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, 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 and six months ended November 30, 2019 was entirely comprised of operating leases and amounted to $106,370 and $212,741, respectively. The Company’s right of use (“ROU”) asset amortization for the three and six months ended November 30, 2019 was $89,265 and $176,578, 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, 2019
Amount at inception of leases	$	1,781,446
Amount amortized		(1,124,112	)
Balance – November 30, 2019	$	657,334

Operating lease liabilities are summarized below:

Amount at inception of leases	$	1,781,446
Amount amortized		(992,296	)
Balance – November 30, 2019	$	789,150

	November 30, 2019
Warehouses and offices	$	789,150
Lease liability	$	789,150
Less: current portion		(444,492	)
Lease liability, non-current	$	344,658

Maturity analysis under these lease agreements is as follows:

Twelve months ended November 30, 2020	$	491,206
Twelve months ended November 30, 2021		196,085
Twelve months ended November 30, 2022		112,073
Twelve months ended November 30, 2023		66,507
Twelve months ended November 30, 2024		-
Thereafter		-
Total	$	865,871
Less: Present value discount		(76,720	)
Lease liability	$	789,150