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Leases

12 Months Ended

Mar. 31, 2023

Note 14 — Leases

The Company leases a space at a location under a non-cancellable operating lease with a remaining lease term of 1 year, which originally expired in fiscal year 2022 and was renewed for an additional year. On December 22, 2020, the Company acquired CPS which included the assumption of an operating lease for a 55,120 square foot light manufacturing facility located in Addison Illinois, expiring June 30, 2024.

The Company leases several office locations with lease terms that are less than 12 months or are on month to month terms. Rent expense is recognized over the term of the lease on a straight-line basis. Rent expense for these leases totaled $0.2 million for the year ended March 31, 2023. Operating leases with lease terms of greater than 12 months are capitalized in Operating lease right-of-use assets and Operating lease liabilities in the consolidated balance sheet. Rent expense for these operating leases totaled $0.4 million and $0.8 million the years ended March 31, 2023 and 2022, respectively, which is included in general and administrative expenses in the consolidated statement of operations.

Operating lease costs for the years ended March 31, 2023 and 2022 consisted of the following (in thousands):

	Year Ended March 31,
	2023		2022
Fixed rent cost	$	490		752
Short term lease cost		141		210
Total operating lease cost	$	631		962

Supplemental balance sheet information related to leases was as follows (in thousands):

Operating leases	March 31, 2023		March 31, 2022
Operating lease right-of-use assets	$	423		728

Operating lease liability, current	$	273		273
Operating lease liability, noncurrent		161		468
Total operating lease liabilities	$	434		741

The operating lease right-of-use assets are included in other assets in the March 31, 2023 and 2022 consolidated balance sheets, and operating lease liabilities are included in accounts payable and accrued liabilities and lease liabilities non-current in the March 31, 2023 and 2022 consolidated balance sheets.

Future maturities of operating lease liabilities as of March 31, 2023 were as follows (in thousands):

For Years Ending March 31,
2024	$	320
2025		154

Total lease payments		474
Less: imputed interest		(40	)
Present value of operating lease liabilities	$	434

Significant judgments

Discount rate – the Company’s lease is discounted using the Company’s incremental borrowing rate of 8.5% as the rate implicit in the lease is not readily determinable.

Options – the lease term is the minimum noncancelable period of the lease. The Company does not include option periods unless the Company determined it is reasonably certain of exercising the option at inception or when a triggering event occurs.

Lease and non-lease components – Non lease components were considered and determined not to be material.

Month to month arrangements

React Presents leased its Chicago, Illinois premises under a month-to-month lease that was terminated in April 2022. Rent expense for the operating leases totaled less than $0.1 million and $0.1 million for the years ended March 31, 2023 and March 31, 2022, respectively.

PodcastOne leases its Los Angeles premises under a month-to-month operating lease. Rent expense for the operating leases totaled $0.3 million and $0.3 million for the year ended March 31, 2023 and March 31, 2022, respectively.