Note 16 - Commitments and Contingencies

Operating Leases

The Company held three lease agreements for office and warehouse space in Texas as of December 31, 2023. The Company’s lease contracts have remaining terms ranging from 3 years to 11 years, some of which may include options to extend the leases for up to 5 years. During 2023, the Company subleased the office and former warehouse space.

For the years ended December 31, 2023 and 2022, the Company paid $908,863 and $279,883, respectively, for amounts included in the measurement of lease liabilities. Rent expense under the leases was $1,118,564, and $406,817, respectively, for the years ended December 31, 2023 and 2022. Rent expense is net of sublease income of $280,120 and $0 for the years ended December 31, 2023 and 2022, respectively.

Litigation

The Company may be a party to routine claims brought against it in the ordinary course of business. After consulting with legal counsel, the Company does not believe that the outcome of any such pending or threatened litigation will have a material adverse effect on its financial condition or results of operations. However, as is inherent in legal proceedings, there is a risk that an unpredictable decision adverse to the Company could be reached. The Company records legal costs associated with loss contingencies as incurred. Settlements are accrued when, and if, they become probable and estimable.

Registration Rights Agreements

The Company is a party to various registration rights agreements with certain stockholders where it may be required to register securities for such stockholders in certain circumstances.