VICTORY OILFIELD TECH: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS (Kind 10-Okay)

INTRODUCTION



The next Administration's Dialogue and Evaluation of Monetary Situation and
Outcomes of Operations ("MD&A") is meant to assist the reader perceive Victory
Oilfield Tech, Inc. MD&A is introduced within the following seven sections:



? Cautionary Info Relating to Ahead-Trying Statements;



 ? Enterprise Overview;




 ? Outcomes of Operations;



? liquidity and capital assets;

? Important accounting conventions and estimates;

? Just lately adopted accounting requirements; and

? Just lately printed accounting requirements.




MD&A is supplied as a complement to, and needs to be learn along with, our
audited consolidated steadiness sheets as of December 31, 2020 and 2019 and our
audited consolidated statements of operations, stockholders' fairness and money
flows for the years then ended and the associated notes thereto.



In MD&A, we use "we," "our," "us," "Victory" and "the Firm" to check with
Victory Oilfield Tech. and its wholly-owned subsidiary, except the context
requires in any other case. Quantities and percentages in tables could not whole because of
rounding. This dialogue comprises forward-looking statements primarily based upon present
expectations that contain dangers and uncertainties, reminiscent of our plans,
targets, expectations and intentions. We warning readers that necessary information
and components described in MD&A and elsewhere on this doc typically have
affected, and sooner or later might have an effect on our precise outcomes, and will trigger our
precise outcomes throughout 2021 and past to vary materially from these expressed
in any forward-looking statements made by, or on behalf of, us.



As acknowledged within the report of the unbiased accounting agency registered on our December 31, 2020 consolidated monetary statements, now we have suffered recurring working losses, which raises substantial doubts about our means to proceed working.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS



Many statements made within the following dialogue and evaluation of our monetary
situation and outcomes of operations and elsewhere on this Annual Report on Kind
10-Okay that aren't statements of historic reality, together with statements about our
beliefs and expectations, are "forward-looking statements" inside the that means of
federal securities legal guidelines and needs to be evaluated as such. Ahead-looking
statements embody info regarding potential or assumed future outcomes of
operations, together with descriptions of our marketing strategy, methods and capital
construction. Particularly, the phrases "anticipate," "anticipate," "suggests," "plan,"
"imagine," "intend," "estimates," "targets," "initiatives," "ought to," "might,"
"would," "could," "will," "forecast," variations of such phrases, and different related
expressions determine forward-looking statements, however should not the unique means
of figuring out such statements and their absence doesn't imply that the
assertion isn't forward-looking. We base these forward-looking statements or
projections on our present expectations, plans and assumptions that now we have made
in mild of our expertise within the business, in addition to our perceptions of
historic tendencies, present circumstances, anticipated future developments and different
components we imagine are applicable underneath the circumstances and at such time. As
you learn and think about this Annual Report on Kind 10-Okay, it is best to perceive
that these statements should not ensures of efficiency or outcomes. The
forward-looking statements and projections are topic to and contain dangers,
uncertainties and assumptions, together with, however not restricted to, the dangers and
uncertainties described in Merchandise 1A "Threat Components" and you shouldn't place undue
reliance on these forward-looking statements or projections. Though we imagine
that these forward-looking statements and projections are primarily based on cheap
assumptions on the time they're made, you have to be conscious that many components
might have an effect on our precise monetary outcomes or outcomes of operations and will
trigger precise outcomes to vary materially from these expressed within the
forward-looking statements and projections. Components which will materially have an effect on
such forward-looking statements and projections embody:



? persevering with working losses;

? the unfavorable growth of financial circumstances and, particularly, of the

the oil and fuel industries;

? volatility in capital, credit score and commodity markets;



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? our incapacity to efficiently execute our development technique;

? the aggressive nature of our business;

? our clients’ credit score threat publicity;

? worth will increase or enterprise disruptions in our provide of uncooked supplies;

? the shortcoming to develop and market new merchandise and handle product lifecycles;



  ? enterprise disruptions, safety threats and safety breaches, together with
    safety dangers to our info know-how programs;



? terrorist acts, conflicts, wars, pure disasters, pandemics and others

crises that might have a major unfavourable influence on our actions, our monetary scenario

    and outcomes of operations;



? non-compliance with anti-terrorism and relevant legal guidelines and laws

    commerce embargoes;




  ? dangers related to defending knowledge privateness;



? important environmental liabilities and prices because of our

previous transactions or merchandise, together with transactions or merchandise associated to our

    licensed coating supplies;



? the transport of sure inherently harmful supplies because of their

    poisonous nature;




  ? litigation and different commitments and contingencies;



? means to recruit and retain the skilled and certified employees we have to

    compete;



? work stoppages, labor disputes and different issues associated to our work

    drive;



? delays in acquiring permits by our future shoppers or acquisition targets for

    their operations;




  ? our means to guard and implement mental property rights;




  ? mental property infringement fits towards us by third events;




  ? our means to comprehend the anticipated advantages of any acquisitions and
    divestitures;




  ? threat that the insurance coverage we keep could not totally cowl all potential
    exposures;




  ? dangers related to adjustments in tax charges or laws, together with

sudden impacts of the information we TCJA laws, which can differ relying on

different regulatory steerage and adjustments in our interpretations and

    assumptions;




  ? our substantial indebtedness;




  ? the outcomes of pending litigation;




    ?   our means to acquire extra capital on commercially cheap phrases
        could also be restricted;



? any assertion of perception and assertion of speculation underlying any

        of the foregoing;




    ?   different components disclosed on this Annual Report on Kind 10-Okay and our different
        filings with the Securities and Change Fee; and




  ? different components past our management.




These cautionary statements shouldn't be construed by you to be exhaustive and
are made solely as of the date of this Annual Report on Kind 10-Okay. Besides as
expressly required by the federal securities legal guidelines, there isn't any enterprise to
publicly replace or revise any forward-looking statements, whether or not because of
new info, future occasions, modified circumstances or another motive.
Potential buyers mustn't make an funding determination primarily based solely on our
projections, estimates or expectations.



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BUSINESS OVERVIEW



Basic



We're an Austin, Texas primarily based publicly held oilfield vitality know-how merchandise
firm centered on bettering properly efficiency and increasing the lifespan of the
business's most refined and costly tools. America's resurgence in
oil and fuel manufacturing is basically pushed by new modern applied sciences and
processes as most dramatically and not too long ago demonstrated by fracking. One such
course of is hardbanding, through which a wear-resistant alloy is utilized to the software
joints of drillpipe or drill collars to lengthen the lifetime of oilfield tubulars.
We make the most of wear-resistant alloys that are mechanically stronger, more durable and
extra corrosion resistant than typical alloys discovered out there immediately. This
mixture of traits creates alternatives for drillers to
dramatically enhance lateral drilling lengths, properly completion time and whole
properly prices.



Development Technique



We plan to proceed our U.S. oilfield providers firm acquisition initiative,
aimed toward corporations that are already acknowledged as a high-quality providers
supplier to strategic clients within the main North American oil and fuel basins.
When accomplished, we anticipate that every of those oilfield providers firm
acquisitions will present quick income from their present regional buyer
base, whereas additionally offering us with a basis for channel distribution and
product growth of our present services and products. We intend to develop
every of those established oilfield providers corporations by offering higher entry
to capital, extra disciplined gross sales and advertising growth, built-in provide
chain logistics and infrastructure construct out that emphasizes excellent
customer support and buyer collaboration, future product growth and
planning.



We imagine {that a} well-capitalized technology-enabled oilfield providers enterprise
will present the premise for extra accessible financing to develop the Firm and
execute our oilfield providers firm acquisitions technique.



Latest Developments


Influence of the coronavirus pandemic



In December 2019, a novel pressure of coronavirus was reported to have surfaced in
Wuhan, China. The virus has since unfold to over 150 nations and each state
in the USA. On March 11, 2020, the World Well being Group declared
the outbreak a pandemic, and on March 13, 2020, the USA declared a
nationwide emergency. Most states and cities have reacted by instituting
quarantines, restrictions on journey, "stay-at-home" guidelines and restrictions on
the forms of companies which will proceed to function, in addition to steerage in
response to the pandemic and the necessity to comprise it.



Though keep at dwelling orders and lock downs on companies within the areas the place we
function have prompted our employees to conduct enterprise operations from their houses,
this variation has not resulted in a major influence to our means to function.
Nonetheless, the unfold of the coronavirus outbreak the world over has pushed
sharp demand destruction for crude oil as complete economies ordered curtailed
exercise. In consequence, corporations throughout the business have responded with extreme
capital spending finances cuts, personnel layoffs, facility closures and
chapter filings. We anticipate business exercise ranges and spending by clients
to stay depressed all through the rest of 2021 as destruction of demand
for oil and fuel continues.



Because the coronavirus continues to unfold all through areas through which we function, we
imagine the outbreak has the potential to have a fabric unfavourable influence on our
working outcomes and monetary situation. The extent of the influence of the
coronavirus on our operational and monetary efficiency will depend upon sure
developments, together with the length and unfold of the outbreak, influence on our
operators, workers and distributors, all of that are unsure and can't be
predicted. The extent of the pandemic's continued impact on our operational and
monetary efficiency will depend upon future developments, together with the
length, unfold and depth of the outbreak, the tempo at which jurisdictions
throughout the nation re-open and restrictions start to raise, the provision of
authorities monetary assist to our enterprise and our clients, and whether or not a
resurgence of the outbreak happens. Given these uncertainties, we can't
moderately estimate the associated influence to our enterprise, working outcomes and
monetary situation, but it surely might be materials.



VPEG Observe


In the course of the interval of January 1, 2021 via August 20, 2021 we acquired extra mortgage proceeds from $ 278,100 of VPEG in accordance with the New VPEG Observe (See Observe 12, Associated Social gathering Transactions, to the consolidated monetary statements for a definition and outline of the New VPEG Observe).

At January 31, 2021 we and VPEG have entered into an modification to the New Debt Settlement (the “Second Modification” underneath which the events have agreed to extend the mortgage quantity as much as $ 3,500,000 to cowl future working capital wants.

At September 3, 2021 We and VPEG have entered into Addendum No.3 to the New Debt Settlement to which the events have agreed to extend the mortgage quantity as much as
$ 4,000,000 to cowl future working capital wants.


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PPP Observe



As of August 6, 2021 now we have acquired discover from Arvest Financial institution and the SBA that
the complete quantity of the primary PPP Observe for $168,800 has been forgiven. See Observe
7, Notes Payable, to the consolidated monetary statements for extra info.
The quantity forgiven will likely be recorded as revenue in our monetary statements
as of
the date of forgiveness.



On February 1, 2021, we acquired mortgage proceeds within the quantity of $98,622 pursuant
to a second draw mortgage underneath the PPP. The unsecured mortgage (the "Second PPP Mortgage")
is evidenced by a promissory be aware (the "Second PPP Observe") issued by us, dated
January 28, 2021, within the principal quantity of $98,622 with Arvest Financial institution.



Beneath the phrases of the Second PPP Observe and the PPP, curiosity accrues on the
excellent principal on the price of 1.0% every year with a deferral of funds
for the primary 10 months. The time period of the Second PPP Observe is 5 years, although
it could be payable sooner in reference to an occasion of default underneath the Second
PPP Observe. To the extent the quantity of the Second PPP Mortgage isn't forgiven underneath
the PPP, we will likely be obligated to make equal month-to-month funds of principal and
curiosity starting after a 10-month deferral interval supplied within the Second PPP
Observe and thru January 28, 2026.



The CARES Act and the PPP present a mechanism for forgiveness of as much as the complete
quantity borrowed. Beneath the PPP, we could apply for forgiveness for all or an element
of the Second PPP Mortgage. The quantity of Second PPP Mortgage proceeds eligible for
forgiveness is predicated on a formulation established by the SBA. Topic to the opposite
necessities and limitations on Second PPP Mortgage forgiveness, solely that portion
of the Second PPP Mortgage proceeds spent on payroll and different eligible prices throughout
the coated twenty-four -week interval will qualify for forgiveness. Though we
have used the complete quantity of the Second PPP Mortgage for qualifying bills, no
assurance is supplied that we'll acquire forgiveness of the Second PPP Mortgage in
complete or partly.


The Second PPP Observe could also be pay as you go partly or in full, at any time, with out
penalty. The Second PPP Observe present for sure customary occasions of default,
together with our: (i) failure to make a fee when due; (ii) breach of the be aware
phrases; (iii) default on another mortgage with the Lender; (iv) submitting of a
chapter petition by or towards us; (v) reorganization merger, consolidation
or different change in possession or enterprise construction with out the Lender's prior
written consent; (vi) antagonistic change in monetary situation or enterprise
operation that the Lender believes could have an effect on our means to pay the Second PPP
Observe; and (vii) default on any mortgage or settlement with one other creditor, if the
Lender believes the default could materially have an effect on our means to pay the Second
PPP Observe. Upon the prevalence of an occasion of default, the Lender has customary
treatments and should, amongst different issues, require quick fee of all quantities
owed underneath the Second PPP Observe, gather all quantities owing from us and file go well with
and acquire judgment towards us.



The foregoing description of the Second PPP Observe doesn't purport to be full
is certified in its entirety by reference to the complete textual content of the Second PPP
Observe, a duplicate of which is filed as Exhibit 10.7 to our Quarterly Report on Kind
10-Q for the intervals ended June 30, 2020.



Filings with the SEC



On September 16, 2020, the Securities and Change Fee ("SEC") adopted
intensive amendments to Rule 15c2-11 ("Rule") underneath the Securities Change Act
of 1934 ("Change Act"). The Rule governs the publication of quotations for
securities within the over-the-counter ("OTC") market, together with the OTC Pink Market
the place our widespread inventory is quoted. Rule 15c2-11 makes it illegal for a
broker-dealer to provoke a citation for a safety except the dealer supplier
has in its information prescribed details about the issuer that's present and
publicly accessible. The dearth of full time accounting personnel and monetary
constraints leading to delayed funds to our exterior skilled providers
suppliers have restricted our means to collect, analyze and correctly evaluate
info associated to monetary reporting in a well timed method. For these
causes, we have been unable to well timed file our quarterly and annual experiences throughout
2019 and 2020 and our quarterly experiences for the primary and second quarters of
2021. We proceed to actively search extra sources of capital which we
imagine will enable the resumption of well timed present public reporting practices
no later than the third quarter of 2021.



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Components Affecting Our Working Outcomes

The next dialogue presents sure parts of our revenue statements and the components that have an effect on these parts.


Whole income


We generate income from reloading options for oilfield operators for drill pipe, ballast rod, tubing and drill collets and grinding providers.

Our revenues are typically impacted by the next components:

? our means to efficiently develop and launch new options and providers



  ? adjustments in shopping for habits of our clients




  ? adjustments within the degree of competitors confronted by our merchandise



? home drilling exercise and expenditure by the petroleum and pure fuel business in

    the USA




Whole value of income



The prices related to producing our income fluctuate because of adjustments in gross sales volumes, common promoting costs, product combine and adjustments within the worth of uncooked supplies and consist primarily of the next:


  ? hardbanding manufacturing supplies purchases




  ? hardbanding provides




  ? labor




  ? depreciation expense for hardbanding tools




  ? subject bills



Promoting, common and administrative bills (“SG&A”)



Our promoting, common and administrative expense consists of all expenditures
incurred in reference to the gross sales and advertising of our merchandise, in addition to
administrative overhead prices, together with:



  ? compensation and profit prices for administration, gross sales personnel and
    administrative employees, which incorporates share-based compensation expense




  ? lease expense, communications expense, and upkeep and restore prices




  ? authorized charges, accounting charges, consulting charges and insurance coverage bills.



These bills should not anticipated to extend or lower considerably instantly with adjustments in whole revenues.

Depreciation and amortization



Depreciation and amortization bills encompass amortization of intangible
property, depreciation of property, plant and tools, internet of depreciation of
hardbanding tools which is reported in Whole value of income



Curiosity expense


Web curiosity expense is primarily comprised of curiosity expense and borrowing prices on borrowings in addition to the amortization of debt issuance prices and debt reductions related to our indebtedness.


Different (revenue) expense, internet


Different (revenue) expense, internet represents prices incurred, internet of revenue, from
varied non-operating gadgets together with prices incurred along with our
debt refinancing and extinguishment transactions, curiosity revenue, acquire or loss
on disposal of mounted property, in addition to non-operational beneficial properties and losses
unrelated to our core enterprise.



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Tax profit (disposition)



We're topic to revenue tax within the varied jurisdictions through which we function.
Whereas the extent of our future tax legal responsibility is unsure, our working
outcomes, the provision of any internet working loss carryforwards, any future
enterprise mixtures, and adjustments to tax legal guidelines and laws are key components
that may decide our future e book and taxable revenue.



Revenue from interrupted operations

Revenue from discontinued operations contains revenue, associated bills and loss on disposal of Aurora. See Observe 3, Discontinued operations, to the consolidated monetary statements for extra info.


RESULTS OF OPERATIONS


The next dialogue needs to be learn along with the data
contained within the accompanying monetary statements and associated notes included
elsewhere on this Annual Report on Kind 10-Okay. Our historic outcomes of
operations summarized and analyzed under could not essentially mirror what's going to
happen sooner or later.



                                             For the Years Ended
                                                 December 31,                           Proportion
($ in hundreds)                             2020           2019          Change          Change
Whole income                              $   851.4$  2,204.1$ (1,352.7 )            -61 %

Whole value of income                          537.4        1,015.9         (478.5 )            -47 %

Gross revenue                                   314.0        1,188.2         (874.2 )            -74 %

Working bills
Promoting, common and administrative          1,165.0        1,705.7         (540.7 )            -32 %
Depreciation and amortization                   19.6          265.3         (245.7 )            -93 %
Impairment loss                                    -        2,616.7       (2,616.7 )           -100 %
Whole working bills                     1,184.6        4,587.7       (3,403.1 )            -74 %
Loss from operations                          (870.6 )     (3,399.5 )      2,528.9              -74 %
Different revenue/(expense)
Curiosity expense                               (87.7 )       (197.9 )        110.2              -56 %
Different revenue/(expense)                           7.0              -            7.0            100.0 %
Whole different revenue/(expense)                   (80.7 )       (197.9 )        117.2              -59 %
Loss from persevering with operations earlier than
tax profit                                   (951.3 )     (3,597.4 )      2,646.1              -74 %
Tax expense                                     (2.5 )            -           (2.5 )              0 %
Loss from persevering with operations               (953.8 )     (3,597.4 )      2,643.6              -73 %
Revenue/(loss) from discontinued
operations                                         -           66.5          (66.5 )           -100 %

Loss relevant to widespread shareholders $ (953.8)$ (3,530.9)$ 2,577.1

              -73 %




Whole Income


Whole income decreased by 61%, from $2,204,104 within the 12 months ended December 31,
2019 to $851,393 within the 12 months ended December 31, 2020 because of a lower in
hardbanding income generated by Professional-Tech because of because of much less
drilling because of the low worth of a barrel of oil and the impact of the COVID-19
pandemic on total demand for oil and fuel.



Whole Value of Income



Whole value of income decreased by 47%, from $1,015,855 within the 12 months ended
December 31, 2019 to $537,427 within the 12 months ended December 31, 2020 due primarily
to decreases in supplies, direct labor, different direct prices ensuing from
decreases in Professional-Tech's income producing actions as in comparison with the 12 months
ended December 31, 2019, and to a lesser extent, different reductions in bills
reminiscent of depreciation on tools.



                                       23




Promoting, common and administrative bills



Promoting, common and administrative bills decreased by 32%, from $1,705,704
within the 12 months ended December 31, 2019 to $1,165,009 within the 12 months ended December 31,
2020 because of the following:



? Consulting prices have been diminished by eliminating the variety of consultants and

        transferring others to payroll




  ? Payroll associated bills have been diminished because of worker downsizing




  ? Premiums for Administrators and Officers legal responsibility insurance coverage have been diminished



These decreases have been partially offset by will increase in accounting prices.

Depreciation and amortization



Depreciation and amortization decreased by 93%, from $265,318 in the course of the 12 months
ended December 31, 2019 to $19,609 in the course of the 12 months ended December 31, 2020 due
to the discount of amortization of Intangible Property, which have been impaired at
the tip of 2019. As well as, please check with Observe 5, Goodwill and Different
Intangible Property,to the consolidated monetary statements for additional
dialogue of our intangible property.



Impairment loss


For the twelve months ended December 31, 2019, we recorded impairments of the AVV sublicense, the trademark license and the non-compete agreements of
$ 2,214,167, $ 1,182,500 and $ 67,500, respectively, which, internet of gathered amortization of $ 847,462 represented 100% of the residual worth of every of those property, for a complete depreciation of $ 2,616,705.

As well as, please check with Observe 5, Goodwill and Different Intangible Property, to
the consolidated monetary statements for additional dialogue of our intangible
property.



Curiosity expense



Curiosity expense decreased by 56%, from $197,851 in the course of the 12 months ended December
31, 2019 to $87,677 within the 12 months ended December 31, 2020 primarily because of the
restructuring of our notes payable to VPEG in addition to the Rogers Observe, the Kodak
Observe, and the Matheson Observe. See Observe 7, Notes Payable, to the condensed
consolidated monetary statements for extra info.



Tax profit



There isn't any materials provision for revenue tax bills recorded for the twelve
months ended December 31, 2020 and 2019 because of the internet working losses, ("NOL")
in every of the respective years. The belief of future tax advantages is
depending on our means to generate taxable revenue inside the NOL carry ahead
interval. Given our historical past of internet working losses, administration has decided
that it's more-likely-than-not we will be unable to comprehend the tax profit
of our NOL carry forwards. Present requirements require {that a} valuation allowance
thus be established when it's extra doubtless than not that each one or a portion of
deferred tax property won't be realized.



Loss from persevering with operations, revenue from discontinued operations and loss relevant to widespread shareholders

We reported an working loss for 2020 of $ (953,858) in comparison with an working lack of ($ 3,530,835) for 2019.



Revenue from discontinued operations encompass revenues and associated bills
ensuing from the trailing exercise of Aurora and loss on disposal of Aurora.
See Observe 3, Discontinued Operations, to the consolidated monetary statements
for additional info.



Because of the foregoing, loss relevant to widespread stockholders for the
12 months ended December 31, 2020 was $(953,858), or $(0.03) per share, in comparison with a
loss relevant to widespread stockholders of $(3,530,835), or $(0.13) per share,
for 2019 on weighted common shares of 28,037,713 in every of the respective
intervals.



                                       24




LIQUIDITY AND CAPITAL RESOURCES


Going Concern



Traditionally now we have skilled, and we proceed to expertise, internet losses, internet
losses from operations, unfavourable money circulation from working actions, and
working capital deficits. These circumstances increase substantial doubt about our
means to proceed as a going concern inside one 12 months after the date of
issuance of the accompanying consolidated monetary statements. The accompanying
consolidated monetary statements don't mirror any changes which may
end result if we're unable to proceed as a going concern.



Administration anticipates that working losses will proceed within the close to time period as
we proceed efforts to leverage our mental property via the platform
supplied by the acquisition of Professional-Tech and, probably, different acquisitions. In
the close to time period, we're counting on financing obtained from VPEG via the New
VPEG Observe to fund operations as we search to generate optimistic money flows from
operations. See Observe 8 "Notes Payable," and Observe 13 "Associated Social gathering
Transactions," to the accompanying consolidated monetary statements for
extra info concerning the New VPEG Observe. Along with
rising money circulation from operations, we will likely be required to acquire different
liquidity assets in an effort to assist ongoing operations. We're addressing
this want by creating extra capital sources which we imagine will allow
us to execute our recapitalization and development plan. This plan contains the
enlargement of Professional-Tech's core hardbanding enterprise via extra drilling
providers and the event of extra services and products together with
wholesale supplies, RFID enclosures and mid-pipe coating options.



Based mostly upon capital formation actions in addition to the continued near-term funding
supplied via the New VPEG Observe, we imagine we can have sufficient capital to
cowl bills via not less than the following twelve months. We'll proceed to
monitor liquidity fastidiously, and within the occasion we don't have sufficient capital to
cowl bills, we'll make the required and applicable reductions in
spending to stay money circulation optimistic.



Capital Sources



In the course of the twelve months ended December 31, 2020, we obtained $1,102,776 from
VPEG via the New VPEG Observe. As of August 20, 2021 and for the foreseeable
future, we anticipate to cowl working shortfalls with funding via the New
VPEG Observe whereas we enact our technique to develop into a technology-focused oilfield
providers firm and search extra sources of capital. As of August 20, 2021
the remaining quantity accessible to us for added borrowings on the New VPEG
Observe, as amended, was roughly $640,224.



Paycheque Safety Program Mortgage



On April 15, 2020, we acquired mortgage proceeds within the quantity of $168,800 underneath the
Paycheck Safety Program (the "PPP"). The PPP, established as a part of the
Coronavirus Assist, Aid and Financial Safety Act of 2020 (the "CARES Act") and
administered by the U.S. Small Enterprise Administration (the "SBA"), supplies for
loans to qualifying companies for quantities as much as 2.5 instances of the typical
month-to-month payroll bills of the qualifying enterprise. The unsecured mortgage (the
"First PPP Mortgage") is evidenced by a promissory be aware (the "First PPP Observe")
issued by us, dated April 14, 2020, within the principal quantity of $168,800 with
Arvest Financial institution
Beneath the phrases of the First PPP Observe and the PPP, curiosity accrues on the
excellent principal on the price of 1.0% every year with a deferral of funds
for the primary seven months. The time period of the First PPP Observe is 2 years, although
it could be payable sooner in reference to an occasion of default underneath the First
PPP Observe. To the extent the quantity of the First PPP Mortgage isn't forgiven underneath
the PPP, we will likely be obligated to make equal month-to-month funds of principal and
curiosity starting after a seven-month deferral interval supplied within the First PPP
Observe and thru April 14, 2022.



The CARES Act and the PPP present a mechanism for forgiveness of as much as the complete
quantity borrowed. Beneath the PPP, we could apply for forgiveness for all or an element
of the First PPP Mortgage. The quantity of First PPP Mortgage proceeds eligible for
forgiveness is predicated on a formulation that takes into consideration plenty of components,
together with: (i) the quantity of First PPP Mortgage proceeds which might be utilized by the
Firm in the course of the 24-week interval after the First PPP Mortgage origination date for
sure specified functions together with payroll prices, curiosity on sure mortgage
obligations, lease funds on sure leases, and sure certified utility
funds, supplied that not less than 75% of the First PPP Mortgage quantity is used for
eligible payroll prices; (ii) our sustaining or rehiring workers, and
sustaining salaries at sure ranges; and (iii) different components established by
the SBA. Topic to the opposite necessities and limitations on First PPP Mortgage
forgiveness, solely that portion of the First PPP Mortgage proceeds spent on payroll
and different eligible prices in the course of the coated twenty 4 -week interval will
qualify for forgiveness. As of August 6, 2021, the Firm acquired discover from
Arvest Financial institution and SBA that the complete quantity of the First PPP Mortgage within the quantity of
$168,800 has been forgiven. See Observe 16, Subsequent Occasions, to the consolidated
monetary statements for added info.



The foregoing description of the First PPP Observe doesn't purport to be full
and is certified in its entirety by reference to the complete textual content of the First PPP
Observe, a duplicate of which is filed as Exhibit 10.5 to our Quarterly Report on Kind
10-Q for the intervals ended June 30, 2020.



                                       25





Financial Harm Catastrophe Mortgage



Moreover, on June 15, 2020, we acquired $150,000 in mortgage funding from the
SBA underneath the Financial Harm Catastrophe Mortgage ("EIDL") program administered by the
SBA, which program was expanded pursuant to the CARES Act. The EIDL is evidenced
by a promissory be aware, dated June 11, 2020 (the "EIDL Observe") within the unique
principal quantity of $150,000 with the SBA, the lender.



Beneath the phrases of the EIDL Observe, curiosity accrues on the excellent principal
on the price of three.75% every year. The time period of the EIDL Observe is 30 years, although it
could also be payable sooner upon an occasion of default underneath the EIDL Observe. Beneath the
EIDL Observe, we will likely be obligated to make equal month-to-month funds of principal and
curiosity starting on July 11, 2021 via the maturity date of June 11, 2050.
The EIDL Observe could also be pay as you go partly or in full, at any time, with out penalty.



The EIDL Observe supplies for sure customary occasions of default, together with: (i) a
failure to adjust to any provision of the EIDL Observe, the associated Mortgage
Authorization and Settlement, or different EIDL mortgage paperwork; (ii) a default on any
different SBA mortgage; (iii) a sale or switch of, or failure to protect or account
to SBA's satisfaction for, any of the collateral or its proceeds; (iv) a failure
of us or anybody performing on its behalf to reveal any materials reality to SBA; (v)
the making of a materially false or deceptive illustration to SBA by us or
anybody performing on our behalf; (vi) a default on any mortgage or settlement with
one other creditor, if SBA believes the default could materially have an effect on our means
to pay the EIDL Observe; (vii) a failure to pay any taxes when due; (viii) if we
develop into the topic of a continuing underneath any chapter or insolvency regulation; (ix)
if a receiver or liquidator is appointed for any a part of our enterprise or
property; (x) the making of an task for the advantage of collectors; (xi) has
any antagonistic change in monetary situation or enterprise operation that SBA
believes could materially have an effect on our means to pay the EIDL Observe; (xii) results
any reorganization, merger, consolidation, or different transaction altering
possession or enterprise construction with out SBA's prior written consent; or (xiii)
turns into the topic of a civil or prison motion that SBA believes could
materially have an effect on our means to pay the EIDL Observe. The foregoing description of
the EIDL Observe doesn't purport to be full and is certified in its entirety
by reference to the complete textual content of the EIDL Observe, a duplicate of which is filed as
Exhibit 10.6 to our Quarterly Report on Kind 10-Q for the intervals ended June 30,
2020.


Off-balance sheet provisions

We’ve got no off-balance sheet association that has or in all fairness prone to have a present or future impact on our monetary situation.


Money Circulate


The next desk supplies detailed info on our internet money flows for the years ended. December 31, 2020 and 2019:


                                                         Years Ended December 31,
($ in hundreds)                                          2020               2019
Web money utilized in working actions                 $     (508.2 )$     (372.1 )
Web money supplied by (utilized in) investing actions           (9.8 )       

Web money supplied by financing actions                    693.2         

312.5

Web lower in money and money equivalents                    175.2              (59.6 )
Money and money equivalents at starting of interval              17.1         

76.7

Money and money equal at finish of interval             $      192.3       $ 
     17.1



Web money utilized in working actions for the 12 months ended December 31, 2020 was
$508,162. Web loss adjusted for non-cash gadgets (impairment of intangible property,
depreciation, amortization, and share primarily based compensation expense) used money of
$711,385. Adjustments in working property and liabilities supplied money of $203,223.
Essentially the most important drivers have been decreases in accounts receivable (because of
timing of collections) and different receivables, stock, and pay as you go and different
present property. These decreases, which supplied internet money, have been partially offset
by decreases in accrued liabilities and accounts payable, which used internet money.



This compares to internet money utilized in working actions for the 12 months ended
December 31, 2019 was $372,139. Web loss adjusted for non-cash gadgets (impairment
of intangible property, depreciation, amortization, and share primarily based compensation
expense) used money of $282,518. As well as, adjustments in working property and
liabilities used money of $89,621. Essentially the most important drivers have been decreases in
accounts receivable (because of timing of collections) and different receivables which
have been partially offset by will increase in accrued liabilities and accounts payable.



Web money supplied by/utilized in investing actions for the 12 months ended December
31, 2020 was $9,758 because of tools upkeep. This compares to $0 of money
utilized by investing actions for the 12 months ended December 31, 2019.



Web money supplied by financing actions for the 12 months ended December 31, 2020
was $693,181 in comparison with $312,469 in internet money supplied by financing actions
in the course of the 12 months ended December 31, 2019. In every of 2020 and 2019 internet money
supplied by financing actions was primarily because of debt financing proceeds
from associates, internet of repayments. See Observe 7, Notes Payable, to the condensed
consolidated monetary statements, and Observe 12, Associated Social gathering Transactions, to
the condensed consolidated monetary statements for extra info concerning
our financing actions.


We imagine that it will likely be essential to safe extra liquidity assets to assist our operations. We meet our liquidity wants by looking for to generate optimistic money circulation from operations and by creating extra sources of backup capital.


                                       26




CRITICAL ACCOUNTING POLICIES AND ESTIMATES



The preparation of economic statements in conformity with U.S. typically
accepted accounting rules, or GAAP, requires our administration to make
assumptions, estimates and judgments that have an effect on the quantities reported, together with
the notes thereto, and associated disclosures of commitments and contingencies, if
any. We've got recognized sure accounting insurance policies which might be important to the
preparation of our monetary statements. These accounting insurance policies are necessary
for an understanding of our monetary situation and outcomes of operation.
Important accounting insurance policies are these which might be most necessary to the portrayal
of our monetary situation and outcomes of operations and require administration's
troublesome, subjective, or advanced judgment, usually because of the necessity to
make estimates concerning the impact of issues which might be inherently unsure and should
change in subsequent intervals. Sure accounting estimates are notably
delicate due to their significance to monetary statements and due to
the chance that future occasions affecting the estimate could differ
considerably from administration's present judgments. We imagine the next
vital accounting insurance policies contain probably the most important estimates and
judgments used within the preparation of our monetary statements.



Whereas there are a selection of accounting insurance policies, strategies and estimates affecting
our consolidated monetary statements, areas which might be notably important
embody:



  ? Money and money equivalents;

  ? Property, plant, and tools;

  ? Different property and tools;

  ? Honest worth;

? Focus of credit score threat, accounts receivable and allowance for uncertain accounts

    Accounts;

  ? Stock

  ? Goodwill and different intangible property

  ? Income recognition

  ? Enterprise mixtures

  ? Share-based compensation,

  ? Revenue taxes and

  ? Earnings per share



As well as, please check with Observe 1, Group and Abstract of Important Accounting Insurance policies, to the Consolidated Monetary Statements for an additional dialogue of our important accounting insurance policies.


Money and Money Equivalents:


We think about all liquid investments with unique maturities of three months or
much less from the date of buy which might be readily convertible into money to be money
equivalents. We had no money equivalents at December 31, 2020 and 2019.



Tangible mounted property



Property, plant and tools is acknowledged at value. Upkeep and repairs are
charged to expense as incurred and the prices of additives and betterments that
improve the helpful lives of the property are capitalized. When property, plant
and tools is disposed of, the price and associated gathered depreciation are
faraway from the consolidated steadiness sheets and any acquire or loss is included in
Different revenue/(expense) within the consolidated assertion of operations.



Depreciation is calculated utilizing the straight-line technique over the estimated helpful lifetime of the property involved, as follows:



Asset class                                       Helpful Life

Welding tools, Vehicles, Equipment and tools 5 years Workplace tools

                                     5 - 7 years
Laptop {hardware} and software program                         7 years




See be aware 4, Property, plant and tools, of the appendix to the consolidated monetary statements for extra info.


                                       27





Different Property and Tools:


Our workplace tools at Austin, Texas is depreciated utilizing the straight-line technique over the estimated helpful lifetime of three to seven years.


Honest Worth:



Monetary Accounting Commonplace Board, or FASB, Accounting Requirements Codification,
or ASC, Subject 820, Honest Worth Measurements and Disclosures, established a
hierarchical disclosure framework related to the extent of pricing
observability utilized in measuring truthful worth. This framework outlined three
ranges of inputs to the truthful worth measurement course of and requires that every
truthful worth measurement be assigned to a degree comparable to the bottom degree
enter that's important to the truthful worth measurement in its entirety. The
three broad ranges of inputs outlined by FASB ASC Subject 820 hierarchy are as
follows:



Stage 1 – quoted costs (unadjusted) in energetic markets for similar property or liabilities that the reporting entity has the choice of accessing on the valuation date;

Leve1 2 - inputs apart from quoted costs included inside Stage 1 which might be
observable for the asset or legal responsibility, both instantly or not directly. If the
asset or legal responsibility has a specified (contractual) time period, a Leve1 2 enter should be
observable for considerably the complete time period of the asset or legal responsibility; and



Leve1 3 - unobservable inputs for the asset or legal responsibility. These unobservable
inputs mirror the entity's personal assumptions concerning the assumptions that market
contributors would use in pricing the asset or legal responsibility and are developed primarily based
on the perfect info accessible within the circumstances (which could embody
the
reporting entity's personal knowledge).


Receivables are carried at quantities that approximate truthful worth. Receivables are
acknowledged internet of an allowance for uncertain accounts receivable. The allowance
for uncertain accounts displays the present estimate of credit score losses anticipated to
be incurred over the lifetime of the monetary asset, primarily based on historic expertise
present circumstances and cheap forecasts of future financial circumstances.
Accounts receivable are written down or off when a portion or all of such
account receivable is decided to be uncollectible.



Inventories are valued on the decrease of value or internet realizable worth, the price being decided utilizing the weighted common value technique. Value gadgets in stock embody:


 ? uncooked supplies,




 ? direct labor, and




? manufacturing and oblique overheads.

Provides are valued on the decrease of value or internet realizable worth; the price is usually decided utilizing the weighted common value technique. Inventories deemed to have prices larger than their respective market values ​​are diminished to their internet realizable worth with a loss recorded in revenue or loss within the interval acknowledged.



At December 31, 2020 and 2019, the carrying worth of our monetary devices
reminiscent of accounts receivable and payables approximated their truthful values primarily based on
the short-term nature of those devices. The carrying worth of short-term
notes and advances approximated their truthful values as a result of the underlying
rates of interest approximated market charges on the steadiness sheet dates.



Focus of credit score threat, accounts receivable and allowance for uncertain accounts



Monetary devices that probably topic us to concentrations of credit score
threat primarily consist of money and money equivalents positioned with excessive credit score
high quality establishments and accounts receivable due from Professional-Tech's clients.
Administration evaluates the collectability of accounts receivable primarily based on a
mixture of things. If administration turns into conscious of a buyer's incapacity to
meet its monetary obligations after a sale has occurred, we report an allowance
to cut back the web receivable to the quantity that it moderately believes to be
collectable from the client. Accounts receivable are written off on the level
they're thought-about uncollectible. As a result of traditionally very low uncollectible
balances and no particular indications of present uncollectibility, now we have not
recorded an allowance for uncertain accounts at December 31, 2020. If the
monetary circumstances of Professional-Tech's clients have been to deteriorate or if common
financial circumstances have been to worsen, extra allowances could also be required within the
future.


From December 31, 2020, 4 clients represented 73% of our gross receivables. For the 12 months ended December 31, 2020, 2 clients represented 64% of our whole turnover.


Stock



Our stock balances are acknowledged on the decrease of value or internet realizable worth
on a first-in, first-out foundation. Stock consists of merchandise bought by
Professional-Tech to be used within the strategy of offering hardbanding providers. No impairment
losses on stock have been recorded for the twelve months ended December 31,
2020
or 2019.



                                       28






Good will and different intangible property



Finite-lived intangible property are recorded at value, internet of gathered
amortization and, if relevant, impairment fees. Amortization of
finite-lived intangible property is supplied over their estimated helpful lives on
a straight-line foundation or the sample through which financial advantages are consumed, if
reliably determinable. We evaluate our finite-lived intangible property for
impairment each time occasions or adjustments in circumstances point out that the
carrying quantity of an asset is probably not recoverable.



We carry out an impairment check of goodwill yearly and each time occasions or
adjustments in circumstances point out that the carrying quantity is probably not
recoverable. A goodwill impairment loss is acknowledged for the quantity that the
carrying quantity of a reporting unit, together with goodwill, exceeds its truthful worth,
restricted to the full quantity of goodwill allotted to that reporting unit. We
have decided that the Firm is comprised of 1 reporting unit at December
31, 2020 and 2019, and the goodwill balances of $145,149 at December of every
12 months are included within the single reporting unit. To this point, an impairment of
goodwill has not been recorded. For the 12 months ended December 31, 2020, we
bypassed the qualitative evaluation, and proceeded on to the quantitative
check for goodwill impairment.



Our Goodwill steadiness consists of the quantity acknowledged in reference to the
acquisition of Professional-Tech. Our different intangible property are comprised of
contract-based and marketing-related intangible property, in addition to
acquisition-related intangibles. Acquisition-related intangibles embody the
worth of Professional-Tech's trademark and buyer relationships, each of that are
being amortized over their anticipated helpful lives of 10 years starting August
2018.



Our contract-based intangible property embody an settlement to sublicense sure
patents belonging to AVV (the "AVV Sublicense"), a license (the "Trademark
License") to the trademark of Liquidmetal Coatings Enterprises LLC
("Liquidmetal"), and a number of other non-compete agreements made in reference to the
acquisition of the AVV Sublicense and the Trademark License (the "Non-Compete
Agreements"). The contract-based intangible property have helpful lives
of roughly 11 years for the AVV Sublicense and 15 years for the Trademark
License. With the initiation of a multi-year technique plan involving synergies
between the acquisition of Professional-Tech and our present mental property, we
have begun to make use of the financial advantages of its intangible property, and due to this fact
started amortization of its intangible property on a straight-line foundation over the
helpful lives indicated above starting July 31, 2018, the efficient date of
the
Professional-Tech acquisition.


In the course of the 12 months ended December 31, 2019, we recorded impairment of the AVV
Sublicense, the Trademark License and the Non-Compete Agreements totaling
$2,616,705. Efficient September 1, 2020, we and AVV have mutually agreed to
terminate the AVV Sublicense Settlement and Trademark License. For the reason that date of
the Transaction Settlement, now we have not realized any income from merchandise or
providers associated to the AVV Sublicense Settlement or Trademark License. Additionally
efficient September 1, 2020, we and LMCE have agreed to terminate the provision and
providers settlement dated September 6, 2019 though we proceed to buy and
make the most of the merchandise of LMCE. We're evaluating our enterprise technique in mild
of the present circumstances of the nationwide and world oil and fuel markets.



Income Recognition


We acknowledge income because it satisfies contractual efficiency obligations by
transferring promised items or providers to the shoppers. The quantity of income
acknowledged displays the consideration we anticipate to be entitled to in trade
for these promised items or providers. A very good or service is transferred to a
buyer when, or as, the client obtains management of that good or service.



We've got one income stream, which pertains to the supply of hardbanding
providers by its subsidiary Professional-Tech. All efficiency obligations of our
contracts with clients are happy over the length of the contract as
customer-owned tools is serviced after which made accessible for quick use
as accomplished in the course of the service interval. We've got reviewed our contracts with
Professional-Tech clients and decided that because of their short-term nature, with
durations of a number of days of service on the buyer's location, it's only
these contracts that happen close to the tip of a monetary reporting interval that
will probably require allocation to make sure income is acknowledged within the
correct interval. We've got reviewed all such transactions and recorded income
accordingly.



For the previous years December 31, 2020 and 2019, all of our income has been acknowledged underneath contracts with oilfield operators, and now we have not acknowledged any impairment on receivables or contractual property.

Since our contracts have an anticipated length of 1 12 months or much less, now we have chosen the sensible expedient in ASC 606-10-50-14 (a) of not disclosing info on its remaining efficiency obligations.


Enterprise mixtures



Enterprise mixtures are accounted for utilizing the acquisition technique of
accounting. Beneath the acquisition technique, property acquired and liabilities
assumed are recorded at their respective truthful values as of the acquisition date
within the Firm's consolidated monetary statements. The surplus of the truthful worth
of consideration transferred over the truthful worth of the web property acquired
is
recorded as goodwill.



                                       29





Share-Based mostly Compensation


Every now and then we could difficulty inventory choices, warrants and restricted inventory as
compensation to workers, administrators, officers and associates, in addition to to
purchase items or providers from third events. In all instances, we calculate
share-based compensation utilizing the Black-Scholes choice pricing mannequin and
bills awards primarily based on truthful worth on the grant date on a straight-line foundation
over the requisite service interval, which within the case of third occasion suppliers is
the shorter of the interval over which providers are to be acquired or the vesting
interval, and for workers, administrators, officers and associates is usually the
vesting interval. Share-based compensation is included basically and
administrative bills within the consolidated statements of operations. See Observe
9, Warrants, and Observe 10, Inventory Choices to the consolidated monetary
statements, for additional info.



Revenue Taxes:


We account for revenue taxes in accordance with FASB ASC 740, Revenue Taxes, which
requires an asset and legal responsibility method for monetary accounting and reporting
of revenue taxes. Deferred revenue taxes mirror the influence of momentary
variations between the quantity of property and liabilities for monetary reporting
functions and such quantities as measured by tax legal guidelines and laws. Deferred tax
property embody tax loss and credit score carry forwards and are diminished by a valuation
allowance if, primarily based on accessible proof, it's extra doubtless than not that some
portion or all the deferred tax property won't be realized.



Earnings per Share:


Primary earnings per share are computed utilizing the weighted common variety of
widespread shares excellent at December 31, 2020 and 2019, respectively. The
weighted common variety of widespread shares excellent was 28,037,713 at every of
December 31, 2020 and 2019. Diluted earnings per share mirror the potential
dilutive results of widespread inventory equivalents reminiscent of choices, warrants and
convertible securities.



The next desk outlines excellent widespread inventory shares and customary inventory
equivalents.



                                               Years Ended December 31,
                                                 2020             2019
Frequent Inventory Shares Excellent                28,037,713       28,037,713
Frequent Inventory Equivalents Excellent
Warrants                                        2,706,847        2,783,626
Inventory Choices                                     211,186          211,186
Whole Frequent Inventory Equivalents Excellent      2,918,033        2,994,812

RECENTLY ADOPTED ACCOUNTING STANDARDS



On October 1, 2019, we adopted ASU 2017-04, "Intangibles - Goodwill and Different
(Subject 350): Simplifying the Check for Goodwill Impairment" ("ASU 2017-04"),
which simplifies how an entity is required to check goodwill for impairment. The
amendments in ASU 2017-04 require goodwill impairment to be measured utilizing the
distinction between the carrying quantity and the truthful worth of the reporting unit
and require the loss acknowledged to not exceed that whole quantity of goodwill
allotted to that reporting unit. ASU 2017-04 has been utilized on a potential
foundation, efficient for our annual goodwill impairment check starting within the fourth
quarter of 2019.



On January 1, 2019, we adopted ASU 2018-07, Enhancements to Nonemployee
Share-Based mostly Cost Accounting ("ASU 2018-07"), which expands the scope of ASC
718 to incorporate all share-based funds preparations associated to the acquisition
of products and providers from each workers and nonemployees. Beneath this ASU, an
entity ought to apply the necessities of Subject 718 to nonemployee awards besides
for particular steerage on inputs to an choice pricing mannequin and the attribution
of value (that's, the time frame over which share-based fee awards vest
and the sample of value recognition over that interval). The amendments specify
that Subject 718 applies to all share-based fee transactions through which a
grantor acquires items or providers for use or consumed in a grantor's personal
operations by issuing share-based fee awards. The amendments additionally make clear
that Subject 718 doesn't apply to share-based funds used to successfully
present (1) financing to the issuer or (2) awards granted along with
promoting items or providers to clients as a part of a contract accounted for underneath
Subject 606, Income from Contracts with Prospects. The amendments on this ASU are
efficient for public entities for fiscal years starting after December 15,
2018, together with interim intervals inside that fiscal 12 months. For all different entities,
the amendments are efficient for fiscal years starting after December 15, 2019,
and interim intervals inside fiscal years starting after December 15, 2020. Early
adoption is permitted, however no sooner than an entity's adoption date of Subject
606. The adoption of this ASU didn't have a fabric influence on our consolidated
monetary statements or monetary assertion disclosures.



                                       30




On January 1, 2019, we adopted ASU 2016-02, "Leases," which, along with
amendments comprising ASC 842, requires lessees to determine preparations that
needs to be accounted for as leases and customarily acknowledged, for working and
finance leases with phrases exceeding twelve months, a right-of-use asset (or
"ROU") and lease legal responsibility on the steadiness sheet. Along with this primary
provision, this commonplace included plenty of extra adjustments to lease
accounting. This commonplace is efficient for fiscal years starting after December
15, 2018, together with interim intervals inside these fiscal years. A modified
retrospective transition method is required, making use of the brand new commonplace to all
leases present on the date of preliminary utility. An entity could select to make use of
both the adoption date or the start of the earliest comparative interval
introduced within the monetary statements as its date of preliminary utility. We
used the adoption date as our date of preliminary utility. In consequence,
historic monetary info was not up to date, and the disclosures required
underneath the brand new commonplace should not supplied as of and for intervals earlier than January 1,
2019.



The brand new commonplace supplies plenty of non-compulsory sensible expedients in
transition. We elected the bundle of sensible expedients, which allows us not
to reassess underneath the brand new commonplace our prior conclusions about lease
identification, lease classification and preliminary direct prices. The brand new commonplace
additionally supplies sensible expedients for an entity's ongoing accounting. We
elected the quick time period lease recognition exemption and we won't acknowledge ROU
property or lease liabilities for qualifying leases (leases with a time period of much less
than 12 months from lease graduation). We additionally elected the accounting coverage
election to not separate lease and non-lease elements for all asset lessons.



We’ve got decided that the adoption of this commonplace won’t have a fabric influence on its consolidated monetary statements, because it at present has no agreements that needs to be accounted for as leases.

RECENTLY ISSUED ACCOUNTING STANDARDS

In December 2019, the FASB issued ASU 2019-12, "Simplifying the Accounting for
Revenue Taxes" as a part of its initiative to cut back complexity in accounting
requirements. The ASU simplifies the accounting for revenue taxes by eradicating
sure exceptions to the overall rules in Subject 740. The brand new commonplace is
efficient for fiscal years starting after December 15, 2020, and interim
intervals inside these fiscal years. Early adoption is permitted. We're at present
evaluating the influence of ASU 2019-12 on our monetary statements.

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