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Commitments and Contingencies | 3 Months Ended
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Mar. 31, 2020
Commitments and Contingencies Disclosure [Abstract] |
COMMITMENTS AND CONTINGENCIES | NOTE 10 — COMMITMENTS AND CONTINGENCIES Although not a party to any proceedings or claims at March 31, 2020, the Company may be subject to legal proceedings and claims from time-to-time arising out of our operations in the ordinary course of business. Leases: On March 31, 2019, the Company entered into a sublease with a related party (see Note 11) for its current corporate headquarters. The sublease expires in November 2022. Monthly lease payments are currently $7,078 per month and increase to $7,535 per month for the final 20 months of the lease. In February 2016, the Financial Accounting Standards Board issued Accounting Standards Update No. 2016-02: "Leases (Topic 842)" whereby lessees need to recognize almost all leases on their balance sheet as a right of use asset and a corresponding lease liability. The Company adopted this standard as of January 1, 2019 using the effective date method. We calculated the present value of the remaining lease payment stream using our incremental effective borrowing rate of 10%. We initially recorded a right to use asset and corresponding lease liability amounting to $269,054 on March 31, 2019. The right to use asset and the corresponding lease liability are being equally amortized on a straight-line basis over the remaining term of the lease. For the three months ended March 31, 2020, lease costs amounted to $37,910 which includes base lease costs of $21,234 and common area and other expenses of $16,676. All costs were expensed during the periods and included in general and administrative expenses on the accompanying consolidated statements of operations. Right-of-use asset ("ROU") is summarized below:
|  | March 31, 2020 |
Operating office lease |  | $ | 269,054 |
Less accumulated reduction |  |  | (73,378 | )
Balance of ROU asset at March 31, 2020 |  | $ | 195,676 |
Operating lease liability related to the ROU asset is summarized below:
|  | March 31, 2020 |
Total lease liability |  | $ | 269,054 |
Reduction of lease liability |  |  | (73,378 | )
Total |  |  | 195,676 |
Less short term portion as of March 31, 2020 |  |  | (73,378 | )
Long term portion as of March 31, 2020 |  | $ | 122,298 |
Future base lease payments under the non-cancellable operating lease at March 31, 2020 are as follows:
2020 |  | $ | 65,763 |
2021 |  |  | 89,736 |
2022 |  |  | 82,885 |
Total minimum non-cancellable operating lease payments |  |  | 238,384 |
Less discount to fair value |  |  | (42,708 | )
Total fair value of lease payments |  | $ | 195,676 |
COVID-19 Uncertainty: In March 2020, the outbreak of COVID-19 (coronavirus) caused by a novel strain of the coronavirus was recognized as a pandemic by the World Health Organization, and the outbreak has become increasingly widespread in the United States, including in each of the areas in which the Company operates. While to date the Company has not been required to stop operating, management is evaluating its use of its office space, virtual meetings and the like to comply with health and safety guidelines to protect employees, contractors and customers, including in connection with a transition back to the workplace. The Company continues to monitor the impact of the COVID-19 (coronavirus) outbreak closely. The extent to which the COVID-19 (coronavirus) outbreak will impact our operations, ability to obtain financing or future financial results is uncertain.

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- Definition The entire disclosure for commitments and contingencies. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 450 -URI http://asc.fasb.org/topic&trid=2127136 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 440 -URI http://asc.fasb.org/topic&trid=2144648 + Details
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