Leases

12 Months Ended

Jun. 30, 2021

LeasesOperating leases are reflected as an operating lease ROU asset included in “Other assets, net”, and as a ROU liability in “Accrued liabilities and other” and “Operating lease liability” on our consolidated balance sheets. Operating lease ROU assets and liabilities are recognized at the commencement date of an arrangement based on the present value of lease payments over the lease term. In addition to the present value of lease payments, the operating lease ROU asset would also include any lease payments made to the lessor prior to lease commencement less any lease incentives and initial direct costs incurred, if any. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Certain leases have payment terms that vary based on the usage of the underlying assets. Variable lease payments are not included in ROU assets

and lease liabilities. For all operating leases, lease and non-lease components are accounted for as a single lease component.

As a non-operator in recent years and having adequate liquidity, the Company has generally not entered into lease transactions. Presently, our only operating lease is for corporate office space in Houston, Texas, effective May 1, 2019 and which expires November 30, 2022. Presently we have one operating lease for office space, no finance leases, and no short-term leases.

The Company makes certain assumptions and judgments when evaluating a contract that meets the definition of a lease under Topic 842. At adoption, July 1, 2019, as our lease did not provide an implicit rate, we used our prime-rate-based borrowing rate under our senior secured credit facility as our incremental borrowing as the term facility was based on a similar term and is appropriately risk-adjusted. We determined lease term by considering any option available to extend or to early terminate the lease which we believed was reasonably certain to be exercised.

At June 30, 2021, maturities of our operating lease liability are as follows:


Fiscal Year	Operating Lease Liability
2022	61,843
2023	26,098
Total lease payments	87,941
Less imputed interest	(2,962)
Total lease liability	$	84,979

Supplemental cash flow, balance sheet, and other disclosures information related to our operating leases are as follows:


	As of and For the Year Ended June 30, 2021			As of and For the Year Ended June 30, 2020
Cash Flow:
Cash paid for amounts included in the measurement of lease liabilities	$	59,945		$	4,903
ROU asset added in exchange for lease obligation at adoption	—			161,125

Balance Sheet:
Operating lease ROU asset (included in other assets)	70,789			117,193
Accrued liabilities - current	64,234			54,290
Operating lease liability - long-term	20,745			84,978

Other:
Weighted average remaining lease term in years	1.34			2.66
Weighted average discount rate	5.15		%	5.15		%