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RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

3 Months Ended

Jul. 31, 2025

NOTE F – RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

The Company’s leases primarily represent offices, warehouses, vehicles, manufacturing and research and development (“R&D”) facilities, which expire at various times through 2030 and are operating leases. Contractual arrangements are evaluated at inception to determine if the agreement contains a lease. The leases contain renewal options, early termination, rent abatement, and escalation clauses that are factored into our determination of lease payments when appropriate. We include options to extend or terminate leases in the right-of-use (“ROU”) operating lease asset and liability when it is reasonably certain we will exercise these options. As of July 31, 2025, lease options were not included in the calculation of the ROU operating lease asset and liability. ROU assets and lease liabilities are recorded based on the present value of future lease payments which will factor in certain qualifying initial direct costs incurred as well as any lease incentives that may have been received. Lease expenses for operating lease payments are recognized on a straight-line basis over the lease term.

The Company elected the practical expedient for short-term leases which allows leases with terms of twelve months or less to be recorded on a straight-line basis over the lease term without being recognized on the consolidated balance sheet. The Company has also elected the practical expedient to account for lease and non-lease components as a single component.

The table below presents ROU assets and liabilities recorded on the respective consolidated balance sheets as follows (in thousands):

	July 31, 2025		April 30, 2025
Assets
Right-of-use assets - operating leases	$	8,249	$	8,659

Liabilities
Operating lease liabilities, current portion		2,067		2,027
Operating lease liabilities, non-current portion		6,292		6,729
Total lease liabilities	$	8,359	$	8,756

Total operating lease expense was $0.6 million and $0.5 million for the three months ended July 31, 2025 and 2024, respectively, the majority of which is included in cost of revenues and the remaining amount in selling and administrative expenses on the unaudited condensed consolidated statements of operations. There were no ROU assets or lease liabilities that were recorded for any leases that had not commenced as of July 31, 2025.

The maturities of lease liabilities at July 31, 2025 are as follows:

Fiscal Year Ending April 30,
(in thousands)

Remainder of 2026	$	1,553
2027		1,942
2028		2,265
2029		2,416
2030		1,550
Thereafter		-
Total lease payments		9,726
Less imputed interest		(1,367	)
Present value of future lease payments		8,359
Less current obligations under leases		(2,067	)
Long-term lease obligations		6,292

As of July 31, 2025 and 2024, the weighted-average remaining lease term for all operating leases was 4.30 years and 4.81 years, respectively. The Company does not generally have access to the rate implicit in the leases and therefore selected a rate that is reflective of companies with similar credit ratings for secured debt as the discount rate. The weighted average discount rate for operating leases as of July 31, 2025 and 2024, was 6.86% and 6.34%, respectively.