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Note 6 - Leases

9 Months Ended

Mar. 31, 2025

Note 6 - Leases

The Company has entered into various operating lease agreements for certain of its offices, manufacturing facilities and equipment, and finance lease agreements for certain equipment. These leases have original lease periods expiring between calendar year 2024 and calendar year 2030. Most leases include one or more options to renew, and the exercise of a lease renewal option typically occurs at the discretion of both parties. Certain non-real estate leases also include options to purchase the leased property. The Company’s lease agreements generally do not contain any material residual value guarantees or material restrictive covenants. The Company had no remaining finance leases recorded as of June 30, 2024.

In June 2024, the Company entered into a forward-starting operating lease agreement to lease office space in Berwyn, Pennsylvania from the owner of the office space that the Company is currently renting under a sublease arrangement. The Company determined that it is an operating lease, and that lease commencement occurred in July 2024. The initial lease termination date is July 31, 2030, and under the lease agreement the Company has one five-year renewal option to extend the lease through July 2035. Undiscounted minimum monthly rent payments average approximately $13,000 over the initial term of the lease. The Company has elected to utilize the practical expedient to not separate lease and non-lease components upon recognition and variable lease payments will be expensed as incurred. The Company recorded an operating lease ROU asset of $0.5 million and a lease liability of $0.5 million at lease commencement in July 2024. The ROU asset and lease liability will be recorded at present value using an incremental borrowing rate of 12.3%.

In June 2024, as part of the wind down of the Consumer Health business, the Company ceased using its leased Oceanside, California warehouse. As a result, the Company wrote off the remaining related operating lease ROU assets associated with this lease. The lease for the Oceanside, California warehouse was set to expire on December 31, 2026, however, in March 2025, the Company terminated this lease with the landlord and recorded a net gain on lease termination of $0.1 million in general and administrative expense in the unaudited consolidated statement of operations.

The components of lease costs are as follows:

	*Three Months Ended*				*Nine Months Ended*
	*March 31,*				*March 31,*
	*2025*		*2024*		*2025*		*2024*		*Statement of Operations Classification*
	(in thousands)
Lease cost:
Operating lease cost	$	120	$	388	$	385	$	1,129	Operating expenses
Short-term lease cost		3		25		180		69	Operating expenses
Finance lease cost:
Amortization of leased assets		—		14		—		43	Cost of sales
Interest on lease liabilities		—		1		—		3	Interest expense
Total lease cost	$	123	$	428	$	565	$	1,244

Supplemental balance sheet information related to leases is as follows:

	*March 31,*		*June 30,*
	*2025*		*2024*		*Balance Sheet Classification*
	(in thousands)
Assets:
Non-current: operating leases	$	1,111	$	829	Operating lease right-of-use assets

Liabilities:
Current: operating leases	$	102	$	712	Other current liabilities
Non-current: operating leases		1,001		577	Other non-current liabilities
Total lease liabilities	$	1,103	$	1,289

The remaining weighted-average lease term and discount rate used are as follows:

	*March 31,*			*June 30,*
	*2025*			*2024*
Weighted-average remaining lease term (years):
Operating lease right-of-use assets		4.6			2.7
Weighted-average discount rate:
Operating lease right-of-use assets		11.2	%		10.0	%

Supplemental cash flow information related to leases is as follows:

	*Nine Months Ended*
	*March 31,*
	*2025*		*2024*
	(in thousands)
Cash flow classification of lease payments:
Operating cash flows from operating leases	$	739	$	1,034
Operating cash flows from finance leases	$	—	$	3
Financing cash flows from finance leases	$	—	$	69

As of June 30, 2024, the Company did not have any remaining finance leases. As of March 31, 2025, the Company’s future minimum lease payments were as follows:

	*Operating*
	(in thousands)
2025 (remaining 3 months)	$	17
2026		309
2027		331
2028		386
2029		358
2030		230
Thereafter		19
Total lease payments		1,650
Less: imputed interest		(421	)
Less: tenant improvement allowance		(126	)
Lease liabilities	$	1,103