Note 9 - Commitments and Contingencies

6 Months Ended

Jun. 30, 2026

Commitments and Contingencies Disclosure [Text Block]

9. COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Company determines whether an arrangement is an operating lease or financing lease at inception. Lease assets and obligations are recognized at the lease commencement date based on the present value of lease payments over the term of the lease. The Company generally uses its incremental borrowing rate, which is based on information available at the lease commencement date, to determine the present value of lease payments.

The Company has entered into leases primarily for real estate and equipment used in research and development. Operating lease expense is recognized in continuing operations as a single lease cost on a straight-line basis over the lease term. Financing lease expense is comprised of both interest expense, which is recognized using the effective interest method, and amortization of the right-of-use assets. Finance lease interest expense and right-of-use asset amortization are presented consistently with other interest expense and depreciation and amortization, respectively. In determining lease asset values, the Company considers fixed and variable payment terms, prepayments, incentives, and options to extend, terminate or purchase. Renewal, termination, or purchase options affect the lease term used for determining lease asset value only if the option is reasonably certain to be exercised.

Balance sheet information related to right-of-use assets and liabilities is as follows:

	Balance Sheet Location	June 30, 2026		December 31, 2025
Operating Leases:
Operating lease right-of-use assets	Operating lease right-of-use assets	$	7,850,246	$	8,340,669

Current portion of operating lease liabilities	Operating lease liability, current portion		532,456		534,508
Noncurrent portion of operating lease liabilities	Operating lease liability		4,834,378		5,102,285
Total operating lease liabilities		$	5,366,834	$	5,636,793

Finance Leases:
Finance lease right-of-use assets	Property, plant, and equipment	$	442,866	$	733,672

Current portion of finance lease liabilities	Finance lease liability, current portion		416,984		618,249
Noncurrent portion of finance lease liabilities	Finance lease liability		109,322		212,957
Total finance lease liabilities		$	526,306	$	831,206

Lease cost recognized in the unaudited interim condensed consolidated statements of operations is summarized as follows:

	*For the Three Months Ended June 30,*				*For the Six Months Ended June 30,*
	*2026*		*2025*		*2026*		*2025*
Operating lease cost	$	393,600	$	475,403	$	787,300	$	958,280

Finance lease cost:
Amortization of lease assets		137,417		153,684		276,082		342,230
Interest on lease liabilities		12,951		25,512		28,794		53,899
Total finance lease costs	$	150,368	$	179,196	$	304,876	$	396,129

Other supplemental information related to leases is summarized as follows:

	*June 30, 2026*
Weighted average remaining lease term (in years):
Operating leases		6.74
Finance leases		1.27

Weighted average discount rate:
Operating leases		11.00	%
Finance leases		8.56	%

Cash paid for amounts included in the measurement of lease liabilities for the six months ended June 30, 2026:
Operating cash flows from operating leases	$	566,835
Operating cash flows from finance leases	$	28,794
Financing cash flows from finance leases	$	304,900

The following table summarizes our future minimum payments under contractual obligations for operating and financing liabilities as of June 30, 2026 :

	*Payments Due by Period*
	*2026(1)*		*2027*		*2028*		*2029*		*2030*		*Thereafter*		*Total*
Operating leases	$	551,107	$	1,076,140	$	1,096,206	$	1,116,675	$	1,137,552	$	2,635,922	$	7,613,602
Less present value adjustment		286,558		524,555		460,933		384,684		298,672		291,366		2,246,768
Operating lease liabilities	$	264,549	$	551,585	$	635,273	$	731,991	$	838,880	$	2,344,556	$	5,366,834

Finance leases	$	330,056	$	160,826	$	53,628	$	14,366	$	-	$	-	$	558,876
Less interest		16,707		11,624		4,059		180		-		-		32,570
Finance lease liabilities	$	313,349	$	149,202	$	49,569	$	14,186	$	-	$	-	$	526,306

⁽¹⁾ Amounts are for the remaining six months ending December 31, 2026.

Legal

In the ordinary course of business, the Company may become involved in legal disputes. In the opinion of management, any potential liabilities resulting from any disputes would not have a material adverse effect on the Company’s unaudited interim condensed consolidated financial statements. As a result, no liability related to any such disputes has been recorded at June 30, 2026, or December 31, 2025.

Indemnification Agreements

From time to time, in the ordinary course of business, the Company may indemnify other parties when it enters into contractual relationships, including members of the Board of Directors, employees, customers, lessors, lenders, and parties to other transactions with the Company. In addition, the Company may agree to hold other parties harmless against specific losses, such as those that could arise from a breach of representation, covenant, or third-party infringement claims. It may not be possible to determine the maximum potential amount of liability under such indemnification agreements due to the unique facts and circumstances likely to be involved in each particular claim and indemnification provision. Management believes any liability arising from these agreements will not be material to the unaudited interim condensed consolidated financial statements. As a result, no liability for these agreements has been recorded at June 30, 2026, or December 31, 2025.