XML 22 R12.htm IDEA: XBRL DOCUMENT v3.25.0.1
Leases
9 Months Ended
Dec. 31, 2024
Leases  
Leases

6. Leases

 

The Company leases approximately 4,160 rentable square feet of office space from an unaffiliated third party for our corporate office located in Midland, Texas. This includes 702 square feet of office space shared with and paid by our majority shareholder. In June 2024, the Company agreed to re-extend its lease at a flat (unescalated) rate for another 36 months. The amended lease now expires on July 31, 2027.

 

The Company determines an arrangement is a lease at inception. Operating leases are recorded in operating lease right-of-use asset, operating lease liability, current, and operating lease liability, long-term on the consolidated balance sheets.

 

 

Operating lease right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s lease does not provide an implicit rate, the Company uses the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate used at adoption was 9%. Significant judgement is required when determining the incremental borrowing rate. Rent expense for lease payments is recognized on a straight-line basis over the lease term.

 

The balance sheets classification of lease assets and liabilities was as follows:

 

   December 31, 2024 
Assets     
Operating lease right-of-use asset, beginning balance  $19,263 
Current period amortization   (38,759)
Lease extension   158,073 
Total operating lease right-of-use asset  $138,577 
      
Liabilities     
Operating lease liability, current  $49,872 
Operating lease liability, long term   88,705 
Total lease liabilities  $138,577 

 

Future minimum lease payments as of December 31, 2024 under non-cancellable operating leases are as follows:

 

   Lease Obligation 
Fiscal Year Ended March 31, 2025  $15,080 
Fiscal Year Ended March 31, 2026   60,320 
Fiscal Year Ended March 31, 2027   60,320 
Fiscal Year Ended March 31, 2028   20,107 
Total lease payments  $155,827 
Less: imputed interest   (17,250)
Operating lease liability   138,577 
Less: operating lease liability, current   (49,872)
Operating lease liability, long term  $88,705 

 

Net cash paid for our operating lease for the nine months ended December 31, 2024 and 2023 was $35,116 and $32,001, respectively. Rent expense, less sublease income of $9,430 is included in general and administrative expenses.