Note 8 - Lease Commitments

12 Months Ended

Nov. 30, 2023

Notes to Financial Statements

Commitments Disclosure [Text Block]

Note 8 – Lease Commitments

The Company rents its office under an operating lease which requires it to pay base rent, real estate taxes, insurance and general repairs and maintenance. A lease was signed in June of 2018, effective October 1, 2018, expiring on March 31, 2024 with an option to renew for a 5 year period. A six month rent abatement and tenant allowance was provided in the lease, with any unused portion to be applied to base rent. The unused portion was determined to be $21,300. The renewal option has not been included in the measurement of the lease liability.

Monthly rent expense is recognized on a straight-line basis over the term of the lease. Rent expenses for fiscal 2023 and 2022 were $97,100 and $91,100, respectively. At November 30, 2023, the remaining lease term was 4 months. The operating lease is included in the balance sheet at the present value of the lease payments at a 5.25% discount rate. The discount rate was considered to be an estimate of the Company’s incremental borrowing rate.

Gross future minimum annual rental commitments as of November 30, 2023, are as follows:

	Undiscounted Rent Payments
Year Ending November 30:
2024		40,177
Total Undiscounted Rent Payments	$	40,177
Present Value Discount		(359	)
Present Value	$	39,818
Short-term lease liability	$	39,818
Long-term lease liability		-
Total Operating Lease Liability	$	39,818

On February 15, 2024 a lease was signed, effective April 1, 2024 for a 6 year period, expiring on March 31, 2030. The Company will be required to pay base rent, real estate taxes, insurance and general repairs and maintenance. Base rent is $23.00 per square foot for the first year with a 3% increase per year before rent abatement and tenant allowance. There is a total of 10 months of gross rent abatement, 2 months in each of the first four years and then one month in the remaining 2 years. The lease includes a tenant allowance of $158,900 to be applied evenly to the 62 monthly rent payments.