Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

RIGHT OF USE ASSET AND LEASE LIABILITY

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RIGHT OF USE ASSET AND LEASE LIABILITY
 12 Months Ended
Dec. 31, 2022
RIGHT OF USE ASSET AND LEASE LIABILITY

NOTE 10 — RIGHT OF USE ASSET AND LEASE LIABILITY

 

Net carrying amounts of right-of-use assets

 

The carrying amounts of right-of-use assets are as follows:

 

    2022     2021  
    As of December 31,  
    2022     2021  
Right of use asset – Buildings   $ 2,541,123     $ 1,378,312  
Right of use asset – Buildings (related party)     11,149,101       -  
Right of use asset – Leasehold     992,410       992,410  
Right of use asset – Office space     58,412       58,412  
Foreign currency translation     (119,182 )     (117,959 )
Accumulated depreciation of right of use assets     (1,723,114 )     (1,233,934 )
Accumulated depreciation of right of use assets (related party)     (325,040 )     -  
  Right of use asset   $ 12,573,710     $ 1,077,241  

 

During the year ended December 31, 2022, the Company recorded depreciation of right-of-use assets of $814,220 (2021 — $507,688).

 

During July 2022, the Company signed two lease agreements for University of Antelope Valley’s buildings with the former owners, a related party, both with 12-year terms. A right of use asset and a lease liability of $11,149,101 was booked to the Consolidated Statements of Financial Condition for the leases.

 

Lease liabilities

 

The maturity analysis of lease liabilities is as follows:

 

                 
    As of December 31,  
    2022     2021  
Within one year   $ 1,664,966     $ 436,270  
Two to five years     6,280,716       298,594  
Thereafter     17,871,937       9,007,645  
 Gross lease liabilities     25,817,619       9,742,509  
Less: Finance Charges component     (12,832,744 )     (8,411,649 )
 Lease liabilities   $ 12,984,875     $ 1,330,860  
                 
Lease liabilities – Current   $ 1,590,538     $ 436,271  
Lease liabilities - Non-Current     11,394,337       894,589  
 Lease liabilities   $ 12,984,875     $ 1,330,860  

 

The weighted average discount rate utilized to calculate the present value of the lease liabilities was 7.71%. The average remaining life of the leases is 22 years.