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Operating Lease
 3 Months Ended
Dec. 31, 2021
Disclosure Text Block [Abstract]  
OPERATING LEASE

7. OPERATING LEASE

 

Effective July 1, 2019, Citius entered into a 76-month lease for office space in Cranford, NJ. Citius will 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 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  Three Months Ended
December 31,
2021		   Three Months Ended
December 31,
2020		 
Operating lease cost  $59,705   $59,706 
Variable lease cost   —    194 
Total lease cost   59,705   $59,900 
           
Other information          
Weighted-average remaining lease term - operating leases   3.8 Years    4.8 Years 
Weighted-average discount rate - operating leases   8.0%   8.0%

 

Maturities of lease liabilities due under the Company’s non-cancellable leases as of December 31, 2021 is as follows: 

 

Year Ending September 30,  December 31,
2021		 
2022 (excluding the 3 months ended December 31, 2021)  $179,783 
2023   244,165 
2024   249,024 
2025   253,883 
2026   21,460 
Total lease payments   948,315 
Less: interest   (135,542)
Present value of lease liabilities  $812,773 

 

Leases  Classification  December 31,
2021		   September 30,
2021		 
Assets             
Lease asset  Operating  $779,949   $822,828 
Total lease assets     $779,949   $822,828 
              
Liabilities             
Current  Operating  $182,028   $177,237 
Non-current  Operating   630,745    678,234 
Total lease liabilities     $812,773   $855,471 

 

Interest expense on the lease liability was $16,826 and $20,035 for the three months ended December 31, 2021 and 2020, respectively.