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

Quarterly report pursuant to Section 13 or 15(d)

Right to Use Assets and Liabilities - Operating Leases

Right to Use Assets and Liabilities - Operating Leases

9 Months Ended

Feb. 29, 2020

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 and nine months ended February 29, 2020 was entirely comprised of operating leases and amounted to $109,236 and $305,019, respectively. The Company’s right of use (“ROU”) asset amortization for the three and nine months ended February 29, 2020 was $92,285 and $267,863, respectively. The difference between the lease expense and the associated ROU asset amortization consists of interest.

Right to use assets – operating leases are summarized below:

	February 29, 2020
Amount at inception of leases	$	1,781,446
Amount amortized		(1,215,397	)
Balance – February 29, 2020	$	566,049

Operating lease liabilities are summarized below:

Amount at inception of leases	$	1,781,446
Amount amortized		(1,101,532	)
Balance – February 29, 2020	$	679,914

	February 29, 2020
Warehouses and offices	$	679,914
Lease liability	$	679,914
Less: current portion		(443,063	)
Lease liability, non-current	$	236,851

Maturity analysis under these lease agreements is as follows:

Twelve months ended February 28, 2021	$	443,063
Twelve months ended February 28, 2022		147,767
Twelve months ended February 28, 2023		122,128
Twelve months ended February 29, 2024		43,677
Twelve months ended February 28, 2025		-
Thereafter		-
Total	$	756,635
Less: Present value discount		(76,721	)
Lease liability	$	679,914