Leases

12 Months Ended

Jun. 30, 2020

Leases [Abstract]

Leases

3. Leases

The Company leases certain laboratory and office space under operating leases, which are described below.

Alachua, Florida

The Company’s headquarters is located in Alachua, Florida where it leases approximately 21,500 square feet of office and laboratory space under a lease arrangement that expires in December 2027. The Company has options to extend the term of the Alachua lease for three additional five-year periods.

Cambridge, Massachusetts

The Company leases approximately 8,000 square feet of office and laboratory space in Cambridge, Massachusetts under a lease arrangement that expires in February 2025. The Company has an option to extend the Cambridge lease for one additional three-year term. The Cambridge facility primarily focuses on business development, pharmacology and basic research and development.

Additionally, the Company leases certain office equipment under a finance lease. 

Lease costs recognized under ASU 2016-02

The table below summarizes the lease costs recognized under ASU 2016-02 and other information pertaining to the Company’s operating and finance leases for the year ended June 30, 2020.

In thousands
Lease cost:
Finance lease cost
Amortization of right-of-use asset	$	46
Interest on lease liability		8
Operating lease cost		770
Variable lease cost		379
Total lease cost	$	1,203
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used for finance lease	$	8
Operating cash flows used for operating leases	$	1,091
Financing cash flows used for finance lease	$	45
Other information:
Weighted average remaining lease term - operating leases (in years)		6.1
Weighted average remaining lease term - finance lease (in years)		1.8
Weighted average discount rate - operating leases		8.5	%
Weighted average discount rate - finance lease		6.9	%

Amortization of the right-of-use asset - finance lease is included in general and administrative and other in the Company’s Statements of Operations. Operating lease cost and variable lease cost are included as rent expense in general and administrative and other, and research and development in the Company’s Statements of Operations. Variable lease cost primarily includes the Company’s allocated share of the expenses incurred by its landlords to operate and manage the office and laboratory space that the Company leases.

As of June 30, 2020, future minimum commitments for the Company’s operating and finance leases for the years ending June 30 are summarized below.

In thousands
Operating lease liabilities:
2021	$	1,109
2022		1,128
2023		1,148
2024		1,168
2025		888
Thereafter		1,159
Total future minimum payments for operating leases		6,600
Imputed interest		(1,472	)
Operating lease liabilities per the balance sheet	$	5,128
Finance lease liability:
2021	$	53
2022		39
Total future minimum payments for finance lease		92
Imputed interest		(6	)
Total finance lease liability per the balance sheet	$	86

Based on the Company’s selected method of adoption for ASU 2016-02, the prior U.S. GAAP disclosures under Topic 840 are required to be presented in the Company’s financial statements during the year ended June 30, 2020. As such, below are the Company’s annual minimum lease payments, including estimated common area maintenance charges, for the years ended or ending June 30 under non-cancelable operating leases as of June 30, 2019.

In thousands
2020	$	1,353
2021		1,376
2022		1,400
2023		1,425
2024		1,450
Thereafter		2,638
Total	$	9,642

Under Topic 840, the Company’s rent expense for operating leases was $1.1 million during the year ended June 30, 2019. Contractual rent increases, rent concessions and landlord incentives were recognized ratably over the life of the related lease agreement under Topic 840.