Commitments

6 Months Ended

Jun. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments [Text Block]

16. Commitments

a) Effective January 1, 2020, new consulting agreements were finalized for the services of the CEO and the CFO. The consulting agreements are each for a period of one year, commencing January 1, 2020. The CEO's monthly fee is $10,998 ($15,000 CAD) and for the CFO $5,866 ($8,000 CAD).  The future minimum commitment under these consulting agreements, is as follows:

 

For the six-month period ending December 31, 2020     $ 101,264

 

b) The Company has agreed to lease its office premises from Haute on a month-to-month basis, at the same monthly rate of $4,399 ($6,000 CAD). The Company is responsible for all expenses and outlays in connection with its occupancy of the leased premises, including, but not limited to utilities, realty taxes and maintenance.

 

c) The Company was assigned the land lease on the purchase of certain assets of Astoria Organic Matters Ltd., and Astoria Organic Matters Canada LP. The land lease, which comprises 13.88 acres in Roslin, Ontario, Canada, has a term expiring March 31, 2034. The basic monthly rent on the net lease is $2,200 ($3,000 CAD) and is subject to adjustment based on the consumer price index as published by Statistics Canada ("CPI"). To date, no adjustment for CPI has been charged. The Company is also responsible for any property taxes, maintenance, insurance and utilities. In addition, the Company has the right to extend the lease for five further terms of five years each and one further term of five years less one day. As the Company acquired the business of 1684567, the previous landlord, there are no future commitments for this lease. The Company was recently informed that, through a special provision of the site plan agreement with the City of Belleville (the "City"), Ontario, Canada, that it is required to fund road maintenance required by the City through to September 30, 2025 at an annual rate of $7,338 ($10,000 CAD). The future minimum commitment is as follows:

 

For the six-month period ending December 31, 2020	$	7,338
For the year ending December 31, 2021		7,338
For the year ending December 31, 2022		7,338
For the year ending December 31, 2023		7,338
For the year ending December 31, 2024		7,338
Thereafter		7,338
	$	44,028

 

PACE has provided the Company a letter of credit in favor of the MECP in the amount of $203,139 ($276,831 CAD) and, as security, has registered a charge of lease over the premises, located at 704 Phillipston Road, Roslin, Ontario, Canada. The Company is required to provide for environmental remediation and clean-up costs for its organic composting facility. The letter of credit is a requirement of the MECP and is in connection with the financial assurance provided by the Company for it to be in compliance with the MECPs environmental objectives. The MECP regularly evaluates the Company's organic waste composting facility to ensure compliance is adhered to and the letter of credit is subject to change by the MECP. Since the fair value of the environmental remediation costs cannot be determined at this time, no estimate of such costs has been recorded in the accounts. As of June 30, 2020, the MECP has not drawn on the letter of credit. PACE renewed the letter of credit to September 30, 2020.