References to the "Company," "us," "our" or "we" refer Northern Lights
Acquisition Corp. The following discussion and analysis of our financial
condition and results of operations should be read in conjunction with our
unaudited Condensed financial statements and related notes included herein.
Cautionary Note Regarding Forward-Looking Statements
All statements other than statements of historical fact included in this Form
10-Q including, without limitation, statements under "Management's Discussion
and Analysis of Financial Condition and Results of Operations" regarding the
Company's financial position, business strategy and the plans and objectives of
management for future operations, are forward- looking statements. When used in
this Form 10-Q, words such as "anticipate," "believe," "estimate," "expect,"
"intend" and similar expressions, as they relate to us or the Company's
management, identify forward-looking statements. Such forward-looking statements
are based on the beliefs of management, as well as assumptions made by, and
information currently available to, the Company's management. Actual results may
differ materially due to various factors, including, but not limited to:
? our ability to complete our initial business combination with SHF or an
alternative business combination;
? our success in retaining or recruiting, or changes required in, our officers,
key employees or directors following our initial business combination;
? our officers and directors allocating their time to other businesses and
potentially having conflicts of interest with our business or in approving our
initial business combination, as a result of which they would then receive
expense reimbursements;
? our ability to close the PIPE Financing (as defined below) which is intended
to provide the financing to complete our initial business combination;
? in the event the Business Combination (as defined below) is consummated, our
ability to implement business plans, forecasts, and other expectations
regarding SHF after the completion of the proposed transactions and optimize
SHF's business;
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? in the event the Business Combination is not consummated, the ability of our
officers and directors to generate a number of potential alternative
acquisition opportunities;
? our pool of prospective target businesses;
? the ability of our officers and directors to generate a number of potential
acquisition opportunities;
? our public securities' potential liquidity and trading;
? the lack of a market for our securities;
? our continued liquidity and our ability to continue as a going concern;
? the use of proceeds not held in the trust account or available to us from
interest income on the trust account balance; or
? our financial performance.
All subsequent written or oral forward-looking statements attributable to us or
persons acting on the Company's behalf are qualified in their entirety by this
paragraph.
The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with the financial statements and the
notes thereto contained elsewhere in this Form 10-Q. Certain information
contained in the discussion and analysis set forth below includes
forward-looking statements that involve risks and uncertainties.
Overview
The Company is a blank check company formed under the laws of the State of
Delaware on February 26, 2021 for the purpose of effecting a merger, share
exchange, asset acquisition, stock purchase, reorganization or similar business
combination with one or more businesses. The Company intends to effectuate its
initial Business Combination using cash from the proceeds of our Initial Public
Offering and the Private Placement, the proceeds of the sale of our securities
in connection with our initial Business Combination, our shares issued to the
owners of the target, debt issued to the bank or other lenders or the owners of
the target, or a combination of the foregoing.
The issuance of additional shares in connection with an initial Business
Combination to the owners of the target or other investors:
? may significantly dilute the equity interest of investors, which dilution
would increase if the anti-dilution provisions in the Class B common stock
resulted in the issuance of Class A Common Stock on a greater than one -to-one
basis upon conversion of the Class B common stock;
? may subordinate the rights of holders of our common stock if preferred stock
is issued with rights senior to those afforded our common stock;
? could cause a change in control if a substantial number of shares of our
common stock is issued, which may affect, among other things, our ability to
use our net operating loss carry forwards, if any, and could result in the
resignation or removal of our present officers and directors;
? may have the effect of delaying or preventing a change of control of us by
diluting the stock ownership or voting rights of a person seeking to obtain
control of us; and
? may adversely affect prevailing market prices for our Class A Common Stock
and/or warrants.
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Similarly, if we issue debt securities or otherwise incur significant debt to
bank or other lenders or the owners of a target, it could result in:
? default and foreclosure on our assets if our operating revenues after an
initial Business Combination are insufficient to repay our debt obligations;
? acceleration of our obligations to repay the indebtedness even if we make all
principal and interest payments when due if we breach certain covenants that
require the maintenance of certain financial ratios or reserves without a
waiver or renegotiation of that covenant;
? our immediate payment of all principal and accrued interest, if any, if the
debt security is payable on demand;
? our inability to obtain necessary additional financing if the debt security
contains covenants restricting our ability to obtain such financing while the
debt security is outstanding;
? our inability to pay dividends on our common stock;
? using a substantial portion of our cash flow to pay principal and interest on
our debt, which will reduce the funds available for dividends on our common
stock if declared, our ability to pay expenses, make capital expenditures and
acquisitions, and fund other general corporate purposes;
? limitations on our flexibility in planning for and reacting to changes in our
business and in the industry in which we operate;
? increased vulnerability to adverse changes in general economic, industry and
competitive conditions and adverse changes in government regulation;
? limitations on our ability to borrow additional amounts for expenses, capital
expenditures, acquisitions, debt service requirements, and execution of our
strategy; and
? other purposes and other disadvantages compared to our competitors who have
less debt.
We expect to continue to incur significant costs in the pursuit of our initial
Business Combination. We cannot assure you that our plans to complete our
initial Business Combination will be successful.
The Unit Purchase Agreement
On February 11, 2022, we and our sponsor entered into the Unit Purchase
Agreement with SHF, Seller, and PCCU. Pursuant to the Unit Purchase Agreement,
upon the Closing of the Business Combination, we will purchase all of the issued
and outstanding membership interests of SHF in exchange for an aggregate of
$185,000,000, consisting of (i) 11,386,139 shares of Class A Common Stock with
an aggregate value equal to $115,000,000 and (b) $70,000,000 in cash. The
obligations of the parties to consummate the Business Combination are subject to
the satisfaction or waiver of certain customary closing conditions of the
respective parties, including, without limitation: (a) the representations and
warranties of the respective parties being true and correct subject to the
materiality standards contained in the Unit Purchase Agreement; (b) material
compliance by the parties of their respective pre-closing covenants and
agreements, subject to the standards contained in the Unit Purchase Agreement;
(c) the approval by our stockholders of the Business Combination; (d) the
approval by the Seller's manager of the Business Combination; (e) the approval
by SHF's managers of the Business Combination; (f) the absence of any Material
Adverse Effect (as defined in the Unit Purchase Agreement) with respect to us or
with respect to SHF since the effective date of the Unit Purchase Agreement that
is continuing and uncured; (g) us having at least $5,000,001 in tangible net
assets upon the Closing; (h) the election of the members of the post-Closing
board of directors consistent with the provisions of the Unit Purchase
Agreement, a majority of which are to be independent in accordance with the
Nasdaq rules; (i) the entry into certain ancillary agreements as of the Closing;
(j) the lack of any notice or communication from, or position of, the SEC
requiring us to amend or supplement the proxy statement on Schedule 14A to be
delivered to our stockholders in connection with the approval of the Business
Combination and related matters; and (k) the receipt of certain closing
deliverables. On June 30, 2022, the Company, the Sponsor, SHF, the Seller, and
PCCU agreed to amend the Unit Purchase Agreement to extend the Outside Date
until July 29, 2022, with the ability for the deadline to be extended through
September 28, 2022, to provide the Company with additional time to complete the
Business Combination as it awaits regulatory approval.
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Concurrently with entering into the Unit Purchase Agreement, we entered into a
Securities Purchase Agreement with the PIPE Investors, pursuant to which, among
other things, the PIPE Investors agreed to subscribe for and purchase, and we
agreed to issue and sell to the PIPE Investors, an aggregate of 60,000 shares of
our Series A Convertible Preferred Stock and warrants to purchase up to a number
of shares of Class A Common Stock equal to 50% of shares of the Class A Common
Stock issuable upon conversion of the PIPE Shares for gross proceeds of $60.0
million the PIPE Financing. The closing of the PIPE Financing is contingent
upon, among other things, the substantially concurrent consummation of the
Business Combination. The Securities Purchase Agreement provides that it will
terminate upon the earlier to occur of (i) termination of the Unit Purchase
Agreement and (ii) the mutual written agreement of each of the parties. The
Securities Purchase Agreement could also be terminated under certain customary
and limited circumstances at any time prior to the closing of the PIPE
Financing, including, among others, if the closing had not occurred by June 30,
2022. The Company is currently completing satisfaction of its remaining closing
conditions, including regulatory approvals, and is discussing with the PIPE
Investors their continuing interest in the investment contemplated by the
Securities Purchase Agreement.
The Unit Purchase Agreement, the PIPE Financing, and related agreements thereto
are further described in the Form 8 K/A, filed by us on February 16, 2022.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities from inception to June 30, 2022, were organizational
activities, those necessary to prepare for the Initial Public Offering and
identifying a target company for a business combination. We do not expect to
generate any operating revenues until after the completion of our initial
Business Combination. We generate non-operating income in the form of interest
income on marketable securities held in the Trust Accounts. We incur expenses as
a result of being a public company (for legal, financial reporting, accounting
and auditing compliance), as well as for due diligence expenses.
For the three months ended June 30, 2021, we had a net loss of $1,743,727, which
consisted of $10,105 in operating and formation costs, $9,495 in unrealized loss
from marketable securities held on the Trust Account, change in fair value of
warrant derivative liabilities of $1,462,306 and offering costs allocated to
warrants of $261,838.
For the three months ended June 30, 2022, we had a net loss of $1,827,245 which
consisted of $1,874,043 in operating costs including $781,070 in costs
associated with the initial fair value of the forward purchase option at
contract inception, $60,969 in franchise tax expense, a change in fair value of
warrant derivative liabilities of $70,796, a change in fair value of the forward
purchase option derivative liability of $14,872 and income tax expense of
$13,526 offset by $145,992 in interest earned on marketable securities held in
the Trust Account.
For the period from February 26, 2021 (inception) through June 30, 2021, we had
a net loss of $1,744,522, which consisted of $10,900 in operating and formation
costs, $9,495 in unrealized loss from marketable securities held on the Trust
Account, change in fair value of warrant liabilities of $1,462,306 and offering
costs allocated to warrants of $261,838.
For the six months ended June 30, 2022, we had a net loss of $1,042,697 which
consisted of $2,593,830 in operating and formation costs including $781,070 in
costs associated with the initial fair value of the forward purchase option at
contract inception, $110,969 in franchise tax expense, a $14,872 change in fair
value of the forward purchase option derivative liability and $13,526 in income
tax expense offset by a change in fair value of warrant derivative liabilities
of $1,432,423 and $147,108 in interest earned on marketable securities held in
the Trust Account.
Liquidity and Capital Resources
On June 28, 2021, we consummated the Initial Public Offering of 11,500,000
Units, which includes the full exercise by the underwriter of the over-allotment
option to purchase 1,500,000 Units at $10.00 per Unit, generation gross proceeds
of $115,000,000. Simultaneously with the closing of the Initial Public Offering,
we consummated the sale of 528,175 Private Placement Units at $10.00 per Private
Placement Unit to our Sponsor, generating gross proceeds of $5,281,750.
For the six months ended June 30, 2022, cash used in operating activities was
$250,699.
Transaction costs of the Initial Public Offering amounted to $6,263,677
consisting of $1,725,000 of underwriting fees, $4,025,000 of deferred
underwriting fees (see Note 6) and $513,677 of other costs.
As of June 30, 2022, we had available to us $172,441 of cash on our balance
sheet and a working capital deficit of $1,810,112. We intend to use the funds
held outside of the Trust Account for identifying and evaluating prospective
acquisition candidates, performing business due diligence on prospective target
businesses, traveling to and from the offices, plants or similar locations of
prospective target businesses, reviewing corporate documents and material
agreements of prospective target businesses, selecting the target business to
acquire and structuring, negotiating and consummating the Business Combination.
The interest income earned on the investments in the Trust Account are
unavailable to fund operating expenses.
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The Company initially had until June 28, 2022 to consummate a Business
Combination. If the Company was unable to complete a Business Combination within
12 months from the closing of the Initial Public Offering, such period could (i)
be extended by the Company's stockholders in accordance with the Company's
amended and restated certificate of incorporation or (ii) at the election of the
Company subject to satisfaction of certain conditions, including the deposit of
up to $2,300,000 into the Trust Account, be extended up to six additional months
to December 28, 2022. On June 27, 2022, the Company, with proceeds advanced from
an affiliate of the Sponsor, deposited $1,150,000 in the Trust Account extending
operations for three months from June 28, 2022 to September 28, 2022. If the
Company is unable to complete a Business Combination by September 28, 2022, such
period could (i) be extended by the Company's stockholders in accordance with
the Company's amended and restated certificate of incorporation or (ii) at the
election of the Company subject to satisfaction of certain conditions, including
the deposit of up to $1,150,000 into the Trust Account, be extended an
additional three months to December 28, 2022. If the Company is unable to
complete a Business Combination by December 28, 2022 and such period is not
extended by the Company's stockholders in accordance with the Company's amended
and restated certificate of incorporation, the Company will (i) cease all
operations except for the purpose of winding up, (ii) as promptly as reasonably
possible but no more than ten business days thereafter, redeem the public
shares, at a per-share price, payable in cash, equal to the aggregate amount
then on deposit in the Trust Account, including interest earned on the funds
held in the Trust Account and not previously released to the Company to pay
taxes (less up to $100,000 of interest to pay dissolution expenses), divided by
the number of then outstanding public shares, which redemption will completely
extinguish public stockholders' rights as stockholders (including the right to
receive further liquidation distributions, if any), subject to applicable law,
and (iii) as promptly as reasonably possible following such redemption, subject
to the approval of the remaining stockholders and the Company's board of
directors, proceed to commence a voluntary liquidation and thereby a formal
dissolution of the Company, subject in each case to its obligations under
Delaware law to provide for claims of creditors and the requirements of
applicable law.
In order to fund working capital deficiencies or finance transaction costs in
connection with our initial Business Combination, our Sponsor or an affiliate of
our Sponsor or certain of our officers and directors may, but are not obligated
to, loan us funds as may be required. If we complete our initial Business
Combination, we would repay such loaned amounts. In the event that our initial
Business Combination does not close, we may use a portion of the working capital
held outside the Trust Accounts to repay such loaned amounts but no proceeds
from our Trust Accounts would be used for such repayment. Up to $1,500,000 of
such loans may be convertible into units identical to the Placement Units, at a
price of $10.00 per unit at the option of the lender.
Moreover, we will need to obtain additional financing either to complete our
initial Business Combination or because we become obligated to redeem a
significant number of our Public Shares upon consummation of our initial
Business Combination, in which case we have entered into the Securities Purchase
Agreements for the additional financing in connection with such Business
Combination. Subject to compliance with applicable securities laws, we expect to
complete such financing simultaneously with the completion of our initial
Business Combination. If we are unable to complete our initial Business
Combination because we do not have sufficient funds available to us, we will be
forced to cease operations and liquidate the Trust Accounts. In addition,
following our initial Business Combination, if cash on hand is insufficient, we
may need to obtain additional financing in order to meet our obligations.
If the Company is unable to raise additional capital, the Company may be
required to take additional measures to conserve liquidity, which could include,
but not necessarily be limited to, curtailing operations, suspending the pursuit
of a potential transaction, and reducing overhead expenses. The Company cannot
provide any assurance that new financing will be available to it on commercially
acceptable terms, if at all.
The Company intends to complete the proposed Business Combination before
September 28, 2022, and we believe we have sufficient arrangements with our
vendors to continue to operate until we complete our initial Business
Combination. However, there can be no assurance that the Company will be able to
consummate the Business Combination by then. In the event that we are unable to
consummate the Business Combination before September 28, 2022 we anticipate
identifying and accessing additional capital resources in order to extend the
Business Combination period to December 28, 2022. As a result, in connection
with the Company's assessment of going concern considerations in accordance with
Financial Accounting Standard Board's Accounting Standards Update ("ASU")
2014-15, "Disclosures of Uncertainties about an Entity's Ability to Continue as
a Going Concern," it is uncertain that the Company will have sufficient
liquidity to fund the working capital needs of the Company beyond September 28,
2022. Should a Business Combination not occur by September 28, 2022, Management
has determined that given the liquidity condition of the Company as well as the
uncertainty regarding the Company's ability to obtain capital to extend the
deadline to consummate the Business Combination, there is substantial doubt
about the Company's ability to continue as a going concern. No adjustments have
been made to the carrying amounts of assets or liabilities should the Company be
required to liquidate.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities which would be considered
off-balance sheet arrangements as of June 30, 2022. We do not participate in
transactions that create relationships with unconsolidated entities or financial
partnerships, often referred to as variable interest entities, which would have
been established for the purpose of facilitating off-balance sheet arrangements.
25
We have not entered any off-balance sheet financing arrangements, established
any special purpose entities, guaranteed any debt or commitments of other
entities, or purchased any non-financial assets.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities, other than an agreement to pay an
affiliate of the Sponsor a monthly fee up to $10,000 for office space, utilities
and secretarial and administrative support services. We began incurring these
fees on June 24, 2021 and will continue to incur these fees monthly until the
earlier of the completion of the Business Combination and our liquidation. For
the three and six months ending June 30, 2022, $30,000 and $60,000 in support
fees was incurred, respectively. $10,000 in support fees was incurred for both
the period from February 26, 2021 (inception) through June 30, 2021 and the
three months ending June 30, 2021. $10,000 and $0 in support fees was due to
Luminous Capital Inc., an affiliate of our Sponsor, at June 30, 2022 and
December 31, 2021, respectively.
The underwriter was paid a cash underwriting fee of 1.5% of gross proceeds of
the Public Offering, or $1,725,000. In addition, the Underwriter is entitled to
aggregate deferred underwriting commissions of $4,025,000 consisting of 3.5% of
the gross proceeds of the Public Offering. The deferred underwriting commissions
will become payable to the Underwriter from the amounts held in the Trust
Account solely in the event that the Company completes an initial Business
Combination, subject to the terms of the underwriting agreement.
In order to finance a portion of the Purchase Agreement consideration and the
costs and expenses incurred in connection therewith, we entered into the PIPE
Securities Purchase Agreements with the PIPE Investors concurrently with the
execution of the Purchase Agreement (the "PIPE Financing"), pursuant to which
such PIPE Investors committed to purchase the aggregate 60,000 PIPE Shares and
PIPE Warrants to purchase up to a number of shares of the Class A Stock equal to
50% of shares of the Class A Stock issuable upon conversion of the PIPE Shares.
The PIPE Shares were to be purchased at a purchase price of $1,000.00 per share
for an aggregate purchase price of $60,000,000. The PIPE Shares will convert
into shares of Class A Stock at a price of $10.00 per share of Class A Stock,
which conversion price is subject to downward adjustment pursuant to the PIPE
Certificate of Designation. The PIPE Warrants will have an exercise price of
$11.50 per share of Class A Stock to be paid in cash (except if the shares
underlying the warrants are not covered by an effective registration statement
after the six-month anniversary of the closing date, in which case cashless
exercise is permitted), subject to adjustment pursuant to the terms thereof.
Pursuant to the PIPE Securities Purchase Agreements, the PIPE Investors have the
right to terminate their commitments to purchase the PIPE Shares and PIPE
Warrants because the closing of the Business Combination did not occur by June
30, 2022. The placement agent for the PIPE Financing is currently contacting the
investors to confirm their continued interest in investing in the PIPE
Financing. The closing of the transactions contemplated by the PIPE Securities
Purchase Agreements will occur immediately prior to the closing of the Business
Combination, subject to the satisfaction or the waiver of the closing conditions
therein. The placement agent's fee for the PIPE Financing is currently being
negotiated.
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity
with GAAP requires the Company's management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities at the date of the financial statements, and
income and expenses during the periods reported. Actual results could materially
differ from those estimates. The Company has identified the following as its
critical accounting policies:
Use of Estimates
The preparation of condensed financial statements in conformity with GAAP
requires the Company's management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting periods.
Making estimates requires management to exercise significant judgment. It is at
least reasonably possible that the estimate of the effect of a condition,
situation or set of circumstances that existed at the date of the financial
statements, which management considered in formulating its estimate, could
change in the near term due to one or more future confirming events.
Accordingly, the actual results could differ significantly from those estimates.
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Financial Instruments
The Company determines fair value based on assumptions that market participants
would use in pricing an asset or liability in the principal or most advantageous
market. When considering market participant assumptions in fair value
measurements, the following fair value hierarchy distinguishes between
observable and unobservable inputs, which are categorized in one of the
following levels:
Level 1 Inputs: Unadjusted quoted prices for identical assets or instruments in
active markets.
Level 2 Inputs: Quoted prices for similar instruments in active markets and
quoted prices for identical or similar instruments in markets that are not
active and model derived valuations whose inputs are observable or whose
significant value drivers are observable.
Level 3 Inputs: Significant inputs into the valuation model are unobservable.
The Company does not have any recurring Level 2 or Level 3 assets or
liabilities. The carrying value of the Company's financial instruments including
its cash and accrued liabilities approximate their fair values principally
because of their short-term nature.
Net Loss Per Share of Common Stock
Net loss per share is computed by dividing net loss by the weighted average
number of common stock shares outstanding for the period. The calculation of
diluted loss per share does not consider the effect of the warrants issued in
connection with the Initial Public Offering and warrants issued as components of
the Private Placement Units (the "Placement Warrants") since the exercise of the
warrants are contingent upon the occurrence of future events and the inclusion
of such warrants would be anti-dilutive.
The Company applies the two-class method in calculating earnings per share. The
contractual formula utilized to calculate the redemption amount approximates
fair value. The Class feature to redeem at fair value means that there is
effectively only one class of stock. Changes in fair value are not considered a
dividend of the purposes of the numerator in the earnings per share calculation.
Net loss per common share is computed by dividing the pro rata net loss between
the redeemable shares and the non-redeemable shares by the weighted average
number of common shares outstanding for each of the periods. The calculation of
diluted loss per common stock does not consider the effect of the warrants
issued in connection with the IPO since the exercise of the warrants are
contingent upon the occurrence of future events and the inclusion of such
warrants would be anti-dilutive. The warrants are exercisable for 6,014,088
shares of common stock in the aggregate.
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments
are derivatives or contain features that qualify as embedded derivatives in
accordance with ASC Topic 815, "Derivatives and Hedging". For derivative
financial instruments that are accounted for as liabilities, the derivative
instrument is initially recorded at its fair value on the grant date and is then
re-valued at each reporting date, with changes in the fair value reported in the
statements of operations. The classification of derivative instruments,
including whether such instruments should be recorded as liabilities or as
equity, is evaluated at the end of each reporting period. Derivative liabilities
are classified in the balance sheet as current or non-current based on whether
net-cash settlement or conversion of the instrument could be required within 12
months of the balance sheet date.
Class A Common Stock Subject to Possible Redemption
The Company accounts for its common stock subject to possible redemption in
accordance with the guidance in Accounting Standards Codification ("ASC") Topic
480 "Distinguishing Liabilities from Equity." Common stock subject to mandatory
redemption (if any) is classified as a liability instrument and is measured at
fair value. Conditionally redeemable common stock (including common stock that
features redemption rights that are either within the control of the holder or
subject to redemption upon the occurrence of events not solely within the
Company's control) is classified as temporary equity. At all other times, common
stock is classified as stockholders' equity. The Company's common stock features
certain redemption rights that are outside of the Company's control and subject
to occurrence of uncertain future events. As of December 31, 2021, there were
12,028,175 shares of Class A Common Stock outstanding, for which 11,500,000
shares of Class A Common Stock were subject to possible redemption. As of June
30, 2022, there were 12,028,175 shares of Class A Common Stock outstanding with
7,695,128 shares of Class A Common Stock subject to possible redemption with
3,804,872 shares held by purchasers subject to the forward purchase agreement
who have waived their redemption rights.
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Recent Accounting Pronouncements
In August 2020, the FASB issued Accounting Standards Update ("ASU") No. 2020-06,
"Debt-Debt with Conversion and Other Options (Subtopic 470- 0) 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" ("ASU
2020-06"), which simplifies accounting for convertible instruments by removing
major separation models required under current U.S. GAAP. The ASU also removes
certain settlement conditions that are required for equity-linked contracts to
qualify for the derivative scope exception, and it simplifies the diluted
earnings per share calculation in certain areas. ASU 2020-06 is effective
January 1, 2022 and should be applied on a full or modified retrospective basis,
with early adoption permitted beginning on January 1, 2021. The Company is
currently assessing the impact, if any, that ASU 2020-06 would have on its
financial position, results of operations or cash flows.
Management does not believe that any other recently issued, but not yet
effective, accounting pronouncements, if currently adopted, would have a
material effect on the Company's financial statements.
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