Commitments and Contingencies

12 Months Ended

Dec. 31, 2020

Notes

Commitments and Contingencies

NOTE 8 - COMMITMENTS AND CONTINGENCIES

Operating Lease Agreements

The Company determines whether or not a contract contains a lease based on whether or not it provides the Company with the use of a specifically identified asset for a period of time, as well as both the right to direct the use of that asset and receive the significant economic benefits of the asset. The Company elected the transition relief package of practical expedients, and as a result, we did not assess 1) whether existing or expired contracts contain embedded leases, 2) lease classification for any existing or expired leases, and 3) whether lease origination costs qualified as initial direct costs. We elected the short-term lease practical expedient by establishing an accounting policy to exclude leases with a term of 12 months or less.

The Company has entered into lease agreements as a lessee for the use of office space. These lease agreements are classified as operating leases and the liability and right-of-use asset are recognized on the balance sheet at lease commencement. Leases with an initial term of 12 months or less are not recorded on the balance sheet and are recognized as lease expense on a straight-line basis over the lease term. As a result of the adoption of ASC 842, the Company recognized an operating lease liability and right-of-use asset of $64,978.

The discount rate utilized for classification and measurement purposes as of the inception date of the lease is based on the Company’s collateralized incremental interest rate to borrow of 12%, as the rate implicit in the lease is not determinable.

During 2018, the Company executed a lease agreement. The lease term is 39 months at a rate of $1,680 per month with 3% increases beginning January 1, 2021 and rent commencing on January 1, 2019. The Company was required to pay a $1,781 security deposit.

In January 2019, the Company executed a lease agreement with Templar Asset Group, LLC, a related party. The lease term is one year at a rate of $4,200 per month for a period of one year with an option to continue a month to

month basis thereafter. Under ASC 842, this lease is not recorded on the balance sheet as its term is 12 months or less.

Undiscounted Cash Flows

As of December 31, 2020, the right of use asset and lease liability were shown on the consolidated balance sheet at $33,990 and $37,189, respectively. The table below reconciles the fixed component of the undiscounted cash flows and the total remaining years to the operating lease liability recorded on the consolidated balance sheet as of December 31, 2020:

Amounts due as of December 31, 20120	Operating Leases
2021		20,765
2022		21,370
Total minimum lease payments	$	42,135
Less: effect of discounting		(4,946)
Present value of future minimum lease payments	$	37,189
Less: current obligations under leases		(16,424)
Long-term lease obligations	$	20,765

Legal Matter

On July 6, 2020 we received a letter from the staff of the Division of Enforcement of the Securities and Exchange Commission (the “Staff”) that indicated the Company may have violated certain rules and regulations regarding a late filing notification filed by the Company and that the Staff is conducting an informal inquiry into the matter. The Staff has asked the Company to voluntarily submit certain information to it and the Company has done so and is cooperating with the Staff into their inquiry. No formal complaint has been filed and we expect to resolve this matter with the Staff without formal litigation. (See Note 12)