Commitments and Contingencies

6 Months Ended

Dec. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 17. COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases it facilities under non-cancelable operating leases expiring at the end of 2020. Right-of-use assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Right-of-use assets and liabilities were recognized at July 1, 2019 based on the present value of lease payments over the lease term, using the Company’s incremental borrowing rate based on the information available. At December 31, 2019, the weighted average remaining lease term is 1.3 years, the weighted average discount rate is 20% and the operating lease costs are $204,600.

Supplemental balance sheet information related to leases at December 31, 2019 is as follows:

Operating leases	Balance Sheet Classification	(in thousands)
Right-of-use assets	Operating lease right-of-use assets, net	$	310
Current lease liabilities	Operating lease obligations	$	379
Non-current lease liabilities	Long-term operating lease obligations		—
Total lease liabilities		$	379

 Maturities of lease liabilities at December 31, 2019 are as follows: 

Payments	(in thousands)
Remainder of fiscal 2020	$	211
2021		211
Total undiscounted lease payments		422
Less: Present value discount		(43	)
Total lease liability balance	$	379

Equipment Notes Payable

The Company has acquired equipment under the provisions of long-term equipment notes. For financial reporting purposes, minimum note payments relating to the equipment have been capitalized. The equipment acquired with these equipment notes has a total cost of $619,744. These assets are included in the fixed assets listed in Note 6 - Equipment and Leasehold Improvements and include production equipment. The equipment notes have stated or imputed interest rates ranging from 8.9% to 11.3%.

The following is an analysis of the minimum future equipment note payable payments subsequent to December 31, 2019:  

Years ending June 30,	(in thousands)
2020 (six months)	$	76
2021		104
2022		62
2023		40
2024		23
Future Minimum Note Payable Payments	$	305
Less Amount Representing Interest		(44	)
Present Value of Minimum Note Payable Payments		261
Less Current Portion		(110	)
Long-Term Obligations under Equipment Notes Payable	$	151

Employment Agreements

The Company has entered into an employment agreement with Louis Friedman, President and Chief Executive Officer. The agreement provides for an annual base salary of $150,000 and eligibility to receive a bonus.  In certain termination situations, the Company is liable to pay severance compensation to Mr. Friedman for up to nine months at his current salary.

Legal Proceedings

As of the date of this Quarterly Report, there are no material pending legal or governmental proceedings relating to our company or properties to which we are a party, and to our knowledge there are no material proceedings to which any of our directors, executive officers or affiliates are a party adverse to us or which have a material interest adverse to us.