Lease Commitments

9 Months Ended

Mar. 31, 2016

Leases of Lessee Disclosure [Text Block]

11.

Lease Commitments

The Company entered into a 10 year lease for office and warehouse space from a related party (see Note 15) commencing in April 2014, and amended in January 2016. The amendment increased monthly rent expense to $46,500 with a 3% annual increase after 12 months. Beginning in January of 2014, the Company began leasing office space in Kentucky on a month-to-month basis from a third party. Additionally, the Company entered into an amended lease agreement in late 2015, for the New Jersey office, for a six year term with annual rental rates ranging from $135,000 to $148,000. There are certain provisions which allow for early termination and extension of the lease.

Rental expense for the three and nine months ended March 31, 2016 was approximately $155,000 and $311,000, respectively and $78,000 and $234,000, for the prior year periods, respectively.

At March 31, 2016, as part of our lease agreement for the New Jersey office, restricted cash of approximately $121,000 was being held as collateral for a letter of credit securing certain lease payments.

The future minimum lease payments under non-cancelable operating leases are approximately as follows for the years ending March 31:

2017	$	694,000
2018		715,000
2019		735,000
2020		756,000
2021		776,000
Thereafter		3,506,000
Total	$	7,182,000

The Company has approximately $39,000 of capital lease obligations for equipment as of March 31, 2016, which is included in accounts payable and accrued expenses on the condensed consolidated balance sheets.