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Note 11 - Leases

6 Months Ended

Sep. 30, 2024

Note 11 — Leases

The Company leases a space at a location under a non-cancellable operating lease with a remaining lease term of one 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, which expired June 30, 2024. During the three months ended September 30, 2024, CPS entered into a three year lease for office space in Palatine, Illinois.

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 and six months ended September 30, 2024 and 2023, 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 $0.2 million during each of the three months ended September 30, 2024 and 2023, respectively. Rent expense for the six months ended September 30, 2024 and 2023 was $0.4 million and $0.5 million, respectively.

Operating lease costs for the six months ended September 30, 2024 and 2023 consisted of the following (in thousands):

	*Six Months Ended*		*Six Months Ended*
	*September 30,*		*September 30,*
	*2024*		*2023*
Fixed rent cost	$	243	$	392
Short term lease cost		110		70
Total operating lease cost	$	353	$	462

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

	*September 30,*		*March 31,*
Operating leases	*2024*		*2024*
Operating lease right-of-use assets	$	117	$	88

Operating lease liability, current	$	5	$	91
Operating lease liability, noncurrent		114		-
Total operating lease liabilities	$	119	$	91

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.

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.