OPERATING LEASE

9 Months Ended

Dec. 31, 2021

NOTE 7 – OPERATING LEASE

The Company has adopted ASU No. 2016-02, Leases (Topic 842), as of April 1, 2019 and will account for new leases in terms of the right of use assets and offsetting lease liability obligations for this new lease under this pronouncement. In accordance with ASC 842 – Leases, effective January 6, 2021, the Company recorded a net lease right of use asset and a lease liability at present value of approximately $67,938. The Company recorded these amounts at present value, in accordance with the standard, using a discount rate of 8.32% which is representative of the average borrowing rates for outstanding notes issued to non-related parties at the time of the entrance into the lease. The right of use asset is composed of the sum of all lease payments, at present value, and is amortized over the life of the expected lease term. For the expected term of the lease the Company used the initial term of the two-year lease. Upon the election by the Company to extend the lease for additional years, that election will be treated as a lease modification and the lease will be reviewed for remeasurement. This lease will be treated as an operating lease under the new standard.

Wappingers Falls, New York – Corporate headquarters

Effective January 6, 2021, the Company moved its corporate headquarters to 4 Nancy Court, Suite 4, Wappingers Falls, New York 12590. The Company’s telephone number remains the same, phone: 917-796-9926. The Company entered into a two-year lease, expiring January 31, 2023. The Company will pay $19,200 annually ($1,600 per month) during the term of the lease. The Company paid $1,600 as a security deposit as part of this lease. The Company has the option to one two-year extension. The Company expects it will exercise this option. Tenant will pay $21,000 annually ($1,750 per month) during the option term, should we exercise this option.

For the three and nine months ended December 31, 2021 and 2020, the Company recorded lease expense of $5,025 and $15,075, respectively compared to $1,261 and $8,998 for the same period in the prior year. As of December 31, 2021, the value of the unamortized lease right of use asset is $52,927. As of December 31, 2021, the Company’s lease liability was $53,827.

The following chart shows the Company’s operating lease cost for the three and nine months ended December 31, 2021 and 2020:

SCHEDULE OF OPERATING LEASE COST

	2021		2020		2021		2020
	For the three months ended December 31,				For the nine months ended December 31,
	2021		2020		2021		2020
Amortization of right of lease asset	$	3,870	$	1,151	$	11,374	$	8,062
Lease interest cost		1,155		109		3,701		936
Total Lease cost	$	5,025	$	1,261	$	15,075	$	8,998

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2021 AND 2020

(US$)

(UNAUDITED)

NOTE 7 – OPERATING LEASE (CONTINUED)

Maturity of Operating Lease Liability for fiscal year ended March 31,


2022	$	3,726
2023		16,201
2024		18,990
2025		14,909
Total lease payments	$	53,827

		December 31, 2021				March 31, 2021
Right of Use (ROU) asset		$	52,927			$	64,301

	December 31, 2021		March 31, 2021
Operating lease liability:
Current	$	15,409	$	14,426
Non-Current		38,418		50,100
Total	$	53,827	$	64,526

TAURIGA SCIENCES, INC. 10-Q