DISCONTINUED OPERATIONS

3 Months Ended

Sep. 30, 2022

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS:

On June 30, 2022, the Company sold its Opensalon® Pro (OSP) solution to Soham Inc. for a purchase price of $20.0 million in cash plus up to an additional $19.0 million in cash contingent upon the number of salons that migrate to Soham's Zenoti product as their salon technology platform. The Company received $13.0 million in proceeds in June 2022 and an additional $4.0 million in the first quarter of fiscal year 2023. The remaining $3.0 million of the purchase price is subject to holdbacks including $1.0 million which is payable once the Company ends its arrangement with ProPoint in December 2022 and $2.0 million of proceeds held back until general indemnity provisions are satisfied within 18 months from closing. As a result of the sale, the Company classified the OSP business as discontinued operations in the financial statements for all periods presented. Discontinued operations is included in the Franchise segment in the Consolidated Statement of Operations for all periods presented. No income taxes have been allocated to discontinued operations based on the methodology required by accounting for income taxes guidance.

The following summarizes the results of discontinued operations for the periods presented:


	Three Months Ended September 30,
	2022		2021
	(Dollars in thousands)


Discontinued operations:
Fees	$	(226)	$	938
Cost of product sales to franchisees	—		(464)
General and administrative	(27)		(1,005)
Rent	(368)		(56)
Depreciation and amortization	—		(330)

Interest expense	—		(179)
Gain from sale of OSP	3,927		—


Gain (loss) from OSP discontinued operations	$	3,306	$	(1,096)