Leases

12 Months Ended

Mar. 31, 2023

A lease is defined as a contract that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. On April 1, 2019, the Company adopted ASC 842 and it primarily affected the accounting treatment for operating lease agreements in which the Company is the lessee.

Substantially all the leases in which the Company is the lessee are comprised of corporate office space and tower space. The Company is obligated under certain lease agreements for office space with lease terms expiring on various dates from October 31, 2023 through June 30, 2027, which includes lease extensions for its corporate headquarters ranging from three to ten-years. The Company entered into multiple lease agreements for tower space. The lease expiration dates range from May 31, 2023 to August 31, 2029.

Substantially all of the Company’s leases are classified as operating leases, and as such, were previously not recognized on the Company’s Consolidated Balance Sheet. With the adoption of ASC 842, operating lease agreements are required to be recognized on the Company’s Consolidated Balance Sheet as ROU assets and corresponding lease liabilities.

ROU assets include any prepaid lease payments and exclude any lease incentives and initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The lease terms may include options to extend or terminate the lease if it is reasonably certain that the Company will exercise that option.

Weighted-average remaining lease term and discount rate for the Company’s operating leases are as follows:


	2023		2022
Weighted average term - operating lease liabilities	2.87 years		3.57 years
Weighted average incremental borrowing rate - operating lease liabilities	12	%	13	%

Rent expense amounted to approximately $1.8 million for the year ended March 31, 2023, of which is included in general and administrative expenses on the Company’s Consolidated Statement of Operations.

Rent expense amounted to approximately $2.0 million for the year ended March 31, 2022, of which is included in general and administrative expenses on the Company’s Consolidated Statement of Operations.

Rent expense amounted to approximately $2.6 million for the year ended March 31, 2021, of which approximately $1.2 million are included in direct cost of revenue and the remainder of approximately $1.4 million included in general and administrative on the Company’s Consolidated Statement of Operations.

For the years ended March 31, 2023, 2022 and 2021, the following table presents net lease cost (in thousands):


	2023		2022		2021
Lease cost
Operating lease cost (cost resulting from lease payments)	$	1,817	$	1,950	$	2,451
Short term lease cost	7		16		110
Sublease income	—		—		(6)
Net lease cost	$	1,824	$	1,966	$	2,555

For the years ended March 31, 2023, 2022 and 2021, the following table presents other supplemental cash flow lease information (in thousands):


	2023		2022		2021
Cash paid activity:
Operating lease - operating cash flows (fixed payments)	$	2,217	$	2,286	$	2,746
Operating lease - operating cash flows (liability reduction)	$	1,042	$	1,382	$	1,674
Non-cash activity:
Right of use assets obtained in exchange for new operating lease liabilities	$	165	$	116	$	230

The following table presents supplemental balance sheet information as of March 31, 2023 and 2022 (in thousands):


	2023		2022
Non-current assets - right of use assets, net	$	3,371	$	4,047
Current liabilities - operating lease liabilities	$	1,725	$	1,512
Non-current liabilities - operating lease liabilities	$	2,922	$	4,177

Future minimum payments under non-cancelable leases for office and tower spaces (exclusive of real estate tax, utilities, maintenance and other costs borne by the Company) for the remaining terms of the leases following the year ended March 31, 2023 are as follows (in thousands):


Fiscal Year	Operating Leases
2024	$	2,161
2025	1,701
2026	943
2027	521
2028	156
After 2027	20
Total future minimum lease payments	5,502
Amount representing interest	(855)
Present value of net future minimum lease payments	$	4,647