LEASES

6 Months Ended

Dec. 31, 2021

LEASES

NOTE 16. LEASES

NOTE 16. LEASES

Stow Professional Lease

In connection with the acquisition of Sarah Adult Day Centers, Inc. on March 25, 2021, the Company acquired a facilities lease with 6,000 square feet at 4472 Darrow Road, Stow, Ohio 44224. The lease expires on December 31, 2025 and the lease payments are as follows:

	Monthly Rent Payments
	Base Rent		Covid-19 Recoup*		Total Rent
April 1, 2021	$	6,369	$	983	$	7,352
May 1, 2021 to December 31, 2021	$	6,369	$	621	$	6,990
January 1, 2022 to December 31, 2022	$	6,433	$	621	$	7,054
January 1, 2023 to December 31, 2023	$	6,497	$	621	$	7,118
January 1, 2024 to December 31, 2024	$	6,562	$	621	$	7,183
January 1, 2025 to December 31, 2025	$	6,628	$	621	$	7,249

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*The Company has to repay the lessor monthly payments as a result of COVID relief.

Harbor Lease

In connection with the acquisition of Sarah Adult Day Centers, Inc. on March 25, 2021, the Company acquired a facilities lease with 3,469 square feet at 4580 Stephen Circle NW. Canton, OH 44718. The monthly lease payments are $4,500 and the lease expires on December 31, 2023.

In connection with the acquisition of Sarah Day Care Centers, Inc. on March 25, 2021, the Company acquired a facilities lease with 5,300 square feet in Jackson, Ohio. The monthly lease payments are $7,910, which includes monthly payments of $603 as repayments for COVID relief. The lease expires on July 1, 2026.

S. Frank Professional Lease

Operating lease right-of-use asset and liability are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value is our incremental borrowing rate, estimated to be 10%, as the interest rate implicit in most of the Company’s leases is not readily determinable. Operating lease expense is recognized on a straight-line basis over the lease term. Since the common area maintenance expenses are expenses that do not depend on an index or rate, they are excluded from the measurement of the lease liability and recognized in general and administrative expenses on the consolidated statements of operations.

Right-of-use asset is summarized below:

	December 31, 2021
	Stow Professional Center Lease			Harbor Lease			S. Frank Professional Lease			Total
Office lease	$	282,371		$	120,003		$	412,770		$	815,144
Less: accumulated amortization		(44,796	)		(32,919	)		(62,014	)		(139,729	)
Right-of-use asset, net	$	237,575		$	87,084		$	350,756		$	675,415

Operating lease liability is summarized below:

	December 31, 2021
	Stow Professional Center Lease			Harbor Lease			S. Frank Professional Lease			Total
Office lease	$	238,291		$	87,084		$	350,756		$	676,134
Less: current portion		(64,415	)		(47,897	)		(63,497	)		(175,812	)
Long term portion	$	173,876		$	39,187		$	287,259		$	500,322

Maturity of the lease liability is as follows:

	December 31, 2021
	Stow Professional Center Lease			Harbor Lease			S. Frank Professional Lease			Total
Year ending June 30, 2022	$	42,320		$	27,000		$	47,462		$	116,782
Year ending June 30, 2023		85,025			54,000			94,923			233,948
Year ending June 30, 2024		85,802			13,501			94,923			194,226
Year ending June 30, 2025		64,841			-			94,923			159,764
Year ending June 30, 2026		-			-			94,923			94,923
Year ending June 30, 2027		-			-			7,913			7,913
Present value discount		(39,697	)		(7,417	)		(84,311	)		(131,425	)
Lease liability	$	238,291		$	87,084		$	350,756		$	676,131