Quarterly report pursuant to Section 13 or 15(d)

10. LEASE

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10. LEASE
9 Months Ended
Dec. 31, 2020
Leases [Abstract]  
LEASE

On June 24, 2019, the Company entered into a service and equipment lease agreement for water treatment services, consumables and equipment. The lease term is for five years, with a renewal option of an additional five years, with a monthly lease payment of $5,000. The Company analyzed the classification of the lease under ASC 842, and as it did not meet any of the criteria for a financing lease it has been classified as an operating lease. The Company determined the Right of Use asset and Lease liability values at inception calculated at the present value of all future lease payments for the lease term, using an incremental borrowing rate of 5%. The Lease Liability will be expensed each month, on a straight line basis, over the life of the lease. As of December 31, 2020 and March 31, 2020, the lease is on hold while the Company waits for new equipment to be delivered and installed. As the lease is on hold there has been no lease expense or amortization of the Right of Use asset for the three and nine months ended December 31, 2020.

 

For the three and nine months ended December 31, 2019 the lease expense was $15,000, and the amortization of the Right of Use asset was $11,702.