NOTE

- LEASES

The Company leases certain vehicles, real property and office equipment under lease agreements. The Company evaluates each lease to determine its appropriate classification as an operating lease or finance lease for financial reporting purposes. The majority of our operating leases are non-cancelable operating leases for production and office space in Hobro, Aarhus and Copenhagen, Denmark; and White Bear Lake, Minnesota.

Supplemental balance sheet information related to leases as of

March 31, 2020

and

December 31, 2019

was as follows:

	March 31, 20 20			December 31, 201 9
Operating leases :
Operating lease right-of-use	$	4,876,698		$	5,053,614

Operating lease liabilities - current	$	985,360		$	999,685
Operating lease liabilities – long-term		3,994,609			4,141,855
Total operating lease liabilities	$	4,979,969		$	5,141,540

Finance leases :
Property and equipment, at cost	$	1,334,310		$	1,362,272
Accumulated depreciation		(1,141,792	)		(1,156,145	)
Property and equipment, net	$	192,518		$	206,127

Finance lease liabilities - current	$	34,403		$	34,772
Finance lease liabilities – long-term		160,006			172,273
Total finance lease liabilities	$	194,409		$	207,045

Weighted average remaining lease term:
Operating leases		10.3			10.2
Finance leases		5.2			5.5

Weighted average discount rate:
Operating leases		6.3	%		6.4
Finance leases		3.9	%		3.9	%

Maturities of lease liabilities at

March 31, 2020

were as follows:

	Operating lease			Finance lease
April 2020 – March 2021	$	1,019,750		$	41,422
April 2021 – March 2022		819,998			41,422
April 2022 – March 2023		763,059			38,370
April 2023 – March 2024		733,877			35,358
April 2024 – March 2025		481,982			35,623
Thereafter		2,889,807			23,699
Total payment under lease agreements		6,708,473			215,894
Less imputed interest		(1,728,504	)		(21,485	)
Total lease liability	$	4,979,969		$	194,409