Note 9 - Leases

9 Months Ended

Sep. 30, 2025

Notes to Financial Statements

Lessee, Operating Leases and Finance Leases [Text Block]

(9)      Leases

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.

In January 2025, the Company entered into a new operating lease agreement for a second facility across the street from its main headquarters. The initial term of the lease is five years, ending December 2029 and includes the option to extend the lease for two additional terms of five years each. The monthly lease rate increases annually by 3% each year. The Company has the right of first refusal on this property that allows it to match any offer to purchase this property. The Company recorded an operating lease right-of-use asset and corresponding operating lease right-of-use liability of $830,720 for this lease based on a life of 15 years and incremental borrowing rate of 6.75%. During the nine months ended September 30, 2025, the Company has been building out the new facility for future production with an expected startup in Q2 2026.

	Nine Months Ended September 30,
	2025			2024
Operating lease costs	$	281,121		$	215,331
Short-term operating lease costs		11,187			5,400
Financing lease expense:
Amortization of right-of-use assets		—			2,304
Interest on lease liabilities		—			92
Total financing lease expense		—			2,396
Total lease expense	$	292,308		$	223,127
Right-of-use assets obtained in exchange for new operating lease liabilities	$	830,720		$	—
Right-of-use assets obtained in exchange for new financing lease liabilities	$	—		$	—
Weighted-average remaining lease term (years) - operating leases		10.7			10.3
Weighted-average remaining lease term (years) - financing leases		—			0.2
Weighted-average discount rate - operating leases		6.75	%		6.75	%
Weighted-average discount rate - financing leases		—			6.75	%

The future minimum payments under these operating lease agreements are as follows:

	Operating Leases			Financing Leases
2025 (excluding the nine-months ended September 30, 2025)	$	93,707			—
2026		374,828			—
2027		374,828			—
2028		374,828			—
2029		374,828			—
Thereafter		2,328,178			—
Total minimum lease obligations		3,921,197			—
Less-amounts representing interest		(1,140,073	)		—
Present value of minimum lease obligations		2,781,124			—
Current maturities		(193,001	)		—
Lease obligations, net of current maturities	$	2,588,123		$	—