Leases

12 Months Ended

Mar. 31, 2021

The Company adopted ASU 2016-2, Leases, (Topic 842) as of April 1, 2019 on a modified retrospective basis and did not restate comparative periods as permitted under the transition guidance. The Company elected the practical expedient not to apply the recognition and measurement guidance of Topic 842 to short-term leases.

The Company leases 40,232 square feet of office space located in Brisbane, California pursuant to a lease agreement, as amended, that expires in May 2026. The Company has the option to extend the lease term for an additional seven years but is not reasonably certain that it will exercise the option and has therefore excluded it from the lease term. The lease agreement, as amended, required the Company to deliver an irrevocable standby letter of credit in the amount of $0.5 million to the landlord, the amount of which is subject to reduction to approximately $0.2 million if certain conditions are met.

The Company subleases an additional 20,116 square feet of office space within the same building as its current corporate office space located in Brisbane, California. The sublease term expires in February 2024. The sublease required the Company to deliver an irrevocable standby letter of credit to the sublessor for the duration of the lease in the amount of $0.2 million.

In June 2020, the Company entered into a agreement to lease fleet vehicles along with certain services whereby the Company leases vehicles to be delivered by the lessor from time to time with various monthly costs depending on the vehicles delivered for a term of one year, commencing on each corresponding delivery date. The leased vehicles are for use by eligible employees of the Company’s commercial operations. The Company maintains a letter of credit of $0.6 million as collateral in favor of the lessor.

The Company has no other significant operating, financing, or short-term leases.

The Company recognizes rent expense on a straight-line basis over the non-cancelable term of its operating leases. For the years ended March 31, 2021 and 2020, the components of operating lease and short-term lease expenses were as follows (in thousands):


	Year Ended March 31,
	2021		2020
Operating lease cost	$	2,914	$	2,496
Short-term lease cost	5		—
Variable lease cost (1)	538		225
Total operating lease cost	$	3,457	$	2,721

(1) Variable lease cost includes common area maintenance and utilities costs that are not included in operating lease liabilities and are expensed as incurred, and maintenance and one-time charges related to the short-term leases.

Prior to the adoption of Topic 842 on April 1, 2019, under Topic 840, rent expense was $2.1 million for the year ended March 31, 2019.

Certain information related to the Company’s operating lease right-of-use assets and operating lease liabilities was as follows for the years ended March 31, 2021 and 2020 (in thousands):


	Year Ended March 31,
	2021		2020
Cash paid for operating lease liabilities	$	2,939	$	2,289
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities	$	—	$	12,237

As of March 31, 2021, the Company’s operating leases had a weighted average remaining lease term of 4.7 years and a weighted average discount rate of 12.3%.

As of March 31, 2021, maturities of operating lease liabilities were as follows (in thousands):


Years Ended March 31,
2022	$	3,028
2023	3,127
2024	3,053
2025	2,409
2026	2,482
Thereafter	416
Total lease payments	14,515
Less imputed interest (1)	(3,519)
Present value of future minimum lease payments	10,996
Less operating lease liability, current portion	(1,807)
Operating lease liability, long-term portion	$	9,189

(1) The Company’s lease agreements do not provide an implicit rate. The imputed interest was determined using the Company’s incremental borrowing rate, which represents an estimated rate of interest that it would have to pay to borrow equivalent funds on a collateralized basis over a similar term at the lease inception date.