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Leases

6 Months Ended

Jan. 31, 2021

NOTE 9 - LEASES

The leased properties have a remaining lease term of sixteen to seventy-two months as of August 1, 2019. At the option of the Company, it can elect to extend the term of the leases.

Beginning August 1, 2019, operating ROU assets and operating lease liabilities are recognized based on the present value of lease payments, including annual rent increases, over the lease term at commencement date. Operating leases in effect prior to August 1, 2019 were recognized at the present value of the remaining payments on the remaining lease term as of August 1, 2019. Because none of our leases included an implicit rate of return, we used our incremental secured borrowing rate based on lease term information available as of the adoption date or lease commencement date in determining the present value of lease payments. The incremental borrowing rate on the leases is 8.0%.

On January 1, 2021, the Company entered into a new office lease, with a monthly base lease payment and applicable shared expenses of $4,750 and $2,140, respectively. The base rent will increase on an annual basis by 2% of the base lease payment. The lease expires on January 1, 2026 and at the option of the Company, the lease can be extended for one (1) five (5) year term with a base rent at the prevailing market rate at the time of the renewal. The Company recorded ROU asset and liability of $254,375 for this new lease, using the incremental borrowing rate of 8.0% over a 5 year term.

The impact of ASU No. 2016-02 ("Leases (Topic 842)" on our consolidated balance sheet beginning August 1, 2019 was through the recognition of ROU assets and lease liabilities for operating leases. Amounts recognized on July 31, 2020 and January 31, 2021 for operating leases are as follows:

ROU Asset	July 31, 2020	$	176,097
Amortization		$	(64,579	)
Addition - Asset		$	254,375
ROU Asset	January 31, 2021	$	365,893

Lease Liability	July 31, 2020	$	176,097
Amortization		$	(64,579	)
Addition - Liability		$	254,375
Lease Liability	January 31, 2021	$	365,893
Lease Liability	Short term	$	105,100
Lease Liability	Long term	$	260,793
Lease Liability	Total:	$	365,893

Operating lease cost:	$	79,940

Cash paid for amounts included in the measurement of lease labilities

Operating cashflow from operating leases:	$	79,940

Weighted-average remain lease term-operating lease:		2.23 years

Weighted-average discount rate		8.0	%

For the period ended January 31, 2021 the amortization of operating ROU assets was $64,579.

For the period ended January 31, 2021 the amortization of operating lease liabilities was $64,579.

The future minimum lease payment under the operating leases are as follows:

Period Ending July 31,	Lease Payments
2021	$	146,549
2022		114,935
2023		84,475
2024		59,528
2025		60,228
2026		30,362
Total:	$	496,077