Leases

6 Months Ended

Oct. 31, 2023

Leases

Leases

Note 4 – Leases

We 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. Multi-year renewal options were included in determining the right-of-use asset and lease liability for each of our leases as we considered it reasonably certain that we would exercise such renewal options. 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 term 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.

We also lease certain manufacturing equipment under finance lease agreements that have terms ranging from 5 to 7 years.

The components of our lease costs for the three and six months ended October 31, 2023 and 2022 were as follows (in thousands):

	Three Months Ended October 31,				Six Months Ended October 31,
	2023		2022		2023		2022
Operating lease cost	$	1,150	$	1,090	$	2,290	$	2,173
Variable lease cost		424		408		775		797
Short-term lease cost		31		197		67		327
Finance lease costs:
Amortization of right-of-use assets		54		54		108		108
Interest on lease liabilities		25		33		52		66
Total lease cost	$	1,684	$	1,782	$	3,292	$	3,471

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

Leases	Classification	October 31, 2023		April 30, 2023
Assets
Operating	Operating lease right-of-use assets	$	41,973	$	42,772
Finance	Property and equipment, net		9,803		2,529
Total leased assets		$	51,776	$	45,301
Liabilities
Current:
Operating	Current portion of operating lease liabilities	$	1,263	$	1,358
Finance	Other current liabilities		1,403		531
Non-current:
Operating	Operating lease liabilities, less current portion		45,036		45,690
Finance	Finance lease liabilities, less current portion		7,840		1,562
Total lease liabilities		$	55,542	$	49,141

Weighted average remaining lease term (years):
Operating leases	16.2	16.6
Finance leases	6.2	3.7
Weighted average discount rate:
Operating leases	6.0%	6.0%
Finance leases	6.4%	5.3%

Supplemental cash flow information related to our leases for the six months ended October 31, 2023 and 2022 were as follows (in thousands):

	Six Months Ended October 31,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2,149	$	2,063
Operating cash flows from finance leases		52		65
Financing cash flows from finance leases		262		249

As of October 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 Leases			Total
2024 (remaining period)	$	1,990		$	982		$	2,972
2025		4,060			1,963			6,023
2026		4,167			1,963			6,130
2027		4,199			1,754			5,953
2028		4,036			1,334			5,370
Thereafter		56,418			3,336			59,754
Total lease payments	$	74,870		$	11,332		$	86,202
Less: imputed interest		(28,571	)		(2,089	)		(30,660	)
Total lease liabilities	$	46,299		$	9,243		$	55,542