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Leases

3 Months Ended

Jun. 30, 2023

Note 11 — 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 for these leases totaled less than $0.1 million for the three months ended June 30, 2023 and 2022, respectively. 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 accompanying condensed consolidated balance sheets. Rent expense for these operating leases totaled $0.1 million during each of the three months ended June 30, 2023 and 2022, respectively.

Operating lease costs for the three months ended June 30, 2023 and 2022 consisted of the following (in thousands):

	Three Months Ended June 30,		Three Months Ended June 30,
	2023		2022
Fixed rent cost	$	159		106
Short term lease cost		48		48
Total operating lease cost	$	207		154

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

Operating leases	June 30, 2023		March 31, 2023
Operating lease right-of-use assets	$	342		423

Operating lease liability, current	$	273		273
Operating lease liability, noncurrent		80		161
Total operating lease liabilities	$	353		434

The operating lease right-of-use assets are included in other assets and current operating lease liabilities are included in accounts payable and accrued liabilities in the accompanying condensed consolidated balance sheets.

Maturities of operating lease liabilities as of June 30, 2023 were as follows (in thousands):

For Years Ending March 31,
2024 (remaining nine months)	$	235
2025		154
Total lease payments		389
Less: imputed interest		(36	)
Present value of operating lease liabilities	$	353

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 this operating lease totaled less than $0.1 million and $0.1 million for the three months ended June 30, 2023 and 2022, respectively.

PodcastOne leases its Los Angeles premises under a month-to-month operating lease. Rent expense for this operating lease totaled $0.1 million and $0.1 million for the three months ended June 30, 2023 and 2022, respectively.