Note 10 - Commitments and Contingencies

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

Note 10 – Commitments and Contingencies

In January 2022, the Company entered into a commercial operating lease agreement for its office space in Florida, expiring on December 31, 2024. The lease requires the Company to pay for its insurance, taxes, and its share of common operating expenses. The lease resulted in an increase in its right of use assets and lease liabilities of $89,312, using a discount rate of 10%. The lease was cancellable by the landlord at any time prior to December 31, 2022 based on certain capital raising contingencies which the Company met in April 2022. 

In February 2022, the Company entered into an additional commercial operating lease for its primary office and warehouse/distribution space in Texas. The lease requires the Company to pay for its insurance, taxes, and its share of common operating expenses. This lease expires in March 2027. The space remained under buildout and Landlord control during the three months ended March 31, 2022 with the Company acquiring control of the lease space effective April 1, 2022; as a result, a right of use asset and lease liability was recognized of $337,226 as of April 1, 2022 using a discount rate of 10%.

Operating lease liabilities are classified as other current and non-current liabilities in the Company’s consolidated balance sheet.

Total operating lease costs were approximately $128,000 for the year ended December 31, 2022, consisting solely of base rental and common area maintenance costs and were zero for the year ended December 31, 2021.   The Company has no financing leases.  The weighted average remaining lease term is 3.8 years at December 31, 2022.

Future undiscounted cash flows under these leases are:

2023	$	109,381
2024		112,833
2025		80,273
2026		82,705
2027		21,284
Total operating lease payments		406,476
Discount factor		(71,431	)
Present value of operating lease liabilities		335,045
Current portion of operating lease liabilities		(79,453	)
Non-current portion of operating lease liabilities	$	255,592