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Leases | 9 Months Ended
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Mar. 31, 2025
Leases |
Leases | 12. Leases Our leases primarily consist of operating leases related to our facilities located in Orlando, Florida; Plano, Texas; Hudson, New Hampshire; Riga, Latvia; and Zhenjiang, China, and finance leases related to certain equipment located in Orlando, Florida and Riga, Latvia. The operating leases for facilities are non-cancelable operating leases, with terms at various times through 2034. We typically 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 such options. We currently have fourteen finance lease agreements entered into during fiscal years 2023, 2024 and 2025 with terms ranging from three to five years. The finance 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. One of our operating leases includes renewal options, which were not included in the measurement of the operating lease ROU assets and related lease liabilities. The lease on the premises comprising our primary facility in Orlando, Florida (the “Orlando Facility”) was amended in April 2021, and again in September 2021, to expand the space from approximately 26,000 square feet to approximately 58,500 square feet. The lease term was extended from April 30, 2022, to that certain date that is one hundred twenty-seven (127) months after the date the landlord completes certain work to be done at the leased premises. The landlord’s work was completed in August 2023, and accordingly the lease expires on March 31, 2034. Effective in January 2022, the terms of our leases in Zhenjiang, China and Riga, Latvia were extended to December 31, 2024 and 2030, respectively. It is our intention to renew the lease on the reduced space in Zhenjiang for at least a one-year term. The operating lease for G5 Infrared’s facility in New Hampshire expires in December 2026. We received tenant improvement allowances for the lease of our Orlando Facility. These allowances were used to construct improvements and are included in leasehold improvements and operating lease liabilities. The balance is being amortized over the corresponding lease term. In August 2023, we completed the construction of additional tenant improvements within the premises subject to our continuing lease for our Orlando Facility, of which the landlord provided $2.4 million in tenant improvement allowances. We funded the balance of the tenant improvement costs of approximately $3.7 million. The components of lease expense for the three and nine months ended March 31, 2025 and 2024 were as follows:
|  | Three Months Ended March 31, |  |  | Nine Months Ended March 31, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Operating lease cost |  | $ | 265,245 |  |  | $ | 238,051 |  |  | $ | 803,725 |  |  | $ | 681,726 |
Finance lease cost: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Depreciation of lease assets |  |  | 45,466 |  |  |  | 23,971 |  |  |  | 126,198 |  |  |  | 57,868 |
Interest on lease liabilities |  |  | 18,105 |  |  |  | 9,712 |  |  |  | 49,194 |  |  |  | 25,104 |
Total finance lease cost |  |  | 63,571 |  |  |  | 33,683 |  |  |  | 175,392 |  |  |  | 82,972 |
Total lease cost |  | $ | 328,816 |  |  | $ | 271,734 |  |  | $ | 979,117 |  |  | $ | 764,698 |
Supplemental balance sheet information related to the leases as of March 31, 2025 and June 30, 2024 was as follows:
|  | Classification |  | March 31, 2025 |  |  | June 30, 2024 |
Assets: |  |  |  |  |  |  |  |
Operating lease assets |  | Operating lease assets |  | $ | 6,457,530 |  |  | $ | 6,741,549 |
Finance lease assets |  | Property and equipment, net(1) |  |  | 928,661 |  |  |  | 1,063,768 |
Total lease assets |  |  |  | $ | 7,386,191 |  |  | $ | 7,805,317 |
Liabilities: |  |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |  |
Operating leases |  | Operating lease liabilities, current |  | $ | 1,271,740 |  |  | $ | 1,059,998 |
Finance leases |  | Finance lease liabilities, current |  |  | 203,954 |  |  |  | 177,148 |
Noncurrent: |  |  |  |  |  |  |  |  |  |
Operating leases |  | Operating lease liabilities, less current portion |  |  | 7,518,766 |  |  |  | 8,058,502 |
Finance leases |  | Finance lease liabilities, less current portion |  |  | 457,441 |  |  |  | 528,753 |
Total lease liabilities |  |  |  | $ | 9,451,901 |  |  | $ | 9,824,401 |
| (1) | Finance lease assets were recorded net of accumulated depreciation of approximately $236,000 and $109,000 as of March 31, 2025 and June 30, 2024, respectively.
Lease term and discount rate information related to leases was as follows:
Lease Term and Discount Rate |  | March 31, 2025 |
Weighted Average Remaining Lease Term (in years) |  |  |
Operating leases |  |  | 8.4 |
Finance leases |  |  | 2.9 |
Weighted Average Discount Rate |  |  |  |
Operating leases |  |  | 2.8 | %
Finance leases |  |  | 7.1 | %
Supplemental cash flow information was as follows for the nine months ended March 31, 2025 and 2024:
|  | Nine Months Ended March 31, |
|  | 2025 |  |  | 2024 |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |
Operating cash used for operating leases |  | $ | 887,180 |  |  | $ | 634,033 |
Operating cash used for finance leases |  | $ | 49,194 |  |  | $ | 25,105 |
Financing cash used for finance leases |  | $ | 142,523 |  |  | $ | 87,610 |
Future maturities of lease liabilities were as follows as of March 31, 2025:
Fiscal year ending: |  | Finance Leases |  |  | Operating Leases |
June 30, 2025 (remaining three months) |  | $ | 82,061 |  |  | $ | 344,553 |
June 30, 2026 |  |  | 243,229 |  |  |  | 1,409,059 |
June 30, 2027 |  |  | 216,580 |  |  |  | 1,281,635 |
June 30, 2028 |  |  | 173,283 |  |  |  | 1,157,748 |
June 30, 2029 |  |  | 57,642 |  |  |  | 1,187,989 |
Thereafter |  |  | — |  |  |  | 5,571,134 |
Total future minimum payments |  |  | 772,795 |  |  |  | 10,952,118 |
Less imputed interest |  |  | (111,400 | ) |  |  | (2,161,612 | )
Present value of lease liabilities |  | $ | 661,395 |  |  | $ | 8,790,506 |

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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