Annual report pursuant to Section 13 and 15(d)

OPERATING LEASE RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES

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OPERATING LEASE RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES
12 Months Ended
Apr. 30, 2024
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 first lease amendment effective as of May 1, 2023, to extend this lease for a period of one year expiring April 30, 2024. On January 11, 2024, the Company entered into a second lease amendment effective as of May 1, 2024, to extend this lease for another period of one year expiring April 30, 2025, with an option to renew the lease for an additional one-year term. Under the second lease amendment, the monthly base rent increased from $1,768 to $1,821 starting on May 1, 2024. The Company accounted for the lease extensions as lease modifications under ASC 842. On January 30, 2023, the effective date of the first lease amendment, 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 January 11, 2024, the effective date of the second lease amendment, the Company recorded an adjustment to the right-of-use asset and lease liability in the amount of $20,936 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 initial term of the lease was for a two-year period from September 2021 through August 2023. On October 18, 2023, the Company entered into a lease amendment effective as of September 1, 2023, to extend the lease for a period of two years expiring August 31, 2025. The Company will not have an option to renew the lease past August 31, 2025, unless agreed to by the lessor and the Company. Pursuant to the lease amendment, the monthly base rent increased to $3,265. On September 1, 2023, the effective date of the amendment, the Company recorded an adjustment to the right-of-use asset and lease liability in the amount of $72,672 based on the net present value of lease payments discounted using an incremental borrowing rate of 8%.

 

During the years ended April 30, 2024 and 2023, lease expense of approximately $59,000 and $56,000, respectively, was included in general and administrative expenses as reflected in the accompanying consolidated statements of operations.

 

Right-of- use assets are summarized below:

 

   

April 30, 2024

   

April 30, 2023

 
Operating leases   $ 70,331     $ 32,080  

 

Operating Lease liabilities are summarized below:

 

   

April 30, 2024

   

April 30, 2023

 
Operating lease, current portion   $ 57,486     $ 32,080  
Operating lease, long term portion     12,845       -  
Total lease liability   $ 70,331     $ 32,080  

 

 

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

APRIL 30, 2024

 

The weighted average remaining lease term for the operating leases is 1.17 years and the weighted average incremental borrowing rate is 8.0% at April 30, 2024.

 

The following table includes supplemental cash and non-cash information related to the Company’s lease:

 

         
    Years ended April 30,  
    2024     2023  
Cash paid for amounts included in the measurement of lease liabilities            
Operating cash flows from operating lease   $ 59,148     $ 56,000  
                 
Lease assets obtained upon lease modification   $ 93,608     $ 20,472  

 

The remaining minimum lease payments under non-cancelable operating leases at April 30, 2024 are as follows:

 

       
Year ended April 30, 2025     61,034  
Year ended April 30, 2026     13,060  
Less: imputed interest     (3,763 )
Total present value of lease liability   $ 70,331