XML 36 R14.htm IDEA: XBRL DOCUMENT

Leases

12 Months Ended

Mar. 31, 2020

NOTE 7 – LEASES

We lease office, manufacturing, and warehouse space in Scottsdale and Payson, AZ and Manitowoc, WI under contracts we classify as operating leases. None of our leases are financing leases. The Payson lease has an option to renew for five years, and the Manitowoc lease has an option to renew for the three years. As of March 31, 2020, we are fairly certain that we will exercise the renewal options on both leases, and we have included such renewal options in the lease liabilities and the disclosures herein. The Scottsdale lease does not include a renewal option.

As of March 31, 2020, total Right of Use Assets and Operating Lease Liabilities on the Balance Sheet were $3,431,746 and $3,483,724, respectively. The current portion of our Operating Lease Liability is $375,813 and is reported as a current liability. The remaining $3,107,911 of the total $3,483,724 Operating Lease Liability is presented as a long-term liability net of the current portion.

Consolidated lease expense for the year ended March 31, 2020 was $836,665 including $706,692 of operating lease expense and $129,973 of other lease associated expenses such as association dues, taxes, utilities, and other month to month rentals. Total lease and rent expense for the year ended March 31, 2019 was $272,700.

The weighted average remaining lease term and weighted average discount rate for operating leases were 7.8 years and 10.0%, respectively.

Future minimum lease payments under non-cancellable leases as of March 31, 2020 are as follows:

Years Ended March 31,
2021		707,391
2022		717,387
2023		727,384
2024		670,112
Thereafter		2,168,932
		4,991,206
Less: Amount Representing Interest		(1,507,482	)
	$	3,483,724

We are obligated under a triple-net operating lease for our 20,000 square foot manufacturing facility located in Payson, Arizona. The terms of the lease require a payment of approximately $10,000 per month, which includes an estimate for utilities, taxes, and repairs. This lease expires in November of 2021.

We believe this facility will be adequate to meet our needs in the near future. However, we are making plans to expand our building footprint to accommodate additional automation equipment. We intend to pay for these improvements using working capital and will amortize the costs over the remaining lease period.

The following table outlines our future contractual financial obligations associated with this lease by fiscal year in which payment is expected, as of March 31, 2020:

	2021		2022		Total
Payson Lease	$	120,000	$	80,000	$	200,000

Our executive offices are located in Scottsdale, Arizona where we lease 21,000 square feet of office and warehouse space for $17,702, which will increase by approximately 4.4% each year. This space houses our principal executive, administration, marketing, and research and development functions. The lease expires in December of 2023.

The following table outlines our future contractual financial obligations associated with this lease by fiscal period in which payment is expected, as of March 31, 2020:

	2021		2022		2023		2024		Total
Scottsdale Lease	$	226,587	$	236,583	$	246,580	$	147,240	$	856,990

Our ammunition casing operations are located in Manitowoc, Wisconsin where we lease approximately 50,000 square feet. The terms of the lease provide for a monthly payment of approximately $32,844. The lease expires in March of 2026 and can be renewed every three years thereafter.

The following table outlines our future contractual financial obligations associated with this lease by fiscal period in which payment is expected, as of March 31, 2020:

	2021		2022		2023		2024		2025		2026		Total
Manitowoc Lease	$	394,128	$	394,128	$	394,128	$	394,128	$	394,128	$	394,128	$	2,364,768

Additional offices were located in Scottsdale, Arizona where we leased approximately 5,000 square feet under a month-to-month triple net lease for $3,800 per month. This office building was owned by a related party.