Note 14 - Lease

On June 17, 2013, the Company entered into a lease agreement for office, warehouse, storage, and distribution space in the U.S. with a five year term, commencing on November 1, 2013 and expiring on October 31, 2018. The lease agreement also provides an option to extend the term for an additional six years. On April 23, 2018, the Company extended the lease for another 36 months with an expiration date of October 31, 2021. The monthly rental payment is $42,000 with an annual 3% increase.

The Company has entered into several lease agreements for office and warehouse space in Commerce, California and showroom space in Las Vegas, Nevada and High Point, North Carolina on monthly or annual terms.

On July 15, 2019, Nova Malaysia entered into a sublease agreement for warehouse space with a two-year term, expiring on July 14, 2021. The monthly rental payment was 20,000 Malaysia Ringgit ($4,918) and has been adjusted to 35,000 Malaysia Ringgit ($8,607) since August 1, 2020.

On October 29, 2019, Nova Malaysia entered into a lease agreement for showroom with a two-year term, commencing on December 1, 2019 and expiring on November 30, 2021. The monthly rental payment is 9,280 Malaysia Ringgit ($2,282).

On August 20, 2020, Nova Malaysia entered into a sublease agreement for an office and service center with a two year term, commencing on September 1, 2020 and expiring on August 31, 2022. The monthly rental payment is $30,000 Malaysia Ringgit ($7,377).

The operating lease expense for the three months ended March 31, 2021 and 2020 were as follows:

	2021		2020

Operating lease cost – straight line	$	200,794	$	176,252

Total lease expense	$	200,794	$	176,252

The following is a schedule, by years, of maturities of lease liabilities as of March 31, 2021:

	Operating Leases

2022	$	757,699
2023		682,621
2024		665,826
2025		338,667
Thereafter		-
Total undiscounted cash flows		2,444,813
Less: imputed interest		(197,823	)
Present value of lease liabilities		2,246,990

Lease Term and Discount Rate

	March 31, 2021
Weighted-average remaining lease term - years
Operating leases - USA		3.59
Operating leases - Malaysia		1.11

Weighted-average discount rate (%)
Operating leases - USA		5.00	%
Operating leases - Malaysia		2.88	%