OPERATING LEASE RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES |
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Operating Lease Right-of-use Assets And Operating Lease Liabilities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OPERATING LEASE RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES |
NOTE 7 – OPERATING LEASE RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES
On May 1, 2021, the Company entered into a lease agreement for its lease facility in Cheyenne, Wyoming. The term of the lease is for a two-year period from May 2021 to May 2023 starting with a monthly base rent of $1,667. The Company has an option to renew the lease for an additional three years beyond the primary term. The Company typically excludes options to extend the lease in a lease term unless it is reasonably certain that the Company will exercise the option and when doing so is in the Company’s sole discretion. The base rent is subject to an annual increase as defined in the lease agreement. In addition to the monthly base rent, the Company is charged separately for common area maintenance which is considered a non-lease component. These non-lease component payments are expensed as incurred and are not included in operating lease assets or liabilities. On January 30, 2023, the Company entered into a lease amendment effective as of May 1, 2023 to extend this lease for a period of one year expiring April 30, 2024 with an option to renew the lease for an additional one year term. The monthly base rent will be $1,768. The Company accounted for the lease extension as a lease modification under ASC 842. On January 30, 2023, the effective date of modification, the Company recorded an adjustment to the right-of-use asset and lease liability in the amount of $20,472 based on the net present value of lease payments discounted using an incremental borrowing rate of 8%.
On September 1, 2021, the Company entered into a lease agreement for a facility in Cheyenne, Wyoming. The term of the lease is for a two-year period from September 2021 to August 2023. The monthly base rent was $3,100 and was lowered to $2,950 starting in March 2022. The Company has an option to renew the lease for an additional two years upon giving a written notice from 60 to 120 days prior to the expiration of the initial term of this lease. The Company typically excludes options to extend the lease in a lease term unless it is reasonably certain that the Company will exercise the option and when doing so is in the Company’s sole discretion.
During the years ended April 30, 2023 and 2022, lease expense of approximately $56,000 and $44,200, respectively, was included in general and administrative expenses as reflected in the accompanying consolidated statements of operations.
Right-of- use assets are summarized below:
Operating Lease liabilities are summarized below:
U.S. GOLD CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS APRIL 30, 2023
The weighted average remaining lease term for the operating leases is 0.67 years and the weighted average incremental borrowing rate is 8.0% at April 30, 2023.
The following table includes supplemental cash and non-cash information related to the Company’s lease:
Minimum lease payments under non-cancelable operating leases at April 30, 2023 are as follows:
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