Leases

9 Months Ended

Mar. 31, 2022

Note 7. Leases

We are party to a lease agreement for approximately 32,800 square feet of office space in San Diego, California. We have accounted for the lease as an operating lease. The original contractual lease term was from July 2020 through March 2028. The lease contained an option to renew and extend the lease terms. We have not included the lease extension within the ROU asset and lease liability on the balance sheet as it is not reasonably certain to be exercised. The lease includes variable non-lease components (e.g., common area maintenance, maintenance, etc.) that are not included in the ROU asset and lease liability and are reflected as an expense in the period incurred. We do not have any other operating or finance leases. Upon commencement of the original lease, we recognized an operating lease ROU asset of $8.7 million and a corresponding operating lease liability of $8.7 million.

In January 2022, we entered into an amended lease agreement for an additional 12,300 square feet of office space in San Diego, California, for a total of approximately 45,100 square feet of office space. The amended lease agreement extended the term of our current office space by 22 months, through January 2030. The lease term for the additional space will begin upon the earlier of September 1, 2022 or the date that the landlord’s work is completed on the additional space, and will expire in January 2030. Our total contractual obligation over the term of the amended lease is approximately $21.5 million. Upon commencement of the lease amendment, we recognized an operating lease ROU asset of $2.4 million and a corresponding operating lease liability of $2.4 million for the extended term of our current office space.

The total operating lease costs were as follows (in thousands):


	Three Months Ended March 31,				Nine Months Ended March 31,
	2022		2021		2022		2021
Operating lease cost	$	377	$	377	$	1,130	$	1,130

Supplemental cash flow information related to our operating leases were as follows (in thousands):


	Three Months Ended March 31,				Nine Months Ended March 31,
	2022		2021		2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	380	$	369	$	1,139	$	615
Right-of-use assets obtained in exchange for operating lease obligations:		2,386		—		2,386		8,689

The following is a schedule of the future minimum rental payments for our operating lease, reconciled to the lease liability as of March 31, 2022 (in thousands):


	March 31, 2022
Remainder of fiscal year ending June 30, 2022	$	380
Years ending June 30,
2023		1,565
2024		1,612
2025		1,168
2026		1,710
2027		1,761
Thereafter		5,450
Total lease payments		13,646
Less: Present value discount		(3,607	)
Total operating lease liability	$	10,039
Balance Sheet Classification – Operating Lease
Operating lease liability	$	828
Operating lease liability, long-term		9,211
Total operating lease liability	$	10,039
Other Balance Sheet Information – Operating Lease
Weighted average remaining lease term (in years)		7.8
Weighted average discount rate		7.50	%