Leases

12 Months Ended

Dec. 31, 2023

Leases

Leases

8. Leases

The Company has leases for corporate and operational facilities (“real estate leases”).

Real estate leases. Substantially all real estate leases have remaining terms of six (6) to nine (9) years, with additional five (5) year extensions available. All of these leases require a fixed lease payment that contains an annual lease payment escalation provision ranging from 3% to 4% per year. Certain leases contain early termination provisions that would require payment of unamortized tenant improvements, real estate broker commissions paid, and up to six (6) months of rent to compensate the landlord for early termination. The cost to exit a lease would be significant and potentially range $0.2 million to $0.8 million. The earliest any lease termination provisions could be exercised would be in 2023, which the Company did not exercise.

The components of lease expense were as follows:

	YEARS ENDED
	DECEMBER 31,
	2023		2022
Operating lease expense	$	12,463	$	16,351
Finance lease expense:
Amortization of right of use assets	$	684,600	$	682,102
Interest on finance lease liabilities		214,954		241,444
Total finance lease expense	$	899,554	$	923,546

Lease expense is included in general and administrative expenses in the consolidated statement of operations. Amortization of right of use assets is include in depreciation and amortization in the consolidated statement of operations.

Supplemental cash flow information related to leases was as follows:

	YEARS ENDED
	DECEMBER 31,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from leases	$	227,417	$	257,795
Financing cash flows from leases		586,833		600,438

Supplemental balance sheet information related to leases was as follows:

	DECEMBER 31,
	2023			2022
Lease right of use assets, net	$	4,045,222		$	4,723,899
Current portion of lease liabilities		638,258			596,529
Lease liabilities, net of current portion		4,114,516			4,745,909
Weighted average remaining lease term
Finance leases		10.2			11
Weighted average discount rate
Finance leases		3.5	%		3.5	%

Maturities of lease liabilities as of December 31, 2023, were as follows:

2024	$	822,740
2025		730,500
2026		631,541
2027		633,663
2028		695,939
Thereafter		2,228,121
Total undiscounted finance lease payments		5,742,504
Less: Imputed interest		989,730
Total lease liability	$	4,752,774

On January 1, 2022, the Company entered into an amendment to its lease agreement for its Tampa office to amend the term and the extension option to June 30, 2022. As a result of the amendment, the Company removed the lease right of use asset and lease liability from its consolidated balance sheet and accounted for the lease as month to month and recorded the monthly rent expense in its consolidated statement of operations until termination on June 30, 2022.