Forward Looking Statements
This section of the report includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. Actual results could differ materially from those anticipated in these forward looking statements as a result of any number of factors, including those set forth in this Quarterly Report, and in the Company's most recent Annual Report on Form 10-K/A filed
onMarch 20, 2020 . All written and oral forward-looking statements made in connection with this Quarterly Report on Form 10-Q that are attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Given the uncertainties that surround such statements, you are cautioned not to place undue reliance on such forward-looking statements, which apply only as of the date of this quarterly report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions. Overview
The following discussion is an overview of the important factors that management focuses on in evaluating our businesses, financial condition and operating performance and should be read in conjunction with the financial statements included in this Quarterly Report on Form 10-Q.
The Company is subject to a number of risks similar to other companies in the medical device industry. These risks include but are not limited to rapid technological change, uncertainty of market acceptance of our products, uncertainty of regulatory approval, competition from substitute products and larger companies, the need to obtain additional financing, compliance with government regulation, protection of proprietary technology, product liability, and the dependence on key individuals. Our Business
We are engaged in the business of designing, developing, manufacturing and marketing of biomaterial internal fixation devices. We hold one medical device permit from theNational Medical Products Administration of the PRC ("NMPA") for our product - polymer orthopaedic internal fixation screws and three patents issued by theState Intellectual Property Office of the P.R.C . ("SIPO"). Our polyamide materials, their uses and manufacturing processes are protected by Patent No. ZL971190739. Patent No. ZL201410647464.1 titled "Bone Fracture Plate Made of High Polymer Materials" and patent No. ZL201511005531.0 titled "Composite fiber, manufacturing method and orthopaedic binding wire" were granted to us in 2018 and 2020 respectively. Our polyamide materials are used in producing screws, binding wires, rods and related products. These products are used in a variety of applications including orthopaedic trauma, sports related medical treatment, or cartilage injuries, and reconstructive dental procedures. At this time, our company is the sole patent holder and market permit holder of PA technologies inChina , as well as the only company currently engaged in clinical trials, manufacturing and marketing for PA orthopaedic internal fixation devices in the PRC. Our products are made of a very unique material called PA6-P(MMA-CO-NVP)-HA ("PA"). Our PA products, such as screws, binding wires, rods, suture anchors and rib-pins consist of enhanced fibers and high molecular polymers which are designed to facilitate quick healing of complex fractures in many areas of the human skeletal system. 4
Our products offer a number of significant advantages over existing metal implants and the first generation of degradable implants (i.e. PLLA) for patients, surgeons and other customers including:
1. A notably reduced need for a secondary surgery to remove implant due to
post-operative complications, therefore avoiding unnecessary risk and expense
on all patient care;
2. Enhancing the performance of the materials by manufacturing them to be easily
fitted to each patient, forming an exact fit;
3. Improving the biological activity of materials. Clinical trial results have
shown that PA implants promote a progressive shift of load to the new bone
creating micro-motion and thereby avoiding bone atrophy due to 'stress shielding'; 4. Reducing the chance of post-operative infection; 5. Stimulate bone tissues to facilitate effective biological integration, benefitting the regeneration of bone; 6. Ease of post-operative care i.e. no distortion during x-ray imaging; 7. Simple and cost-effective to manufacture. Our products are designed to replace the traditional internal fixation device made of stainless steel and titanium and overcome the limitations of previous generations of products such as PLA and PLLA. Our laboratory statistics show that our PA products have a higher mechanical strength, last longer in degradation ratio and are more evenly absorbed form outer layer inwards as compared with similar materials such as PLA and PLLA. Thus PA allows increased restoration time for bone healing and re-growth. The Company's polymer orthopaedic internal fixation screws received approval from theNational Medical Products Administration of the PRC ("NMPA") inApril 2018 . We launched our sales campaign at the end of our fiscal year endedOctober 31, 2019 and achieved a milestone in the Company's history by generating revenue through the sales
of our PA Screws.
NMPA Application Process and Approval for Polymer Screws
The Company first submitted its application for PA Screws to the NMPA (formerly the SFDA/CFDA) in 2008. The application has been withheld by the NMPA pending additional clinical trial cases. This is due to the amended NMPA regulations, which unlike previous regulations require the applicant to specify the position on the body where the clinical trial is carried out. Our amended NMPA application has specified the ankle fracture as the body part of our clinical trial. This is because bones around this part carry most of the body weight. Due to the uniqueness of our material, there were no established NMPA Product Standards that we could follow during our application process for our PA Screws. To establish our own Product Standards, the Company had been carrying out extra tests. The Company submitted its Product Standards and supplementary reports to the NMPA in 2014. InDecember 2016 , the Company received a notice from the NMPA requesting supplementary report as part of the review process. The Company completed the supplementary report and submitted it to the NMPA inJune 2017 .
In
Process of Human Trials
As ofJuly 31, 2020 , for medical study and comparison purpose, the Company has completed a total of 83 successful clinical human trial cases, including 71 cases on ankle fractures and 57 successful PA Binding Wire trial cases. We have been conducting human trials at the 6 state level hospitals recognized by NMPA for clinical trials in different cities throughoutChina ; includingNanchang ,Changsha ,Luoyang ,Nanning andTianjin . The cities and provinces where our clinical trial hospitals are based will be the initial target regions on our marketing plan. These regions are both densely populated and have experienced high or above medium economic growth. The clinical trials for the Company's PA Screws have been completed with 100 percent success rate. Having gained NMPA approval for PA Screws, the Company is planning to start clinical trials on series of orthopaedic products the Company has developed using the same unique biomaterial. 5 Government Regulation
Medical implant devices/products manufactured or marketed by the Company inChina are subject to extensive regulations by the NMPA. Pursuant to the related laws and acts, as amended, and the regulations promulgated there under (the "NMPA Regulations"), the NMPA regulates the clinical testing, manufacture, labeling, distribution and promotion of medical devices. The NMPA also has the authority to request repair, replacement, or refund of the cost of any device manufactured or distributed by the Company. Under the NMPA Regulations, medical devices are classified into three classes (class I, II or III), the basis of the controls deemed necessary by the NMPA to reasonably assure their safety and efficacy. Under the NMPA's regulations, class I devices are subject to general controls (for example, labeling and adherence to Good Manufacturing Practices ("GMP") requirements) and class II devices are subject to general and special controls. Generally, class III devices are those which must receive premarket approval by the NMPA to ensure their safety and efficacy (for example, life-sustaining, life-supporting and certain implantable devices, or new devices which have not been found substantially equivalent to legally marketed class I or class II devices). The Company is classified as a manufacturer of class III medical devices. Current NMPA enforcement policy prohibits the marketing of approved medical devices for unapproved uses. Before a new device can be introduced into the market inChina , the manufacturer generally must obtain NMPA marketing clearance through clinical trials. Since the Company is classified as a manufacturer of Class III medical devices, the Company must carry out all clinical trials in pre-selected NMPA approved hospitals. Manufacturers of medical devices for marketing inChina are required to adhere to GMP requirements. Enforcement of GMP requirements has increased significantly in the last several years and the NMPA has publicly stated that compliance will be more strictly scrutinized. From time to time the NMPA has made changes to the GMP and other requirements that increase the cost of compliance. Changes in existing laws or requirements or adoption of new laws or requirements could have a material adverse effect on the Company's business, financial condition and results of operations. There can be no assurance that the Company will not incur significant costs to comply with applicable laws and requirements in the future or that applicable laws and requirements will not have a material adverse effect upon the Company's business, financial condition and results of operations. Regulations regarding the development, manufacturing and sale of the Company's products are subject to change. The Company cannot predict the impact, if any, that such changes might have on its business, financial condition and results of operations. Results of Operations
The "Results of Operations" discussed in this section merely reflect the
information and results of the Company for the period from
6 Revenues
Our revenue for the three and nine months endedJuly 31, 2020 and 2019 were$961 and $Nil; and$61,251 and $Nil respectively, including sales of U$48,491 to its distributor, a company in which Mr.Chen Tie Jun , a key management personnel of Shenzhen Changhua, has a significant equity interest. We started to generate revenue at the end of our last fiscal year before our sales campaign was disrupted by the COVID-19 pandemic. The Company achieved a milestone in its history by generating sales revenue at the end of the fiscal year endedOctober 31, 2019 . Due to the COVID-19 pandemic, non-essential operations have been cancelled in hospitals nationwide inChina . We have not achieved any sales of our PA Screws in the third quarter but we expect the sales to gradually recover as the COVID-19 cases ease off inChina . Our management team is continuously looking for fundraising possibilities for sales and marketing expansion, product improvement, machinery upgrades, facility expansions and continuous research and development. Our facility is located inShenzhen, China , which is built to meet the GMP standards. Our facility covers about 865 square meters, which includes the combined facilities of offices, laboratories, and workshops. There is one production line for the PA Screw and another production line for the PA Binding Wire. The annual production capabilities of each production line are 100,000 pieces for PA Screw, and 240,000 packs for the PA Binding Wires. Both production lines, at their maximum production capacities are capable of generating approximately$30,000,000 in annual revenue.
Estimate current production lines in full capacity
Total Turnover Output Quantity (Max.) Price at ex-factory ($) ($) PA Screw 100,000 (piece) 180 18,000,000 PA Binding Wire 240,000 (pack) 50 12,000,000 Total: 30,000,000China's Marketing Analysis: We have established long term relationships with many hospitals and national distributors inChina . Ms.Hui Wang , the Company's CEO, has over 25 years' sales experience in medical distribution. Professor Shangli Liu, our chief medical advisor, is one of the highest ranked orthopedic doctors inChina as well as being highly renowned in the rest of the world. He will assist the Company in nationwide product promotion and joint projects with associated academic institutions and medical schools. During product development and clinical trial stages, we developed close relationships with many major national hospitals. We expect these relationships to boost our revenue generation.
- Patients - Advanced technology level
- Performance and price of the materials
China has gradually entered theOld Age Society . It is expected that there will be 245 million people over 60 years of age by 2020, and, according to the survey of 50 years old, the incidence of osteoporosis is as high as 60%, accompanied by osteoporosis, fracture, bone necrosis, disability and other diseases, resulting in continued high demand of orthopaedic implant medical devices. (Source: The UN;Shenwan Hongyuan Securities research report). 7
The Company has advantages and more opportunities over others competitors due to:
- No other similar patent registrations in
- We are the only company to receive market approval and permission to perform PA clinical trials by the NMPA to the best of our knowledge.
- We have a timing advantage over other Chinese companies; other companies would need to successfully complete preclinical testing for the NMPA in order to obtain clinical trial permits.
- Under new regulations by the NMPA, it will take at least 5-10 years for clinical trials of new materials.
- Our patented material enables us to rapidly diversify our product line according to market trend and demand.
Number of Hospitals at the end of
Statistic and Census report by theNational Health Commission of the People's Republic of China (June 2020) June 2020 June 2019 Increase / (Decrease) Total No. of Hospitals 34,658 33,290 1,368 Public Hospital 11,903 11,941 (38 ) Private Hospital 22,755 21,349 1,406 Hospital Rating AAA 2,831 2,619 212 AA 9,901 9,256 645 A 11,400 10,946 454 Unrated 10,526 10,469 57 In general, technological advancements and the marketing potential withinAsia are the biggest factors in driving significant growth within the global orthopedic devices market. Another major factor that positively influences this market is the growing number of aging baby boomers with active lifestyles. This sector represents a large portion of the total population. Cost of Sales Cost of sales for the three and nine months endedJuly 31, 2020 and 2019 were$820 , $Nil,$33,831 and $Nil respectively, which accounted for 85.33% and nil; and 55.23% and nil of the gross revenue. Gross Profits Gross profits for the three and nine months endedJuly 31, 2020 and 2019 was$141 , $Nil,$27,420 and $Nil respectively, which accounted for 14.67% and nil; and 44.77% and nil of the gross revenue. We started to generate revenue at the end of our fiscal year endedOctober 31, 2019 before our sales campaign was disrupted by the COVID-19 pandemic. Operating Expenses Operating expenses for the three and nine months endedJuly 31, 2020 and 2019 were$116,582 ,$125,429 ,$363,840 and$443,866 respectively, which accounted for 12131% and nil; and 594.01% and nil of the gross revenue. Compared to prior period, the other expenses for the three and nine months endedJuly 31, 2020 and 2019 were reduced by 7.05% and 18.03%. The major reasons for the reduction were due to$16,355 or 22.99% for three months endedJuly 31, 2020 and$179,696 or 51.81% for the nine months endedJuly 31, 2020 which was partly offset by$8,416 or 135.28% and$29,048 or 178.93% increment in depreciation expenses respectively. Research and Development
Research and development costs related to both present and future products are expensed as incurred. Total expenditure on research and development charged to general and administrative expenses for the three and nine months endedJuly 31, 2020 and 2019 were$42,773 ,$48,081 ,$140,858 and$81,103 respectively. Compared to prior period, the research and development expenses for the three and nine months endedJuly 31, 2020 and 2019 were reduced by 11.04%, due to depreciation in Renminbi, and increased by 73.68%. The main component of research and development costs is staff costs of the technical personnel on product improvements to enhance industrial design. We expect research and development expenses to grow as we continue to invest in basic research, clinical trials, product development and in our intellectual property. The Company will be working closely with medical institutions and research universities to expedite future clinical trials of upcoming series of polymer fixation devices, including Intramedullary Nailing Fixation, Binding Wires, Micromodule Screws & Plates, Maxillofacial & Craniofacial Plates, and Rib Pins. Marketing Strategy The Company has been conductingPre-Market Research before its PA Screws application was approved by the NMPA inApril 2018 . The research is intended to estimate the potential market success of the company's products that can be expected. The research also beyond the Company's initial market -China , and covers international markets. Based on the results of ourPre-Market Research and the positive feedbacks we have received from trade shows and industrial conferences, it is the Company's intention to apply for additional international regulatory approvals in due course. 8
The Company will market its products through a hybrid sales force comprised of a
managed network of independent regional distributors/sales agents (80%) and
direct sales representatives (20%) in
There are two ways the Company will generate revenue, 1) through our nationwide and regional distributors and 2) through our direct sales channels.
The Company is currently working to have its products registered on multiple provincial Group Purchasing Organization (GPO) platforms. A few distributors have made deposit payment. The Company is working with distributors to develop sales channels and have its products reaching hospitals. Impact of COVID-19 Outbreak
The Company's primary business is carried out through its subsidiary,
The Company has identified the following areas that have been adversely affected by COVID-19 pandemic:
1. Operation: Our facilities in
lockdown, travel restrictions and quarantine requirements. This affected our
accounting and marketing departments mostly because a small number of staff
couldn't come back to office as they were not allowed to travel or have
14-day quarantine before they come back to work. As the crisis is easing off
in
2. Manufacturing: We have sufficient raw material stock for 2 months and our
production should not be affected. However, if COVID-19 pandemic persists and
new breakout occurs, our supply chain may be affected, and we may be short of
raw material supply.
3. Marketing: We launched our sales campaign in
marketing plans have been disrupted by COVID-19 pandemic because almost all
the hospitals in
operations have been postponed or cancelled.
The Company has been working with its business partners and workforce through crisis planning, effective communication and co-operation to minimize the negative impact of the COVID-19 pandemic.
Other Income and Expenses Total other expenses, net of other income, for the three and nine months endedJuly 31, 2020 and 2019 were$88,784 ,$87,447 ,$142,246 and$257,212 respectively. Compared to prior period, the other expenses for the three and nine months endedJuly 31, 2020 and 2019 were increased by 1.53% and reduced by 44.69%. There was no significant changes in total other expenses for the three months endedJuly 31, 2020 . For the nine months endedJuly 31, 2020 , there was a reduction in other expenses compared to the same period last year. The major contributor to the reduction of total other expenses was due to that the Company received a grant of$125,237 from local government inShenzhen inJanuary 2020 . The remaining other expenses comprised mainly interest expenses with no significant differences between the relevant periods of 2020 and 2019. Finance Costs As ofJuly 31, 2020 andOctober 31, 2019 , a stockholder and four related parties had loaned a total of$5,083,314 and$4,916,638 respectively to the Company as unsecured loans repayable on demand and interest is charged at 7% per annum on the amount due. Total interest expenses on advances from a stockholder and the related parties accrued for the three and nine months endedJuly 31, 2020 and 2019 were$79,615 ,$79,846 ,$239,946 and$234,816 respectively. As ofJuly 31, 2020 andOctober 31, 2019 , the Company owed$299,195 and$280,514 respectively to the directors for advances made on an unsecured basis, repayable on demand. Total imputed interest expenses on advances from the directors, calculated at 5% per annum, recorded as additional paid-in capital amounted to$3,409 ,$3,189 ,$10,205 and$9,544 for the three and nine months ended July
31, 2020 and 2019 respectively. 9 Net Loss The net loss attributable to common stockholders for the three and nine months endedJuly 31, 2020 and 2019 were$205,225 , 212,876, 478,666 and$701,078 respectively. Compared to prior period, the net loss for the three and nine months endedJuly 31, 2020 and 2019 were reduced by 3.59% and 31.92%. We started to generate revenue at the end of our fiscal year endedOctober 31, 2019 before our sales campaign was disrupted by the COVID-19 pandemic, but we have to incur operating expenses for the upkeep of the Company and the clinical trials.
Liquidity and Capital Resources
We had a working capital deficit of$7,135,064 and$6,577,273 as ofJuly 31, 2020 andOctober 31, 2019 respectively. Our working capital deficit is due to the fact that we received the NMPA approval for one product inApril 2018 and we are in the process to produce, market and sell our product inChina . We only started our sales campaign and our sales revenues were not able to cover our expenses and we relied on loans from our related parties and stockholders.
Cash Flows
Net cash used in operating activities was$105,512 and$550,039 in the nine months endedJuly 31, 2020 and 2019 respectively. This amount was attributable primarily to the net loss after adjustment for non-cash items, such as depreciation, loss on disposal of property and equipment, imputed interest on advances from directors, and others like charges in other receivables and prepaid expenses and other payables and accrued expenses.
We recorded net cash used of$29,692 and$34,027 in investing activities in the nine months endedJuly 31, 2020 and 2019 respectively. This amount reflected purchases of property and equipment, primarily for research and development
to our facilities.
Net Cash Provided by Financing Activities
Net cash provided by financing activities in the nine months endedJuly 31, 2020 and 2019 was$143,975 and 588,120 respectively, which represented advances from a stockholder, directors and related parties, loan repayment to directors and advances to a related company.
Operating Capital and Capital Expenditure Requirements
Our ability to continue as a going concern and support the commercialization of current products is dependent upon our ability to market our product while obtaining additional financing in the near term. We anticipate that such funding will be in the form of marketing of our products and equity financing from sales of our common stock. However, there is no assurance that we will be able to raise sufficient funding from the sale of our products and common stock to fund our business plan should we decide to proceed. We anticipate our sales revenue will not meet our financial needs in 2020 and we need to rely on advances from our related parties and stockholders in order to continue to fund our business operations.
We believe that our existing cash, cash equivalents atJuly 31, 2020 , will be insufficient to meet our cash needs. Our minimum cash requirement for the next 12 months is projected to be$700,000 . This amount may increase if we decide to start clinical trials on new products. The management is actively pursuing additional funding and strategic partners, which will enable the Company to implement our business plan, business strategy, to continue research and development, clinical trials or further development that may arise. 10 We intend to spend more to support the commercialization of current products and on research and development activities, including new products development, regulatory and compliance, clinical studies, and the enhancement and protection of our intellectual property portfolio.
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our investors. CRITICAL ACCOUNTING POLICIES The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including but not limited to those related to income taxes and impairment of long-lived assets. We base our estimates on historical experience and on various other assumptions and factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Based on our ongoing review, we plan to adjust to our judgments and estimates where facts and circumstances dictate. Actual results could differ from our estimates. We believe the following critical accounting policies are important to the portrayal of our financial condition and results and require our management's most difficult, subjective or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain. 1. Property and equipment
Property and equipment are stated at cost, less accumulated depreciation. Expenditures for additions, major renewals and betterments are capitalized and expenditures for maintenance and repairs are charged to expense as incurred.
Depreciation is provided on a straight-line basis, less estimated residual value over the assets estimated useful lives. The estimated useful lives of the assets are 5 years. 2. Long-lived assets
In accordance with FASB Codification Topic 360 (ASC Topic 360), "Accounting for the impairment or disposal of Long-Lived Assets", long-lived assets and certain identifiable intangible assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For purposes of evaluating the recoverability of long-lived assets, the recoverability test is performed using undiscounted net cash flows related to the long-lived assets. The Company reviews long-lived assets to determine that carrying values are not impaired. 3. Inventory
Inventory is stated at the lower of cost (using weighted average basis) and net realizable value.
11 4. Fair value of financial instruments FASB Codification Topic 825 (ASC Topic 825), "Disclosure About Fair Value of Financial Instruments," requires certain disclosures regarding the fair value of financial instruments. The carrying amounts of other receivables and prepaid expenses, other payables and accrued liabilities and due to a stockholder, directors and related parties approximate their fair values because of the short-term nature of the instruments. The management of the Company is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial statements. 5. Income taxes The Company accounts for income taxes underThe Financial Accounting Standards Board (FASB) Codification Topic 740-10-25 ("ASC 740-10-25"). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized as income in the period included the enactment date. 6. Research and Development
Research and development costs related to both present and future products are expensed as incurred.
7. Foreign currency translation The reporting currency of the company's financial statements is the US dollar. The financial statements of the Company's subsidiary denominated in currencies other than the US dollar are translated into US dollars using the closing rate method. The balance sheet items are translated into US dollars using the exchange rates at the respective balance sheet dates. The capital and various reserves are translated at historical exchange rates prevailing at the time of the transactions while income and expenses items are translated at the average exchange rate for the year. All exchange differences are recorded within equity.
ADOPTION OF NEW ACCOUNTING STANDARD
Leases
The Company has initially adopted ASU No. 2016-02, Leases (Topic 842) as of
The Company elected the short-term lease recognition exemption, which allows the Company not to recognize right-of-use assets and lease liabilities for leases with a term of 12 months or less and do not include a purchase option whose exercise is reasonably certain. In addition, the Company elected the transition method permitted under the ASU 2018-11 issued inJuly 2018 , which allowed the Company to initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of accumulated deficits in the period of adoption. The cumulative effect of the changes made to the consolidated balance sheet as of1 November 2019 for the adoption of the new leases standard was as follows: Balances at Adjustments Balances at October 31, on adoption of November 1, 2019 ASU 2016-02 2019 ASSETS Right-of-use assets $ - $ 74,139$ 74,139 CURRENT LIABILITIES
Lease liabilities, current portion - (43,732 ) (43,732 ) NON-CURRENT LIABILITIES Lease liabilities, net of current portion - (33,333
) (33,333 )
Cumulative-effect adjustment to opening balance of accumulated deficit $ - $ (2,926 )$ (2,926 )
In determining the lease liability and corresponding right-of-use asset for each lease, the Company calculated the present value of future lease payments using the Company's incremental borrowing rate. The incremental borrowing rate was determined with reference to the interest rate applicable to borrowings from related parties disclosed in Note 4, Related Parties Transactions. The reported results for the three and nine months endedJuly 31, 2020 reflect the adoption of ASC 842 guidance while the reported results for the three and nine months endedJuly 31, 2019 were prepared and continue to be reported under the guidance of ASC 840, Leases.
RECENT ACCOUNTING PRONOUNCEMENTS
There has been no newly effective accounting pronouncement that has significance, or potential significance, to our consolidated financial statements.
The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoptions of any such pronouncements may be expected to cause a material impact on the financial condition or the results of operations. The Company will carefully analyze these recently accounting pronouncements and take action to adopt them as required. 12
© Edgar Online, source