Commitments and Contingencies

3 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 16. 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 September 30, 2020, the weighted average remaining lease term is 1.3 years and the weighted average discount rate is 20%. Supplemental balance sheet information related to leases at September 30, 2020 is as follows:

Operating leases	Balance Sheet Classification	(in thousands)
Right-of-use assets	Operating lease right-of-use assets, net	$	85
Current lease liabilities	Operating lease obligations	$	102
Non-current lease liabilities	Long-term operating lease obligations		—
Total lease liabilities		$	102

Maturities of lease liabilities at September 30, 2020 are as follows: 

Payments	(in thousands)
2021 (nine months)	$	105
Total undiscounted lease payments		105
Less: present value discount		(3	)
Total lease liability balance	$	102

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 $530,682. 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 September 30, 2020:  

Years ending June 30,	(in thousands)
2021 (nine months)		88
2022		82
2023		60
2024		39
2025		2
Future Minimum Note Payable Payments	$	271
Less Amount Representing Interest		(37	)
Present Value of Minimum Note Payable Payments		234
Less Current Portion		(95	)
Long-Term Obligations under Equipment Notes Payable	$	139

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.