Note 7 - Lease Commitments and Contingencies |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Commitments and Contingencies Disclosure [Text Block] |
NOTE 7 — LEASE COMMITMENTS AND CONTINGENCIES
Operating Leases: The Company occupies an executive office and warehouse space in Fountain Valley and Whittier, CA, pursuant to separate lease agreements. Under ASC 842, at contract inception the Company determined whether the contract is or contains a lease and whether the lease should be classified as an operating or a financing lease. Operating leases are included in ROU (right-of-use) assets and operating lease liabilities in our consolidated balance sheet.
The Company’s executive office and warehouse lease agreements are classified as operating leases. The office lease agreement, as amended, expires on January 31, 2030, and does not include any renewal options. The Whittier, CA warehouse lease agreement commenced on February 1, 2025 expires on January 31, 2028, and does not include any renewal options. The agreements provide for initial monthly base amounts plus annual escalations through the term of the leases.
In addition to the monthly base amounts in the lease agreements, the Company is required to pay a portion of real estate taxes and common operating expenses during the lease terms.
NOTE 7 — LEASE COMMITMENTS AND CONTINGENCIES (continued)
The Company’s operating lease expense was $79,000 and $98,000 for the three months ended March 31, 2026 and 2025, respectively, and $238,000 and $283,000 for the nine months ended March 31, 2026 and 2025, respectively.
Future minimum lease payments at March 31, 2026 under these arrangements are as follows:
The following table sets forth the ROU assets and operating lease liabilities as of March 31, 2026:
The Company’s weighted average remaining lease term for its operating leases is 3.52 years using a weighted average discount rate of
Legal Matters: From time to time, the Company is involved in routine litigation that arises in the ordinary course of business. There are no significant legal proceedings pending to which the Company is a party for which management believes the ultimate outcome would have a material adverse effect on the Company’s financial position.
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