Note 13 - Leases

9 Months Ended

Aug. 31, 2022

Notes to Financial Statements

Leases [Text Block]

13) Leases

	August 31, 2022		November 30, 2021
Operating lease right-of-use assets (in other assets)	$	38,209	$	47,794
Current portion of operating lease liabilities (in accrued expenses)	$	11,631	$	12,863
Long-term portion of operating lease liabilities		26,578		34,931
Total operating lease liabilities	$	38,209	$	47,794

The Company recorded $4,333and $14,368of operating lease costs in the three and nine months ended August 31, 2022, respectively, which included variable costs tied to usage, compared to $5,547and $17,536for the three and nine months ended August 31, 2021. The Company’s operating leases carry a weighted average lease term of 42months and have a weighted average discount rate of 4.86%

Future maturities of operating lease liabilities are as follows:

Twelve Months Ending August 31
2023	$	13,201
2024		11,488
2025		9,695
2026		7,149
Total lease payments	$	41,533
Less imputed interest		(3,324	)
Total operating lease liabilities	$	38,209

The components of finance leases on the Consolidated Balance Sheets on August 31, 2022 and November 30, 2021 were as follows:

	August 31, 2022		November 30, 2021
Finance lease right-of-use assets (net of amortization in other assets)	$	577,023	$	190,667
Current portion of finance lease liabilities (accrued expenses)	$	169,023	$	48,591
Long-term portion of finance lease liabilities		645,499		142,386
Total finance lease liabilities	$	814,522	$	190,977

The Company received $224,513 of grant funds from the Iowa Economic Development’s Manufacturing 4.0 program in Q3 of fiscal 2022. These funds were for 75% reimbursement of three robotic welders that were later financed under a capital lease. These funds have reduced the right-of-use asset account and will reduce amortization over the life of the asset.

Future maturities of finance lease liabilities as of August 31, 2022 are as follows:

Twelve Months Ending August 31
2023	$	199,836
2024		199,836
2025		179,387
2026		157,258
2027		160,688
Total lease payments		897,005
Less imputed interest		(82,483	)
Total finance lease liabilities	$	814,522

The weighted average lease term of the Company’s finance leases are 52 months while the weighted average rate of finance leases is 4.18%. The Company incurred $40,140 and $87,284 of amortization expense from ROU assets related to finance leases in three- and nine-months ending August 31, 2022, respectively compared to $0 for the same periods in 2021.