| Critical Accounting Policies and Estimates | 2. Critical Accounting Policies and Estimates Basis of Presentation These accompanying financial statements
have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”)
and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for annual financial statements. Use of Estimates The preparation of financial statements
in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported therein. Due
to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that
differ from these estimates. Reclassifications Certain prior year amounts have been reclassified
to conform to the current year presentation. These reclassifications had no impact on the Company’s net (loss) earnings and
financial position. Fair Value Measurements Fair value is defined as the exchange price
that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market
for the asset or liability, in an orderly transaction between market participants on the measurement date. Valuation techniques
used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value
hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, as follows: Level 1 – Quoted
prices in active markets for identical assets or liabilities. Level 2 – Inputs other
than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted
prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for
substantially the full term of the assets or liabilities. Level 3 – Unobservable
inputs that are supported by little or no market activity and that are significant to the measurement of the fair value of the
assets or liabilities. The Company’s financial instruments
include cash, accounts receivable, note receivable, accounts payables and tenant deposits. The carrying values of these financial
instruments approximate their fair value due to their short maturities. The carrying amount of the Company’s debt approximates
fair value because the interest rates on these instruments approximate the interest rate on debt with similar terms available to
us. The Company’s derivative liability was adjusted to fair
market value at the end of the year, using Level 3 inputs. The following is the Company’s assets
and liabilities measured at fair value on a recurring and nonrecurring basis at December 31, 2019 and 2018, using quoted prices
in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs
(Level 3):
December 31, 2019 December 31, 2018
Level 1 – Marketable Securities Available-for-Sale –
Recurring $ 406,774 $ 2,199,344 Marketable Securities at Fair Value
on a Recurring Basis Certain assets are measured at fair value
on a recurring basis. The Level 1 position consists of an investment in equity securities held in Canada House Wellness Group,
Inc. (CHV), a publicly-traded company whose securities are actively quoted on the Toronto Stock Exchange. Fair Value of Financial Instruments The carrying amounts of cash and current
assets and liabilities approximate fair value because of the short-term maturity of these items. These fair value estimates are
subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision.
Changes in assumptions could significantly affect these estimates. Available-for-sale securities are recorded at current market
value as of the date of this report. Accounts Receivable The Company extends unsecured credit to
its customers in the ordinary course of business. Accounts receivable related to consulting revenues are recorded when a milestone
is reached at point in time resulting in funds being due for delivered services, and where payment is reasonably assured. Accounts
receivable related to Cultivation Max revenues are recorded based on cultivation yields over time on harvested cannabis. Consulting
and Cultivation Max revenues are generally collected from 30 to 60 days after the invoice is sent. The following table depicts the composition
of our accounts receivable as of December 31, 2019 and 2018:
December 31, 2019 December 31, 2018
Accounts receivable – trade $ 384,202 $ 1,180,757
Accounts receivable – related party 72,658 125,112
Accounts receivable – litigation, non-current 3,063,968 1,281,511
Allowance for doubtful accounts (70,885 ) –
Total accounts receivable $ 3,449,943 $ 2,587,380 The Company establishes an allowance for
doubtful accounts based on management’s assessment of the collectability of trade receivables. A considerable amount of judgment
is required in assessing the amount of the allowance. The Company makes judgments about the creditworthiness of each customer based
on ongoing credit evaluations and monitors current economic trends that might impact the level of credit losses in the future.
If the financial condition of the customers were to deteriorate, resulting in their inability to make payments, a specific allowance
will be required. At December 31, 2019 and 2018, the Company recorded an allowance for doubtful accounts of $70,885 and $0, respectively. Recovery of bad debt amounts previously
written off is recorded as a reduction of bad debt expense in the period the payment is collected. If the Company’s actual
collection experience changes, revisions to its allowance may be required. After all attempts to collect a receivable have failed,
the receivable is written off against the allowance. The Company wrote-off $80,284 of its accounts receivable during the
year ended December 31, 2019. The Company did not write-off any of its accounts receivable in year ended December 31, 2018. On March 22, 2019, the Company
entered into an Agreement of Sale of Future Receipts (“Factoring Agreement”) with Libertas Funding, LLC
(“Purchaser”). Under the terms of the Factoring Agreement, the Purchaser acquired $810,000 of certain future
receivables from the Company for $582,000 in net proceeds. The Company is required to repay the Purchaser $24,107 weekly for
an estimated term of eight months. On July 2, 2019, the Company repaid $436,607, which represented all remaining amounts owed
under the Factoring Agreement. The Company recorded $192,107 in interest expense related to the Factoring Agreement during
the year ended December 31, 2019. In July 2018, the Company commenced legal
action against a customer in Clark County, Nevada for breach of contract, adding a significant value to its receivables for fees
that had been booked, due to forbearance grants by the Company that were subsequently violated, causing the Company to increase
its receivables accordingly. The Company provided services to this customer for a period of thirteen months, agreeing conditionally
to three modifications in December 2017, March 2018 and May 2018 to forego certain revenue sharing payments in accordance with
the agreement with the customer, which were subsequently breached by the customer. As a result, the Company engaged legal counsel
and filed a complaint in Clark County, Nevada, which alleged breach of contract and sought general, special and punitive damages
in the amount of $3,876,850. On August 2, 2019, a jury in the District
Court of Clark County, Nevada found in favor of the Company and awarded the Company damages totaling $2,773,321 (See Part II, Item
1, Legal Proceedings for more information). The Company has classified the awarded amount receivable as a non-current asset since
the customer has subsequently filed an appeal. Considering this customer’s appeal, the Company sought to compel the customer
to obtain and produce a bond securing the award. On December 13, 2019, proof of the bond was posted through United States Fire
Insurance Company, naming the Company as the obligee. At December 31, 2019 and 2018, the accounts
receivable for this matter totaled $2,773,321 and $990,864, and the related revenue recorded totaled $1,782,457 and $1,015,154
for the years ended December 31, 2019 and 2018, respectively. The Company analyzed the contract, associated
revenue and litigation process under Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with
Customers Paragraph 606-10-25 states that an entity
transfers control of a good or service over time and, therefore, satisfies a performance obligation and recognizes revenue over
time if one of the following criteria is met:
· The customer simultaneously receives and consumes the benefits provided by the entity’s performance as the entity performs.
· The entity’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced.
· The entity’s performance does not create an asset with an alternative use to the entity, and the entity has an enforceable right to payment for performance completed to date. Paragraph 606-10-25 further states that
the process for determining the proper treatment for a contract modification includes three steps:
· Determine whether a change to a contract qualifies as a contract modification.
· Determine whether the modification should be treated as a separate, standalone contract or as a modification of the original contract. If the contract is a separate contract, the entity follows the five-step model to determine how to recognize revenue. If the modification is not treated as a separate contract, the entity continues to Step 3.
· Determine appropriate accounting treatment for contract modification not accounted for as a separate contract. ASC
606 defines a contract modification as a change in scope and/or price to an original contract or any change to the enforceable
rights and obligations of the parties to the original contract. Enforceable rights and obligations are those that are approved
by both parties and legally required. A contract modification does not need to be written; enforceable changes can be the result
of oral agreements or implied through customary business practices. The effect that the modification has
on the transaction price and on the entity’s measure of progress towards satisfaction of the performance obligation is
recognized as an adjustment to revenue either as an increase in or a reduction of revenue at the date of the modification.
The adjustment to revenue is made on a cumulative catch-up basis. As management determined that the litigation
process constituted a contract modification, and that the contract was upheld judicially, the Company recognized and recorded $1,782,457
on a cumulative catch-up basis as of August 2, 2019. On June 7, 2019, the Company filed a complaint
against a second customer in Clark County, Nevada, for, amongst other causes of action, breach of contract. On July 17, 2019, the
parties stipulated to stay the case in favor of arbitration. Since that time, the parties have been in the process of mutually
agreeing upon an arbitrator, which has now completed. The parties are now in the process of scheduling the arbitration. As of December
31, 2019 and 2018, the accounts receivable for this matter totaled $290,647. Notes Receivable In July 2016, the Company executed a non-binding
Term Sheet to acquire Capital G Ltd, an Ohio limited liability company and its three wholly owned subsidiary companies, Funk Sac
LLC, Commodogy LLC, and OdorNo LLC. The agreement was subject to the Company’s due diligence as well as execution of definitive
agreements. In January 2017, the parties agreed not to proceed with this transaction. As part of the term sheet, the Company agreed
to loan Capital G the principal balance of $250,000 pursuant to the terms of a convertible note which accrues interest at the rate
of 12% per annum and which became due November 1, 2017. As of September 30, 2018, this note has not been repaid when it became
due. As of December 31, 2018, the Company has written off 100%, or $250,000, of this balance plus accrued interest of $49,018.
Due to this bad debt expense not being a part of the Company’s normal business this expense is categorized in other income
and expense on the income statement. On July 17, 2018, the Company entered
into an intellectual property license agreement with Abba Medix Corp. (AMC), a wholly-owned subsidiary of publicly-traded Canada
House Wellness Group, Inc. (CHV). The Company agreed to provide a lending facility to AMC in CAD$125,000 increments of up to CAD$500,000.
The lending facility is for a term of 36 months and bears interest at a rate of 2%. As of December 31, 2019 and 2018, the Company
had loaned to AMC a total of $241,711 and $92,888, respectively. The Company classified these loans as long-term notes receivable
on its consolidated balance sheets as of December 31, 2019 and 2018. Other Assets (Current and Non-Current) Other assets at December 31, 2019 and 2018
were $529,416 and $50,824, respectively. At December 31, 2019, other assets included
$480,881 in prepaid expenses, $21,085 in interest receivable and $27,450 in security deposits. Prepaid expenses were primarily
comprised of insurance premiums, membership dues, conferences and seminars and other general and administrative costs. At December 31, 2018, other assets included
$29,005 in prepaid expenses and $21,819 in security deposits. Goodwill and Intangible Assets Goodwill represents the future economic
benefit arising from other assets acquired that could not be individually identified and separately recognized. The goodwill arising
from the Company’s acquisitions is attributable to the value of the potential expanded market opportunity with new customers.
Intangible assets have either an identifiable or indefinite useful life. Intangible assets with identifiable useful lives are amortized
on a straight-line basis over their economic or legal life, whichever is shorter. The Company’s amortizable intangible assets
consist of licensing agreements, product licenses and registrations, and intellectual property or trade secrets. Their estimated
useful lives range from 10 to 15 years. Goodwill and indefinite-lived assets are
not amortized but are subject to annual impairment testing unless circumstances dictate more frequent assessments. The Company
performs an annual impairment assessment for goodwill at the end of each calendar year and more frequently whenever events or changes
in circumstances indicate that the fair value of the asset may be less than the carrying amount. Goodwill impairment testing is
a two-step process performed at the reporting unit level. Step one compares the fair value of the reporting unit to its carrying
amount. The fair value of the reporting unit is determined by considering both the income approach and market approaches. The fair
values calculated under the income approach and market approaches are weighted based on circumstances surrounding the reporting
unit. Under the income approach, the Company determines fair value based on estimated future cash flows of the reporting unit,
which are discounted to the present value using discount factors that consider the timing and risk of cash flows. For the discount
rate, the Company relies on the capital asset pricing model approach, which includes an assessment of the risk-free interest rate,
the rate of return from publicly traded stocks, the Company’s risk relative to the overall market, the Company’s size
and industry and other Company-specific risks. Other significant assumptions used in the income approach include the terminal value,
growth rates, future capital expenditures and changes in future working capital requirements. The market approaches use key multiples
from guideline businesses that are comparable and are traded on a public market. If the fair value of the reporting unit is greater
than its carrying amount, there is no impairment. If the reporting unit’s carrying amount exceeds its fair value, then the
second step must be completed to measure the amount of impairment, if any. Step two calculates the implied fair value of goodwill
by deducting the fair value of all tangible and intangible net assets of the reporting unit from the fair value of the reporting
unit as calculated in step one. In this step, the fair value of the reporting unit is allocated to all of the reporting unit’s
assets and liabilities in a hypothetical purchase price allocation as if the reporting unit had been acquired on that date. If
the carrying amount of goodwill exceeds the implied fair value of goodwill, an impairment loss is recognized in an amount equal
to the excess. Determining the fair value of a reporting
unit is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates, strategic
plans and future market conditions, among others. There can be no assurance that the Company’s estimates and assumptions
made for purposes of the goodwill impairment testing will prove to be accurate predictions of the future. Changes in assumptions
and estimates could cause the Company to perform an impairment test prior to scheduled annual impairment tests. The Company performed its annual fair
value assessment at December 31, 2019 on its reporting units and subsidiary with material goodwill and intangible asset amounts
on their respective balance sheets and determined that no impairment exists. Long-Lived Assets The Company evaluates the recoverability
of its long-lived assets whenever events or changes in circumstances have indicated that an asset may not be recoverable. Long-lived
asset are grouped with other assets at the lowest level for which identifiable cash flows are largely independent of the cash flows
of other groups of assets and liabilities. If the sum of the projected undiscounted cash flows is less than the carrying value
of the assets, the assets are written down to the estimated fair value. The Company evaluated the recoverability
of its long-lived assets at December 31, 2019 on its reporting units and subsidiary with material amounts on their respective balance
sheets and determined that no impairment exists. Accounts Payable Accounts payable at December 31, 2019 and
2018 were $699,961 and $202,515, respectively, and were comprised of trade payables for various purchases and services rendered
during the ordinary course of business. Accrued Expenses and Other Liabilities Accrued expenses and other liabilities
at December 31, 2019 and 2018 were $1,091,204 and $291,084, respectively. At December 31, 2019, accrued expenses
and other liabilities was comprised of customer deposits of $148,109, accrued payroll of $714,220, and operating expenses of $228,875. At December 31, 2018, accrued expenses
and other liabilities was comprised of $163,568 in customer deposits, $21,330 in deferred rent expense and $106,185 in accrued
payroll. Revenue Recognition and Related Allowances The Company’s revenue recognition
policy is significant because the amount and timing of revenue is a key component of its results of operations. Certain criteria
are required to be met in order to recognize revenue. If these criteria are not met, then the associated revenue is deferred until
the criteria are met. When consideration is received in advance of the delivery of goods or services, a contract liability is recorded.
Revenue contracts are identified when accepted from customers and represent a single performance obligation to sell the Company’s
products to a customer. The Company has three main revenue streams:
(i) product sales; (ii) licensing, consulting and Cultivation Max fees; and (iii) other operating revenues from seminars, reimbursements
and other miscellaneous sources. Product sales are recorded at the time
that control of the products is transferred to customers. In evaluating the timing of the transfer of control of products to customers,
the Company considers several indicators, including significant risks and rewards of products, its right to payment, and the legal
title of the products. Based on the assessment of control indicators, sales are generally recognized when products are delivered
to customers. Revenue from licensing, consulting and
Cultivation Max fees are recognized when the obligations to the client are fulfilled which is determined when milestones in the
contract are achieved and target harvest yields are exceeded. Revenue from seminar fees is related to
one-day seminars and is recognized as earned upon the completion of the seminar. The Company also recognizes expense reimbursement
from clients as revenue for expenses incurred during certain jobs. Intellectual Property Licensing
Agreement with ABBA Medix Corp. On July 17, 2018, the Company entered
into an intellectual property license agreement with Abba Medix Corp. (“AMC”), a wholly-owned subsidiary of publicly-traded
CHV. The license agreement granted AMC the right
to use products and processes related to high-efficiency cultivation of cannabis, as well as various inventions, ideas, discoveries,
algorithms, designs, hardware, prototypes, copyrights, processes, mask works, trade secrets, know-how, calculations, testing results,
technical data, documentation, potential customer contracts, marketing ideas and other technology in the cannabis cultivation industry,
in addition to all related trademarks, from the Company. The license was granted as of the effective date of the agreement for
an 18-month period and shall automatically renew for successive 18-month periods until the agreement is otherwise terminated. As consideration for granting the license
to AMC, the Company received the following:
· $1,150,000 in cash;
· $3,500,000 in shares of CHV common stock; and
· Ongoing licensing fees calculated as a percentage of AMC’s sales revenue directly related to the Company’s intellectual property. ASC 606 provides guidance in determining
the proper accounting treatment for the license of the intellectual property requiring the Company had to complete a sequence of
analyses. These analyses include the following: (i) sale versus licensing transactions; (ii) distinct performance obligations;
(iii) the nature of the license; and (iv) the timing of recognition based on the nature of the license. Based on an analysis of
ASC 606, the Company determined the following:
· The license agreement establishes AMC’s right to use the intellectual property; it does not transfer any of the Company’s ownership in the assets. Therefore, the agreement is clearly identified as a licensing transaction.
· The license agreement grants AMC the right to use the intellectual property immediately and does provide for the transfer of any other goods or services to AMC. The property is capable of being distinct, and the promise to transfer the property is distinct within the context of the contract. The Company recognized its license as distinct and a separate performance obligation.
· The intellectual property is functional intellectual property as it has significant standalone functionality. The license agreement with AMC grants them with the exclusive right to use the Company’s intellectual property immediately upon the date of the agreement. This date clearly represents a transfer of control to the customer. Further, upon its effectiveness, the Company established the right to payment and the customer accepted the asset. As control has been transferred to the customer, the Company has satisfied its performance obligation and, as such, is entitled to immediately recognize the $4,650,000 in revenue associated with the granting of the licensing rights. Additionally, under the terms of the agreement,
the Company agreed to provide a loan facility to AMC under the following terms: The Licensor (the Company) shall provide
a lending facility to the Licensee (AMC) in $125,000 increments of up to $500,000; noting that any increment over the initial
$250,000 advanced shall only be funded upon the Licensee’s funding of the second $575,000 amount to the Licensor. Such lending
facilities shall bear a nominal interest rate and carry terms as agreed to by both parties. Both parties agree that each of the
Licensor’s advances shall be first money in and first money to be repaid in accordance with the terms mutually agreed to. The purpose of this lending facility was
to provide financing support to AMC, the licensee of the Company’s intellectual property, for investing in capital expenses
that would allow them to generate revenue that would result in a royalty being paid to Medicine Man Technologies, Inc. The Company
is entitled to receive 4% of the gross revenues associated with the sale of Success Nutrients by AMC over the term of the agreement.
The Company considered the guidance under ASC 606 in determining whether the facility had any impact on the Company’s ability
to recognize revenue from the licensing agreement. Based upon the Company’s analysis, the Company determined the business
purpose of the financing facility that it provided to AMCwas a separate agreement with distinct responsibilities from the Company’s
performance obligations under the intellectual property license agreement. The Company considered the scope exceptions highlighted
in 606-10-15-2(c) and determined that ASC 825, Financial Instruments On July 31, 2018, the license agreement
was amended solely to eliminate the equal $1,000,000 million-dollar stock swap element. Based upon the Company’s analysis
of ASC 606-10-25-13, the Company determined the modification represented the elimination of a stock swap between the Company and
its customer’s parent company, CHV. While the consideration had a defined value, the result of the modification does not
beneficially or negatively impact either the Company or its customer. The Company determined that the remaining goods or services
as of the time of the modification are not distinct and, form part of a single performance obligation that was partially, if not
fully, satisfied. As the consideration represented an exchange of equal value between the two parties, the Company did not record
any revenue adjustments (either as an increase or a reduction) due to the elimination of the stock swap. Cultivation Max fees On August 6, 2018, the Company entered
into an agreement with a client that was comprised of two basic elements: Element One Element Two 25% of the value of the product grown over 2 pounds
per light”
· The term for receiving 25% of the value grown over 2 pounds per light, was reduced from five three
· The 25% level was reduced to 5%
· In return, the Company received a $1,000,000 fee which it billed in 2018 and collected in full in January 2019. Specifically, the wording in the addendum stated, “ The aforementioned fee of $1,000,000 shall be deemed earned by the Licensor (Medicine Man) upon the execution of this Addendum and shall be payable before January 15, 2019”. The amendment also provided that the client
will reimburse the Company up to $11,000 a month for the cost of its employees if they are needed at the client’s locations.
The Company considered this a pass-thru item where no profit was recognized. Under the guidelines of ASC 606-10-25-27, an entity
transfers control of a good or service over time and, therefore, satisfies a performance obligation and recognizes revenue over
time, if one of the following criteria is met:
a. The customer simultaneously receives and consumes the benefits provided by the entity’s performance
as the entity performs (see paragraphs 606-10-55-5 through 55-6).
b. The entity’s performance creates or enhances an asset (for example, work in process) that
the customer controls as the asset is created or enhanced (see paragraph 606-10-55-7).
c. The entity’s performance does not create an asset with an alternative use to the entity (see
paragraph 606-10-25-28), and the entity has an enforceable right to payment for performance completed to date (see paragraph 606-10-25-29). As a result of the contractual consulting
services the Company provided for Element One, control of the services has been transferred to the customer. These services enhanced
the client’s crop output capabilities and clearly meet criteria (a) and (b) above, and, therefore were recorded as revenue
in 2018. With respect to Element Two in terms of
considering the revenue method of recognition under ASC 606, the following characteristics of the transaction were considered:
· The Company had no further performance obligations
· The customer contractually deemed this fee as earned
· The future potential value of the reduction from 25% over five years, to 5% over three years, is an asset that legally passed to the client.
· The customer paid the fee Based on the analysis performed, the Company
determined “control” at a point in time, transferred immediately to the client upon the signing of the amendment. As
a result, the Company recorded a trade receivable of $1,000,000 on its balance sheet as of December 31, 2018 and $1,000,000 of
revenue in its statement of operations for the year ended December 31, 2018. This $1,000,000 receivable was fully received in January
of 2019. The Company notes no change in the pattern
of revenue recognition due to the adoption of Financial Accounting Standards Board (“FASB”) Accounting Standards Update
(“ASU”) 2014-09, Revenue from Contracts with Customers Costs of Goods and Services Sold Costs of goods and services sold are comprised
of related expenses incurred while supporting the implementation and sales of Company’s products and services. General and Administrative Expenses General and administrative expense are
comprised of all expenses not linked to the production or advertising of the Company’s products or services. Advertising and Marketing Costs Advertising and marketing costs are expensed
as incurred and totaled $455,047 and $291,711 for years ended December 31, 2019 and 2018, respectively. Stock-Based Compensation The Company accounts for share-based payments
pursuant to ASC 718, Stock Compensation Stock compensation expense for stock options
is recognized over the vesting period of the award or expensed immediately under ASC 718 and Emerging Issues Task Force (“EITF”)
96-18 when stock or options are awarded for previous or current service without further recourse. Share-based expense paid to through direct
stock grants is expensed as occurred. Since the Company’s stock is publicly traded, the value is determined based on the
number of shares issued and the over-the-counter quoted value of the stock on the date of the transaction. On June 20, 2018, the FASB issued ASU 2018-07
which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of
the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees.
Previously, share-based payment arrangements to nonemployees were accounted for under ASC 718, while nonemployee share-based payments
issued for goods and services were accounted for under ASC 505-50. Before the amendment, the major difference for the Company (but
not limited to) was the determination of measurement date, which generally is the date on which the measurement of equity classified
share-based payments becomes fixed. Equity classified share-based payments for employees was fixed at the time of grant. Equity-classified
nonemployee share-based payment awards are no longer measured at the earlier of the date which a commitment for performance by
the counterparty is reached or the date at which the counterparty’s performance is complete. They are now measured at the
grant date of the award, which is the same as share-based payments for employees. The Company adopted the requirements of the new
rule as of January 1, 2019, the effective date of the new guidance. The Company recognized $7,279,363 and $1,457,250
in expense for stock-based compensation to directors, employees and consultants during the years ended December 31, 2019 and 2018,
respectively. Income Taxes ASC 740, Income Taxes Right of Use Assets and Lease Liabilities In February 2016, the FASB issued ASU No.
2016-02, Leases (Topic 842) Under ASC 842, the Company determines if
an arrangement is a lease at inception. ROU assets and liabilities are recognized at commencement date based on the present value
of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and dete |
