Forward-Looking Statements
This Quarterly Report on Form 10-Q and the documents incorporated herein by
reference contain forward-looking statements. Such forward-looking statements
are based on current expectations, estimates, and projections about our
industry, management beliefs, and certain assumptions made by our management.
Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks,"
"estimates," variations of such words, and similar expressions are intended to
identify such forward-looking statements. These statements are not guaranteeing
of future performance and are subject to certain risks, uncertainties, and
assumptions that are difficult to predict; therefore, actual results may differ
materially from those expressed or forecasted in any such forward-looking
statements. Unless required by law, we undertake no obligation to update
publicly any forward-looking statements, whether as a result of new information,
future events, or otherwise. However, readers should carefully review the risk
factors set forth in other reports and documents that we file from time to time
with the United States Securities and Exchange Commission (the "SEC"),
particularly the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and
any Current Reports on Form 8-K, as the same may be amended from time to time.
The following discussion of our financial condition and results of operations
should be read in conjunction with, and is qualified in its entirety by, the
unaudited consolidated financial statements and notes thereto included in Item 1
of this Quarterly Report on Form 10-Q.
Overview
Since December 24, 2014, New Asia Holdings, Inc. (the "Company") has been
developing and deploying its proprietary, neural trading models for the
financial community. We offer trading software solutions to clients on the basis
of a software-as-a-service ("SaaS") licensing and delivery models with licensed
users availing themselves of service-based contractual arrangements.
The Company's products capitalize the large volume of the 24-hour Forex markets
to achieve capital appreciation over a medium- to long-term basis, combined with
the usage of a good wealth vehicle designed to control risk, profit from both
bull or bear markets, and maximize liquidity and economic resilience.
Our proprietary trading models were developed by a team of professional
engineers in communications, electronic circuitry design and financial
engineering. This diverse team is the key factor in our successful development
of non-traditional and innovative trading models. Our systems were designed to
take intelligent positions as the market moves/changes and, upon development,
our systems were to bring a rigorously tested track-record.
The Company's systems were designed to adapt themselves and to take intelligent
positions as the market moves/changes. The models were subjected to rigorous
testing akin to the volatile trading environment of major financial
events/crises that have happened in recent history. These models were also
programmed to have the ability to learn and adapt new manners of trading,
effectively translating the human behavioral of trading into a predictive
science. The Company's quantitative strategies and proprietary algorithmic
trading system were developed to generate risk adjustable returns for its
licensees and their clients.
Since 2016, the Company's focus has been to license its algorithm to licensees,
regulated funds and banks to capitalize on the large volume of the 24-hour Forex
markets to achieve capital appreciation over a medium- to long- term basis,
combined with the usage of a good wealth vehicle designed to control risk,
profit from both bull or bear markets, and maximize liquidity and economic
resilience.
On August 25, 2015, the Company entered into a Sale and Purchase Agreement (the
"Purchase Agreement") with Anthony Ng Zi Qin, pursuant to which the Company
acquired Magdallen Quant Pte Ltd ("MQL"). The MQL acquisition was accomplished
through a share exchange with Anthony Ng Zi Qin of 7,422,000 restricted shares
of common stock of the Company ("Consideration Shares"), with a value of $0.41
per share, and an aggregate fair value of $3,043,020, in exchange for the entire
issued and outstanding capital of MQL held by Mr. Anthony Ng Zi Qin, consisting
of 8,000,100 shares of stock issued at par value of SGD 1.00 per share, or
$0.714 on the acquisition date.
On August 19, 2016, the Company and Anthony Ng Zi Qin entered into an Addendum
(the "First MQL Addendum") to the Purchase Agreement to extend the August 25,
2016 anniversary date for the adjustment of issued shares for an additional
period of 12 months. On November 10, 2017, the Company and Anthony Ng Zi Qin
signed an Addendum (the "Second MQL Addendum") to the Purchase Agreement, as
amended, pursuant to which the Company agreed to issue an aggregate of 3,339,900
shares of common stock, in satisfaction of the shortfall in the value of the
shares issued. These shares were issued on December 12, 2017 in full
satisfaction of the aforementioned contingent liability. The Purchase Agreement,
as amended, is referred to herein as the "MQL Acquisition Agreement."
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The algorithms were placed into commercial operation in November 2015 upon the
execution of a Software Licensing Agreement (the "MQL License Agreement")
between and New Asia Momentum Limited ("NAML"), a company owned and controlled
by Dr. Lin Kok Peng, the Company's Chief Executive Officer, Chief Financial
Officer and Chairman of the Board. Under the terms of the MQL License Agreement,
MQL agreed to license its proprietary trainable, trading algorithms to NAML in
exchange for payment of a license fee and certain other fixed and time and
materials fees. Pursuant to the terms of the MQL License Agreement, MQL licensed
its proprietary trainable, trading algorithms. NAML, in turn, offered these
proprietary, trainable, algorithm trading software solutions to broker-dealers,
banks, funds and other clients on the basis of a SaaS licensing and delivery
model, with sub-licensed users availing themselves of service-based contractual
arrangements. NAML was required to pay MQL royalty fees equal to 20% of the
trading profits achieved by the SaaS contract agreements that NAML executed with
its clients. The targeted geographic market was Asia, with an initial emphasis
on Singapore, Hong Kong, Indonesia, and Australia. From 2015 to 2017, NAML grew
its retail assets under management ("AUM") from zero to approximately $2.5
million.
In conjunction with the expansion into the regulated fund and bank model, NAML
decided to ask its clients to redeem the AUM and as of September 30, 2017,
trading on the AUM was terminated.
The Company initiated its focus on the regulated bank and fund model in 2017
with the launch of the Feuris Fund A with AUM of approximately $6.67 million.
Because the risk profiles required by these regulated funds and banks reflect a
lower level of risk, there was a significantly reduced frequency of trading
activities. As of September 30, 2019, due to market conditions that impacted
trading frequencies and volumes, NAML liquidated the Feuris Fund A and returned
the AUM to the investors.
The MQL License Agreement remains in place.
While the Company continues to improve its algorithm products, there are no
guarantees that such product improvements will translate to improved financial
performance. The Company, in its efforts to expand its business, is currently
considering several new business opportunities, including the following:
·The Company may integrate a business solution to not rely on using an
application that relies on our algorithms for actual trading, but instead to
provide a platform where users can use the algorithms as a tool to obtain
information that can assist users in making potential investment decisions.
·The Company may integrate a business solution to provide an e-Commerce platform
where buyers and sellers trade products online through incentive-based
marketing. If launched, the platform is expected to offer a wide range of
selective products to the buyers within a social network of community led by
influencers and dedicated services integrated with logistical and payment
support to provide buyers with easy, simple and secure online shopping
experience and be rewarded at the same time. The platform would use a hybrid of
Business-to-Business (B2B) and Business-to-Consumer (B2C) business models. The
Global E-Commerce revenue has exceeded more than $2 Trillion and has been
enjoying double-digital growth annually fueled by increasing numbers of internet
users, greater familiarity and dependence with online shopping without the need
of physical interactions especially during the ongoing pandemic, and improved
purchasing power of the middle-class population.
·A global digital payment system that would allow users to gain access to the
existing global merchant base in multiple countries and regions and earn
attractive rewards and cashback benefits. We expect that access to the existing
global merchant base would be established through proven payment merchant
networks.
There can be no assurance that any of these business opportunities will come to
fruition and, if initiated, will be successful. The Company continues to improve
its products and has been working to create new products. The Company is doing
its best to provide the basis for improved performance in the coming quarters,
however, there is no guarantee that such new products and product improvements
will translate to improved financial performance.
The Company did not generate any revenue during the six months ended June 30,
2021 and 2020.
In May 2020, the Company filed with the Securities and Exchange Commission (the
"SEC") a definitive information statement on Schedule 14C relating to a proposed
change of the Company's corporate name from New Asia Holdings, Inc. to Digital
Alliance Holdings, Inc. and the increase of the number of authorized shares of
common stock and preferred stock. On July 8, 2020, the Company filed a
Certificate of Amendment (the "Amendment") to the Company's articles of
incorporation, as amended, with the Secretary of State of the State of Nevada.
The Amendment had the effect of increasing the number of authorized shares of
the Company's common stock from 400,000,000 to 4,000,000,000 and the number of
authorized shares of the Company's preferred stock from 30,000,000 to
400,000,000. The Amendment was approved by the Company's Board of Directors on
March 26, 2020 and by the holders of a majority of the voting power of the
Company's issued and outstanding capital stock on May 22, 2020. The Company has
decided not to pursue the change in the Company's name at this time.
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On September 21, 2020, the Company entered into an Equity Purchase Agreement
(the "ENJU Equity Purchase Agreement") between the Company and ENJU Planning Pte
Ltd. ("ENJU"). Pursuant to the terms of the ENJU Equity Purchase Agreement, the
Company agreed to sell to ENJU, and ENJU agreed to purchase, 1,000,000
restricted shares of the Company's common stock at a per share purchase price of
$0.20, for an aggregate purchase price of $200,000. The purchase price was
received by the Company on October 8, 2020.
On September 16, 2020, the Company entered into that certain Equity Purchase
Agreement (the "Global Crypto Equity Purchase Agreement") between the Company
and Global Crypto Offering Exchange Ltd. ("Global Crypto"). Pursuant to the
terms of the Global Crypto Equity Purchase Agreement, the Company agreed to sell
to Global Crypto, and Global Crypto agreed to purchase, an aggregate of
50,000,000 restricted shares of the Company's common stock at a per share
purchase price of $0.01, for an aggregate purchase price of $500,000 (the "Share
Purchase"). The Global Crypto Equity Purchase Agreement provides that the Share
Purchase will be effected in 10 separate blocks (each, a "Block" and
collectively, "Blocks"), with the first Block closing on September 16, 2020. In
the first Block, Global Crypto purchased 2,000,000 shares for an aggregate
purchase price of $20,000. The parties to the Global Crypto Equity Purchase
Agreement agreed that each of the remaining nine Blocks will close within 12
months of September 16, 2020. As of August 23, 2021, Global Crypto has not
purchased any additional Blocks.
The Global Crypto Equity Purchase Agreement will terminate (i) upon the
completion of the full Share Purchase, or (ii) on September 18, 2021. If the
Global Crypto Equity Purchase Agreement terminates on September 18, 2021 prior
to completion of the full Share Purchase, no additional shares may be purchased
under the Global Crypto Equity Purchase Agreement.
The parties to the Global Crypto Equity Purchase Agreement do not intend to
effect a change in control as a result of entering into the Global Crypto Equity
Purchase Agreement.
COVID-19
In December 2019, a novel strain of coronavirus (COVID-19) emerged in Wuhan,
Hubei Province, China. While initially the outbreak was largely concentrated in
China and caused significant disruptions to its economy, it has now spread to
most countries around the world and infections have been reported globally. The
spread of COVID-19 and now the Delta Variant has had a material adverse effect
on segments of the global economy, particularly in Asia, where our Company's
headquarters are located.
Because COVID-19 and the Delta Variant, infections have continued to increase
worldwide, certain national, state and local governmental authorities have
issued stay-at-home orders, proclamations and/or directives aimed at minimizing
the spread of COVID-19. Additional, more restrictive proclamations and/or
directives may be issued in the future. As a result, certain Company internal
operations communications and accounting operations have been disrupted by these
stay-at-home orders, which have affected the timing of certain new business
development activities (the Company had previously liquidated the Feuris Fund A
AUM during the third quarter of 2019).
The ultimate impact of the COVID-19 pandemic on the Company's operations is
unknown and will depend on future developments, which are highly uncertain and
cannot be predicted with confidence, including the duration of the COVID-19
outbreak, new information which may emerge concerning the severity of the
COVID-19 pandemic, and any additional preventative and protective actions that
governments, or the Company, may direct, which may result in an extended period
of continued business disruption and reduced operations. Any resulting financial
impact cannot be reasonably estimated at this time but could be anticipated to
have a material adverse impact on our business, financial condition and results
of operations.
The measures taken to date have impacted the Company's business during the first
half of 2021 and will impact the Company's business for the third quarter of
2021 and potentially beyond. The significance of the impact of the COVID-19
outbreak on the Company's business and the duration for which it may have an
impact cannot be determined at this time.
The COVID-19 outbreak is a widespread health crisis that could adversely affect
the economies and financial markets of many countries, resulting in an economic
downturn that could materially impact our operating results.
Results of Operations
Three Months Ended June 30, 2021 Compared to the Three Months Ended June 30,
2020
Revenues
We had no revenue during the three months ended June 30, 2021 and 2020,
respectively. As of June 30, 2021, due to market conditions that impacted
trading frequencies and volumes, the Company's exclusive licensee, NAML,
liquidated the Feuris Fund A and returned the AUM to the investors. The MQL
License Agreement between MQL and NAML still remains in place and the Company is
focusing on the development of expanded new business solutions as described
above.
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Operating Expenses
Operating expenses were $37,553 for the three months ended June 30, 2021,
consisting of $16,067 of general and administrative expenses, $8,400 of outside
service expenses, and $13,086 of professional fees. This compares to operating
expenses for the three months ended June 30, 2020, of $47,764, consisting of
$17,595 of general and administrative expenses, $8,400 of outside service
expenses, and $21,769 of professional fees. The operating expenses for the
three-month period ended June 30, 2021 were lower than the operating expenses
for the corresponding period in 2020 because professional service expenses were
lower.
Net Loss
As a result of the foregoing, we had a net loss of $37,553 for the three months
ended June 30, 2021, compared to $47,764 for the three months ended June 30,
2020.
We expect to incur net losses through 2021 because we expect to continue to
incur expenses, but do not expect to generate significant, or any, revenues. We
cannot guarantee that we will be successful in generating sufficient revenues or
other funds in the future to cover our expenses. We expect to cover such
shortfall in operating margins through advances from our principal shareholder
and other fundraising measures, some of which have been conducted, as the
Company deems appropriate. There is no assurance that our principal shareholder
will continue to advance funds to us or that we will be successful in any other
fundraising measures.
Six Months Ended June 30, 2021 Compared to the Six Months Ended June 30, 2020
Revenues
We had no revenue during the six months ended June 30, 2021 and 2020,
respectively. As of June 30, 2021, due to market conditions that impacted
trading frequencies and volumes, the Company's exclusive licensee, NAML,
liquidated the Feuris Fund A and returned the AUM to the investors. The MQL
License Agreement between MQL and NAML still remains in place and the Company is
focusing on the development of expanded new business solutions as described
above.
Operating Expenses
Operating expenses were $86,317 for the six months ended June 30, 2021,
consisting of $36,455 of general and administrative expenses, $18,143 of outside
service expenses, and $37,719 of professional fees. This compares to operating
expenses for the six months ended June 30, 2020, of $101,077, consisting of
$37,759 of general and administrative expenses, $16,800 of outside service
expenses, and $46,518 of professional fees. The operating expenses for the
six-month period ended June 30, 2021 were lower than the operating expenses for
the corresponding period in 2020 because professional service expenses were
lower.
Net Loss
As a result of the foregoing, we had a net loss of $86,317 for the six months
ended June 30, 2021, compared to $101,077 for the six months ended June 30,
2020.
We expect to incur net losses through 2021 because we expect to continue to
incur expenses, but do not expect to generate significant, or any, revenues. We
cannot guarantee that we will be successful in generating sufficient revenues or
other funds in the future to cover our expenses. We expect to cover such
shortfall in operating margins through advances from our principal shareholder
and other fundraising measures, some of which have been conducted, as the
Company deems appropriate. There is no assurance that our principal shareholder
will continue to advance funds to us or that we will be successful in any other
fundraising measures.
Liquidity and Capital Resources
We had cash in the amount of $105,028 and $30,503 at June 30, 2021 and June 30,
2020, respectively. To date, we have funded our operations from private
placements concluded in the third and fourth quarter of 2020 and from advances
from our principal shareholder, Lin Kok Peng. Dr. Lin Kok Peng, our Chief
Executive Officer, Chief Financial Officer and Chairman of the Board, also has
voting and dispositive control over the shares of the Company's common stock,
and we just recently completed two Private Placements as described in herein.
We do not have sufficient capital to sustain our operations for the next 12
months. We expect to continue to rely on advances from our principal
shareholder, as well as from other sources of financing, including additional
private placements of our common shares in order to continue to fund our
business operations. Issuances of additional shares will result in dilution to
existing stockholders.
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There is no assurance that we will achieve any additional sales of equity
securities or that we will be able to arrange for debt or other financing to
fund our operations and other activities. We do not have any oral or written
agreements with NAHL which would require NAHL to fund our operations.
During the six-month period ended June 30, 2021, Lin Kok Peng did not make any
advances to the Company. The total advances due to Lin Kok Peng are $916,452 and
$955,149 as of June 30, 2021, and December 31, 2020, respectively. As of June
30, 2021, the advances constitute unsecured interest-free loans to the Company.
On August 14, 2020, the Company signed an Agreement with NAHL. Pursuant to the
terms of the Agreement, all funds advanced to the Company by NAHL up to August
14, 2020 (the "Prior Advances") will continue to constitute an interest-free
loan to the Company, which was due and payable by the Company to NAHL on or
before September 15, 2020 (the "Prior Advance Repayment Date", which may be
extended as set forth below). If the Company does not repay the Prior Advances
by the Prior Advance Repayment Date, NAHL, at its sole discretion, will have the
option to extend the Prior Advance Repayment Date or convert all or a portion of
the Prior Advances into Common Stock at a conversion price of $0.003 per share
(the "Prior Advance Conversion Price"), subject to adjustment as set forth in
the Agreement. NAHL's election to extend the Prior Advance Repayment Date or to
convert the Prior Advances into Common Stock shall be made on the first business
day following the Prior Advance Repayment Date. The Parties acknowledge and
agree that the Prior Advances shall not be convertible into Common Stock prior
to the Prior Advance Repayment Date.
Following the Effective Date, NAHL was to endeavor, on a best efforts' basis, to
continue to advance operating funds to the Company as may be required and
requested by the Company for its operations, for a period of at least through
December 31, 2020 (such additional advances, as funded, the "Additional
Advances" and, together with the Prior Advances, the "Advances"). Any such
Additional Advances were to be due and payable by the Company to NAHL on or
before January 31, 2021 (as the same may be extended as set forth below, the
"Additional Advance Repayment Date"). In the event that any Additional Advances
were made and were not repaid by the Additional Advance Repayment Date, NAHL, at
its sole discretion, would have the option to extend the Additional Advance
Repayment Date or convert all or a portion of the Additional Advances into
Common Stock at a conversion price of $0.003 per share (the "Additional Advance
Conversion Price"), subject to adjustment as set forth in the Agreement. NAHL's
election to extend the Additional Advance Repayment Date or to convert the
Additional Advances into Common Stock shall be made on the first business day
following the Additional Advance Repayment Date. The Parties acknowledge and
agree that any Additional Advances shall not be convertible into Common Stock
prior to the Additional Advance Repayment Date.
As of June 30, 2021, NAHL had not exercised its option to convert the advances
into shares of common stock. Accordingly, the total of $916,452 in advances
remained as an unsecured interest-free loan to the Company as of June 30, 2021.
Through June 30, 2021, Lin Kok Peng has continued to advance operating funds to
the Company totaling $916,452 and is expected to continue to advance such
operating funds in the future. In August of 2020, NAHL informed the Company that
the previous terms of the prior agreement had not reflected the level of risk
that NAHL has taken in effecting these advances over the years. Therefore, on
August 14, 2020, the Company and NAHL entered into an Agreement on Advances (the
"Agreement") wherein the Company and NAHL agreed as follows. On January 5, 2021,
Lin Kok Peng decided to change his ownership of the Company from NAHL to his own
Name (Lin Kok Peng) and thus all prior agreements executed between the Company
and NAHL remain fully in effect:
•All funds that have been advanced to the Company by NAHL up to August 14, 2020
(the "Prior Advances") will continue to constitute an interest-free loan to the
Company, which will be due and payable by the Company to NAHL on or before
September 15, 2020. If the Company does not repay the Prior Advances by that
date NAHL will have the right to extend that date for repayment or to convert
all or a portion of the Prior Advances into Common Stock at a conversion price
of $0.003 per share.
•Following August 14, 2020, NAHL will endeavor, on a best efforts' basis, to
continue to advance operating funds to the Company as may be required and
requested by the Company for its operations, for a period of at least through
December 31, 2020 (such additional advances, as funded, the "Additional
Advances"). Any such Additional Advances will be due and payable by the Company
to NAHL on or before January 31, 2021. In the event that any Additional Advances
are made and are not repaid by such date, NAHL will have the right to extend
that date for repayment or convert all or a portion of the Additional Advances
into Common Stock at a conversion price of US $0.003 per share.
•In the event that NAHL determines not to fund any Additional Advances, then
conversion price for any Prior Advances made prior to January 1, 2020, will
remain $0.003 per share but the conversion price with respect to any Prior
Advances made after January 1, 2020 will be $0.01 per share.
•The conversion prices as set forth above are subject to customary adjustments
for stock splits, stock dividends, recapitalizations and other customary events
which occur following August 14, 2020.
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We expect to incur losses and negative operating cash flows for the foreseeable
future, and we may never become profitable. We also expect to continue to incur
significant operating and capital expenditures for the next several years and
anticipate that our expenses will increase substantially in the foreseeable
future. We also expect to experience negative cash flow for the foreseeable
future as we fund our operating losses and capital expenditures.
As a result, we will need to generate significant revenues to achieve and
maintain profitability. We may not be able to generate these revenues or achieve
profitability in the future. Our failure to achieve or maintain profitability
could negatively impact the value of our common stock.
We have no agreements to obtain funds through bank loans, lines of credit or any
other traditional sources. Since we have no financing committed, our inability
to realize financing to maintain operations and grow our business would
materially restrict our business operations. Future financing may not be
available upon acceptable terms, or at all. Should we be successful in securing
future financing, new issuances of equity or convertible debt (i) would dilute
our current shareholders, possibly significantly, (ii) might require a
significant increase to our authorized stock, and (iii) might have rights,
preferences, or privileges senior to our common or preferred stock. If financing
is not available to us on favorable terms, such severe limitation might cause us
to consider another consolidation of existing common equity at any time to
attract financing and maintain our business.
Due to the uncertainty of our ability to meet our current operating and capital
expenses and the fact that we have suffered recurring losses from operations and
have a net capital deficiency, in their report on our audited annual financial
statements as of and for the years ended December 31, 2020 and 2019, our
independent auditors included an explanatory paragraph regarding concerns about
our ability to continue as a going concern. Recurring losses from operations
raise substantial doubt about our ability to continue as a going concern. The
presence of the going concern explanatory paragraph may have an adverse impact
on the relationships we are developing and plan to develop with third parties as
we continue the commercialization of our products and could make it challenging
and difficult for us to raise additional financing, all of which could have a
material adverse impact on our business and prospects and result in a
significant or complete loss of your investment.
Cash and Cash Equivalents
The following table summarizes the sources and uses of cash for the periods
stated. The Company held no cash equivalents for any of the periods presented.
For the Six Months Ended
June 30, 2021 June 30, 2020
Cash, beginning of period $200,378 $23,874
Net cash used in operating activities (56,368) (62,796)
Net cash provided by investing activities - -
Net cash (used in) provided by financing activities (38,697) 70,000
Effect of exchange rate on cash
(285) (575)
Cash, end of period $105,028 $30,503Off-Balance Sheet Arrangements
We have no 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 stockholders.
Critical Accounting Policies
Our financial statements and related public financial information are based on
the application of accounting principles generally accepted in the United States
("U.S. GAAP"). U.S. GAAP requires the use of estimates, assumptions, judgments
and subjective interpretations of accounting principles that have an impact on
the assets, liabilities, revenue and expense amounts reported. These estimates
can also affect supplemental information contained in our external disclosures
including information regarding contingencies, risks and financial condition. We
believe our use of estimates and underlying accounting assumptions adhere to
U.S. GAAP and are consistently and conservatively applied. We base our estimates
on historical experience and on various other assumptions that we believe to be
reasonable under the circumstances. Actual results may differ materially from
these estimates under different assumptions or conditions. We continue to
monitor significant estimates made during the preparation of our financial
statements.
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Our significant accounting policies are summarized in Note 1 in the Annual
Report on Form 10-K for the most recent fiscal year, as filed with the SEC.
While all these significant accounting policies impact our financial condition
and results of operations, we view certain of these policies as critical.
Policies determined to be critical are those policies that have the most
significant impact on our financial statements and require management to use a
greater degree of judgment and estimates. Actual results may differ from those
estimates. Our management believes that given current facts and circumstances,
it is unlikely that applying any other reasonable judgments or estimate
methodologies would cause effect on our results of operations, financial
position or liquidity for the periods presented in this report.
Related Parties
The Company follows the Financial Accounting Standards Board's ("FASB")
Accounting Standards Codification ("ASC") 850, "Related Party Disclosures," for
the identification of related parties and disclosure of related party
transactions. See Note 4.
Leases
In February 2016, the FASB issued Accounting Standards Update ("ASU") 2016-02,
"Leases (Topic 842)," which requires lessees to recognize right-of use assets
and lease liability, initially measured at present value of the lease payments,
on its balance sheet for leases with terms longer than 12 months and classified
as either financing or operating leases. ASU 2016-02 requires a modified
retrospective transition approach for capital and operating leases existing at,
or entered into after, the beginning of the earliest comparative period
presented in the financial statements and provides certain practical expedients
that companies may elect including those contained in ASU 2018-01, "Leases
(Topic 842): Lease Easement Practical Expedient for Transition to Topic 842".
This ASU is effective for fiscal years beginning after December 15, 2018,
including interim periods within those fiscal years with early adoption
permitted. The Company has adopted ASC 842, "Leases" as of January 1, 2019.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
The extent to which the COVID-19 pandemic may directly or indirectly impact our
business, financial condition, and results of operations is highly uncertain and
subject to change. We considered the potential impact of the COVID-19 pandemic
on our estimates and assumptions and there was not a material impact to our
consolidated financial statements as of and for the six months ended June 30,
2021; however, actual results could differ from those estimates and there may be
changes to our estimates in future periods.
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