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Leases

9 Months Ended

Jan. 31, 2024

(9) Leases

Lessor Information

As of January 31, 2024 and April 30, 2023, the Company had five and three WAM-V’s leased to customers which have been classified as operating leases per accounting guidance contained within ASC Topic 842, “Leases”, respectively. The remaining term on these operating leases is less than 2 years.

Lessee Information

Right-of-use assets 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’s operating leases consist of 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 Company filed an 8-K subsequent to the end of the quarter on February 8, 2024 discussing the lease extension for its main headquarters in Monroe NJ to April 30, 2026. The Company’s Board of Directors approved the amendment on January 30, 2024 and it was executed and recorded as an additional right of use asset and liability as of January 31, 2024. The lease is classified as an operating lease and is included in right-of-use assets, right-of-use liabilities on the Company’s Consolidated Balance Sheets.

The Company also had a lease for office space located in Houston, Texas. The lease term was for 1 year, and expired in January 2024. ASC 842 allows a company an accounting policy election to recognize lease payments within the Consolidated Statement of Operations on a straight-line basis if the lease term is equal to or less than 12 months and not recognize a right-of use asset and lease liability. The accounting policy election was made on the commencement date of the lease. The Company chose this election for the Houston lease and classified it as a short-term lease. Final payment was made in January of 2024 and this lease has been terminated.

The Company also has a lease for office space located in Richmond, California. This lease commenced in April of 2023 and will continue for 62 months. The lease is classified as an operating lease and is included in right-of-use assets, right-of-use liabilities- current and right-of-use liabilities- long-term on the Company’s Consolidated Balance Sheets.

Variable lease expenses, if any, are recorded as incurred. The operating lease cash flow payments for the three months ended January 31, 2024 and 2023 were $193,000 and $110,000, respectively. The operating lease cash flow payments for the nine months ended January 31, 2024 and 2023 were $564,000 and $326,000, respectively.

The components of lease expense in the Consolidated Statement of Operations for the three and nine months ended January 31, 2024 and 2023 were as follows:

Schedule of Operating Lease Costs

	2024		2023		2024		2023
	Three months ended January 31,				Nine months ended January 31,
	2024		2023		2024		2023
	(in thousands)				(in thousands)
Operating lease cost	$	162	$	92	$	478	$	276
Short-term lease cost		20		8		60		24
Total lease cost	$	182	$	100	$	538	$	300

Information related to the Company’s right-of use assets and lease liabilities as of January 31, 2024 was as follows:

	January 31, 2024
	(in thousands)
Operating lease:
Operating right-of-use assets, net	$	2,610

Right-of-use liabilities- current	$	625
Right-of-use liabilities- long term		2,065
Total lease liabilities	$	2,690

Weighted average remaining lease term- operating leases		3.23 years
Weighted average discount rate- operating leases		8.4	%

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

	January 31, 2024
	(in thousands)
Remainder of fiscal year 2024	$	174
2025		1,410
2026		1,847
2027		329
2028		333
thereafter		28
Total future minimum lease payments	$	4,121
Less imputed interest		(1,431	)
Total	$	2,690