Quarterly report [Sections 13 or 15(d)]

Operating Lease Obligations

v3.25.1
Operating Lease Obligations
9 Months Ended
Mar. 31, 2025
Operating Lease Obligations  
Operating Lease Obligations

14.   Operating Lease Obligation

San Diego

On September 10, 2021, the Company entered into a lease for 11,383 square feet of space in San Diego, California.  Terms of the lease include the following:

The length of term of the lease is 88 months from the lease commencement date (as defined).
The lease commencement date is September 16, 2022.
The monthly rent for the first year of the lease is $51,223 and increases approximately 3% per year.
The lease provides for a base rent abatement for months two through five in the first year of the lease.
The landlord provided a tenant improvement allowance of $81,860 to be used for improvements as specified in the lease.
The Company is responsible for other expenses such as electric, janitorial, etc.
The Company opened an irrevocable letter of credit in the amount of $188,844 in favor of the landlord. The letter of credit expires on October 8, 2025 and renews annually as required.

As discussed above, the lease provides for scheduled increases in base rent and scheduled rent abatements. Rent expense is charged to operations using the straight-line method over the term of the lease which results in rent expense being charged to operations at inception of the lease in excess of required lease payments. This excess (formerly classified as deferred rent) is shown as a reduction of the operating lease ROU asset in the accompanying condensed consolidated balance sheets. Rent expense for the San Diego facility commenced in fiscal year 2022, when the Company began making improvements to the facility.

The following tables present the components of lease expense and supplemental balance sheet information related to the operating lease obligation (in thousands).

Three Months Ended

Three Months Ended

March 31, 

March 31, 

2025

2024

Operating lease cost:

$

141

$

141

Total lease cost

$

141

$

141

 

  

 

  

Other information:

 

  

 

  

Cash paid for amounts included in the measurement lease liability:

 

  

 

  

Operating cash flows from operating lease

$

141

$

141

Operating cash flows from operating lease obligation

$

163

$

158

Nine Months Ended

Nine Months Ended

March 31, 

March 31, 

2025

2024

Operating lease cost:

$

422

$

422

Total lease cost

$

422

$

422

 

 

  

Other information:

 

  

 

  

Cash paid for amounts included in the measurement lease liability:

 

  

 

  

Operating cash flows from operating lease

$

422

$

422

Operating cash flows from operating lease obligation

$

486

$

472

Future minimum payments under the operating lease obligation are as follows (in thousands):

Fiscal year ending on March 31:

    

Principal

    

Imputed Interest

    

Total

2026

$

476

$

188

$

664

2027

532

151

683

2028

 

593

 

111

 

704

2029

 

659

 

66

 

725

2030

 

541

 

17

 

558

 

  

 

  

 

  

Total minimum lease payments

 

2,801

$

533

$

3,334

Less: current portion

 

(476)

 

  

 

  

Long-term portion of minimum lease obligation

$

2,325