Quarterly report pursuant to Section 13 or 15(d)

Right to Use Assets and Liabilities - Operating Leases

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Right to Use Assets and Liabilities - Operating Leases
6 Months Ended
Nov. 30, 2019
Disclosure Text Block [Abstract]  
Lessee, Operating Leases [Text Block]

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