Operating Lease Liability

12 Months Ended

Mar. 31, 2022

Disclosure Text Block [Abstract]

Lessee, Operating Leases [Text Block]

12. Operating Lease Liability

The Company leases its general office and manufacturing facility in East Rutherford, NJ with monthly payments of $18,467 under an operating lease agreement which expired July 31, 2016. The lease is for a five year period, beginning August 1, 2011, with a five year option in a one-story facility. In June 2016, the Company extended the lease term for another five years until August 2021. Under terms of the lease, the Company is also responsible for its proportionate share of the additional rent to include all real estate taxes, insurance, snow removal, landscaping, and other building charges. The Company is also responsible for the utility costs for the premises. During April 2021, the Company extended the lease term for another eight years until August 31, 2029. Under the extended lease all terms remain the same, with the exception of the monthly payment of $18,467 escalating to $23,083 commencing September 1, 2021. 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 leases a small office in Lawrence, Kansas under an operating lease agreement which expired March 30, 2022, and was renewed for an additional 12 months, expiring on March 31, 2023.

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 3.9% for both March 31, 2022, and 2021, respectively.

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 consolidated balance sheet as of March 31, 2022:

2023	$	254,840
2024		254,840
2025		254,840
2026		267,767
2027		277,000
Thereafter		669,416
Total undiscounted future minimum lease payments		1,978,703
Less: Difference between undiscounted lease payments and discounted lease liabilities		(257,782	)
Present value of net minimum lease payments		1,720,921
Less current portion		(194,370	)
Operating lease liabilities – long-term	$	1,526,551

Total rent expense for the years ended March 31, 2022, and 2021 were $395,558 and $364,582, respectively