Lease Liabilities

12 Months Ended

Dec. 31, 2021

Lease Liabilities

Lease Liabilities

18. Lease Liabilities

During the year ended December 31, 2021 the Company entered into a second lease agreement for warehouse space to commence on June 1, 2021 and end on May 31, 2024 with monthly lease payments of $19,910. During the year ended December 31, 2019, the Company signed a lease agreement for warehouse space to commence on August 1, 2019 and end on July 31, 2022 with monthly lease payments of $2,221.

The Company has accounted for its leases upon adoption of ASC 842 whereby it recognizes a lease liability and a right-of-use asset at the date of initial application, beginning January 1, 2019. The lease liability is measured at the present value of the remaining lease payments, discounted using the Company’s incremental borrowing rate of 10%. The Company has measured the right-of-use asset at an amount equal to the lease liability.

The Company’s right-of-use asset for the years ended December 31, 2021 and 2020 as follows:

	December 31, 2021		December 31, 2020
Right-of-use asset	$	515,819	$	38,506
Current lease liability	$	212,929	$	22,883
Long-term lease liability	$	316,988	$	14,624

The components of lease expense are as follows:

	December 31, 2021		December 31, 2020
Amortization of right-of-use	$	144,864	$	21,619
Interest on lease liability	$	34,796	$	5,039
Total lease cost	$	179,660	$	26,658

Worksport Ltd.

Notes to the Consolidated Financial Statements

December 31, 2021 and 2020

18. Lease Liabilities (continued)

Maturities of lease liability are as follows:

Future minimum lease payments as of December 31, 2021,

2022		254,469
2023		238,918
2024		99,549
Total future minimum lease payments		592,936
Less: amount representing interest		(63,019	)
Present value of future payments		529,917
Current portion		212,929
Long term portion	$	316,988