7. Leases

12 Months Ended

Jun. 30, 2021

Leases [Abstract]

Leases

Leases recorded on the balance sheet consist of the following:

	Classification on the Balance Sheet	June 30, 2021		June 30, 2020
Lease Assets
Operating lease assets	Operating lease assets, net	$	2,456,539	$	3,347,378
Finance lease assets	Property and equipment, net	$	2,195,473	$	2,550,102
Lease Liabilities
Current
Operating	Current portion of operating lease liability	$	864,081	$	852,419
Finance	Current portion of finance lease liability	$	335,444	$	316,103
Noncurrent
Operating	Operating lease liability, net of current portion	$	1,605,477	$	2,505,232
Finance	Finance lease liability, net of current portion	$	2,260,815	$	2,597,525

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

	June 30, 2021			June 30, 2020
Weighted Average Remaining Lease Term
Operating leases	2.8 years			3.8 years
Finance leases	7.6 years			8.6 years
Weighted Average Discount Rate
Operating leases		4.6	%		4.6	%
Finance leases		5.7	%		5.7	%

The components of lease expense are as follows:

	Classification on the Statement of Operations	Year Ended June 30, 2021		Year Ended June 30, 2020
Operating lease cost
Operating lease cost	Cost of sales	$	282,060	$	282,060
Operating lease cost	Selling, general, and administrative expenses		773,957		764,590
Short term lease cost	Selling, general, and administrative expenses		52,500		63,000
Finance lease cost
Amortization of finance lease assets	Cost of sales	$	142,680	$	142,680
Amortization of finance lease assets	Selling, general, and administrative expenses		195,865		196,102
Interest on finance lease liabilities	Interest expense, net		154,488		175,913
Total lease cost		$	1,601,550	$	1,624,345

Supplemental cash flow information related to leases is as follows:

	Year Ended June 30, 2021		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
2022	$	1,005,073	$	472,874
2023		493,168		445,280
2024		-		384,754
2025		-		392,446
2026		-		400,292
Thereafter		-		1,320,610
Total future minimum lease payments	$	1,498,241	$	3,416,256
Imputed interest				616,077
Deferred rent				203,920

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 $1,048,311 and $1,046,677 for the years ended June 30, 2021 and 2020, respectively.