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Note 6 - Leases

6 Months Ended

Dec. 31, 2023

NOTE 6. LEASES

The Company has lease agreements for office equipment that expire in the fiscal year 2026. Lease expenses included in general and administrative expense on the Consolidated Statements of Operations totaled $33,000 and $65,000 for the three and six months ended December 31, 2023, respectively, and $32,000 and $54,000 for the three and six months ended December 31, 2022, respectively.

The following table presents the components of lease cost.

	*Six Months Ended*				*Three Months Ended*
	*December 31,*				*December 31,*
(dollars in thousands)	*2023*		*2022*		*2023*		*2022*
Finance lease cost:
Amortization of right-of-use assets	$	15	$	14	$	8	$	7
Interest on lease liabilities		1		2		-		1
Total finance lease cost		16		16		8		8
Short-term lease cost		50		40		25		25
Total lease cost	$	66	$	56	$	33	$	33

Supplemental information related to the Company's leases follows.

	*Six Months Ended*				*Three Months Ended*
	*December 31,*				*December 31,*
(dollars in thousands)	*2023*		*2022*		*2023*		*2022*
Operating cash flows from financing leases included in lease liabilities	$	1	$	2	$	-	$	1
Financing cash flows from financing leases included in lease liabilities	$	15	$	13	$	8	$	8

Additional qualitative information concerning the Company’s leases follows.

	*December 31, 2023*			*June 30, 2023*
Weighted-average remaining lease term - financing leases (years)		1.75			2.25
Weighted-average discount rate - financing leases		4.75	%		4.75	%

The following table presents the maturities of lease liabilities as of December 31, 2023.

(dollars in thousands)
Fiscal Year	*Finance Leases*
2024 (excluding the six months ended December 31, 2023)	$	16
2025		33
2026		8
Total lease payments		57
Less imputed interest		(3	)
Total	$	54

The Company is the lessor of certain areas of its owned office building under operating leases expiring in various months through fiscal year 2025. At the commencement of an operating 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 $27,000 and $55,000 for the three and six months ended December 31, 2023, respectively, and $31,000 and $65,000 for the three and six months ended December 31, 2022, respectively. The cost of obtaining lessor contracts, which is included in other assets on the Consolidated Balance Sheets, was $3,000 at December 31, 2023, and $4,000 at June 30, 2023.

The following is a summary analysis of annual undiscounted cash flows to be received on leases as of December 31, 2023.

(dollars in thousands)
Fiscal Year	*Operating Leases*
2024 (excluding the six months ended December 31, 2023)	$	21
2025		36
Total lease payments	$	57

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.