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Leases

3 Months Ended

Jul. 31, 2022

(7) Leases

Lessee Information

Right-of-use asset and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. When the implicit rate of the lease is not provided or cannot be determined, the Company uses the incremental borrowing rate based on the information available at the effective date to determine the present value of future payments. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise those options. The renewal options have not been included in the lease term as they are not reasonably certain of exercise. The Company only has operating leases for office facilities and warehouse space. Lease expense for minimum lease payments is recognized on a straight- line basis over the lease term and consists of interest on the lease liability and the amortization of the right of use asset.

The Company has a lease for its facility located in Monroe Township, New Jersey that is used as warehouse/production space and the Company’s principal offices and corporate headquarters. The initial lease term is for seven years which is set to expire in November of 2024 with an option to extend the lease for another five years. The lease is classified as an operating lease. The operating lease is included in right-of-use assets, lease liabilities- current and lease liabilities- long-term on the Company’s Consolidated Balance Sheets.

The Company also has a lease located in Houston, Texas that was acquired as part of the 3Dent acquisition that is used as office space. The lease term is for 3 years and is set to expire in January of 2023. The lease is classified as an operating lease and included in the right-of-use assets and lease liabilities- current on the Company’s Consolidated Balance Sheets.

The Company also has a lease with the University of California Berkeley in Richmond, California that was acquired as part of the MAR acquisition. The lease expired on June 30, 2022 and the Company is in discussions to renew this lease. As the lease expired prior to renewal, it has become a month-to-month lease in accordance with the agreement. In accordance with ASC 842-20-5-2, since the remaining lease term at the time of the acquisition of MAR was less than 12 months, the asset was not recognized as a right-of-use asset.

The operating lease cash flow payments for the three months ended July 31, 2022 and 2021 were $100,000 and $102,000, respectively.

The components of lease expense in the Consolidated Statement of Operations for the three months ended July 31, 2022 and 2021 were as follows:

Schedule of Operating Lease Costs


	Three months ended July 31,
	2022		2021
	(in thousands)
Operating lease cost	$	92	$	92
Short-term lease cost		8		5
Total lease cost	$	100	$	97

Information related to the Company’s right-of use assets and lease liabilities as of July 31, 2022 was as follows:


	July 31, 2022
	(in thousands)

Operating lease:
Operating right-of-use asset, net	$	677

Right-of-use liability- current	$	328
Right-of-use liability- long term		446
Total lease liability	$	774

Weighted average remaining lease term- operating leases		2.15 years
Weighted average discount rate- operating leases		8.3	%

Total remaining lease payments under the Company’s operating leases are as follows:


	July 31, 2022
	(in thousands)

Remainder of fiscal year 2023	$	295
2024		362
2025		184
Total future minimum lease payments	$	841
Less imputed interest		(67	)
Total	$	774