NOTE 11 PROPERTY AND EQUIPMENT

12 Months Ended

Dec. 31, 2020

NOTE 11 PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

11. PROPERTY AND EQUIPMENT

A continuity of property and equipment for the years ended December 31, 2020 and 2019 is as follows:

	Right-of-use assets $			Furniture and equipment $			Leasehold improvements $			Testing equipment $		Total $
Cost
Balance, December 31, 2018		-			28,360			118,465			-		146,825
Adoption of IFRS 16		324,972			-			-			-		324,972
Acquisition of Sun Valley		431,544			32,952			91,859			-		556,355
Additions		425,539			3,828			-			-		429,367
Impairment		(324,972	)		(28,360	)		(118,466	)		-		(471,798	)
Balance, December 31, 2019		857,083			36,780			91,858			-		985,721
Acquisition of Kai Medical		294,669			114,000			86,000			928,149		1,422,818
Acquisition of LP&A		39,271			-			-			-		39,271
Additions		-			3,495			-			-		3,495
Disposals		(402,533	)		-			-			-		(402,533	)
Balance, December 31, 2020		788,490			154,275			177,858			928,149		2,048,772

Accumulated amortization
Balance, December 31, 2018	-		(19,765	)	-		-		(19,765	)
Adoption of IFRS 16	(196,479	)	-		-		-		(196,479	)
Amortization	(196,563	)	(13,164	)	(37,873	)	-		(247,600	)
Write off	245,847		25,750		3,949		-		275,546
Balance, December 31, 2019	(147,195	)	(7,179	)	33,924	)	-		(188,298	)
Amortization	(222,910	)	(35,776	)	(40,881	)	(29,005	)	(328,572	)
Disposals	58,145		-		-		-		58,145
Balance, December 31, 2020	(311,960	)	(42,955	)	(74,805	)	(29,005	)	(458,725	)

Carrying amount
Balance, December 31, 2019	709,888	29,601	57,934	-	797,423
Balance, December 31, 2020	476,530	111,320	103,053	899,144	1,590,047

On May 9, 2019, the Company terminated the lease for the Chicago clinic. As a result of the lease termination, the Company derecognized the right-of-use asset with a cost of $255,859 and accumulated amortization of $184,787 and recorded an impairment loss $71,072 representing the undepreciated portion of the right-of-use asset above the lease liability which is included as impairment loss on write-off of property and equipment on the consolidated statements of loss and comprehensive loss.

The Company also derecognized the associated lease liability of $76,626 and recorded a gain of $5,549 representing the excess of the right-of-use asset above the lease liability which is included as impairment loss on property and equipment on the consolidated statements of loss and comprehensive loss. In addition, the Company recognized an impairment loss of $114,516 representing the carrying value of leasehold improvements written-off for the Chicago clinic on termination of the lease. This is included as impairment loss on property and equipment on the consolidated statements of loss and comprehensive loss.

The Company defaulted on the Spokane lease and as a result, derecognized the right-of-use asset with a cost of $69,113 and accumulated amortization of $61,060 and recorded a loss of $8,053 representing the carrying value of the right-of-use asset which is included as impairment loss on property and equipment on the consolidated statements of loss and comprehensive loss. The lease liability of $9,700 has not been derecognized as the Company negotiates a settlement with the landlord of the facility. In addition, the Company recognized a loss on disposal of $2,610 representing the carrying value of the furniture and equipment.

Through the acquisition of Kai Medical on October 5, 2020, the Company acquired testing equipment with a fair value of $829,803 and right-of-use assets of $294,669. The right-of-use assets relate to leased office space and equipment.

The Company defaulted on the right-of-use CBD extraction facility and as a result, derecognized the right of use asset with a cost of $402,533 and accumulated depreciation of $58,145. The Company recognized a gain on lease termination of $14,049. The Company still has $15,533 in lease liabilities related to unpaid rent for three months where the Company still had possession of the facility.