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

3 Months Ended

Aug. 31, 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 months ended August 31, 2020 was entirely comprised of operating leases and amounted to $102,617. The Company’s right of use (“ROU”) asset amortization for the three months ended August 31, 2020 was $86,830. The difference between the lease expense and the associated ROU asset amortization consists of interest.

Right to use assets – operating leases are summarized below:

	August 31, 2020
Amount at inception of leases	$	2,703,821
Amount amortized		(1,387,222	)
Balance – August 31, 2020	$	1,316,599

Operating lease liabilities are summarized below:

Amount at inception of leases	$	2,675,310
Amount amortized		(1,304,876	)
Balance – August 31, 2020	$	1,370,434

	August 31, 2020
Warehouses and offices	$	1,370,434
Lease liability	$	1,370,434
Less: current portion		(257,384	)
Lease liability, non-current	$	1,113,050

Maturity analysis under these lease agreements is as follows:

Twelve months ended August 31, 2021	$	354,295
Twelve months ended August 31, 2022		183,429
Twelve months ended August 31, 2023		166,060
Twelve months ended August 31, 2024		170,826
Twelve months ended August 31, 2025		175,735
Thereafter		854,884
Total	$	1,905,229
Less: Present value discount		(534,795	)
Lease liability	$	1,370,434