Note 8 - Lease Revenue

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Lessor, Leases [Policy Text Block]

8.

Lease Revenue

Other revenue consists of revenue derived from leasing a portion of our headquarters building to Nutracom effective

January 1, 2019.

The leased space, encompassing manufacturing, warehouse, and certain office space, is for a term of

seven

years, with a tenant option for an additional

five

-year term. Annual lease amounts range from

$193,000

to

$410,000

over the

seven

-year term.

We recognize lessor rent revenue on a straight-line basis over the term of the lease. As part of this straight-line methodology, the cumulative rental billings

may

be greater or less than the financial period's recognized revenue; such timing differences are recognized on the balance sheet as an accrued other liability or an unbilled rent revenue receivable.

Also included in other revenue are billings to the tenant for its share of the facility's common area costs such as real estate taxes, maintenance, and utilities; totaling approximately

$358,600

and

$305,100

for the

nine

month periods ending

September 30, 2020

and

2019,

respectively. These same common area costs plus the tenant's share of the facilities' depreciation are recorded as cost of goods sold.

The following table details lessor's estimated remaining straight-line rent revenue over the

seven

-year lease term as compared with fixed rent amounts under the lease agreement.

	Estimated
	Straight-line		Lease Agreement
	Rent Revenue		Fixed Rent
Remainder of 2020	$	86,433	$	48,225
2021		345,732		385,800
2022		345,732		385,800
2023		345,732		385,800
2024		345,732		409,913
Thereafter		345,733		409,912
Total	$	1,815,094	$	2,025,450