This Annual Report Form 10-K contains forward-looking statements. Our actual
results could differ materially from those set forth due to general economic
conditions and changes in the assumptions used in making such forward-looking
statements. The following discussion and analysis of our financial condition and
results of operations should be read together with the audited financial
statements and accompanying notes and the other financial information appearing
elsewhere in this report. The analysis set forth below is provided pursuant to
applicable Securities and Exchange Commission regulations and is not intended to
serve as a basis for projections of future events.
The Company is building a diversified global financial services company driven
by proprietary Condor trading technologies, complementary regulatory licenses,
and a proven executive team. The Company plans to acquire, integrate, transform,
and scale legacy financial service companies. The Company believes its
proprietary technology and software development capabilities allow legacy
financial services companies immediate exposure to -forex, stocks, ETFs,
commodities, crypto, social/copy trading, and other high-growth fintech markets.
From December 2021 onwards, the Company expects to grow from its acquisition
strategy, specializing in buying and integrating small to mid-size legacy
financial services companies. The Company intends to build a diversified global
software-driven financial services company. The Company plans to acquire,
integrate, transform, and scale legacy financial service companies. The Company
replaces conventional legacy software infrastructure with its regulatory-grade
proprietary Condor trading technologies, intending to improve end-user
experience, increase client retention, and realize cost synergies.
Currently, we have three primary business segments, (1) Wealth Management, (2)
Technology and Software Development, and (3) Margin Brokerage Business. The
Company has signed a definitive agreement to acquire a controlling interest in
the US Brokerage business pending regulatory approval.
In March 2020, the World Health Organization declared the outbreak of a novel
coronavirus (COVID-19) as a pandemic that continues throughout the United
States. While the outbreak was initially concentrated in China, it spread to
several other countries, including Russia and Cyprus, and reported infections
globally. Many countries worldwide, including the United States, have
implemented significant governmental measures to control the spread of the
virus, including temporary closure of businesses, severe restrictions on travel
and the movement of people, and other material limitations on our business.
These measures have resulted in work stoppages, absenteeism in the Company's
labor workforce, and other disruptions. The extent to which the coronavirus
impacts our operations will depend on future developments. These developments
are highly uncertain. We cannot predict them with confidence, including the
duration and severity of the outbreak and the actions required to contain the
coronavirus or treat its impact. In particular, the spread of the coronavirus
globally could adversely impact our operations and workforce, including our
marketing and sales activities and ability to raise additional capital, which
could harm our business, financial condition, and operation results.
The geopolitical situation in Eastern Europe intensified on February 24, 2022,
with Russia's invasion of Ukraine. The war between the two countries continues
to evolve as military activity continues. The United States and certain European
countries have imposed additional sanctions on Russia and specific individuals.
By the end of August 2022, the Company closed its technical support and
development office in Russia. We relocated our personnel to Turkey, currently
considered a neutral zone. No individual associated with the Company is banned
or under Special Designated Nationals and Blocked Person list. If the military
activities worsen and expand in Europe, we may relocate our office from Turkey
to other neutral zones in Asia. If we cannot relocate our technical and
development operations to a safer zone, it may impact our software development
capabilities and negatively impact the Company's business plans.
As of the date of this report, there has been no disruption in our operations.
Wealth Management - AD Advisory Services Pty Ltd.
On December 22, 2021, the Company entered into a Share Exchange Agreement (the
"Agreement") with AD Financial Services Pty Ltd ACN 628 331 117 of Level 38/71
Eagle St, Brisbane, Queensland, Australia, 4000 ("ADFP" or "Target"). According
to the Agreement, the Company acquired 51% of ADFP's issued and outstanding
shares of capital stock in exchange for 45,000,000 (the "Consideration") newly
issued "restricted" common shares. The operating and licensed entity of ADFP is
AD Advisory Services Pty Ltd. ADFP owns one hundred percent (100%) equity
interest in AD Advisory Services Pty Ltd ("ADS"). As a result, the Company is
51% owner of ADS. Our wealth management business, AD Advisory Services (ADS), is
subject to enhanced regulatory scrutiny and is regulated by multiple regulators
in Australia. The Australian Securities and Investments Commission (ASIC)
administers a licensing regime for financial services providers. ADS holds an
Australian Financial Services License (AFSL) and meets various compliance,
conduct, and disclosure obligations.
AD Advisory Services Pty Ltd. (ADS) is an Australian-regulated wealth management
company with 20 offices, 28 advisors, and $530+ million in funds under advice.
ADS provides licensing solutions for financial advisers & accountants in
Australia. ADS offers financial planners different licensing, compliance, and
education solutions to meet their practice's specific needs.
Wealth Management Revenue & Gross Margins:
Fiscal year ended Fiscal year ended
December 31, 2022 December 31, 2021*
(Audited) (Audited)
Revenue, $ 5,827,732 156,013
Cost of sales, $ 5,275,741 140,922
Gross Profit (loss), $ 551,991 15,091
* Includes prorate revenue from December 22, 2021, to December 31, 2021.
Technology & Software Development - Condor Trading Technology
The Company has three sources of revenue.
? Technology Solutions - The Company licenses its proprietary and sometimes
resells third-party technologies to customers. Our proprietary technology
includes but is not limited to Condor Risk Management Back Office ("Condor
Risk Management"), Condor Pro Multi-Asset Trading Platform (previously known
as Condor FX Pro Trading Terminal), Condor Pricing Engine, Crypto Web Trader
Platform, and other cryptocurrency-related solutions.
? Customized Software Development - The Company develops software for Customers
with unique requirements outlined in the Software Development Agreement
("Agreement").
? Consulting Services - The Company's turnkey business solutions -
Start-Your-Own-Brokerage ("SYOB"), Start-Your-Own-Prime Brokerage ("SYOPB"),
Start-Your-Own-Crypto Exchange ("SYOC"), FX/OTC liquidity solutions, and lead
generations.
The Company has completed the Condor Pro Multi-Asset Trading Platform,
previously known as the Condor FX Trading Platform. The Condor Pro Multi-Asset
Trading Platform is a regulatory-grade trading platform targeted at day traders
and retail investors. The industry characterized such platforms by their ease of
use and helpful features, such as the simplified front-end (user interface/user
experience), back-end (reporting system), news feeds, and charting system. The
Condor Pro Multi-Asset Trading Platform includes risk management (dealing desk,
alert system, margin calls, etc.), a pricing engine (best bid/ask), and
connectivity to multiple liquidity providers or market makers. We have tailored
the Condor Pro Multi-Asset Trading Platform to markets such as forex, stocks,
commodities, cryptocurrencies, and other financial products.
The Company released, marketed, and distributed its Condor Pro Multi-Asset
Trading Platform in the second quarter of the fiscal year, December 31, 2019.
The Company has developed the Condor Back Office API to integrate third-party
CRM and banking systems into Condor Back Office.
10
The Company has ten (10) licensing agreements for its Condor Pro Multi-Asset
Trading Platform. The Company continuously negotiates additional licensing
agreements with several retail online brokers to use the Condor Pro Multi-Asset
Trading Platform. Condor Pro Multi-Asset Trading Platform is available in
desktop, web, and mobile versions.
The Company's upgraded Condor Back Office (Risk Management) meets various
jurisdictions' regulatory requirements. Condor Back Office meets the directives
under the Markets in Financial Instruments Directive (MiFID II/MiFIR),
legislation by European Securities and Market Authority (ESMA) implemented
across the European Union on January 3, 2018.
The Company is developing the Condor Investing & Trading App, a simplified
trading platform for traders with varied experiences in trading stocks, ETFs,
and other financial markets from their mobile phones. The Company expects to
commercialize the Condor Investing & Trading App by the end of the second
quarter of the fiscal year ending December 31, 2023.
The Company had developed NFT Marketplace, a decentralized NFT marketplace, a
multichain platform with a lazy minting option to reduce and limit unnecessary
blockchain usage fees, also known as gas fees. The Company has no plans to
commercialize the NFT Marketplace in the fiscal year ending December 31, 2023,
as the market for NFT has slowed considerably.
The Company and its subsidiary, ADS, intend to develop a digital wealth
management company, initially including a Robo Advice Platform catering to
Australia's wealth management industry. The Company expects to commercialize the
Robo Advice Platform by the fiscal year ending December 31, 2023.
Technology & Software Development Revenue & Gross Margins:
Fiscal year ended Fiscal year ended
December 31, 2022 December 31, 2021
(Audited) (Audited)
Revenue, $ 626,000 301,648
Cost of sales, $ 159,051 274,462
Gross Profit (loss), $ 466,949 27,186
Gross Margins, % 74.59 % 9.01 %
Margin Brokerage (Europe and the Middle East) - NSFX Ltd.
On December 31, 2022, the Company announced the sales purchase agreement
("Agreement") under which the Company acquired a 50.10% equity interest in New
Star Capital Trading Ltd., a British Virgin Island company ("New Star") and its
operating subsidiary NSFX Ltd ("NSFX"). NSFX is an online trading brokerage firm
regulated by the Malta Financial Services Authority (MFSA). The Company will
assume a business acquisition loan liability of $350,000 to purchase the
controlling interest in NSFX. The Company amended the Agreement to February 28,
2023, to comply with the BVI Companies Act requirement for the change of
ownership. The Company expects to consolidate the fair value of NSFX's assets
and liabilities on or after February 28, 2023 but no later than June 30, 2023.
NSFX is authorized to deal with its account (market maker) as a Category 3
licensed entity by the MFSA, receive and transmit orders for retail and
professional clients, and hold and control clients' money and assets. NSFX
trading platform services in the English, French, German, Italian, and
Arabic-speaking markets, whereby customers can trade in currency, commodity,
equity, and cryptocurrency-linked derivatives in real time.
US Brokerage - CIM Securities, LLC
On July 19, 2022, the Company signed a non-binding letter of intent to acquire
fifty-one percent (51%) equity interest in CIM Securities, LLC ("CIM
Securities"), a FINRA and SIPC member firm. On September 30, 2022, the Company
signed a definitive agreement pending regulatory approval, paid a $20,000
non-refundable deposit, and transferred $180,000 to the escrow account to
complete the transaction. The Company filed the CMA form with FINRA in February
2023. Once the Company receives approval from FINRA and pays the balance of
$180,000, it will start consolidating income statements and balance sheets as it
holds the controlling interest in CIM Securities.
Consolidated Financial Summary
The Company has prepared consolidated financial statements on a going concern
basis, which contemplates the realization of assets and the settlement of
liabilities and commitments in the ordinary business course. The Company
generated $8,695,165 in revenues from January 21, 2016 (inception) to December
31, 2022. For the fiscal year ending December 31, 2022, and 2021, the Company
generated $6,453,732 and $457,661 in revenues, an increase of over 1,310%. At
December 31, 2022, the Company had a cash balance of $264,829 and an accumulated
deficit of $4,335,053.
Financial Condition at December 31, 2022
On December 31, 2022, the accumulated deficit, cash balance, and working capital
deficit were $4,335,053, $264,829, and $541,359, respectively.
On January 27, 2022, the Company signed a promissory note ('AJB Note') with AJB
Capital Investments, LLC ('AJB Capital'), a Delaware limited liability company,
for the principal amount of $550,000 with a maturity date of July 27, 2022, and
a coupon of 10%. The parties extended the AJB Note maturity date by another six
months till January 23, 2023. As part of the AJB Note, the Company entered into
a securities purchase agreement, where AJB Capital will receive equity equal to
US $155,000 of the Company's common stock. The Company issued 2,214,286 common
stock valued at $71,521 upon issuance of the Note (the "Shares") and 1,000,000
3-year cash warrants ('Warrants') priced at $0.30. The Warrants and the Shares,
collectively known as the 'Incentive Fee,' are issued upon execution of the
agreement.
The Company executed five "Purchase Notice Rights" under an Investment Agreement
with White Lion and received a net of $72,420 after deducting financing costs
associated with the Investment Agreement for the nine months ended September 30,
2022.
On September 30, 2022, the Company issued 30,000,000 restricted common shares
for cash valued at $300,000.
We do not believe that our cash balance is sufficient to fund our operations and
growth; as a result, the Company plans to raise additional capital as disclosed
in Subsequent Events. The Company intends to continue its efforts to enhance its
revenue from its diversified portfolio of technological solutions, become cash
flow positive, and raise funds through private placement offerings and debt
financing. As the Company increases its customer base globally, it intends to
acquire long-lived assets that will provide a future economic benefit beyond
fiscal 2023.
Financial Condition at December 31, 2021
On December 31, 2021, the accumulated deficit, cash balance, and working capital
deficit were $3,230,679, $93,546, and $199,132, respectively.
On December 31, 2021, the Company eliminated all four FRH Group convertible
notes, including interest, of $1,256,908, in return for issuing 12,569,080
unregistered common stock of the Company (the "Shares") to FRH. Therefore, no
current or non-current portion of convertible notes payable and accrued interest
existed.
The Company executed two "Purchase Notice Rights" under an Investment Agreement
with White Lion and received a net of $23,551 after deducting financing costs
associated with the Investment Agreement for the fiscal year ending December 31,
2021. The Company also received a net amount of $81,000 from the related parties
to fund its operations. Our cash balance is $93,546 as of December 31, 2021. The
Company did not receive additional funding from U.S. Small Business
Administration (SBA) or Cares Act Paycheck Protection Program during the fiscal
year ending December 31, 2021. We do not believe our cash balance is sufficient
to fund our operations.
The Company intends to continue its efforts to enhance its revenue from its
acquisition strategy and diversified portfolio of technological solutions,
become cash flow positive, and raise funds through private placement offerings
and debt financing. As the Company increases its customer base globally, it
intends to acquire long-lived assets that will provide a future economic benefit
beyond fiscal 2021.
11
RESULTS OF OPERATIONS
For the fiscal year ending December 31, 2022, compared to the fiscal year ending
December 31, 2021
For the fiscal year ending December 31, 2022, and 2021, the Company had ten (10)
and eight (8) active customers. Revenues generated from the top three (3)
customers represented approximately 81.01% and 52.98% of total revenue for the
fiscal year ending December 31, 2022, and 2021, respectively. The revenues
generated for the fiscal year ending December 31, 2022, and 2021 were $6,453,732
and $457,661, respectively. During the fiscal year ending December 31, 2022, and
2021, the Company incurred a net profit and a net loss of $1,104,374 and
$1,736,695.
The total revenue breakdown for the fiscal year ending December 31, 2022, and
2021 is below:
Fiscal year ended Fiscal year ended
December 31, 2022 December 31, 2021
(Audited) (Audited)
Wealth Management, $ 5,827,732 301,648
Technology & Software Development, $ 626,000 156,013
Total, $ 6,453,732 457,661
Fiscal year ended Fiscal year ended
December 31, 2022 December 31, 2021
(Audited) (Audited)
Wealth Management, % 90.30 % 65.91 %
Technology & Software Development, % 9.70 % 34.09 %
Total, % 100.00 % 100.00 %
During the fiscal years ended December 31, 2022, and 2021, the Company incurred
General and administrative costs ("G and A") of $1,679,121 and $1,127,503,
respectively. The increase in G and A costs for the fiscal year ending December
31, 2021, was mainly due to higher professional & consulting fees related to
common stock issued for services. The G and A expenses were 26.02% and 246.36%
of the fiscal revenue for the fiscal year ending December 31, 2022, and 2021.
Amortization expenses were $159,051 and $274,462 for the fiscal year ending
December 31, 2022, and 2021 respectively, and the Company has included them in
the Cost of sales expense. The decrease in amortization expense for the fiscal
year ending December 2022 is due to the complete amortization of Condor Back
Office, Condor Crypto Trading Platform, and Condor FX Trading Platform
(Desktop).
The rental expenses were $25,438 and $29,705 for the fiscal year ending December
31, 2022, and 2021. Effective October 29, 2019, the Company rents its servers,
computers, and data center from an unrelated third party. Under the rent
Agreement, the lessor provides furniture and fixtures and any leasehold
improvements at 200 Spectrum Drive, Suite 300, Irvine, CA 92618, as discussed in
Note 2. Effective February 2019, the Company leases office space at Suite 205,
Building 9, Potamos Germasogeia, 4047, Limassol District, Cyprus, from an
unrelated party for a year. The Company uses the office for sales and marketing
in Europe and Asia. The office's monthly rent payment is $1,750, which is
included in the General and administrative expenses. From February 2020, the
Company extended the one-year agreement to $1,750 monthly. Effective April 2019,
the Company leases office space at Suite 512, 83 Plan, Chelyabinsk, Russia, from
an unrelated party for an eleven-month term. The office's rent payment is $500
monthly, including the General and administrative expenses. From March 2020,
this agreement continues month-to-month until the Company or the lessor chooses
to terminate the agreement's terms by giving thirty days' notice. The Company
uses the office for software development and technical support. Effective August
2022, the Company closed its offices in Russia and relocated its team to Turkey.
The Company incurred $382,864 and $648,833 in sales, marketing, and advertising
costs ("sales and marketing") for the fiscal year ending December 31, 2022, and
2021, respectively. The sales and marketing costs increase due to increased
stock-based compensation to certain marketing and branding consultants. The
sales and marketing costs mainly included stock-based payment to marketing and
branding consultants, travel costs for tradeshows, customer meetings, online
marketing on industry websites, press releases, and public relations activities.
The sales, marketing, and advertising expenses represented 5.93% and 141.77% of
the sales for the fiscal year ending December 31, 2022, and 2021, respectively.
12
LIQUIDITY AND CAPITAL RESOURCES
On December 31, 2022, and 2021, we had a cash balance of $264,829 and $93,546,
respectively. At December 31, 2022, and 2021, the working capital surplus and
deficit were $541,359 and $199,132, respectively. The increase in the working
capital surplus was mainly due to the acquisition of NSFX, resulting in the
increase of current assets over current liabilities as of December 31, 2022.
In the next twelve (12) months, the Company will continue investing in sales,
marketing, product development, new technology solutions, and existing
technology support to serve our customers. We expect capital expenditures to
increase to $500,000 in the next twelve (12) months to support the growth,
including working capital, software development, sales & marketing, and
purchasing computers and servers.
We expect the combination of existing cash, cash equivalents, cash flows from
operations, and access to private equity and capital markets to be sufficient
for at least twelve (12) months. The availability of funds will fund our
operating activities to meet the need for investing and financing, such as debt
maturities and material capital expenditures. However, we may need additional
funds to achieve a sustainable sales level to fund our ongoing operations out of
revenues. There is no assurance that any additional financing will be available
or, if available, on terms that will be acceptable to us.
Should we require additional capital, the Company's operations are insufficient
to fund its capital requirements. The Company may attempt to restructure Notes,
refinance existing Notes with financial institutions, or raise capital by
selling additional capital stock or debt issuance. The Company intends to
continue growing its operations and raising funds through private equity and
debt financing.
Between February 22, 2016, and April 24, 2017, the Company borrowed $1,000,000
from FRH Group, a founder and principal shareholder. Effective June 1, 2017, we
raised $98,000 through our common stock's private placement to our officers,
directors, friends, relatives, and business associates. Between February 22,
2016, and April 24, 2017, the Company borrowed $1,000,000 from FRH Group, a
founder and principal shareholder ("FRH"). The Company executed Convertible
Promissory Notes, due between February 28, 2018, and April 24, 2019. The Notes
were convertible into common stock initially at $0.10 per share but may be
discounted under certain circumstances. In no event will the conversion price be
less than $0.05 per share with a maximum of 20,000,000 shares.
From January 29, 2019, to February 15, 2019, the Company issued 33,000
registered shares under the Securities Act of 1933 for a cash amount of $4,950.
The Company closed its offering effective February 26, 2019.
On February 22, 2021, the Company entered into an Assignment of Debt Agreement
(the "Agreement") with FRH and FRH Group Corporation. The Company eliminated all
four FRH Group convertible notes, including interest, of $1,256,908, in return
for the issuance of 12,569,080 of unregistered common stock of the Company (the
"Shares") to FRH. Following the Agreement, FRH assigned the Shares to FRH Group
Corporation, also owned by Mr. Hong.
On May 01, 2020, the Company received proceeds of Fifty-Thousand Six Hundred and
Thirty-Two ($50,632) from the Promissory Note ("PPP Note") under the Paycheck
Protection Program under the Coronavirus Aid, Relief, and Economic Security Act
(the "CARES Act").
On May 22, 2020, the Company received proceeds of one hundred and forty-four
thousand nine hundred and 00/100 Dollars ($144,900.00).
On July 15, 2020, the Company engaged Kingswood Capital Markets, a Benchmark
Investments division, Inc., as its exclusive general financial advisor for
strategic corporate planning and investment banking services. On August 25,
2020, the Company and Broker-Dealer terminated all obligations other than
maintaining confidentiality with no fees to the Broker-Dealer. The Broker-Dealer
agreed to return the 2,745,053 shares of the Company's common stock.
On September 02, 2020, the Company engaged Garden State Securities Inc. (GSS) as
its exclusive advisor for the private placement of debt or equity securities to
fulfill the Company's business plan and an offering of debt securities to assist
in the Company's acquisition strategy. On October 05, 2021, the Company and GSS
terminated all obligations other than maintaining confidentiality, with no fees
to the GSS. The Broker-Dealer agreed to return the 1,750,000 shares of the
Company's common stock.
On September 27, 2021, the Company engaged EF Hutton, a division of Benchmark
Investments, LLC ("EF Hutton"). EF Hutton will act as lead underwriter, deal
manager, and investment banker for the proposed firm commitment public offering
and uplisting ("Offering") by the Company in connection with the offering of the
Company's equity, debt, or equity derivative instruments (the "Securities"). The
Company engagement expired as of December 31, 2022.
On October 04, 2021, the Company filed a prospectus that relates to the resale
of up to 22,670,000 shares of our Common Stock issued or issuable to selling
shareholders for up to $2,200,000, including (i) up to 2,000,000 shares issued
to AD Securities America, LLC, (ii) up to 20,000,000 issuable to White Lion
Capital, LLC ("White Lion"), according to a "Purchase Notice Right" under an
Investment Agreement and (iii) 670,000 shares issued to White Lion as a
commitment fee associated with the Investment Agreement.
13
On January 27, 2022, the Company signed a promissory note ('AJB Note') with AJB
Capital Investments, LLC ('AJB Capital'), a Delaware limited liability company,
for the principal amount of $550,000 with a maturity date of July 27, 2022, and
a coupon of 10%. The parties extended the AJB Note maturity date by another six
months till January 23, 2023. As part of the AJB Note, the Company entered into
a securities purchase agreement, where AJB Capital will receive equity equal to
US $155,000 of the Company's common stock. The Company issued 2,214,286 common
stock valued at $71,521 upon issuance of the Note (the "Shares") and 1,000,000
3-year cash warrants ('Warrants') priced at $0.30. The Warrants and the Shares,
collectively known as the 'Incentive Fee,' are issued upon execution of the
agreement.
In April 2022, the Company engaged CIM Securities, LLC as its private placement
agent to raise capital. The Company did not raise any funds.
The Company executed five "Purchase Notice Rights" under an Investment Agreement
with White Lion and received a net of $72,420 after deducting financing costs
associated with the Investment Agreement for the nine months ended September 30,
2022.
On September 30, 2022, the Company issued 30,000,000 restricted common shares
for cash valued at $300,000.
GOING CONCERN CONSIDERATION
We have generated revenues of $6,453,732 for the fiscal year ending on December
31, 2022. As of December 31, 2022, and 2021, the Company had an accumulated
deficit of $4,335,053 and $3,230,679. Our independent auditors included an
explanatory paragraph in their report on the audited financial statements for
the fiscal year ending December 31, 2022, and 2021, and the period from January
21, 2016 (inception) to December 31, 2016, regarding concerns about our ability
to continue as a going concern. Our financial statements contain additional note
disclosures describing the circumstances that lead to this disclosure by our
independent auditors. Our financial statements do not include any adjustments
related to the recoverability or classification of asset-carrying amounts or the
amounts and classifications of liabilities that may result in the Company being
unable to continue as a going concern.
Critical Accounting Policies and Significant Judgments and Estimates
We have based our management's discussion and analysis of our financial
condition and operations results on our financial statements, which we have
prepared following the U.S. generally accepted accounting principles. In
preparing our financial statements, we are required to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting periods. Our actual results could differ from these estimates, and
such differences could be material.
We have described significant accounting policies in Note 2 of our annual
financial statements included in our 10-K for the fiscal year ending December
31, 2020, filed with the SEC on March 3, 2021. We evaluate our critical
accounting estimates and judgments required by our policies on an ongoing basis
and update them as appropriate based on changing conditions.
JOBS Act Accounting Election
We are an "emerging growth company," defined in the JOBS Act. Under the JOBS
Act, emerging growth companies can delay adopting new or revised accounting
standards after enacting the JOBS Act until those standards apply to private
companies. We have applied for exemption as an emerging growth company; thus,
the Company may delay adopting certain accounting standards until the standards
would otherwise apply to private companies.
Off-Balance Sheet Arrangements and Contractual Obligations
We have not engaged in any off-balance sheet arrangements defined in Item 303(c)
of the SEC's Regulation S-B. We had no relationships with unconsolidated
organizations or financial partnerships, such as structured finance or special
purpose entities that would have been established to facilitate off-balance
sheet arrangements or other contractually narrow or limited purposes.
Recent Accounting Pronouncements
The ASU amendments are effective for fiscal years beginning after December 15,
2019, including interim periods therein. Early adoption of the standard is
permitted, including adoption in interim or annual periods for which financial
statements have not yet been issued. We have adopted ASC 606 - Revenue
Recognition from January 1, 2019, and Amended ASU 2016-02, Leases (Topic 840)
from January 1, 2020. The ASU is currently not expected to have a material
impact on our consolidated financial statements. We believe the accounting
policies described in Note 2 are critical to the judgments and estimates used to
prepare our financial statements. As a result, we have described significant
accounting policies in more detail in Note 2 of our annual financial statements
included in our 10-K for the fiscal year ending December 31, 2020, filed with
the SEC on March 3, 2021.
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