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Leases

3 Months Ended

Sep. 30, 2019

Note 9. Leases

The Company has four leases for office and warehouse space that require monthly payments. These leases have escalating payments ranging from approximately $450 to $4,400 per month which expire through July 2022 and are recognized on a straight-line basis over the life of the lease. The Company has a lease for office equipment that requires payments of approximately $1,500 per month through December 2022. All leases are classified as operating leases which do not include renewal options. The Company currently does not have any short-term or variable lease costs. The Company applied the practical expedient to calculate the present value of the fixed payments without having to perform an allocation to lease and non-lease components.

The Company has recognized a right of use assets associated with its operating leases of approximately $138,000 and $45,000 as of September 30, 2019 and June 30, 2019, respectively, which is included in other assets on the Company’s Condensed Balance Sheet. Operating lease liabilities were $138,000 and $45,000 as of September 30, 2019 and June 30, 2019, respectively, which are included in current maturities of long-term liabilities and other long-term liabilities on the Company’s Condensed Balance Sheet.

For the three months ended September 30, 2019, the Company has a weighted-average lease term of 0.9 years for its operating leases, which have a weighted-average discount rate of 4.0%. Operating lease payments of $22,000 are included in operating cash flows for the three months ended September 30, 2019.

Maturities of lease liabilities, which are included in current maturities of long-term liabilities and other long-term liabilities on the Company’s Condensed Balance Sheet, are as follows:

Fiscal years ending June 30:
2020^*	$	64,000
2021		71,000
2022		7,000
2023		1,000
Total lease payments		143,000
Less: Interest		(5,000	)
Present value of lease liabilities	$	138,000
^*Nine months ended June 30, 2019