CHEMBIO DIAGNOSTICS: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS (Form 10-K)

0
We develop, manufacture and commercialize point-of-care tests for the detection
and diagnosis of infectious diseases, including COVID 19, sexually transmitted
disease, and fever and tropical disease.

Our product portfolio is based upon our proprietary DPP technology, a diagnostic
platform that provides high-quality, cost-effective results in 15 to 20 minutes
using fingertip blood, nasal swabs and other sample types. The DPP technology
platform addresses the rapid diagnostic test market, which includes infectious
diseases, cardiac markers, cholesterol and lipids, pregnancy and fertility, and
drugs of abuse. Compared with traditional lateral flow technology, the DPP
technology platform can provide enhanced sensitivity and specificity, advanced
multiplexing capabilities and, with the DPP Micro Reader, quantitative results.

We target the market for rapid diagnostic test solutions for infectious
diseases, which is driven by the high prevalence of infectious diseases
globally, an increase in the geriatric population, growing demand for rapid test
results, and advancements in multiplexing. We have a broad portfolio of
infectious disease products, which prior to 2020 were focused principally on
sexually transmitted disease and fever and tropical disease. In February 2020 we
began the process of shifting substantially all of our resources to leverage the
DPP technology platform to address the acute and escalating need for diagnostic
testing for COVID-19.

Our products are sold worldwide, directly and through distributors, to medical laboratories and hospitals, government and public health entities, non-governmental organizations, healthcare professionals and retail establishments. . We continue to seek to expand our commercial distribution channels.

In 2020 we continued to invest in automating our test manufacturing processes,
all of which are now based in the United States. Among other actions, we
expanded our manufacturing capabilities by validating and implementing automated
lines. Our transition from manual to automated assembly is intended to add
capacity, reduce variable costs and improve product margins. In order to address
challenging economic conditions and implement our business strategy, we
continued to execute a program to reduce operating expenses and better align our
costs with revenues, including by eliminating positions that were no longer
aligned with our strategy.

Consolidated operating results

The results of operations for the years ended December 31, 2020 and 2019 were as
follows:

                                                         Year Ended December 31,
                                                              (in thousands)
                                                      2020                     2019

TOTAL REVENUES                                 $  32,470       100 %    $  34,464       100 %

COSTS AND EXPENSES:
Cost of product sales                             23,874        74 %       22,394        65 %
Research and development expenses                  9,509        29 %        8,538        25 %
Selling, general and administrative expenses      21,038        65 %       16,139        47 %
Severance and related costs                        1,122         3 %            -         0 %
Acquisition costs                                     63         0 %          721         2 %
                                                  55,606       171 %       47,792       139 %
LOSS FROM OPERATIONS                             (23,136 )     (71 )%     (13,328 )     (39 )%

OTHER (EXPENSE) / INCOME                          (2,842 )      (9 )%        (847 )      (2 )%

LOSS BEFORE INCOME TAX BENEFIT                   (25,978 )     (80 )%     (14,175 )     (41 )%

Income tax benefit                                   457         1 %          500         1 %
NET LOSS                                       $ (25,521 )     (79 )%   $ (13,675 )     (40 )%


The percentages in the table reflect the percentage of total income.

Total income

Total revenues during 2020 were $32.5 million, a decrease of $2.0 million, or
5.8%, compared to 2019. The decrease in total revenues reflected a $4.1 million,
or 14%, decrease in net product sales, which was principally comprised of (a)
lower sales in Africa, Latin America, and the United States associated with
diminished funding and the closure of clinics for HIV testing due to the
COVID-19 pandemic, offset in part by (b) The Company's success in achieving
regulatory approvals for and selling the COVID-19 IgM/IgG Systems in Latin
America and gains in Europe associated with our long term agreement with UNICEF
for our DPP Zika IgM/IgG and DPP ZCD IgM/IgG multiplex tests and Micro Readers.
The decrease in net product sales was offset in part by a $2.2 million, or
31.9%, increase in research and development and grant revenues relating to new
government grants for the development, and submission for U.S. regulatory
approval, of DPP SARS-CoV-2 Antigen and DPP Respiratory Panel test systems.

Gross product margin

Cost of product sales is primarily comprised of material, labor, manufacturing
overhead, depreciation and amortization, and freight and distribution costs.
Gross product margin is net product sales less cost of product sales, and gross
product margin percentage is gross product margin as a percentage of net product
sales.

The gross margin on product decreased by $ 5.6 million, i.e. 86.2% compared to 2019. The following scale calculates the gross margin of the product:

                                               For the years ended December 31           Favorable/
                                                 2020                   2019            (unfavorable)       % Change
                                                       (in thousands)
Net product sales                          $         24,767       $         28,845     $        (4,078 )        (14.1 )%
Less: Cost of product sales                         (23,874 )              (22,394 )            (1,480 )          6.6 %
Gross product margin                       $            893       $          6,451     $        (5,558 )        (86.2 )%
Gross product margin %                                  3.6 %                 22.4 %



                                       40
--------------------------------------------------------------------------------
  Table of Contents
In 2020 we invested in developing and offering products to address the COVID-19
pandemic, which we expect will have average selling prices greater than those of
our legacy products. We also continued to invest in automation in order to
reduce our reliance on manual labor and improve our product margins (see Q1'21
Restructuring Charge). The $5.6 million decrease in gross product margin was
comprised of (a) $4.7 million from unfavorable product margins and (b) $0.9
million from unfavorable product sales volume as described under "-Total
Revenues" above. The $4.6 million decrease from unfavorable product margins
principally reflected the following:

? We have incurred the cost of product sales for COVID-19 IgM / IgG systems that have been

returned by customers following the Revocation.

? Revocation prevented planned sales of COVID-19 IgM / IgG systems to customers

in United States during the last three quarters of 2020 and resulted in the

postponement of certain customer opportunities for the sale of COVID-19 IgM / IgG

Outdoor systems United States, which had a negative impact on our sales mix because

we recorded (a) a significant drop in sales in United States, or U.S

have our highest average selling prices, and (b) outside United States, a

higher combination of sales in geographic areas with lower average selling prices.

? We have experienced operational inefficiencies, including those triggered by the

Revocation and activities related to the qualification of automated lines for production

of certain products, which has resulted in an increase in the cost of sales of products as we

dramatically shifted our production of COVID-19 products towards legacy

   products.



                                       41
--------------------------------------------------------------------------------
  Table of Contents
Research and Development

This category includes costs incurred for clinical and regulatory affairs and other research and development activities, as follows:

                                                For the years ended December 31            Favorable/
                                                 2020                     2019            (unfavorable)       % Change
                                                        (in thousands)
Clinical and regulatory affairs            $          1,061         $          1,516     $           455           30.0 %
Other research and development                        8,448                    7,022              (1,426 )        (20.3 )%
Total research and development             $          9,509         $       

$ 8,538 (971) (11.4)%



The decrease in clinical and regulatory affairs costs for 2020 as compared to
2019 was primarily associated with reduced clinical trial costs following the
FDA's granting of premarket approval for the DPP HIV-Syphilis test during 2020,
offset in part by expenditures related to the DPP SARS-CoV-2 Systems. The
increase in other research and development costs was primarily related to costs
associated with the development of the DPP SARS-CoV-2 Systems.

Selling, general and administrative expenses

Selling, general and administrative expenses include administrative expenses,
sales and marketing costs (including commissions), and other corporate items.
The $4.9 million, or 30%, increase in selling, general and administrative
expenses for 2020 as compared to 2019  primarily reflected legal costs arising
subsequent to the Revocation, costs from expanding our U.S. commercial
organization, a full year of our Brazilian facility (which was acquired during
the fourth quarter of 2019), and facility costs related to the COVID-19
pandemic, offset in part by cost savings from retrenching our Malaysia facility
and other restructuring actions taken during the first quarter of 2020.

Severance pay, restructuring and other related costs

During the year ended December 31, 2020, the Company recognized $0.7 million in
net severance expenses related to the departure of Chembio's former chief
executive officer and the elimination of certain positions as part of its
multi-faceted expense reduction program to reduce operating expenses. The
Company undertook actions to adjust the size and composition of the
organization, including by removing positions that were non-essential in light
of its new business strategy, and to remove other expenses, all of which the
Company expects will provide savings throughout, and after, 2020.

In light of market dynamics, the Company retrenched its Malaysian operations,
including the termination of employment of its Malaysian workforce. The Company
will maintain its Malaysian subsidiary and sustain the product registrations
that were obtained throughout southeast Asia, with the benefit of having that
entity and the WHO prequalification certified facility.

Based on these activities, the Company took restructuring actions totaling $0.4
million to realign and resize its production capacity and cost structure. All
expenses have been paid as of December 31, 2020.

Acquisition costs

Acquisition costs include legal, due diligence, audit, and related costs
associated with acquisitions. The $0.7 million decrease in acquisition costs for
2020 as compared to 2019 reflected the fact that we completed acquisitions in
2019 but not 2020.

Other (Expense) / Income

Other (expense) / income  was principally comprised of interest expense net of
interest income. Interest expense increased by $2.0 million for 2020 as compared
to 2019, due to the interest paid on the term loan debt we incurred in September
2019.

Income Tax Benefit

For 2020 we recognized a tax benefit of $0.4 million primarily attributable to
the loss generated by Chembio Diagnostics Germany. As of December 31, 2020 and
2019, the Company recorded a full valuation allowance against its net deferred
tax assets.

Liquidity and capital resources

During the year ended December 31, 2020, we funded our business operations,
including capital expenditures and working capital requirements, principally
from a public offering of common stock, which generated proceeds of $28.4
million (net of expenses), and from cash and cash equivalents. Our operations
used $18.9 million of cash. As of December 31, 2020, we had outstanding
indebtedness of $20 million (carrying amount of $18.2 million) pursuant to the
Credit Agreement described under "-Sources of Funds-Credit Agreement" below.

                                       42
--------------------------------------------------------------------------------
  Table of Contents
We continually evaluate our liquidity requirements, capital needs and
availability of capital resources based on our operating needs and our planned
growth initiatives, particularly in the light of our shift in business focus to
the DPP SARS-CoV-2 Systems. We believe our existing cash and cash equivalents
will be sufficient to meet our anticipated cash needs for at least the next
twelve months. Our future working capital needs will depend on many factors,
including: the fact and timing of our receipt from the FDA of an EUA award for
the DPP SARS-CoV-2 Antigen System and/or the DPP Respiratory Panel System; the
fact and timing of our receipt from the FDA of a CLIA waiver for the DPP
HIV-Syphilis System; the rate of our business and revenue growth, including our
ability to successfully build distribution channels and commercialize the
COVID-19 Diagnostic Test Systems in geographies (principally Europe) covered by
our CE-Marks for those products, particularly if we are able to resume
commercialization of the COVID-19 Diagnostic Test Systems in the United States;
the occurrence and timing of regulatory approvals for other new products; the
timing of our continuing automation of U.S. manufacturing; and the timing of our
investment in research and development as well as sales and marketing. If our
sources of liquidity become insufficient to fund the growth of our business, we
may need to reduce the level or slow the timing of our growth plans, which would
likely curtail or delay the growth in our business contemplated by our operating
plan and could impair or defer our ability to achieve profitability and generate
cash flow, or to seek to raise additional funds through debt or equity
financings, strategic relationships, or other arrangements, to the extent
funding would be available to us on acceptable terms or at all. If we were to
raise additional funds through the issuance of equity or convertible securities,
the issuance could result in substantial dilution to existing stockholders, and
the holders of those new securities may have rights, preferences and privileges
senior to those of the holders of common stock.

Sources of funds

Credit agreement. At September 3, 2019, we, as the borrower, and certain of our subsidiaries, as guarantors, have entered into a credit and guarantee agreement, or the credit agreement, with Perceptive Credit Holdings II, LP, or the lender.

? The principal amount. The credit agreement provides for a $ 20,000,000 Senior

secured term credit facility, which has been drawn in full from September 4,

2019. Under the terms of the credit agreement, we may use the proceeds to

for general working capital purposes and for other purposes authorized for the business, to

refinance some of our existing debts and pay the fees, costs and

expenses incurred under the Credit Agreement.

? Interest rate. The principal overdue under the credit agreement bears interest

at an annual rate equal to the sum of (a) the greater of the two months London

Interbank rate offered and 2.5% plus (b) 8.75%. Any time an event

default (as described under “- Default Provisions” below) has occurred and is

Continuing, the interest rate will increase by 4.0%. The accrued interest is

payable monthly.

? Scheduled reimbursement. No capital repayment is due before September 30,

2022, unless we decide to prepay the capital as described in the section “- Optional

Prepayment “below or the principal is accelerated in the event of default

as described under “- Default Provisions” below. The main payments in the

number of $ 300,000 are payable on the last day of each of the eleven months

of September 2022 through July 2023, and all the remaining capital is payable

at maturity on September 3, 2023.

? Optional prepayment. We may prepay outstanding principal from time to time,

subject to payment of a premium on the prepaid principal equal to 10%

through September 3, 2020, 8% of September 4, 2020 through September 3, 2021,

and 4% of September 4, 2021 through September 3, 2022. No premium will be due

in respect of any prepayment made on or after September 4, 2022.

? Guarantees. Our subsidiaries Chembio diagnostic systems inc. and Chembio

Diagnosis Malaysia Sdn Bhd. have guaranteed, and the lender from time to time

may require our other subsidiaries to guarantee our obligations under the

   Credit Agreement.



? Security. Our obligations under the credit agreement are secured by a first

priority and perfect privilege on almost all of our property and assets,

including our holdings in our subsidiaries. Our subsidiary Chembio

Diagnostic Systems Inc. obtained its guarantee from our Credit Agreement

bonds with a lien on substantially all of its assets, and the lender of

from time to time may require Chembio Diagnostics Malaysia Sdn Bhd. and any of our

other subsidiaries that have guaranteed our credit agreement obligations to be made

   the same.



? Representations and guarantees; Financial and other commitments. To credit

Agreement that we have made the usual representations and warranties as well as

positive and negative restrictive covenants, including restrictive covenants

debts, liens, sureties, mergers and acquisitions, substantial assets

sales, investments and loans, sale-leaseback, transactions with

affiliates and fundamental changes. The credit agreement also contains

financial commitments requiring that we maintain total unallocated liquidity of

no less than $ 3,000,000 at any time and we get a specified minimum turnover

total amount of income for the four quarters (“last twelve months”) at September 30,

2019 and the last day of each calendar quarter thereafter. The minimum total

income amounts, which range from $ 32.0 million To $ 50.1 million, were

developed for the purposes of the credit agreement and do not reflect the

estimates and plans used by our management and board of directors to understand

and assess our operational performance, establish budgets and establish

operational objectives for the management of our company. So we do not think that

restrictive covenants provide useful information to investors or others

   enhancing an understanding of our future prospects.



                                       43

————————————————– ——————————-

Contents

? Default provisions. The credit agreement provides for the usual events of

default, including events of default based on non-payment of sums due under

credit agreement, defaults on other debts, misrepresentation, commitment

violations, changes of control, insolvency, bankruptcy and the occurrence of a

material adverse effect on the Company. In the event of failure resulting from

voluntary or involuntary bankruptcy, insolvency or

receivership, the amounts unpaid under the credit agreement will become

immediately due and payable and the Lender’s commitments will automatically be

ended. In the event of the occurrence and continuation of any other event of default,

the lender can expedite the payment of all obligations and terminate the lender’s contract

commitments under the credit agreement. When accelerating payment

following an event of default that occurred before September 4, 2021, the amounts

   due and payable by us will include a prepayment premium on accelerated
   principal in the amount described under "-Optional Prepayment" above.


We were in compliance with the financial covenants on cash and income balances at December 31, 2020.

Equities and equity-linked securities. We raised additional capital from a public offering of ordinary shares subscribed in 2020 for an amount of $ 28.4 million (net of charges).

Research and Development Awards. We routinely seek research and development
programs that may be awarded by government, non-governmental organizations, and
non-profit entities, including private foundations. Since 2015 we have received
over $14.2 million of funding from some of the world's leading health
organizations, which has helped us accelerate the expansion of our pipeline of
infectious disease tests. Our collaborators have included Bill & Melinda Gates
Foundation, The Paul G. Allen Family Foundation, FIOCRUZ and FIND, as well as
U.S. government agencies such as Centers for Disease Control and Prevention,
Biomedical Advanced Research and Development Authority or BARDA, and the U.S.
Department of Agriculture. See "Item 1. Business-Products" above. During the
year ended December 31, 2020, we recognized grant revenue totaling $2 million
from government, non-governmental organizations, and non-profit entities.

Working Capital. The following table sets forth selected working capital
information:

                                             December 31, 2020
                                              (in thousands)
Cash and cash equivalents                   $            23,066
Accounts receivable, net                                  3,377
Inventories, net                                         12,516
Prepaid expenses and other current assets                   779
Total current assets                                     39,738
Less: Total current liabilities                          12,351
Working capital                             $            27,387



On December 2, 2020, we were awarded a contract of $12.7 million from BARDA to
assist us in (a) developing, and requesting an EUA from the FDA for, the DPP
Respiratory Panel and (b) performing the clinical trials for and submitting the
DPP SARS-CoV-2 Antigen system to the FDA for a 510(k).

Our cash and cash equivalents at December 31, 2020, which included a restricted
amount of $1.0 million, were held for working capital purposes. We currently
intend to retain all available funds and any future earnings for use in the
operation of our business and do not anticipate paying any cash dividends. We
have not entered into, and do not expect to enter into, investments for trading
or speculative purposes. Our accounts receivable and inventory balances
fluctuate from period to period, which affects our cash flow from operating
activities. Fluctuations vary depending on cash collections, client mix, raw
material lead times, the mix of vendor terms, and the timing of shipment of our
products and the invoicing of our research and development activities.

Uses of funds

Cash Flow Used in Operating Activities. Our operations used $18.9 million of
cash during the year ended December 31, 2020, primarily due to the net loss
adjusted for non-cash items of $7.3 million and a $6.5 million increase in
inventory related to supply chain timelines, including materials for COVID-19
systems that were ordered but could not be cancelled following the Revocation.
Those uses of cash were offset in part by a $3.9 million increase in accounts
payable and other accrued liabilities, a $1.5 million increase in deferred
revenue, and a $0.3 million reduction in accounts receivable.

Capital Expenditures. Our capital expenditures totaled $4.2 million in 2020, of
which $4.0 million related to investments in automated manufacturing equipment,
facilities, and other fixed assets.

                                       44
--------------------------------------------------------------------------------
  Table of Contents
We have capital purchase obligations of $1.3 million related to additional
automated manufacturing equipment with payments expected to come due during 2021
based on vendor performance milestones.

Effects of inflation

Other than the impact of increases in minimum wage levels in New York, inflation
and changing prices have not had a material effect on our business, and we do
not expect that they will materially affect our business in the foreseeable
future. Any impact of inflation on cost of revenue and operating expenses,
especially employee compensation costs (including any effects of future
increases in minimum wages levels in New York), may not be readily recoverable
in the price of our product offerings.

Q1’21 restructuring charge

On January 14, 2021, the Company's Board of Directors (the "Board") approved a
restructuring plan ("2021 Plan") to better align its business priorities. The
Plan comprises the termination of employees primarily in the manufacturing
department. These actions were intended to better align the Company's cost
structure with the skills and resources required to more effectively pursue
opportunities in the marketplace and execute the Company's long-term growth
strategy.

Costs associated with the 2021 Plan are primarily related to Severance and Legal
costs. Severance payouts are expected to be substantially completed by the end
of the six months ending June 30, 2021. Under the 2021 Plan, the Company expects
to incur pre-tax charges between approximately $0.1 million and $0.2 million.

Off-balance sheet provisions

We have no off-balance sheet arrangements, as defined in Section 303 (a) (4) (ii) of Regulation SK under the Securities Exchange Act of 1934.

Significant accounting policies and critical accounting estimates

Our significant accounting policies are described in Note 2 - Significant
Accounting Policies to the audited consolidated financial statements included
herein. Certain of our accounting policies require the application of
significant judgment by management in selecting the appropriate assumptions for
calculating financial estimates. By their nature, these judgments are subject to
an inherent degree of uncertainty. These judgments are based on our historical
experience, terms of existing contracts, our evaluation of trends in the
industry, information provided by our customers and information available from
other outside sources, as appropriate. We consider an accounting estimate to be
critical if (a) it requires us to make assumptions about matters that were
uncertain at the time we were making the estimate and (b) changes in the
estimate or different estimates that we could have selected would have had a
material impact on our financial condition or results of operations.

The following listing is not intended to be a comprehensive list of all of our
accounting policies.  In many cases, the accounting treatment of a particular
transaction is specifically dictated by accounting principles generally accepted
in the United States, with no need for management's judgment in their
application. There are also areas in which management's judgment in selecting
any viable alternative would not produce a materially different result.

Revenue recognition

We recognize revenue for product sales in accordance with Financial Accounting
Standards Board Accounting Standards Codification, or ASC, 606, Revenue from
Contracts with Customers. Revenues from product sales are recognized when the
customer obtains control of our product, which occurs at a point in time,
typically upon tendering to the customer. We expense incremental costs of
obtaining a contract as and when incurred because the expected amortization
period of the asset that it would have recognized is one year or less or the
amount is immaterial. Freight and distribution activities on products are
performed after the customer obtains control of the goods. We have made an
accounting policy election to account for shipping and handling activities that
occur either when or after goods are tendered to the customer as a fulfillment
activity, and therefore recognizes freight and distribution expenses in cost of
product sales. We exclude certain taxes from the transaction price (e.g., sales,
value added and some excise taxes).

Product revenue reserves, which are classified as a reduction in product
revenue, are generally related to discounts and returns. Estimates of variable
consideration and the determination of whether to include estimated amounts in
the transaction price are based on all information (historical, current, and
forecasted) that is reasonably available to the Company, taking into
consideration the type of customer, the type of transaction, market events and
trends, and the specific facts and circumstances of each arrangement. The
transaction price, which includes variable consideration reflecting the impact
of discounts, allowances and returns may be subject to constraint and is
included in the net sales price only to the extent that it is probable that a
significant reversal of the amount of the cumulative revenue recognized will not
occur in a future period. Actual amounts may ultimately differ from the
Company's estimates. If actual results vary, the Company adjusts these
estimates, which could have an effect on revenue and earnings in the period of
adjustment.

For applicable contracts, we recognize revenue from research and development,
milestone and grant revenues when earned.  Grants are invoiced after expenses
are incurred. Revenues from projects or grants funded in advance are deferred
until earned. For certain collaborative research projects, we recognize revenue
by defining milestones at the inception of the agreement and applying judgement
and estimates in recognizing revenue for relevant contracts.

Stock-based compensation

We recognize the fair value of equity-based awards as compensation expense in
our consolidated statement of operations. The fair value of restricted stock and
restricted stock unit awards are their fair value on the date of grant. The fair
value of our stock option awards was estimated using a Black-Scholes option
valuation model. This valuation model's computations incorporate subjective
assumptions, such as the expected stock price volatility and the estimated life
of each award. The fair value of equity-based awards, after considering the
effect of expected forfeitures, is then amortized, generally on a straight-line
basis, over the related vesting period of the option.

                                       45
--------------------------------------------------------------------------------
  Table of Contents
Research and Development Costs

Research and development activities primarily consist of new product development, further engineering for existing products, and regulatory costs and clinical trials. Costs related to research and development efforts on existing or potential products are expensed / included as they are incurred.

Inventories

Inventories are stated at the lower of cost or net realizable value with cost
being determined using a standard cost method, which approximates average cost.
Average cost consists primarily of material, labor and manufacturing overhead
expenses (including fixed production-overhead costs). The Company analyzes its
inventory levels quarterly and writes down, in the applicable period, inventory
that has become obsolete, inventory that has a cost basis in excess of its
expected net realizable value and inventory in excess of expected customer
demand. The Company also writes off, in the applicable period, the costs related
to expired inventory. Costs of purchased inventories are recorded using
weighted-average costing.

Accounts receivable

Our policy is to review our accounts receivable on a periodic basis, no less
frequently than monthly. On a quarterly basis an analysis is made of the
adequacy of our allowance for doubtful accounts and adjustments are made
accordingly. The allowance was approximately 0.6% of accounts receivable as of
December 31, 2020.

Good will and intangible assets with indefinite useful life

We periodically review goodwill for impairment indicators. We review goodwill
for impairment annually in the fourth quarter or more frequently if events or
changes in circumstances indicate that goodwill might be impaired. We perform
the goodwill impairment review at the reporting unit level. We perform a
qualitative assessment of whether it is more likely than not that a reporting
unit's fair value is less than its carrying amount. If not, no further goodwill
impairment testing is performed. If so, we perform the step discussed hereafter.
Our qualitative assessment involves significant estimates, assumptions, and
judgments, including, macroeconomic conditions, industry and market conditions,
our financial performance, reporting unit specific events and changes in our
share price.

If the fair value of the reporting unit is greater than its carrying amount,
goodwill is not considered to be impaired. We would recognize an impairment
charge for the amount by which the carrying amount exceeds the reporting unit's
fair value, provided the impairment charge does not exceed the total amount of
goodwill allocated to the reporting unit.

Indefinite-lived intangible assets are tested for impairment annually during the
first fiscal quarter of the year, and when events or changes in circumstances
indicate the assets might be impaired. Impairment is indicated when the carrying
value of the intangible asset exceeds its fair value.

Recently published accounting position papers

Refer to Note 2 - Significant Accounting Policies to the audited consolidated
financial statements included herein for a complete description of recent
accounting standards that we have not yet been required to implement which may
be applicable to our operations. Additionally, the significant accounting
standards that have been adopted during the year ended December 31, 2020 are
described.

                                       46

————————————————– ——————————-

Contents

© Edgar online, source Previews

Leave A Reply

Your email address will not be published.