Northern Technologies International Corp 10-K for FY2022

Northern Technologies International Corp (NTIC)

10-K 2022-11-15 For: 2022-08-31

Added on April 06, 2026

About this 10-K

Northern Technologies International Corp filed this 10-K on November 15, 2022, covering the fiscal year ended August 31, 2022 (FY2022).

Headline figures

Fiscal year ended August 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $74.16M; up 31.3% from $56.49M a year earlier
Net income: $6.32M; up 0.7% from net income of $6.28M a year earlier
Diluted EPS: $0.66; up 3.1% from $0.64 a year earlier

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Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.02 per share	NTIC	Nasdaq Global Market

Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☒	Smaller reporting company ☒
Emerging growth company ☐

		Page

PART I		1
	Item 1. BUSINESS	1
	INFORMATION ABOUT OUR EXECUTIVE OFFICERS	14
	Item 1A. RISK FACTORS	16
	Item 1B. UNRESOLVED STAFF COMMENTS	36
	Item 2. PROPERTIES	36
	Item 3. LEGAL PROCEEDINGS	36
	Item 4. MINE SAFETY DISCLOSURES	36

PART II		37
	Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	37
	Item 6. [RESERVED]	37
	Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	38
	Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	54
	Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	55
	Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	85
	Item 9A. CONTROLS AND PROCEDURES	85
	Item 9B. OTHER INFORMATION	86
	Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	86

PART III		87
	Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	87
	Item 11. EXECUTIVE COMPENSATION	87
	Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	87
	Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	89
	Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES	89

PART IV		90
	Item 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES	90
	Item 16. FORM 10-K SUMMARY	94

Subsidiary Name	Country	NTIC Percent (%) Ownership
HNTI Limited	India		100	%
Natur Tec Lanka (Pvt) Ltd	Sri Lanka⁽¹⁾		75	%
Natur-Tec India Private Limited	India		75	%
NTI Asean LLC	United States		60	%
NTIC (Shanghai) Co., Ltd	China		100	%
NTIC Europe GmbH	Germany		100	%
Zerust Prevenção de Corrosão S.A.	Brazil		85	%
Zerust Singapore Pte Ltd	Singapore⁽²⁾		60	%
Zerust Vietnam Co. Ltd	Vietnam⁽³⁾		60	%
ZERUST-EXCOR MEXICO, S. de R.L. de C.V.	Mexico		100	%

(1)	Natur Tec Lanka (Pvt) Ltd. is 100% owned by Natur-Tec India Private Limited and, therefore, indirectly owned by NTIC.
(2)	Zerust Singapore Pte Ltd is 100% owned by NTI Asean LLC and, therefore, indirectly owned by NTIC.
(3)	Zerust Vietnam Co. Ltd is 100% owned by Zerust Singapore Pte Ltd and, therefore, indirectly owned by NTIC.

Joint Venture Name	Country	NTIC Percent (%) Ownership
ACOBAL SAS	France		50	%
CHONG WAH-NTIA SDN. BHD.	Malaysia⁽¹⁾		30	%
EXCOR KORROSIONSSCHUTZ – TECHNOLOGIEN ….UND PRODUKTE GMBH	Germany		50	%
EXCOR SP. Z.O.O.	Poland		50	%
EXCOR-ZERUST S.R.O.	Czech Republic		50	%
KOREA ZERUST CO., LTD.	South Korea⁽¹⁾		30	%
PT. CHEMINDO – NTIA	Indonesia⁽¹⁾		30	%
TAIYONIC LTD.	Japan		50	%
ZERUST – DNEPR	Ukraine		50	%
ZERUST (U.K.) LTD.	United Kingdom		50	%
ZERUST A.Ş.	Turkey		50	%
ZERUST AB	Sweden		50	%
ZERUST CONSUMER PRODUCTS, LLC	United States		50	%
ZERUST OY	Finland		50	%
ZERUST SPECIALTY TECH CO. LTD.	Thailand⁽¹⁾		30	%
ZERUST-NIC (TAIWAN) CORP.	Taiwan⁽¹⁾		30	%

Name	Age	Position with NTIC

G. Patrick Lynch	55	President and Chief Executive Officer

Matthew C. Wolsfeld	48	Chief Financial Officer and Corporate Secretary

Declaration Date	Amount		Record Date	Payable Date
October 20, 2021	$	0.07	November 3, 2021	November 17, 2021
January 21, 2022	$	0.07	February 2, 2022	February 16, 2022
April 22, 2022	$	0.07	May 4, 2022	May 18, 2022
July 20, 2022	$	0.07	August 3, 2022	August 17, 2022

	Fiscal 2022		% of Net Sales			Fiscal 2021		% of Net Sales			$ Change			% Change
Net sales, excluding joint ventures	$	71,190,801		96.0	%	$	53,470,623		94.6	%	$	17,720,178			33.1	%
Net sales, to joint ventures		2,968,089		4.0	%		3,023,196		5.4	%		(55,107	)		(1.8	)%
Cost of goods sold		51,090,298		68.9	%		36,920,814		65.4	%		14,169,484			38.4	%
Equity in income from joint ventures		4,725,918		6.4	%		7,465,214		13.2	%		(2,739,296	)		(36.7	)%
Fees for services provided to joint ventures		5,767,682		7.8	%		5,964,260		10.6	%		(196,578	)		(3.3	)%
Selling expenses		13,038,180		17.6	%		12,016,974		21.3	%		1,021,206			8.5	%
General and administrative expenses		10,600,603		14.3	%		8,262,173		14.6	%		2,338,430			28.3	%
Research and development expenses		4,775,334		6.4	%		4,400,479		7.8	%		374,855			8.5	%

	Page

Report of Independent Registered Public Accounting Firm, PCAOB Firm ID # 23	56
Consolidated Balance Sheets as of August 31, 2022 and 2021	58
Consolidated Statements of Operations for the years ended August 31, 2022 and 2021	59
Consolidated Statements of Comprehensive Income for the years ended August 31, 2022 and 2021	60
Consolidated Statements of Equity for the years ended August 31, 2022 and 2021	61
Consolidated Statements of Cash Flows for the years ended August 31, 2022 and 2021	62
Notes to Consolidated Financial Statements	63 - 84

	August 31, 2022			August 31, 2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	5,333,890		$	7,680,641
Available for sale securities		5,590			4,634
Receivables:
Trade excluding joint ventures, less allowance for doubtful accounts of $439,000 as of August 31, 2022 and $382,000 as of August 31, 2021		14,136,930			11,128,805
Trade, joint ventures		697,861			624,808
Fees for services provided to joint ventures		1,765,117			1,505,127
Income taxes		-			386,574
Inventories		16,341,729			11,114,207
Prepaid expenses		1,953,764			1,302,293
Total current assets		40,234,881			33,747,089

PROPERTY AND EQUIPMENT, NET		12,170,493			11,821,458

OTHER ASSETS:
Investments in joint ventures		21,814,754			27,623,768
Deferred income taxes		-			92,554
Patents and trademarks, net		710,011			709,572
Goodwill		4,782,376			—
Intangible asset, net		5,923,867			—
Operating lease right of use assets		557,571			376,438
Total other assets		33,788,579			28,802,332
Total assets	$	86,193,953		$	74,370,879
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable	$	7,796,494		$	4,290,972
Line of credit		5,900,000			—
Income taxes payable		30,742			178,923
Accrued liabilities:
Payroll and related benefits		2,297,543			2,879,468
Other		667,292			894,497
Current portion of operating lease		373,330			272,336
Total current liabilities		17,065,401			8,516,196
LONG-TERM LIABILITIES:
Deferred income tax, net		1,700,015			—
Operating lease, less current portion		184,241			104,102
Total long-term liabilities		1,884,256			104,102

COMMITMENTS AND CONTINGENCIES (Note 17)
EQUITY:
Preferred stock, no par value; authorized 10,000 shares; none issued and outstanding		—			—
Common stock, $0.02 par value per share; authorized 15,000,000 shares as of August 31, 2022 and August 31, 2021; issued and outstanding 9,232,483 and 9,184,811, respectively		184,650			183,696
Additional paid-in capital		19,939,131			18,736,268
Retained earnings		50,716,613			46,973,092
Accumulated other comprehensive loss		(7,245,132	)		(3,525,030	)
Stockholders’ equity		63,595,262			62,368,026
Non-controlling interests		3,649,034			3,382,555
Total equity		67,244,296			65,750,581
Total liabilities and equity	$	86,193,953		$	74,370,879

	2022			2021
NET SALES:
Net sales, excluding joint ventures	$	71,190,801		$	53,470,623
Net sales, to joint ventures		2,968,089			3,023,196
Total net sales		74,158,890			56,493,819
Cost of goods sold		51,090,298			36,920,814
Gross profit		23,068,592			19,573,005

JOINT VENTURE OPERATIONS:
Equity in income from joint ventures		4,725,918			7,465,214
Fees for services provided to joint ventures		5,767,682			5,964,260
To Total joint venture operations		10,493,600			13,429,474

OPERATING EXPENSES:
Selling expenses		13,038,180			12,016,974
General and administrative expenses		10,600,603			8,262,173
Research and development expenses		4,775,334			4,400,479
Total operating expenses		28,414,117			24,679,626

OPERATING INCOME		5,148,075			8,322,853

REMEASUREMENT GAIN ON ACQUISITION OF EQUITY METHOD INVESTEE		3,951,550			—
INTEREST INCOME		49,241			151,875
INTEREST EXPENSE		(89,096	)		(16,086	)

INCOME BEFORE INCOME TAX EXPENSE		9,059,770			8,458,642

INCOME TAX EXPENSE		1,873,836			1,461,905

NET INCOME		7,185,934			6,996,737

NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS		861,234			715,499

NET INCOME ATTRIBUTABLE TO NTIC	$	6,324,700		$	6,281,238

NET INCOME ATTRIBUTABLE TO NTIC PER COMMON SHARE:
Basic	$	0.69		$	0.69
Diluted	$	0.66		$	0.64

WEIGHTED AVERAGE COMMON SHARES ASSUMED OUTSTANDING:
Basic		9,216,216			9,116,472
Diluted		9,635,028			9,874,139
CASH DIVIDENDS DECLARED PER COMMON SHARE	$	0.28		$	0.195

	STOCKHOLDERS’ EQUITY
										Accumulated
					*Additional*					*Other*			*Non-*
	*Common Stock*				*Paid-in*		*Retained*			*Comprehensive*			*Controlling*			*Total*
	*Shares*		*Amount*		*Capital*		*Earnings*			*Loss*			*Interests*			*Equity*

BALANCE AT AUGUST 31, 2020		9,099,990	$	182,000	$	17,415,043	$	42,472,810		$	(3,410,438	)	$	3,045,026		$	59,704,441
Stock options exercised		74,950		1,499		582,915		—			—			—			584,414
Stock issued for employee stock purchase plan		9,871		197		74,136		—			—			—			74,333
Stock option expense		—		—		664,174		—			—			—			664,174
Dividends paid to stockholders		—-		—		—		(1,780,956	)		—-			—			(1,780,956	)
Dividend received by non-controlling interest		—		—		—		—			—			(400,000	)		(400,000	)
Net income		—		—		—		6,281,238			—			715,499			6,996,737
Other comprehensive income (loss)		—		—		—		—			(114,592	)		22,030			(92,562	)
BALANCE AT AUGUST 31, 2021		9,184,811	$	183,696	$	18,736,268	$	46,973,092		$	(3,525,030	)	$	3,382,555		$	65,750,581
Stock options exercised		42,071		842		197,798		—			—			—			198,640
Stock issued for employee stock purchase plan		5,601		112		73,533		—			—			—			73,645
Stock option expense		—		—		931,532		—			—			—			931,532
Dividends paid to stockholders		—-		—		—		(2,581,179	)		—-			—			(2,581,179	)
Dividend received by non-controlling interest		—		—		—		—			—			(402,729	)		(402,729	)
Net income		—		—		—		6,324,700			—			861,234			7,185,934
Other comprehensive loss		—		—		—		—			(3,720,102	)		(192,026	)		(3,912,128	)
BALANCE AT AUGUST 31, 2022		9,232,483	$	184,650	$	19,939,131	$	50,716,613		$	(7,245,132	)	$	3,649,034		$	67,244,296

	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	7,185,934		$	6,996,737
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation		931,532			664,174
Depreciation expense		938,489			905,299
Amortization expense		629,843			203,088
Remeasurement gain on acquisition of equity method investee		(3,951,550	)		—
Change in allowance for doubtful accounts		57,000			262,000
Equity in income from joint ventures		(4,725,918	)		(7,465,214	)
Dividends received from joint ventures		5,723,176			3,665,365
Deferred income taxes		(81,500	)		114,620
Changes in current assets and liabilities:
Receivables:
Trade, excluding joint ventures		(2,091,353	)		(3,030,655	)
Trade, joint ventures		(73,053	)		(148,908	)
Fees for services provided to joint ventures		(259,550	)		(577,841	)
Income taxes		284,025			(362,438	)
Inventories		(4,818,860	)		58,314
Prepaid expenses and other		3,111			(487,771	)
Accounts payable		3,010,526			866,597
Income tax payable		(493,091	)		(160,231	)
Accrued liabilities		(1,122,713	)		1,389,804
Net cash provided by operating activities		1,146,078			2,892,940

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Zerust India business, net of cash acquired (see Note 3)		(5,062,003	)		—
Investment in joint venture		(341,392	)		-
Purchase of available for sale securities		-			(800,000	)
Proceeds from the sale of available for sale securities		(956	)		6,340,088
Purchases of property and equipment		(1,496,674	)		(5,532,750	)
Investments in patents		(207,149	)		(110,654	)
Net cash used in investing activities		(7,108,174	)		(103,316	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Dividend received by non-controlling interest		(402,729	)		(400,000	)
Proceeds from line of credit		5,900,000			—
Dividends paid on NTIC common stock		(2,581,179	)		(1,780,956	)
Proceeds from employee stock purchase plan		73,645			74,333
Proceeds from exercise of stock options		198,640			584,414
Net cash provided by (used in) financing activities		3,188,377			(1,522,209	)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS		426,968			10,194

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(2,346,751	)		1,277,609
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		7,680,641			6,403,032

CASH AND CASH EQUIVALENTS AT END OF YEAR	$	5,333,890		$	7,680,641

Buildings and improvements	5-30 years
Machinery and equipment	3-10 years

Cash and cash equivalents	$	1,187,997
Trade account receivable		1,954,769
Inventories		886,650
Prepaid expenses and other		396,545
Property, plant and equipment		219,077
Operating lease, right of use asset		355,000
Customer relationships		6,347,000
Goodwill		4,782,376
Current liabilities		(1,370,314	)
Deferred tax liability		(1,904,100	)
Operating lease liability		(355,000	)
Net assets acquired	$	12,500,000
Less:
Fair value of previously held equity method investment		(1,637,362	)
Cumulative foreign currency translation		(661,088	)
Gain recognized on acquisition		(3,951,550	)
		(6,250,000	)
Cash paid for acquisition	$	6,250,000

	August 31, 2022		August 31, 2021
Production materials	$	6,496,656	$	4,453,688
Finished goods		9,845,073		6,660,519
	$	16,341,729	$	11,114,207

	August 31, 2022			August 31, 2021
Land	$	310,365		$	310,365
Buildings and improvements		14,778,759			13,149,258
Machinery and equipment		5,643,320			5,453,679
		20,732,444			18,913,302
Less accumulated depreciation		(8,561,951	)		(7,091,844	)
	$	12,170,493		$	11,821,458

	August 31, 2022			August 31, 2021
Patents and trademarks	$	3,225,655		$	3,018,507
Less accumulated amortization		(2,515,644	)		(2,308,935	)
	$	710,011		$	709,572

	As of August 31, 2022
	Total		EXCOR		OTHER
Current assets	$	52,428,831	$	26,047,914	$	26,380,917
Total assets		55,854,457		27,932,532		27,921,925
Current liabilities		10,981,833		2,943,895		8,037,938
Noncurrent liabilities		1,138,980		-		1,138,980
Joint ventures’ equity		43,733,644		24,988,637		18,745,007
Northern Technologies International Corporation’s share of joint ventures’ equity		21,814,754		12,494,320		9,320,434
Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings		21,256,923		12,463,415		8,793,508

	Fiscal Year Ended August 31, 2022
	Total		EXCOR		OTHER
Net sales	$	104,077,748	$	42,853,162	$	61,224,586
Gross profit		41,030,647		20,312,400		20,718,247
Net income		9,302,237		6,487,855		2,814,382
Northern Technologies International Corporation’s share of equity in income of joint ventures		4,725,918		3,236,989		1,488,929
Northern Technologies International Corporation’s dividends received from joint ventures		5,723,176		4,255,200		1,467,976

	As of August 31, 2021
	Total		EXCOR		OTHER⁽¹⁾
Current assets	$	69,394,796	$	33,886,655	$	35,508,141
Total assets		73,814,402		36,211,520		37,602,882
Current liabilities		16,366,398		5,386,377		10,980,021
Noncurrent liabilities		1,455,524		-		1,455,524
Joint ventures’ equity		55,992,480		30,825,144		25,167,336
Northern Technologies International Corporation’s share of joint ventures’ equity		27,623,768		15,412,574		12,211,194
Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings		24,702,778		14,697,490		10,005,288

	Fiscal Year Ended August 31, 2021
	Total		EXCOR		OTHER⁽¹⁾
Net sales	$	120,954,550	$	46,522,688	$	74,431,862
Gross profit		53,371,610		25,389,981		27,981,629
Net income		14,921,531		8,798,995		6,122,536
Northern Technologies International Corporation’s share of equity in income of joint ventures		7,465,214		4,400,403		3,064,811
Northern Technologies International Corporation’s dividends received from joint ventures		3,665,365		1,809,900		1,855,465

Numerator:	August 31, 2022		August 31, 2021
Net income attributable to NTIC	$	6,324,700	$	6,281,238

Denominator:
Basic-weighted shares outstanding		9,216,216		9,116,472
Weighted shares assumed upon exercise of stock options		418,812		757,667
Diluted – weighted shares outstanding		9,635,028		9,874,139

Basic net income per share:	$	0.69	$	0.69
Diluted net income per share:	$	0.66	$	0.64

	Fiscal Year 2022			Fiscal Year 2021
Dividend yield		2.46	%		1.65	%
Expected volatility		45.2	%		45.4	%
Expected life of option (years)		10			10
Weighted average risk-free interest rate		3.30	%		0.77	%

	Number of Shares (#)			Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding at August 31, 2020		1,127,968		$	9.63
Options granted		419,874			8.24
Options exercised		(77,645	)		8.18
Options terminated		(43,546	)		9.63

Outstanding at August 31, 2021		1,426,651		$	9.30
Options granted		174,840			16.97
Options exercised		(51,218	)		6.60
Options terminated		(5,546	)		18.23

Outstanding at August 31, 2022		1,544,727		$	10.23	$	4,151,365

Exercisable at August 31, 2022		1,156,211		$	9.58	$	3,394,957

	Fiscal 2022		Fiscal 2021
ZERUST® net sales	$	57,459,382	$	45,554,434
Natur-Tec® net sales		16,699,508		10,939,385
Total net sales	$	74,158,890	$	56,493,819

	Fiscal 2022		Fiscal 2021
Direct cost of goods sold
ZERUST®	$	34,673,146	$	26,028,555
Natur-Tec®		12,859,343		7,717,429
Indirect cost of goods sold		3,557,809		3,174,830
Total net cost of goods sold	$	51,090,298	$	36,920,814

	Fiscal Year Ended August 31,
	2022		2021
Inside the U.S.A. to unaffiliated customers	$	25,301,067	$	22,039,456
Outside the U.S.A. to:
Joint ventures in which the Company is a shareholder directly and indirectly		2,968,089		3,023,196
Unaffiliated customers		45,889,734		31,431,167
	$	74,158,890	$	56,493,819

	Fiscal 2022		% of Total Fees for Services Provided to Joint Ventures			Fiscal 2021		% of Total Fees for Services Provided to Joint Ventures
Germany	$	834,725		14.5	%	$	920,902		15.4	%
Poland		730,523		12.7	%		798,570		13.4	%
Japan		669,371		11.6	%		826,403		13.9	%
France		448,579		7.8	%		435,032		7.3	%
Sweden		447,441		7.8	%		528,755		8.9	%
Thailand		344,649		6.0	%		399,563		6.7	%
United Kingdom		342,488		5.9	%		316,786		5.3	%
Finland		340,783		5.9	%		298,663		5.0	%
Czech Republic		300,257		5.2	%		377,395		6.3	%
South Korea		270,309		4.7	%		317,042		5.3	%
Indonesia		156,476		2.7	%		122,513		2.1	%
India		-		-			392,074		6.6	%
Other *		882,081		15.2	%		230,562		3.8	%
	$	5,767,682		100.0	%	$	5,964,260		100.0	%

	At August 31, 2022		At August 31, 2021
China	$	5,826,898	$	5,110,071
Other		565,022		453,199
United States		5,778,573		6,258,188
Total property and equipment	$	12,170,493	$	11,821,458

	August 31,
	2022			2021
Accrued compensation	$	329,100		$	539,300
Inventory costs		93,900			55,100
Other accrued expenses		84,800			103,100
Lease liability		98,300			84,300
Goodwill and other intangible assets		398,600			453,000
Stock-based compensation		547,200			466,300
Property and equipment		9,100			—
Foreign tax credit carryforward		4,892,100			4,893,300
Other credit and loss carryforward		5,455,500			5,243,100
Other		23,000			—
Total deferred tax assets		11,931,600			11,837,500
Valuation allowance		(11,592,900	)		(11,447,500	)
Total deferred tax assets after valuation allowance		338,700			390,000
Property and equipment		—			(7,300	)
Right-of-use asset		(98,300	)		(84,300	)
Intangible assets		(1,777,200	)		—
Unremitted foreign earnings		(163,200	)		(154,900	)
Other		—			(50,900	)
Total deferred tax liabilities		(2,038,700	)		(297,400	)
Net deferred tax assets	$	(1,700,000	)	$	92,600

	August 31, 2022		August 31, 2021
Right-of-use assets, net	$	557,571	$	376,438

Current portion of lease liability		373,330		272,336
Lease liability, less current portion		184,241		104,102
Total lease liability	$	557,571	$	376,438

Fiscal 2023	$	373,330
Fiscal 2024		209,802
Total future minimum lease payments		583,132
Less amount representing interest		(25,561	)
Present value of obligations under operating leases		557,571
Less current portion		(373,330	)
Long-term operating lease obligations	$	184,241

	Level 1 -	Inputs are quoted prices in active markets for identical assets or liabilities.
	Level 2 -	Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly.
	Level 3 -	Inputs are unobservable for the asset or liability.