered a business and is accounted for as an asset acquisition. This determination of whether the gross assets acquired are concentrated in a group of similar assets is based on whether the risks associated with managing and creating outputs from the assets are similar.

Revenue Recognition. We recognize revenue in accordance with FASB ASC Topic 606-Revenue from Contracts with Customers, which we adopted effective January 1, 2018, using the modified retrospective approach. Note 4- Revenue Recognition to our consolidated financial statements included in Item 8 of this report on Form 10-K under " Financial Statements and Supplementary Data "

Stock-Based Compensation. We measure the cost of employee services received in exchange for all equity awards granted, including stock options, based on the fair market value of the award as of the grant date. We recognize the cost of the equity awards over the period during which an employee is required to provide service in exchange for the award, usually the vesting period. For awards granted which contain a graded vesting schedule, and the only condition for vesting is a service condition, compensation cost is recognized as an expense on a straight-line basis over the requisite service period as if the award was, in substance, a single award.

Warrant Liability. In connection with a private placement of common shares in December 2016, we concurrently sold to the purchasers warrants to purchase 100,000 shares of common stock. During 2020, 50,000 of the warrants were exercised, leaving 50,000 warrants outstanding at December 31, 2020. The exercise price and the number of shares issuable upon exercise of the warrants is subject to adjustment in the event of any stock dividends and splits, reverse stock splits, recapitalization, reorganization or similar transaction, as described in the warrants. The warrants are also subject to "down-round" anti-dilution in the event we issue additional common stock or common stock equivalents at a price per share less than the exercise price in effect. We have classified the warrants as liabilities due to provisions in the warrant agreement that precluded equity classification, including an option of the holder to receive the calculated fair value of the warrant from the Company in cash in the event of a "Fundamental Transaction," as defined in the warrant agreement. Changes in fair value are reported each period in the consolidated statements of operations.

Preferred Stock. On December 31, 2020, we redeemed all outstanding shares of our Series A Convertible Preferred Stock, as discussed above. In previous periods, we have excluded our Series A Convertible Preferred Stock from stockholders' equity due to a redemption feature whereby the holders of the preferred stock had the option to redeem their shares in the event of a change of control, which is outside of our control. See Note 10- Preferred Stock to our consolidated financial statements included in Item 8 of this report on Form 10-K under " Financial Statements and Supplementary Data " for more information related to the Series A Convertible Preferred Stock.

Recently Issued Accounting Standards

Please refer to the section entitled Recent Accounting Pronouncements under

Note 1 - Organization, Operations and Significant Accounting Policies in Item 8 of this annual report on Form 10-K under " Financial Statements and Supplementary Data " for additional information on recently issued accounting standards and our plans for adoption of those standards.





48







Results of Operations

Comparison of our Statements of Operations for the Years Ended December 31, 2020


                                    and 2019

During the year ended December 31, 2020, we recorded a net loss of $6.4 million as compared to a net loss of $0.6 million for the year ended December 31, 2019. In the following sections we discuss our revenue, operating expenses, and non-operating income for the year ended December 31, 2020, compared to the year ended December 31, 2019.

Revenue. Presented below is a comparison of our oil and natural gas sales, production quantities and average sales prices for the years ended December 31, 2020 and 2019 (dollars in thousands, except average sales prices):





                                                                      Change
                                    2020          2019         Amount        Percent

         Revenue:
         Oil                      $   2,127     $   6,149     $  (4,022 )         -65 %
         Gas                            203           424          (221 )         -52 %
         Total                    $   2,330         6,573     $  (4,243 )         -65 %

         Production quantities:
         Oil (Bbls)                  60,469       110,090       (49,621 )         -45 %
         Gas (Mcfe)                 116,082       209,518       (93,436 )         -45 %
         BOE                         79,816       145,010       (65,194 )         -45 %

         Average sales prices:
         Oil (Bbls)               $   35.18     $   55.85     $  (20.67 )         -37 %
         Gas (Mcfe)                    1.75          2.03         (0.28 )         -14 %
         BOE                          29.19         45.33        (16.14 )         -36 %

The decrease in our oil sales of $4.0 million for the year ended December 31, 2020, compared to the prior year's period resulted from a 45% decrease in production quantities and a 37% decrease in the average sales price received during 2020, compared to 2019. The decline in oil prices is primarily due to reduced demand on a global basis beginning in mid-March 2020, as a result of the COVID-19 pandemic. In addition, our oil price differential widened for our North Dakota properties where the differential from WTI increased to $6.60 per barrel in 2020, compared to $5.06 per barrel in 2019. The decrease in oil production quantities is the result of operators shutting in production in our North Dakota properties beginning in April 2020 as a response to low oil prices, and the production declines from our South Texas wells, which were drilled in late 2018 and early 2019.

For the year ended December 31, 2020, we produced 79,816 BOE, or an average of 218 BOE per day, as compared to 145,010 BOE or 397 BOE per day in 2019. Production from our properties in South Texas decreased by 60,369 BOE during 2020, a 72% decrease compared to 2019. This decrease was attributable to steep production declines related to wells drilled in our South Texas properties in late 2018 and early 2019. In addition, production from our Williston Basin properties decreased by 12,076 BOE during 2020, which is a 20% reduction compared to 2019. This decrease is primarily due to operators in North Dakota shutting-in production due to low oil prices in the second fiscal quarter of 2020. These declines were partially offset by production from properties acquired during 2020 of 7,252 BOE.





Oil and Natural Gas Production Costs. Presented below is a comparison of our oil
and natural gas production costs for the years ended December 31, 2020 and 2019
(in thousands):



                                                                     Change
                                       2020        2019       Amount       Percent

           Lease operating expenses   $ 1,535     $ 1,848     $  (313 )         -17 %
           Production taxes               168         429        (261 )         -60 %

           Total                      $ 1,703     $ 2,277     $  (574 )         -25 %




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For the year ended December 31, 2020, lease operating expense decreased by $313 thousand or 17% due to cost cutting measures enacted due to low commodity prices and reduced field activity. Production taxes decreased by $261 thousand or 60% compared to 2019. The decrease in production taxes is the result of decreased revenue from oil and natural gas revenue of 65%.

Depreciation, Depletion and Amortization. Our DD&A rate for the year ended December 31, 2020 was $5.09 per BOE, compared to $4.78 per BOE for year ended December 31, 2019. During 2020, our depletion rate was impacted by a reclassification of $2.1 million of our unevaluated properties and ceiling test write downs of $2.9 million. Our DD&A rate can fluctuate as a result of changes in drilling and completion costs, impairments, divestitures, changes in the mix of our production, the underlying proved reserve volumes and estimated costs to drill and complete proved undeveloped reserves.

Impairment of Oil and Natural Gas Properties. For the year ended December 31, 2020, we recorded an impairment of $2.9 million due to the net capitalized cost of our oil and natural gas properties exceeding the full cost ceiling limitation. For the year ended December 31, 2019, there was no such full cost ceiling limitation.





General and Administrative Expenses. Presented below is a comparison of our
general and administrative expenses for the years ended December 31, 2020 and
2019 (in thousands):



                                                                              Change
                                         2020           2019          Amount         Percent

Compensation and benefits,
including directors                   $    1,141     $    1,187     $      (46 )            -4 %
Professional fees, insurance and
other                                      1,506          3,178         (1,672 )           -53 %
Bad debt expense                               -             28            (28 )             - %
Total                                 $    2,647     $    4,393     $   (1,746 )           -40 %

General and administrative expenses decreased by $1,746 thousand for the year ended December 31, 2020 as compared to the year ended December 31, 2019 primarily due to a reduction in professional fees of $1,672 thousand. The decrease in professional fees was primarily attributable to a reduction in legal fees of $1,431 thousand of which $1,216 thousand was directly related to the APEG II litigation and the forensic accounting review. See Litigation-APEG II Litigation and -Litigation with Former Chief Executive Officer in Note 9-Commitments, Contingencies and Related-Party Transactions in the Notes to the Financial Statements included in Item 8 of this annual report on Form 10-K under " Financial Statements and Supplementary Data ". Compensation and benefits decreased $46 thousand due to a reduction in salary expense of $198 thousand due to lower headcount and a reduction in accrued bonuses of $92 thousand. These reductions were partially offset by a $170 thousand increase in the amortization of stock-based compensation awards granted to our Chief Executive Officer and directors in January 2020 and an increase in director compensation of $75 thousand, due to an increase in the number of directors serving on the board of directors.





Non-Operating Income (Expense). Presented below is a comparison of our
non-operating income (expense) for the years ended December 31, 2020 and 2019
(in thousands):



                                                                             Change
                                               2020        2019       Amount       Percent

  Loss on real estate assets held for sale     (1,054 )        -       (1,054 )        -100 %
  Loss on marketable equity securities            (81 )     (229 )        148            65 %
  Warrant revaluation (loss) gain                 (23 )      352         (375 )        -107 %
  Rental property loss                            (27 )      (72 )         45            63 %
  Other income                                     88        200         (112 )          56 %
  Interest expense, net                           (14 )      (11 )         (3 )         -27 %
  Total other (expense) income               $ (1,111 )   $  240     $ (1,351 )        -563 %




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During the year ended December 31, 2020 we reclassified our Riverton, Wyoming office building and land to real estate held for sale. Concurrent with the reclassification we recognized a $651 thousand loss to adjust the carrying amount of the land and building to its estimated fair value of $725 thousand and an additional $403 thousand loss to adjust the carrying amount of three land parcels adjacent to our building to their estimated fair value of $250 thousand. See Note 3-Real Estate Held for Sale in the notes to the consolidated financial statements included in this report.

During the year ended December 31, 2020 we recognized an unrealized loss on marketable equity securities of $81 thousand as compared to an unrealized loss of $229 thousand for the comparable period of 2019. The unrealized loss represents the decline in value of our investment in Anfield Energy Inc. In July 2020, we sold 1,210,455 shares, representing one-third of our total investment for proceeds of $45 thousand. We expect to sell the remaining shares in the second quarter of 2021.

During the year ended December 31, 2020, we recognized a warrant revaluation loss of $23 thousand as compared to a gain of $352 thousand during the year ended December 31, 2019. The current year loss was attributable to an increase in the warrant liability, primarily as a result of the increase in the value of our common stock, which was partially offset by the exercise of 50,000 warrants during the period.

In 2018, due to uncertainty of collection, we wrote off a receivable of $374 thousand related to a refundable deposit for a transaction that was not completed. During the year ended December 31, 2020, we recovered $75 thousand of the receivable. During the year ended December 31, 2019 we recovered $200 thousand related to the recovery of the same receivable. The total amounts of the receivable collected through December 31, 2020 is $275 thousand. The recovery of the deposit is included in other income in the table above.

Interest, net increased by $3 thousand during the year ended December 31, 2020 compared to the comparable period in 2019. Interest in the current year is attributable to interest accrued on the $375 thousand secured note payable with APEG II, which we borrowed in September 2020. Interest in the prior year represents interest on our credit facility, which was repaid in full on March 1, 2019.

Liquidity and Capital Resources

Based on the current commodity price environment, we believe we have sufficient liquidity and capital resources to execute our business plan while continuing to meet our current financial obligations in a challenging commodity price environment.

We have no control over the market prices for oil, and natural gas, although we may be able to influence the amount of our realized revenues from our oil, and natural gas sales through the use of derivative contracts. In March 2021, we entered into a crude oil swap contract to fix the price of 100 barrels of our crude production oil per day from March 1 to December 31, 2021 at $61.90 per barrel. Lower oil and natural gas prices not only decrease our revenues, but an extended decline in oil or gas prices may materially and adversely affect our future business, financial position, cash flows, results of operations, liquidity, ability to finance planned capital expenditures and the oil and natural gas reserves that we can economically produce. Commodity derivative contracts may limit the prices we receive for our oil and natural gas sales if prices rise substantially over the price established by the commodity derivative contract.

The following table sets forth certain measures about our liquidity as of December 31, 2020 and 2019, in thousands:





                                   2020               2019           Change

Cash and equivalents          $        2,854     $        1,532     $  1,322
Working capital surplus (1)            2,499              1,470        1,029
Total assets                          12,363             13,467       (1,104 )
Outstanding debt                         375                  -          375
Total shareholders' equity             8,567              9,210         (643 )

Select Ratios:
Current ratio (2)               2.17 to 1.00       2.20 to 1.00
Debt-to-equity ratio (3)        0.04 to 1.00                N/A




  (1) Working capital is computed by subtracting total current liabilities from
      total current assets.
  (2) The current ratio is computed by dividing total current assets by total
      current liabilities.
  (3) The debt-to-equity ratio is computed by dividing total debt by total
      shareholders' equity.




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As of December 31, 2020, we had a working capital surplus of $2.5 million compared to a working capital surplus of $1.5 million as of December 31, 2019, an increase of $1.0 million. This increase was primarily attributable to $4.5 million in proceeds received from offerings of our common stock during the period less $2.0 million paid for the redemption of our Series A preferred stock and cash of approximately $1.0 million paid for acquisitions and development of our oil and natural gas properties.

As of December 31, 2020, we had cash and cash equivalents of $2.9 million and accounts payable and accrued liabilities of $1.5 million. As of March 22, 2021, we had cash and cash equivalents of $7.3 million and accounts payable and accrued liabilities of approximately $0.9 million.

We own a 14-acre tract in Riverton, Wyoming with a two-story, 30,400 square foot office building and an additional 13-acre parcel of land adjacent to the building. The building served as our corporate headquarters until 2015 and is currently being leased to government agencies and other non-affiliated companies. During 2020, we made the decision to sell the land and building and began a process to determine the price at which we would list the property for sale. The process included obtaining an appraisal, analyzing operating statements for the building, reviewing capitalization rates and consulting a large national commercial real estate company. We determined the realizable value of the real estate assets was in the range of $950 thousand to $1.2 million. A special committee of the board of directors was formed to evaluate the sales process and during 2020, we entered into an agreement with a large national commercial broker and a local broker in Riverton, Wyoming to sell our real estate assets.

In July 2020, we sold 1,210,455 shares of our investment in Anfield Energy Inc. and received proceeds of approximately $45 thousand. The sale represented one-third of our total investment in Anfield. We intend to dispose of the remaining shares during the second fiscal quarter of 2021.

In the fourth fiscal quarter of 2020, we closed on a registered direct offering of 315,810 shares of our common stock and underwritten offering of an additional 1,150,000 shares of our common stock. The net proceeds from the offerings were approximately $4.5 million. In addition, in February 2021, we closed an underwritten offering of 1,131,600 shares of our common stock and received net proceeds of approximately $5.3 million.

If we have needs for financing in 2021, alternatives that we will consider would potentially include entering into a reserve-based credit facility, selling all or a partial interest in certain of our non-operated oil and natural gas assets, selling our marketable equity securities, issuing additional shares of our common stock for cash or as consideration for acquisitions, and other alternatives, as we determine how to best fund our capital programs and meet our financial obligations.





Cash Flows

The following table summarizes our cash flows for the years ended December 31, 2020 and 2019 (in thousands):





                                               2020         2019        Change
           Net cash provided by (used in):
           Operating activities              $   (717 )   $    638     $ (1,355 )
           Investing activities                (1,109 )       (281 )       (828 )
           Financing activities                 3,148       (1,165 )      4,313

Operating Activities. Cash used in operating activities for the year ended December 31, 2020, was $0.7 million as compared to cash provided by operating activities of $0.6 million for 2019, an increase of $1.3 million. This increase was primarily related to the decrease in oil revenues as a result of a reduction in oil prices combined with production declines, primarily in our South Texas properties.





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Investing Activities. Cash used in investing activities for the year ended December 31, 2020, was $1.1 million compared to cash used in investing activities of $0.3 million for 2019, an increase of $0.8 million. The increase in cash used in investing activities was primarily attributable the acquisitions we completed during the year and well work that we performed to bring some of the idle wells acquired back to production.

Financing Activities. Cash provided by financing activities for the year ended December 31, 2020, was $3.1 million as compared to cash used in financing activities of $1.2 million for 2019, an increase of $4.3 million. The increase was due to net proceeds of $4.5 million from the issuance of common stock, $0.6 million in proceeds from the exercise of stock purchase warrants, and $0.4 million from the related party note payable. These increases were partially offset by a cash payment of $2.0 million for the redemption of our Series A preferred stock and $0.2 million in payments on our note payable to finance insurance premiums. In 2019, cash used in financing activities was primarily due to $0.9 million paid on credit facility and $0.2 million in payments on the note payable to finance insurance premiums.

Off-Balance Sheet Arrangements

As part of our ongoing business, we have not participated in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities ("SPEs"), which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

We evaluate our transactions to determine if any variable interest entities exist, if it is determined that we are the primary beneficiary of a variable interest entity, that entity will be consolidated in our consolidated financial statements. We have not been involved in any off-balance sheet arrangements via unconsolidated SPE transactions during the two-year period ended December 31, 2020.

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