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Note 6 - Leases

12 Months Ended

Dec. 31, 2022

Lessee, Operating and Finance Leases [Text Block]

NOTE 6 - 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. The lease agreements expire on November 30, 2034, August 31, 2024, and August 31, 2028, respectively. During the second quarter of 2022, the Company terminated the lease agreement for the office and production space in Taicang, China.

During the year ended December 31, 2022, cash paid for amounts included for the measurement of operating lease liabilities was $906,373, and the Company recorded operating lease expenses included in operating expenses of $984,236.

During the year ended December 31, 2022, cash paid for amounts included for the measurement of finance lease liabilities was $427,113, and the Company recorded finance lease expenses included in other income (expenses) of $323,081.

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

	December 31, 2022			December 31, 2021
Operating leases:
Operating lease right-of-use assets	$	3,271,997		$	6,925,807

Operating lease liabilities – current	$	561,182		$	846,544
Operating lease liabilities – long-term		2,710,815			6,154,064
Total operating lease liabilities	$	3,271,997		$	7,000,608

Finance leases:
Property and equipment, at cost	$	3,877,955		$	3,334,830
Accumulated depreciation		(544,653	)		(336,337	)
Property and equipment, net	$	3,333,302		$	2,998,494

Finance lease liabilities – current	$	399,198		$	373,824
Finance lease liabilities – long-term		2,384,011			2,499,591
Total finance lease liabilities	$	2,783,209		$	2,873,415

Weighted average remaining lease term:
Operating leases		9.6			8.9
Finance leases		5.4			5.9

Weighted average discount rate:
Operating leases		6.2	%		6.5	%
Finance leases		2.2	%		2.8	%

Maturities of lease liabilities at December 31, 2022 were as follows:

	Operating lease			Finance lease
2023	$	745,898		$	516,175
2024		604,324			517,076
2025		315,007			513,658
2026		304,595			478,441
2027		304,595			1,016,291
Thereafter		2,056,019			190,659
Total payment under lease agreements		4,330,439			3,232,300
Less imputed interest		(1,058,442	)		(449,091	)
Total lease liability	$	3,271,997		$	2,783,209