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Note 5 - Leases

12 Months Ended

Dec. 31, 2021

Lessee, Operating and Finance Leases [Text Block]

NOTE 5 - LEASES

The Company leases certain vehicles, real property, production equipment 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 as well as in Taicang, China and White Bear Lake, Minnesota. As of September 1, 2021 the Company entered a new lease agreement for a 8,524.67 square meter production facility in Taicang, China. The lease term is a minimum of 8 years, and the monthly lease payment is RMB 30 per square meter until August 31, 2025 (RMB 255,740 / $ 40,918) and RMB 33.6 (RMB 286,429 / $ 45,829 ) per square meter from September 1, 2025 until the end of the lease period. The parties have agreed on a 50% discount on the lease payments for the period September 1, 2021 to June 30, 2022. The lease in White Bear Lake expired in February 2021, and due to the closure of the activity in North America, the lease has not been extended.

During the year ended December 31, 2021, cash paid for amounts included for the measurement of operating lease liabilities was $1,057,810, and the Company recorded operating lease expenses included in operating expenses of $1,135,814.

During the year ended December 31, 2021, cash paid for amounts included for the measurement of finance lease liabilities was $470,389, and the Company recorded finance lease expenses included in other income (expenses) of $265,221.

Supplemental balance sheet information related to leases as of December 31, 2021 and 2020 was as follows:

	December 31, 2021			December 31, 2020
Operating leases:
Operating lease right-of-use assets	$	6,925,807		$	4,947,734

Operating lease liabilities – current	$	846,544		$	1,026,235
Operating lease liabilities – long-term		6,154,064			4,159,225
Total operating lease liabilities	$	7,000,608		$	5,185,460

Finance leases:
Property and equipment, at cost	$	3,334,830		$	4,819,201
Accumulated depreciation		(336,337	)		(1,389,488	)
Property and equipment, net	$	2,998,494		$	3,429,713

Finance lease liabilities – current	$	373,824		$	394,839
Finance lease liabilities – long-term		2,499,591			3,112,496
Total finance lease liabilities	$	2,873,415		$	3,507,335

Weighted average remaining lease term:
Operating leases		8.9			10.0
Finance leases		5.9			6.9

Weighted average discount rate:
Operating leases		6.5	%		6.2	%
Finance leases		2.8	%		2.8	%

Maturities of lease liabilities at December 31, 2021 were as follows:

	Operating lease			Finance lease
2022	$	1,220,960		$	449,480
2023		1,234,435			444,777
2024		1,083,993			445,735
2025		794,225			442,102
2026		818,507			404,679
Thereafter		3,828,035			976,221
Total payment under lease agreements		8,980,155			3,162,994
Less imputed interest		(1,979,546	)		(289,579	)
Total lease liability	$	7,000,608		$	2,873,415