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 a facility in Cheyenne, Wyoming. The initial term of the lease was for a two-year period from May 2021 to May 2023 starting with a monthly base rent of $1,667. 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 increased to $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 another facility in Cheyenne, Wyoming. The term of the lease is for a two-year period from September 2021 through 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. The Company is currently negotiating a two-year lease extension effective September 1, 2023.
During the three months ended July 31, 2023 and 2022, lease expense of $14,267 and $14,039 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:
The weighted average remaining lease term for the operating leases is 0.42 years and the weighted average incremental borrowing rate is 8.0% at July 31, 2023.
U.S. GOLD CORP. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JULY 31, 2023
The following table includes supplemental cash and non-cash information related to the Company’s lease:
The remaining minimum lease payments under non-cancelable operating leases at July 31, 2023 are as follows:
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