Leases

3 Months Ended

Sep. 30, 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 months ended September 30, 2023 and 2022 are as follows:


	Three Months Ended		Three Months Ended
Lease Cost	September 30, 2023		September 30, 2022
Operating lease cost:
Operating lease cost	$	85	$	85
Short-term rent expense		5		6
Variable lease cost		1		1
Total operating lease cost	$	91	$	92

Finance lease cost:
Amortization of right-of-use assets	$	9	$	9
Interest on finance lease liabilities		0		1
Total finance lease cost	$	9	$	10

Supplemental balance sheet information relating to leases was as follows:


		As of		As of
		September 30,		June 30,
		2023		2023
Operating Leases:	Balance Sheet Classifications
Operating lease ROU Assets	ROU Assets	$	732	$	798

Finance Leases:
Finance lease ROU Assets	Property, plant and equipment		203		203
Accumulated amortization	Accumulated depreciation		138		130
Current finance lease liabilities	Current maturities of long-term debt		3		14

Supplemental cash flow and other information related to leases as of and for the three months ended September 30, 2023 and 2022 are as follows:


	Three Months Ended
Other information	September 30, 2023			September 30, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	85		$	85
Operating cash flows from finance leases		0			1
Financing cash flow from finance leases		10			10
Right-of-use assets obtained in exchange for new operating lease liabilities		18			7
Weighted-average remaining lease term:
Operating leases	2.29 years			3.19 years
Finance leases	.16 years			1.16 years
Weighted-average discount rate:
Operating leases		0.99	%		1.03	%
Finance leases		6.54	%		6.54	%

Commitments relating to non-cancellable operating and finance leases as of September 30, 2023 for each of the next five years and thereafter are as follows:


Payments due within	Operating Leases			Finance Leases
1 year	$	341		$	4
2 years		318			0
3 years		91			0
4 years		6			0
5 years		1			0
Over 5 years		0			0
Total minimum future payments		757			4
Less: Imputed interest		(10	)		(1	)
Total liabilities		747			3
Less: Current portion		(335	)		(3	)
Long-term liabilities	$	412		$	0