Cineverse is a virtual company with one domestic operating lease, acquired through the acquisition of Digital Media Rights ("DMR") and subleased to a third party. The Company has not been relieved of the its original lease obligation and therefore recognizes both a lease liability and right-of-use asset as part of the arrangement. The end of both the original lease and sublease's term is January 2025. The Company has recognized $115 thousand of sublease income related to its subleasing arrangement.

In addition, during the year ended March 31, 2023, the Company entered into two operating leases for its India operations, with expiration dates in July 2027.

The table below presents the lease-related assets and liabilities recorded on our Consolidated Balance Sheets (in thousands):


	Classification on the Balance Sheet	2023		2022
Assets
Noncurrent	Other long-term assets	$	1,265	$	749
Liabilities
Current	Operating leases – current portion		418		258
Noncurrent	Operating leases – long-term portion		863		491
Total operating lease liabilities		$	1,281	$	749

The table below presents the annual gross undiscounted cash flows related to the Company's operating lease commitments and subleasing arrangements (in thousands):


Year ending March 31,	Operating Lease Commitments		Sublease Payments
2024	$	446	$	180
2025		415		154
2026		191		—
2027		201		—
2028		68		—
Thereafter		—		—

Since our operating leases do not provide a readily determinable implicit rate, the Company estimated its incremental borrowing rate to discount the lease payments based on information available at Cineverse's lease commencement date. The average discount rate utilized was 3.34%.

The Company incurred $441 thousand and $125 thousand in rental expense associated with its operating leases during the years ended March 31, 2023 and 2022, respectively.

In the ordinary course of business, the Company enters into contractual arrangements, from time to time, under which it agrees to commitments with content providers for certain rights which are in production or have not yet been completed, delivered to, and accepted by the Company. Based on the nature of these agreements, which may be subject to delay or project abandonment, there is uncertainty with the amounts and timing of its commitments. Certain of these advances are eligible to be recouped through future revenue sharing arrangements. Based on the stage of the Company's projects, the table presented below represents an estimate of the Company's gross project commitments over the next five fiscal years (in thousands).


	Fiscal Year Ended March 31,
	2024		2025		2026		2027		2028
Total Project Commitments	$	1,718	$	343	$	283	$	-	$	-