Leases

3 Months Ended

Sep. 30, 2022

Leases

Leases

Note 5 - Leases

On July 1, 2022, the Company adopted ASU No. 2016-02 “Leases (Topic 842)” and all subsequent ASUs that modified Topic 842. The Company elected the prospective application approach provided by ASU 2018-11 and did not adjust prior periods for ASC 842. The Company also elected certain practical expedients within the standard and consistent with such elections did not reassess whether any expired or existing contracts are or contain leases, did not reassess the lease classification for any expired or existing leases, and did not reassess any initial direct costs for existing leases. The implementation of the new standard resulted in recognition of right-of-use assets and lease liabilities totaling $698,837 at the date of adoption, which are related to the Company’s lease of premises and equipment used in operations.

Lease liabilities represent the Company’s obligation to make lease payments and are presented at each reporting date as the net present value of the remaining contractual cash flows. Cash flows are discounted at the Company’s incremental borrowing rate in effect at the commencement date of the lease. Right-of-use assets represent the Company’s right to use the underlying asset for the lease term and are calculated as the sum of the lease liability and if applicable prepaid rent, initial direct costs and any incentives received from the lessor.

The Company’s long-term lease agreements are classified as operating leases. Certain of these leases offer the option to extend the lease term and the Company has included such extensions in its calculation of the lease liabilities to the extent the options are reasonably assured of being exercised. The lease agreements do not provide for residual value guarantees and have no restrictions or covenants that would impact dividends or require incurring additional financial obligations.

The following tables present information about the Company’s leases as of and for the three months ended September 30, 2022:

Right-to-use assets	$	672,428
Lease liability		663,025
Weighted average remaining lease term		7.39 years
Weighted average discount rate		3.23%
	Three Months
	Ended September 30,
	2022
Operating lease costs	$	31,929
Short-term lease costs		9,750
Total lease costs	$	41,679
Cash paid for amounts included in measurement of lease liabilities		30,999

A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total of operating lease liabilities is as follows:

	As of September 30,
	2022
Lease payments due
	$	82,758
Nine months ending June 30, 2023		125,220
Year ending June 30, 2024		105,013
Year ending June 30, 2025		103,622
Year ending June 30, 2026		99,575
Thereafter		233,999
Total		750,187
Discount		87,162
Lease liability	$	663,025