Facility Operating Lease |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Facility Operating Lease [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Facility Operating Lease | Note 5 – Facility Operating Lease
On April 1, 2021, the Company commenced a 5-year operating lease for a facility in Santa Barbara, California with total lease payments of $781,813. The Company determined the lease constitutes a Right of Use (ROU) asset and has recorded the present value of the lease payments as an asset and liability per ASC 842. The lease agreement waived the first three months of rent with payments commencing July 1, 2021. At the commencement of the lease, the net present value of the lease payments was $767,553. In addition to these lease payments, the Company is also responsible for its shares of common area operating expenses and electricity. Such expenses are considered variable costs and are not included in the measurement of the lease liability. The lease agreement also provides for the option to extend the lease for two additional sixty-month periods. On July 1, 2023, one of the two options to extend was considered reasonably certain of exercise and the Company remeasured the ROU asset and lease liability. The Company recorded the net present value of $1,189,606 for both the ROU asset and lease liability on July 1, 2023.
The following table presents maturities of operating lease liabilities on an undiscounted basis as of March 31, 2024:
The lease term and the discount rate for the lease at March 31, 2024 is 7.0 years and 4.00%, respectively. The total lease expenses were $31,398 and $24,360 for the three months ended March 31, 2024 and 2023, respectively, and $125,656 and $97,078 for the nine months ended March 31, 2024 and 2023, respectively. The variable costs for common area operating expenses and electricity were $42,821, and $54,643 for the three months ended March 31, 2024 and 2023, respectively and $194,667 and $228,454 for the nine months ended March 31, 2024 and 2023.
In April 1, 2021, the Company subleased a portion of their facility. The sub-lease provided for base monthly rent of $13,013 through May 31, 2021 and $8,400 starting June 1, 2021 plus common area operating and utility costs. The sublease was amended again on May 17, 2022 to sublease a smaller portion of the property at a base rental rate of $5,200 per month effective June 1, 2022. The Company recognized sub-lease income of $23,405 and $128,921, including reimbursement of common area operating and utility costs, for the three and nine months ended March 31, 2023. The sub-lease ended in March 2023. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||