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Note 16 - Leases

12 Months Ended

Mar. 31, 2025

16. 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.

Supplemental balance sheet information related to leases at March 31, 2025 and 2024 are as follows (in thousands):

	*March 31, 2025*			*March 31, 2024*
Leases:
Right-of-use assets - Operating		3,829			2,557
Total right-of-use assets	$	3,829		$	2,557

Lease liabilities - ST Operating		685			716
Lease liabilities - LT Operating		2,684			1,968
Total lease liabilities	$	3,369		$	2,684

Weighted-average remaining lease term		4.94			3.49
Weighted-average discount rate		14.94	%		9.83	%

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, 2025 and 2024, are as follows (in thousands):

	*Year ended*		*Year ended*
	*March 31, 2025*		*March 31, 2024*
Operating Leases:
Operating lease costs - fixed	$	1,453	$	1,023
Operating lease costs - variable		119		158
Short-term lease costs		153		149
Total lease costs	$	1,725	$	1,330

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

	*Operating Leases*
Year ended March 31,
2026	$	1,041
2027		1,426
2028		812
2029		401
2030		300
Thereafter		1,212
Total minimum lease payments		5,192
Less: interest		(1,823	)
Present value of lease liabilities	$	3,369