Note E - Leases

3 Months Ended

Jun. 30, 2021

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

 NOTE E — LEASES

The Company’s lease of its office space in Longview, Texas is the only operating lease included in the Company's right-of-use ("ROU") asset and lease liability. The lease calls for monthly rent payments of $4,878 and expires on April 30, 2024. The Company’s other operating leases for items such as IT equipment and storage space are either short-term in nature or immaterial.

In October 2019, the Company received a new heavy-duty forklift under a 5-year finance lease arrangement with a financed amount of $518,616 and a monthly payment of $9,074.

The components of expense related to leases for the three months ended June 30, 2021 and 2020 are as follows:

	THREE MONTHS ENDED JUNE 30,
	2021		2020
Finance lease – amortization of ROU asset	$	25,487	$	25,000
Finance lease – interest on lease liability		1,736		2,223
Operating lease expense		14,634		12,384
	$	41,857	$	39,607

The following table illustrates the balance sheet classification for ROU assets and lease liabilities as of June 30, 2021 and March 31, 2021:

	June 30, 2021		March 31, 2021		Balance Sheet Classification
Assets
Operating lease right-of-use asset	$	150,045	$	4,850	Other assets
Finance lease right-of-use asset		475,397		481,880	Property, plant & equipment
Total right-of-use assets	$	625,442	$	486,730
Liabilities
Operating lease liability, current	$	49,604	$	4,850	Accrued expenses
Finance lease liability, current		103,185		102,689	Current portion of finance lease
Operating lease liability, non-current		100,441		—	Other non-current liabilities
Finance lease liability, non-current		239,575		265,557	Other non-current liabilities
Total lease liabilities	$	492,805	$	373,096

As of June 30, 2021, the weighted-average remaining lease term was 2.8 years for operating leases and 3.3 years for finance leases. The weighted average discount rate was 7% for operating leases and 1.9% for finance leases.

Maturities of lease liabilities as of June 30, 2021 were as follows:

	Operating Leases			Finance Leases
Fiscal 2022 (remainder of fiscal year)		43,902			81,669
Fiscal 2023		58,536			108,888
Fiscal 2024		58,536			108,888
Fiscal 2025		4,878			54,445
Fiscal 2026		—			—
Total undiscounted lease payments	$	165,852		$	353,890
Less: imputed interest		(15,807	)		(11,130	)
Present value of lease liability	$	150,045		$	342,760