| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE
3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis
of Presentation and Principles of Consolidation The
accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the
United States of America (“US GAAP”). The
consolidated financial statements of the Company reflect the principal activities of the Company, its subsidiaries, the VIEs and the
VIEs’ subsidiaries. The non-controlling interest represents the minority shareholders’ interest in the Company’s majority
owned subsidiaries and the VIEs. All intercompany accounts and transactions have been eliminated in consolidation. Consolidation
of Variable Interest Entities VIEs
are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties
or whose equity holders lack adequate decision-making ability. All VIEs and their subsidiaries with which the Company is involved must
be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate
the VIE for financial reporting purposes. The
total carrying amount of the VIEs and their subsidiaries’ consolidated assets and liabilities and income information were as follows: SCHEDULE
OF CONSOLIDATED ASSETS AND LIABILITIES AND INCOME INFORMATION
June 30, 2022 June 30, 2021
Current assets $ 34,723,255 $ 44,631,744
Plant and equipment, net 1,446 4,698,184
Other non-current assets 1,211,293 4,894,445
Total assets 35,935,994 54,224,373
Total liabilities (5,719,289 ) (7,377,886 )
Net assets $ 30,216,705 $ 46,846,487
2022 2021
For the years ended June 30,
2022 2021
Net sales $ 2,142,511 $ 10,991,641
Gross loss $ (1,556,403 ) $ (3,165,304 )
Loss from operations $ (11,476,699 ) $ (22,319,655 )
Net loss $ (14,023,582 ) $ (27,754,161 ) The
carrying amount of the VIEs and their subsidiaries’ consolidated assets and liabilities and income information held for discontinued
operations were as follows:
June 30, 2022 June 30, 2021
Current assets $ - $ 19,659,742
Plant and equipment, net - 3,683,525
Other non-current assets - 1,359,506
Total assets - 24,702,773
Total liabilities - (4,866,934 )
Net assets $ - $ 19,835,839
2022 2021
For the years ended June 30,
2022 2021
Net sales $ - $ 8,085,527
Gross profit $ - $ 986,174
Loss from operations $ - $ (4,544,819 )
Net loss $ (2,433,395 ) $ (10,038,088 ) The
carrying amount of the VIEs and their subsidiaries’ consolidated assets and liabilities and income information held for continued
operations were as follows:
June 30, 2022 June 30, 2021
Current assets $ 34,723,255 $ 24,972,002
Plant and equipment, net 1,446 1,014,659
Other non-current assets 1,211,293 3,534,939
Total assets 35,935,994 29,521,600
Total liabilities (5,719,289 ) (2,510,952 )
Net assets $ 30,216,705 $ 27,010,648
2022 2021
For the years ended June 30,
2022 2021
Net sales $ 2,142,511 $ 2,906,114
Gross loss $ (1,556,403 ) $ (4,151,478 )
Loss from operations $ (11,476,699 ) $ (17,774,836 )
Net loss $ (11,590,187 ) $ (17,716,073 ) Non-controlling
Interests U.S.
GAAP requires that non-controlling interests in subsidiaries and affiliates be reported in the equity section of a company’s balance
sheet. In addition, the amounts attributable to the non-controlling interests in the net income of these entities are reported separately
in the consolidated statements of loss and comprehensive loss. Risks
and Uncertainties The
operations of the Company are located in the PRC and are subject to special considerations and significant risks not typically associated
with companies in North America and Western Europe. These include risks associated with, among others, the political, economic, and legal
environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political, regulatory,
and social conditions in the PRC, and by changes in governmental policies or interpretations with respect to laws and regulations, anti-inflationary
measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things. Although the Company has not
experienced losses from these factors and believes that it is in compliance with existing laws and regulations, there is no guarantee
that the Company will continue to do so in the future. Members
of the current management team own controlling interests in the Company and are also the owners of the VIEs in the PRC. The Company only
has contractual arrangements with
the economic benefits from Use
of Estimates The
preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated
financial statements as well as the reported amounts of revenue and expenses during the reporting periods. Significant estimates required
to be made by management include, but are not limited to, useful lives of property and equipment, and intangible assets, the recoverability
of long-lived assets, and the valuation of accounts receivable, advances to suppliers, deferred taxes, and inventory reserves. Actual
results could differ from those estimates. Revenue
Recognition We
previously recognized revenue from sales of Luobuma products, Chinese medicinal herbal products, and agricultural products, as well as
providing logistic services and other processing services to external customers. We recognized revenue when all of the following have
occurred: (i) there was persuasive evidence of an arrangement with a customer; (ii) delivery had occurred or services had been rendered;
(iii) the sales price was fixed or determinable; and (iv) our collection of such fees was reasonably assured. These criteria, as related
to our revenue, were considered to have been met as follows: Sales
of products: Revenue
from the provision of services The Company merely
acts as an agent in this type of services transactions. Revenue from domestic air and overland freight forwarding services was recognized upon the performance of services as stipulated in the underlying
contract or when commodities were being released from the customer’s warehouse; the service price was fixed or determinable; and
collectability was deemed probable. With
the adoption of ASC 606, “Revenue from Contracts with Customers,” revenue is recognized when all of the following five
steps are met: (i) identify the contract(s) with the customer; (ii) identify the performance obligations in the contract; (iii)
determine the transaction price; (iv) allocate the transaction price to the performance obligations; (v) recognize revenue when (or
as) each performance obligation is satisfied. The Company adopted the new revenue standard beginning July 1, 2018, and adopted a
modified retrospective approach upon adoption. The
Company has assessed the impact of the guidance by reviewing its existing customer contracts to identify differences that will
result from applying the new requirements, including the evaluation of its performance obligations, transaction price, customer
payments, transfer of control, and principal versus agent considerations. In accordance with ASC 606, the Company evaluates whether
it is appropriate to record the gross amount of product sales and related costs or the net amount earned as commissions. When the
Company is a principal, that the Company obtains control of the specified goods or services before they are transferred to the
customers, the revenues should be recognized in the gross amount of consideration to which it expects to be entitled in exchange for
the specified goods or services transferred. When the Company is an agent and its obligation is to facilitate third parties in
fulfilling their performance obligation for specified goods or services, the revenues should be recognized in the net amount for the
amount of commission which the Company earns in exchange for arranging for the specified goods or services to be provided by other
parties. Based on the assessment, the Company concluded that there was no change to the timing and pattern of revenue recognition
for its current revenue streams in scope of Topic 606 and therefore there was no material changes to the Company’s
consolidated financial statements upon adoption of ASC 606. Cash
and Cash Equivalents Cash
and cash equivalents consist of cash on hand, cash on deposit, and other highly liquid investments which are unrestricted as to withdrawal
or use, and which have original maturities of three months or less when purchased. The Company maintains cash with various financial
institutions mainly in the PRC. As of June 30, 2022 and 2021, the Company had no Under
PRC law, it is generally required that a commercial bank in the PRC that holds third-party cash deposits protect the depositors’
rights over and interests in their deposited money. PRC banks are subject to a series of risk control regulatory standards, and PRC bank
regulatory authorities are empowered to take over the operation and management of any PRC bank that faces a material credit crisis. The
Company monitors the banks utilized and has not experienced any problems. Accounts
Receivable, Net Accounts
receivable are recorded at net realizable value, consisting of the carrying amount less an allowance for uncollectible accounts, as necessary.
The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the
collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many
factors, including the age of the balance, the customers’ historical payment history, their current credit-worthiness, and current
economic trends. The fair value of long-term receivables is determined using a present value technique by discounting the future expected
contractual cash flows using current rates at which similar instruments would be issued at the measurement date. As of June 30, 2022
and 2021, the allowance for doubtful accounts from the continuing operations was US$ 7,317,236 9,805,402 ,
respectively. As of June 30, 2022 and 2021, the allowance for doubtful accounts from the discontinued operations was US$ nil and
US$ 3,675,619 , respectively. Accounts are written off against the allowance after efforts
at collection prove unsuccessful. Inventories,
Net Inventories,
which are stated at the lower of cost or net realizable value, consist of raw materials, work-in-progress, and finished goods related
to the Company’s products. Cost is determined using the first in first out (“FIFO”) method. Agricultural products that
the Company farms are recorded at cost, which includes direct costs such as seed selection, fertilizer, labor cost and contract fees
that are spent in growing agricultural products on the leased farmland, and indirect costs which include amortization of prepayments
of farmland leases and farmland development costs. All the costs are accumulated until the time of harvest and then allocated to the
harvested crops costs when they are sold. The Company periodically evaluates its inventory and records an inventory reserve for certain
inventories that may not be saleable or whose cost exceeds net realizable value. As of June 30, 2022 and 2021, the inventory reserve
from the continuing operations was US$ 1,249,543 1,349,288 ,
respectively. As of June 30, 2022 and 2021, the inventory reserve from the discontinued operations were both US$ nil . Advances
to Suppliers, Net Advances
to suppliers consist of payments to suppliers for materials that have not been received. Advances to suppliers are reviewed periodically
to determine whether their carrying value has become impaired. As of June 30, 2022 and 2021, the Company had an allowance for uncollectible
advances to suppliers from the continuing operations of US$ 13,544,627 11,546,609 ,
respectively. As of June 30, 2022 and 2021, the Company had an allowance for uncollectible advances to suppliers from the discontinued
operations of US$ nil and US$ 1,773,698 , respectively. Business
Acquisitions Business
acquisitions are accounted for under the acquisition method. The acquisition method requires the reporting entity to identify the acquirer,
determine the acquisition date, recognize and measure the identifiable assets acquired, the liabilities assumed and any non-controlling
interest in the acquired entity, and recognize and measure goodwill or a bargain gain from the purchase. The acquiree’s results
are included in the Company’s consolidated financial statements from the date of acquisition. Assets acquired and liabilities assumed
are recorded at their fair values on the date acquired and the excess of the purchase price over the amounts assigned is recorded as
goodwill, or if the fair value of the net assets acquired exceeds the purchase price consideration, a bargain purchase gain is recorded.
Adjustments to fair value assessments are generally recorded to goodwill over the measurement period (not longer than 12 months). The
acquisition method also requires that acquisition-related transaction and post-acquisition restructuring costs be charged to expense
as committed, and requires the Company to recognize and measure certain assets and liabilities, including those arising from contingencies
and contingent consideration in a business combination. Goodwill Goodwill
represents the excess of the purchase price over the fair value of assets acquired. The goodwill impairment test compares the fair value
of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value,
goodwill of the reporting unit would be considered impaired. To measure the amount of the impairment loss, the implied fair value of
a reporting unit’s goodwill is compared to the carrying amount of that goodwill. The implied fair value of goodwill is determined
in the same manner as the amount of goodwill recognized in a business combination. If the carrying amount of a reporting unit’s
goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. For each
of these tests, the fair value of each of the Company’s reporting units is determined using a combination of valuation techniques,
including a discounted cash flow methodology. To corroborate the discounted cash flow analysis performed at each reporting unit, a market
approach is utilized using observable market data such as comparable companies in similar lines of business that are publicly traded
or which are part of a public or private transaction (to the extent available). Leases The
Company adopted ASU 2016-02, “Leases” on July 1, 2019 and used the alternative transition approach, which permits the effects
of adoption to be applied at the effective date. The new standard provides a number of optional practical expedients in transition. The
Company elected the “package of practical expedients,” which permits it not to reassess under the new standard its prior
conclusions about lease identification, lease classification, and initial direct costs. The Company also elected the short-term lease
exemption and combining the lease and non-lease components practical expedients. The most significant impact upon adoption relates to
the recognition of new Right-of-use (“ROU”) assets and lease liabilities on the Company’s balance sheet for office
space operating leases. Upon adoption, the Company recognized additional operating liabilities of approximately US$ 0.5
million, with corresponding ROU assets of US$ million
based on the present value of the remaining rental payments under current leasing standards for existing operating leases. There was
no cumulative effect of adopting the standard. For
the years ended June 30, 2022 and 2021, the Company had an impairment for ROU lease assets from the continuing operations of US$ 2,268,344 nil , respectively. For the years ended June 30, 2022 and 2021, the impairment for
ROU lease assets from the discontinued operations were both US$ . Property
and Equipment, Net Property
and equipment are stated at cost, less accumulated depreciation and amortization. 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, if any, over an asset’s estimated useful life. Farmland leasehold improvements are amortized
over the shorter of lease term or estimated useful lives of the underlying assets. The estimated useful lives of the Company’s
property and equipment are as follows: SCHEDULE
OF ESTIMATED USEFUL LIVES OF PROPERTY AND EQUIPMENT
Estimated useful lives
Buildings 20 50
Machinery equipment 5 10
Motor vehicles 5 10
Office equipment 5 10
Farmland leasehold improvements 12 18
Leasehold improvement Lesser of useful life and lease term Land
Use Rights, Net According
to Chinese laws and regulations regarding land use rights, land in urban districts is owned by the state, while land in the rural areas
and suburban areas, except otherwise provided for by the state, is collectively owned by individuals designated as resident farmers by
the state. In accordance with the legal principle that land ownership is separate from the right to the use of the land, the government
grants individuals and companies the rights to use parcels of land for a specified period of time. Land use rights, which are usually
prepaid, are stated at cost less accumulated amortization. Amortization is provided over the life of the land use rights, using the straight-line
method. The useful life is 50 years,
based on the term of the land use rights. Long-lived
Assets Finite-lived
assets and intangibles are reviewed for impairment testing when circumstances require. For purposes of evaluating the recoverability
of long-lived assets, when undiscounted future cash flows will not be sufficient to recover an asset’s carrying amount, the asset
is written down to its fair value. The long-lived assets of the Company that are subject to evaluation consist primarily of property
and equipment, land use rights, distribution right, ROU assets and investments. For the years ended June 30, 2022 and 2021, the Company
had an impairment for long-lived assets from the continuing operations of US$ 4,315,888
and US$ nil ,
respectively. For the years ended June 30, 2022 and 2021, the impairment for long-lived assets from the discontinued operations were
both US$ nil . Fair
Value of Financial Instruments The
Company follows the provisions of ASC 820, “Fair Value Measurements and Disclosures.” ASC 820 clarifies the definition of
fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring
fair value as follows: Level
1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level
2 applies to assets or liabilities for which there are inputs, other than quoted prices in level, that are observable for the asset or
liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities
in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant
inputs are observable or can be derived principally from, or corroborated by, observable market data. Level
3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement
of the fair value of the asset or liability. The
carrying value of financial instruments included in current assets and liabilities approximate their fair values because of the short-term
nature of these instruments. Income
Taxes Deferred
tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations
in the period that includes the enactment date. A valuation allowance is established, when necessary, to reduce deferred tax assets to
the amount expected to be realized. The
provisions of ASC 740-10-25, “Accounting for Uncertainty in Income Taxes,” prescribe a more-likely-than-not threshold for
consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This
ASC also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax
assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures. The Company did
not have any uncertain tax positions from the continuing operations and the discontinued operations at June 30, 2022 and 2021. The Company
had not provided deferred taxes for undistributed earnings of non-U.S. subsidiaries from the continuing operations and the discontinued
operations at June 30, 2022, as it is the Company’s policy to indefinitely reinvest these earnings in non-U.S. operations. Quantification
of the deferred tax liability, if any, associated with indefinitely reinvested earnings is not practicable. The
statute of limitations for the Company’s U.S. federal income tax returns and certain state income tax returns remains open for
tax year 2019 and thereafter. As of June 30, 2022, the tax years ended December 31, 2017 through December 31, 2021 for the Company’s
PRC subsidiaries remained open for statutory examination by PRC tax authorities. On
December 22, 2017, the “Tax Cuts and Jobs Act” (“The Act”) was enacted. Under the provisions of The Act, the
U.S. corporate tax rate decreased from 35 21 744,766 The Company elects to pay the transition tax over an eight-year period using specified percentages
(eight percent per year for the first five years, 15 percent in year six, 20 percent in year seven, and 25 percent in year eight) Value-Added
Tax Sales
revenue represents the invoiced value of goods, net of a value-added tax (“VAT”). Before
May 1, 2018, all of the Company’s products that were sold in the PRC were subject to a Chinese value-added tax at a rate of 17%
of the gross sales price. After May 1, 2018, the Company was subject a tax rate of 16%, and after April 1, 2019, the tax rate was further
reduced to 13% based on the new Chinese tax law . This VAT may be offset by VAT paid by the Company
on raw materials and other materials included in the cost of producing finished products or acquiring finished products. The Company
records a VAT payable or VAT receivable in the accompanying consolidated financial statements. Foreign
Currency Translation The
Company uses the United States dollar (“U.S. dollars,” “USD,” or “US$”) for financial reporting purposes.
The Company’s subsidiaries and VIEs maintain their books and records in their functional currency of Renminbi (“RMB”),
the currency of the PRC. In
general, for consolidation purposes, the Company translates the assets and liabilities of its subsidiaries and VIEs into U.S. dollars
using the applicable exchange rates prevailing at the balance sheet date, and the statements of income and cash flows are translated
at average exchange rates during the reporting periods. As a result, amounts related to assets and liabilities reported on the statement
of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheet. Equity accounts are translated
at historical rates. Adjustments resulting from the translation of the financial statements of the subsidiaries and VIEs are recorded
as accumulated other comprehensive loss. The
balance sheet amounts, with the exception of equity, at June 30, 2022 and 2021 were translated at 1 0.1493 1 0.1549 1 0.1549 1 0.1510 USD, respectively. Convertible
Notes Payable In
accordance with ASC 470 Debt with conversion and other option ,
an embedded beneficial conversion feature present in a convertible instrument shall be recognized separately at issuance by
allocating a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital. Issuance costs
should be allocated proportionally to the debt host and conversion feature. Deferred
financing costs will be discounted and amortized subsequently, and the convertible notes are subsequently carried at amortized
cost. Comprehensive
Loss Comprehensive
loss consists of two components, net loss and other comprehensive income (loss). The foreign currency translation gain or loss resulting
from translation of the financial statements expressed in RMB to USD is reported in other comprehensive income (loss) in the consolidated
statements of loss and comprehensive loss. Equity
Investment An
investment in which the Company has the ability to exercise significant influence, but does not have a controlling interest, is accounted
for using the equity method. Significant influence is generally considered to exist when the Company has an ownership interest in the
voting stock between 20 %
and %, and other factors, such as representation on the board of directors, voting rights,
and the impact of commercial arrangements, are considered in determining whether the equity method of accounting is appropriate. Loss
per Share The
Company computes loss per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”).
ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net loss divided
by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect
on a per share basis of potential common shares (e.g., outstanding convertible securities, options, and warrants) as if they had been
converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect
(i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. There is no
anti-dilutive effect for the years ended June 30, 2022 and 2021. The
following table presents a reconciliation of basic and diluted loss per share for the years ended June 30, 2022 and 2021: SCHEDULE
OF RECONCILIATION OF BASIC AND DILUTED EARNINGS (LOSS) PER SHARE
2022 2021
For the years ended June 30,
2022 2021
Net loss from continuing operations attributable to Shineco $ (24,599,699 ) $ (21,407,359 )
Net loss from discontinued operations attributable to Shineco (2,433,395 ) (10,038,088 )
Net loss attributable to Shineco (27,033,094 ) (31,445,447 )
Weighted average shares outstanding - basic and diluted 9,458,077 4,401,048
Net loss from continuing operations per share of common share
Basic and diluted $ (2.60 ) $ (4.86 )
Net loss from discontinued operations per share of common share
Basic and diluted $ (0.26 ) $ (2.28 )
Net loss per share of common share
Basic and diluted $ (2.86 ) (7.14 ) Reclassifications Certain
prior year balances were reclassified to conform to the current year’s presentation with consideration of reflecting the Company’s
Ankang Longevity Group as discontinued operations. None of these reclassifications had an impact on reported financial position or cash
flows for any of the periods presented. New
Accounting Pronouncements In
November 2019, the FASB issued ASU No. 2019-08, Compensation - Stock Compensation (Topic 718) and Revenue from Contracts with Customers
(Topic 606). The guidance identifies, evaluates, and improves areas of GAAP for which cost and complexity can be reduced while maintaining
or improving the usefulness of the information provided. The amendments in that ASU expanded the scope of Topic 718 to include share-based
payment transactions for acquiring goods and services from nonemployees. For entities that have adopted the amendments in Update 2018-07,
the updated guidance is effective for annual periods beginning after December 15, 2019, and is applicable to the Company in fiscal 2021.
Early adoption is permitted. The Company adopted this ASU on July 1, 2020 and the adoption of this ASU did not have a material impact
on its financial statements. In
December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes. The FASB is issuing
this Update as part of its initiative to reduce complexity in accounting standards (the “Simplification Initiative”). The
objective of the Simplification Initiative is to identify, evaluate, and improve areas of GAAP for which cost and complexity can be reduced
while maintaining or improving the usefulness of the information provided to users of financial statements. The specific areas of potential
simplification in this ASU were submitted by stakeholders as part of the Simplification Initiative. For public business entities, the
amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020.
The Company adopted this ASU on July 1, 2021 and the adoption of this ASU did not have a material impact on its financial statements. In
March 2020, the FASB issued ASU 2020-03, Codification Improvements to Financial Instruments, (“ASU 2020-03”). ASU 2020-03
improves various financial instruments topics, including the CECL Standard. ASU 2020-03 includes seven different issues that describe
the areas of improvement and the related amendments to GAAP, intended to make the standards easier to understand and apply by eliminating
inconsistencies and providing clarifications. The amendments related to Issue 1, Issue 2, Issue 4, and Issue 5 were effective upon issuance
of ASU 2020-03. The amendments related to Issue 3, Issue 6, and Issue 7 were effective for the Company beginning on January 1, 2020.
The Company adopted this ASU on July 1, 2020 and the adoption of this ASU did not have a material impact on its financial statements. In
March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform
on Financial Reporting. ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships,
and other transactions affected by reference rate reform. The amendments in this standard can be applied anytime between the first quarter
of 2020 and the fourth quarter of 2022. The Company is currently in the process of evaluating the impact of adoption of the new rules
on the Company’s financial condition, results of operations, cash flows, and disclosures. The
Company believes that other recent accounting pronouncement updates will not have a material effect on the Company’s consolidated
financial statements. |
