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Note 5 - Leases

6 Months Ended

Jun. 30, 2022

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. During the quarter, the Company terminated the lease agreement for the office and production space in Taicang, China.

During the six months ended June 30, 2022, cash paid for finance lease liabilities was $217,473, and the Company recorded finance lease expenses in other income (expenses) of $148,157.

During the six months ended June 30, 2022, cash paid for operating lease liabilities was $546,530, and the Company recorded operating lease expense of $627,549.

Supplemental balance sheet information related to leases as of June 30, 2022, and December 31, 2021 was as follows:

	June 30, 2022			December 31, 2021
Operating leases:
Operating lease right-of-use assets	$	3,468,258		$	6,925,807

Operating lease liabilities – current	$	552,400		$	846,544
Operating lease liabilities – long-term		2,915,857			6,154,064
Total operating lease liabilities	$	3,468,257		$	7,000,608

Finance leases:
Property and equipment, at cost	$	3,055,081		$	3,334,830
Accumulated depreciation		(412,985	)		(336,337	)
Property and equipment, net	$	2,642,096		$	2,998,494

Finance lease liabilities – current	$	344,528		$	373,824
Finance lease liabilities – long-term		2,117,126			2,499,591
Total finance lease liabilities	$	2,461,654		$	2,873,415

Weighted average remaining lease term:
Operating leases		9.7			8.9
Finance leases		5.4			5.9

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

Maturities of lease liabilities at June 30, 2022 were as follows:

	Operating Lease			Finance lease
2022 (remaining 6 months)	$	386,343		$	205,150
2023		726,131			407,466
2024		588,309			408,343
2025		306,659			405,016
2026		296,523			370,372
Thereafter		2,298,056			894,329
Total payment under lease agreements		4,602,021			2,691,036
Less imputed interest		(1,133,764	)		(229,382	)
Total lease liability	$	3,468,257		$	2,461,654