Item 2. Properties
ITEM
2 - PROPERTIES
Our
corporate headquarters and production facility totals approximately 63,200 square feet and is located in Vista, California. Our
production facility is ISO 9001 certified. In June 2019 we relocated to our current facility, noted above, where we leased approximately
45,600 square feet of industrial space. In April 2020, we leased an additional 17,600 rentable space under a lease which terminates
concurrently with the term for the lease of the original lease, which expires on November 20, 2026. Monthly rent for the total
space is approximately $58,700 per month and escalates approximately 3% per year through the end of the lease term on November
20, 2026. We also subleased space to a related party, Epic Boats, on a month-to-month basis at a rate of 10% of lease expense
during Fiscal 2019, and such sublease ended on June 30, 2019. Total rent expense was approximately $673,000 and $168,000 for the
years ended June 30, 2020 and 2019, respectively, net of sublease income.
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