Leases

9 Months Ended

Mar. 31, 2024

Leases

Leases

Note 14: Leases

The Company leases offices and warehouses, computer equipment and vehicles. Certain operating leases may contain one or more options to renew. The renewal terms can extend the lease term from one to 13 years. The exercise of lease renewal options is at the Company’s sole discretion. Renewal option periods are included in the measurement of the Right of Use (ROU) asset and lease liability when the exercise is reasonably certain to occur.

The depreciable lives of assets and leasehold improvements are limited by the expected lease term unless there is a transfer of title or purchase option reasonably certain of exercise.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Payments due under the lease contracts include fixed payments plus, may include variable payments. The Company’s office space leases require it to make variable payments for the Company’s proportionate share of the building’s property taxes, insurance, and common area maintenance. These variable lease payments are not included in lease payments used to determine the lease liability and are recognized as variable costs when incurred. Fixed payments may contain predetermined fixed rent escalations.

Operating leases are included in the following asset and liability accounts on the Company’s Balance Sheet: Operating Lease Right-of-Use Assets, Current Portion of Operating Lease Obligations, and Noncurrent Operating Lease Obligations. ROU assets and liabilities arising from finance leases are included in the following asset and liability accounts on the Company’s Consolidated Balance Sheet: Property & Equipment - Net, Current Portion of Finance Lease Obligation, and Noncurrent Finance Lease Obligations.

Components of lease expense were as follows for the three and nine months ended March 31, 2024, and 2023:

	Three Months		Three Months		Nine Months		Nine Months
	Ended		Ended		Ended		Ended
	March 31,		March 31,		March 31,		March 31,
Lease Cost ($ in thousands)	2024		2023		2024		2023
Finance Lease Cost:
Amortization of Right of Use Assets	46		51		139		153
Interest on lease liabilities	1		3		4		9
Capitalized Operating Lease Cost	915		949		2,768		3,137
Short – Term Lease Cost	18		—		55		—
Variable Lease Cost	336		14		1,927		36
Total Lease Cost	1,316		1,017		4,893		3,335
Other Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	1		3		4		10
Operating cash flows from Capitalized Operating leases	1,031		1,043		3,077		3,387
Financing cash flows from finance leases	50		53		149		158
Right of use assets obtained in exchange for new finance lease liabilities	—		10,457		—		10,457
Right of use assets obtained in exchange for new Capitalized Operating lease liabilities	8,561		—		8,561		—
Net ROU remeasurement	—		—		—		(9)
Weighted average remaining lease term - finance leases (in Years)	0.42		10.4		0.42		10.4
Weighted average remaining lease term - Capitalized Operating leases (in Years)	0.87		1.7		0.87		1.7
Weighted average discount rate - finance leases	3.57	%	3.70	%	3.57	%	3.70	%
Weighted average discount rate - Capitalized Operating leases	4.16	%	4.13	%	4.16	%	4.13	%

Maturities of operating and finance lease liabilities as of March 31, 2024 are as follows:

($ in thousands)	Operating Leases	Finance Leases
Remaining in fiscal 2024	956	871
2025	1,415	3,338
2026	113	3,340
2027	14	1,987
2028	4	—
Total Lease Payments	2,502	9,536
Less Imputed Interest	(37)	(975)
Total	2,465	8,561