Note 4 - Leases

9 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Lessee, Operating and Finance Leases [Text Block]

Note

4

– Leases

The Company determines if an arrangement is a lease at inception and has lease agreements for warehouses, office facilities, and equipment. These commitments have remaining non-cancelable lease terms, with lease expirations which range from

2021

to

2032.

As a result of the adoption of ASC

842,

certain real estate and equipment operating leases have been recorded on the balance sheet with a lease liability and right-of-use asset ("ROU"). Application of this standard resulted in the recognition of ROU assets of

$182,624,

net of accumulated amortization, and a corresponding lease liability of 

$190,173

at the

April 1, 2019,

date of adoption. Accounting for finance leases is substantially unchanged.

Operating leases are included in other current assets , accrued liabilities, and operating lease obligations, long term on the unaudited condensed consolidated balance sheets. Finance leases are included in property and equipment, finance lease obligations, short term, and finance lease obligations, long term, on the unaudited condensed consolidated balance sheets. ROU assets represent the Company's right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make scheduled lease payments. ROU assets and liabilities are recognized on the lease commencement date based on the present value of lease payments over the lease term. The present value of lease payments is calculated using the incremental borrowing rate at lease commencement, which takes into consideration recent debt issuances as well as other applicable market data available. The rates used to discount finance leases previously recorded as capital leases range from

10.2%

to

11.5%.

Operating leases were discounted at a rate of

17.0%.

Lease terms include options to extend when it is reasonably certain that the option will be exercised. Leases with a term of

12

months or less are

not

recorded on the consolidated balance sheet.

During the

nine

months ended

December 31, 2019

, finance lease costs recorded in the consolidated financial statements were

$

790,666

, of which 

$

474,686

represents interest expense and 

$

315,980

represents amortization of the right-of-use assets. Operating lease costs were

$

61,144

, of which 

$

22,667

represents interest expense and 

$

38,477

represents amortization of the right-of-use assets.

Discontinued operations includes 

$

280,227

in finance lease costs, of which 

$

153,977

represents interest expense and 

$

126,250

represents amortization of right-of-use assets.

Amortization of lease assets is included in general and administrative expenses. The future minimum lease payments of lease liabilities as of

December 31, 2019

, from continuing operations are as follows:

	Year Ending				Operating
	March 31,	Finance Leases			Leases
	2020 (3 months)	$	185,871		$	17,547
	2021		528,443			71,548
	2022		544,296			73,939
	2023		560,625			38,101
	2024		577,444			3,926
	Thereafter		4,375,869			-
Total undiscounted lease payments			6,772,548			205,061
Less: Amount representing interest			(3,072,687	)		(43,925	)
Present value of minimum lease payments			3,699,861			161,136
Less: Current maturities of lease obligations			(134,239	)		(47,084	)
Long-term lease obligations		$	3,565,622		$	114,052