Operating Lease Liability

3 Months Ended

Jun. 30, 2021

Disclosure Text Block [Abstract]

Lessee, Operating Leases [Text Block]

Note 11 – Operating Lease Liability

The Company leases its facility in East Rutherford, NJ with monthly payments of $18,467 which expires in August 2021 and has been renewed for an additional eight years. The renewal commences September 2021 with monthly payments of $21,237 with an increase to $23,083 monthly payments in September 2025. As a result, the Company recorded $1,830,858 of right-of-use assets and related operating leases liabilities during the year ended March 31, 2021.

The Company's leases generally do not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease. The Company estimated its incremental borrowing rate based on its credit quality, line of credit agreement and by comparing interest rates available in the market for similar borrowings. The Company used a discount rate of 3.90% at June 30, 2021.

The following table reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under non-cancelable operating leases with terms of more than one year to the total lease liabilities recognized on the unaudited condensed consolidated balance sheet as of June 30, 2021:

Remaining payments 2022	$	185,591
2023		254,840
2024		254,840
2025		254,840
2026		267,767
Thereafter		946,417
Total undiscounted future minimum lease payments		2,164,295
Less: Difference between undiscounted lease payments and discounted lease liabilities		(296,790	)
Present value of net minimum lease payments		1,867,505
Less current portion		(194,469	)
Operating lease liabilities – long-term	$	1,673,036

Total rent expense for the three months ended June 30, 2021, was $92,134, as compared to $90,921 or the three months ended June 30, 2020, respectively.