Note 7 - Operating Leases

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

Note 7. 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 $157,682 and $150,129 for the years ended December 31, 2023 and 2022, respectively. The lease expires on July 31, 2024.

The Company leased approximately 3,794 square feet of office space for its Nashville, Tennessee sales offices and operations. Rental expense under the operating lease was $36,995 and $102,976 for the years ended December 31, 2023 and 2022, respectively. The lease expired on April 30, 2023. We did enter into a lease extension, or new lease agreement in Nashville, Tennessee upon the expiration of the lease agreement.

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 years ended  December 31, 2023 and 2022 was $117,836 and $112,504 respectively.

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 years ended  December 31, 2023 and 2022 was $79,467 and $83,610 respectively. On January 26, 2023, the Company entered into a lease amendment commencing on February 1, 2023, extending the term of the existing lease for a period of 23 months and expiring on January 31, 2025.

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 years ended  December 31, 2023 and 2022 was $48,113 and $46,658 respectively.

On October 19, 2021, the Company entered into a lease amendment to the existing lease in San Antonio, Texas commencing April 1, 2022 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. Rental expense for the year ended  December 31, 2023 and 2022 was $104,375 and $75,269 respectively.

The Company has various copier equipment with leases that have not expired. Rental expense under the operating lease was $6,546 and $12,729 for the years ended December 31, 2023 and 2022, respectively.

The weighted average remaining lease term is 4.20 years. The weighted average discount rate is 4.47%

The Company recognized total operating lease expense of approximately $674,000 and $711,000 for the years ended December 31, 2023 and 2022, respectively. In 2023, the operating lease expense of $674,000 consisted of $544,000 of fixed operating expense and $130,000 of interest expense.

The maturities of lease liabilities are as follows at December 31, 2023:

Year ended December 31,
2024	$	633,616
2025		454,928
2026		447,683
2027		447,683
2028		447,683
Thereafter		478,836
Total minimum lease payments		2,910,429
Less imputed interest		(357,669	)
Total lease liabilities	$	2,552,760