On July 1, 2019, the Company adopted ASC 842, (“ASC 842”). ASC 842 requires lessees to recognize at the lease commencement date a lease liability, which is the lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.

The Company has entered into an operating lease for office space under an agreement that expires in 2025. The lease requires the Company to pay utilities, insurance, taxes, and other operating expenses. The Company’s lease does not contain any residual value guarantees or material restrictive covenants.

The tables below show the changes during the year ended June 30, 2022 and 2021:

 

 

As of June 30, 2022, the Company’s operating lease has a remaining lease term of 2.96 years and a discount rate of 4.67%. The maturities of the operating lease liabilities are as follows:

 

For the fiscal years ended June 30, 2022 and 2021, total lease expense under operating leases was approximately $260,000 and $208,000, respectively, and was recorded in general and administrative expenses.