Leases

6 Months Ended

Jan. 31, 2021

Leases [Abstract]

Leases

Note 13 – Leases

The Company has various operating lease agreements for leases of office spaces. Some leases include purchase, termination or extension options for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised.

The Company adopted ASC 842 effective August 1, 2019 using the cumulative-effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting the comparative periods presented. The Company adopted the following practical expedients and elected the following accounting policies related to this standard update:

• The option to not reassess prior conclusions related to the identification, classification and accounting for initial direct costs for leases that commenced prior to August 1, 2019.

• Short-term lease accounting policy election allowing lessees to not recognize right-of-use assets and liabilities for leases with a term of 12 months or less; and

• The option to not separate lease and non-lease components for certain equipment lease asset categories such as freight car, vehicles and work equipment.

• The package of practical expedients applied to all of its leases, including (i) not reassessing whether any expired or existing contracts are or contain leases, (ii) not reassessing the lease classification for any expired or existing leases, and (iii) not reassessing initial direct costs for any existing leases. The assets and liabilities from operating and finance leases are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company’s incremental borrowing rates or implicit rates, when readily determinable. Short-term leases, which have an initial term of 12 months or less, are not recorded on the balance sheet.

The Company’s operating leases do not provide an implicit rate that can readily be determined. Therefore, the Company uses a discount rate based on its incremental borrowing rate, which is determined using the average of borrowing rates explicitly stated in the Company’s convertible debt.

The Company’s weighted-average remaining lease term relating to its operating leases is 2.48 years, with a discount rate of 10%.

The Company incurred lease expense for its operating leases of $15,122 and $40,336 for three and six   months ended January 31, 2021, respectively.

On January 31, 2021, the Company renewed its lease for office space in Miramar, Florida. The lease extends until September 30, 2023. The payments will be made as follows in the future fiscal years: $50,643 in 2021; $69,775 in 2022; $72,566 2023; $12,172 in 2024.

NuGenerex Health, LLC has entered into lease agreement in Phoenix, Arizona on January 13, 2021 for two premises of 892 sq ft. and 3,247 sq ft, respectively. The spaces are for the implementation of our clinic strategy beginning with our roll out of RPM CCM and then our specialty practices of Podiatry and Ophthalmology. The lease term is for 77 Months and the expected payments start at $1,933 and $5,888 per month for each premise respectively. Although executed in January 2021, the lease is not expected to commence until the third or fourth quarter of fiscal year 2021.

The following table presents information about the amount and timing of liabilities arising from the Company’s operating leases as of January 31, 2021:

Maturity of operating lease liabilities for the remainder of the current fiscal year and the following fiscal years: 

2021	$	49,049
2022		69,775
2023		72,566
2024		12,172
Total undiscounted operating lease payments		203,562
Less: Imputed interest		24,388
Present value of operating lease liabilities	$	179,174