LEASES

6 Months Ended

Sep. 30, 2021

Leases

LEASES

NOTE 12 –LEASES

Kokomo lease

On October 1, 2020, the Company, under its subsidiary ONE More Gym LLC, entered into a facilities lease (“Kokomo Lease”) for 25,000 square feet in Kokomo, Indiana. The initial lease term is for five years and the lease commencement date is October 1, 2020. The monthly lease payments are $7,291.66 in year 1, $7,656.25 in year 2, $8,039.06 in year 3, and $8,441.02 in years 4 and 5.

Valparaiso Lease7,624

The Company leases 11,676 square feet of office space located at 1805 E. Lincolnway, Valparaiso, Indiana 46383. The Company assumed the lease (“Valparaiso Lease”) when it acquired CFit Indiana Inc. on October 6, 2020. The monthly lease payments are $7,624.50 and the lease expires on December 31, 2023.

Merrill Lease

In connection with the acquisition of CFit Indiana Inc. on October 6, 2020, the Company acquired a facilities lease for 15,000 square feet at 6055N. Broadway Ave., Merrillville, Indiana. The monthly lease payments are $11,189.50 and the lease expires on February 28, 2026.

Tuscaloosa Lease

In connection with the acquisition of Hillcrest Fitness LLC on December 1, 2020, the Company acquired a facilities lease at 6551 Highway 69 South, Tuscaloosa, AL 35405. The monthly lease payments are $6,000 and the lease expires on March 6, 2024.

Birmingham Lease

In connection with the acquisition of Club Fitness LLC on April 1, 2021, the Company acquired a facilities lease at 2520 Moody Parkway, Mood, AL 35004. The monthly lease payments are $6,000 and the lease expires on April 30, 2026.

Valparaiso Additional Space Lease

On August 30, 2021, the Company entered into a facilities lease (“Valparaiso Additional Space”) for 6,380 square feet in Valparaiso, Indiana. The initial lease term is for five years and the lease commencement date is August 30, 2021. The monthly lease payments are $4,250.00 plus Common Area Maintenance (“CAM”) in year 1, $5,316.66 plus (“CAM”) in year 2 and 3, and $6,380.00 plus (“CAM”) in year 4 and 5. The Company has the option to renew at a rental rate of $6,911.66 plus (“CAM”) for years 2029 through 2033.

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 our 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 other general and administrative expenses on the statements of operations.

Right-of-use asset is summarized below:  

	September 30, 2021
	Kokomo Lease			Valparaiso Lease			Merrill Lease			Tuscaloosa Lease			Birmingham Lease			Valparaiso Additional Lease			Total
Office lease	$	375,483		$	374,360		$	701,404		$	222,087		$	284,745		$	372,778		$	2,330,857
Less: accumulated amortization		(61,255	)		(102,574	)		(66,088	)		(39,078	)		(18,695	)		(3,114	)		(290,804	)
Right-of-use asset, net	$	314,228		$	271,786		$	635,316		$	183,009		$	266,050		$	369,664		$	2,040,053

Operating lease liability is summarized below: 

	September 30, 2021
	Kokomo Lease			Valparaiso Lease			Merrill Lease			Tuscaloosa Lease			Birmingham Lease			Valparaiso Additional Lease			Total
Office lease	$	322,413		$	271,786		$	681,570		$	183,009		$	266,051		$	375,884		$	2,100,713
Less: current portion		(63,246	)		(113,315	)		(95,730	)		(56,858	)		(48,163	)		(9,999	)		(387,311	)
Long term portion	$	259,167		$	158,471		$	585,840		$	126,151		$	217,888		$	365,885		$	1,713,402

Maturity of the lease liability is as follows: 

	September 30, 2021
	Kokomo Lease			Valparaiso Lease			Merrill Lease			Tuscaloosa Lease			Birmingham Lease			Valparaiso Additional Lease			Total
Fiscal year ending March 31, 2022	$	45,938		$	67,137		$	58,756		$	36,000		$	36,000		$	15,780		$	259,611
Fiscal year ending March 31, 2023		94,172			134,274			201,450			72,000			72,000			63,122			637,018
Fiscal year ending March 31, 2024		98,880			100,706			201,450			72,000			72,000			66,441			611,477
Fiscal year ending March 31, 2025		101,292			–			201,450			30,000			72,000			76,400			481,142
Fiscal year ending March 31, 2026		50,646			–			184,664			–			72,000			79,665			386,974
Fiscal year ending March 31, 2027		–			–			–			–			6,000			89,460			95,460
Fiscal year ending March 31, 2028		–			–			–			–			–			89,460			89,460
Fiscal year ending March 31, 2029		–			–			–			–			–			67,095			67,095
Present value discount		(68,515	)		(30,330	)		(166,199	)		(26,991	)		(63,949	)		(171,540	)		(527,524	)
Lease liability	$	322,413		$	271,786		$	681,570		$	183,009		$	266,051		$	375,884		$	2,100,713