Leases

12 Months Ended

Jan. 31, 2024

Leases [Abstract]

Leases

Leases

The Company determines if an arrangement contains a lease at inception. Right of Use ("ROU") assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.

The Company’s leases consist of office space, manufacturing space and machinery and equipment. The Company utilized a portfolio approach in determining the discount rate. The portfolio approach takes into consideration the range of the term, the range of the lease payments, the category of the underlying asset and the Company’s estimated incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments. The Company also considered its recent debt issuances as well as publicly available data for instruments with similar characteristics when calculating the incremental borrowing rates.

The lease term includes options to extend the lease when it is reasonably certain that the Company will exercise that option. Future obligations relating to the exercise of renewal options is included in the measurement if, based on the judgment of management, the renewal option is reasonably certain to be exercised. Factors in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of leasehold improvements, the value of the renewal rate compared to market rates, and the presence of factors that would cause a significant economic penalty to the Company if the option is not exercised.

Leases with a term of 12 months or less are not recorded on the balance sheet, per the election of the practical expedient.

The Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company recognizes variable lease payments in the period in which the obligation for those payments is incurred. Variable lease payments that depend on an index or a rate are initially measured using the index or rate at the commencement date, otherwise variable lease payments are recognized in the period incurred.

The components of lease expense were as follows (in thousands):

	January 31, 2024	January 31, 2023
Finance Leases
Depreciation of Assets	257	128
Interest on lease liabilities	62	38
Operating Leases	572	545
Total net lease cost	891	711

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

	January 31, 2024		January 31, 2023
Operating Leases
Operating lease ROU assets	$	2,889	$	3,237
Current operating lease liabilities, included in current liabilities	$	434	$	392
Noncurrent operating lease liabilities, included in long-term liabilities	2,515		2,897
Total operating lease liabilities	$	2,949	$	3,289
Finance Leases
Property and equipment at cost	$	2,187	$	917
Accumulated depreciation	(610)		(353)
Property and equipment, net	$	1,577	$	564
Current obligations of finance lease liabilities, included in current liabilities	$	367	$	182
Finance leases, net of current obligations, included in long-term liabilities	1,062		249
Total finance lease liabilities	$	1,429	$	431

Supplemental cash flow and other information related to leases was as follows:

	January 31, 2024			January 31, 2023
Cash paid for amounts included in the measurement of lease liabilities (in thousands)
Operating cash flows from operating leases	$	340		$	343
Financing cash flows from finance leases	272			235
ROU assets obtained in exchange for lease liabilities (in thousands)
Operating leases	$	-		$	-
Finance leases	1,270			72
Weighted average remaining lease term (in years)
Operating leases	6.57			7.50
Finance leases	4.49			2.60
Weighted average discount rate:
Operating leases	4.85		%	4.85		%
Finance Leases	6.74		%	3.41		%

Maturities of lease liabilities for each of the succeeding fiscal years are as follows (in thousands):

For the fiscal years ended	Finance Leases		Operating Leases		Total Maturities of Lease Liabilities
2025	$	454	$	572	$	1,026
2026	349		573		922
2027	302		467		769
2028	293		495		788
2029	197		495		692
Thereafter	90		836		926
Total undiscounted future lease payments	1,685		3,438		5,123
Less: imputed interest	(256)		(489)		(745)
Total present value of future lease liabilities	$	1,429	$	2,949	$	4,378

Leases

Leases

The Company determines if an arrangement contains a lease at inception. Right of Use ("ROU") assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.

The Company’s leases consist of office space, manufacturing space and machinery and equipment. The Company utilized a portfolio approach in determining the discount rate. The portfolio approach takes into consideration the range of the term, the range of the lease payments, the category of the underlying asset and the Company’s estimated incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments. The Company also considered its recent debt issuances as well as publicly available data for instruments with similar characteristics when calculating the incremental borrowing rates.

The lease term includes options to extend the lease when it is reasonably certain that the Company will exercise that option. Future obligations relating to the exercise of renewal options is included in the measurement if, based on the judgment of management, the renewal option is reasonably certain to be exercised. Factors in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of leasehold improvements, the value of the renewal rate compared to market rates, and the presence of factors that would cause a significant economic penalty to the Company if the option is not exercised.

Leases with a term of 12 months or less are not recorded on the balance sheet, per the election of the practical expedient.

The Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company recognizes variable lease payments in the period in which the obligation for those payments is incurred. Variable lease payments that depend on an index or a rate are initially measured using the index or rate at the commencement date, otherwise variable lease payments are recognized in the period incurred.

The components of lease expense were as follows (in thousands):

	January 31, 2024	January 31, 2023
Finance Leases
Depreciation of Assets	257	128
Interest on lease liabilities	62	38
Operating Leases	572	545
Total net lease cost	891	711

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

	January 31, 2024		January 31, 2023
Operating Leases
Operating lease ROU assets	$	2,889	$	3,237
Current operating lease liabilities, included in current liabilities	$	434	$	392
Noncurrent operating lease liabilities, included in long-term liabilities	2,515		2,897
Total operating lease liabilities	$	2,949	$	3,289
Finance Leases
Property and equipment at cost	$	2,187	$	917
Accumulated depreciation	(610)		(353)
Property and equipment, net	$	1,577	$	564
Current obligations of finance lease liabilities, included in current liabilities	$	367	$	182
Finance leases, net of current obligations, included in long-term liabilities	1,062		249
Total finance lease liabilities	$	1,429	$	431

Supplemental cash flow and other information related to leases was as follows:

	January 31, 2024			January 31, 2023
Cash paid for amounts included in the measurement of lease liabilities (in thousands)
Operating cash flows from operating leases	$	340		$	343
Financing cash flows from finance leases	272			235
ROU assets obtained in exchange for lease liabilities (in thousands)
Operating leases	$	-		$	-
Finance leases	1,270			72
Weighted average remaining lease term (in years)
Operating leases	6.57			7.50
Finance leases	4.49			2.60
Weighted average discount rate:
Operating leases	4.85		%	4.85		%
Finance Leases	6.74		%	3.41		%

Maturities of lease liabilities for each of the succeeding fiscal years are as follows (in thousands):

For the fiscal years ended	Finance Leases		Operating Leases		Total Maturities of Lease Liabilities
2025	$	454	$	572	$	1,026
2026	349		573		922
2027	302		467		769
2028	293		495		788
2029	197		495		692
Thereafter	90		836		926
Total undiscounted future lease payments	1,685		3,438		5,123
Less: imputed interest	(256)		(489)		(745)
Total present value of future lease liabilities	$	1,429	$	2,949	$	4,378