)

Operating Leases

The Company determines if an arrangement is a lease at inception of a contract. The nature of the Company’s operating leases at this time is office equipment, mainly copiers, with terms of

months. Operating leases are included in other assets as operating lease right-of-use (“ROU”) assets on the Condensed Consolidated Balance Sheets while current lease liabilities are included as accrued expenses. The long-term portions of operating lease liabilities are shown as long-term liabilities on the Condensed Consolidated Balance Sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value payments over the lease term. As most of the Company’s leases do

not

provide an implicit rate, the Company generally uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The lease terms

may

include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company has copier lease agreements with lease and non-lease components and has elected the practical expedient

not

to separate lease and non-lease components for this asset class. The Company has also elected

not

to recognize lease liabilities and ROU assets for short-term leases. The Company recognizes variable costs that depend on usage in profit or loss as they are incurred.

The components of operating leases on the Condensed Consolidated Balance Sheets at

May 31, 2020

were as follows:

	May 31 , 2020
Operating lease right-of-use assets	$	32,072

Current portion of operating lease liabilities	$	9,297
Long-term portion of operating lease liabilities		22,775
Total operating lease liabilities	$	32,072

The Company included

$32,072

of operating lease ROU assets in other assets, the current portion of operating lease liabilities of

$9,297

was included in accrued expenses and the

$22,775

of long-term operating lease liabilities was included in the long-term liability portion of the Condensed Consolidated Balance Sheets. The Company recorded

$5,481

and

$13,632

of operating lease costs in the

three

and

six

months ended

May 31, 2020,

respectively, which included variable costs tied to usage. The Company’s operating leases carry a weighted average lease term of

months and have a weighted average discount rate of

5.50%

Future maturities of operating lease liabilities are as follows:

Maturities of operating lease liabilities are as follows:
Year Ending November 30,
2020	5,138
2021	10,847
2022	10,847
2023	6,456
2024	1,630
Total lease payments	34,918
Less imputed interest	(2,847	)
Total operating lease liabilities	32,072