Note 8 - Operating Leases

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

Note 8. Operating Leases

The Company leases approximately 10,535 square feet of office space for its San Antonio, TX executive offices and operations. Rental expense under the operating lease was $143,149 and $136,713 for the years ended December 31, 2021 and 2020, respectively. The lease expires on July 31, 2024.

The Company leases approximately 3,794 square feet of office space for its Nashville, Tennessee sales offices and operations. Rental expense under the operating lease was $85,122 and $81,474 for the years ended December 31, 2021 and 2020, respectively. The lease expires on April 30, 2023.

The Company assumed a lease in San Antonio, Texas as a part of the Information Management Solutions, LLC acquisition for its Output Solutions employees and warehouse operations.  The lease has a remaining life of 45 months and expires on September 30, 2024. The space leased is 22,400 square feet. Annual rents during the lease term range from $123,554 to $133,703. Rental expense for the year ended  December 31, 2021 was $107,647.

On January 1, 2021, we entered into a lease in Austin, Texas commencing on January 1, 2021 for our Austin technology organization. The lease is for a period of 25 months and expires on January 31, 2023. The space leased is 1,890 square feet. Rental expense for the year ended  December 31, 2021 was $81,353.

On March 15, 2021, we entered into a lease amendment to our existing lease in San Antonio, Texas commencing April 1, 2021 and expiring on September 30, 2024 running concurrently with the existing lease.   The incremental space leased is 2,734 square feet.   The incremental annual rent during the lease term ranges from $56,047 to $60,148. Rental expense for the year ended  December 31, 2021 was $34,125.

On October 19, 2021, the Company entered into a lease amendment to the existing lease in San Antonio, Texas commencing at a date to be determined and expiring on September 24, 2024 running concurrently with the existing lease.  The incremental space lease is 6,628 square feet.   The incremental annual rent during the lease term ranges from $135,874 to $145,816.

The Company has various copier equipment with leases that have not expired. Rental expense under the operating lease was $12,729 and $25,000 for the years ended December 31, 2021 and 2020, respectively.

The weighted average remaining lease term is 5.27 years. The weighted average discount rate is 4.17%

The Company recognized total operating lease expense of approximately $591,000 and $360,000 for the years ended December 31, 2021 and 2020, respectively. In 2021, the operating lease expense of $591,000 consisted of $457,000 of fixed operating expense and $134,000 of interest expense.

The maturities of lease liabilities are as follows at December 31, 2021:

Year ended December 31,
2022	$	621,802
2023		554,916
2024		518,935
2025		414,138
2026		414,138
Thereafter		917,081
Total minimum lease payments		3,441,010
Less imputed interest		(460,692	)
Total lease liabilities	$	2,980,318