The Company’s principal facility and its corporate headquarters are located at the Natural Energy Laboratory of Hawaii Authority (“NELHA”) at Keahole Point in Kailua-Kona, Hawaii. The Company leases two properties from the State of Hawaii under a 40-year commercial lease expiring in 2035 and a 19-year commercial lease expiring in 2037. Under the terms of the existing NELHA leases, the Company could be required to remove improvements at the end of the lease terms. Under GAAP, an entity should recognize the fair value of a liability for an asset retirement obligation in the period in which the retirement obligation is incurred, if a reasonable estimate of fair value can be made. If such an estimate cannot be made in the period the asset retirement obligation is incurred, the liability should be recognized when the fair value can be reasonably estimated. Based on communications with NELHA, management does not believe the projected cost for such removal to be material to the consolidated financial statements, or likely, given historical practices. However, conditions could change in the future. It is not possible to predict such changes or estimate any impact thereof.

The Company leases facilities, equipment and land under non-cancelable operating leases expiring through 2037. One of its facility leases contains price escalations and a renewal option for five years. The NELHA land lease provides for contingent rentals in excess of minimum rental commitments based on a percentage of the Company’s sales. For fiscal years ended March 31, 2025 and 2024, there were no contingent rental payments.

Right-of-use assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are based on the present value of lease payments over the lease terms, using the Company’s incremental borrowing rate based on the information available at recognition, and the Company has elected to exclude non-lease components. The Company also leases two 84-month solar leases for two of its buildings and a 48-month lease for equipment, which are included in the right-of-use assets and liabilities. As of March 31, 2025, the weighted average remaining lease terms of all operating leases was 8.6 years, the weighted average discount rate was 7.4% and the operating lease costs were $840,000. As of March 31, 2024, the weighted average remaining lease terms of all operating leases was 9.1 years, the weighted average discount rate was 7.3% and the operating lease costs were $818,000. For the fiscal year ended March 31, 2025, non-cash right-of-use assets obtained in exchange for operating lease obligations was $18,000, representing the lease renewal of one of the Company's equipment leases. There were no new leases for the fiscal year ended March 31, 2024.

Supplemental balance sheet information related to leases consists of the following as of:

Maturities of lease liabilities as of March 31, 2025 are as follows:

Rent expense, including contingent rent, under operating leases were $702,000 and $685,000 for the years ended March 31, 2025 and 2024, respectively. Property taxes paid to the states of Hawaii and California were $38,000 for both the fiscal years ended March 31, 2025 and 2024.