LEASES

12 Months Ended

Jun. 30, 2023

The Company adopted Accounting Standards Codification 842, Leases "ASC 842" on July 1, 2019. The Company has leased buildings, manufacturing equipment and autos that are classified as Right of Use assets, "ROU", and operating lease liabilities beginning in fiscal 2020 in the Company's Consolidated Balance Sheets. ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date for leases exceeding 12 months. Minimum lease payments include only the fixed lease component of the agreement.

The following tables shows the balance of ROU assets and lease liabilities for operating leases as of June 30, 2023.


	Right-of-Use Assets		Operating Lease Obligations	Remaining Cash Commitment
Operating leases	$	4,931	5,112	$	5,914

The Company had new leases in fiscal 2023 totaling $1.3 million. The Company renewed its leases in both Australia (ends September 2026) and New Zealand (ends April 2025) and recorded $0.6 million in new leases as ROU assets.

The Company’s weighted average discount rate and remaining term on lease liabilities is approximately 9.0% and 3.1 years. As of June 30, 2023, the Company’s financing leases are de minimis. The foreign exchange impact affecting the operating leases was $0.2 million for the fiscal year ending June 30, 2023. The Company had lease expense of $2.1 million in fiscal 2023 and $2.6 million in fiscal 2022. The Company has other operating lease agreements with commitments of less than one year or that

are not significant. The Company elected the practical expedient option and as such, these lease payments are expensed as incurred.

The Company entered into $1.3 million in operating lease commitments in the twelve months ended June 30, 2023. At June 30, 2023, the Company had the following fiscal year minimum operating lease commitments (in thousands):


	Operating Lease Commitments
2024	$	2,122
2025	1,659
2026	1,352
2027	692
2028	89

Subtotal	$	5,914
Imputed Interest	(802)
Total	$	5,112