Right of Use Assets and Operating Lease Liability

9 Months Ended

Dec. 31, 2023

Disclosure Text Block [Abstract]

Lessee, Operating Leases [Text Block]

Note 8 – Right of Use Assets and Operating Lease Liability

The Company leases its facility in East Rutherford, NJ with monthly payments of $21,237 until August 2025. Thereafter, monthly payments are $23,083 for the balance of the 8 year lease agreement expiring August 2029.

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% for both December 31, 2023 and March 31,2023. The weighted average remaining lease term is 5.67 years.

Right to use assets is summarized below:

	December 31, 2023			March 31, 2023
Right to use asset	$	1,830,857		$	1,830,857
Less: Accumulated amortization		(455,131	)		(304,306	)
Right to use assets, net	$	1,375,726		$	1,526,551

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 December 31, 2023:

Remaining payments in fiscal 2024	$	63,710
2025		254,840
2026		267,767
2027		277,000
2028		277,000
Thereafter		392,417
Total undiscounted future minimum lease payments		1,532,734
Less: Difference between undiscounted lease payments and discounted lease liabilities		(157,008	)
Present value of net minimum lease payments		1,375,726
Less current portion		(208,076	)
Operating lease liabilities – long-term	$	1,167,650

Total rent expense for the three and nine months ended December 31, 2023, was $102,900 and $308,634, respectively, as compared to $96,233 and $304,736 for the three and nine months ended December 31, 2022, respectively.