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LEASE OBLIGATIONS

6 Months Ended

Dec. 31, 2022

5. LEASE OBLIGATIONS

In March 2021 the Company entered into a five-year financing lease in the amount of $161,977 for manufacturing equipment. In January 2020, the Company entered into a five-year financing lease for $47,750 for manufacturing equipment. The net book value of fixed assets under financing lease obligations as of December 31, 2022 is $125,181.

On July 1, 2019 the Company entered into a three-year operating lease for its facility in El Paso, Texas, and in February 2022 the Company entered into an extension of the lease for an additional three years through June 2025. Remaining minimum lease payments at December 31, 2022 total $112,885. Total rent expense including base rent and common area expenses was $7,986 and $15,705 during the three months ended December 31, 2022 and 2021, respectively. On October 4, 2021 the Company assumed the remaining term of the Windham, Maine lease as part of the Lighthouse acquisition. The lease expires on July 31, 2025. Remaining minimum lease payments at December 31, 2022 total $355,797. Total rent expense including base rent and common area expenses was $35,017 during the three months ended December 31, 2022. Included in the accompanying balance sheet at December 31, 2022 is a right-of-use asset of $439,074 and current and long-term right-of-use operating lease liabilities of $163,984 and $275,090, respectively.

At December 31, 2022 future minimum lease payments under the financing lease and operating lease obligations are as follows:

Future minimum lease payments
Fiscal Year Ending June 30:	Financing Leases		Operating Lease
2023	$	24,285	$	90,778
2024		48,619		182,652
2025		43,917		183,775
2026		28,028		11,477
Total Minimum Payments		144,849	$	468,682
Less: amount representing interest		12,502
Present value of minimum lease payments		132,347
Less: current portion		41,938
	$	90,409

The Company’s operating leases for its Gardner, Massachusetts office, production and storage spaces plus an equipment lease have expired and are continuing on a month-to-month tenant at will basis. Rent expense on these operating leases was $101,156 and $101,727 for the six months ended December 31, 2022 and 2021, respectively.