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Leases | 12 Months Ended
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Jun. 30, 2023
Leases [Abstract] |
Leases | 14. LEASES The Company leases its facility in Milwaukee, Wisconsin from Koss Holdings, LLC, which is controlled by five equal ownership interests in trusts held by the five beneficiaries of the former Chairman’s revocable trust and includes current stockholders of the Company. On May 24, 2022, the lease was renewed for a period of five years, ending June 30, 2028 (the “Extended Term”), and is being accounted for as an operating lease. The lease extension maintained the rent at a fixed rate of $380,000 per year and included an option to renew at an increased rate of $397,000 for an additional five years ending June 30, 2033 (the “Second Extended Term”). The negotiated increase in rent slated for 2028 will be the first increase in rent since 1996. The Company is responsible for all property maintenance, insurance, taxes, and other normal expenses related to ownership. The Company used its incremental borrowing rate as of the date of renewal, May 24, 2022, to recalculate the net present value of the operating lease ROU asset and liability. Both the Extended Term and the Second Extended Term renewal options were included in the calculation of the ROU asset and liability as the Company believes it is reasonably certain to exercise both rights to renew. The non-lease components of the agreement related to common area maintenance charges are accounted for separately. Supplemental information related to lease expense and valuation of the ROU asset and liability was as follows:
|  |  | Year Ended
|  | 2023 |  | 2022
Operating lease cost |  | $ | 387,669 |  | $ | 380,000
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |
Operating cash flows from operating leases |  | $ | (380,000) |  | $ | (380,000)
Weighted-average remaining lease term (in years) |  |  | 10 |  |  | 11
Weighted-average discount rate |  |  | 5.25% |  |  | 5.25%
The maturity schedule of future minimum lease payments and reconciliation to the operating lease liabilities reported on the 2023 Consolidated Balance Sheet is as follows:
Year Ending June 30, |  |  |
2024 |  | $ | 380,000
2025 |  |  | 380,000
2026 |  |  | 380,000
2027 |  |  | 380,000
2028 |  |  | 380,000
Thereafter |  |  | 1,985,000
Total lease payments |  |  | 3,885,000
Present value adjustment |  |  | (860,805)
Total lease liabilities |  | $ | 3,024,195
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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 -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=77888251 + Details
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