Leases

3 Months Ended

Jul. 31, 2023

Leases [Abstract]

Leases

Note 4 – Leases

We currently 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 three 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 life 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 a 5-year finance lease that commenced in the second quarter of fiscal year 2022.

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

	Three Months Ended July 31,
	2023		2022
Operating lease cost	$	1,140	$	1,083
Variable lease cost		351		389
Short-term lease cost		36		130
Finance lease costs:
Amortization of right-of-use assets		54		54
Interest on lease liabilities		27		33
Total lease costs	$	1,608	$	1,689

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

Leases	Classification	July 31, 2023		April 30, 2023
Assets
Operating	Operating lease right-of-use assets	$	42,374	$	42,772
Finance	Property and equipment, net		2,460		2,529
Total leased assets		$	44,834	$	45,301
Liabilities
Current:
Operating	Current portion of operating lease liabilities	$	1,262	$	1,358
Finance	Other current liabilities		539		531
Non-current:
Operating	Operating lease liabilities, less current portion		45,370		45,690
Finance	Finance lease liabilities, less current portion		1,424		1,562
Total lease liabilities		$	48,595	$	49,141

Weighted average remaining lease term (years):
Operating leases		16.4	16.6
Finance lease		3.4	3.7
Weighted average discount rate:
Operating leases		6.0%	6.0%
Finance lease		5.3%	5.3%

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

	Three Months Ended July 31,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,119	$	963
Operating cash flows from finance lease		27		22
Financing cash flows from finance lease		130		83
Non-cash transaction:
Unpaid finance lease obligation	$	–	$	41

As of July 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 Lease			Total
2024 (remaining period)	$	3,021		$	472		$	3,493
2025		4,060			629			4,689
2026		4,167			629			4,796
2027		4,199			419			4,618
2028		4,036			–			4,036
Thereafter		56,418			–			56,418
Total lease payments	$	75,901		$	2,149		$	78,050
Less: imputed interest		(29,269	)		(186	)		(29,455	)
Total lease liabilities	$	46,632		$	1,963		$	48,595