Lease

12 Months Ended

Aug. 31, 2019

Notes to Financial Statements

NOTE 8 - Lease

NOTE 8 – Lease

On May 1, 2019, the Company leased office space in Vestal, New York and entered into a Professional Building Lease Agreement (the “Lease”). The Lease has an initial term of three years through May 1, 2022 with monthly rent due of $2,200 for the first two years and $2,266 during year three. The Company has the sole option to renew the lease for an additional two years through May 1, 2024. The amounts disclosed in the Balance Sheets pertaining to the right-of-use asset and lease liability are measured based on only the initial, three-year term.

The Company’s existing leases are not subject to any restrictions or covenants which preclude its ability to pay dividends, obtain financing, or enter into additional leases.

As of August 31, 2019, the Company has not entered into any leases which have not yet commenced which would entitle the Company to significant rights or create additional obligations.

The Company used its estimated incremental borrowing rate as the basis to calculate the present value of future lease payments at lease commencement. The incremental borrowing rate represents the rate the Company would have to pay to borrow funds on a collateralized basis over a similar term and in a similar economic environment.

The components of lease expenses were as follows:

	Years Ended August 31,
	2019		2018
Operating lease cost	$	8,888	$	-
Short-term lease costs		-		12,000
Total net lease costs	$	8,888	$	12,000

Supplemental balance sheet information related to the Lease is as follows:

	As of August 31, 2019
Operating lease right-of-use asset	$	65,646
Current maturities of operating lease	$	23,169
Non-current operating lease		42,564
Total operating lease liabilities	$	65,733
Weighted Average remaining lease term (in years):		2.9
Discount rate:		5.85	%

The Company’s future lease payments, which are presented as current maturities of operating leases and non-current operating leases liabilities on the Company’s balance sheets as of August 31, 2019 are as follows:

	Amount
2020	$	26,400
2021		26,664
2022		18,128
Total lease payments		71,192
Less: Imputed interest		(5,458	)
Total lease obligation		65,733
Less: current lease obligations		23,169
Long term lease obligations	$	42,564