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Note 16 - Leases

9 Months Ended

Dec. 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 condensed consolidated balance sheets.

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

	*December 31, 2025*			*March 31, 2025*
Leases:
Right-of-use assets – Operating	$	3,655		$	3,829
Total right-of-use assets		3,655			3,829

Lease liabilities – ST Operating	$	1,078		$	685
Lease liabilities – LT Operating		2,560			2,684
Total lease liabilities	$	3,638		$	3,369

Weighted-average remaining lease term		4.46			4.94
Weighted-average discount rate		15.51	%		14.94	%

The costs related to the Company's operating leases for the three and nine months ended December 31, 2025 and 2024, are as follows (in thousands):

	*Three Months Ended*		*Nine Months Ended*
	*December 31, 2025*		*December 31, 2025*
Operating Leases:
Operating lease costs – fixed	$	425	$	1,259
Operating lease costs – variable		45		136
Short-term lease costs		42		125
Total lease costs	$	512	$	1,520

	*Three Months Ended*		*Nine Months Ended*
	*December 31, 2024*		*December 31, 2024*
Operating Leases:
Operating lease costs – fixed	$	407	$	1,052
Operating lease costs – variable		21		110
Short-term lease costs		38		116
Total lease costs	$	466	$	1,278

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

	*Leases*
Year ending March 31,
2026 (remaining)	$	305
2027		1,583
2028		1,026
2029		420
2030		350
Thereafter		1,242
Total minimum lease payments		4,926
Less: interest		(1,288	)
Present value of lease liabilities	$	3,638