Leases

9 Months Ended

Mar. 31, 2023

Note 9. – Leases

The Company has operating leases and a financing lease relating to its pharmacy operations, medical office buildings, certain medical equipment, and office equipment. All lease agreements generally require the Company to pay maintenance, repairs, property taxes and insurance costs, all of which are variable amounts based on actual costs. Variable lease costs also include escalating rent payments that are not fixed at commencement but are based on an index determined in future periods over the lease term based on changes in the Consumer Price Index or other measure of cost inflation. Some leases include one or more options to renew the lease at the end of the initial term, with renewal terms that generally extend the lease at the then market rental rates. Leases may also include an option to buy the underlying asset at or a short time prior to the termination of the lease. All such options are at the Company’s discretion and are evaluated at the commencement of the lease, with only those that are reasonably certain of exercise included

in determining the appropriate lease term. The components of lease cost and rent expense for the three and nine months ended March 31, 2023 and 2022 are as follows:


	Three Months Ended		Three Months Ended		Nine Months Ended		Nine Months Ended
Lease Cost	March 31, 2023		March 31, 2022		March 31, 2023		March 31, 2022
Operating lease cost:
Operating lease cost	$	85	$	112	$	266	$	362
Short-term rent expense (benefit)		52		17		113		56
Variable lease cost		0		0		2		1
Total operating lease cost	$	137	$	129	$	381	$	419

Finance lease cost:
Amortization right-of-use assets	$	11	$	9	$	29	$	27
Interest on finance lease liabilities		0		1		2		4
Total finance lease cost	$	11	$	10	$	31	$	31

Supplemental balance sheet information relating to leases was as follows:


		As of		As of
		March 31,		June 30,
		2023		2022
Operating Leases:	Balance Sheet Classifications
Operating Lease ROU Assets	ROU Assets	$	947	$	1,187

Finance Leases:
Finance Lease ROU Assets	Property, plant and equipment		203		203
Accumulated amortization	Accumulated depreciation		125		101
Current finance lease liabilities	Current maturities of long-term debt		24		40
Long-term finance lease liabilities	Long-term debt		0		14

Supplemental cash flow and other information related to leases as of and for the three and nine months ended March 31, 2023 and 2022 are as follows:


	Three Months Ended						Nine Months Ended
Other information	March 31, 2023			March 31, 2022			March 31, 2023			March 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	91		$	114		$	273		$	366
Operating cash flows from finance leases		2			1			2			4
Financing cash flow from finance leases		10			10			29			28
Right-of-use assets obtained in exchange for new operating lease liabilities		0			289			24			324
Weighted-average remaining lease term:
Operating leases	2.83 years			3.74 years			2.83 years			3.74 years
Finance leases	0.66 years			1.66 years			0.66 years			1.66 years
Weighted-average discount rate:
Operating leases		1.00	%		1.04	%		1.00	%		1.04	%
Finance leases		6.54	%		6.54	%		6.54	%		6.54	%

Commitments relating to non-cancellable operating and finance leases as of March 31, 2023 for each of the next five years and thereafter are as follows:


Payments due within	Operating Leases			Finance Leases
1 year	$	359		$	25
2 years		342			0
3 years		255			0
4 years		16			0
5 years		5			0
Over 5 years		0			0
Total minimum future payments		977			25
Less: Imputed interest		(14	)		(1	)
Total liabilities		963			24
Less: Current portion		(351	)		(24	)
Long-term liabilities	$	612		$	0