NOTES TO FINANCIAL STATEMENTS
Other than amounts pledged as collateral in conjunction with the term bank loan and investments under lockup period, the balance of the Institute’s investment portfolio is unreserved and has no Board restrictions or designations. The Board of Trustees has established an overall Investment Policy. Funds within the portfolio are managed by the Board of Trustees’ designated Investment Committee, which utilizes an independent financial investment advisor. As of December 31, 2024 and 2023, the following financial assets could readily be made available within one year of the balance sheet date to meet operating expenditures: 2024 2023 Cash and cash equivalents..................................................... $ 19,464,875 $ 20,904,245
As of December 31, 2024, future minimum rental commitments under noncancelable leases, classified as operating leases, were as follows:
Real-Estate
Equipment
Total
2025 ............................................................... $ 6,070,669 2026 .................................................................. 6,102,616 2027 .................................................................. 6,135,522 2028 .................................................................. 6,169,416 2029 .................................................................. 3,284,316
$ 15,968 $ 6,086,637
14,940
6,117,556 6,137,916 6,169,416 3,284,316
2,394
- -
Accounts receivable for programs, publications and memberships, net of allowance for credit losses of approximately $540,000 in 2024 and $446,000 in 2023....... 2,190,439 Investments, at fair value............................................................ 59,202,902
Thereafter...........................................................
711,264
-
711,264
Total minimum lease payments..................... 28,473,803 (Less): amounts representing interest................. (996,247)
33,302 (1,366)
28,507,105
2,375,857 59,732,965
(997,613)
$ 27,477,556 $ 31,936 $ 27,509,492 Supplemental balance sheet information related to operating leases at December 31, 2024 and 2023 is as follows: 2024 2023 ROU assets............................................................... $ 34,123,951 $ 34,115,660 Less: accumulated amortization................................. (12,833,548) (8,488,904) $ 21,290,403 $ 25,626,756 Weighted-average remaining lease term: 4.67 years 5.67 years Weighted-average discount rate: 1.55% 1.55% The components of lease costs for the years ended December 31, 2024 and 2023 is as follows: 2024 2023 Operating lease cost................................................ $ 4,816,556 $ 4,824,788
Total financial assets available within one year................. $ 80,858,216
$ 83,013,067
NOTE 5 - FIXED ASSETS At December 31, 2024 and 2023, fixed assets consisted of the following: 2024 Furniture, equipment and computer hardware........................ $ 14,907,873 Leasehold improvements........................................................... 18,513,475 Software..................................................................................... 53,666,793
2023
$ 15,106,271
18,906,957 45,657,806
Total fixed assets................................................................. 87,088,141
79,671,034
Less: accumulated depreciation and amortization................... (56,546,064)
(52,043,056)
Net fixed assets................................................................ $ 30,542,077
$ 27,627,978
Depreciation and amortization expense related to fixed assets for the years ended December 31, 2024 and 2023 totaled approximately $5,669,000 and $4,723,000, respectively. NOTE 6 - GOODWILL AND INTANGIBLE ASSETS In 2014, the Institute acquired the programming assets of The SEC Institute, a leader in the training of accountants, auditors, attorneys, and other related professionals for Securities & Exchange Commission compliance, financial reporting, and accounting education. The SEC Institute operates as a division of the Institute. The following tables summarize the changes in the Institute’s goodwill and intangible assets for the fiscal years ended December 31, 2024 and 2023:
Supplemental cash flow information related to leases for the years ended December 31, 2024 and 2023 follows: 2024 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases....... $ 5,885,392
2023
$ 5,619,090
2024
2023
NOTE 9 - REVENUES Revenue from programs is recognized at the time the program is held. Revenue from subscriptions to publications is recognized pro rata over the subscription period as recipients receive benefits accordingly over the subscription period. Memberships fees are received in exchange for benefits provided by the Institute and are recognized pro rata over the membership period as members simultaneously receive and consume the benefits over the respective period. Revenue from book orders (publications) is recognized at the time of shipment and, at the same time, an allowance is recorded to account for returns. Revenue recognition for these various revenue streams coincides with the completion of the corresponding performance obligations to their customers. Programs, publications, and membership fees are generally billed on the same day of order placement and are due upon receipt. Amounts received in advance of recognition are recorded as deferred revenues. The changes in deferred revenues were caused by normal timing differences between
Intangibles Goodwill
Intangibles Goodwill
Book value, beginning of year.............$ 140,000 $ 476,500
$ 190,000 $ 571,800
Amortization........................................
-
(95,300)
(50,000)
(95,300)
Book value, end of year.......................$ 140,000 $ 381,200
$ 140,000 $ 476,500
As of December 31, 2024 and 2023 intangibles are comprised of trademark with a carrying value of $140,000, with an indefinite life and content of $0, which is amortized over 10 years. NOTE 7 - TERM BANK LOAN The Institute has a $12,000,000 term loan with a bank that matures on May 22, 2025 with a fixed interest rate of 2.3% per annum. Principal payments of $250,000 are due quarterly and the balance at maturity. At December 31, 2024 and 2023, the balance on the term bank loan was $7,500,000 and $8,500,000, respectively. The Institute pledged certain shares of stock as collateral for the loan (Note 3). The Institute has a $2,000,000 revolving line of credit with a maturity date of June 30, 2026 with an interest rate equal to an adjusted term SOFR plus 1.00% per annum and 0.15% per annum facility fee on the unused portion of available funds. At December 31, 2024 and 2023, there were no borrowings on the line of credit. Future principal payments on the term bank loan were as follows at December 31, 2024: Year ending December 31, 2025.......................................................................$ 7,500,000
the satisfaction of performance obligations and customer payments. The disaggregation of the Institute’s revenue streams are as follows: 2024 Programs. ..................................................................... $ 5,843,192 Publications.................................................................... 10,215,816 Memberships. ................................................................ 71,120,534
2023
$ 6,175,092
9,435,338 67,231,149
Total revenues..................................................... $ 87,179,542
$ 82,841,579
Management has elected the practical expedient not to disclose information about remaining performance obligations for the above revenue streams as these contracts primarily have original terms that are one year or less. NOTE 10 - DEFERRED REVENUES At December 31, 2024 and 2023, deferred revenues consisted of the following:
NOTE 8 - LEASES Operating Leases
The Institute is obligated under two non-cancellable operating leases for office premises in San Francisco, California and New York, New York, that expire on July 31, 2030 and May 31, 2029, respectively. The lease payments are subject to increases for taxes and other building expenses. In conjunction with the New York City lease agreement, the Institute signed a letter of credit representing approximately five months of rent commitments. Additionally, the terms of the New York City and San Francisco lease agreements include both landlord contributions toward the cost of the construction related to the new office space as well as rent abatements during and after the construction period. Total rent and non-rent expenses (cleaning charges, real estate taxes, electric charges and tenant share of building operating expenses) amounted to $5,994,000 and $5,890,000 in 2024 and 2023, respectively. The Institute has several smaller equipment leases as well. Total rent expense for these operating equipment leases for years ending December 31, 2024 and December 31, 2023, was $18,000 and $23,000.
2024
2023
Programs. ..................................................................... $
84,919
$
118,864
Publications..................................................................... 3,022,217 Memberships. ................................................................. 35,627,066
2,987,867 34,663,203
Total deferred revenues....................................... $ 38,734,202
$ 37,769,934
12
2024 Annual Report
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