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LEASES
 12 Months Ended
Mar. 31, 2022
Leases [Abstract]  
LEASES LEASESOn March 31, 2022, the Company adopted ASC Topic 842, Leases (ASC 842), using the modified retrospective transition method. The Company elected to apply the package of practical expedients provided under the transition guidance withing ASC 842, and accordingly, did not reassess whether any expired or existing contracts are or contain leases, did not reassess lease classification for expired or existing leases, and did not reassess initial indirect costs for any existing leases. The Company adopted this ASU by applying the new guidance to new and existing leases effective April 1, 2021, with no restatement of comparative periods. Upon adoption, the Company recorded an operating lease right-of-use asset and an operating lease liability on the balance sheet as per table below. In addition, assets under equipment leases previously classified as capital leases within Property and Equipment on the Company’s balance sheet were reclassified to finance lease right-of-use assets upon adoption of the guidance. Right-of-use assets and obligations were recognized based on the present value of remaining lease payments over the lease term. As the Company’s operating lease agreements do not provide an implicit rate or a readily determinable incremental borrowing rate, an estimated incremental borrowing rate was used based on the information available at the adoption date in determining the present value of lease payments. Operating lease cost is recognized on a straight-line basis over the lease term. Finance lease cost is recognized as a combination of the amortization expense for the Right-of-Use (“ROU”) asset and interest expense for the outstanding lease liabilities using the discounted rate discussed above.Variable lease costs such as common area costs and other operating costs are expensed as incurred. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The adoption of this
new guidance did not have a material net impact on the Company’s consolidated statements of operations or consolidated statements of cash flows.
Operating Leases
The Company has operating leases for its offices and fulfillment centers. Rental expense for operating leases was $5.2 million and $3.3 million for the years ended March 31, 2022 and 2021, respectively. Upon adoption of ASC 842, the Company recognized operating lease right-of-use assets of $29.6 million and operating lease liabilities of $33.9 million.
On March 26, 2021, the Company entered into a lease agreement for its fulfillment center in Columbus, Ohio. In accordance with the ASC 842 guidance, the lease is classified as an operating lease. The average monthly cash payment related to the Company’s Columbus, Ohio operating lease is approximately $36,000 per month, and the lease term will expire on July 31, 2026. In connection with the adoption of ASC 842, the Company recorded a right-of-use asset and lease liability related to this lease of $1.4 million and $1.8 million respectively as of March 31, 2022 based on the present value of payments and incremental borrowing rate of 5.5%.
On October 29, 2021, the Company entered into a lease agreement for a new office space. In accordance with the ASC 842 guidance, the lease is classified as an operating lease. The new lease commences on April 1, 2022 and includes escalating rent payments and a 198 month term. Rent expense will be recorded on a straight-line basis over the lease term. Future minimum lease payments required under the operating lease are approximately $51.7 million. In connection with the lease agreement the Company executed a letter of credit of approximately $1.9 million.
On April 23, 2021, the Company entered into a lease agreement for its fulfillment center in Las Vegas, Nevada. In accordance with the ASC 842 guidance, the lease is classified as an operating lease. The average monthly cash payment related to the Company’s Las Vegas, Nevada operating lease is approximately $205,000 per month, and the lease term will expire on March 31, 2029. In connection with the adoption of ASC 842, the Company recorded a right-of-use asset and lease liability related to this lease of $13.3 million and $14.4 million respectively as of March 31, 2022 based on the present value of payments and incremental borrowing rate of 6.2%.
The following schedule represents the components of the Company’s operating and finance lease assets as of March 31, 2022 (in thousands):
LeasesClassificationMarch 31, 2022
Assets
OperatingOperating lease right-of-use assets$29,552 
FinanceProperty and equipment, net2,538 
Liabilities
Operating lease liabilities (current)Operating lease liabilities, current$5,060 
Finance lease liabilities (current)Accrued and other current liabilities642 
Operating lease liabilities (non-current)Operating lease liabilities$28,847 
Finance lease liabilities (non-current)Other long-term liabilities1,896 
The following schedule represents the components of lease expense for the fiscal year ended March 31, 2022 (in thousands):
March 31, 2022
Finance Lease Costs:
  Amortization of right-of-use assets$588 
  Interest on lease liabilities 313 
Operating lease costs5,554 
Sublease income(357)
Total lease costs$6,098 
As of March 31, 2022, the Company’s maturity of operating lease liabilities in the years ending up March 31. 2027 and thereafter are as follows (in thousands):
Finance Leases Operating Leases
2023$890 $6,963 
2024890 6,725 
2025890 6,263 
2026383 6,437 
20279 5,284 
Thereafter— 9,260 
Total lease payments3,062 40,931 
Less: imputed interest(524)(7,024)
Present value of lease liabilities$2,538 $33,907 
Other operating leases information:
Cash paid for amounts included in the measurement of lease liabilities$4,541 
Right-of-use assets obtained in exchange for new lease liabilities$33,387 
Weighted-average remaining term (years)6.2
Weighted average discount rate
 4.6%
Other finance leases information:
Cash paid for amounts included in the measurement of lease liabilities$588 
Right-of-use assets obtained in exchange for new lease liabilities$3,107 
Weighted-average remaining term (years)3.5
Weighted average discount rate
11.0%
In accordance with ASC 840, the following is a schedule by years of future minimum lease payments required under the operating leases that have initial or noncancelable lease terms in excess of one year as of March 31, 2021.
Fiscal year ending March 31:
2022$4,113 
20234,559 
20244,269 
20253,798 
20263,899 
Thereafter6,459 
Total minimum lease payments$27,097 
In accordance with ASC 840, rental expense for operating leases was $3.5 million for the fiscal year ended March 31, 2021.
LEASES LEASESOn March 31, 2022, the Company adopted ASC Topic 842, Leases (ASC 842), using the modified retrospective transition method. The Company elected to apply the package of practical expedients provided under the transition guidance withing ASC 842, and accordingly, did not reassess whether any expired or existing contracts are or contain leases, did not reassess lease classification for expired or existing leases, and did not reassess initial indirect costs for any existing leases. The Company adopted this ASU by applying the new guidance to new and existing leases effective April 1, 2021, with no restatement of comparative periods. Upon adoption, the Company recorded an operating lease right-of-use asset and an operating lease liability on the balance sheet as per table below. In addition, assets under equipment leases previously classified as capital leases within Property and Equipment on the Company’s balance sheet were reclassified to finance lease right-of-use assets upon adoption of the guidance. Right-of-use assets and obligations were recognized based on the present value of remaining lease payments over the lease term. As the Company’s operating lease agreements do not provide an implicit rate or a readily determinable incremental borrowing rate, an estimated incremental borrowing rate was used based on the information available at the adoption date in determining the present value of lease payments. Operating lease cost is recognized on a straight-line basis over the lease term. Finance lease cost is recognized as a combination of the amortization expense for the Right-of-Use (“ROU”) asset and interest expense for the outstanding lease liabilities using the discounted rate discussed above.Variable lease costs such as common area costs and other operating costs are expensed as incurred. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The adoption of this
new guidance did not have a material net impact on the Company’s consolidated statements of operations or consolidated statements of cash flows.
Operating Leases
The Company has operating leases for its offices and fulfillment centers. Rental expense for operating leases was $5.2 million and $3.3 million for the years ended March 31, 2022 and 2021, respectively. Upon adoption of ASC 842, the Company recognized operating lease right-of-use assets of $29.6 million and operating lease liabilities of $33.9 million.
On March 26, 2021, the Company entered into a lease agreement for its fulfillment center in Columbus, Ohio. In accordance with the ASC 842 guidance, the lease is classified as an operating lease. The average monthly cash payment related to the Company’s Columbus, Ohio operating lease is approximately $36,000 per month, and the lease term will expire on July 31, 2026. In connection with the adoption of ASC 842, the Company recorded a right-of-use asset and lease liability related to this lease of $1.4 million and $1.8 million respectively as of March 31, 2022 based on the present value of payments and incremental borrowing rate of 5.5%.
On October 29, 2021, the Company entered into a lease agreement for a new office space. In accordance with the ASC 842 guidance, the lease is classified as an operating lease. The new lease commences on April 1, 2022 and includes escalating rent payments and a 198 month term. Rent expense will be recorded on a straight-line basis over the lease term. Future minimum lease payments required under the operating lease are approximately $51.7 million. In connection with the lease agreement the Company executed a letter of credit of approximately $1.9 million.
On April 23, 2021, the Company entered into a lease agreement for its fulfillment center in Las Vegas, Nevada. In accordance with the ASC 842 guidance, the lease is classified as an operating lease. The average monthly cash payment related to the Company’s Las Vegas, Nevada operating lease is approximately $205,000 per month, and the lease term will expire on March 31, 2029. In connection with the adoption of ASC 842, the Company recorded a right-of-use asset and lease liability related to this lease of $13.3 million and $14.4 million respectively as of March 31, 2022 based on the present value of payments and incremental borrowing rate of 6.2%.
The following schedule represents the components of the Company’s operating and finance lease assets as of March 31, 2022 (in thousands):
LeasesClassificationMarch 31, 2022
Assets
OperatingOperating lease right-of-use assets$29,552 
FinanceProperty and equipment, net2,538 
Liabilities
Operating lease liabilities (current)Operating lease liabilities, current$5,060 
Finance lease liabilities (current)Accrued and other current liabilities642 
Operating lease liabilities (non-current)Operating lease liabilities$28,847 
Finance lease liabilities (non-current)Other long-term liabilities1,896 
The following schedule represents the components of lease expense for the fiscal year ended March 31, 2022 (in thousands):
March 31, 2022
Finance Lease Costs:
  Amortization of right-of-use assets$588 
  Interest on lease liabilities 313 
Operating lease costs5,554 
Sublease income(357)
Total lease costs$6,098 
As of March 31, 2022, the Company’s maturity of operating lease liabilities in the years ending up March 31. 2027 and thereafter are as follows (in thousands):
Finance Leases Operating Leases
2023$890 $6,963 
2024890 6,725 
2025890 6,263 
2026383 6,437 
20279 5,284 
Thereafter— 9,260 
Total lease payments3,062 40,931 
Less: imputed interest(524)(7,024)
Present value of lease liabilities$2,538 $33,907 
Other operating leases information:
Cash paid for amounts included in the measurement of lease liabilities$4,541 
Right-of-use assets obtained in exchange for new lease liabilities$33,387 
Weighted-average remaining term (years)6.2
Weighted average discount rate
 4.6%
Other finance leases information:
Cash paid for amounts included in the measurement of lease liabilities$588 
Right-of-use assets obtained in exchange for new lease liabilities$3,107 
Weighted-average remaining term (years)3.5
Weighted average discount rate
11.0%
In accordance with ASC 840, the following is a schedule by years of future minimum lease payments required under the operating leases that have initial or noncancelable lease terms in excess of one year as of March 31, 2021.
Fiscal year ending March 31:
2022$4,113 
20234,559 
20244,269 
20253,798 
20263,899 
Thereafter6,459 
Total minimum lease payments$27,097 
In accordance with ASC 840, rental expense for operating leases was $3.5 million for the fiscal year ended March 31, 2021.