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. 28, 2021

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 28, 2021 was entirely comprised of operating leases and amounted to $106,903 and $314,313, respectively. The Company’s right of use (“ROU”) asset amortization for the three and nine months ended February 28, 2021 was $91,007 and $266,734, 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 28, 2021
Amount at inception of leases	$	2,703,821
Amount amortized		(1,567,126	)
Balance – February 28, 2021	$	1,136,695

Operating lease liabilities are summarized below:

Amount at inception of leases	$	2,675,310
Amount amortized		(1,516,570	)
Balance – February 28, 2021	$	1,158,740

	February 28, 2021
Warehouses and offices	$	1,158,740
Lease liability	$	1,158,740
Less: current portion		(93,532	)
Lease liability, non-current	$	1,065,208

Maturity analysis under these lease agreements is as follows:

Twelve months ended February 28, 2022	$	182,858
Twelve months ended February 28, 2023		173,710
Twelve months ended February 29, 2024		168,408
Twelve months ended February 28, 2025		173,244
Twelve months ended February 28, 2026		178,225
Thereafter		765,722
Total	$	1,642,167
Less: Present value discount		(483,427	)
Lease liability	$	1,158,740