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Leases

3 Months Ended

Sep. 30, 2025

12. Leases

Our leases primarily consist of operating leases related to our facilities located in Orlando, Florida; Plano, Texas; Hudson, New Hampshire; Riga, Latvia; and Zhenjiang, China, and finance leases related to certain equipment located in Orlando, Florida and Riga, Latvia. The operating leases for facilities are non-cancelable operating leases, with terms at various times through 2034. We typically include options to renew (or terminate) in our lease term, and as part of our right-of-use (“ROU”) assets and lease liabilities, when it is reasonably certain that we will exercise such options. We currently have fourteen finance lease agreements entered into during fiscal years 2023, 2024 and 2025 with terms ranging from three to five years. The finance leases are for computer and manufacturing equipment.

Our operating lease ROU assets and the related lease liabilities are initially measured at the present value of future lease payments over the lease term. One of our operating leases includes renewal options, which were not included in the measurement of the operating lease ROU assets and related lease liabilities. The lease on the premises comprising our primary facility in Orlando, Florida (the “Orlando Facility”) was amended in April 2021, and again in September 2021, to expand the space. The lease term was extended and will expire on March 31, 2034.

Our wholly-owned subsidiary, G5 Infrared, has a lease agreement for a manufacturing and office facility in Hudson, New Hampshire, which expires November 30, 2026. The Company’s wholly-owned subsidiary, Visimid, has a lease agreement for a manufacturing and office facility in Plano, Texas, which expires October 31, 2026. On July 7, 2025, Visimid entered into a lease agreement for another manufacturing and office facility in Plano, Texas, which commenced September 1, 2025 for a five-year term. The existing facility will be relocated to this larger facility.

Our wholly-owned subsidiary, LPOIZ, has a lease agreement for a manufacturing and office facility in Zhenjiang, China, which expires December 31, 2027. ISP’s wholly-owned subsidiary, ISP Latvia, has two lease agreements for a manufacturing and office facility in Riga, Latvia, which leases expire December 31, 2030.

The components of lease expense for the three months ended September 30, 2025 and 2024 were as follows:

	Three Months Ended September 30,
	2025		2024
Operating lease cost	$	253,318	$	268,495
Finance lease cost:
Depreciation of lease assets		45,480		37,816
Interest on lease liabilities		17,030		14,062
Total finance lease cost		62,510		51,878
Total lease cost	$	315,828	$	320,373

Supplemental balance sheet information related to the leases as of September 30, 2025 and June 30, 2025 was as follows:

	Classification	September 30, 2025		June 30, 2025
Assets:
Operating lease assets	Operating lease assets	$	7,688,839	$	7,429,378
Finance lease assets	Property and equipment, net⁽¹⁾		875,886		920,569
Total lease assets		$	8,564,725	$	8,349,947

Liabilities:
Current:
Operating leases	Operating lease liabilities, current	$	1,338,632	$	1,254,062
Finance leases	Finance lease liabilities, current		202,328		206,518

Noncurrent:
Operating leases	Operating lease liabilities, less current portion		8,440,693		8,326,250
Finance leases	Finance lease liabilities, less current portion		370,422		421,363
Total lease liabilities		$	10,352,075	$	10,208,193

⁽¹⁾

Finance lease assets were recorded net of accumulated depreciation of approximately $0.3 million as of both September 30, 2025 and June 30, 2025.

Lease term and discount rate information related to leases was as follows:

Lease Term and Discount Rate	September 30, 2025
Weighted Average Remaining Lease Term (in years)
Operating leases		7.7
Finance leases		3.0

Weighted Average Discount Rate
Operating leases		3.3%
Finance leases		8.6%

Supplemental cash flow information was as follows for the three months ended September 30, 2025 and 2024:

	Three Months Ended September 30,
	2025		2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash used for operating leases	$	313,766	$	294,274
Operating cash used for finance leases	$	17,030	$	14,062
Financing cash used for finance leases	$	55,398	$	40,058

Future maturities of lease liabilities were as follows as of September 30, 2025:

Fiscal year ending:	Finance Leases			Operating Leases
June 30, 2026 (remaining nine months)	$	183,232		$	1,218,933
June 30, 2027		225,756			1,495,144
June 30, 2028		181,640			1,331,165
June 30, 2029		57,642			1,321,478
June 30, 2030		—			1,356,046
Thereafter		—			4,379,685
Total future minimum payments		648,270			11,102,451
Less imputed interest		(75,520	)		(1,323,126	)
Present value of lease liabilities	$	572,750		$	9,779,325