TSS, Inc. Leases Disclosure

Note 4 -

Leasing Arrangements

 

We have operating leases for our office and integration facilities as well as for certain equipment and vehicles. Our leases have remaining lease terms of 15 to 65 months. As of December 31, 2023, we have not entered into any lease arrangement classified as a finance lease.

 

We determine if an arrangement is a lease at inception. Operating leases are included in lease right-of-use assets, current lease liabilities and lease liabilities, non-current, on our consolidated balance sheets. We have elected an accounting policy to not recognize short-term leases (one year or less) on the balance sheet. We also elected the package of practical expedients which applies to leases that commenced before the adoption date. By electing the package of practical expedients, we did not need to reassess whether any existing contracts are or contain leases, the lease classification for any existing leases and initial direct costs for any existing leases.

 

Right-of-use assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. When the implicit rate of the lease is not provided or cannot be determined, we use our incremental borrowing rate based on the information available at the commencement date to determine the present value of future payments. Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise those options. Lease expense for minimum lease payments is recognized on a straight- line basis over the lease term. Components of lease expense and other information is as follows (in ‘000’s):

 

		Years ended December 31,
		2023				2022
Lease expense
Operating lease cost		$	869			$	844
Operating Lease – operating cash flows		$	(457	)		$	(806	)
New right-of-use assets – operating leases			-				-

 

 

The following presents information regarding the Company's operating leases as of December 31:

 

		2023				2022
Weighted average remaining lease term – operating leases (months)			63				75
Weighted average discount rate – operating leases			6	%			6	%

 

Future minimum lease payments under non-cancellable leases as of December 31, 2023, were as follows (in ‘000’s): 

 

		Fiscal Year
2024		$	890
2025			909
2026			934
2027			962
2028			991
Thereafter			250
Total minimum future lease payments			4,936
Less imputed interest			(617	)
Total		$	4,319
Reported as of December 31, 2023:
Current portion of lease liability		$	688
Non-current portion of lease liability			3,631
		$	4,319