XML 30 R16.htm IDEA: XBRL DOCUMENT
v3.22.1

Leases | 9 Months Ended
--- | ---
Mar. 31, 2022
Leases |
10. Leases | 10. Leases Our leases primarily consist of operating leases related to our facilities located in Orlando, Florida; Riga, Latvia; Shanghai, China; and Zhenjiang, China, and finance leases related to certain equipment located in Orlando, Florida. The operating leases for facilities are non-cancelable operating leases, expiring through 2032. We include options to renew (or terminate) in our lease term, and as part of our right-of-use (“ROU”) assets and lease liabilities, when it is reasonably certain that we will exercise that option. We currently have obligations under three finance lease agreements, entered into during fiscal 2019, with terms ranging from three to five years. The leases are for computer and manufacturing equipment. Our operating lease ROU assets and the related lease liabilities are initially measured at the present value of future lease payments over the lease term. Two of our operating leases include renewal options, which were not included in the measurement of the operating lease ROU assets and related lease liabilities. One such lease ends in November 2022 and we do not plan to renew, and the second such lease was amended in April 2021, and subsequently amended in September 2021, to extend the term to 2032 and increase the leased space from 26,000 square feet to approximately 58,500 square feet. Effective in January 2022, our leases in Zhenjiang, China and Riga, Latvia were extended to December 31, 2024 and 2030, respectively. As most of our leases do not provide an implicit rate, we use our collateralized incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. Currently, none of our leases include variable lease payments that are dependent on an index or rate. We are responsible for payment of certain real estate taxes, insurance and other expenses on certain of our leases. These amounts are generally considered to be variable and are not included in the measurement of the ROU asset and lease liability. We generally account for non-lease components, such as maintenance, separately from lease components. Our lease agreements do not contain any material residual value guarantees or material restricted covenants. Leases with a term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. We received tenant improvement allowances for each of our two leases with respect to our facility located in Orlando, Florida (the “Orlando Facility”). These allowances were used to construct improvements and are included in leasehold improvements and operating lease liabilities. The balances are being amortized over the corresponding lease terms. The components of lease expense were as follows:
|  | Three Months Ended March 31, |  |  | Nine Months Ended March 31, |
|  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Operating lease cost |  | $ | 129,934 |  |  | $ | 168,017 |  |  | $ | 474,075 |  |  | $ | 508,428 |
Finance lease cost: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Depreciation of lease assets |  |  | 36,767 |  |  |  | 47,354 |  |  |  | 127,946 |  |  |  | 160,577 |
Interest on lease liabilities |  |  | 4,323 |  |  |  | 11,432 |  |  |  | 16,070 |  |  |  | 35,688 |
Total finance lease cost |  |  | 41,090 |  |  |  | 58,786 |  |  |  | 144,016 |  |  |  | 196,265 |
Total lease cost |  | $ | 171,024 |  |  | $ | 226,803 |  |  | $ | 618,091 |  |  | $ | 704,693 |
Supplemental balance sheet information related to leases was as follows:
|  | Classification |  | March 31, 2022 |  |  | June 30, 2021 |
Assets: |  |  |  |  |  |  |  |
Operating lease assets |  | Operating lease assets |  | $ | 10,598,425 |  |  | $ | 9,015,498 |
Finance lease assets |  | Property and equipment, net(1) |  |  | 95,677 |  |  |  | 477,102 |
Total lease assets |  |  |  | $ | 10,694,102 |  |  | $ | 9,492,600 |
Liabilities: |  |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |  |
Operating leases |  | Operating lease liabilities, current |  | $ | 973,174 |  |  | $ | 799,507 |
Finance leases |  | Finance lease liabilities, current |  |  | 91,277 |  |  |  | 212,212 |
Noncurrent: |  |  |  |  |  |  |  |  |  |
Operating leases |  | Operating lease liabilities, less current portion |  |  | 9,686,335 |  |  |  | 8,461,133 |
Finance leases |  | Finance lease liabilities, less current portion |  |  | 15,392 |  |  |  | 66,801 |
Total lease liabilities |  |  |  | $ | 10,766,178 |  |  | $ | 9,539,653 |
| (1) | Finance lease assets were recorded net of accumulated depreciation of approximately $435,000 and $1.2 million as of March 31, 2022 and June 30, 2021, respectively. In December 2021, we executed a purchase option at the end of one of our finance leases, therefore the related asset and accumulated depreciation were reclassified from finance lease assets.
Lease term and discount rate information related to leases was as follows:
Lease Term and Discount Rate |  | March 31, 2022 |
Weighted Average Remaining Lease Term (in years) |
Operating leases |  |  | 10.2 |
Finance leases |  |  | 1.0 |
Weighted Average Discount Rate |  |  |  |
Operating leases |  |  | 3.0 | %
Finance leases |  |  | 7.7 | %
Supplemental cash flow information:
|  | Nine Months Ended March 31, |
|  | 2022 |  |  | 2021 |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |
Operating cash used for operating leases |  | $ | 638,943 |  |  | $ | 645,174 |
Operating cash used for finance leases |  | $ | 16,070 |  |  | $ | 35,688 |
Financing cash used for finance leases |  | $ | 172,344 |  |  | $ | 206,644 |
Future maturities of lease liabilities were as follows as of March 31, 2022:
Fiscal year ending: |  | Finance Leases |  |  | Operating Leases |
June 30, 2022 (remaining three months) |  | $ | 43,369 |  |  | $ | 168,270 |
June 30, 2023 |  |  | 59,647 |  |  |  | 1,195,376 |
June 30, 2024 |  |  | 11,811 |  |  |  | 1,213,080 |
June 30, 2025 |  |  | - |  |  |  | 1,177,525 |
June 30, 2026 |  |  | - |  |  |  | 1,143,042 |
Thereafter |  |  | - |  |  |  | 7,779,560 |
Total future minimum payments |  |  | 114,827 |  |  |  | 12,676,853 |
Less imputed interest |  |  | (8,158 | ) |  |  | (2,017,344 | )
Present value of lease liabilities |  | $ | 106,669 |  |  | $ | 10,659,509 |

X
- References No definition available. + Details
Name: | us-gaap_LeasesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing. + References Reference 1: http://fasb.org/us-gaap/role/ref/otherTransitionRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 + Details
Name: | us-gaap_LeasesOfLesseeDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration