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

6 Months Ended

Nov. 30, 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 six months ended November 30, 2020 was entirely comprised of operating leases and amounted to $104,793 and $270,410, respectively. The Company’s right of use (“ROU”) asset amortization for the three and six months ended November 30, 2020 was $88,897 and $175,727, 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:

	November 30, 2020
Amount at inception of leases	$	2,703,821
Amount amortized		(1,476,119	)
Balance – November 30, 2020	$	1,227,702

Operating lease liabilities are summarized below:

Amount at inception of leases	$	2,675,310
Amount amortized		(1,409,668	)
Balance – November 30, 2020	$	1,265,642

	November 30, 2020
Warehouses and offices	$	1,265,642
Lease liability	$	1,265,642
Less: current portion		(176,275	)
Lease liability, non-current	$	1,089,367

Maturity analysis under these lease agreements is as follows:

Twelve months ended November 30, 2021	$	268,577
Twelve months ended November 30, 2022		178,570
Twelve months ended November 30, 2023		167,234
Twelve months ended November 30, 2024		172,035
Twelve months ended November 30, 2025		176,980
Thereafter		810,327
Total	$	1,773,723
Less: Present value discount		(508,081	)
Lease liability	$	1,265,642