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Lease Commitments

12 Months Ended

Jun. 30, 2017

Leases [Abstract]

Lease Commitments

13. Lease Commitments

The Company has operating leases for office space. At June 30, 2017, the Company has a lease agreement for its manufacturing and office facility in Orlando, Florida (the “Orlando Lease”). The Orlando Lease, which is for a seven-year original term with renewal options, expires April 2022 and expanded our space to 25,847 square feet, including space added in July 2014. Minimum rental rates for the extension term were established based on annual increases of two and one half percent starting in the third year of the extension period. Additionally, there is one five-year extension option exercisable by the Company. The minimum rental rates for such additional extension option will be determined at the time an option is exercised and will be based on a “fair market rental rate” as determined in accordance with the Orlando Lease, as amended.

The Company received $420,000 in a leasehold improvement allowance in fiscal 2015. This amount is included in the property and equipment and deferred rent on the Consolidated Balance Sheets. Amortization of leasehold improvements was $126,510 as of June 30, 2017. The deferred rent is being amortized as a reduction in lease expense over the term of the lease.

As of June 30, 2017, the Company, through its wholly-owned subsidiary, LPOI, has a lease agreement for an office facility in Shanghai, China (the “Shanghai Lease”) for 1,900 square feet. The Shanghai Lease commenced in October 2015. Subsequent to the end of fiscal 2017, the Shanghai Lease was renewed for an additional one year term, and now expires October 2018.

As of June 30, 2017, the Company, through its wholly-owned subsidiary, LPOIZ, has a lease agreement for a manufacturing and office facility in Zhenjiang, China (the “Zhenjiang Lease”) for 26,000 square feet. The Zhenjiang Lease, which is for a five-year original term with renewal options, expires March 2019. Subsequent to the end of fiscal 2017, another lease was executed for 13,000 additional square feet in this same facility. This new lease has a 54-month term, and expires in December 2021.

At June 30, 2017, the Company, through its wholly-owned subsidiary ISP, has a lease agreement for a manufacturing and office facility in Irvington, New York (the “ISP Lease”) for 13,000 square feet. The ISP Lease, which is for a five-year original term with renewal options, expires September 2020.

At June 30, 2017, the Company, through ISP’s wholly-owned subsidiary ISP Latvia, has two lease agreements for a manufacturing and office facility in Riga, Latvia (the “Riga Leases”) for 23,000 square feet. The Riga Leases, each of which is for a five-year original term with renewal options, expires December 2019.

During fiscal 2014, 2015 and 2016, the Company entered into five capital lease agreements, with terms ranging from three to five years, for computer and manufacturing equipment, which are included as part of property and equipment. Assets under capital lease include approximately $749,000 and $513,000 in computer equipment and software and manufacturing equipment, with accumulated amortization of approximately $361,000 and $155,000 as of June 30, 2017 and 2016, respectively. Amortization related to capital leases is included in depreciation expense.

Rent expense totaled $770,000 and $529,341 during the years ended June 30, 2017 and 2016, respectively.

The approximate future minimum lease payments under capital and operating leases at June 30, 2017 were as follows:


Fiscal year ending June 30,			Capital Leases				Operating Lease

2018			$	241,726			$	799,000
2019				113,391				758,000
2020				62,258				689,000
2021				—				445,000
2022				—				285,000
2023 and beyond				—				—
Total minimum payments				417,375			$	2,976,000


Less imputed interest			(35,942	)
Present value of minimum lease payments included in capital lease obligations			381,433
Less current portion			239,332
Non-current portion		$	142,101