COMMITMENTS AND CONTINGENCIES

9 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

LITIGATION

We are a party to litigation and other proceedings that arise in the ordinary course of our business. These types of matters could result in fines, penalties, compensatory or treble damages or non-monetary sanctions or relief. In accordance with the accounting guidance for contingencies, we reserve for litigation claims and assessments asserted or threatened against us when a loss is probable and the amount of the loss can be reasonably estimated. We cannot predict the outcome of legal or other proceedings with certainty.

Securities and Exchange Commission ("SEC") Inquiries and Settlement

In fiscal year 2019, the USA Technologies Audit Committee, with the assistance of independent legal and forensic accounting advisors, conducted an internal investigation of then-current and prior period matters relating to certain contractual arrangements, including the accounting treatment, financial reporting and internal controls related to such arrangements (the “2019 Investigation”). During the quarter, the Company entered into a preliminary settlement agreement with the SEC to resolve its investigation of these legacy matters. If approved by the SEC, the Company anticipates that this resolution will entail a financial payment no more than $1 million higher than the amount previously accrued. As of March 31, 2023, we fully reserved for the settlement. During the quarter, the Company received a $2.0 million insurance reimbursement for legal fees and expenses incurred in connection with the 2019 Investigation. The insurance reimbursement was recorded as a reduction of "Investigation, proxy and restatement expenses, net of insurance recoveries" on the Company's Condensed Consolidated Statement of Operations.

The Company has entered into various operating lease obligations. See Note 3 - Leases for additional information.

Purchase Commitments

As of March 31, 2023, the Company had firm commitments to purchase inventory of approximately $7.4 million over the next year.