Note 16 – Recent Accounting Pronouncements:

Accounting Guidance Adopted by the Company

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASU 2014-09, which has been modified on several occasions, provides new guidance designed to enhance the comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets. The core principle of the new guidance is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The new guidance also requires disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted the new guidance effective January 1, 2018, using the full retrospective method, under which the Company applies the new guidance to each comparative period presented. Under the new guidance, the Company’s performance obligation to its customers under agreements currently in force is satisfied when the goods are shipped or picked up by the customer and title of the goods is transferred (generally upon such shipment or pick up); with regard to a customer for which the Company’s inventory is held at the customer’s warehouses, the Company’s performance obligation is deemed satisfied when the Company is notified of sales by the customer. While the timing of the Company’s revenue recognition did not change as a result of the new guidance, certain allowances provided by the Company to customers, primarily for cooperative advertising and freight, are now considered a reduction of net sales instead of an expense, resulting in a reduction of net sales of $992,480, a reduction of cost of goods sold of $127,648, and a reduction of advertising and promotional expense of $864,832 for the year ended December 31, 2017. This reclassification did not affect net income.

In November 2016, the FASB issued ASU 2016-18, which requires that a statement of cash flows explain the change during the reporting period in the total of cash, cash equivalents, and amounts generally described as restricted cash and restricted cash equivalents. The new guidance also requires disclosure of such amounts in the statements of cash flows or in the financial statement footnotes if restricted cash and restricted cash equivalents are presented in separate line items in the balance sheet. The Company adopted this guidance effective January 1, 2018. In accordance with the new guidance, the Company includes additional disclosures regarding its cash and restricted cash amounts in its consolidated statements of cash flows for each comparative period presented. The changes to the Company’s 2017 statement of cash flows are as follows:

	Originally Reported			ASU 2016-18 Adjustment		As Revised
Net cash provided by operating activities	$	2,928,277		$	-	$	2,928,277
Net cash used in investing activities		(8,023,092	)		2,747,360		(5,275,732	)
Net cash provided by financing activities		3,442,826			-		3,442,826
Effect of exchange rate fluctuations on cash		28			-		28
Net (decrease) increase in cash	$	(1,651,961	)	$	2,747,360	$	1,095,399

Accounting Guidance Not Yet Adopted by the Company

In February 2016, the FASB issued ASU 2016-02 (Topic 842) “Leases.” Under this new guidance, lessees (including lessees under leases classified as finance leases, which are to be classified based on criteria similar to that applicable to capital leases under current guidance, and leases classified as operating leases) will recognize a right-to-use asset and a lease liability on the balance sheet, initially measured as the present value of lease payments under the lease. Under current guidance, operating leases are not recognized on the balance sheet. However, the new guidance permits companies to make an accounting policy election not to apply the recognition provisions of the new guidance to short term leases (leases with a lease term of 12 months or less that do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise). If this election is made, lease payments under short term leases will be recognized on a straight-line basis over the lease term. The Company will adopt the new guidance effective January 1, 2019 using a modified retrospective method, under which it will record an immaterial cumulative adjustment to retained earnings rather than retrospectively adjusting prior periods. This application of the modified retrospective method will result in a balance sheet presentation that will not be comparable to the prior period in the first year of adoption. Based on the Company’s portfolio of leases at December 31, 2018, approximately $430,000 of lease assets and liabilities will be recognized on its balance sheet upon adoption, almost all of which relate to the lease for to the Company’s executive offices and manufacturing facilities located in Ft. Lauderdale, Florida. The Company does not expect the new standard to have a material impact on its results of operations or cash flows.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses,” which replaces the “incurred loss” model under current GAAP with a forward-looking “expected loss” model, principally in connection with financial assets subject to credit losses. Under current GAAP, an entity reflects credit losses on financial assets measured on an amortized cost basis only when it is probable that losses have been incurred, generally considering only past events and current conditions in making these determinations. The guidance under ASU 2016-13 prospectively replaces this approach with a forward-looking methodology that reflects the expected credit losses over the lives of financial assets, beginning when such assets are first acquired. Under the expected loss model, credit losses will be measured based not only on past events and current conditions, but also on reasonable and supportable forecasts that affect the collectability of financial assets. The guidance also expands disclosure requirements. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted as of January 1, 2019. The Company is currently evaluating the impact the adoption of this new standard will have on the Company’s financial statements.