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Operating Lease
 6 Months Ended
Mar. 31, 2022
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 lease does not provide an implicit rate, the Company estimated the incremental borrowing rate in calculating the present value of the lease payments 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,
2022		   Six Months Ended
March 31,
2021		 
Operating lease cost  $119,411   $119,412 
Variable lease cost   
—
    194 
Total lease cost   119,411   $119,606 
           
Other information          
Weighted-average remaining lease term - operating leases   3.6 Years    4.6 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 March 31, 2022 is as follows: 

 

Year Ending September 30,  March 31,
2022		 
2022 (excluding the 6 months ended March 31, 2022)  $120,260 
2023   244,165 
2024   249,024 
2025   253,883 
2026   21,460 
Total lease payments   888,792 
Less: interest   (119,574)
Present value of lease liabilities  $769,218 

 

Leases  Classification   March 31,
2022		   September 30,
2021		 
Assets            
Lease asset   Operating   $736,209   $822,828 
Total lease assets       $736,209   $822,828 
                
Liabilities               
Current   Operating   $186,916   $177,237 
Non-current   Operating    582,302    678,234 
Total lease liabilities       $769,218   $855,471 

 

Interest expense on the lease liability was $32,792 and $39,300 for the six months ended March 31, 2022 and 2021, respectively.