9. Leases

12 Months Ended

Jun. 30, 2020

Leases [Abstract]

Leases

Leases recorded on the balance sheet consist of the following:

	Classification on the Balance Sheet	June 30, 2020		June 30, 2019
Lease Assets
Operating lease assets	Operating lease assets, net	$	3,347,378	$	-
Finance lease assets	Property and equipment, net	$	2,550,102	$	2,875,188
Lease Liabilities
Current
Operating	Current portion of operating lease liability	$	852,419	$	-
Finance	Current portion of finance lease liability	$	316,103	$	283,781
Noncurrent
Operating	Operating lease liability, net of current portion	$	2,505,232	$	-
Finance	Finance lease liability, net of current portion	$	2,597,525	$	2,915,241

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

	June 30, 2020
Weighted Average Remaining Lease Term
Operating leases	3.8 years
Finance leases	8.6 years
Weighted Average Discount Rate
Operating leases		4.6%
Finance leases		5.7%

The components of lease expense are as follows:

	Classification on the Statement of Operations	Year Ended June 30, 2020
Operating lease cost
Operating lease cost	Cost of sales	$	282,060
Operating lease cost	Selling, general, and administrative expenses		764,590
Short term lease cost	Selling, general, and administrative expenses		63,000
Finance lease cost
Amortization of finance lease assets	Cost of sales	$	142,680
Amortization of finance lease assets	Selling, general, and administrative expenses		196,102
Interest on finance lease liabilities	Interest expense, net		175,913
Total lease cost		$	1,624,345

Supplemental cash flow information related to leases is as follows:

	Year Ended  June 30, 2020
ROU assets obtained in exchange for lease liabilities:
Operating leases	$	4,203,925
Financing leases	$	12,509

Future minimum lease payments are summarized as follows:

	Operating Leases		Finance Leases
Year ending June 30,
2021	$	959,721	$	465,624
2022		600,000		472,874
2023		150,000		445,280
2024		-		384,754
2025		-		392,446
Thereafter		-		1,720,902
Total future minimum lease payments	$	1,709,721	$	3,881,880
Imputed interest				772,836
Deferred rent				195,416

In September 2020, we exercised the option to extend the term of the New Jersey facility operating lease by two years through April 2023. The annual minimum lease payment for this facility is approximately $390,000.

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 $1,046,677 and $1,041,187 for the years ended June 30, 2020 and 2019, respectively.