Operating Lease Obligations

3 Months Ended

Sep. 30, 2025

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:

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The length of term of the lease is 88 months from the lease commencement date (as defined).

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The lease commencement date is September 16, 2022.

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The monthly rent for the first year of the lease is $51,223 and increases approximately 3% per year.

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The lease provides for a base rent abatement for months two through five in the first year of the lease.

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The landlord provided a tenant improvement allowance of $81,860 to be used for improvements as specified in the lease.

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The Company is responsible for other expenses such as electric, janitorial, etc.

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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, 2026 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
	September 30,			September 30,
	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	$	165		$	160

	September 30,			June 30,
	2025			2025
Operating lease ROU assets	$	1,958		$	2,051
Operating lease obligations - current portion	$	504		$	490
Operating lease obligations - noncurrent portion	$	2,068		$	2,199
Weighted average remaining lease term - operating leases		4.25	years		4.50
Weighted average discount rate - operating lease obligations		7.25	%		7.25

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


Fiscal year ending on September 30:	Principal		Imputed Interest		Total
2026	$	504	$	170	$	674
2027		561		132		693
2028		626		89		715
2029		694		41		735
2030		187		2		189

Total minimum lease payments		2,572	$	434	$	3,006
Less: current portion		(504)
Long-term portion of minimum lease obligation	$	2,068

iBio, Inc. 10-Q