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Pedelta, Inc. Statement of Direct Labor, Fringe Benefits and General Overhead For the Year Ended December 31, 2019 NOTE 1- HISTORY OF THE COMPANY Pedelta, Inc. (the "Company") is a specialty bridge and structural engineering consultancy firm founded in 2006 and is located in Coral Gables, Florida. The Company specializes in providing construction engineering assessment, inspection, and rehabilitation of bridges as wells as providing engineering services for buildings, transportation, and civil engineering. NOTE 2 - BASIS OF ACCOUNTING AND DESCRIPTION OF ACCOUNTING SYSTEMS The Company's policy is to prepare its indirect cost rate schedule on the basis of accounting practices prescribed in Part 31 of the Federal Acquisition Regulations (FAR), Section 112.061 of the Florida Statutes and Florida Department of Management Services. Accordingly, the above mentioned statement is not intended to present the results of operations of the Company in conformity with generally accepted accounting principles in the United States of America. The Company maintains financial and job cost records using the accrual basis of accounting. The Company maintains a job -order cost accounting system for the recording and accumulation of costs incurred under its contracts. Each project is assigned a job number so that costs may be segregated and accumulated in the company's job -order cost accounting system. The Company's method of estimating costs for pricing purposes during the proposal process is consistent with the accumulation and reporting of costs under its job -order accounting system. Property and equipment is recorded at cost upon acquisition. Depreciation of property and equipment is computed over the estimated useful lives of the assets using the straight-line method. The Company consistently bills its clients for the following direct costs: travel, reproduction, sub -consultants. Costs in the general ledger are separated between direct and indirect costs. The Company has separate expense accounts for sub -consultants that are project -related. Description of Overhead Rate Structure: In calculating the home office overhead rate, all costs are allocated based on Direct Labor Cost. NOTE 3 - CADD MACHINE COST The Company has several employees who work on the Company's Computer -Aided Design and Drafting (CADD) system. Time for work by employees on the CADD system is charged to direct labor with no profit margin included. All outside services for the CADD system are charged to direct cost. NOTE 4 - LABOR RELATED COSTS The Company's policy for recording the premium portion of overtime compensation is to record such costs as direct expense but exclude such cost from both the overhead and the direct expense rates. The Company's policy for recording uncompensated overtime for salaried employees is to apply an average labor rate to all cost objectives for each pay period based on the salary paid and total hours worked. The Company provides employees with paid time off (PTO) for vacation, holidays and sickness based on a consistently applied and established paid leave policy. These costs are recorded as allowable fringe benefits. -5- 292-