Operating Lease

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Operating Lease

NOTE 12: OPERATING LEASE

The Company has adopted ASU No. 2016-02, Leases (Topic 842), as of January 1, 2019 and will account for their lease in terms of the right of use assets and offsetting lease liability obligations for this new lease under this pronouncement. In accordance with ASC 842 - Leases, effective January 1, 2019, the Company up until May 16, 2019 did not have any long-term lease commitments. On May 17, 2019 with the Company’s acquisition of TRAQ Pvt Ltd., recorded a lease right of use asset and a lease liability at present value of $576,566 and $585,207, respectively. The Company is recording this amount at present value, in accordance with the standard, using an incremental borrowing rate by adjusting the benchmark reference rates with appropriate financing spreads and lease specific adjustments for the effects of collateral. The right of use asset will be composed of the sum of all lease payments plus any initial direct cost and will be straight line amortized over the life of the expected lease term. For the expected term of the lease the Company will use the term of the nine-year lease. This lease will be treated as an operating lease under the new standard.

The Company has chosen to implement this standard using the modified retrospective model approach with a cumulative-effect adjustment, which does not require the Company to adjust the comparative periods presented when transitioning to the new guidance on January 1, 2019. The Company has also elected to utilize the transition related practical expedients permitted by the new standard. The modified retrospective approach provides a method for recording existing leases at adoption and in comparative periods that approximates the results of a modified retrospective approach.

The lease right of use asset of $592,909 will be amortized on a straight-line basis over the term of the lease. For the year ended December 31, 2019 the Company recorded a rent expense of $74,214. As of December 31, 2019, the value of the unamortized lease right of use asset is $537,268. As of December 31, 2019, the Company’s lease liability was $555,143.

Remaining Lease Obligation by calendar year (undiscounted cash flows)
2020	$	122,343
2021		125,670
2022		131,611
2023		140,695
2024		144,520
2025 and thereafter		163,494
Total lease payments		828,333
Less: Imputed interest		273,190
Present value of lease liabilities	$	555,143