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Leases

12 Months Ended

Jun. 30, 2023

Leases

In general, our leases include office buildings for various facilities worldwide which are all classified as operating leases. We also have financing leases related to some office equipment in the United States.

Components of lease expense and supplemental cash flow information:

Components of lease expense
	June 30, 2023
	(In thousands)
Components of lease expense
Operating lease cost	$	2,583
Financing lease cost		30
Financing lease interest expense		10

Supplemental cash flow information
Cash paid for amounts included in the measurement of operating lease liabilities	$	1,701
Cash paid for amounts included in the measurement of financing lease liabilities	$	30

Right-of-use assets obtained in exchange for lease obligation	$	4,856

The weighted-average remaining lease term is 3.76 years. The weighted-average discount rate is 4.6 percent.

Maturities of lease liabilities as of June 30, 2023 were as follows:

Maturities of lease liabilities
Years ending June 30,	Operating			Financing
	(In thousands)
2024	$	2,272		$	222
2025		2,059			213
2026		1,695			117
2027		1,648			22
2028		1,698			19
Thereafter		4,479			–
Total remaining lease payments		13,851			593
less: imputed interest		(2,076	)		(84	)
Lease liability	$	11,775		$	509
Reported as:
Current liabilities	$	1,677		$	182
Non-current liabilities	$	10,098		$	327

California Corporate Headquarters Lease

In July 2022, we commenced the lease of approximately 14,000 square feet of office space for our corporate headquarters in Irvine, California. The term of the lease is 84 months from the commencement date, with an option to extend the lease for one 60-month extension period at a basic rent to be agreed upon by the parties or determined pursuant to the lease. The initial basic rent payable is $28,900 per month and is subject to customary annual rent increases. The aggregate basic rent payable under the lease during the 84-month term is approximately $2,700,000. We are also obligated to pay as additional rent our proportionate share of operating expenses, including property taxes. Additionally, the lease required us to deliver to the landlord an irrevocable stand-by letter of credit in the amount of $50,000 as security in the case of default.

We accounted for this lease as an operating lease in accordance with ASC 842. Upon commencement of the lease, we recorded a right-of-use asset of $2,852,000 and lease liability of $2,852,000 at the inception of the lease based upon a discount rate of 4.6% over a term of 7 years.