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Note 24 - Leases

12 Months Ended

Jun. 30, 2022

24. LEASES

Company as Lessor

Operating leases under which the Company is the lessor arise from leasing the Company’s commercial real estate investment property to third parties. Initial lease terms generally range from 12 to 60 months. Depreciation expense for assets subject to operating leases is taken into account primarily on the straight-line method over a period of twenty years in amounts necessary to reduce the carrying amount of the asset to its estimated residual value. Depreciation expense relating to the property held as investments in operating leases were $75 and $72 for the years ended June 30, 2022 and 2021, respectively.

Future minimum rental income in China and Thailand to be received from fiscal year ended June 30, 2023 to fiscal year ended June 30, 2027 on non-cancellable operating leases, and is contractually due as of June 30, 2022, as follows:

2023	$	6
2024	$	27
2025	$	28
2026	$	29
2027	$	10
	$	100

Future minimum rental income in China and Thailand to be received from Fiscal 2022 to the fiscal year ended June 30, 2023 on non-cancellable operating leases, and is contractually due as of June 30, 2021, as follows:

2022	$	145
2023	$	16
	$	161

Sales-type leases under which the Company is the lessor arise from the lease of four units of chiller systems. The Company classifies its lease arrangements at inception of the arrangement. The lease term is 3 years, contains an automatic transfer of title at the end of the lease term and a guarantee of residual value at the end of the lease term. The customer is required to pay for executory cost such as taxes.

Financing receivables, consisting of net investment in sales-type leases and receivables from financed sales of four units of chiller systems are as follows:

Components of Lease Balances	June 30,
	2022
Assets
Gross financial sales receivable	$	41
Unearned finance income		(3	)
Financed Sales Receivable	$	38

Net financed sales receivables due within one year	$	21
Net financed sales receivables due after one year	$	17

As of June 30, 2022, the financed sale receivables had a weighted average effective interest rate of 11.16% and weighted average remaining lease term of 1.75 years.

Company as Lessee

The Company has operating leases for corporate offices and research and development facilities with remaining lease terms of one year to five years and finance leases for plant and equipment.

Supplemental balance sheet information related to leases is as follows (in thousands):

			June 30,
Components of Lease Balances	Classification		2022

Assets
Operating lease assets	Right-of-use asset-operating, net	$	3,152
Finance lease assets	Property, plant & equipment		1,727
Accumulated amortization Right-of-use asset			(1,179	)
Assets	Property, plant & equipment	$	548
*Total Leased Assets*		$	3,700

Liabilities
Operating Lease Liabilities
Current portion	Current portion of lease liability- operating	$	1,218
Long-term portion	Lease liability- operating, net of current portion		1,934
*Total Operating Lease Liabilities*		$	3,152
Finance Lease Liabilities
Current portion of finance leases	Current portion of lease liability- finance	$	118
Net of current portion of finance leases	Lease liability- finance, net of current portion		119
*Total Finance Lease Liabilities*		$	237

*Total Lease Liabilities*		$	3,389

	June 30, 2022
Lease Cost
Finance lease cost:
Interest on lease liability	$	29
Amortization of right-of-use asset		209
Total Finance Lease Cost		238

Operating Lease Costs	$	949

Other information related to leases was as follows (in thousands except lease term and discount rate):

	June 30,
	2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from finance leases	$	(21	)
Operating cash flows from operating leases	$	(1,151	)
Right-of-use assets obtained in exchange for new operating lease liabilities	$	1,276

Weighted average remaining lease term (years):
Finance leases		2.02
Operating leases		2.83
Weighted average discount rate:
Finance leases		3.26
Operating leases		5.53

As of June 30, 2022, the maturities of the Company's operating and finance lease liabilities were as follow:

	Operating Lease Liabilities			Finance Lease Liabilities
Fiscal Year
2023		1,357			129
2024		1,032			104
2025		554			20
2026		423			-
Thereafter		69			-
Total future minimum lease payments	$	3,435		$	253
Less: amount representing interest		(283	)		(16	)
Present value of net minimum lease payments		3,152			237

Presentation on statement of financial position
Current	$	1,218		$	118
Non-Current	$	1,934		$	119

As of June 30, 2021, the maturities of the Company's operating and finance lease liabilities were as follow:

	Operating Lease Liabilities			Finance Lease Liabilities
Fiscal Year
2022		748			218
2023		537			137
2024		313			111
2025		291			22
Thereafter		156			-
Total future minimum lease payments	$	2,045		$	488
Less: amount representing interest		(169	)		(38	)
Present value of net minimum lease payments		1,876			450

Presentation on statement of financial position
Current	$	672		$	197
Non-Current	$	1,204		$	253