XML 32 R19.htm IDEA: XBRL DOCUMENT

Note 13 - Leases

9 Months Ended

Mar. 31, 2026

13. 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 ending 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 eighteen finance lease agreements entered into during fiscal years 2024 thru 2026 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 lease was amended in April 2021, and again in September 2021, to expand the space. The lease term was extended and will expire on March 31, 2034.

Our wholly-owned subsidiary, G5 Infrared, has a lease agreement for a manufacturing and office facility in Hudson, New Hampshire, which expires December 31, 2031. The Company’s wholly-owned subsidiary, Visimid, has a lease agreement for a manufacturing and office facility in Plano, Texas, which commenced September 1, 2025 for a five-year term. The prior facility was relocated to this larger facility, and the lease of the prior facility, which was set to expire October 31, 2026, was terminated in March 2026 pursuant to a mutual agreement with the lessor.

Our wholly-owned subsidiary, LPOIZ, has a lease agreement for a manufacturing and office facility in Zhenjiang, China, which expires December 31, 2027. ISP’s wholly-owned subsidiary, ISP Latvia, has two lease agreements for a manufacturing and office facility in Riga, Latvia, which leases expire December 31, 2030.

The components of lease expense for the three and nine months ended March 31, 2026 and 2025 were as follows:

	*Three Months Ended*				*Nine Months Ended*
	*March 31,*				*March 31,*
	*2026*		*2025*		*2026*		*2025*
Operating lease cost	$	319,082	$	265,245	$	883,194	$	803,725
Finance lease cost:
Depreciation of lease assets		52,274		45,466		142,530		126,198
Interest on lease liabilities		19,717		18,105		54,547		49,194
Total finance lease cost		71,991		63,571		197,077		175,392
Total lease cost	$	391,073	$	328,816	$	1,080,271	$	979,117

Supplemental balance sheet information related to the leases as of March 31, 2026 and June 30, 2025 was as follows:

		*March 31,*		*June 30,*
	*Classification*	*2026*		*2025*
Assets:
Operating lease assets	Operating lease assets	$	8,406,283	$	7,429,378
Finance lease assets	Property and equipment, net⁽¹⁾		1,044,445		920,569
Total lease assets		$	9,450,728	$	8,349,947

Liabilities:
Current:
Operating leases	Operating lease liabilities, current	$	1,177,423	$	1,254,062
Finance leases	Finance lease liabilities, current		271,015		206,518

Noncurrent:
Operating leases	Operating lease liabilities, less current portion		9,197,980		8,326,250
Finance leases	Finance lease liabilities, less current portion		460,316		421,363
Total lease liabilities		$	11,106,734	$	10,208,193

⁽¹⁾

Finance lease assets were recorded net of accumulated depreciation of approximately $0.4 million and $0.3 million as of March 31, 2026 and June 30, 2025, respectively.

Lease term and discount rate information related to leases was as follows:

	*March 31,*
Lease Term and Discount Rate	*2026*
Weighted Average Remaining Lease Term (in years)
Operating leases		7.2
Finance leases		2.8

Weighted Average Discount Rate
Operating leases		3.1	%
Finance leases		9.2	%

Supplemental cash flow information was as follows for the nine months ended March 31, 2026 and 2025:

	*Nine Months Ended*
	*March 31,*
	*2026*		*2025*
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash used for operating leases	$	1,056,876	$	887,180
Operating cash used for finance leases	$	54,548	$	49,194
Financing cash used for finance leases	$	168,089	$	133,711

Future maturities of lease liabilities were as follows as of March 31, 2026:

	*Finance*			*Operating*
Fiscal year ending:	*Leases*			*Leases*
June 30, 2026 (remaining three months)	$	83,868		$	397,980
June 30, 2027		318,382			1,592,513
June 30, 2028		274,265			1,661,520
June 30, 2029		116,952			1,660,647
June 30, 2030		23,779			1,705,603
Thereafter		18,278			4,926,194
Total future minimum payments		835,524			11,944,457
Less imputed interest		(104,193	)		(1,569,054	)
Present value of lease liabilities	$	731,331		$	10,375,403