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Note 6 - Leases

6 Months Ended

Sep. 30, 2025

NOTE 6 — LEASES

In August 2025, the Company was assigned operating leases for distribution and warehouse facilities in Orlando, FL and Tampa, FL and certain transportation equipment related to the acquisition of Century. The Orlando lease expires July 31, 2029 and calls for monthly rental payments of approximately $25,000. The Tampa lease expires November 30, 2029 but contains a 6 month extension option and calls for monthly rental payments of approximately $21,000. The Company recognized initial right-of-use ("ROU") assets and lease liabilities of approximately $2.4 million during the September 30, 2025 quarter related to the assumed Century leases. The Company's other ROU assets and lease liabilities consist primarily of operating leases for the Granite City, IL operating facility and administrative office spaces in The Woodlands, TX and Longview, TX. The Company’s other operating leases for items such as operations equipment, IT equipment and storage space are either short-term in nature or immaterial. The Company does not have any finance leases in place.

The Company determines if an arrangement contains a lease at inception based on if the arrangement conveys the right to control the use of an identified asset for a period of time in exchange for consideration and allows the Company to obtain substantially all of the economic benefit from the use of the identified asset. Certain lease agreements contain rent escalation clauses and one or more options to extend the lease. The Company considers these provisions when calculating operating lease obligations. The Company uses its incremental borrowing rate at lease commencement to determine the present value of lease payments.

The components of expense related to leases for the three and six months ended September 30, 2025 and 2024 are as follows (in thousands):

	*Three Months Ended*				*Six Months Ended*
	*September 30,*				*September 30,*
	*2025*		*2024*		*2025*		*2024*
Operating lease expense	$	168	$	108	$	276	$	168
	$	168	$	108	$	276	$	168

The following table illustrates the balance sheet classification for ROU assets and lease liabilities as of September 30, 2025 and March 31, 2025 (in thousands):

	*September 30, 2025*		*March 31, 2025*		*Balance Sheet Classification*
Assets
Operating lease right-of-use asset	$	5,108	$	2,841	Operating lease right-of-use asset
Total right-of-use assets	$	5,108	$	2,841
Liabilities
Operating lease liability, current	$	750	$	160	Accrued expenses
Operating lease liability, non-current		4,466		2,752	Non-current lease liabilities
Total lease liabilities	$	5,216	$	2,912

As of September 30, 2025, the weighted-average remaining lease term was 12.4 years for operating leases. The weighted average discount rate was 7.0% for operating leases.

Maturities of lease liabilities as of September 30, 2025 were as follows (in thousands):

	*Operating Leases*
Fiscal 2026 (remainder of fiscal year)		532
Fiscal 2027		1,054
Fiscal 2028		990
Fiscal 2029		959
Fiscal 2030 and beyond		5,034
Total undiscounted lease payments	$	8,569
Less: imputed interest		(3,353	)
Present value of lease liability	$	5,216