11. Leases

12 Months Ended

Dec. 31, 2019

Notes

11. Leases

11.  Leases

In February 2016, the FASB issued ASU No. 2016-02 Leases (Topic 842). The update modifies the classification criteria and requires lessees to recognize the assets and liabilities on the balance sheet for most leases. The update is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company implemented this standard effective January 1, 2019. Upon implementation of the new guidance, the Company had no leases that met the classification criteria.  

In February 2019, the Company entered into an operating lease for its office that met the criteria of the update.  A liability and right-of-use asset of $29,617 was recognized on the lease inception date.  To calculate the liability and right of use asset, the Company utilized an 8.0% incremental borrowing rate to discount the future rent payments of approx. $1,300 per month over the lease term of 2.0 years.   The lease contains no renewal option.   

As of December 31, 2019, total future payments required through the remaining lease term of 1.09 years are as follows: 

For the 12 months ending December 31,
2020	$	16,369
2021		1,369
Total		17,738
Less imputed interest		(1,113)
Net lease liability	$	16,625
Current portion		(1,360)
Long term	$	15,265

For the years ended December 31, 2019, costs relating to the operating lease were recognized in the consolidated statements of operations as follows:

Base rent pursuant to lease agreement	$	14,437
Variable lease costs		5,156
Total		19,593
Less lease costs reimbursed by BeMetals (see Note 3)		(12,631)
	$	6,962