Operating Lease Commitments

9 Months Ended

Aug. 31, 2020

Disclosure Text Block [Abstract]

OPERATING LEASE COMMITMENTS

NOTE J – OPERATING LEASE COMMITMENTS

The Company leases its office and warehouse space through 2030 from a corporation that is partially owned by officers/shareholders of the Company (“Related Company”). Annual minimum rental payments to the Related Company approximated $180,000 for the year ended November 30, 2019, and increase at the rate of two per cent per annum throughout the lease term.

Pursuant to the lease, rent expense charged to operations differs from rent paid because of scheduled rent increases. Accordingly, the Company has recorded deferred rent. Rent expense is calculated by allocating to rental payments, including those attributable to scheduled rent increases, on a straight line basis, over the lease term.

In June 2019, the Company renewed its lease to rent office space and a warehouse in Hong Kong for two years. Annual minimum rental payments for this space are approximately $68,460.

In January 2019, the Company entered into a lease to rent warehouse space in Hong Kong for two years. Annual minimum rental payments for this space are approximately $36,840.

The Company’s future minimum rental commitments at August 31, 2020 are as follows:

Twelve Months Ended August 31,

2021	$	258,528
2022		193,390
2023		197,258
2024		201,203
2025		205,227
2026 and after	$	1,108,281
	$	2,163,887

Net rental expense for the nine months ended August 31, 2020 and August 31, 2019 were $281,599 and $265,114 respectively, of which $200,156 and $197,418 respectively, was paid to the Related Company.