Note 3 - Inventories

6 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Inventory Disclosure [Text Block]

3. INVENTORIES

Inventories are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out method. Inventories consist of the following as of:

	September 30, 2024		March 31, 2024
	(in thousands)
Raw materials	$	835	$	1,149
Work in process		3,942		2,195
Finished goods		2,058		3,658
Supplies		350		311
Inventories	$	7,185	$	7,313

The Company recognizes abnormal production costs, including fixed cost variances from normal production capacity, fixed production overhead costs, idle facilities, freight handling costs and spoilage, as an expense in the period incurred, without adjusting overhead absorption rates. Normal production capacity is defined as the production expected to be achieved over a number of periods or seasons under normal circumstances, taking into account the loss of capacity resulting from planned maintenance. The Company had abnormal production capitalization of $31,000 and no abnormal production costs to cost of sales for the three months ended September 30, 2024 and 2023, respectively. The Company had abnormal production capitalization of $53,000 and abnormal production expense of $133,000 to cost of sales for the six months ended September 30, 2024 and 2023, respectively.

In fiscal year 2024, cultivation of astaxanthin was completed year-round, however, in fiscal year 2025, cultivation of astaxanthin will be completed in the most productive nine months of the year. The Company calculates total production costs for the year based on normal capacity of production expected to be achieved in a year under normal circumstances. These costs are then allocated into inventory based on the period of production, not including abnormal production costs. Allocating fixed and overhead costs requires management’s judgement to determine when production is outside of the normal range of expected variation in production.

Other non-inventoriable fixed costs of $15,000 and $136,000 were expensed to cost of sales for the three months ended September 30, 2024 and 2023, respectively. Other non-inventoriable fixed costs of $83,000 and $325,000 were expensed to cost of sales for the six months ended September 30, 2024 and 2023, respectively.