LEASE OBLIGATIONS

9 Months Ended

Mar. 31, 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 in the amount of $47,750 for manufacturing equipment. The net book value of fixed assets under capital lease obligations as of March 31, 2022 is $156,640.

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 March 31, 2022 total $150,504. Total rent expense including base rent and common area expenses was $15,705 and $21,438 during the three months ended March 31, 2022 and 2021, respectively. Included in the accompanying balance sheet at March 31, 2022 is a right-of-use asset of $140,607 and current and long-term right-of-use operating lease liabilities of $45,405 and $95,202, respectively.

At March 31, 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
2022	$	12,155	$	15,705
2023		48,619		43,828
2024		48,619		44,924
2025		43,917		46,047
2026		28,006		–
Total Minimum Payments		181,316	$	150,504
Less: amount representing interest		19,118
Present value of minimum lease payments		162,198
Less: current portion		40,102
	$	122,096

The Company’s operating leases for its Gardner, Massachusetts office, production and storage spaces plus an equipment lease as well as the Windham, Maine office and production space have expired and are continuing on a month-to-month tenant at will basis. Rent expense on these operating leases was $222,112 and $124,848 for the nine months ended March 31, 2022 and 2021, respectively.