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LEASES
 6 Months Ended
Sep. 30, 2020
Leases [Abstract]  
LEASES

Effective April 1, 2019, the Company adopted ASU No. 2016-02, Leases (ASC 842), and related ASUs, as amended, using the alternative transition method, which allowed the Company to initially apply the new lease standard at the adoption date (the “effective date method”). In January 2020, the Company executed a lease for a new, larger corporate facility in San Diego, California and paid a $100,000 security deposit. The 39-month lease term commenced April 1, 2020, and the lease provides for an initial monthly rent of approximately $12,400 with annual rent increases of approximately 3%. In addition to the minimum lease payments, the Company is responsible for property taxes, insurance and certain other operating costs. The right-to-use asset and corresponding liability for the facility lease have been measured at the present value of the future minimum lease payments. A discount rate of 11%, which approximated the Company’s incremental borrowing rate, was used to measure the lease asset and liability. Lease expense is recognized on a straight line basis over the lease term.

 

The Company obtained a right-of-use asset of $270,950 in exchange for its obligations under the operating lease. The landlord also provided a lease incentive of approximately $139,000, which was paid to the Company in June 2020, for the Company to make improvements to the leased space.

 

Future minimum payments under the facility operating lease, as of September 30, 2020, are listed in the table below.

 

    Operating  
Annual Fiscal Years   lease  
2021   $ 74,478  
2022     153,432  
2023     158,028  
2024     40,692  
Less:        
Imputed interest     (61,162)  
Present value of lease liabilities   $ 365,468  

 

Cash paid for amounts included in the measurement of lease liabilities was $49,652 for the six months ended September 30, 2020. Rent expense was $26,884 and $9,000 for the three months ended September 30, 2020 and 2019, respectively, and $53,768 and $18,000 for the six months ended September 30, 2020 and 2019, respectively.