Annual report pursuant to Section 13 and 15(d)

Leases

v3.22.0.1
Leases
12 Months Ended
Nov. 30, 2021
Leases [Abstract]  
Leases

NOTE 16 - LEASES

Effective December 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842), using the modified retrospective approach and utilizing the effective date as its date of initial application. As a result, prior periods are presented in accordance with the previous guidance in ASC 840, Leases (“ASC 840”). The Company has elected to apply the ‘package of practical expedients’ which allows the Company to not reassess i) whether existing or expired arrangements contain a lease, ii) the lease classification of existing or expired leases, or iii) whether previous initial direct costs would qualify for capitalization under the new lease standard.

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present in the arrangement. Leases with a term greater than one year are recognized on the balance sheet as a right-of-use (ROU) assets and as short-term and long-term lease liabilities, as applicable. The Company does not have any financing leases.

Operating lease liabilities and their corresponding right-of-use assets are initially recorded based on the present value of lease payments over the expected remaining lease term. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rate to discount lease payments, which reflects the fixed rate at which the Company believes it could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment.

The Company has elected not to recognize leases with an original term of one year or less on the balance sheet. The Company typically only includes an initial lease term in its assessment of a lease arrangement. Options to renew a lease are not included in the Company’s assessment unless there is reasonable certainty that the Company will renew.

The following table presents the right-of-use asset and short-term and long-term lease liabilities amounts recorded on the consolidated balance sheets as of November 30, 2021:

 

 

 

November 30,
2021

 

November 30,
2020

 

Assets

 

 

 

 

 

Operating lease right-of-use asset

 

$

916,493

 

$

299,089

 

Liabilities

 

 

 

 

 

Current portion of operating lease liabilities

 

$

312,067

 

$

275,570

 

Operating lease long term liabilities

 

 

610,989

 

 

23,632

 

Total lease liability

 

$

923,056

 

$

299,202

 

 

The maturity of the Company’s lease liabilities at November 30, 2021 were as follows:

 

 

 

Future Operating

 

Fiscal Year Ending November 30,

 

Lease Payments

 

2022

 

$

339,182

 

2023

 

 

313,996

 

2024

 

 

295,086

 

2025

 

 

24,591

 

Less: Imputed interest

 

 

(49,799

)

Present value of lease liabilities

 

$

923,056

 

 

The remaining lease term and discount rates are as follows:

 

 

 

November 30,
2021

 

November 30,
2020

 

Lease Term and Discount Rate

 

 

 

 

 

Remaining lease term (years)

 

 

 

 

 

Operating lease

 

 

3.08

 

 

1.08

 

Discount rate (percentage)

 

 

 

 

 

Operating lease

 

 

3.5

%

 

5.3

%

 

Supplemental cash flow information related to leases is as follows:

 

 

 

Twelve
Months
Ended

 

 

Twelve
Months
Ended

 

 

 

November 30,
2021

 

 

November 30,
2020

 

Operating cash outflows from operating leases

 

$

328,752

 

 

$

278,790