LEASES

6 Months Ended

Dec. 31, 2021

LEASESThe Company has operating leases for real estate, field equipment, office equipment and vehicles and financing leases for vehicles and office equipment. Operating leases are included in Operating Lease Right of Use ("ROU") Asset and Operating Lease Liability on our Condensed Consolidated Balance Sheets. Financing leases are included in Financing Lease ROU Asset and Financing Lease Liability on the Condensed Consolidated Balance Sheets.

During the three and six months ended December 31, 2021 and 2020, lease cost amounts, which reflect the fixed rent expense associated with operating and financing leases, are as follows (in thousands):


	Three-Months Ended December 31,				Six-Months Ended December 31,
	2021		2020		2021		2020
Lease cost (1) - fixed rent expense:
Operating lease cost included in:
Cost of revenues	$	671	$	621	$	1,324	$	1,192
Selling, general and administrative	112		113		222		226
Financing lease cost included in:
Cost of revenues (amortization expense)	24		18		89		36
Interest expense	7		4		15		8
Total	$	814	$	756	$	1,650	$	1,462

(1) Short-term lease cost and variable lease cost were not significant during the period.

During the six months ended December 31, 2021 and 2020, the Company had the following cash and non-cash activities associated with leases (in thousands):


	Six-Months Ended December 31,
	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflow for operating leases	$	1,553	$	1,357
Non-cash changes to the Operating ROU Asset and Operating Lease Liability
Additions and modifications to ROU asset obtained from new operating lease liabilities	$	2,170	$	1,688

Additions to ROU asset obtained from new financing lease liabilities	$	190	$	—

As of December 31, 2021, the weighted average remaining lease term for all operating and financing leases is 3.93 years and 5.07 years. The weighted average discount rate associated with operating and financing leases as of December 31, 2021 is 4% and 3%, respectively.

The future payments due under operating leases as of December 31, 2021 is as follows (in thousands):


Future payments due in the twelve months ended December 31,	Operating lease		Financing lease
2022	$	2,780	$	217
2023	2,592		215
2024	2,338		215
2025	1,662		204
2026	485		169
Thereafter	92		52
Total undiscounted lease payments	9,949		1,071
Less effects of discounting	(740)		(78)
Lease liability recognized	$	9,209	$	993

Effective January 24, 2022, the Company entered into a lease agreement for 27,318 square feet of additional warehouse space in Houston, Texas. This lease extends through January 23, 2027. The blended base rent for the first year of the Term is $5.76 per square foot with subsequent annual increases of 2.5%. The future minimum lease payments for the extended lease will be

an additional $0.1 million, $0.2 million, $0.2 million, $0.2 million, $0.2 million and $0.2 million for the twelve months ended December 31, 2022, 2023, 2024, 2025, 2026, and 2027, respectively.