Leases

9 Months Ended

Jan. 31, 2023

Leases

Leases

Note 4 – Leases

We currently lease certain office, manufacturing, laboratory and warehouse space located in Orange County, California under operating lease agreements. Our leased facilities have original lease terms ranging from 7 to 12 years, contain multi-year renewal options, and scheduled rent increases of 3% on either an annual or biennial basis. A multi-year renewal option was included in determining the right-of-use asset and lease liability for one of our leases as we considered it reasonably certain that we would exercise such renewal option. In addition, certain of our leases provide for periods of free rent, lessor improvements and tenant improvement allowances, of which certain of these improvements have been classified as leasehold improvements and/or are being amortized over the shorter of the estimated useful life of the improvements or the remaining life of the lease.

Certain of our operating facility leases require us to pay property taxes, insurance and common area maintenance. While these payments are not included as part of our lease liabilities, they are recognized as variable lease cost in the period they are incurred.

The components of operating lease cost for the three and nine months ended January 31, 2023 and 2022 were as follows (in thousands):

	Three Months Ended January 31,				Nine Months Ended January 31,
	2023		2022		2023		2022
Operating lease cost	$	1,060	$	1,051	$	3,233	$	2,828
Variable lease cost		348		221		1,145		620
Short-term lease cost		187		163		514		379
Total lease cost	$	1,595	$	1,435	$	4,892	$	3,827

We also lease certain manufacturing equipment under a 5-year finance lease that commenced in the second quarter of fiscal year 2022. Finance lease costs were not significant for the three and nine months ended January 31, 2023 and 2022.

Supplemental consolidated balance sheet and other information related to our operating and finance leases as of January 31, 2023 and April 30, 2022 were as follows (in thousands, expect weighted average data):

Leases	Classification	January 31, 2023		April 30, 2022
Assets
Operating	Operating lease right-of-use assets	$	34,463	$	36,806
Finance	Property and equipment, net		2,584		2,728
Total leased assets		$	37,047	$	39,534
Liabilities
Current:
Operating	Current portion of operating lease liabilities	$	3,024	$	2,969
Finance	Other current liabilities		524		505
Non-current:
Operating	Operating lease liabilities, less current portion		35,659		37,886
Finance	Finance lease liabilities, less current portion		1,698		2,093
Total lease liabilities		$	40,905	$	43,453

Weighted average remaining lease term (years):
Operating leases	11.8	12.4
Finance lease	3.9	4.7
Weighted average discount rate
Operating leases	3.3%	3.3%
Finance lease	5.3%	5.3%

Cash paid for amounts included in the measurement of operating lease liabilities was $3.0 million and $1.6 million for the nine months ended January 31, 2023 and 2022, respectively, and is included in net cash (used in) provided by operating activities in our accompanying unaudited condensed consolidated statements of cash flows. Cash paid for amounts included in the measurement of finance lease liabilities was not significant for the nine months ended January 31, 2023.

As of January 31, 2023, the maturities of our lease liabilities, which includes those derived from lease renewal options that we considered it reasonably certain that we would exercise, were as follows (in thousands):

Fiscal Year Ending April 30,	Operating Leases			Finance Lease			Total
2023 (remaining period)	$	1,114		$	157		$	1,271
2024		4,140			629			4,769
2025		4,060			629			4,689
2026		4,167			629			4,796
2027		4,199			419			4,618
Thereafter		28,708			–			28,708
Total lease payments	$	46,388		$	2,463		$	48,851
Less: imputed interest		(7,705	)		(241	)		(7,946	)
Total lease liabilities	$	38,683		$	2,222		$	40,905