As of June 30, 2026 and 2025, the Company has a deferred compensation agreement with a current officer. The related expense is calculated using the net present value of the expected payments and is included in selling, general and administrative expenses in the Consolidated Statements of Operations. The Company's non-current deferred compensation obligation is recorded as deferred compensation in the Consolidated Balance Sheets.

The deferred compensation liability of $2,462,285 and $2,226,454 recorded at June 30, 2026 and June 30, 2025, respectively, relates to a supplemental retirement plan for a current officer that calls for annual cash compensation following retirement from the Company in an amount equal to 2% of base salary, as defined in the agreement, multiplied by the number of years of service to the Company. The retirement payments are to be paid monthly to the officer until his death and then to his surviving spouse monthly until her death. Deferred compensation expense of $235,831 and $133,330 was recognized under this arrangement during the years ended June 30, 2026 and 2025, respectively, to record the liability at net present value of the future expected payments. The net present value was calculated using a discount factor of 5.67% and 5.81% at June 30, 2026 and 2025, respectively. The life expectancies used in the calculation of net present value were 16.50 and 17.30 years for fiscal years ended June 30, 2026 and 2025, respectively. The increase in the deferred compensation expense recorded in the year ended June 30, 2026 compared to the prior year was due mainly to the annual increase in the future payments under the arrangement, a decrease in the discount factor and the reduction in the time period before payments commence. The current officer's retirement date is estimated to be October 2029.