Note 6. Leases

Leases recorded on the balance sheets consist of the following:

			June 30, 2024		June 30, 2023
Lease Assets	Classification on the Balance Sheet
Operating lease assets	Operating lease assets, net	$	2,831,417	$	3,631,780
Finance lease assets	Property and equipment, net		1,365,860		1,633,450

Lease Liabilities
Current
Operating	Current portion of operating lease liability	$	1,004,808	$	1,075,690
Finance	Current portion of finance lease liability		302,998		286,522
Noncurrent
Operating	Operating lease liability, net of current portion	$	1,829,608	$	2,554,450
Finance	Finance lease liability, net of current portion		1,428,870		1,731,868

Other information related to lease term and discount rate is as follows:

	June 30, 2024	June 30, 2023
Weighted Average Remaining Lease Term
Operating leases	3.3 years	4.0 years
Finance leases	4.4 years	6.1 years
Weighted Average Discount Rate
Operating leases	9.2%	8.5%
Finance leases	4.8%	5.6%

The components of lease expense are as follows:

			Year Ended June 30, 2024		Year Ended June 30, 2023
Operating lease cost	Classification on the Statement of Operations
Operating lease cost	Cost of sales	$	433,065	$	418,306
Operating lease cost	Selling, general, and administrative expenses		582,772		660,052
Short term lease cost	Selling, general, and administrative expenses		3,079.00		-

Finance lease cost
Amortization of finance lease assets	Cost of sales		125,967		141,287
Amortization of finance lease assets	Selling, general, and administrative expenses		140,674		169,444
Interest on finance lease liabilities	Interest expense, net		105,591		119,639
Total lease cost		$	1,391,148	$	1,508,728

Future minimum lease payments as of June 30, 2024, are summarized as follows:

		Operating Lease			Finance Lease
Year ending June 30
2025	$	1,193,856		$	412,342
2026		760,268			420,188
2027		776,063			428,200
2028		591,171			428,080
2029		-			424,800
Thereafter		-			71,032
Total future minimum lease payments		3,321,358			2,184,642
Less imputed interest		(486,942	)		(452,774	)
Total present value of lease liabilities	$	2,834,416		$	1,731,868

The Company has exercised the option to extend the term of the New Jersey facility operating lease by five years through March 31, 2028. For the Minnesota facility operating lease, the Company exercised an extension for six months through April 2024, and subsequently another extension through December 2025. The annual minimum lease payments for the New Jersey and Minnesota facilities are approximately $745,000 and $449,000, respectively.

The Company leases office, manufacturing and warehouse facilities in Northvale, New Jersey, and Eagan, Minnesota from employees, shareholders, and entities controlled by shareholders, who were previously principals of businesses acquired by the Company. The combined expenses associated with these related-party transactions totaled $1,339,252 and $1,078,685 for the years ended June 30, 2024 and 2023, respectively.