LEASE OBLIGATIONS

3 Months Ended

Sep. 30, 2022

Lease Obligations

LEASE OBLIGATIONS

5. LEASE OBLIGATIONS

In March 2021 the Company entered into a five-year capital lease in the amount of $161,977 for manufacturing equipment. In January 2020, the Company entered into a five-year capital lease for $47,750 for manufacturing equipment. The net book value of fixed assets under capital lease obligations as of September 30, 2022 is $135,667.

On July 1, 2019 the Company entered into a three-year operating lease for its facility in El Paso, Texas, and in February 2022 the Company entered into an extension of the lease for an additional three years through June 2025. Remaining minimum lease payments at September 30, 2022 total $123,842. Total rent expense including base rent and common area expenses was $11,630 and $13,997 during the fiscal quarters ended September 30, 2022 and 2021, respectively. On October 4, 2021 the Company assumed the remaining term of the Windham, Maine lease as part of the Lighthouse acquisition. The lease expires on July 31, 2025. Remaining minimum lease payments at September 30, 2022 total $390,229. Total rent expense including base rent and common area expenses was $35,017 during the fiscal quarter ended September 30, 2022. Included in the accompanying balance sheet at September 30, 2022 is a right-of-use asset of $478,645 and current and long-term right-of-use operating lease liabilities of $160,924 and $317,722, respectively.

At September 30, 2022 future minimum lease payments under the capital lease and operating lease obligations are as follows: 

Fiscal Year Ending June 30:	Capital Leases		Operating Lease
2023	$	36,464	$	136,167
2024		48,619		182,652
2025		43,917		183,775
2026		28,028		11,477
Total Minimum Payments		157,028	$	514,071
Less: amount representing interest		14,582
Present value of minimum lease payments		142,446
Less: current portion		41,318
	$	101,128

The Company’s operating leases for its Gardner, Massachusetts office, production and storage spaces plus an equipment lease have expired and are continuing on a month-to-month tenant at will basis. Rent expense on these operating leases was $50,826 and $51,277 for the fiscal quarter ended September 30, 2022 and 2021, respectively.