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DISCONTINUED OPERATIONS
 12 Months Ended
Jun. 30, 2023
Discontinued Operations and Disposal Groups [Abstract]  
DISCONTINUED OPERATIONS DISCONTINUED OPERATIONS
On June 30, 2022, the Company sold its OSP software-as-a-service solution to Soham Inc. The Company received $13.0 million in proceeds in June 2022 and received an additional $5.0 million in proceeds in fiscal year 2023, offset by a $0.5 million transaction fee. The Company expects to receive an additional $2.0 million of proceeds held back for general indemnity provisions in December 2024 and additional proceeds as salons migrate to the Zenoti platform. As a result of the sale, the Company classified the OSP business, which had been included in the Company's franchise segment, as discontinued operations in the financial statements for all years presented.
The following summarizes the results of discontinued operations for the periods presented:
Fiscal Years
202320222021
(Dollars in thousands)
Discontinued operations:
Fees$(226)$3,811 $3,461 
Cost of product sales to franchisees— (1,037)(2,790)
General and administrative(27)(3,517)(9,006)
Rent(351)(194)(176)
Depreciation and amortization— (1,322)(964)
Goodwill impairment (1)— (2,880)— 
Interest expense— (715)(650)
Gain (loss) from sale of OSP4,562 (36,143)— 
Income (loss) from discontinued operations, before taxes 3,958 (41,997)(10,125)
Income tax benefit from discontinued operations (2)— 2,599 — 
Income (loss) from discontinued operations, net of tax$3,958 $(39,398)$(10,125)
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(1)Goodwill impairment included in discontinued operations represents the portion of impairment allocated to the OSP business based on relative fair value.
(2)Income taxes have been allocated to continuing and discontinued operations based on the methodology required by accounting for income taxes guidance. There was no tax impact in fiscal years 2023 and 2021 due to a valuation allowance.
The Company exited its office space in Fremont, California, but remains liable for lease payments through September 2024. The related liability is included in accrued expenses as of June 30, 2023 in the Consolidated Balance Sheets. The Company is actively trying to sublet the space.
The following summarizes the gain (loss) from sale of OSP for the periods presented:
Fiscal Years
202320222021
(Dollars in thousands)
Cash proceeds$5,000 $13,000 $— 
Goodwill derecognition— (38,358)— 
Software write-off (1)(64)(8,408)— 
Hardware write-down (2)(367)(1,825)— 
Other, net, including professional fees(7)(552)— 
Gain (loss) from sale of OSP$4,562 $(36,143)$— 
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(1)Write-off of internally developed capitalized software.
(2)Prior to the sale, hardware used to run OSP was sold to franchisees. As a result of the sale, the Company wrote-down the value of the hardware to its net realizable value and the charge is included in the loss on the sale of OSP.
The following summarizes capital expenditures related to discontinued operations for the periods presented:
Fiscal Years
202320222021
(Dollars in thousands)
Capital expenditures$— $1,067 $3,591