| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Presentation The accompanying unaudited condensed consolidated
financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America
(“US GAAP”) pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The
unaudited condensed consolidated financial statements include the accounts of the Company and include the assets, liabilities,
revenues and expenses of the subsidiaries and VIEs. All intercompany transactions and balances have been eliminated in consolidation. Sino-Global Shipping Agency Ltd., a PRC
corporation (“Sino-China”), is considered a variable interest entity (“VIE”), with the Company as the
primary beneficiary. The Company, through Trans Pacific Shipping Ltd., entered into certain agreements with Sino-China, pursuant
to which the Company receives 90% of Sino-China’s net income. Sino-China was designed to operate in China for the benefit
of the Company. The Company does not receive any payment from Sino-China unless Sino-China recognizes net income during its fiscal
year. These agreements do not entitle the Company to any consideration if Sino-China incurs a net loss during its fiscal year.
If Sino-China incurs a net loss during its fiscal year, the Company is not required to absorb such net loss. As a VIE, Sino-China’s revenues
are included in the Company’s total revenues, and any income/loss from operations is consolidated with that of the Company.
Because of contractual arrangements between the Company and Sino-China, the Company has a pecuniary interest in Sino-China that
requires consolidation of the financial statements of the Company and Sino-China. The Company has consolidated Sino-China’s
operating results in accordance with Accounting Standards Codification (“ASC”) 810-10, “Consolidation”.
The agency relationship between the Company and Sino-China and its branches is governed by a series of contractual arrangements
pursuant to which the Company has substantial control over Sino-China. Management makes ongoing reassessments of whether the Company
remains the primary beneficiary of Sino-China. The carrying amount and classification
of Sino-China’s assets and liabilities included in the Company’s unaudited condensed consolidated balance sheets were
as follows:
December 31, June 30,
2020 2020
Current assets:
Cash $ 5,183 $ 5,022
Total current assets 5,183 5,022
Deposits 1,740 1,608
Property and equipment, net 37,241 41,171
Total assets $ 44,164 $ 47,801
Current liabilities:
Other payables and accrued liabilities $ 43,406 $ 39,919
Total liabilities $ 43,406 $ 39,919 (b) Fair Value of Financial Instruments The Company follows the provisions of
ASC 820, Fair Value Measurements and Disclosures, which 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 — Observable inputs such
as unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. Level 2 — Inputs other than quoted
prices that are observable for the asset or liability in active markets, quoted prices for identical or similar assets and liabilities
in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by
observable market data. Level 3 — Unobservable inputs that
reflect management’s assumptions based on the best available information. The carrying value of accounts receivable,
other receivables, other current assets, and current liabilities approximate their fair values because of the short-term nature
of these instruments. (c) Use of Estimates and Assumptions The preparation of the Company’s
unaudited condensed consolidated financial statements in conformity with US 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 dates of
the financial statements and the reported amounts of revenues and expenses during the reporting periods. Estimates are adjusted
to reflect actual experience when necessary. Significant accounting estimates reflected in the Company’s unaudited condensed
consolidated financial statements include revenue recognition, fair value of stock based compensation, cost of revenues, allowance
for doubtful accounts, impairment loss, deferred income taxes, income tax expense and the useful lives of property and equipment.
The inputs into the Company’s judgments and estimates consider the economic implications of COVID-19 on the Company’s
critical and significant accounting estimates. Since the use of estimates is an integral component of the financial reporting
process, actual results could differ from those estimates. (d) Translation of Foreign Currency The accounts of the Company and its subsidiaries
are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”).
The Company’s functional currency is the U.S. dollar (“USD”) while its subsidiaries in the PRC, including Sino-China,
Trans Pacific Shipping Ltd. and Trans Pacific Logistic Shanghai Ltd. report their financial positions and results of operations
in Renminbi (“RMB”), its subsidiary Sino-Global Shipping Australia Pty Ltd., reports its financial positions and results
of operations in Australian dollar (“AUD”), its subsidiary Sino-Global Shipping Hong Kong reports its financial positions
and results of operations in Hong Kong dollar (“HKD”) and its subsidiary Sino-Global Shipping Canada, Inc. reports
its financial positions and results of operations in Canadian Dollar (“CAD”). The accompanying unaudited condensed
consolidated financial statements are presented in USD. Foreign currency transactions are translated into USD using the fixed
exchange rates in effect at the time of the transaction. Generally, foreign exchange gains and losses resulting from the settlement
of such transactions are recognized in the consolidated statements of operations. The Company translates the foreign currency
financial statements in accordance with ASC 830-10, “Foreign Currency Matters”. Assets and liabilities are translated
at current exchange rates quoted by the People’s Bank of China at the balance sheets’ dates and revenues and expenses
are translated at average exchange rates in effect during the year. The resulting translation adjustments are recorded as other
comprehensive loss and accumulated other comprehensive loss as a separate component of equity of the Company, and also included
in non-controlling interests. The exchange rates as of December 31,
2020 and June 30, 2020 and for the three and six months ended December 31, 2020 and 2019 are as follows:
December 31, June 30, 2020 Three months ended December 31, Six months ended December 31,
Foreign currency Balance Sheet Balance Sheet 2020 Profits/Loss 2019 Profits/Loss 2020 Profits/Loss 2019 Profits/Loss
RMB:1USD 6.5286 7.0651 6.6254 7.0446 6.7736 7.0296
AUD:1USD 1.2974 1.4514 1.3688 1.4630 1.3840 1.4611
HKD:1USD 7.7536 7.7505 7.7520 7.8256 7.7513 7.8278
CAD:1USD 1.2754 1.3617 1.3038 1.3200 1.3181 1.3200 (e) Cash Cash consists of cash on hand and cash
in bank which are unrestricted as to withdrawal or use. The Company maintains cash with various financial institutions mainly
in the PRC, Australia, Hong Kong, Canada and the U.S. As of December 31, 2020 and June 30, 2020, cash balances of $4,462,063 and
$126,720, respectively, were maintained at financial institutions. In China, the deposit insurance system only insured each depositor
at one bank for a maximum of approximately $70,000 (RMB 500,000). For the balance maintained at U.S. financial institutions, the
Federal Deposit Insurance Corporation as it only insured deposits up to $250,000. The Hong Kong Deposit Protection Board pays
compensation up to a limit of HKD 500,000 (approximately $64,000) if the bank with which an individual/a company holds its eligible
deposit fails. As of December 31, 2020 and June 30, 2020, amount of deposits the Company had not covered by insurance amounted
to $3,881,953 and $8,780, respectively. (f) Receivables and Allowance for Doubtful
Accounts Accounts receivable are presented at net
realizable value. The Company maintains allowances for doubtful accounts and for estimated losses. 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
receivable balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including
the age of the balances, customers’ historical payment history, their current credit-worthiness and current economic trends.
Receivables are generally considered past due after 180 days. The Company reserves 25%-50% of the customers balance aged between
181 days to 1 year, 50%-100% of the customers balance over 1 year and 100% of the customers balance over 2 years. Accounts receivable
are written off against the allowances only after exhaustive collection efforts. As the Company has focused its development in
the shipping management segment, its customer base will be more from smaller privately owned companies that will pay more timely
than state owned companies. The Company also considers the economic implications of COVID-19 on its estimates of the allowance
and made additional $2,609 and $258,561 of allowance for doubtful accounts of accounts receivable for the three months ended December
31, 2020 and 2019, $33,418 and $1,282,492 of allowance for doubtful accounts of accounts receivable for the six months ended December
31, 2020 and 2019. The Company recovered nil and $22,869 of accounts receivable for the three months ended December 31, 2020 and
2019, respectively. The Company recovered $2,456 and $22,869 of accounts receivable for the six months ended December 31, 2020
and 2019, respectively. For the three and six months ended December 31, 2019 the Company wrote off nil and $99,366. There was
no write off for the three and six months ended December 31, 2020. Other receivables represent mainly customer
advances, prepaid employee insurance and welfare benefits, which will be subsequently deducted from the employee payroll, guarantee
deposits on behalf of ship owners as well as office lease deposits. Management reviews its receivables on a regular basis to determine
if the bad debt allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against
allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. Other receivables
are written off against the allowances only after exhaustive collection efforts. The Company made $11,673 allowance for doubtful
accounts of other receivables for the three and six months ended December 31, 2020. There was no allowance of other receivables
for the three and six months ended December 31, 2019. For the three and six months ended December 31, 2020, $11,673 was written
off against other receivables. For the three and six months ended December 31, 2019, nil and $1,763 was written off against other
receivables, respectively. The Company recovered $30,173 of other receivables for the three and six months ended December 31,
2020. There was no recovery against other receivables for the three and six months ended December 31, 2019. (g) Property and Equipment, net Property and equipment are stated at historical
cost less accumulated depreciation. Historical cost comprises its purchase price and any directly attributable costs of bringing
the assets to its working condition and location for its intended use. Depreciation is calculated on a straight-line basis over
the following estimated useful lives:
Buildings 20 years
Motor vehicles 3-10 years
Computer and office equipment 1-5 years
Furniture and fixtures 3-5 years
System software 5 years
Leasehold improvements Shorter of lease term or useful lives The carrying value of a long-lived asset is considered impaired
by the Company when the anticipated undiscounted cash flows from such asset is less than its carrying value. If impairment is
identified, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset.
Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved or
based on independent appraisals. There was no impairment for the three months ended December 31, 2020 and 2019. For the six months
ended December 31, 2020 and 2019, an impairment of nil and $127,177 were recorded, respectively. (h) Intangible Assets, net Intangible assets are recorded at cost
less accumulated amortization. Amortization is calculated on a straight-line basis over the following estimated useful lives:
Logistics platform 3 years The Company evaluates intangible assets for impairment whenever
events or changes in circumstances indicate that the assets might be impaired. There was no impairment for the three months
ended December 31, 2020 and 2019. For the six months ended December 31, 2020 and 2019, an impairment of nil and $200,455 were
recorded, respectively. (i) Revenue Recognition The Company recognizes revenue which represents
the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be
entitled in such exchange. The Company identifies contractual performance obligations and determines whether revenue should be
recognized at a point in time or over time, based on when control of goods and services transfers to a customer. The Company’s
revenue streams are recognized at a point in time. The Company uses a five-step model to
recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer,
(ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration
to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the
respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance
obligation. The Company
continues to derive its revenues from sales contracts with its customers with revenues being recognized upon performance of services.
Persuasive evidence of an arrangement is demonstrated via sales contract and invoice; and the sales price to the customer is fixed
upon acceptance of the sales contract and there is no separate sales rebate, discount, or other incentive. The Company’s
revenues are recognized at a point in time after all performance obligations are satisfied. Contract balances The Company records receivables related
to revenue when the Company has an unconditional right to invoice and receive payment. Deferred revenue consists primarily of
customer billings made in advance of performance obligations being satisfied and revenue being recognized. The Company’s disaggregated revenue
streams are described as follows:
For the Three Months Ended For the Six Months Ended
December 31, December 31, December 31, December 31,
2020 2019 2020 2019
Shipping and management agency services $ - $ 500,000 $ 206,845 $ 1,000,000
Freight logistics services 1,884,440 1,503,500 2,814,394 2,745,641
Container trucking services - 17,624 - 61,709
Total $ 1,884,440 $ 2,021,124 $ 3,021,239 $ 3,807,350
● Revenues from shipping and management agency services are recognized upon completion of
services, which coincides with the date of departure of the relevant vessel from port. Advance payments and deposits received
from customers prior to the provision of services and recognition of the related revenues are presented as deferred revenue.
● Revenues from freight logistics
services are recognized when the related contractual services are rendered. For certain freight logistics contracts that the Company
entered into with customers starting in the first quarter of fiscal year 2020, the Company (i) acts as an agent in arranging
the relationship between the customer and the third-party service provider and (ii) does not control the services rendered
to the customers, revenues related to this contracts are presented net of related costs. For the three months ended December
31, 2019, gross revenue and gross cost of revenue related to these contracts not presented in the table above amounted
to approximately $12.9 million and $12.0 million, respectively. For the six months ended December 31, 2019, gross revenue
and gross cost of revenue related to these contracts amounted to approximately $22.0 million and $20.5 million, respectively.
There was no such transaction for the three and six months ended December 31, 2020.
● Revenues from container trucking services are recognized when
the related contractual services are rendered. Disaggregated information of revenues by geographic locations
are as follows:
For the Three Months Ended For the Six Months Ended
December 31, December 31, December 31, December 31,
2020 2019 2020 2019
PRC $ 1,884,440 1,503,500 2,814,394 2,745,641
U.S. - 517,624 206,845 1,061,709
Total revenues $ 1,884,440 $ 2,021,124 $ 3,021,239 $ 3,807,350 (j) Taxation Because the Company and its subsidiaries
and Sino-China were incorporated in different jurisdictions, they file separate income tax returns. The Company uses the asset
and liability method of accounting for income taxes in accordance with U.S. GAAP. Deferred taxes, if any, are recognized for the
future tax consequences of temporary differences between the tax basis of assets and liabilities and their reported amounts in
the unaudited condensed consolidated financial statements. A valuation allowance is provided against deferred tax assets if it
is more likely than not that the asset will not be utilized in the future. The Company recognizes the tax benefit
from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the
taxing authorities, based on the technical merits of the position. The Company recognizes interest and penalties, if any, related
to unrecognized tax benefits as income tax expense. The Company had no uncertain tax positions as of December 31, 2020 and June
30, 2020. Income tax returns for the years prior
to 2017 are no longer subject to examination by U.S. tax authorities. PRC Enterprise Income Tax PRC enterprise income tax is calculated
based on taxable income determined under the PRC Generally Accepted Accounting Principles (“PRC GAAP”) at 25%. Sino-China
and Trans Pacific are registered in PRC and governed by the Enterprise Income Tax Laws of the PRC. PRC Value Added Taxes and Surcharges The Company is subject to value added
tax (“VAT”). Revenue from services provided by the Company’s PRC subsidiaries and affiliates, including Sino-China
and Trans Pacific are subject to VAT at rates ranging from 9% to 13%. Entities that are VAT general taxpayers are allowed to offset
qualified VAT paid to suppliers against their VAT liability. Net VAT liability is recorded in taxes payable on the unaudited condensed
consolidated balance sheets. In addition, under the PRC regulations,
the Company’s PRC subsidiaries and affiliates are required to pay the city construction tax (7%) and education surcharges
(3%) based on the net VAT payments. (k) Earnings (loss) per Share Basic earnings (loss) per share is computed
by dividing net income (loss) attributable to holders of common stock of the Company by the weighted average number of shares
of common stock of the Company outstanding during the applicable period. Diluted earnings (loss) per share reflect the potential
dilution that could occur if securities or other contracts to issue common stock of the Company were exercised or converted into
common stock of the Company. Common stock equivalents are excluded from the computation of diluted earnings per share if their
effects would be anti-dilutive. For the three and six months ended December
31, 2020 and 2019, there was no dilutive effect of potential shares of common stock of the Company because the Company generated
a net loss. (l) Comprehensive Income (Loss) The Company reports comprehensive income
(loss) in accordance with the authoritative guidance issued by Financial Accounting Standards Board (the “FASB”) which
establishes standards for reporting comprehensive income (loss) and its component in financial statements. Other comprehensive
income (loss) refers to revenue, expenses, gains and losses that under US GAAP are recorded as an element of Stockholders’
equity but are excluded from net income. Other comprehensive income (loss) consists of a foreign currency translation adjustment
resulting from the Company not using the U.S. dollar as its functional currencies. (m) Stock-based Compensation The Company accounts for stock-based compensation
awards to employees in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation”, which requires
that stock-based payment transactions with employees be measured based on the grant-date fair value of the equity instrument issued
and recognized as compensation expense over the requisite service period. The Company records stock-based compensation expense
at fair value on the grant date and recognizes the expense over the employee’s requisite service period. The Company accounts for stock-based compensation
awards to non-employees in accordance with FASB ASC Topic 718 amended by ASU 2018-07. Under FASB ASC Topic 718, stock compensation
granted to non-employees has been determined as the fair value of the consideration received or the fair value of equity instrument
issued, whichever is more reliably measured and is recognized as an expense as the goods or services are received. Valuations of stock based compensation
are based upon highly subjective assumptions about the future, including stock price volatility and exercise patterns. The fair
value of share-based payment awards was estimated using the Black-Scholes option pricing model. Expected volatilities are based
on the historical volatility of the Company’s stock. The Company uses historical data to estimate option exercise and employee
terminations. The expected term of options granted represents the period of time that options granted are expected to be outstanding.
The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury yield curve in effect at the
time of the grant. (n) Risks and Uncertainties The Company’s business, financial
position and results of operations may be influenced by the political, economic, health and legal environments in the PRC, as
well as by the general state of the PRC economy. The Company’s operations in the PRC 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, health and legal environments 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. In March 2020, the World Health Organization
declared the COVID-19 as a pandemic. Given the rapidly expanding nature of the COVID-19 pandemic, and because substantially all
of the Company’s business operations and the workforce are concentrated in China and United States, the Company’s
business, results of operations, and financial condition have been adversely affected for the three months ended September 30,
2020. The situation remains highly uncertain for any further outbreak or resurgence of the COVID-19. It is therefore difficult
for the Company to estimate the impact on the business or operating results that might be adversely affected by any further outbreak
or resurgence of COVID-19. (o) Liquidity In assessing the Company’s liquidity,
the Company monitors and analyzes its cash on-hand and its operating and capital expenditure commitments. The Company’s
liquidity needs are to meet its working capital requirements, operating expenses and capital expenditure obligations. As of December
31, 2020, the Company’s working capital was approximately $1.1 million and the Company had cash of approximately $4.5 million.
The Company believes its revenues and operations will continue to grow and the current working capital is sufficient to support
its operations and debt obligations as they become due one year through report date. The Company expects to realize the balance
of its current assets within the normal operating cycle of a twelve month period. If the Company is unable to realize its current
assets within the normal operating cycle of a twelve month period, the Company had considered supplementing its available sources
of funds through the following sources:
● the Company will continuously seek equity financing to support its working capital. On January 27, 2021, the Company entered into a securities purchase agreement with the non-U.S. persons to purchase 1,086,956 shares at a per share purchase price of $3.68 for aggregate proceeds of approximately $4.0 million. The Company has received the full amount of payment in January 2021. On February 6, 2021, the Company entered into a securities purchase agreement with the investors to purchase an aggregate of 1,998,500 shares at a per share purchase price of $6.805 for aggregate net proceeds of approximately $12.3 million after deducting estimated offering expenses and placement agent fees. The Company has received the full amount of payment in February 2021. On February 9, 2021, the Company entered into a securities purchase agreement with the investors to purchase an aggregate of 3,655,000 shares at a per share purchase price of $7.80 for aggregate net proceeds of approximately $26.2 million after deducting estimated offering expenses and placement agent fees. The Company has received the full amount of payment in February 2021;
● other available sources of financing from PRC banks and other financial institutions; and
● financial support and credit guarantee commitments from the Company’s shareholders and directors. Based on the above considerations, the
Company’s management is of the opinion that it has sufficient funds to meet the Company’s future liquidity requirements
for at least twelve months from issuance of these unaudited condensed consolidated financial statements. (p) Recent Accounting Pronouncements Pronouncements adopted In August 2018, the FASB issued ASU 2018-13,
“Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”
(“ASU 2018-13”). ASU 2018-13 removes, modifies and adds certain disclosure requirements in Topic 820 “Fair Value
Measurement”. ASU 2018-13 eliminates certain disclosures related to transfers and the valuations process, modifies disclosures
for investments that are valued based on net asset value, clarifies the measurement uncertainty disclosure, and requires additional
disclosures for Level 3 fair value measurements. The Company adopted this ASU on July 1, 2020 and the adoption has no significant
impact to the Company’s unaudited condensed consolidated financial statements as a whole. Pronouncements not yet adopted In May 2019, the FASB issued ASU 2019-05,
which is an update to ASU Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses
on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial
assets measured at amortized cost basis, replacing the previous incurred loss methodology. The amendments in Update 2016-13 added
Topic 326, Financial Instruments—Credit Losses, and made several consequential amendments to the Codification. Update 2016-13
also modified the accounting for available-for-sale debt securities, which must be individually assessed for credit losses when
fair value is less than the amortized cost basis, in accordance with Subtopic 326-30, Financial Instruments— Credit Losses—Available-for-Sale
Debt Securities. The amendments in this ASU address those stakeholders’ concerns by providing an option to irrevocably elect
the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted
transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies
for similar financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply
with the amendments in Update 2016-13 while still providing financial statement users with decision-useful information. In November
2019, the FASB issued ASU No. 2019-10, which to update the effective date of ASU No. 2016-13 for private companies, not-for-profit
organizations and certain smaller reporting companies applying for credit losses standard. The new effective date for these preparers
is for fiscal years beginning after July 1, 2023, including interim periods within those fiscal years. The Company has not early
adopted this update and it will become effective on July 1, 2023 assuming the Company will remain eligible to be smaller reporting
company. The Company is currently evaluating the impact of this new standard on Company’s unaudited condensed consolidated
financial statements and related disclosures. In December 2019, the FASB issued ASU
2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”. The amendments in this Update simplify
the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve
consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12
is effective for the Company for annual and interim reporting periods beginning July 1, 2021. Early adoption of the amendments
is permitted, including adoption in any interim period for public business entities for periods for which financial statements
have not yet been issued. An entity that elects to early adopt the amendments in an interim period should reflect any adjustments
as of the beginning of the annual period that includes that interim period. Additionally, an entity that elects early adoption
must adopt all the amendments in the same period. The Company is currently evaluating the impact of this new standard on Company’s
unaudited condensed consolidated financial statements and related disclosures. In August 2020, the FASB issued ASU 2020-06,
“Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s
Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”. The
amendments in this Update to address issues identified as a result of the complexity associated with applying generally accepted
accounting principles for certain financial instruments with characteristics of liabilities and equity. ASU 2020-06 is effective
for the Company for annual and interim reporting periods beginning July 1, 2022. Early adoption is permitted, but no earlier than
fiscal years beginning after July 1, 2021, including interim periods within those fiscal years. An entity that elects to early
adopt the amendments in an interim period should reflect any adjustments as of the beginning of the annual period that includes
that interim period. The Company is currently evaluating the impact of this new standard on Company’s unaudited condensed
consolidated financial statements and related disclosures. In October 2020, the FASB issued ASU 2020-08,
“Codification Improvements to Subtopic 310-20, Receivables—Nonrefundable Fees and Other Costs”. The amendments
in this Update represent changes to clarify the Codification. The amendments make the Codification easier to understand and easier
to apply by eliminating inconsistencies and providing clarifications. ASU 2020-08 is effective for the Company for annual and
interim reporting periods beginning July 1, 2021. Early application is not permitted. All entities should apply |
