Leases

6 Months Ended

Dec. 31, 2022

Leases

Leases

Note 10 – Leases

The Company leases office and building space and equipment under operating lease agreements. The Company previously leased computer equipment under finance lease agreements that was disposed of in June 2022. The Company’s lease agreements have terms not exceeding five years. Certain leases contain options to extend that are assessed by management at the commencement of the lease and are included in the lease term if the Company is reasonably certain of exercising.

In July 2021, the Company commenced a lease for office space of approximately 284 square meters in Saint Julians, Malta over a 3-year lease term. The lease has an annual expense of €83,000 ($89,032 translated using the exchange rate in effect at December 31, 2022), increasing 4% annually. At lease inception, the Company determined it was not reasonably certain to exercise any of the options to extend. In October 2021, the Company commenced a lease for building space of approximately 3,200 square feet at the University of California in Los Angeles over a 5-year lease term (the “UCLA Lease”). The lease has an annual expense of $17,500, increasing 3% annually. At lease inception, the Company determined it was not reasonably certain to exercise any of the options to extend. On January 26, 2023, the Company agreed to terminate the UCLA lease and there are no further obligations going forward.

The consolidated balance sheet allocation of assets and liabilities related to operating and finance leases is as follows:

	Condensed Consolidated Balance Sheet Caption	December 31, 2022 (unaudited)		June 30, 2022
Assets:
Operating lease assets	Operating lease right-of-use assets	$	126,064	$	164,288
Total lease assets		$	126,064	$	164,288
Liabilities:
Current:
Operating lease liabilities	Operating lease liability - current	$	422,344	$	364,269
Long-term:
Operating lease liabilities	Operating lease liability - non-current		549,482		669,286
Total lease liabilities		$	971,826	$	1,033,555

The operating lease expense for the three and six months ended December 31, 2022 was $36,154 and $73,408, respectively. The operating lease expense for the three and six months ended December 31, 2021 was $181,313 and $296,216, respectively. The finance lease expense for the three and six months ended December 31, 2021 was $8,430 and $23,182, respectively. The rent expense for short-term leases was not material to the unaudited condensed consolidated financial statements.

Weighted average remaining lease terms and discount rates follow:

	December 31, 2022			June 30, 2022
Weighted Average Remaining Lease Term (Years):
Operating leases		3.43			3.87
Weighted Average Discount Rate:
Operating leases		8.00	%		8.00	%

The future minimum lease payments at December 31, 2022 follows:

	Operating Lease
Remainder of fiscal 2023	$	318,834
Fiscal 2024		315,170
Fiscal 2025		222,789
Fiscal 2026		229,473
Total lease payments		1,086,266
Less: imputed interest		(114,440	)
Present value of lease liabilities	$	971,826