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Note 15 - Leases

12 Months Ended

Mar. 31, 2024

15. Leases

Operating Leases

All significant lease arrangements are recognized at lease commencement. Operating lease right–of-use assets and lease liabilities are recognized at commencement. The operating lease right-of-use asset includes any lease payments related to initial direct cost and prepayments and excludes any lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company enters into a variety of operating lease agreements through the normal course of its business, but primarily real estate leases to support its operations. The real estate lease agreements generally provide for fixed minimum rental payments and the payment of real estate taxes and insurance. Many of these real estate leases have one or more renewal options that allow the Company, at its discretion, to renew the lease for varying periods up to five years or to terminate the lease. Only renewal options or termination rights that the Company believed were likely to be exercised were included in the lease calculations.

The Company also enters into leases for vehicles, IT equipment and service agreements, and other leases related to its manufacturing operations that are also included in the right-of-use assets and lease liability accounts if they are for a term of longer than twelve months. However, many of these leases are either short-term in nature or immaterial. The Company has made the policy election to exclude short-term leases from the consolidated balance sheets.

Finance Leases

Finance lease right-of-use assets and lease liabilities are recognized similar to an operating lease, at the lease commencement date or the date the lessor makes the leased asset available for use. Finance lease right-of-use assets are generally amortized on a straight-line basis over the lease term, and the carrying amount of the finance lease liabilities are (1) accreted to reflect interest using the incremental borrowing rate if the rate implicit in the lease is not readily determinable, and (2) reduced to reflect lease payments made during the period. Amortization expense for finance lease right-of-use assets and interest accretion on finance lease liabilities are recorded to depreciation expense and interest expense, respectively in the Company's consolidated statement of operations.

Supplemental balance sheet information related to leases at March 31, 2024 and 2023 are as follows (in thousands):

	March 31, 2024			March 31, 2023
Leases:
Right-of-use assets - Financing	$	—		$	1
Right-of-use assets - Operating		2,557			2,857
Total right-of-use assets	$	2,557		$	2,858

Lease liabilities - ST Financing	$	—		$	1
Lease liabilities - ST Operating		716			807
Lease liabilities - LT Financing		—			—
Lease liabilities - LT Operating		1,968			2,184
Total lease liabilities	$	2,684		$	2,992

Weighted-average remaining lease term		3.49			3.95
Weighted-average discount rate		9.83	%		6.46	%

The costs related to the Company's finance lease are not material. The costs related to the Company's operating leases for the fiscal years ended March 31, 2024 and 2023, are as follows (in thousands):

	*Year ended*		*Year ended*
	*March 31, 2024*		*March 31, 2023*
Operating Lease:
Operating lease costs - fixed	$	1,023	$	1,026
Operating lease costs - variable		158		156
Short-term lease costs		149		127
Total lease costs	$	1,330	$	1,309

The Company’s estimated minimum future lease obligations under the Company's leases are as follows:

	Operating Leases
Year ended March 31,
2025	$	936
2026		893
2027		750
2028		493
2029		102
Total minimum lease payments		3,174
Less: interest		(490	)
Present value of lease liabilities	$	2,684