Commitments and Contingencies

12 Months Ended

Jun. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

A majority of the Company’s net revenues in fiscal years 2021, 2020 and 2019 were received from the sale of products purchased from the Company’s ten largest suppliers. The Company has entered into written agreements with substantially all of its major suppliers. While the Company’s agreements with most of its suppliers contain standard provisions for periodic renewals, these agreements generally permit termination by either party without cause upon 30 to 120 days' notice.

The Company or its subsidiaries are, from time to time, parties to lawsuits arising out of operations. Although there can be no assurance, based upon information known to the Company, the Company believes that any liability resulting from an adverse determination of such lawsuits would not have a material adverse effect on the Company’s financial condition or results of operations.

Capital Projects

The Company expects total capital expenditures to range from $5.0 million to $8.0 million during fiscal year 2022 primarily for rental equipment investments, IT investments and facility improvements.

Pre-Acquisition Contingencies

During the Company's due diligence for the Network1 acquisition, several pre-acquisition contingencies were identified regarding various Brazilian federal and state tax exposures. The Company recorded indemnification receivables that are reported gross of the pre-acquisition contingency liabilities as the funds were escrowed as part of the acquisition. There were no deposits into the escrow account and $1.1 million was released from the escrow account during the fiscal year ended June 30, 2021. There were no deposits into, or releases from the escrow account for the fiscal year ended June 30, 2020. The amount available after the impact of foreign currency translation, as of June 30, 2021 and 2020, for future pre-acquisition contingency settlements or to be released to the sellers was $4.0 million and $4.8 million, respectively.

The table below summarizes the balances and line item presentation of Network1's pre-acquisition contingencies and corresponding indemnification receivables in the Company's consolidated balance sheet:


	June 30, 2021		June 30, 2020
	(in thousands)
Assets
Prepaid expenses and other assets (current)	$	16	$	14
Other assets (noncurrent)	$	3,998	$	3,652
Liabilities
Other current liabilities	$	16	$	14
Other long-term liabilities	$	3,998	$	3,652

The net decline in the value of pre-acquisition contingencies for Network1 is primarily due to the expiration of the statute of limitations for identified pre-acquisition contingencies. The amount of reasonably possible undiscounted pre-acquisition contingencies as of June 30, 2021 is estimated to range from $4.0 million to $16.2 million at this time, of which all exposures are indemnifiable under the share purchase agreement.