26.  LEASES

Company as Lessor

Operating leases under which the Company is the lessor arise from leasing the Company’s commercial real estate investment property to third parties. Initial lease terms generally range from 12 to 48 months. Depreciation expense for assets subject to operating leases is taken into account primarily on the straight-line method over a period of 20 years in amounts necessary to reduce the carrying amount of the asset to its estimated residual value. Depreciation expense relating to the property held as investments in operating leases were $68 and $67 for the years ended June 30, 2026 and 2025, respectively.

Future minimum rental income in China and Thailand to be received from Fiscal 2027 to the fiscal year ended June 30, 2029 (“Fiscal 2029”) on non-cancellable operating leases, and is contractually due as of  June 30, 2026, as follows:

Future minimum rental income in China and Thailand to be received from Fiscal 2026 to fiscal year ended June 30, 2029 (“Fiscal 2029”) on non-cancellable operating leases, and is contractually due as of June 30, 2025, as follows:

Company as Lessee

The Company is the lessee under operating leases for corporate offices and research and development facilities with remaining lease terms of one year to five years and finance leases for plant and equipment.

Supplemental balance sheet information related to leases was as follows:

*During fiscal year 2026, the Company's Malaysia and Singapore subsidiary fully repaid the outstanding finance lease liabilities. Upon completion of the repayment, the related asset was reclassified from finance lease liabilities to Machinery and Equipment. 

As of  August 2026, the Company's China subsidiary in real estate segment has renewed its 1-year office lease agreement with commencement dates of  August 16, 2026. The future minimum lease payments are $3 and $1 for Fiscal 2027 and Fiscal 2028, respectively.

As the lease terms commence after  June 30, 2026, the Company has not recognized a Right-of-Use ("ROU") asset or the corresponding lease liability in the balance sheet as of that date. The ROU asset and lease liabilities will be recognized in the financial statements upon commencement of the respective lease terms.

Other information related to leases was as follows (in thousands except lease term and discount rate):

As of June 30, 2026, future minimum lease payments under finance leases and noncancelable operating leases were as follows:

As of June 30, 2025, future minimum lease payments under finance leases and noncancelable operating leases were as follows: