Note 8 - Lease Obligations

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Lessee, Operating Leases and Finance Leases [Text Block]

NOTE 8 – LEASE OBLIGATIONS

The Company leases office and warehouse space under operating leases. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments under the lease. Operating lease, right-of-use assets, and liabilities are recognized at the lease commencement date based on the present value of lease payments over the reasonably certain lease term. The implicit rates with the Company’s operating leases are generally not determinable and the Company uses its incremental borrowing rate at the lease commencement date to determine the present value of its lease payments. The determination of the Company’s incremental borrowing rate requires judgement. The company determines its incremental borrowing rate for each lease using its then-current borrowing rate. Certain of the Company’s leases include options to extend or terminate the lease. The Company establishes the number of renewal options periods used in determining the operating lease term based upon its assessment at the inception of the operating lease. The option to renew the lease may be automatic, at the option of the Company, or mutually agreed to between the landlord and the Company. Once the facility lease term has begun, the present value of the aggregate future minimum lease payments is recorded as a right-of-use asset. Lease expense is recognized on a straight-line basis over the term of the lease.

	Year Ended
	December 31,
	2023			2022
Operating lease costs	$	287,108		$	285,159
Short-term operating lease costs		7,200			12,066
Financing lease expense:
Amortization of right-of-use assets		6,023			4,172
Interest on lease liabilities		395			649
Total financing lease expense		6,418			4,821
Total lease expense	$	300,726		$	302,046
Right-of-use assets obtained in exchange for new operating lease liabilities	$	—		$	—
Right-of-use assets obtained in exchange for new financing lease liabilities	$	—		$	—
Weighted-average remaining lease term (years) - operating leases		11.1			12.1
Weighted-average remaining lease term (years) - financing leases		1.2			1.1
Weighted-average discount rate - operating leases		6.75	%		6.75	%
Weighted-average discount rate - financing leases		6.75	%		7.93	%

Maturities of lease liabilities as of December 31, 2023, were as follows:

	Operating leases			Finance leases
For the years ended December 31,
2024	$	287,108		$	2,929
2025		287,108			—
2026		287,108			—
2027		287,108			—
2028		287,108			—
Thereafter		1,738,084			—
Total minimum lease obligations		3,173,624			2,929
Less-amount representing interest		(941,380	)		(97	)
Present value of minimum lease obligations		2,232,244			2,832
Current maturities		(140,733	)		(2,832	)
Lease obligations, net of current maturities	$	2,091,511		$	—