13.

Leases

April 1, 2019,

the Company adopted ASU

2016

02,

Leases (Topic

842

)

("ASC

842"

), using the modified retrospective approach. The Company elected the package of practical expedients available in the standard and as a result, did

not

reassess the lease classification of existing contracts or leases or the initial direct costs associated with existing leases. The Company did

not

elect the hindsight practical expedient and evaluated lease terms for existing leases. The Company has also elected the practical expedient to

not

separate lease components and non-lease components and will account for the leases as a single lease component for all classes of leases.

All significant lease arrangements are recognized at lease commencement. Operating lease right–of-use assets and lease liabilities are recognized at commencement. The operating lease right-of-use asset includes any lease payments related to initial direct cost and prepayments and excludes any lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company enters into a variety of operating lease agreements through the normal course of its business, but primarily real estate leases to support its operations. The real estate lease agreements generally provide for fixed minimum rental payments and the payment of real estate taxes and insurance. Many of these real estate leases have

one

or more renewal options that allow the Company, at its discretion, to renew the lease for varying periods up to

five

years or to terminate the lease. Only renewal options or termination rights that the Company believed were likely to be exercised were included in the lease calculations.

The Company also enters into leases for vehicles, IT equipment and service agreements, and other leases related to its manufacturing operations that are also included in the right-of-use assets and lease liability accounts if they are for a term of longer than

twelve

months. However, many of these leases are either short-term in nature or immaterial. The Company has made the policy election to exclude short-term leases from the balance sheet.

The discount rate was calculated using an incremental borrowing rate based on an assessment prepared by the Company through the use of Company credit ratings, consideration of its lease populations potential risk to its total capital structure, and a market rate for a collateralized loan for its risk profile, calculated by a

third

party. The Company elected to apply the discount rate using the remaining lease term at the date of adoption.

The Company did

not

identify any leases that are classified as financing leases.

Supplemental balance sheet information related to leases at

September 30, 2020

and

March 31, 2020

are as follows:

	September 30, 2020			March 31, 2020
Operating Leases:
Right-of-use assets	$	3,907		$	3,359
Total right-of-use assets		3,907			3,359

Lease liabilities - ST	$	568		$	439
Lease liabilities - LT		3,430			3,000
Total operating lease liabilities		3,997			3,439

Weighted-average remaining lease term		6.31			6.91
Weighted-average discount rate		6.79	%		7.08	%

The costs related to the Company's leases for the

three

and

six

months ended

September 30, 2020

and

2019

are as follows:

	Three Months Ended		Six Months Ended
	September 30, 2020		September 30, 2020
Operating Leases:
Operating lease costs - fixed	$	214	$	392
Operating lease costs - variable		28		55
Short-term lease costs		510		678
Total lease costs		752		1,125

	Three Months Ended		Six Months Ended
	September 30, 2019		September 30, 2019
Operating Leases:
Operating lease costs - fixed	$	178	$	356
Operating lease costs - variable		27		46
Short-term lease costs		176		214
Total lease costs		381		616

The Company's estimated minimum future lease obligations under the Company's leases are as follows:

	Operating Leases
Year ended March 31,
2021	$	416
2022		791
2023		764
2024		709
2025		647
Thereafter		1,597
Total minimum lease payments		4,924
Less: interest		927
Present value of lease liabilities		3,997