Leases

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Leases

9. Leases

The Company leases certain assets under lease agreements. The lease liability consists of a single lease for office space which was classified as an operating lease. Upon adoption of Topic 842, on January 1, 2019 the Company recognized an addition to right-of-use assets of $104,866 and lease liabilities of $59,076. The difference between the recorded right-of-use assets and lease liabilities is mainly due to the reclassification of prepaid leasehold improvements incurred in lieu of twelve months rent which was included within the right-of-use asset recognized upon transition. As of September 30, 2019, the lease had remaining terms of 2.50 years and a weighted average remaining lease term of 2.50 years. Operating right-of-use assets and lease liabilities have been included within property and equipment and lease liabilities on the Company’s condensed consolidated balance sheet as follows:

Right-of-use asset	September 30, 2019
Lease asset	$	60,390
Leasehold improvements		44,476
Depreciation		(22,675	)
Change in foreign exchange		(6,609	)
Total right-of-use asset	$	75,582

Lease liability	September 30, 2019
Lease liability		59,076
Lease payments		(15,060	)
Interest		3,794
Change in foreign exchange rate		(3,689	)
Total lease liability		44,121
Current portion	$	16,343
Long-term portion		27,778
Total lease liability	$	44,121

Operating lease liabilities are measured at the commencement date based on the present value of future lease payments. As the Company’s lease did not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. The Company used a weighted average discount rate of 10% in determining its lease liabilities. The discount rate was derived from the Company’s assessment of current borrowings.

Operating lease right-of-use assets include any prepaid lease payments and exclude any lease incentives and initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The lease terms may include options to extend or terminate the lease if it is reasonably certain that the Company will exercise that option.

Future minimum lease payments to be paid by the Company as a lessee for operating leases as of September 30, 2019 for the next four years are as follows:

Remainder of 2019	$	5,005
2020		20,019
2021		20,019
2022		5,005
Total future minimum lease payments	$	50,048
Discount		(5,927	)
Total	$	44,121