| LEASES |
NOTE 6 – LEASES
Lessee Arrangements
As discussed in Note 2, we acquired six partnerships which had solar equipment leases in place. We reassessed the leases as of the acquisition date and recorded them as finance leases in accordance with ASC 842. Our leases have remaining terms of 2.17 to 6.75 years. Right-of-use assets and lease liabilities by lease type, and the associated balance sheet classifications, are as follows:
|
|
Balance Sheet Classification
|
|
June 30, 2026
|
|
|
June 30, 2025
|
|
|
Right-of-use assets:
|
|
|
|
|
|
|
|
|
Finance leases
|
Real estate assets, net |
|
$
|
1,138,697 |
|
|
$
|
1,587,825 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease liabilities:
|
|
|
|
|
|
|
|
|
|
|
Finance leases
|
Finance lease liabilities
|
|
$
|
1,672,528 |
|
|
$
|
1,898,005 |
|
We have included these leases in real estate assets, net as follows:
| |
|
June 30 2026
|
|
|
June 30, 2025
|
|
|
Building, fixtures and improvements
|
|
$
|
2,165,738 |
|
|
$
|
2,165,738 |
|
|
Accumulated depreciation
|
|
|
(1,027,041 |
)
|
|
|
(577,913 |
)
|
|
Real estate assets, net
|
|
$
|
1,138,697 |
|
|
$
|
1,587,825 |
|
Lease Expense
The components of total lease cost were as follows for the years ended June 30, 2026 and 2025:
|
|
|
Year Ended June 30,
|
|
|
|
|
2026
|
|
|
2025
|
|
|
Finance lease cost
|
|
|
|
|
|
|
|
Right-of-use asset amortization
|
|
$
|
467,778 |
|
|
$
|
495,079 |
|
|
Interest expense
|
|
|
104,942 |
|
|
|
114,723 |
|
|
Total lease cost
|
|
$
|
572,720 |
|
|
$
|
609,802 |
|
Lease Obligations
Future undiscounted lease payments for finance leases with initial terms of one year or more are as follows:
|
Fiscal Year Ending June 30, :
|
|
Finance Leases
|
|
|
2027
|
|
$
|
320,919 |
|
|
2028
|
|
|
328,691 |
|
|
2029
|
|
|
489,729 |
|
|
2030
|
|
|
428,598 |
|
|
2031
|
|
|
89,831 |
|
|
Thereafter
|
|
|
257,640 |
|
|
Total undiscounted lease payments
|
|
|
1,915,408 |
|
|
Less: Imputed interest
|
|
|
(242,880 |
)
|
|
Net lease liabilities
|
|
$
|
1,672,528 |
|
Supplemental Lease Information
| | | June 30, 2026 | | | June 30, 2025 | | | Finance lease weighted average remaining lease term (years) | | 4.32 years | | | 5.32 years | | | Finance lease weighted average discount rate | | | 5.0 | % | | | 5.0 | % | | | | | | | | | | | Cash paid for amounts included in the measurement of lease liabilities Financing cash flows from finance leases | | $ | 274,028 | | | $ | 234,109 | | | | | | | | | | | | | Right-of-use assets obtained in exchange for new finance lease liabilities | | $ | - | | | $ | 600,000 | |
|