Leases

6 Months Ended

Dec. 31, 2019

Leases [Abstract]

LEASES

(12) LEASES

In February 2016, the FASB issued Accounting Standards Update 2016-02 (ASU 2016-02), Leases (Topic 842). ASU 2016-02 requires lessees to recognize a right-of-use (ROU) asset and lease liability in the balance sheet for all leases, including operating leases, with terms of more than twelve months. Recognition, measurement, and presentation of expenses and cash flows from a lease by a lessee have not significantly changed from previous guidance. The amendments also require qualitative disclosures along with specific quantitative disclosures. We adopted this guidance using the cumulative-effect adjustment method on July 1, 2019, meaning we did not restate prior periods. Current year financial information is presented under the guidance in topic 842, while prior year information will continue to be presented under Topic 840. Adoption of the standard resulted in the recognition of an operating ROU asset and lease liability of approximately $147,000.

We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use ("ROU") assets, other current liabilities, and operating lease liabilities in our balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our balance sheets.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

We have lease agreements with lease and non-lease components, which are generally accounted for separately. For certain equipment leases, such as vehicles, we account for the lease and non-lease components as a single lease component. Additionally, for certain equipment leases, we apply a portfolio approach to effectively account for the operating lease ROU assets and liabilities.

Our leases have remaining lease terms of 12 to 25 months as of December 31, 2019.

The components of lease expense were as follows:

	Six Months Ended
	December 31, 2019
Operating lease expense	$	51,108
Total lease expense	$	51,108

Supplemental cash flow information related to leases was as follows:

	Six Months Ended
	December 31, 2019
Cash paid for amounts included in measurement of lease liabilities
Operating cash flows from operating leases	$	40,425
Right-of-use assets obtained in exchange for new lease obligation
Operating leases	$	147,291

Supplemental balance sheet information related to leases was as follows:

	December 31, 2019
Operating leases
Operating lease right-of-use assets	$	106,463
Current portion of operating lease liability		102,783
Operating lease liability, net of current portion		14,362
Total operating lease liability	$	117,145
Weighted Average Remaining Lease Term
Operating leases		1.24 Years
Weighted Average Discount Rate
Operating leases		15	%

As of December 31, 2019, maturities of lease liabilities were as follows:

	Operating
Years Ended June 30,	Leases
2020	$	61,575
2021		58,546
2022		8,427
Total minimum lease payments		128,548
Less: amounts representing interest		(11,403	)
Present value of capital lease liabilities	$	117,145