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Note 8 - Leases

12 Months Ended

Jun. 30, 2022

NOTE 8. LEASES

The Company has lease agreements for office equipment that expire in fiscal year 2026. Lease expense totaled $168,000 and $155,000 for the years ended June 30, 2022, and 2021, respectively.

The components of lease expense included in general and administrative expense on the Consolidated Statements of Operations for the years ended June 30, 2022, and June 30, 2021, and qualitative information concerning the Company’s leases were as follows:

	*Year Ended*			*Year Ended*
	*June 30,*			*June 30,*
(dollars in thousands)	*2022*			*2021*
Operating lease cost	$	44		$	53
Short-term lease cost		124			102
Total lease cost	$	168		$	155

Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	44		$	53

Right-of-use assets obtained in exchanged for:
Net finance lease liabilities	$	93		$	-

Finance leases:
Weighted-average remaining lease term (in years)		3.25			-
Weighted-average discount rate		4.75	%		-

Operating leases:
Weighted-average remaining lease term (in years)		-			0.83
Weighted-average discount rate		-			4.11	%

Maturities of lease liabilities as of June 30, 2022, are as follows:

(dollars in thousands)
Fiscal Year	*Finance Leases*
2023	$	31
2024		31
2025		31
2026		8
2027		-
Total lease payments		101
Less imputed interest		(8	)
Total	$	93

The Company is the lessor of certain areas of its owned office building under operating leases expiring in various years through fiscal year 2025. At the commencement of an operation lease, no income is recognized; subsequently, lease payments received are recognized on a straight-line basis. Lease income included in other income on the Consolidated Statements of Operations was $115,000 and $91,000, for fiscal years 2022 and 2021, respectively. The cost of obtaining lessor contracts, which is included in other assets on the Consolidated Balance Sheets, was $9,000 and $4,000 at June 30, 2022, and June 30, 2021, respectively.

A summary analysis of annual undiscounted cash flows to be received on leases as of June 30, 2022, is as follows:

(dollars in thousands)
Fiscal Year	*Operating Leases*
2023	$	75
2024		42
2025		36
Total lease payments	$	153

The Company may terminate the building leases with one hundred eighty days written notice if it sells the property. If the Company terminates the lease, the Company will pay the tenant a termination fee of the lesser of six months of the base monthly rent or the base monthly rent times the number of months remaining in the initial term.