9. Leases

Lessor

The Company rents microturbine equipment to its customers for terms ranging from a couple of months to up to ninety-six months with most of the leases generally with thirty-six month terms with an extension option, which may impact the lease term. The leases may provide the lessee with the option to purchase the underlying assets at the end of the lease term. Monthly rental payments are fixed; however, the leases may include variable payments for fuel, excess labor, additional equipment, or technician labor and engineering support. The leases are classified as either sales-type leases or operating leases, as appropriate. As further described below, the Company rents certain microturbine equipment back from customers and subleases this equipment to end users as a part of its Energy-as-a-Service business.

At September 30, 2025, the Company’s minimum rental revenue to be received was as follows (in thousands):

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At September 30, 2025, the Company’s future scheduled minimum lease payments to be received from its sales-type lease were as follows (in thousands):

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The Company recognized less than $0.1 million of interest income related to lease receivables during the three months ended September 30, 2025 and recognized $0.1 million of interest income related to lease receivables during the six months ended September 30, 2025. There was no interest income related to lease receivables during the three and six months ended September 30, 2024.

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 Lessee

The Company leases facilities and equipment under various non-cancelable operating and finance leases expiring at various times through Fiscal 2029. All of the leases require the Company to pay maintenance, insurance and property taxes. The lease agreements for primary office and manufacturing facilities provide for rent escalation over the lease term and renewal options for five-year periods. Lease expense is recognized on a straight-line basis over the term of the lease, which may include extension periods.

During the six months ended September 30, 2025, the Company did not enter into new rental agreements to rent used microturbine equipment from customers where that equipment was not currently in use. The Company may enter into lease modifications from time to time, and modified four of their current lease agreements during the six months ended September 30, 2025. The existing rental agreements provide the Company an option to extend the lease, however, the Company is not likely to exercise these options and therefore they are not included in the determination of the lease term. As of September 30, 2025, lease commitments totaled approximately 19.0 megawatts of microturbines and had an average term of 34 months and a total remaining commitment value of approximately $7.7 million.

The components of lease expense were as follows (in thousands):

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Supplemental balance sheet information related to the leases was as follows (dollars in thousands):

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Supplemental cash flow information related to the leases was as follows (in thousands):

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At September 30, 2025, the Company’s minimum commitments under non-cancelable operating and finance leases were as follows (in thousands):

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