10.	Revenue Recognition

May 2014,

August 2015

and

May 2016,

the FASB issued ASU

2014

Revenue from Contracts with Customers, ASU

2015

Revenue from Contracts with Customers, Deferral of the Effective Date, and ASU

2016

Revenue from Contracts with Customers, Narrow-Scope Improvements and Practical Expedients, respectively, which implement ASC Topic

606.

ASC Topic

606

outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance under U.S. GAAP, including industry-specific guidance. It also requires entities to disclose both quantitative and qualitative information that enable financial statements users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amendments in these ASUs are effective for annual periods beginning after

December 15, 2017,

and interim periods therein. These ASUs

may

be applied retrospectively with a cumulative adjustment to retained earnings in the year of adoption. As of

January 1, 2018,

the Company adopted this guidance and it did

not

have a material impact on our financial statements except for providing additional footnote disclosures related to revenue.

The Company records revenue under ASC Topic

606

at a single point in time, when control of the promised products or services is transferred to the customer, which is consistent with past practice. The Company’s revenue results from

two

sources, Parts and Service. All revenues for these

two

revenue streams are recorded for Parts when sold and Service when performed. Revenue is recognized at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those products or services. The Company does

not

have any agreements or contracts that have special provisions which would affect revenue recognition.

When consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a sales contract, we record unearned revenue, which represents a contract liability. Unearned revenue was

$15,000

as of

June 30, 2018

and

$2,000

as of

December 31, 2017

and is included in accrued expenses on the Company’s balance sheet. Unearned revenue was recorded as a result of customer deposits and

not

as a requirement of the newly implemented revenue recognition standard.

We recognize unearned revenue as net sales after we have transferred control of the goods or services to the customer and all revenue recognition criteria are met. The adoption of the new standard would have had

effect on the revenues, earnings and cash flows reported for the year ended

December 31, 2017,

had it been adopted prior to

January 1, 2018.

For the

second

quarter of

2018,

Parts and Service revenues were

$1,069,000

and

$1,282,000,

respectively. For the

six

months ended

June 30, 2018,

Parts and Service revenues were

$2,357,000

and

$2,815,000,

respectively.