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Operating Lease
 6 Months Ended
Mar. 31, 2020
Leases [Abstract]  
OPERATING LEASE

7. OPERATING LEASE

 

LMB leased office space from Akrimax (see Note 6) in Cranford, New Jersey at a monthly rental rate of $2,167 pursuant to an agreement which expired on April 30, 2019. Rent expense for the six months ended March 31, 2019 was $13,000.

 

Effective July 1, 2019, Citius entered into a 76-month lease for office space in Cranford, NJ.

  

Citius will also pay its proportionate share of real estate taxes and operating expenses in excess of the base year expenses. These costs are considered to be variable lease payments and are not included in the determination of the lease's right-of-use asset or lease liability. 

 

The Company identified and assessed the following significant assumptions in recognizing its right-of-use assets and corresponding lease liabilities:

 

  ● As the Company's current Cranford lease does not provide an implicit rate, the Company estimated the incremental borrowing rate in calculating the present value of the lease payments. The Company has estimated its incremental borrowing rate based on the remaining lease term as of the adoption date.

 

  ● Since the Company elected to account for each lease component and its associated non-lease components as a single combined component, all contract consideration was allocated to the combined lease component.

 

  ● The expected lease terms include noncancelable lease periods.

 

The elements of lease expense are as follows:  

 

Lease cost  Six Months
Ended
March 31,
2020		 
Operating lease cost  $126,844 
Variable lease cost   — 
Total lease cost  $126,844 
      
Other information     
Weighted-average remaining lease term - operating leases   5.6 Years 
Weighted-average discount rate - operating leases   8.0 

 

Maturities of lease liabilities due under the Company's non-cancellable leases as of March 31, 2020 is as follows:

 

Year Ending September 30,  March 31,
2020		 
2020 (excluding the 6 months ended March 31, 2020)  $115,401 
2021   234,447 
2022   239,306 
2023   244,165 
2024   249,024 
Thereafter   275,343 
Total lease payments   1,357,686 
Less: interest   (270,120)
Present value of lease liabilities  $1,087,566 

 

Leases  Classification  March 31,
2020		 
Assets       
Lease asset  Operating  $1,055,877 
Total lease assets     $1,055,877 
         
Liabilities        
Current  Operating  $150,411 
Non-current  Operating   937,155 
Total lease liabilities     $1,087,566 

 

Interest expense on the lease liability was $44,997 for the six months ended March 31, 2020.