2.	Basis of Presentation and Revenue Recognition P olicy

The interim financial information included in this report is unaudited; however, the information reflects all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary for the fair presentation of the consolidated financial position, results of operations and cash flows for the interim periods reflected herein. These interim condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and, therefore, omit certain information and note disclosures that would be necessary to present the statements in accordance with US generally accepted accounting principles (“US GAAP”). The interim condensed consolidated financial statements should be read in conjunction with the Company’s current year SEC filings, as well as the Company’s consolidated financial statements for the year ended

December 31, 2018,

which are included in the Company’s Annual Report on Form

-K for the fiscal year ended

December 31, 2018 (

the

“2018

Form

-K”), filed with the SEC on

March 6, 2019.

The results of operations for the

three

and

six

months ended

June 30, 2019

reported in this Quarterly Report on Form

-Q are

not

necessarily indicative of the results to be expected for the full year. The condensed consolidated balance sheet as of

December 31, 2018

was prepared using information from the audited consolidated balance sheet contained in the

2018

Form

-K; however, it does

not

include all disclosures required by US GAAP for annual consolidated financial statements.

As of

January 1, 2018,

the Company adopted the new accounting standard, Accounting Standards Codification (“ASC”)

606,

Revenue from Contracts with Customers

. This standard was retrospectively adopted for the

2017

year, and there was

cumulative effect adjustment upon adoption. Under ASC

606,

net sales includes revenue from products and shipping and handling charges, net of estimates for product returns and any related sales incentives. Revenue is measured as the amount of consideration that we expect to receive in exchange for transferring products. All revenue is recognized when we satisfy our performance obligations under the applicable contract. We recognize revenue in connection with transferring the promised products to the customer, with revenue being recognized at the point in time when the customer obtains control of the products, which is generally when title passes to the customer upon delivery, at which time a receivable is created for the invoice sent to the customer. We recognize revenue for shipping and handling charges at the time the products are delivered to or picked up by the customer. We estimate product returns based on historical return rates and estimate rebates based on contractual agreements. Using probability assessments, we estimate sales incentives expected to be paid over the term of the contract. Our contracts have a single performance obligation. Sales taxes and value added taxes in foreign and domestic jurisdictions that are collected from customers and remitted to governmental authorities are accounted for on a net basis and, therefore, are excluded from net sales. The Company manufactures certain private label goods for customers and has determined that control does

not

pass to the customer at the time of manufacture, based upon the nature of the private labelling. In connection with the adoption of ASC

606,

the Company determined that it had

material contract assets, and concluded that its contract liabilities (primarily rebates) had the right of offset against customer receivables. See Notes

and

for information on revenue disaggregated by type and by geographic region.