CLS Holdings USA, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Note 10 - Right to Use Assets and Liabilities - Operating Leases

Note 10 - Right to Use Assets and Liabilities - Operating Leases

3 Months Ended

Aug. 31, 2019

Note 10 – Right to Use Assets and Liabilities – Operating Leases

The Company has operating leases for offices and warehouses. The Company’s leases have remaining lease terms of 1 year to 4 years, some of which include options to extend.

The Company’s lease expense for the three months ended August 31, 2019 was entirely comprised of operating leases and amounted to $106,370. The Company’s right of use (“ROU”) asset amortization for the three months ended August 31, 2019 was $87,313. The difference between the lease expense and the associated ROU asset amortization consists of interest.

Right to use assets – operating leases are summarized below:

	August 31, 2019
Amount at inception of leases	$	1,781,446
Amount amortized		(1,034,847	)
Balance - August 31, 2019	$	746,599

Operating lease liabilities are summarized below:

Amount at inception of leases	$	1,781,446
Amount amortized		(893,301	)
Balance - August 31, 2019	$	888,145

	August 31, 2019
Warehouses and offices		888,145
Lease liability	$	888,145
Less: current portion		(437,808	)
Lease liability, non-current	$	450,337

Maturity analysis under these lease agreements is as follows:

Twelve months ended August 31, 2020	$	493,321
Twelve months ended August 31, 2021		282,398
Twelve months ended August 31, 2022		111,242
Twelve months ended August 31, 2023		95,010
Twelve months ended August 31, 2024		-
Thereafter		-
Total	$	981,971
Less: Present value discount		(93,826	)
Lease liability	$	888,145