11.

Recent Accounting Pronouncements

Effective

January 1, 2018,

the Company adopted ASC Topic

606

“Revenue from Contracts with Customers”, using the modified retrospective method. This guidance supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods and services. The Company has drafted its accounting policy for the new standard based on a detailed review of its business and contracts. Based on the new guidance, the Company expects to continue to recognize revenue at the time its products are shipped, and therefore, adoption of this standard did

not

have a material impact on the financial statements.

Effective

January 2018,

the Company adopted Accounting Standards Update (“ASU”)

2016

01,

“Recognition and Measurement of Financial Assets and Financial Liabilities”. This amendment requires companies to measure equity investments at fair value with the changes in fair value recognized in net income. In accordance with the implementation of the standard, the Company made a cumulative-effect adjustment to increase retained earnings and decrease accumulated other comprehensive income as of

January 1, 2018

in the amount of

$466,025

to reflect the cumulative unrealized gains recorded as of that date.

February 2018,

the FASB issued ASU

2018

02,

“Income Statement- Reporting Comprehensive Income (Topic

220

): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” This guidance gives businesses the option of reclassifying to retained earnings the so-called “stranded tax effects” left in accumulated other comprehensive income due to the reduction in the corporate income tax rate resulting from the

2017

Tax Cuts and Jobs Act. This amendment is effective for all organizations for fiscal years beginning after

December 15, 2018

and interim periods within those fiscal years. Early adoption is allowed. The Company adopted this amendment in the

fourth

quarter of

2017.

As a result, a reclassification of

$34,595

was made to retained earnings at

December 31, 2017

to reflect the effect of the reduction in the federal corporate tax rate as it relates to the unrealized gains on marketable securities that are recorded in other comprehensive income.

February 2016,

the FASB issued ASU

2016

02,

“Leases”, which is intended to improve financial reporting for lease transactions. This ASU will require organizations that lease assets, such as real estate and manufacturing equipment, to recognize both assets and liabilities on their balance sheet for the rights to use those assets for the lease term and obligations to make the lease payments created by those leases that have terms of greater than

months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as finance or operating lease. This ASU will also require disclosures to help investors and other financial statement users better understand the amount and timing of cash flows arising from leases. These disclosures will include qualitative and quantitative requirements, providing additional information about the amounts recorded in the financial statements. This ASU will be adopted by the Company in the

first

quarter of

2019.

We do

not

believe that this ASU will have a material impact on our financial statements.

June 2016,

the FASB issued ASU-

2016

“Financial Instruments – Credit Losses”. This guidance affects organizations that hold financial assets and net investments in leases that are

not

accounted for at fair value with changes in fair value reported in net income. The guidance requires organizations to measure all expected credit losses for financial instruments at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. It is effective for fiscal years beginning after

December 15, 2019.

The Company is evaluating the potential impact on the Company’s financial statements.