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Leases

9 Months Ended

Mar. 31, 2024

5. LEASES

We lease our office facilities under non-cancelable operating leases that expire on various dates through fiscal year 2033. We also modified three of our existing operating leases by extending the terms under such leases, which resulted in an increase in operating lease right-of-use assets and operating lease liabilities in the amount of approximately $2.1 million during the nine months ended March 31, 2024. 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 $353,000 and $325,000 for the three months ended March 31, 2024 and 2023, respectively. Total operating lease costs were $1.0 million and $961,000 for the nine months ended March 31, 2024 and 2023, respectively.

For the three and nine months ended March 31, 2024, operating cash outflows for operating leases were $310,000 and $900,000, respectively. For the three and nine months ended March 31, 2023, operating cash outflows for operating leases were $307,000 and $900,000, respectively.

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



	March 31,		June 30,
	2024		2023
Assets:
Operating lease right-of-use assets	$	4,077	$	2,797
Liabilities:
Operating lease liabilities		1,192		832
Operating lease liabilities, net of current portion		2,803		1,762

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


	March 31, 2024			June 30, 2023
Weighted average remaining lease term (in years)		5.34			3.40
Weighted average discount rate		7.61	%		4.97	%

As of March 31, 2024, remaining maturities of lease liabilities are as follows (in thousands):


Fiscal Period:
Remaining three months of fiscal 2024	$	299
Fiscal 2025		1,181
Fiscal 2026		1,056
Fiscal 2027		805
Fiscal 2028		278
Fiscal 2029		278
Fiscal 2030 and thereafter		1,249
Total minimum lease payments		5,146
Less: Imputed interest		(1,151)
Total operating lease liabilities		3,995
Less: Current operating lease liabilities		(1,192)
Total operating lease liabilities, net of current portion	$	2,803