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Note E - Leases

9 Months Ended

Dec. 31, 2021

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 and nine months ended December 31, 2021 and 2020 are as follows:

	*Three Months Ended*				*Nine Months Ended*
	*December 31,*				*December 31,*
	*2021*		*2020*		*2021*		*2020*
Finance lease – amortization of ROU asset	$	25,734	$	25,243	$	76,831	$	75,364
Finance lease – interest on lease liability		1,489		1,981		4,838		6,306
Operating lease expense		14,634		14,634		43,902		41,652
	$	41,857	$	41,858	$	125,571	$	123,322

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

	*December 31, 2021*		*March 31, 2021*		*Balance Sheet Classification*
Assets
Operating lease right-of-use asset	$	125,676	$	4,850	Other assets
Finance lease right-of-use asset		462,431		481,880	Property, plant & equipment
Total right-of-use assets	$	588,107	$	486,730
Liabilities
Operating lease liability, current	$	51,366	$	4,850	Accrued expenses
Finance lease liability, current		104,185		102,689	Current portion of finance lease
Operating lease liability, non-current		74,310		—	Other non-current liabilities
Finance lease liability, non-current		187,231		265,557	Other non-current liabilities
Total lease liabilities	$	417,092	$	373,096

As of December 31, 2021, the weighted-average remaining lease term was 2.3 years for operating leases and 2.8 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 December 31, 2021 were as follows:

	*Operating Leases*			*Finance Leases*
Fiscal 2022 (remainder of fiscal year)		14,634			27,223
Fiscal 2023		58,536			108,892
Fiscal 2024		58,536			108,892
Fiscal 2025		4,878			54,446
Fiscal 2026		—			—
Total undiscounted lease payments	$	136,584		$	299,453
Less: imputed interest		(10,908	)		(8,037	)
Present value of lease liability	$	125,676		$	291,416