Annual report pursuant to Section 13 and 15(d)

Commitments and Contingencies

Commitments and Contingencies
12 Months Ended
Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]  



Operating Lease


LMB leased office space from Akrimax (see Note 7) 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 year ended September 30, 2019 was $56,063.


Effective July 1, 2019, Citius entered into a 76-month lease for office space in Cranford, NJ. Rent expense under this agreement for the year ended September 30, 2019 was $57,349.


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   Year Ended
September 30,
Operating lease cost   $ 228,828  
Variable lease cost      
Total lease cost   $ 228,828  

Other information        
Weighted-average remaining lease term - operating leases     5.1 Years  
Weighted-average discount rate - operating leases     8.0  


Maturities of lease liabilities due under the Company's non-cancellable leases are as follows:


Year Ending September 30,      
2021   $ 234,447  
2022     239,306  
2023     244,165  
2024     249,024  
2025     253,883  
Thereafter     21,460  
Total lease payments     1,242,285  
Less: interest     (227,815 )
Present value of lease liabilities   $ 1,014,470  



Leases   Classification   September 30,
Lease asset   Operating   $ 986,204  
Total lease assets       $ 986,204  
Current   Operating   $ 158,999  
Non-current   Operating     855,471  
Total lease liabilities       $ 1,014,470  


Interest expense on the lease liability was $87,303 for the year ended September 30, 2020.


Legal Proceedings


The Company is not involved in any litigation that it believes could have a material adverse effect on its financial position or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company's executive officers, threatened against or affecting the Company or its officers or directors in their capacities as such.