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Leases

9 Months Ended

Mar. 31, 2023

5. LEASES

We lease our office facilities under non-cancelable operating leases that expire on various dates through fiscal year 2027 and we were the sublessor for some office spaces through March 2022. We also modified one of the existing operating leases by extending it through 2027, which resulted in an increase in operating lease ROU assets and operating lease liabilities in the amount of $2.8 million during our fiscal year ended June 30, 2022. All of our office leases are classified as operating leases with lease expense recognized on a straight-line basis over the lease term. Lease ROU assets and liabilities are recognized on the commencement date at the present value of lease payments over the lease term. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on information available at the commencement date to determine the present value of lease payments.

Total operating lease costs were $325,000 and $329,000 for the three months ended March 31, 2023 and 2022, respectively. Total operating lease costs were $961,000 and $1.0 million for the nine months ended March 31, 2023 and 2022, respectively.

For the three and nine months ended March 31, 2023, operating cash outflows for operating leases were $307,000 and $900,000, respectively. For the three and nine months ended March 31, 2022, operating cash outflows for operating leases were $468,000 and $1.4 million, respectively.

The following tables present information about leases on our condensed consolidated balance sheets (in thousands):



	March 31,		June 30,
	2023		2022
Assets:
Operating lease right-of-use assets	$	3,086	$	3,850
Liabilities:
Operating lease liabilities		967		1,044
Operating lease liabilities, net of current portion		1,906		2,537

The following table presents information about the weighted average lease term and discount rate as follows:


	As of March 31, 2023			As of June 30, 2022
Weighted average remaining lease term (in years)		3.52			4.05
Weighted average discount rate		4.95	%		4.92	%

As of March 31, 2023, remaining maturities of lease liabilities are as follows (in thousands):


Fiscal Period:
Remaining three months of fiscal 2023	$	314
Fiscal 2024		933
Fiscal 2025		668
Fiscal 2026		688
Fiscal 2027		528
Total minimum lease payments		3,131
Less: Imputed interest		(258)
Total	$	2,873