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Leases

9 Months Ended

Dec. 31, 2024

11 — LEASES

The Company adopted Topic 842 for all periods presented. At the inception of a contract, the Company determines if the arrangement is, or contains, a lease. The leases of the Company mainly consisted of offices, retail stores, and warehouses.

The Company’s operating right-of-use (“ROU”) assets and lease liabilities were as follows:

	December 31, 2024		March 31, 2024
Operating ROU:
ROU assets	$	14,318,422	$	16,000,742
Total operating ROU assets	$	14,318,422	$	16,000,742

	December 31, 2024		March 31, 2024
Operating lease obligations:
Current operating lease liabilities	$	3,151,171	$	2,852,744
Non-current operating lease liabilities		12,153,196		13,986,879
Total lease liabilities	$	15,304,367	$	16,839,623

The Company had 34 and 38 leases as of December 31, 2024 and March 31, 2024, respectively.

The weighted average lease term, discount rates, and remaining lease terms for the operating leases as of December 31, 2024 were as follows:

Remaining lease term and discount rate:

Weighted average discount rate			6.8	%
Weighted average remaining lease term (years)			4.79 years

The weighted average lease term, discount rates, and remaining lease terms for the operating leases as of March 31, 2024 were as follows:

Remaining lease term and discount rate:

Weighted average discount rate			6.4	%
Weighted average remaining lease term (years)			5.51 years

The Company leases its offices, warehouse, and retail stores under non-cancellable operating lease agreements. During the three months ended December 31, 2024, lease expenses were $1.02 million, including $0.36 million in cost of goods-occupancy cost, $0.67 million in rent expense included in selling expense, and nil in rent expense in general and administrative expense. During the three months ended December 31, 2023, lease expenses were $0.84 million, including $0.14 million in cost of goods-occupancy cost, $0.65 million in rent expense in selling expense, and $0.04 million in rent expense in general and administrative expense.

Lease expenses were $3.26 million for the nine months ended December 31, 2024, including $1.00 million in cost of goods-occupancy cost, $2.16 million in rent expense in selling expense, and $0.09 million rent expense in general and administrative expense. Lease expenses for the nine months ended December 31, 2023 were $2.33 million, including $0.39 million in goods-occupancy cost, $1.73 million in rent expense in selling expense, and $0.21 million in rent expense in general and administrative expense. For the nine months ended December 31, 2024, the Company terminated six leases.

As of December 31, 2024, future minimum lease liabilities, all under office and facilities non-cancellable operating lease agreements, were as follows:

As of December 31, 2024	Operating Lease Liabilities
2025	$	4,065,892
2026		3,957,134
2027		3,629,042
2028		3,001,292
2029		1,500,384
Thereafter		1,821,813
Total lease payments		17,975,557
Less: interest		(2,671,190	)
Present value of lease liabilities	$	15,304,367