NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2017 AND 2016
NOTE 1 – NATURE OF BUSINESS
ADM Tronics Unlimited, Inc. ("we", "us", "the Company" or "ADM"), was incorporated under the laws of the state of Delaware on November 24, 1969. We are a manufacturing and engineering concern whose principal lines of business are the design, manufacture and sale of electronics of our own products or on a contract manufacturing basis; the production and sale of chemical and antistatic products; and, research, development and engineering services.
Electronic equipment is manufactured in accordance with customer specifications on a contract basis. Our electronic device product line consists principally of proprietary devices used in diagnostics and therapeutics of humans and animals and electronic controllers for spas and hot tubs. These products are sold to customers located principally in the United States. We are registered with the FDA as a contract manufacturing facility and we manufacture medical devices for customers in accordance with their designs and specifications. Our chemical product line is principally comprised of water-based chemical products used in the food packaging and converting industries, and anti-static conductive paints, coatings and other products. These products are sold to customers located in the United States, Australia, Asia and Europe. We also provide research, development, regulatory and engineering services to customers. Our Sonotron Medical Systems, Inc. subsidiary (“Sonotron”) is involved in medical electronic therapeutic technology.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of ADM Tronics Unlimited, Inc. and its subsidiary Sonotron. All significant intercompany balances and transactions have been eliminated in consolidation.
USE OF ESTIMATES
These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and, accordingly, require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. Significant estimates made by management include expected economic life and value of our deferred tax assets, valuation allowance, impairment of long lived assets, fair value of equity instruments for services, allowance for doubtful accounts, and warranty reserves. Actual amounts could differ from those estimates.
FAIR VALUE OF FINANCIAL INSTRUMENTS
For certain of our financial instruments, including accounts receivable, accounts payable, accrued expenses, and notes payable – bank, the carrying amounts approximate fair value due to their relatively short maturities.
CASH AND CASH EQUIVALENTS
Cash equivalents are comprised of certain highly liquid investments with maturities of three months or less when purchased. We maintain our cash in bank deposit accounts, which at times, may exceed federally insured limits. We have not experienced any losses to date as a result of this policy. Cash and cash equivalents held in these accounts are currently insured by the Federal Deposit Insurance Corporation (“FDIC”) up to a maximum of $250,000. At March 31, 2017, approximately 1,659,000 exceeded the FDIC limit.
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS
Accounts receivable are stated at the amount management expects to collect from outstanding balances. The carrying amounts of accounts receivable is reduced by a valuation allowance that reflects management's best estimate of the amounts that will not be collected. Management individually reviews all accounts receivable balances that exceed the due date and estimates the portion, if any, of the balance that will not be collected. Management provides for probable uncollectible amounts through a charge to expenses and a credit to a valuation allowance, based on its assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable.
REVENUE RECOGNITION
ELECTRONICS:
We recognize revenue from the sale of our electronic products when they are shipped to the purchaser. We offer a limited 90-day warranty on our electronics products and a limited 5-year warranty on our electronic controllers for spas and hot tubs. We have no other post shipment obligations. Based on prior experience, no amounts have been accrued for potential warranty costs and actual costs were less than $2,000, for each of the fiscal years ended March 31, 2017 and 2016. For contract manufacturing, revenues are recognized after shipment of the completed products.
CHEMICAL PRODUCTS:
Revenues are recognized when products are shipped to end users. Shipments to distributors are recognized as revenue when no right of return exists.
ENGINEERING SERVICES:
We provide certain engineering services, including research, development, quality control and quality assurance services along with regulatory compliance services. We recognize revenue from engineering services as the services are provided.
WARRANTY LIABILITIES
The Company’s provision for estimated future warranty costs is based upon historical relationship of warranty claims to sales. Based upon historical experience, the Company has concluded that no warranty liability is required as of the consolidated balance sheet dates. However, the Company periodically reviews the adequacy of its product warranties and will record an accrued warranty reserve if necessary.
RESTRICTED CASH
Restricted cash represents funds on deposit with a financial institution that secures the bank note payable. The bank note payable was paid-off in 2017 and accordingly, there is no restricted cash.
INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out method) or market. Inventories that are expected to be sold within one operating cycle (1 year) are classified as a current asset. Inventories that are not expected to be sold within 1 year, based on historical trends, are classified as Inventories - long term portion.
PROPERTY & EQUIPMENT
We record our property and equipment at historical cost. We expense maintenance and repairs as incurred. Depreciation is provided for by the straight-line method over five to seven years, the estimated useful lives of the property and equipment.
INTANGIBLE ASSETS
Intangible assets are reviewed for impairment whenever changes in circumstances indicate that the carrying amount may not be recoverable. In reviewing for impairment, the Company compares the carrying value of the relevant asset to the estimated undiscounted future cash flows expected from the use of the assets and their eventual disposition. When the estimated undiscounted future cash flows are less than their carrying amount, an impairment loss is recognized equal to the difference between the assets’ fair value and its carrying value.
ADVERTISING COSTS
Advertising costs are expensed as incurred and amounted to $46,129 and $32,124 for the fiscal years ended March 31, 2017 and 2016, respectively.
SHIPPING AND HANDLING COSTS
Shipping and handling costs incurred for the years ended March 31, 2017 and 2016 were approximately $6,092 and $11,831, respectively. Such costs are included in selling, general, and administrative expenses in the accompanying consolidated statements of income.
INCOME TAXES
We report the results of our operations as part of a consolidated Federal tax return with our subsidiary. Deferred income taxes result primarily from temporary differences between financial and tax reporting. Deferred tax assets and liabilities are determined based on the difference between the financial statement bases and tax bases of assets and liabilities using enacted tax rates. A valuation allowance is recorded to reduce a deferred tax asset to that portion that is expected to more likely than not be realized.
The Company has adopted the authoritative accounting guidance with respect to accounting for uncertainty in income taxes, which clarified the accounting and disclosures for uncertain tax positions related to income taxes recognized in the consolidated financial statements and addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.
The Company files income tax returns in several jurisdictions. The Company’s tax returns remain subject to examination, by major jurisdiction, for the years ended March 31, as follows:
Jurisdiction
|
Fiscal Year
|
Federal
|
2013 and beyond
|
New Jersey
|
2012 and beyond
|
There are currently no tax years under examination by any major tax jurisdictions.
The Company will recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. As of March 31, 2017 and 2016, the Company has no accrued interest or penalties related to uncertain tax positions.
NET INCOME/LOSS PER SHARE
We compute basic income/loss per share by dividing net income/loss by the weighted average number of common shares outstanding. Diluted income/loss per share is computed similar to basic income/loss per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential shares had been issued and if the additional shares were dilutive. Common equivalent shares are excluded from the computation of net income/loss per share if their effect is anti-dilutive.
Per share basic and diluted net income amounted to $0.02 and $0.02 for the fiscal years ended March 31, 2017 and 2016, respectively.
RECLASSIFICATION
Certain items in the 2016 consolidated financial statements have been reclassified to conform to the current year presentation.
RECENT ACCOUNTING PRONOUNCEMENTS
In March 2016, the FSAB issued ASU 2016-09, “Improvement to Employee Share-Based Payment Accounting.” The new guidance will require entities to recognize all income tax effects of awards in the income statement when the awards vest or are settled. It also will allow an employer to repurchase more of an employee’s shares than it can today for tax withholding purposes without triggering liability accounting and to make a policy election to account for forfeitures as they occur. For public business entities, the guidance is effective for fiscal years beginning after December 15, 2016 and interim periods within those years. For all other entities, it is effective for fiscal years beginning December 15, 2017, and interim periods within fiscal years beginning after December 15, 2018. Early adoption is permitted, but all of the guidance must be adopted in the same period. The Company is still evaluating the potential impact on the Company’s financial statements.
On February 25, 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-2, “Leases” (Topic 842), 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 on assets and liabilities on their balance sheet for the rights to use those assets for the lease term and obligations to make lease payments created by those leases that have terms of greater than 12 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 effective for public entities beginning the first quarter 2019. We do not believe that this ASU will have a material impact on our financial statements.
In November 2015, the FASB issued ASU 2015-17, “Income Taxes, Balance Sheet Classifications of Deferred Taxes.” This amendment simplifies the presentation of deferred taxes by requiring that all deferred tax liabilities and assets now be recorded as noncurrent. This amendment is effective for interim and annual reporting periods beginning after December 15, 2016 with early adoption permissible. The Company adopted this amendment in March of 2017, which did not have any material impact on the Company’s results of operation.
In July 2015, the FASB issued ASU 2015-11, “Inventory. Simplifying the Measurement of Inventory.” This amendment only applies to entities that use the first-in, first-out (FIFO) or average cost methods of valuing inventory. Entities should now measure inventory at the lower of cost and net realizable value. This amendment aligns measurement of inventory in GAAP with the International Financial Reporting Standards (IFRS). This amendment is effective for annual periods beginning after December 15, 2016 with early adoption permitted. The Company will adopt this amendment in April of 2017. The Company does not believe that this amendment will have a material impact on their results of operation.
On May 14, 2014, FASB issued ASU 2015-14, “Revenue from Contracts with Customers,” which supersedes nearly all U.S. GAAP guidance on revenue recognition. The core principal of the standard is that revenue recognition should depict the transfer of goods and 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 standard is effective for the Company for the fiscal year beginning April 1, 2018 and the effects of the standard on the Company’s consolidated financial statements are not known at this time.
Management does not believe that any other recently issued, but not yet effective accounting pronouncement, if adopted, would have a material effect on the accompanying consolidated financial statements.
NOTE 3 - INVENTORIES
Inventories at March 31, 2017 consisted of the following:
|
|
Current
|
|
|
Long Term
|
|
|
Total
|
|
Raw materials
|
|
$
|
338,443
|
|
|
$
|
56,611
|
|
|
$
|
395,054
|
|
Finished Goods
|
|
|
31,353
|
|
|
|
-
|
|
|
|
31,353
|
|
|
|
$
|
369,796
|
|
|
$
|
56,611
|
|
|
$
|
426,407
|
|
Inventories at March 31, 2016 consisted of the following:
|
|
Current
|
|
|
Long Term
|
|
|
Total
|
|
Raw materials
|
|
$
|
187,333
|
|
|
$
|
51,939
|
|
|
$
|
239,272
|
|
Finished Goods
|
|
|
28,775
|
|
|
|
718
|
|
|
|
29,493
|
|
|
|
$
|
216,108
|
|
|
$
|
52,657
|
|
|
$
|
268,765
|
|
The Company values its inventories at the first in, first out ("FIFO") method at the lower of cost or market.
NOTE 4 - PROPERTY AND EQUIPMENT
Property and equipment as of March 31, 2017 and 2016 consisted of the following:
|
|
2017
|
|
|
2016
|
|
Computer equipment
|
|
$
|
-
|
|
|
$
|
13,364
|
|
Machinery and equipment
|
|
|
199,810
|
|
|
|
87,435
|
|
Leasehold improvements
|
|
|
3,750
|
|
|
|
3,750
|
|
|
|
|
203,560
|
|
|
|
104,549
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation and amortization
|
|
|
(32,562
|
)
|
|
|
(77,690
|
)
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
$
|
170,998
|
|
|
$
|
26,859
|
|
Depreciation and amortization expense related to property and equipment amounted to $16,142 and $3,620 for the years ended March 31, 2017 and 2016, respectively.
NOTE 5 - INTANGIBLE ASSETS
Intangible assets are being amortized using the straight-line method over periods ranging from 3-15 years with a weighted average remaining life of approximately 4.13 years.
|
|
March 31, 2017
|
|
|
March 31, 2016
|
|
|
|
Cost
|
|
|
Weighted
Average
Amortization
Period
(years)
|
|
|
Accumulated
Amortization
|
|
|
Net
Carrying
Amount
|
|
|
Cost
|
|
|
Weighted
Average
Amortization
Period
(years)
|
|
|
Accumulated
Amortization
|
|
|
Net
Carrying
Amount
|
|
Patents & Trademarks
|
|
$
|
20,934
|
|
|
|
15
|
|
|
$
|
(9,244
|
)
|
|
$
|
11,690
|
|
|
$
|
82,702
|
|
|
|
15
|
|
|
$
|
(69,616
|
)
|
|
$
|
13,086
|
|
Formulas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,446
|
|
|
|
15
|
|
|
|
(25,446
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Compete Agreement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
7
|
|
|
|
(50,000
|
)
|
|
|
-
|
|
Customer List
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
3
|
|
|
|
(10,000
|
)
|
|
|
-
|
|
|
|
$
|
20,934
|
|
|
|
|
|
|
$
|
(9,244
|
)
|
|
$
|
11,690
|
|
|
$
|
168,148
|
|
|
|
|
|
|
$
|
(155,062
|
)
|
|
$
|
13,086
|
|
Amortization expense was $1,395 for each of the years ended March 31, 2017 and 2016.
Estimated aggregate future amortization expense related to intangible assets is as follows:
For the fiscal years ended March 31,
|
|
|
|
|
2018
|
|
$
|
1,395
|
|
2019
|
|
|
1,395
|
|
2020
|
|
|
1,395
|
|
2021
|
|
|
1,395
|
|
Thereafter
|
|
|
6,110
|
|
|
|
$
|
11,690
|
|
NOTE 6 – NOTE PAYABLE, BANK
On August 21, 2008, the Company entered into a note payable with a commercial bank in the amount of $200,000. This note bears interest at a rate of 2% above the interest rate for the Company’s savings account at this bank. Interest rate at March 31, 2016 was 2.15%. The note was secured by cash on deposit with the institution, which was classified as restricted cash. Amounts outstanding under the note were payable on demand, and interest is payable monthly. During the year ended March 31, 2017, the Note was paid-off and the restrictions were lifted from the cash account.
NOTE 7 – CAPITAL LEASES
D
uring September 2016 the Company leased equipment with a cost of approximately $129,000, under provisions of various long-term capital leases whereby the minimum lease payments have been capitalized. Accumulated depreciation at March 31, 2017 is approximately $2,000. The leases expire over various years through 2021. Depreciation of the leased assets is included in depreciation and amortization expense. The lease obligations are secured by the leased assets.
Future minimum lease payments under the above capital leases, as of March 31, 2017, are approximately as follows:
For the Years Ending
March 31,
|
|
|
|
|
2018
|
|
$
|
35,000
|
|
2019
|
|
|
35,000
|
|
2020
|
|
|
35,000
|
|
2021
|
|
|
18,000
|
|
|
|
|
123,000
|
|
Less:
Amount attributable to imputed interest
|
|
|
8,000
|
|
|
|
|
|
|
Present value of minimum lease payments
|
|
|
115,000
|
|
L
ess:
Current maturities
|
|
|
31,000
|
|
|
|
|
|
|
|
|
$
|
84,000
|
|
NOTE 8 – CONCENTRATIONS
During the year ended March 31, 2017, one customer accounted for 59% of our net revenues. As of March 31, 2017, one customer accounted for 83% of our accounts receivable.
During the year ended March 31, 2016, one customers accounted for 45% of our net revenues. As of March 31, 2016, one customer accounted for 43% of our accounts receivable.
The Company’s customer base is comprised of foreign and domestic entities with diverse demographics. Revenues from foreign customers represented $332,693 of net revenue or 6.3% of net revenue for the year ended March 31, 2017. Revenues from foreign customers represented $374,130 of net revenue or 8.3% for the year ended March 31, 2016.
NOTE 9 - SEGMENT INFORMATION
Information about segments is as follows:
|
|
Chemical
|
|
|
Electronics
|
|
|
Engineering
|
|
|
Total
|
|
Year ended March 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from external customers
|
|
$
|
1,285,353
|
|
|
$
|
1,820,490
|
|
|
$
|
2,165,388
|
|
|
$
|
5,271,231
|
|
Segment operating income
|
|
$
|
216,371
|
|
|
$
|
361,484
|
|
|
$
|
560,706
|
|
|
$
|
1,138,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended March 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from external customers
|
|
$
|
1,412,179
|
|
|
$
|
849,447
|
|
|
$
|
2,251,444
|
|
|
$
|
4,513,070
|
|
Segment operating income
|
|
$
|
123,851
|
|
|
$
|
41,473
|
|
|
$
|
97,349
|
|
|
$
|
262,983
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets at March 31, 2017
|
|
$
|
1,110,111
|
|
|
$
|
1,553,484
|
|
|
$
|
1,857,054
|
|
|
$
|
4,520,649
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets at March 31, 2016
|
|
$
|
1,070,944
|
|
|
$
|
644,189
|
|
|
$
|
1,707,413
|
|
|
$
|
3,422,546
|
|
NOTE 10 - INCOME TAXES
At March 31, 2017, the Company had federal and state net operating loss carry-forwards, (NOL’s) of approximately $2,288,000, which are due to expire through fiscal 2033. These NOLs may be used to offset future taxable income through their respective expiration dates and thereby reduce or eliminate our federal and state income taxes otherwise payable. A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Ultimate utilization of such NOL’s and credits is dependent upon the Company’s ability to generate taxable income in future periods and may be significantly curtailed if a significant change in ownership occurs.
Significant components of deferred tax assets are as follows as of March 31, 2017 and 2016:
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
Deferred tax assets (liabilities):
|
|
|
|
|
|
|
|
|
Net operating loss carry-forward
|
|
$
|
915,000
|
|
|
$
|
1,407,000
|
|
Stock based compensation
|
|
|
279,000
|
|
|
|
239,000
|
|
Other
|
|
|
11,000
|
|
|
|
11,000
|
|
Deferred tax assets
|
|
|
1,205,000
|
|
|
|
1,657,000
|
|
Valuation allowance
|
|
|
(279,000
|
)
|
|
|
(800,000
|
)
|
|
|
|
|
|
|
|
|
|
Deferred tax asset, net
|
|
$
|
926,000
|
|
|
$
|
857,000
|
|
The change in the valuation allowance for the year ended March 31, 2016 decreased by $929,000.
The benefit from income taxes for the years ended at March 31, 2017 and 2016 differs from that amount using the statutory federal income tax rate as follows:
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
Statutory federal income tax rate
|
|
|
34
|
%
|
|
|
34
|
%
|
Change in valuation allowance
|
|
|
(40
|
%)
|
|
|
(362
|
%)
|
Effective income tax rate
|
|
|
(6
|
%)
|
|
|
(328
|
%)
|
NOTE 11 - COMMITMENTS AND CONTINGENCIES
We lease our office and manufacturing facility under a non-cancelable operating lease, which expires on June 30, 2019. The Company’s future minimum lease commitment at March 31, 2017 is as follows:
For the years ended March 31,
Year
|
|
Per year
|
|
2018
|
|
$
|
104,625
|
|
2019
|
|
$
|
26,156
|
|
|
|
$
|
130,781
|
|
Rent and real estate tax expense for all facilities for the years ended March 31, 2017 and 2016 was approximately $127,000 and $126,000, respectively.
NOTE 12 – STOCK BASED COMPENSATION
During 2013, ADM granted an aggregate of 5,600,000 stock options to employees and consultants expiring at various dates through March 2016. During 2014, 5,000,000 of the outstanding stock options were exercised.
On September 2, 2015, ADM granted an additional 3,000,000 stock options to employees at an exercise price of $0.20 per option and with a term of three years. The options were valued at $598,699 using the Black Scholes option pricing model with the following assumptions: risk free interest rate of 2.03%, volatility of 353%, estimated useful life of 3 years and dividend rate of 0%.
The following table summarizes information on all common share purchase options issued by us as of March 31, 2017 and 2016.
|
|
2017
|
|
|
2016
|
|
|
|
# of Shares
|
|
|
Weighted
Average
Exercise
Price
|
|
|
# of Shares
|
|
|
Weighted
Average
Exercise
Price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding, beginning of year
|
|
|
3,000,000
|
|
|
$
|
0.20
|
|
|
|
600,000
|
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued
|
|
|
-
|
|
|
$
|
-
|
|
|
|
3,000,000
|
|
|
$
|
0.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expired
|
|
|
-
|
|
|
$
|
-
|
|
|
|
(600,000
|
)
|
|
$
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding, end of year
|
|
|
3,000,000
|
|
|
$
|
0.20
|
|
|
|
3,000,000
|
|
|
$
|
0.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable, end of year
|
|
|
3,000,000
|
|
|
$
|
0.20
|
|
|
|
3,000,000
|
|
|
$
|
0.20
|
|
On October 26, 2016, ADM issued 290,000 shares of common stock at par value of $.0005 to two privately held companies for consulting and public relation services. On March 15, 2017, ADM issued an additional 290,000 shares at a par value of $.0005 to the same companies for additional services. During the year ended March 31, 2017, ADM issued a total of 580,000 shares of common stock. We estimated the value of these services to be $98,600 based on the quoted market price of a share of common stock on the date of issuance.
NOTE 13 - LEGAL PROCEEDINGS
None
NOTE 14 – SUBSEQUENT EVENTS
We evaluated all subsequent events from the date of the consolidated balance sheet through the issuance date of this report and determined that there are no events or transactions occurring during the subsequent event reporting period which require recognition or disclosure in the consolidated financial statements.