XML 38 R23.htm IDEA: XBRL DOCUMENT v3.25.1
OPERATING LEASE
 12 Months Ended
Dec. 31, 2024
Operating Lease  
OPERATING LEASE

NOTE 14. OPERATING LEASE

 

The Company entered into an operating lease with a third party in October 2019 for copiers used for office and warehouse purposes. The terms of the lease include 48 monthly payments of $1,598 with a maturity date of October 2023. The Company has the option to purchase such equipment at maturity for its estimated fair market value at that point in time. The lease for the Company’s copier operating lease expired and was renewed in October 2023.

 

The Company entered into an operating lease with a third party in October 2023 for copiers used for office and warehouse purposes. The terms of the lease include 48 monthly payments of $1,786 with a maturity date of October 2027. The Company has the option to purchase such equipment at maturity for its estimated fair market value at that point in time. The remaining lease term for the Company’s copier operating lease as of December 31, 2024 was thirty-four months.

 

The Company entered into an operating lease with a third party on November 27, 2024 for a copier used for office purposes. The terms of the lease include 36 monthly payments of $90 with a maturity date of November 27, 2027. The Company has the option to purchase such equipment at maturity for its estimated fair market value at that point in time. The remaining lease term for the Company’s copier operating lease as of December 31, 2024 was thirty-five months.

 

The Company entered into an operating lease with a third party on October 16, 2024 for office space used by the entertainment segment and temporarily by the video solutions segment. The terms of the lease include 36 monthly payments of $7,251.92 with a maturity date of October 31, 2027. The remaining lease term for the Company’s office space lease as of December 31, 2024 was thirty-four months.

 

On May 13, 2020, the Company entered into an operating lease for new warehouse and office space, which served as its new principal executive office and primary business location prior to the April 30 purchase and sale agreement. The original lease agreement was amended on August 28, 2020 to correct the footage under lease and monthly payment amounts resulting from such correction. The lease terms, as amended include no base rent for the first nine months and monthly payments ranging from $12,398 to $14,741 thereafter, with a termination date of December 2026. The Company is responsible for property taxes, utilities, insurance and its proportionate share of common area costs related to its new location. The Company took possession of the leased facilities on June 15, 2020. On September 16, 2024, the Company and the landlord agreed to terminate the lease and the Company relinquished possession and control of the premises. The Company reversed the related right of use asset by $349,710 and its $37,500 rent deposit. In addition, the Company reversed its right of use lease liability by $396,595, resulting in a net gain from the lease extinguishment totaling $9,385 for the year ended December 31, 2024.

 

On June 30, 2021, the Company completed the acquisition of its first medical billing company, through Nobility Healthcare. Upon completion of this acquisition, Nobility Healthcare became responsible for the operating lease for the seller’s office space. The lease terms include monthly payments ranging from $2,648 to $2,774 thereafter, with a termination date in July 2024. The Company was responsible for property taxes, utilities, insurance and its proportionate share of common area costs related to this location. The lease term expired in July 2024 and was not renewed by the Company.

 

 

On August 31, 2021, the Company completed the acquisition of its second acquired medical billing company, through Nobility Healthcare. Upon completion of this acquisition, Nobility Healthcare became responsible for the operating lease for the seller’s office space. The lease was renewed in April 2023 with favorable terms and payments ranging from $7,436 to $8,877 thereafter, with a termination date in March 2030. The Company is responsible for property taxes, utilities, insurance and its proportionate share of common area costs related to this location. The remaining term for the Company’s office operating lease was sixty-three months as of December 31, 2024.

 

On September 1, 2021, the Company completed the acquisition of Goody Tickets, LLC and TicketSmarter, LLC through TicketSmarter. Upon completion of this acquisition, the Company became responsible for the operating lease for TicketSmarter’s office space. The lease terms include monthly payments ranging from $7,211 to $7,364 thereafter, with a termination date of December 2022. The Company is responsible for property taxes, utilities, insurance and its proportionate share of common area costs related to this location. The Company took possession of the leased facilities on September 1, 2021. The Company currently rents this space on a month-to-month basis with intentions to relocate upon the identification of suitable space.

 

On January 1, 2022, the Company completed the acquisition of a private medical billing company, through its revenue cycle management segment. Upon completion of this acquisition, the Company became responsible for the operating lease for the seller’s office space. The lease terms include monthly payments ranging from $4,233 to $4,626, with a termination date of June 2025. The Company is responsible for property taxes, utilities, insurance and its proportionate share of common area costs related to this location. The Company took possession of the leased facilities on January 1, 2022. The Company terminated this lease in January 2024 and reversed the right of use asset and lease liability by $73,894.

 

Lease expense related to the Company’s office space and copier operating leases was recorded on a straight-line basis over the lease term. Total lease expense under the five operating leases was approximately $627,212 for the year ended December 31, 2024.

 

The weighted-average remaining lease-term related to the Company’s lease liabilities as of December 31, 2024 and December 31, 2023 were 4.3 years and 4.5 years, respectively.

 

The discount rate implicit within the Company’s operating leases was not generally determinable, and therefore, the Company determined the discount rate based on its incremental borrowing rate on the information available at commencement date. As of the commencement date, the operating lease liabilities reflect a weighted average discount rate of 8%.

 

The following sets forth the operating lease right of use assets and liabilities as of December 31, 2024:

 

Assets:    
Operating lease right of use assets  $718,509 
      
Liabilities:     
Operating lease obligations-current portion   158,304 
Operating lease obligations-less current portion   560,205 
Total operating lease obligations  $718,509 

 

Following are the minimum lease payments for each year and in total.

 

Year ending December 31:    
2025  $210,086 
2026   210,925 
2027   189,275 
2028   100,863 
2029 and thereafter   130,086 
Total undiscounted minimum future lease payments   841,235 
Imputed interest   (122,726)
Total operating lease liability  $718,509