0001213900-19-023948.txt : 20191119 0001213900-19-023948.hdr.sgml : 20191119 20191118183804 ACCESSION NUMBER: 0001213900-19-023948 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 76 CONFORMED PERIOD OF REPORT: 20190930 FILED AS OF DATE: 20191119 DATE AS OF CHANGE: 20191118 FILER: COMPANY DATA: COMPANY CONFORMED NAME: US NUCLEAR CORP. CENTRAL INDEX KEY: 0001543623 STANDARD INDUSTRIAL CLASSIFICATION: MEASURING & CONTROLLING DEVICES, NEC [3829] IRS NUMBER: 454535739 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-54617 FILM NUMBER: 191228650 BUSINESS ADDRESS: STREET 1: 7051 ETON AVENUE CITY: CANOGA PARK STATE: CA ZIP: 91303 BUSINESS PHONE: 818-883-7043 MAIL ADDRESS: STREET 1: 7051 ETON AVENUE CITY: CANOGA PARK STATE: CA ZIP: 91303 FORMER COMPANY: FORMER CONFORMED NAME: APEX 3, INC. DATE OF NAME CHANGE: 20120301 10-Q 1 f10q0919_usnuclearcorp.htm QUARTERLY REPORT

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended SEPTEMBER 30, 2019

 

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission file number: 000-54617

 

 

(Exact name of registrant as specified in its charter)

 

Delaware   45-4535739
State or other jurisdiction of   (I.R.S. Employer
Incorporation or organization   Identification No.)

 

7051 Eton Avenue

Canoga Park, CA 91303

(Address of principal executive offices)

 

(818) 883-7043

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒   No  ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  ☒  No  ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 

 

Large accelerated filer  ☐ Accelerated filer  ☐
Non-accelerated filer  ☒ Smaller reporting company  ☒
  Emerging Growth Company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No  ☒

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
         

 

The number of shares of the Registrant’s common stock outstanding as of November 18, 2019 was 19,843,503.

 

 

 

 

 

 

TABLE OF CONTENTS

 

PART I    
Item 1. Financial Statements (Unaudited) 1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 16
Item 3. Quantitative and Qualitative Disclosures About Market Risk 21
Item 4. Controls and Procedures 21
PART II    
Item 1. Legal Proceedings 22
Item 1A. Risk Factors 22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 22
Item 3. Defaults Upon Senior Securities 22
Item 4. Mine Safety Disclosures 22
Item 5. Other Information 22
Item 6. Exhibits 23
  Signatures 24

 

i

 

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

US NUCLEAR CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

   September 30,   December 31, 
   2019   2018 
   (unaudited)   (audited) 
ASSETS 
         
CURRENT ASSETS        
Cash  $1,051,531   $969,118 
Accounts receivable, net   618,344    730,773 
Inventories   1,039,613    1,047,612 
Prepaid expenses and other current assets   4,500    2,500 
TOTAL CURRENT ASSETS   2,713,988    2,750,003 
           
Property and equipment, net   4,727    5,752 
Right-of-use assets   249,065      
Investment   10,000    10,000 
Acquisition deposit   300,000    - 
Goodwill   570,176    570,176 
TOTAL ASSETS  $3,847,956   $3,335,931 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY 
           
CURRENT LIABILITIES          
Accounts payable  $110,958   $93,263 
Accrued liabilities   37,491    54,511 
Accrued compensation - officer   425,000    350,000 
Customer deposit   4,928    96,571 
Acquisition contingency   35,989    57,142 
Note payable   16,875    16,262 
Operating lease liability   153,627      
Line of credit   215,197    222,490 
TOTAL CURRENT LIABILITIES   1,000,065    890,239 
           
Note payable, net of current portion   13,633    26,543 
Note payable to shareholder   398,551    413,555 
Operating lease liabillity, net of current portion   95,438    - 
TOTAL LIABILITIES   1,507,687    1,330,337 
           
COMMITMENTS & CONTINGENCIES   -    - 
           
SHAREHOLDERS’ EQUITY:          
Preferred stock, $0.0001 par value, 5,000,000 shares authorized; none issued and outstanding   -    - 
Common stock, $0.0001 par value; 100,000,000 shares authorized, 19,781,371 and 16,959,784 shares issued and outstanding   1,978    1,696 
Additional paid in capital   8,843,362    6,445,625 
Accumulated deficit   (6,505,071)   (4,441,727)
TOTAL SHAREHOLDERS’ EQUITY   2,340,269    2,005,594 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY  $3,847,956   $3,335,931 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

1

 

 

US NUCLEAR CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

 

   Three Months Ended   Nine Months Ended 
   September 30,   September 30, 
   2019   2018   2019   2018 
                 
Sales  $659,325   $1,145,480   $2,818,901   $2,706,785 
Cost of sales   336,882    633,384    1,392,608    1,429,606 
Gross profit   322,443    512,096    1,426,293    1,277,179 
                     
Operating expenses                    
Selling, general and administrative expenses   1,729,246    834,685    3,474,788    2,545,379 
Acquisition of manufacturing and supply rights   -    1,084,000    -    1,084,000 
Total operating expenses   1,729,246    1,918,685    3,474,788    3,629,379 
                     
Loss from operations   (1,406,803)   (1,406,589)   (2,048,495)   (2,352,200)
                     
Other income (expense)                    
Interest expense   (3,103)   (8,126)   (14,849)   (21,910)
Total other expense   (3,103)   (8,126)   (14,849)   (21,910)
                     
Loss before provision for income taxes   (1,409,906)   (1,414,715)   (2,063,344)   (2,374,110)
                     
Provision for income taxes   -    -    -    - 
                     
Net loss  $(1,409,906)  $(1,414,715)  $(2,063,344)  $(2,374,110)
                     
Weighted average shares outstanding - basic and diluted   18,654,300    16,584,617    17,748,583    15,643,639 
                     
Loss per shares - basic and diluted  $(0.08)  $(0.09)  $(0.12)  $(0.15)

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

2

 

 

US NUCLEAR CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

(unaudited)

 

   Common Stock   Additional
Paid-in
   Accumulated   Total
Shareholders’
 
   Shares   Amount   Capital   Deficit   Equity 
Balance, December 31, 2018   16,959,784   $1,696   $6,445,625   $(4,441,727)  $2,005,594 
                          
Issuance of common stock for services   257,050    26    118,541    -    118,567 
Net loss   -    -    -    (187,419)   (187,419)
                          
Balance, March 31, 2019   17,216,834    1,722    6,564,166    (4,629,146)   1,936,742 
                          
Issuance of common stock for services   615,287    61    804,070    -    804,131 
Issuance of common stock for cash   583,333    58    249,942    -    250,000 
Net loss   -    -    -    (466,019)   (466,019)
                          
Balance, June 30, 2019   18,415,454    1,841    7,618,178    (5,095,165)   2,524,854 
                          
Issuance of common stock for services   1,218,857    122    1,150,199    -    1,150,321 
Issuance of common stock for cash   147,060    15    74,985    -    75,000 
Net loss   -    -    -    (1,409,906)   (1,409,906)
                          
Balance, September 30, 2019   19,781,371   $1,978   $8,843,362   $(6,505,071)  $2,340,269 
                          
Balance, December 31, 2017   14,047,403   $1,405   $3,342,953   $(2,034,657)  $1,309,701 
                          
Issuance of common stock for services   386,410    38    632,918         632,956 
Issuance of common stock for cash   1,270,000    127    781,123         781,250 
Net loss                  (542,141)   (542,141)
                          
Balance, March 31, 2018   15,703,813    1,570    4,756,994    (2,576,798)   2,181,766 
                          
Issuance of common stock for services   126,000    13    328,307         328,320 
Issuance of common stock for cash   460,000    46    287,454         287,500 
Net loss                  (417,254)   (417,254)
                          
Balance, June 30, 2018   16,289,813    1,629    5,372,755    (2,994,052)   2,380,332 
                          
Issuance of common stock for services   326,000    33    448,707         448,740 
Issuance of common stock for acquisition   300,000    30    593,970         594,000 
Net loss                  (1,414,715)   (1,414,715)
                          
Balance, September 30, 2018   16,915,813   $1,692   $6,415,432   $(4,408,767)  $2,008,357 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

3

 

 

US NUCLEAR CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

   Nine Months Ended 
   September 30, 
   2019   2018 
         
OPERATING ACTIVITIES        
Net loss  $(2,063,344)  $(2,374,110)
Adjustment to reconcile net loss to net cash provided by (used in) operating activities:          
Depreciation and amortization   1,025    59,117 
Adjustment to acquisition contingency   (7,719)   6,631 
Issuance of common stock for services   2,073,019    1,410,016 
Issuance of common stock for manufacturing and supply rights        594,000 
Expenses paid directly by majority shareholder   -    41,900 
Operating lease expense   107,443    - 
Changes in operating assets and liabilities:          
Accounts receivable   112,429    (334,640)
Other receivables   -    - 
Inventories   7,999    89,671 
Prepaid expenses and other current assets   (2,000)     
Accounts payable   4,261    (38,534)
Accrued liabilities   (17,020)   (17,507)
Accrued compensation - officer   75,000    75,000 
Customer deposits   (91,643)   (36,855)
Operating lease liability   (107,443)   - 
Net cash provided by (used in) operating activities   92,007    (525,311)
           
INVESTING ACTIVITIES          
Purchase of property and equipment   -    (5,777)
Cash paid for investment   -    (10,000)
Cash paid for acquisition deposit   (300,000)   - 
Net cash used in investing activities   (300,000)   (15,777)
           
FINANCING ACTIVITIES          
Net borrowings (repayments) under lines of credit   (7,293)   (27,178)
Proceeds from sale of common stock   325,000    1,068,750 
Repayments for note payable   (12,297)   (11,280)
Proceeds from note payable to shareholder   15,155    - 
Repayments for note payable to shareholder   (30,159)   (40,174)
Net cash provided by (used in) financing activities   290,406    990,118 
           
NET INCREASE (DECREASE) IN CASH   82,413    449,030 
           
CASH          
Beginning of period   969,118    442,341 
End of period  $1,051,531   $891,371 
           
Supplemental disclosures of cash flow information          
Taxes paid  $-   $- 
Interest paid  $14,849   $21,910 
           
Reclassification of acquisition contingency to accounts payable  $13,434   $15,796 
Right of use asset and operating lease liability recognized  $356,508   $- 
Payment by stockholder for intangible asset and investment  $-   $26,000 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

4

 

 

US NUCLEAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

 

Note 1 – Organization

 

Organization and Line of Business

 

US Nuclear Corp., formerly known as APEX 3, Inc., (the “Company” or “US Nuclear”) was incorporated under the laws of the State of Delaware on February 14, 2012.

 

On May 31, 2016, the Company entered into an Asset Purchase Agreement with Electronic Control Concepts (“ECC”) whereby the Company purchased certain tangible and intangible assets of ECC.

 

The Company is engaged in developing, manufacturing and selling radiation detection and measuring equipment. The Company markets and sells its products to consumers throughout the world.

 

Note 2 – Basis Presentation

 

Interim financial statements

 

The unaudited interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosure are adequate to make the information presented not misleading.

 

These statements reflect all adjustment, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2018 and notes thereto included in the Company’s annual report on Form 10-K filed on April 17, 2019. The Company follows the same accounting policies in the preparation of interim report. Results of operations for the interim period are not indicative of annual results.

 

Principles of Consolidation

 

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Optron and its wholly-owned subsidiary, Overhoff Technology Corporation (“Overhoff”), and have been prepared in conformity with accounting principles generally accepted in the United States of America. All significant intercompany transactions and balances have been eliminated.

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. It is possible that accounting estimates and assumptions may be material to the Company due to the levels of subjectivity and judgment involved.

 

Cash and Cash Equivalents

 

Cash and cash equivalents include cash on hand and cash in time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less. There were no cash equivalents as of September 30, 2019 and December 31, 2018.

 

5

 

 

US NUCLEAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

 

Accounts Receivable

 

The Company maintains reserves for potential credit losses for accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves.  Reserves are recorded based on the Company’s historical collection history. Allowance for doubtful accounts as of September 30, 2019 and December 31, 2018 were $5,000 and $5,000, respectively.

 

Inventories

 

Inventories are valued at the lower of cost (determined primarily by the average cost method) or net realizable value. Management compares the cost of inventories with the net realizable value and allowance is made for writing down their inventories to net realizable value, if lower. As of September 30, 2019 and December 31, 2018, there was no allowance for slow moving or obsolete inventory. The Company periodically assessed its inventory for slow moving and/or obsolete items. If any are identified an appropriate allowance for those items is made and/or the items are deemed to be impaired.

 

Property and Equipment

 

Property and Equipment are stated at cost. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and betterments are capitalized. When equipment is retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of equipment is provided using the straight-line method for substantially all assets with estimated lives as follows:

 

Furniture and fixtures   5 years
Leasehold improvement   Lesser of lease life or economic life
Equipment   5 years
Computers and software   5 years

 

Long-Lived Assets

 

The Company applies the provisions of Accounting Standards Codification (“ASC”) Topic 360, Property, Plant, and Equipment, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. ASC 360 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair values are reduced for the cost of disposal. Based on its review at September 30, 2019 and December 31, 2018, the Company believes there was no impairment of its long-lived assets.

 

Intangible Assets

 

The Company’s intangible assets at September 30, 2019 and December 31, 2018 were all acquired with the purchase of ECC and are being amortized over 24 months. The Company performs a test for impairment at least annually. No impairment test was performed as of the intangible assets were fully amortized. 

 

Goodwill

 

Goodwill represents the excess of purchase price over the underlying net assets of businesses acquired. The entire goodwill balance in the accompanying financial statements resulted from the Company’s acquisition of Overhoff Technology Corporation in 2006. The Company complies with ASC 350, Goodwill and Other Indefinite Lived Intangible Assets , requiring that a test for impairment be performed at least annually. As of September 30, 2019 and December 31, 2018 the Company performed the required impairment analysis which resulted in no impairment adjustments. 

 

6

 

 

US NUCLEAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

 

Fair Value of Financial Instruments

 

For certain of the Company’s financial instruments, including cash, accounts receivable, accounts payable, accrued liabilities, customer deposits, and line of credit, the carrying amounts approximate their fair values due to their short maturities. In addition, the Company has a note payable to shareholder that the carrying amount also approximates fair value.

  

Revenue Recognition

 

Accounting Standards Update (“ASU”) No. 2014-09,  Revenue from Contracts with Customers  (“Topic 606”), became effective for the Company on January 1, 2018. The Company’s revenue recognition disclosure reflects its updated accounting policies that are affected by this new standard. The Company applied the “modified retrospective” transition method for open contracts for the implementation of  Topic 606. As   sales are and have been primarily from the sale of products to customers, and the Company has no significant post-delivery obligations, this new standard did not   result in a material recognition of revenue on the Company’s accompanying consolidated financial statements for the cumulative impact of applying this new standard. The Company made no adjustments to its previously-reported total revenues, as those periods continue to be presented in accordance with its historical accounting practices under  Topic 605, Revenue Recognition.

 

Revenue from the product sales are recognized under  Topic 606  in a manner that reasonably reflects the delivery of its products to customers in return for expected consideration and includes the following elements:

 

executed contracts with the Company’s customers that it believes are legally enforceable;

 

identification of performance obligations in the respective contract;

 

determination of the transaction price for each performance obligation in the respective contract;

 

allocation the transaction price to each performance obligation; and

 

recognition of revenue only when the Company satisfies each performance obligation.

 

These five elements, as applied to each of the Company’s revenue category, is summarized below:

 

Product sales - revenue is recognized when the Company performs its obligations under the contracts it has with its customers to deliver products at an agreed upon price and it is generally when the control of the product has been transferred to the customer.

   

Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as customer deposits.

 

Sales returns and allowances was $0 for the nine months ended September 30, 2019 and 2018. The Company provides a one-year warranty on all sales. Warranty expense for the nine months ended September 30, 2019 and 2018 was insignificant. The Company does not provide unconditional right of return, price protection or any other concessions to its customers.

 

See Notes 12 and 13 for disclosures of revenue disaggregated by geographical area and product line.

 

Customer Deposits

 

Customer deposits represent cash paid to the Company by customers before the product has been completed and shipped.

 

Income Taxes

 

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes . ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

7

 

 

US NUCLEAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

 

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption had no effect on the Company’s consolidated financial statements.

 

Stock-Based Compensation

 

The Company records stock-based compensation in accordance with FASB ASC Topic 718, ” Compensation – Stock Compensation.” FASB ASC Topic 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the employee’s requisite service period. The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees.

 

Basic and Diluted Earnings Per Share

 

Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share . Basic earnings per share (“EPS”) is based on the weighted average number of common shares outstanding. Diluted EPS is based on the assumption that all dilutive convertible shares and stock warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. There were no potentially dilutive securities outstanding during the nine months ended September 30, 2019 and 2018.

 

Segment Reporting

 

FASB ASC Topic 280, Segment Reporting , requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. The Company determined it has two reportable segments. See Note 12.

 

Related Parties

 

The Company accounts for related party transactions in accordance with ASC 850, Related Party Disclosures . A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.

 

Reclassifications

 

Certain prior period amounts were reclassified to conform to the manner of presentation in the current period. These reclassifications had no effect on the net loss or stockholders’ equity. 

 

Recent Accounting Pronouncements

 

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers.  ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle-based approach for determining revenue recognition.  ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract.  The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract.  ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017.   Early adoption is permitted only in annual reporting periods beginning after December 15, 2016, including interim periods therein.  Entities will be able to transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company adopted this ASU beginning on January 1, 2018 and used the modified retrospective method of adoption. The adoption of this ASC did not have a material impact on the Company’s financial statements and disclosures.

 

8

 

 

US NUCLEAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

 

In June 2018, the FASB issued Accounting Standards Update (“ASU”) ASU 2018-07, Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting , which simplifies the accounting for share-based payments granted to nonemployees for goods and services and aligns most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees. ASU 2018-07 is effective on January 1, 2019. Early adoption is permitted. The Company adopted this ASU on January 1, 2019 with no material impact on the Company’s financial statements.

 

In February 2016, the FASB issued ASU 2016-02,  Leases (Topic 842). ASU 2016-02 requires lessees to recognize lease assets and lease liabilities on the balance sheet and requires expanded disclosures about leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods in fiscal years beginning after December 15, 2018, with early adoption permitted. ASU 2016-02 and additional ASUs are now codified as Accounting Standards Codification Standard (“ASC”) 842 - Leases (“ASC 842”). ASC 842 supersedes the lease accounting guidance in ASC 840 Leases, and requires lessees to recognize a lease liability and a corresponding lease asset for virtually all lease contracts. It also requires additional disclosures about leasing arrangements. The Company adopted ASC 842 on January 1, 2019 and used the modified retrospective transition approach and did not restate its comparative periods. As of the date of implementation on January 1, 2019, the impact of the adoption of ASC 842 resulted in the recognition of a right of use asset and lease payable obligation on the Company’s consolidated balance sheets of $356,508. As the right of use asset and the lease payable obligation were the same upon adoption of ASC 842, there was no cumulative effect impact on the Company’s accumulated deficit. 

 

Note 3 – Inventories

 

Inventories at September 30, 2019 and December 31, 2018 consisted of the following:

 

   September 30,   December 31, 
   2019   2018 
Raw materials  $705,662   $591,970 
Work in Progress   100,186    25,353 
Finished goods   233,765    430,289 
Total inventories  $1,039,613   $1,047,612 

 

At September 30, 2019 and December 31, 2018 the inventory reserve was $0.

 

Note 4 – Property and Equipment

 

The following are the details of the property and equipment at September 30, 2019 and December 31, 2018:

 

   September 30,   December 31, 
   2019   2018 
Furniture and fixtures  $148,033   $148,033 
Leasehold Improvements   50,091    50,091 
Equipment   233,826    233,826 
Computers and software   33,036    33,036 
    464,986    464,986 
Less accumulated depreciation   (460,259)   (459,234)
Property and equipment, net  $4,727   $5,752 

 

Depreciation expense for the nine months ended September 30, 2019 and 2018 was $1,025 and $5,276, respectively. At September 30, 2019, the Company has $437,044 of fully depreciated property and equipment that is still in use.

 

9

 

 

US NUCLEAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

 

Note 5 – Investment

 

On August 3, 2018, the Company closed an agreement by and among, MIFTEC Laboratories, Inc. (“MIFTEC”), a licensee of Magneto-Inertial Fusion Technologies, Inc., (“MIFTI”), and the Company. MIFTEC is a licensee of MIFTI radionuclide technology. MIFTEC will engage the Company to manufacture equipment pursuant to MIFTEC’s specifications and designs and have the Company as a sales representative for the manufactured equipment. The Company will be the exclusive manufacturer and supplier to MIFTEC of equipment in North America and Asia. In addition, the Company received a 10% ownership interest in MIFTEC. The consideration for the exclusive manufacturing rights and a 10% ownership interest in MIFTEC was $500,000 and 300,000 shares of the Company’s common stock valued at $594,000. The fair value was determined based on the Company’s stock price on August 3, 2018. The Company recorded the value of the 10% interest in MIFTEC at $10,000 and recorded $1,084,000 as the acquisition of manufacturing and supply rights in the accompanying consolidated statement of operations during the year ended December 31, 2018. The Company evaluated this investment for impairment and determined that no impairment was necessary during the nine months ended September 30, 2019. The carrying value of this investment at September 30, 2019 and December 31, 2018 was $10,000 and $10,000, respectively.

 

Note 6 – Acquisition Deposit

 

In April 2019, the Company also entered into a Cooperative Agreement with Magneto-Inertial Fusion Technologies, Inc (“MIFTI”) whereby the Company acquired certain exclusive manufacturing and supply rights, including thermonuclear fusion-powered reactor for production of electricity per MIFTI designs in return for $500,000, of which $100,000 is payable upon signing, $200,000 within four months of the agreement and $200,000 within nine months of the agreement. The $500,000 is an option to buy a 10% interest in MIFTI for $2,700,000, if completed with 24 months of the agreement date. If the options expires, MIFTI shall issue the Company 500,000 shares of common stock and rescind all other exclusive rights contained in the agreement. As of September 30, 2019, the Company has paid $300,000 which is presented as an acquisition deposit in the accompanying consolidated balance sheet.

 

Note 7 – Notes Payable

 

In connection with the acquisition of assets from ECC, the Company issued a note payable to the owner of ECC. The note accrued interest at 5% per annum, requires quarterly principal and interest payments of $4,518 and is due on April 15, 2021. At September 30, 2019 and December 31, 2018, the amount outstanding under this note payable was $30,508 and $42,805, respectively. The Company repaid $12,297 during the nine months ended September 30, 2019.

 

Future maturities of notes payable as of September 30, 2019 are as follows:

 

Twelve months ending September 30,    
2020  $16,875 
2021   13,633 
   $30,508 

 

Note 8 – Note Payable to Shareholder

 

Robert Goldstein, the CEO and majority shareholder, has loaned funds to the Company from time to time to cover general operating expenses. These loans are evidenced by unsecured, non-interest bearing notes due on December 31, 2020. During the nine months ended September 30, 2019, the Company’s majority shareholder loaned an additional $15,155 to the Company and was repaid $30,159. During the nine months ended September 30, 2018, the Company’s majority shareholder was repaid $40,174. The amounts due to Mr. Goldstein are $398,551 and $413,555 as of September 30, 2019 and December 31, 2018, respectively.

 

10

 

 

US NUCLEAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

 

Note 9 – Line of Credit

 

As of September 30, 2019, the Company had four lines of credit with a maximum borrowing amount of $400,000 with interest ranging from 5.5% to 11.5%. As of September 30, 2019, and December 31, 2018, the amounts outstanding under these lines of credit were $215,197 and $222,490, respectively.

 

Note 10 – Leases

 

The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company must discount lease payments based on an estimate of its incremental borrowing rate which is based on the interest rate of similar debt outstanding.

 

The Company leases its current facilities from Gold Team Inc., a company owned by the Company’s CEO, which owns both the Canoga Park, CA and Milford, Ohio locations. The leases expire on April 30, 2020 and the Company expects to exercise a renewal option for an additional 12 months. Effective January 1, 2019, the Company adopted the provision of ASC 842 Leases.

 

The table below presents the lease related assets and liabilities recorded on the Company’s consolidated balance sheets as of September 30, 2019: 

 

   Classification on Balance Sheet  September 30,
2019
 
Assets       
Operating lease assets  Operating lease right of use assets  $249,065 
Total lease assets     $249,065 
         
Liabilities        
Current liabilities        
Operating lease liability  Current operating lease liability  $153,627 
Noncurrent liabilities        
Operating lease liability  Long-term operating lease liability   95,438 
Total lease liability     $249,065 

 

Lease obligations at September 30, 2019 consisted of the following:

 

Twelve months ending September 30,    
2020  $168,000 
2021   98,000 
Total payments   266,000 
Amount representing interest   (16,935)
Lease obligation, net   249,065 
Less lease obligation, current portion   (153,627)
Lease obligation, long-term portion  $95,438 

 

The lease expense for the nine months ended September 30, 2019 was $126,000 which consisted of amortization expense of $107,443 and interest expense of $18,557. The cash paid under operating leases during the nine months ended September 30, 2019 was $126,000. At September 30, 2019, the weighted average remaining lease terms were 1.6 years and the weighted average discount rate was 8%

 

11

 

 

US NUCLEAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

 

Note 11 – Shareholders’ Equity

 

During the nine months ended September 30, 2019, the Company issued:

 

2,086,144 shares of common stock to consultants and board members for services rendered valued at $2,070,494. The fair value was determined based on the Company’s stock price on the grant date

 

5,050 shares of common stock to employees for compensation valued at $2,525. The fair value was determined based on the Company’s stock price on the grant date; and

 

730,393 shares of common stock for cash of $325,000.

 

Note 12 – Segment Reporting

 

ASC Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. The Company has two reportable segments: Optron and Overhoff. Optron is located in Canoga Park, California and Overhoff is located in Milford, Ohio. The assets and operations of the Company’s recent acquisition of the assets of Electronic Control Concepts are included with Overhoff in the table below.

 

The following tables summarize the Company’s segment information for the three and nine months ended September 30, 2019 and 2018:

 

   Three Months Ended September 30,   Nine Months Ended
September 30,
 
   2019   2018   2019   2018 
                 
Sales                
Optron  $72,619   $377,775   $1,132,364   $850,360 
Overhoff   586,706    767,705    1,686,537    1,856,425 
Corporate   -    -    -    - 
   $659,325   $1,145,480   $2,818,901   $2,706,785 
                     
Gross profit                    
Optron  $33,102   $171,694   $619,597   $394,668 
Overhoff   289,341    340,402    806,696    882,511 
Corporate   -    -    -    - 
   $322,443   $512,096   $1,426,293   $1,277,179 
                     
Income (loss) from operations                    
Optron  $(160,601)  $38,444   $81,650   $17,118 
Overhoff   112,012    161,032    246,747    346,128 
Corporate   (1,358,214)   (1,606,065)   (2,376,892)   (2,715,446)
   $(1,406,803)  $(1,406,589)  $(2,048,495)  $(2,352,200)
                     
Interest Expenses                    
Optron  $2,724   $5,285   $13,460   $17,605 
Overhoff   -    485    49    1,949 
Corporate   379    2,356    1,340    2,356 
   $3,103   $8,126   $14,849   $21,910 
                     
Net income (loss)                    
Optron  $(157,325)  $33,159   $86,190   $(487)
Overhoff   103,012    160,547    219,698    344,179 
Corporate   (1,355,593)   (1,608,421)   (2,369,232)   (2,717,802)
   $(1,409,906)  $(1,414,715)  $(2,063,344)  $(2,374,110)

 

12

 

  

US NUCLEAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

 

   As of   As of 
   September 30,   December 31, 
   2019   2018 
Total Assets          
Optron  $1,454,897   $1,324,707 
Overhoff   1,940,046    1,811,483 
Corporate   453,013    199,741 
   $3,847,956   $3,335,931 
           
Goodwill          
Optron  $-   $- 
Overhoff   570,176    570,176 
Corporate   -    - 
   $570,176   $570,176 

 

Note 13 – Geographical Sales

 

The geographical distribution of the Company’s sales for the three and nine months ended September 30, 2019 and 2018 is as follows:

 

   Three Months Ended
September 30,
   Nine Months Ended
September 30,
 
   2019   2018   2019   2018 
Geographical sales                
North America  $187,819   $463,678   $995,861   $1,431,443 
Middle East   -    -    751,100    - 
Asia   429,536    607,408    972,154    1,055,726 
South America   -    59,929    11,576    139,237 
Other   41,970    14,465    88,210    80,379 
   $659,325   $1,145,480   $2,818,901   $2,706,785 

 

Note 14 – Related Party Transactions

 

The Company leases its current facilities from Gold Team Inc., a company owned by the Company’s CEO, which owns both the Canoga Park, CA and Milford, Ohio locations. Rent expense for the nine months ended September 30, 2019 and 2018 were $126,000 and $126,000, respectively. As of September 30, 2019 and December 31, 2018, payable to Gold Team Inc. in connection with the above leases amount to $28,000 and $0, respectively. (See Note 10)

 

13

 

 

US NUCLEAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

 

In addition, as of September 30, 2019 and December 31, 2018, the Company had accrued compensation payable to its majority shareholder of $425,000 and $350,000, respectively.

 

Also see Note 7.

 

Note 15 – Concentrations

 

One customer accounted for 26.8% of the Company’s sales for the nine months ended September 30, 2019 and two customers accounted for 30% and 20% of the Company’s sales for the nine months ended September 30, 2018.

 

No vendors accounted for more than 10% of the Company’s purchases for the nine months ended September 30, 2019 and 2018.

 

Note 16 – Fair Value Measurements

 

The Company follows a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest priority to measurements involving unobservable inputs (Level 3). The three levels of the fair value hierarchy are as follows:

 


Level 1 inputs - observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

 

Level 2 inputs - other inputs that are directly or indirectly observable in the marketplace.

 

Level 3 inputs - unobservable inputs which are supported by little or no market activity.

 

The Company categorizes its fair value measurements within the hierarchy based on the lowest level input that is significant to the fair value measurement in its entirety. The following table presents the amount and level in the fair value hierarchy of each of its assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018. The contingent liability is for the earn-out related to the purchase of Electronic Control Concepts. 

 

   September 30, 2019 
   Level 1   Level 2   Level 3   TOTAL 
LIABILITES                
Contingent Liability   -    -   $35,989   $35,989 

 

   December 31, 2018 
   Level 1   Level 2   Level 3   TOTAL 
LIABILITES                
Contingent Liability   -    -   $57,142   $57,142 

 

A summary of the activity of the contingent liability is as follows:

 

Contingent liability at December 31, 2018  $57,142 
Change in fair value   (7,719)
Reclassification to accounts payable   (13,434)
Contingent liability at September 30, 2019  $35,989 

 

14

 

 

US NUCLEAR CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

 

Note 17 – Commitments

 

Future payment under all of the Company obligations as of September 30, 2019:

 

   Twelve Months Ended September 30,     
   2020   2021   2022   2023   Total 
Note payable  $16,875   $13,633   $-   $-   $30,508 
Note payable - shareholder   -    398,551    -    -    398,551 
Operating lease obligations   168,000    98,000    -    -    266,000 
Line of credit   218,197    -    -    -    218,197 
   $403,072   $510,184   $-   $-   $913,256 

 

Note 18 – Subsequent Events

 

Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855, from the balance sheet date through the date the financial statements were available to be issued and has determined that no material subsequent events exist other than the following.  

 

Subsequent to September 30, 2019, the Company issued a total of 62,132 shares for professional services rendered.

 

15

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand US Nuclear Corp, our operations and our present business environment. MD&A is provided as a supplement to—and should be read in conjunction with—our consolidated financial statements and the accompanying notes included in this Quarterly Report on Form 10-Q. The audited financial statements for our fiscal year ended December 31, 2018 filed with the Securities Exchange Commission on Form 10-K on April 17, 2019 should be read in conjunction with the discussion below. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results may differ materially from those anticipated in these forward-looking statements. In the opinion of management, all material adjustments necessary to present fairly the results of operations for such periods have been included in these unaudited financial statements. 

 

We were incorporated in Delaware on February 14, 2012, and on March 2, 2012, we filed a registration statement on Form 10 to register with the U.S. Securities and Exchange Commission as a public company.  We were originally organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation.

 

On April 18, 2012, Richard Chiang, then our sole director and shareholder, entered into a Stock Purchase Agreement whereby Mr. Goldstein of US Nuclear Corp purchased 10,000,000 shares of our common stock from Mr. Chiang, which constituted 100% of our issued and outstanding shares of common stock. Mr. Chiang then resigned from all positions. Subsequently, on May 18, 2012, the Registrant appointed Mr. Chiang to serve as a member of the Board of Directors. He resigned from this position on March 31, 2013.

 

Since our acquisition of Overhoff Technology in 2006, we have had discussions with other companies in our industry for an acquisition. While we targeted Overhoff due to its unique position in the tritium market, we had not commenced an acquisition since our Overhoff Technology acquisition; we believe in part the reason was due to lack of additional capital, our status as a privately-held entity at the time, and focus on developing our own products. We will seek out companies whom our management believes will provide value to our customers and will complement our business. We will focus on diversifying our product line into a larger range so that our customers and vendors may have a more expansive experience in type, choice, options, price and selection. We also believe that with a more diverse product line we will become more competitive as our industry is intensely competitive.

 

Generally, our product concentration places a heavy reliance on our Overhoff Technology division; however, during the nine months ended September 30, 2019 we derived 26.7% of our total revenues from sales made by Optron to one customer. We expect to encounter a continuation of this trend unless we are successful in diversifying our client base, executing our acquisition strategy and experience increases in business from our Technical Associates division.

 

Our international revenues were 65% of our total revenue in 2019. We expect this to increase over time as we continue to field new orders inquires and engage new customers overseas. We believe that Korea and China will likely be a larger contributor to revenue within the next few years. While we maintain steady growth domestically, the international side of our business may be a larger component as nuclear technology and rapid development for clean energy grows abroad. Additionally, the Company relies on continued growth and orders from CANDU reactors (Canada Deuterium Uranium), and rapid development of the next generation of nuclear reactors called Molten Salt Reactors, (MSR) and Liquid-Fluoride Thorium Reactors (LFTR), all of which purchase tritium detection and monitor products. There can be no assurances as to our growth projections and our risk profile as we depend upon increased foreign customers for business.

 

For the next twelve months, we anticipate we will need approximately $5,000,000 in additional capital to fund our business plans. If we do not raise the required capital we may not meet our expenses and there can be no assurance that we will be able to do so and if we do, we may find the cost of such financing to be burdensome on the Company. Additionally, we may not be able to execute on our business plans due to unforeseen market forces such as lower natural gas prices, difficulty attracting qualified executive staff, general downturn in our sector or by competition as we operate in an extremely competitive market for all of our product offerings.

 

16

 

 

Robert I. Goldstein, our President, Chief Executive Officer and Chairman of the Board of Directors also maintains a position as President of Gold Team Inc., a Delaware company that invests in industrial real estate properties for investment purposes. He holds an 8% interest in Gold Team Inc. and spends approximately 5 hours per week with affairs related to Gold Team Inc. The Company leases its current facilities from Gold Team Inc. which owns both the Canoga Park, CA and Milford, Ohio properties at an expense of $7,000 for each facility per month. 

 

On May 31, 2016, we entered into an Asset Purchase Agreement with Electronic Control Concepts (“ECC”) whereby the Company purchased certain tangible and intangible assets of ECC.  ECC a small manufacturer of test and maintenance meters for x-ray machines both medical and industrial. We acquired ECC to give a boost to our current x-ray related product and hospital/medical product sales.

 

On August 3, 2018, we closed an agreement by and among, MIFTEC Laboratories, Inc. (“MIFTEC”), a licensee of Magneto-Inertial Fusion Technologies, Inc., (“MIFTI”), and us. MIFTEC is a licensee of MIFTI radionuclide technology. MIFTEC will engage us to manufacture equipment pursuant to MIFTEC’s specifications and designs and have us as a sales representative for the manufactured equipment. We will be the exclusive manufacturer and supplier to MIFTEC of equipment in North America and Asia. In addition, we received a 10% ownership interest in MIFTEC. The consideration for the exclusive manufacturing rights and a 10% ownership interest in MIFTEC was $500,000 and 300,000 shares of our common stock.

 

On April 22, 2019 the Company entered into a Cooperative Agreement with MIFTI whereby the Company acquired certain exclusive manufacturing and supply rights in return for $500,000, of which $100,000 is payable upon signing, $200,000 within four months of the agreement and $200,000 within nine months of the agreement. The Company also has the option to purchase 10% of MIFTI for $2,700,000.

  

Results of Operations

 

For the three months ended September 30, 2019 compared to the three months ended September 30, 2018

 

  

Three Months Ended

September 30,

   Change 
   2019   2018   $   % 
                 
Sales  $659,325   $1,145,480   $(486,155)   -42.4%
Cost of goods sold   336,882    633,384    (296,502)   -46.8%
Gross profit   322,443    512,096    (189,653)   -37.0%
Selling, general and administrative expenses   1,729,246    1,918,685    (189,439)   -9.9%
Loss from operations   (1,406,803)   (1,406,589)   (214)   0.0%
Other expense   (3,103)   (8,126)   5,023    -61.8%
Loss before provision for income taxes   (1,409,906)   (1,414,715)   4,809    -0.3%
Provision for income taxes   -    -    -      
Net loss  $(1,409,906)  $(1,414,715)  $4,809    -0.3%

 

Sales for the three months ended September 30, 2019 were $659,325 compared to $1,145,480 for the same period in 2018. The decrease of $486,155 or 42.4% is a result of a decrease in sales from both our Overhoff and Optron subsidiaries of $180,999 and $305,156, respectively. The decrease in sales from our Overhoff subsidiary was due to several large orders not shipping within the quarter. The decrease in sales from our Optron subsidiary was due to a decrease in large purchase orders. We recognize revenue from the sale of our products when the orders are completed, and we ship the product to our customer. The sales breakdown for the three months ended September 30, 2019 is as follows:


North America 29%

Middle East 0%

Asia (Including Japan) 65%

South America 0%

Other 6%

 

17

 

 

Our gross margins for the three months ended September 30, 2019 were 48.9% as compared to 44.7% for the same period in 2018. The increase in gross margin is due to lower overhead costs.

 

Selling, general and administrative expense for the three months ended September 30, 2019 were $1,729,246 compared to $1,918,685 for the same period in 2018. The decrease of $189,439 or 9.9% was due to the acquisition of manufacturing and supply rights in 2018 of $1,084,000 offset by higher stock-based compensation in 2019. During the three months ended September 30, 2019, stock-based compensation was $1,150,321 compared to $448,740 during the same period in 2018.

 

Other expense for the three months ended September 30, 2019 was $3,103, a decrease of $5,023 from $8,126 for the same period in 2018. The decrease was due to lower interest expense due to less debt outstanding.

 

Net loss for the three months ended September 30, 2019 was $1,409,906 compared to $1,414,715 for the same period in 2018. The change was principally attributed to the factors described above.

 

For the nine months ended September 30, 2019 compared to the nine months ended September 30, 2018

 

  

Nine Months Ended

September 30,

   Change 
   2019   2018   $   % 
                 
Sales  $2,818,901   $2,706,785   $112,116    4.1%
Cost of goods sold   1,392,608    1,429,606    (36,998)   -2.6%
Gross profit   1,426,293    1,277,179    149,114    11.7%
Selling, general and administrative expenses   3,474,788    3,629,379    (154,591)   -4.3%
Loss from operations   (2,048,495)   (2,352,200)   303,705    -12.9%
Other expense   (14,849)   (21,910)   7,061    -32.2%
Loss before provision for income taxes   (2,063,344)   (2,374,110)   310,766    -13.1%
Provision for income taxes   0    0    0      
Net loss  $(2,063,344)  $(2,374,110)  $310,766    -13.1%

 

Sales for the nine months ended September 30, 2019 were $2,818,901 compared to $2,706,785 for the same period in 2018. The increase of $112,116 or 4.1% is a result of an increase in sales from our Optron subsidiary of $282,004; offset by a decrease in sales from our Overhoff subsidiary of $169,888. The increase in sales from our Optron subsidiary was due to the fulfillment of a large order of drone detector instruments shipped in May 2019. The decrease in sales from our Overhoff subsidiary was due to several large orders not shipping during the third quarter. We recognize revenue from the sale of our products when the orders are completed, and we ship the product to our customer. The sales breakdown for the nine months ended September 30, 2019 is as follows:


North America 35%

Middle East 27%

Asia (Including Japan) 35%

South America 0%

Other 3%

 

18

 

 

Our gross margins for the nine months ended September 30, 2019 were 50.6% as compared to 47.2% for the same period in 2018. The increase in gross margin is due to lower overhead costs.

 

Selling, general and administrative expense for the nine months ended September 30, 2019 were $3,474,788 compared to $3,629,379 for the same period in 2018. The decrease of $154,591 or 4.3% was due to the acquisition of manufacturing and supply rights in 2018 of $1,084,000 offset by higher stock-based compensation in 2019. During the nine months ended September 30, 2019, stock-based compensation was $2,073,019 compared to $1,410,016 during the same period in 2018.

 

Other expense for the nine months ended September 30, 2019 was $14,849, a decrease of $7,061 from $21,910 for the same period in 2018. The decrease was due to lower interest expense due to less debt outstanding.

 

Net loss for the nine months ended September 30, 2019 was $2,063,344 compared to $2,374,110 for the same period in 2018. The change was principally attributed to the factors described above.

 

Liquidity and Capital Resources

 

Our operations have historically been financed by our majority shareholder and more recently from proceeds from the sale of our common stock. As funds were needed for working capital purposes, our majority shareholder would loan us the needed funds. During the nine months ended September 30, 2019, our majority shareholder loaned the Company an additional $15,155 and was repaid $30,159. We anticipate funding the growth of our business through the sales of additional shares of our common stock and loans from our majority stockholder if necessary.

 

At September 30, 2019, total assets increased by 15.3% to $3,847,956 from $3,335,931 at December 31, 2018 principally related to an increase in cash, acquisition deposit and right-of use assets offset by a decrease in inventory.

 

At September 30, 2019, total liabilities increased by 13.3% to $1,507,687 from $1,330,337 at December 31, 2018. The increase is principally related to the lease obligation associated with the right-of-use assets.

 

Net cash provided by operating activities for the nine months ended September 30, 2019 was $92,007 compared to cash used in operating activities of $525,311 for the same period in 2018. The change in cash from operations was principally due to a decrease in the net loss and the changes in working capital accounts, principally inventory and accounts receivable.

 

Net cash used in investing activities for the nine months ended September 30, 2019 was $300,000 compared to $15,777 for the same period in 2018. The increase in cash used in investing activities was principally due to an acquisition deposit paid in 2019 of $300,000.

 

Net cash provided by financing activities for the nine months ended September 30, 2019 was $290,406 compared to $990,118 for the same period in 2018. The change in cash from financing activities was principally due to the sale of 1,730,000 shares of our common stock for proceeds of $1,068,750 during the nine months ended September 30, 2018 compared to the sale of 730,393 shares of our common stock for proceeds of $325,000 during the same period in 2019.

 

Critical Accounting Policies

 

Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“US GAAP”). US GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expenses amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

 

Income Taxes

 

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

19

 

 

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption had no effect on the Company’s consolidated financial statements.

 

We believe the following is among the most critical accounting policies that impact our consolidated financial statements. We suggest that our significant accounting policies, as described in our financial statements in the Summary of Significant Accounting Policies, be read in conjunction with this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

We qualify as an “emerging growth company” under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:

 

have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;

 

comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis); 

 

submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay” and “say-on-frequency;” and

 

disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation.

 

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

 

We will remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.

 

As an emerging growth company, the company is exempt from Section 14A and B of the Securities Exchange Act of 1934 which require the shareholder approval of executive compensation and golden parachutes.

 

The Company is an Emerging Growth Company under the JOBS Act of 2012, but the Company has irrevocably opted out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(B) of the JOBS Act. 

 

Off-Balance Sheet Arrangements

 

We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

 

20

 

  

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

None

 

Item 4. Controls and Procedures.

 

Evaluation of disclosure controls and procedures

 

Under the supervision and with the participation of our management, including our principal executive officer and the principal financial officer, we are responsible for conducting an evaluation of the effectiveness of the design and operation of our internal controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the end of the fiscal quarter covered by this report.  Disclosure controls and procedures means that the material information required to be included in our Securities and Exchange Commission (“SEC”) reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our company, particularly during the period when this report was being prepared.  Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were not effective as of September 30, 2019.

 

Changes in internal controls

 

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, performed an evaluation to determine whether any change in our internal controls over financial reporting occurred during the three-month period ended September 30, 2019.  Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that no change occurred in the Company’s internal controls over financial reporting during the nine months ended September 30, 2019 that has materially affected, or is reasonably likely to materially affect, the Company’s internal controls over financial reporting.

  

21

 

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

There are not presently any material pending legal proceedings to which the Company is a party or as to which any of its property is subject, and no such proceedings are known to the Company to be threatened or contemplated against it.

 


Item 1A. Risk Factors

 

See our Form 10K filed on April 17, 2019 for Risk Factors.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

During the three months ended September 30, 2019, the Company issued 1,218,857 shares of common stock to consultants for services rendered and 147,060 shares of common stock to investors for cash.

 

The above shares were issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, for transactions not involving a public offering.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information.

 

None.

 

22

 

 

Item 6. Exhibits. 

  

        Incorporated by reference    
Exhibit   Exhibit Description   Filed
herewith
  Form   Period ending     Exhibit   Filing
date
3.1   Certificate of Incorporation       10         3.1   02/14/2012
3.2   By-Laws       10         3.2   02/14/2012
3.3   Amendment to Certificate of Incorporation       8-K         3.3   05/29/2012
4.1   Specimen Stock Certificate       10         4.1   02/14/2012
10.1   Robert I. Goldstein Employment Agreement       10-Q         10.1   11/11/2014
10.2   Forgiveness of Debt and Conversion Agreement       10-Q         10.2   11/11/2014
31.1   Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002   X                  
31.2   Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002   X                  
32.1   Certification pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002   X                  
32.2   Certification pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002   X                  
101.INS   XBRL Instance Document   X                  
101.SCH   XBRL Taxonomy Extension Schema Document   X                  
101.CAL   XBRL Taxonomy Extension Calculation Linkbase Document   X                  
101.LAB   XBRL Taxonomy Extension Label Linkbase Document   X                  
101.PRE   XBRL Taxonomy Extension Presentation Linkbase Document   X                  
101.DEF   XBRL Taxonomy Extension Definition Linkbase Definition   X                  

 

23

 

  

SIGNATURES 

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

  

  US Nuclear Corp
     
  By: /s/ Robert Goldstein
    President, Chief Executive Officer, Chairman of the Board of Directors
     
  By: /s/ Rachel Boulds
    Chief Financial Officer and Secretary

 

Date:  November 18, 2019

 

 

24

 

 

EX-31.1 2 f10q0919ex31-1_usnuclearcorp.htm CERTIFICATION

EXHIBIT 31.1

 

US Nuclear Corp.

OFFICER’S CERTIFICATE PURSUANT TO SECTION 302

  

I, Robert I. Goldstein, certify that:

  

1.  I have reviewed this quarterly report on Form 10-Q for the quarterly period ended September 30, 2019 (the “report”);

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. 

 

Dated: November 18, 2019

 

By: /s/ Robert I. Goldstein    
  Robert I. Goldstein  
  President, Chief Executive Officer, Chairman  
  (Principal Executive Officer)  

 

EX-31.2 3 f10q0919ex31-2_usnuclearcorp.htm CERTIFICATION

EXHIBIT 31.2

 

US Nuclear Corp.

OFFICER’S CERTIFICATE PURSUANT TO SECTION 302

 

I, Rachel Boulds, certify that:

  

1. I have reviewed this quarterly report on Form 10-Q for the quarterly period ended September 30, 2019 (the “report”); 

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. 

 

Dated: November 18, 2019

  

By: /s/ Rachel Boulds    
  Rachel Boulds  
  Chief Financial Officer  
  (Principal Financial Officer)  

 

EX-32.1 4 f10q0919ex32-1_usnuclearcorp.htm CERTIFICATION

EXHIBIT 32.1

 

US Nuclear Corp.

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, 

AS ADOPTED PURSUANT TO SECTION 906 OF 

THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of US Nuclear Corp. (the Registrant) on Form 10-Q for the period ended September 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Robert I. Goldstein, Principal  Executive  Officer of the Company, certify,  pursuant to 18 U.S.C.  ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

  

(1)  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

  

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

  

A signed original of this written statement required by Section 906 has been provided to Robert I. Goldstein and will be retained by US Nuclear Corp. and furnished to the Securities and Exchange Commission or its staff upon request. 

 

Dated: November 18, 2019 

 

By: /s/ Robert I. Goldstein  
  Robert I. Goldstein  
  President, Chief Executive Officer, Chairman  
  (Principal Executive Officer)  

 

EX-32.2 5 f10q0919ex32-2_usnuclearcorp.htm CERTIFICATION

EXHIBIT 32.2

 

US Nuclear Corp.

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, 

AS ADOPTED PURSUANT TO SECTION 906 OF 

THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of US Nuclear Corp. (the Registrant) on Form 10-Q for the period ended September 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Rachel Boulds Principal Financial Officer of the Company, certify,  pursuant to 18 U.S.C.  ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

  

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

  

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

  

A signed original of this written statement required by Section 906 has been provided to Rachel Boulds, and will be retained by US Nuclear Corp. and furnished to the Securities and Exchange Commission or its staff upon request. 

 

Dated: November 18, 2019 

 

By: /s/ Rachel Boulds    
  Rachel Boulds  
  Chief Financial Officer  
  (Principal Financial Officer)  

 

 

 

GRAPHIC 6 img_001.jpg GRAPHIC begin 644 img_001.jpg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end EX-101.INS 7 ucle-20190930.xml XBRL INSTANCE FILE 0001543623 2018-01-01 2018-12-31 0001543623 2018-12-31 0001543623 2017-12-31 0001543623 us-gaap:FurnitureAndFixturesMember 2018-12-31 0001543623 us-gaap:ComputerEquipmentMember 2018-12-31 0001543623 us-gaap:LeaseholdImprovementsMember 2018-12-31 0001543623 us-gaap:EquipmentMember 2018-12-31 0001543623 UCLE:PurchasesMember UCLE:VendorMember 2019-01-01 2019-09-30 0001543623 us-gaap:SalesRevenueNetMember UCLE:CustomerTwoMember 2018-01-01 2018-09-30 0001543623 us-gaap:SalesRevenueNetMember UCLE:CustomerOneMember 2019-01-01 2019-09-30 0001543623 us-gaap:FairValueInputsLevel1Member 2018-12-31 0001543623 us-gaap:FairValueInputsLevel2Member 2018-12-31 0001543623 us-gaap:FairValueInputsLevel3Member 2018-12-31 0001543623 us-gaap:FairValueInputsLevel1Member 2019-09-30 0001543623 us-gaap:FairValueInputsLevel2Member 2019-09-30 0001543623 us-gaap:FairValueInputsLevel3Member 2019-09-30 0001543623 2018-06-30 0001543623 us-gaap:CommonStockMember 2017-12-31 0001543623 us-gaap:CommonStockMember 2018-12-31 0001543623 us-gaap:AdditionalPaidInCapitalMember 2017-12-31 0001543623 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0001543623 us-gaap:RetainedEarningsMember 2017-12-31 0001543623 us-gaap:RetainedEarningsMember 2018-12-31 0001543623 UCLE:MIFTECMember 2018-08-01 2018-08-03 0001543623 us-gaap:OperatingSegmentsMember UCLE:OptronMember 2018-12-31 0001543623 us-gaap:OperatingSegmentsMember UCLE:OverhoffMember 2018-12-31 0001543623 us-gaap:OperatingSegmentsMember us-gaap:CorporateMember 2018-12-31 0001543623 UCLE:ShareholderMember 2019-09-30 0001543623 2019-01-01 2019-09-30 0001543623 2019-09-30 0001543623 2018-01-01 2018-09-30 0001543623 2018-03-31 0001543623 us-gaap:FurnitureAndFixturesMember 2019-09-30 0001543623 us-gaap:LeaseholdImprovementsMember 2019-09-30 0001543623 us-gaap:EquipmentMember 2019-09-30 0001543623 us-gaap:ComputerEquipmentMember 2019-09-30 0001543623 us-gaap:LineOfCreditMember 2019-09-30 0001543623 us-gaap:LineOfCreditMember srt:MinimumMember 2019-09-30 0001543623 us-gaap:LineOfCreditMember srt:MaximumMember 2019-09-30 0001543623 us-gaap:CommonStockMember 2018-06-30 0001543623 us-gaap:CommonStockMember 2019-09-30 0001543623 us-gaap:AdditionalPaidInCapitalMember 2018-06-30 0001543623 us-gaap:AdditionalPaidInCapitalMember 2019-09-30 0001543623 us-gaap:RetainedEarningsMember 2018-06-30 0001543623 us-gaap:RetainedEarningsMember 2019-09-30 0001543623 UCLE:ConsultantMember 2019-01-01 2019-09-30 0001543623 UCLE:EmployeesMember 2019-01-01 2019-09-30 0001543623 us-gaap:OperatingSegmentsMember UCLE:OptronMember 2019-01-01 2019-09-30 0001543623 us-gaap:OperatingSegmentsMember UCLE:OptronMember 2018-01-01 2018-09-30 0001543623 us-gaap:OperatingSegmentsMember UCLE:OptronMember 2019-09-30 0001543623 us-gaap:OperatingSegmentsMember us-gaap:CorporateMember 2019-01-01 2019-09-30 0001543623 us-gaap:OperatingSegmentsMember us-gaap:CorporateMember 2018-01-01 2018-09-30 0001543623 us-gaap:OperatingSegmentsMember us-gaap:CorporateMember 2019-09-30 0001543623 us-gaap:OperatingSegmentsMember UCLE:OverhoffMember 2019-01-01 2019-09-30 0001543623 us-gaap:OperatingSegmentsMember UCLE:OverhoffMember 2018-01-01 2018-09-30 0001543623 us-gaap:OperatingSegmentsMember UCLE:OverhoffMember 2019-09-30 0001543623 srt:AsiaMember 2019-01-01 2019-09-30 0001543623 srt:AsiaMember 2018-01-01 2018-09-30 0001543623 srt:SouthAmericaMember 2019-01-01 2019-09-30 0001543623 srt:SouthAmericaMember 2018-01-01 2018-09-30 0001543623 UCLE:OtherMember 2019-01-01 2019-09-30 0001543623 UCLE:OtherMember 2018-01-01 2018-09-30 0001543623 srt:NorthAmericaMember 2019-01-01 2019-09-30 0001543623 srt:NorthAmericaMember 2018-01-01 2018-09-30 0001543623 UCLE:GoldTeamIncMember 2019-01-01 2019-09-30 0001543623 UCLE:GoldTeamIncMember 2018-01-01 2018-09-30 0001543623 us-gaap:SalesRevenueNetMember UCLE:CustomerOneMember 2018-01-01 2018-09-30 0001543623 UCLE:PurchasesMember UCLE:VendorMember 2018-01-01 2018-09-30 0001543623 us-gaap:FurnitureAndFixturesMember 2019-01-01 2019-09-30 0001543623 us-gaap:LeaseholdImprovementsMember 2019-01-01 2019-09-30 0001543623 us-gaap:EquipmentMember 2019-01-01 2019-09-30 0001543623 us-gaap:ComputerEquipmentMember 2019-01-01 2019-09-30 0001543623 2019-04-04 2019-04-30 0001543623 us-gaap:OperatingSegmentsMember UCLE:OptronMember 2019-07-01 2019-09-30 0001543623 us-gaap:OperatingSegmentsMember UCLE:OverhoffMember 2019-07-01 2019-09-30 0001543623 us-gaap:OperatingSegmentsMember us-gaap:CorporateMember 2019-07-01 2019-09-30 0001543623 us-gaap:OperatingSegmentsMember UCLE:OptronMember 2018-07-01 2018-09-30 0001543623 us-gaap:OperatingSegmentsMember UCLE:OverhoffMember 2018-07-01 2018-09-30 0001543623 us-gaap:OperatingSegmentsMember us-gaap:CorporateMember 2018-07-01 2018-09-30 0001543623 2019-07-01 2019-09-30 0001543623 2018-07-01 2018-09-30 0001543623 us-gaap:MiddleEastMember 2019-01-01 2019-09-30 0001543623 us-gaap:MiddleEastMember 2018-01-01 2018-09-30 0001543623 srt:NorthAmericaMember 2019-07-01 2019-09-30 0001543623 us-gaap:MiddleEastMember 2019-07-01 2019-09-30 0001543623 srt:AsiaMember 2019-07-01 2019-09-30 0001543623 srt:SouthAmericaMember 2019-07-01 2019-09-30 0001543623 UCLE:OtherMember 2019-07-01 2019-09-30 0001543623 srt:NorthAmericaMember 2018-07-01 2018-09-30 0001543623 us-gaap:MiddleEastMember 2018-07-01 2018-09-30 0001543623 srt:AsiaMember 2018-07-01 2018-09-30 0001543623 srt:SouthAmericaMember 2018-07-01 2018-09-30 0001543623 UCLE:OtherMember 2018-07-01 2018-09-30 0001543623 us-gaap:CommonStockMember 2019-01-01 2019-03-31 0001543623 us-gaap:CommonStockMember 2019-03-31 0001543623 us-gaap:CommonStockMember 2018-01-01 2018-03-31 0001543623 us-gaap:CommonStockMember 2018-03-31 0001543623 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0001543623 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0001543623 us-gaap:AdditionalPaidInCapitalMember 2018-01-01 2018-03-31 0001543623 us-gaap:AdditionalPaidInCapitalMember 2018-03-31 0001543623 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0001543623 us-gaap:RetainedEarningsMember 2019-03-31 0001543623 us-gaap:RetainedEarningsMember 2018-01-01 2018-03-31 0001543623 us-gaap:RetainedEarningsMember 2018-03-31 0001543623 2018-01-01 2018-03-31 0001543623 us-gaap:CommonStockMember 2018-07-01 2018-09-30 0001543623 us-gaap:AdditionalPaidInCapitalMember 2018-07-01 2018-09-30 0001543623 us-gaap:RetainedEarningsMember 2018-07-01 2018-09-30 0001543623 2019-01-01 2019-03-31 0001543623 2019-03-31 0001543623 us-gaap:CommonStockMember 2019-07-01 2019-09-30 0001543623 us-gaap:AdditionalPaidInCapitalMember 2019-07-01 2019-09-30 0001543623 us-gaap:RetainedEarningsMember 2019-07-01 2019-09-30 0001543623 UCLE:MIFTECMember 2018-08-03 0001543623 us-gaap:CommonStockMember 2018-04-01 2018-06-30 0001543623 us-gaap:CommonStockMember 2019-04-01 2019-06-30 0001543623 us-gaap:CommonStockMember 2019-06-30 0001543623 us-gaap:AdditionalPaidInCapitalMember 2018-04-01 2018-06-30 0001543623 us-gaap:AdditionalPaidInCapitalMember 2019-04-01 2019-06-30 0001543623 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0001543623 us-gaap:RetainedEarningsMember 2018-04-01 2018-06-30 0001543623 us-gaap:RetainedEarningsMember 2019-04-01 2019-06-30 0001543623 us-gaap:RetainedEarningsMember 2019-06-30 0001543623 2018-04-01 2018-06-30 0001543623 2019-04-01 2019-06-30 0001543623 2019-06-30 0001543623 us-gaap:CommonStockMember 2018-09-30 0001543623 us-gaap:AdditionalPaidInCapitalMember 2018-09-30 0001543623 us-gaap:RetainedEarningsMember 2018-09-30 0001543623 2018-09-30 0001543623 2019-11-18 iso4217:USD xbrli:shares iso4217:USD xbrli:shares xbrli:pure UCLE:Segments 2818901 2706785 1132364 850360 1686537 1856425 972154 1055726 11576 139237 88210 80379 995861 1431443 72619 586706 377775 767705 659325 1145480 751100 187819 429536 41970 463678 607408 59929 14465 464986 148033 33036 50091 233826 464986 148033 50091 233826 33036 459234 460259 57142 57142 35989 35989 1426293 1277179 619597 394668 806696 882511 33102 289341 171694 340402 322443 512096 5752 4727 1084000 249065 95438 1025 5276 437044 0.10 0.10 594000 10000 107443 126000 18557 126000 249065 P1Y7M6D 2 10000 10000 The Company also entered into a Cooperative Agreement with Magneto-Inertial Fusion Technologies, Inc (“MIFTI”) whereby the Company acquired certain exclusive manufacturing and supply rights, including thermonuclear fusion-powered reactor for production of electricity per MIFTI designs in return for $500,000, of which $100,000 is payable upon signing, $200,000 within four months of the agreement and $200,000 within nine months of the agreement. The $500,000 is an option to buy a 10% interest in MIFTI for $2,700,000, if completed with 24 months of the agreement date. If the options expires, MIFTI shall issue the Company 500,000 shares of common stock and rescind all other exclusive rights contained in the agreement. As of September 30, 2019, the Company has paid $300,000 which is presented as an acquisition deposit in the accompanying consolidated balance sheet. 153627 249065 300000 325000 2070494 2525 500000 730393 2086144 5050 -16935 249065 153627 95438 -2048495 -2352200 81650 17118 -2376892 -2715446 246747 346128 -160601 112012 -1358214 38444 161032 -1606065 -1406803 -1406589 14849 21910 13460 17605 1340 2356 49 1949 2724 379 5285 485 2356 3103 8126 -2063344 -2374110 86190 -487 -2369232 -2717802 219698 344179 -157325 103012 -1355593 33159 160547 -1608421 -1409906 -1414715 3335931 1324707 1811483 199741 3847956 1454897 453013 1940046 570176 570176 570176 570176 -7719 -13434 16875 398551 13633 398551 30508 168000 98000 266000 218197 218197 403072 510184 913256 62132 0.08 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Note 4 &#8211; Property and Equipment</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The following are the details of the property and equipment at September 30, 2019 and December 31, 2018:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td><b>&#160;</b></td><td><b>&#160;</b></td> <td colspan="2" style="text-align: center"><b>September&#160;30,</b></td><td><b>&#160;</b></td><td><b>&#160;</b></td> <td colspan="2" style="text-align: center"><b>December&#160;31,</b></td><td><b>&#160;</b></td></tr> <tr style="vertical-align: bottom"> <td><b>&#160;</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>2019</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>2018</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Furniture and fixtures</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">148,033</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">148,033</td><td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Leasehold Improvements</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">50,091</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">50,091</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Equipment</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">233,826</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">233,826</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Computers and software</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">33,036</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">33,036</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">464,986</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">464,986</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Less accumulated depreciation</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(460,259</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(459,234</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Property and equipment, net</td><td style="padding-bottom: 4pt">&#160;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">4,727</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">5,752</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Depreciation expense for the nine months ended September 30, 2019 and 2018 was $1,025 and $5,276, respectively. At September 30, 2019, the Company has $437,044 of fully depreciated property and equipment that is still in use.</font></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td><b>&#160;</b></td><td><b>&#160;</b></td> <td colspan="2" style="text-align: center"><b>September&#160;30,</b></td><td><b>&#160;</b></td><td><b>&#160;</b></td> <td colspan="2" style="text-align: center"><b>December&#160;31,</b></td><td><b>&#160;</b></td></tr> <tr style="vertical-align: bottom"> <td><b>&#160;</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>2019</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>2018</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Furniture and fixtures</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">148,033</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">148,033</td><td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Leasehold Improvements</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">50,091</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">50,091</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Equipment</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">233,826</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">233,826</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Computers and software</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">33,036</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">33,036</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">464,986</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">464,986</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Less accumulated depreciation</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(460,259</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(459,234</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Property and equipment, net</td><td style="padding-bottom: 4pt">&#160;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">4,727</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">5,752</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>Note 6 &#8211; Acquisition Deposit</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>&#160;</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In April 2019, the Company also entered into a Cooperative Agreement with Magneto-Inertial Fusion Technologies, Inc ("MIFTI") whereby the Company acquired certain exclusive manufacturing and supply rights, including thermonuclear fusion-powered reactor for production of electricity per MIFTI designs in return for $500,000, of which $100,000 is payable upon signing, $200,000 within four months of the agreement and $200,000 within nine months of the agreement. The $500,000 is an option to buy a 10% interest in MIFTI for $2,700,000, if completed with 24 months of the agreement date. If the options expires, MIFTI shall issue the Company 500,000 shares of common stock and rescind all other exclusive rights contained in the agreement. As of September 30, 2019, the Company has paid $300,000 which is presented as an acquisition deposit in the accompanying consolidated balance sheet.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Note 10 &#8211; Leases</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company's leases do not provide a readily determinable implicit rate. Therefore, the Company must discount lease payments based on an estimate of its incremental borrowing rate which is based on the interest rate of similar debt outstanding.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company leases its current facilities from Gold Team Inc., a company owned by the Company's CEO, which owns both the Canoga Park, CA and Milford, Ohio locations. The leases expire on April 30, 2020 and the Company expects to exercise a renewal option for an additional 12 months. Effective January 1, 2019, the Company adopted the provision of ASC 842 Leases.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The table below presents the lease related assets and liabilities recorded on the Company's consolidated balance sheets as of September 30, 2019:&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td style="font-weight: bold; border-bottom: Black 1.5pt solid">Classification on Balance Sheet</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">September 30,<br /> 2019</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="font-weight: bold">Assets</td><td>&#160;</td> <td>&#160;</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 44%; text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in">Operating lease assets</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td> <td style="width: 43%; text-align: left; padding-bottom: 1.5pt">Operating lease right of use assets</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td> <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">249,065</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 4pt">Total lease assets</td><td style="padding-bottom: 4pt">&#160;</td> <td style="padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">249,065</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>&#160;</td><td>&#160;</td> <td>&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold">Liabilities</td><td>&#160;</td> <td>&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Current liabilities</td><td>&#160;</td> <td>&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-left: 0.125in">Operating lease liability</td><td>&#160;</td> <td style="text-align: left">Current operating lease liability</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">153,627</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Noncurrent liabilities</td><td>&#160;</td> <td>&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in">Operating lease liability</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; padding-bottom: 1.5pt">Long-term operating lease liability</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">95,438</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Total lease liability</td><td style="padding-bottom: 4pt">&#160;</td> <td style="padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">249,065</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">Lease obligations at September 30, 2019 consisted of the following:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; text-align: left"><b>Twelve months ending September 30,</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td> <td colspan="2"><b>&#160;</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: left">2020</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">168,000</td><td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">2021</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">98,000</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Total payments</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">266,000</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Amount representing interest</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(16,935</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Lease obligation, net</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">249,065</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Less lease obligation, current portion</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(153,627</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Lease obligation, long-term portion</td><td style="padding-bottom: 4pt">&#160;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">95,438</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The lease expense for the nine months ended September 30, 2019 was $126,000 which consisted of amortization expense of $107,443 and interest expense of $18,557. The cash paid under operating leases during the nine months ended September 30, 2019 was $126,000. At September 30, 2019, the weighted average remaining lease terms were 1.6 years and the weighted average discount rate was 8%</font></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td style="font-weight: bold; border-bottom: Black 1.5pt solid">Classification on Balance Sheet</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">September 30,<br /> 2019</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="font-weight: bold">Assets</td><td>&#160;</td> <td>&#160;</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 44%; text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in">Operating lease assets</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td> <td style="width: 43%; text-align: left; padding-bottom: 1.5pt">Operating lease right of use assets</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td> <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">249,065</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 4pt">Total lease assets</td><td style="padding-bottom: 4pt">&#160;</td> <td style="padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">249,065</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>&#160;</td><td>&#160;</td> <td>&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold">Liabilities</td><td>&#160;</td> <td>&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Current liabilities</td><td>&#160;</td> <td>&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-left: 0.125in">Operating lease liability</td><td>&#160;</td> <td style="text-align: left">Current operating lease liability</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">153,627</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Noncurrent liabilities</td><td>&#160;</td> <td>&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in">Operating lease liability</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; padding-bottom: 1.5pt">Long-term operating lease liability</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">95,438</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Total lease liability</td><td style="padding-bottom: 4pt">&#160;</td> <td style="padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">249,065</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr> </table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; text-align: left"><b>Twelve months ending September 30,</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td> <td colspan="2"><b>&#160;</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: left">2020</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">168,000</td><td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">2021</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">98,000</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Total payments</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">266,000</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Amount representing interest</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(16,935</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Lease obligation, net</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">249,065</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">Less lease obligation, current portion</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(153,627</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 4pt">Lease obligation, long-term portion</td><td style="padding-bottom: 4pt">&#160;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">95,438</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Note 11 &#8211; Shareholders' Equity</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">During the nine months ended September 30, 2019, the Company issued:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#9679;</font></td><td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">2,086,144 shares of common stock to consultants and board members for services rendered valued at $2,070,494. The fair value was determined based on the Company's stock price on the grant date</font></td> </tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#9679;</font></td><td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">5,050 shares of common stock to employees for compensation valued at $2,525. The fair value was determined based on the Company's stock price on the grant date; and</font></td> </tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0.25in"></td><td style="width: 0.25in; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#9679;</font></td><td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">730,393 shares of common stock for cash of $325,000.</font></td></tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>Note 12 &#8211; Segment Reporting</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 22pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">ASC Topic 280, "Segment Reporting," requires use of the "management approach" model for segment reporting. The management approach model is based on the way a company's management organizes segments within the company for making operating decisions and assessing performance. The Company has two reportable segments: Optron and Overhoff. Optron is located in Canoga Park, California and Overhoff is located in Milford, Ohio. The assets and operations of the Company's recent acquisition of the assets of Electronic Control Concepts are included with Overhoff in the table below.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>&#160;</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The following tables summarize the Company's segment information for the three and nine months ended September 30, 2019 and 2018:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"></font></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Three Months Ended September 30,</td><td style="padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Nine Months Ended<br /> September 30,</td><td style="padding-bottom: 1.5pt">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td></tr> <tr style="vertical-align: bottom"> <td>&#160;</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="font-weight: bold">Sales</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; padding-left: 0.125in">Optron</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">72,619</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">377,775</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,132,364</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">850,360</td><td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in">Overhoff</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">586,706</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">767,705</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">1,686,537</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">1,856,425</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; padding-bottom: 1.5pt">Corporate</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">-</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">-</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">-</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">-</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">659,325</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">1,145,480</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">2,818,901</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">2,706,785</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; text-align: left">Gross profit</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in">Optron</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">33,102</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">171,694</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">619,597</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">394,668</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in">Overhoff</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">289,341</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">340,402</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">806,696</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">882,511</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; padding-bottom: 1.5pt">Corporate</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">-</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">-</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">-</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">-</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">322,443</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">512,096</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">1,426,293</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">1,277,179</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; text-align: left">Income (loss) from operations</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in">Optron</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">(160,601</td><td style="text-align: left">)</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">38,444</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">81,650</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">17,118</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in">Overhoff</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">112,012</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">161,032</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">246,747</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">346,128</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; padding-bottom: 1.5pt">Corporate</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">(1,358,214</td><td style="text-align: left; padding-bottom: 1.5pt">)</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">(1,606,065</td><td style="text-align: left; padding-bottom: 1.5pt">)</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">(2,376,892</td><td style="text-align: left; padding-bottom: 1.5pt">)</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">(2,715,446</td><td style="text-align: left; padding-bottom: 1.5pt">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">(1,406,803</td><td style="text-align: left; padding-bottom: 4pt">)</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">(1,406,589</td><td style="text-align: left; padding-bottom: 4pt">)</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">(2,048,495</td><td style="text-align: left; padding-bottom: 4pt">)</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">(2,352,200</td><td style="text-align: left; padding-bottom: 4pt">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; text-align: left">Interest Expenses</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in">Optron</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">2,724</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">5,285</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">13,460</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">17,605</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in">Overhoff</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">485</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">49</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">1,949</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; padding-bottom: 1.5pt">Corporate</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">379</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">2,356</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">1,340</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">2,356</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">3,103</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">8,126</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">14,849</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">21,910</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; text-align: left">Net income (loss)</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in">Optron</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">(157,325</td><td style="text-align: left">)</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">33,159</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">86,190</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">(487</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in">Overhoff</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">103,012</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">160,547</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">219,698</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">344,179</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; padding-bottom: 1.5pt">Corporate</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">(1,355,593</td><td style="text-align: left; padding-bottom: 1.5pt">)</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">(1,608,421</td><td style="text-align: left; padding-bottom: 1.5pt">)</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">(2,369,232</td><td style="text-align: left; padding-bottom: 1.5pt">)</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">(2,717,802</td><td style="text-align: left; padding-bottom: 1.5pt">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">(1,409,906</td><td style="text-align: left; padding-bottom: 4pt">)</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">(1,414,715</td><td style="text-align: left; padding-bottom: 4pt">)</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">(2,063,344</td><td style="text-align: left; padding-bottom: 4pt">)</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">(2,374,110</td><td style="text-align: left; padding-bottom: 4pt">)</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"></font></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#160;</td><td style="font-weight: bold">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold">&#160;</td><td style="font-weight: bold">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold">&#160;</td></tr> <tr style="vertical-align: bottom"> <td>&#160;</td><td style="font-weight: bold">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center">September&#160;30,</td><td style="font-weight: bold">&#160;</td><td style="font-weight: bold">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center">December&#160;31,</td><td style="font-weight: bold">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; text-align: left">Total Assets</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; padding-left: 0.125in">Optron</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,454,897</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,324,707</td><td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in">Overhoff</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">1,940,046</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">1,811,483</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; padding-bottom: 1.5pt">Corporate</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">453,013</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">199,741</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">3,847,956</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">3,335,931</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold">Goodwill</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in">Optron</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in">Overhoff</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">570,176</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">570,176</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; padding-bottom: 1.5pt">Corporate</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">-</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">-</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">570,176</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">570,176</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td></tr></table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"><tr style="vertical-align: bottom"><td style="padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Three Months Ended September 30,</td><td style="padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Nine Months Ended<br /> September 30,</td><td style="padding-bottom: 1.5pt">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td></tr> <tr style="vertical-align: bottom"> <td>&#160;</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="font-weight: bold">Sales</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; padding-left: 0.125in">Optron</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">72,619</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">377,775</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,132,364</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">850,360</td><td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in">Overhoff</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">586,706</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">767,705</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">1,686,537</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">1,856,425</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; padding-bottom: 1.5pt">Corporate</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">-</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">-</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">-</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">-</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">659,325</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">1,145,480</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">2,818,901</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">2,706,785</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; text-align: left">Gross profit</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in">Optron</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">33,102</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">171,694</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">619,597</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">394,668</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in">Overhoff</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">289,341</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">340,402</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">806,696</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">882,511</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; padding-bottom: 1.5pt">Corporate</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">-</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">-</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">-</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">-</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">322,443</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">512,096</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">1,426,293</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">1,277,179</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; text-align: left">Income (loss) from operations</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in">Optron</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">(160,601</td><td style="text-align: left">)</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">38,444</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">81,650</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">17,118</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in">Overhoff</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">112,012</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">161,032</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">246,747</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">346,128</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; padding-bottom: 1.5pt">Corporate</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">(1,358,214</td><td style="text-align: left; padding-bottom: 1.5pt">)</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">(1,606,065</td><td style="text-align: left; padding-bottom: 1.5pt">)</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">(2,376,892</td><td style="text-align: left; padding-bottom: 1.5pt">)</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">(2,715,446</td><td style="text-align: left; padding-bottom: 1.5pt">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">(1,406,803</td><td style="text-align: left; padding-bottom: 4pt">)</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">(1,406,589</td><td style="text-align: left; padding-bottom: 4pt">)</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">(2,048,495</td><td style="text-align: left; padding-bottom: 4pt">)</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">(2,352,200</td><td style="text-align: left; padding-bottom: 4pt">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; text-align: left">Interest Expenses</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in">Optron</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">2,724</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">5,285</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">13,460</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">17,605</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in">Overhoff</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">485</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">49</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">1,949</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; padding-bottom: 1.5pt">Corporate</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">379</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">2,356</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">1,340</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">2,356</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">3,103</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">8,126</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">14,849</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">21,910</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; text-align: left">Net income (loss)</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in">Optron</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">(157,325</td><td style="text-align: left">)</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">33,159</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">86,190</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">(487</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in">Overhoff</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">103,012</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">160,547</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">219,698</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">344,179</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; padding-bottom: 1.5pt">Corporate</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">(1,355,593</td><td style="text-align: left; padding-bottom: 1.5pt">)</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">(1,608,421</td><td style="text-align: left; padding-bottom: 1.5pt">)</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">(2,369,232</td><td style="text-align: left; padding-bottom: 1.5pt">)</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">(2,717,802</td><td style="text-align: left; padding-bottom: 1.5pt">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">(1,409,906</td><td style="text-align: left; padding-bottom: 4pt">)</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">(1,414,715</td><td style="text-align: left; padding-bottom: 4pt">)</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">(2,063,344</td><td style="text-align: left; padding-bottom: 4pt">)</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">(2,374,110</td><td style="text-align: left; padding-bottom: 4pt">)</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"></font></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td>&#160;</td><td style="font-weight: bold">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold">&#160;</td><td style="font-weight: bold">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center">As of</td><td style="font-weight: bold">&#160;</td></tr> <tr style="vertical-align: bottom"> <td>&#160;</td><td style="font-weight: bold">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center">September&#160;30,</td><td style="font-weight: bold">&#160;</td><td style="font-weight: bold">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center">December&#160;31,</td><td style="font-weight: bold">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; text-align: left">Total Assets</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; padding-left: 0.125in">Optron</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,454,897</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,324,707</td><td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in">Overhoff</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">1,940,046</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">1,811,483</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; padding-bottom: 1.5pt">Corporate</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">453,013</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">199,741</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">3,847,956</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">3,335,931</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold">Goodwill</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in">Optron</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 0.125in">Overhoff</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">570,176</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">570,176</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in; padding-bottom: 1.5pt">Corporate</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">-</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">-</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">570,176</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">570,176</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td></tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>Note 16 &#8211; Fair Value Measurements</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company follows a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest priority to measurements involving unobservable inputs (Level 3). The three levels of the fair value hierarchy are as follows:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><br /> Level 1 inputs - observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Level 2 inputs - other inputs that are directly or indirectly observable in the marketplace.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Level 3 inputs - unobservable inputs which are supported by little or no market activity.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company categorizes its fair value measurements within the hierarchy based on the lowest level input that is significant to the fair value measurement in its entirety. The following table presents the amount and level in the fair value hierarchy of each of its assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018. The contingent liability is for the earn-out related to the purchase of Electronic Control Concepts.&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: center"><b>&#160;</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td> <td colspan="14" style="text-align: center; border-bottom: Black 1.5pt solid"><b>September 30, 2019</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"><b>&#160;</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>Level 1</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>Level 2</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>Level 3</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>TOTAL</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td></tr> <tr style="vertical-align: bottom"> <td>LIABILITES</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left; padding-bottom: 4pt">Contingent Liability</td><td style="width: 1%; padding-bottom: 4pt">&#160;</td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">-</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 4pt">&#160;</td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">-</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 4pt">&#160;</td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">$</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">35,989</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 4pt">&#160;</td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">$</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">35,989</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">&#160;</td></tr> </table> <p style="margin: 0">&#160;</p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: center"><b>&#160;</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td> <td colspan="14" style="text-align: center; border-bottom: Black 1.5pt solid"><b>December 31, 2018</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"><b>&#160;</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>Level 1</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>Level 2</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>Level 3</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>TOTAL</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td></tr> <tr style="vertical-align: bottom"> <td>LIABILITES</td><td>&#160;</td> <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left; padding-bottom: 4pt">Contingent Liability</td><td style="width: 1%; padding-bottom: 4pt">&#160;</td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">-</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 4pt">&#160;</td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">-</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 4pt">&#160;</td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">$</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">57,142</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 4pt">&#160;</td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">$</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">57,142</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">&#160;</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 22pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>&#160;</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">A summary of the activity of the contingent liability is as follows:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%">Contingent liability at December 31, 2018</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">57,142</td><td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Change in fair value</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">(7,719</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Reclassification to accounts payable</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(13,434</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 4pt">Contingent liability at September 30, 2019</td><td style="padding-bottom: 4pt">&#160;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">35,989</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr></table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"><tr style="vertical-align: bottom"><td style="text-align: center"><b>&#160;</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td> <td colspan="14" style="text-align: center; border-bottom: Black 1.5pt solid"><b>September 30, 2019</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"><b>&#160;</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>Level 1</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>Level 2</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>Level 3</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>TOTAL</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td></tr> <tr style="vertical-align: bottom"> <td>LIABILITES</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left; padding-bottom: 4pt">Contingent Liability</td><td style="width: 1%; padding-bottom: 4pt">&#160;</td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">-</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 4pt">&#160;</td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">-</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 4pt">&#160;</td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">$</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">35,989</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 4pt">&#160;</td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">$</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">35,989</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">&#160;</td></tr> </table> <p style="margin: 0">&#160;</p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: center"><b>&#160;</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td> <td colspan="14" style="text-align: center; border-bottom: Black 1.5pt solid"><b>December 31, 2018</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"><b>&#160;</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>Level 1</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>Level 2</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>Level 3</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>TOTAL</b></td><td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td></tr> <tr style="vertical-align: bottom"> <td>LIABILITES</td><td>&#160;</td> <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left; padding-bottom: 4pt">Contingent Liability</td><td style="width: 1%; padding-bottom: 4pt">&#160;</td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">-</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 4pt">&#160;</td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">&#160;</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">-</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 4pt">&#160;</td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">$</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">57,142</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 4pt">&#160;</td> <td style="width: 1%; border-bottom: Black 4pt double; text-align: left">$</td><td style="width: 9%; border-bottom: Black 4pt double; text-align: right">57,142</td><td style="width: 1%; padding-bottom: 4pt; text-align: left">&#160;</td></tr></table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%">Contingent liability at December 31, 2018</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">57,142</td><td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Change in fair value</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">(7,719</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Reclassification to accounts payable</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(13,434</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 4pt">Contingent liability at September 30, 2019</td><td style="padding-bottom: 4pt">&#160;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">35,989</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>Note 17 &#8211; Commitments</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>&#160;</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Future payment under all of the Company obligations as of September 30, 2019:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="14" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Twelve Months Ended September 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold">&#160;</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2023</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Total</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 40%; text-align: left">Note payable</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">16,875</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">13,633</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">-</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">-</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">30,508</td><td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Note payable - shareholder</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">398,551</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">398,551</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Operating lease obligations</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">168,000</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">98,000</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">266,000</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">Line of credit</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">218,197</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">218,197</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">403,072</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">510,184</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">913,256</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr></table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="14" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Twelve Months Ended September 30,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold">&#160;</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2023</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Total</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 40%; text-align: left">Note payable</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">16,875</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">13,633</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">-</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">-</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">30,508</td><td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Note payable - shareholder</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">398,551</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">398,551</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Operating lease obligations</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">168,000</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">98,000</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">266,000</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1.5pt">Line of credit</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">218,197</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">218,197</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">403,072</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">510,184</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">913,256</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>Note 18 &#8211; Subsequent Events </b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>&#160;</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855, from the balance sheet date through the date the financial statements were available to be issued and has determined that no material subsequent events exist other than the following. &#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">Subsequent to September 30, 2019, the Company issued a total of 62,132 shares for professional services rendered.</font></p> 2005594 1309701 2380332 1405 1696 3342953 6445625 -2034657 -4441727 2340269 2181766 1629 1978 5372755 8843362 -2994052 -6505071 1722 1570 6564166 4756994 -4629146 -2576798 1936742 1841 7618178 -5095165 2524854 1692 6415432 -4408767 2008357 14047403 16959784 16289813 19781371 17216834 15703813 18415454 16915813 1150321 448740 26 38 118541 632918 632956 33 448707 118567 122 1150199 13 61 328307 804070 328320 804131 257050 386410 326000 1218857 126000 615287 75000 127 781123 781250 15 74985 46 58 287454 249942 287500 250000 1270000 147060 460000 583333 -1409906 -1414715 -187419 -542141 -542141 -1414715 -187419 -1409906 -417254 -466019 -417254 -466019 594000 30 593970 300000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Note 1 &#8211; Organization </b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Organization and Line of Business</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">US Nuclear Corp., formerly known as APEX 3, Inc., (the "Company" or "US Nuclear") was incorporated under the laws of the State of Delaware on February 14, 2012.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On May 31, 2016, the Company entered into an Asset Purchase Agreement with Electronic Control Concepts ("ECC") whereby the Company purchased certain tangible and intangible assets of ECC.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company is engaged in developing, manufacturing and selling radiation detection and measuring equipment. The Company markets and sells its products to consumers throughout the world.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>Note 2 &#8211; Basis Presentation</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Interim financial statements</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The unaudited interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosure are adequate to make the information presented not misleading.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">These statements reflect all adjustment, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2018 and notes thereto included in the Company's annual report on Form 10-K filed on April 17, 2019. The Company follows the same accounting policies in the preparation of interim report. Results of operations for the interim period are not indicative of annual results.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Principles of Consolidation</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Optron and its wholly-owned subsidiary, Overhoff Technology Corporation ("Overhoff"), and have been prepared in conformity with accounting principles generally accepted in the United States of America. All significant intercompany transactions and balances have been eliminated.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Use of Estimates</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. It is possible that accounting estimates and assumptions may be material to the Company due to the levels of subjectivity and judgment involved.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Cash and Cash Equivalents</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Cash and cash equivalents include cash on hand and cash in time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less. There were no cash equivalents as of September 30, 2019 and December 31, 2018.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Accounts Receivable</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company maintains reserves for potential credit losses for accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves.&#160; Reserves are recorded based on the Company's historical collection history. Allowance for doubtful accounts as of September 30, 2019 and December 31, 2018 were $5,000 and $5,000, respectively.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Inventories</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Inventories are valued at the lower of cost (determined primarily by the average cost method) or net realizable value. Management compares the cost of inventories with the net realizable value and allowance is made for writing down their inventories to net realizable value, if lower. As of September 30, 2019 and December 31, 2018, there was no allowance for slow moving or obsolete inventory. The Company periodically assessed its inventory for slow moving and/or obsolete items. If any are identified an appropriate allowance for those items is made and/or the items are deemed to be impaired.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Property and Equipment</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Property and Equipment are stated at cost. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and betterments are capitalized. When equipment is retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of equipment is provided using the straight-line method for substantially all assets with estimated lives as follows:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)"> <td style="width: 49%; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><font style="font: 10pt Times New Roman, Times, Serif">Furniture and fixtures</font></td> <td style="width: 2%">&#160;</td> <td style="width: 49%; padding-right: -11.7pt; text-align: center; font: 10pt Times New Roman, Times, Serif"><font style="font: 10pt Times New Roman, Times, Serif">5 years</font></td></tr> <tr style="vertical-align: top; font: 10pt Times New Roman, Times, Serif; background-color: White"> <td style="padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><font style="font: 10pt Times New Roman, Times, Serif">Leasehold improvement</font></td> <td>&#160;</td> <td style="padding-right: -11.7pt; text-align: center; font: 10pt Times New Roman, Times, Serif"><font style="font: 10pt Times New Roman, Times, Serif">Lesser of lease life or economic life</font></td></tr> <tr style="vertical-align: top; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)"> <td style="padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><font style="font: 10pt Times New Roman, Times, Serif">Equipment</font></td> <td>&#160;</td> <td style="padding-right: -11.7pt; text-align: center; font: 10pt Times New Roman, Times, Serif"><font style="font: 10pt Times New Roman, Times, Serif">5 years</font></td></tr> <tr style="vertical-align: top; font: 10pt Times New Roman, Times, Serif; background-color: White"> <td style="padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><font style="font: 10pt Times New Roman, Times, Serif">Computers and software</font></td> <td>&#160;</td> <td style="padding-right: -11.7pt; text-align: center; font: 10pt Times New Roman, Times, Serif"><font style="font: 10pt Times New Roman, Times, Serif">5&#160;years</font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Long-Lived Assets</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company applies the provisions of Accounting Standards Codification ("ASC") Topic 360, <i>Property, Plant, and Equipment</i>, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. ASC 360 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair values are reduced for the cost of disposal. Based on its review at September 30, 2019 and December 31, 2018, the Company believes there was no impairment of its long-lived assets.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Intangible Assets</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company's intangible assets at September 30, 2019 and December 31, 2018 were all acquired with the purchase of ECC and are being amortized over 24 months. The Company performs a test for impairment at least annually. No impairment test was performed as of the intangible assets were fully amortized.&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Goodwill</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Goodwill represents the excess of purchase price over the underlying net assets of businesses acquired. The entire goodwill balance in the accompanying financial statements resulted from the Company's acquisition of Overhoff Technology Corporation in 2006. The Company complies with ASC 350, <i>Goodwill and Other Indefinite Lived Intangible Assets</i> , requiring that a test for impairment be performed at least annually. As of September 30, 2019 and December 31, 2018 the Company performed the required impairment analysis which resulted in no impairment adjustments.&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Fair Value of Financial Instruments</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">For certain of the Company's financial instruments, including cash, accounts receivable, accounts payable, accrued liabilities, customer deposits, and line of credit, the carrying amounts approximate their fair values due to their short maturities. In addition, the Company has a note payable to shareholder that the carrying amount also approximates fair value.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Revenue Recognition</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Accounting Standards Update ("ASU") No. 2014-09,&#160; <i>Revenue from Contracts with Customers&#160;</i> ("<i>Topic 606</i>"), became effective for the Company on January 1, 2018. The Company's revenue recognition disclosure reflects its updated accounting policies that are affected by this new standard. The Company applied the "modified retrospective" transition method for open contracts for the implementation of&#160; <i>Topic 606.</i> As <i>&#160;</i> sales are and have been primarily from the sale of products to customers, and the Company has no significant post-delivery obligations, this new standard did not <i>&#160;</i> result in a material recognition of revenue on the Company's accompanying consolidated financial statements for the cumulative impact of applying this new standard. The Company made no adjustments to its previously-reported total revenues, as those periods continue to be presented in accordance with its historical accounting practices under&#160; <i>Topic 605, Revenue Recognition</i>.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Revenue from the product sales are recognized under&#160; <i>Topic 606</i> &#160;in a manner that reasonably reflects the delivery of its products to customers in return for expected consideration and includes the following elements:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#9679;</font></td><td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">executed contracts with the Company's customers that it believes are legally enforceable;</font></td> </tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#9679;</font></td><td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">identification of performance obligations in the respective contract;</font></td> </tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#9679;</font></td><td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">determination of the transaction price for each performance obligation in the respective contract;</font></td> </tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#9679;</font></td><td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">allocation the transaction price to each performance obligation; and</font></td> </tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#9679;</font></td><td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">recognition of revenue only when the Company satisfies each performance obligation.</font></td> </tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">These five elements, as applied to each of the Company's revenue category, is summarized below:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#9679;</font></td><td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Product sales - revenue is recognized when the Company performs its obligations under the contracts it has with its customers to deliver products at an agreed upon price and it is generally when the control of the product has been transferred to the customer.</font></td> </tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160; <i>&#160;</i></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as customer deposits.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Sales returns and allowances was $0 for the nine months ended September 30, 2019 and 2018. The Company provides a one-year warranty on all sales. Warranty expense for the nine months ended September 30, 2019 and 2018 was insignificant. The Company does not provide unconditional right of return, price protection or any other concessions to its customers.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">See Notes 12 and 13 for disclosures of revenue disaggregated by geographical area and product line.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Customer Deposits</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Customer deposits represent cash paid to the Company by customers before the product has been completed and shipped.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Income Taxes</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company accounts for income taxes in accordance with ASC Topic 740, <i>Income Taxes</i> . ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will&#160;not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Under ASC 740, a tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded. The adoption had no effect on the Company's consolidated financial statements.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Stock-Based Compensation</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company records stock-based compensation in accordance with FASB ASC Topic 718, " <i>Compensation &#8211; Stock Compensation</i>." FASB ASC Topic 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the employee's requisite service period. The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Basic and Diluted Earnings Per Share</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Earnings per share is calculated in accordance with ASC Topic 260, <i>Earnings Per Share</i> . Basic earnings per share ("EPS") is based on the weighted average number of common shares outstanding. Diluted EPS is based on the assumption that all dilutive convertible shares and stock warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. There were no potentially dilutive securities outstanding during the nine months ended September 30, 2019 and 2018.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Segment Reporting</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">FASB ASC Topic 280, <i>Segment Reporting</i> , requires use of the "management approach" model for segment reporting. The management approach model is based on the way a company's management organizes segments within the company for making operating decisions and assessing performance. The Company determined it has two reportable segments. See Note 12.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Related Parties</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company accounts for related party transactions in accordance with ASC 850, <i>Related Party Disclosures</i> . A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Reclassifications</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Certain prior period amounts were reclassified to conform to the manner of presentation in the current period. These reclassifications had no effect on the net loss or stockholders' equity.&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Recent Accounting Pronouncements</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><i>&#160;</i></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In May 2014, the FASB issued ASU No. 2014-09, <i>Revenue from Contracts with Customers</i>.&#160; ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle-based approach for determining revenue recognition.&#160; ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract.&#160; The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract.&#160; ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017.&#160;&#160; Early adoption is permitted only in annual reporting periods beginning after December 15, 2016, including interim periods therein.&#160; Entities will be able to transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption.&#160;The Company adopted this ASU beginning on January 1, 2018 and used the modified retrospective method of adoption. The adoption of this ASC did not have a material impact on the Company's financial statements and disclosures.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In June 2018, the FASB issued Accounting Standards Update ("ASU") ASU 2018-07, <i>Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting</i> , which simplifies the accounting for share-based payments granted to nonemployees for goods and services and aligns most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees. ASU 2018-07 is effective on January 1, 2019. Early adoption is permitted. The Company adopted this ASU on January 1, 2019 with no material impact on the Company's financial statements.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In February 2016, the FASB issued ASU 2016-02,&#160; <i>Leases (Topic&#160;842)</i>. ASU 2016-02 requires lessees to recognize lease assets and lease liabilities on the balance sheet and requires expanded disclosures about leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods in fiscal years beginning after December&#160;15, 2018, with early adoption permitted. ASU 2016-02 and additional ASUs are now codified as Accounting Standards Codification Standard ("ASC") 842 - <i>Leases</i> ("ASC 842"). ASC 842 supersedes the lease accounting guidance in ASC 840 <i>Leases</i>, and requires lessees to recognize a lease liability and a corresponding lease asset for virtually all lease contracts. It also requires additional disclosures about leasing arrangements. The Company adopted ASC 842 on January 1, 2019 and used the modified retrospective transition approach and did not restate its comparative periods. As of the date of implementation on January 1, 2019, the impact of the adoption of ASC 842 resulted in the recognition of a right of use asset and lease payable obligation on the Company's consolidated balance sheets of $356,508. As the right of use asset and the lease payable obligation were the same upon adoption of ASC 842, there was no cumulative effect impact on the Company's accumulated deficit.&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>Note 3 &#8211; Inventories</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">Inventories at September 30, 2019 and December 31, 2018 consisted of the following:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td><b>&#160;</b></td><td><b>&#160;</b></td> <td colspan="2" style="text-align: center"><b>September&#160;30,</b></td><td><b>&#160;</b></td><td><b>&#160;</b></td> <td colspan="2" style="text-align: center"><b>December 31,</b></td><td><b>&#160;</b></td></tr> <tr style="vertical-align: bottom"> <td><b>&#160;</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>2019</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>2018</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Raw materials</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">705,662</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">591,970</td><td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Work in Progress</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">100,186</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">25,353</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Finished goods</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">233,765</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">430,289</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 4pt">Total inventories</td><td style="padding-bottom: 4pt">&#160;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,039,613</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,047,612</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">At September 30, 2019 and December 31, 2018 the inventory reserve was $0.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>Note 7 &#8211; Notes Payable</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In connection with the acquisition of assets from ECC, the Company issued a note payable to the owner of ECC. The note accrued interest at 5% per annum, requires quarterly principal and interest payments of $4,518 and is due on April 15, 2021. At September 30, 2019 and December 31, 2018, the amount outstanding under this note payable was $30,508 and $42,805, respectively. The Company repaid $12,297 during the nine months ended September 30, 2019.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Future maturities of notes payable as of September 30, 2019 are as follows:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1.5pt solid; text-align: left"><b>Twelve months ending September 30,</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td> <td colspan="2"><b>&#160;</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: left">2020</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">16,875</td><td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">2021</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">13,633</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">30,508</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Note 8 &#8211; Note Payable to Shareholder</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>&#160;</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Robert Goldstein, the CEO and majority shareholder, has loaned funds to the Company from time to time to cover general operating expenses. These loans are evidenced by unsecured, non-interest bearing notes due on December 31, 2020. During the nine months ended September 30, 2019, the Company's majority shareholder loaned an additional $15,155 to the Company and was repaid $30,159. During the nine months ended September 30, 2018, the Company's majority shareholder was repaid $40,174. The amounts due to Mr. Goldstein are $398,551 and $413,555 as of September 30, 2019 and December 31, 2018, respectively.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>Note 9 &#8211; Line of Credit</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">As of September 30, 2019, the Company had four lines of credit with a maximum borrowing amount of $400,000 with interest ranging from 5.5% to 11.5%. As of September 30, 2019, and December 31, 2018, the amounts outstanding under these lines of credit were $215,197 and $222,490, respectively.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>Note 13 &#8211; Geographical Sales </b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The geographical distribution of the Company's sales for the three and nine months ended September 30, 2019 and 2018 is as follows:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Three Months Ended<br /> September 30,</td><td style="padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Nine Months Ended<br /> September 30,</td><td style="padding-bottom: 1.5pt">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="font-weight: bold">Geographical sales</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left; padding-left: 0.125in">North America</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">187,819</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">463,678</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">995,861</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,431,443</td><td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-left: 0.125in">Middle East</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">751,100</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in">Asia</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">429,536</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">607,408</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">972,154</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">1,055,726</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-left: 0.125in">South America</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">59,929</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">11,576</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">139,237</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt; padding-left: 0.125in">Other</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">41,970</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">14,465</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">88,210</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">80,379</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">659,325</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">1,145,480</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">2,818,901</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">2,706,785</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td></tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>Note 14 &#8211; Related Party Transactions </b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company leases its current facilities from Gold Team Inc., a company owned by the Company's CEO, which owns both the Canoga Park, CA and Milford, Ohio locations. Rent expense for the nine months ended September 30, 2019 and 2018 were $126,000 and $126,000, respectively. As of September 30, 2019 and December 31, 2018, payable to Gold Team Inc. in connection with the above leases amount to $28,000 and $0, respectively. (See Note 10)</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 22pt; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In addition, as of September 30, 2019 and December 31, 2018, the Company had accrued compensation payable to its majority shareholder of $425,000 and $350,000, respectively.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">Also see Note 7.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>Note 15 &#8211; Concentrations </b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">One customer accounted for 26.8% of the Company's sales for the nine months ended September 30, 2019 and two customers accounted for 30% and 20% of the Company's sales for the nine months ended September 30, 2018.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">No vendors accounted for more than 10% of the Company's purchases for the nine months ended September 30, 2019 and 2018.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Interim financial statements</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The unaudited interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosure are adequate to make the information presented not misleading.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">These statements reflect all adjustment, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2018 and notes thereto included in the Company's annual report on Form 10-K filed on April 17, 2019. The Company follows the same accounting policies in the preparation of interim report. Results of operations for the interim period are not indicative of annual results.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Principles of Consolidation</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Optron and its wholly-owned subsidiary, Overhoff Technology Corporation ("Overhoff"), and have been prepared in conformity with accounting principles generally accepted in the United States of America. All significant intercompany transactions and balances have been eliminated.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Use of Estimates</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. It is possible that accounting estimates and assumptions may be material to the Company due to the levels of subjectivity and judgment involved.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Cash and Cash Equivalents</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Cash and cash equivalents include cash on hand and cash in time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less. There were no cash equivalents as of September 30, 2019 and December 31, 2018.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Accounts Receivable</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company maintains reserves for potential credit losses for accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves.&#160; Reserves are recorded based on the Company's historical collection history. Allowance for doubtful accounts as of September 30, 2019 and December 31, 2018 were $5,000 and $5,000, respectively.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Inventories</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Inventories are valued at the lower of cost (determined primarily by the average cost method) or net realizable value. Management compares the cost of inventories with the net realizable value and allowance is made for writing down their inventories to net realizable value, if lower. As of September 30, 2019 and December 31, 2018, there was no allowance for slow moving or obsolete inventory. The Company periodically assessed its inventory for slow moving and/or obsolete items. If any are identified an appropriate allowance for those items is made and/or the items are deemed to be impaired.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Property and Equipment</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Property and Equipment are stated at cost. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and betterments are capitalized. When equipment is retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of equipment is provided using the straight-line method for substantially all assets with estimated lives as follows:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)"> <td style="width: 49%; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><font style="font: 10pt Times New Roman, Times, Serif">Furniture and fixtures</font></td> <td style="width: 2%">&#160;</td> <td style="width: 49%; padding-right: -11.7pt; text-align: center; font: 10pt Times New Roman, Times, Serif"><font style="font: 10pt Times New Roman, Times, Serif">5 years</font></td></tr> <tr style="vertical-align: top; font: 10pt Times New Roman, Times, Serif; background-color: White"> <td style="padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><font style="font: 10pt Times New Roman, Times, Serif">Leasehold improvement</font></td> <td>&#160;</td> <td style="padding-right: -11.7pt; text-align: center; font: 10pt Times New Roman, Times, Serif"><font style="font: 10pt Times New Roman, Times, Serif">Lesser of lease life or economic life</font></td></tr> <tr style="vertical-align: top; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)"> <td style="padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><font style="font: 10pt Times New Roman, Times, Serif">Equipment</font></td> <td>&#160;</td> <td style="padding-right: -11.7pt; text-align: center; font: 10pt Times New Roman, Times, Serif"><font style="font: 10pt Times New Roman, Times, Serif">5 years</font></td></tr> <tr style="vertical-align: top; font: 10pt Times New Roman, Times, Serif; background-color: White"> <td style="padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><font style="font: 10pt Times New Roman, Times, Serif">Computers and software</font></td> <td>&#160;</td> <td style="padding-right: -11.7pt; text-align: center; font: 10pt Times New Roman, Times, Serif"><font style="font: 10pt Times New Roman, Times, Serif">5&#160;years</font></td></tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Long-Lived Assets</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company applies the provisions of Accounting Standards Codification ("ASC") Topic 360, <i>Property, Plant, and Equipment</i>, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. ASC 360 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair values are reduced for the cost of disposal. Based on its review at September 30, 2019 and December 31, 2018, the Company believes there was no impairment of its long-lived assets.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Intangible Assets</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company's intangible assets at September 30, 2019 and December 31, 2018 were all acquired with the purchase of ECC and are being amortized over 24 months. The Company performs a test for impairment at least annually. No impairment test was performed as of the intangible assets were fully amortized.&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Goodwill</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Goodwill represents the excess of purchase price over the underlying net assets of businesses acquired. The entire goodwill balance in the accompanying financial statements resulted from the Company's acquisition of Overhoff Technology Corporation in 2006. The Company complies with ASC 350, <i>Goodwill and Other Indefinite Lived Intangible Assets</i> , requiring that a test for impairment be performed at least annually. As of September 30, 2019 and December 31, 2018 the Company performed the required impairment analysis which resulted in no impairment adjustments.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Fair Value of Financial Instruments</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">For certain of the Company's financial instruments, including cash, accounts receivable, accounts payable, accrued liabilities, customer deposits, and line of credit, the carrying amounts approximate their fair values due to their short maturities. In addition, the Company has a note payable to shareholder that the carrying amount also approximates fair value.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Revenue Recognition</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Accounting Standards Update ("ASU") No. 2014-09,&#160; <i>Revenue from Contracts with Customers&#160;</i> ("<i>Topic 606</i>"), became effective for the Company on January 1, 2018. The Company's revenue recognition disclosure reflects its updated accounting policies that are affected by this new standard. The Company applied the "modified retrospective" transition method for open contracts for the implementation of&#160; <i>Topic 606.</i> As <i>&#160;</i> sales are and have been primarily from the sale of products to customers, and the Company has no significant post-delivery obligations, this new standard did not <i>&#160;</i> result in a material recognition of revenue on the Company's accompanying consolidated financial statements for the cumulative impact of applying this new standard. The Company made no adjustments to its previously-reported total revenues, as those periods continue to be presented in accordance with its historical accounting practices under&#160; <i>Topic 605, Revenue Recognition</i>.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Revenue from the product sales are recognized under&#160; <i>Topic 606</i> &#160;in a manner that reasonably reflects the delivery of its products to customers in return for expected consideration and includes the following elements:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#9679;</font></td><td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">executed contracts with the Company's customers that it believes are legally enforceable;</font></td> </tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#9679;</font></td><td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">identification of performance obligations in the respective contract;</font></td> </tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#9679;</font></td><td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">determination of the transaction price for each performance obligation in the respective contract;</font></td> </tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#9679;</font></td><td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">allocation the transaction price to each performance obligation; and</font></td> </tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#9679;</font></td><td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">recognition of revenue only when the Company satisfies each performance obligation.</font></td> </tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">These five elements, as applied to each of the Company's revenue category, is summarized below:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0"></td><td style="width: 0.25in; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">&#9679;</font></td><td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Product sales - revenue is recognized when the Company performs its obligations under the contracts it has with its customers to deliver products at an agreed upon price and it is generally when the control of the product has been transferred to the customer.</font></td> </tr></table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160; <i>&#160;</i></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as customer deposits.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Sales returns and allowances was $0 for the nine months ended September 30, 2019 and 2018. The Company provides a one-year warranty on all sales. Warranty expense for the nine months ended September 30, 2019 and 2018 was insignificant. The Company does not provide unconditional right of return, price protection or any other concessions to its customers.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">See Notes 12 and 13 for disclosures of revenue disaggregated by geographical area and product line.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Customer Deposits</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Customer deposits represent cash paid to the Company by customers before the product has been completed and shipped.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Income Taxes</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company accounts for income taxes in accordance with ASC Topic 740, <i>Income Taxes</i> . ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will&#160;not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Under ASC 740, a tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded. The adoption had no effect on the Company's consolidated financial statements.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Stock-Based Compensation</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company records stock-based compensation in accordance with FASB ASC Topic 718, " <i>Compensation &#8211; Stock Compensation</i>." FASB ASC Topic 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the employee's requisite service period. The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Basic and Diluted Earnings Per Share</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Earnings per share is calculated in accordance with ASC Topic 260, <i>Earnings Per Share</i> . Basic earnings per share ("EPS") is based on the weighted average number of common shares outstanding. Diluted EPS is based on the assumption that all dilutive convertible shares and stock warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. There were no potentially dilutive securities outstanding during the nine months ended September 30, 2019 and 2018.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Segment Reporting</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">FASB ASC Topic 280, <i>Segment Reporting</i> , requires use of the "management approach" model for segment reporting. The management approach model is based on the way a company's management organizes segments within the company for making operating decisions and assessing performance. The Company determined it has two reportable segments. See Note 12.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Related Parties</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The Company accounts for related party transactions in accordance with ASC 850, <i>Related Party Disclosures</i> . A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><u>Reclassifications</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">Certain prior period amounts were reclassified to conform to the manner of presentation in the current period. These reclassifications had no effect on the net loss or stockholders' equity.&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><u>Recent Accounting Pronouncements</u></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><i>&#160;</i></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In May 2014, the FASB issued ASU No. 2014-09, <i>Revenue from Contracts with Customers</i>.&#160; ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle-based approach for determining revenue recognition.&#160; ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract.&#160; The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract.&#160; ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017.&#160;&#160; Early adoption is permitted only in annual reporting periods beginning after December 15, 2016, including interim periods therein.&#160; Entities will be able to transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption.&#160;The Company adopted this ASU beginning on January 1, 2018 and used the modified retrospective method of adoption. The adoption of this ASC did not have a material impact on the Company's financial statements and disclosures.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In June 2018, the FASB issued Accounting Standards Update ("ASU") ASU 2018-07, <i>Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting</i> , which simplifies the accounting for share-based payments granted to nonemployees for goods and services and aligns most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees. ASU 2018-07 is effective on January 1, 2019. Early adoption is permitted. The Company adopted this ASU on January 1, 2019 with no material impact on the Company's financial statements.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In February 2016, the FASB issued ASU 2016-02,&#160; <i>Leases (Topic&#160;842)</i>. ASU 2016-02 requires lessees to recognize lease assets and lease liabilities on the balance sheet and requires expanded disclosures about leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods in fiscal years beginning after December&#160;15, 2018, with early adoption permitted. ASU 2016-02 and additional ASUs are now codified as Accounting Standards Codification Standard ("ASC") 842 - <i>Leases</i> ("ASC 842"). ASC 842 supersedes the lease accounting guidance in ASC 840 <i>Leases</i>, and requires lessees to recognize a lease liability and a corresponding lease asset for virtually all lease contracts. It also requires additional disclosures about leasing arrangements. The Company adopted ASC 842 on January 1, 2019 and used the modified retrospective transition approach and did not restate its comparative periods. As of the date of implementation on January 1, 2019, the impact of the adoption of ASC 842 resulted in the recognition of a right of use asset and lease payable obligation on the Company's consolidated balance sheets of $356,508. As the right of use asset and the lease payable obligation were the same upon adoption of ASC 842, there was no cumulative effect impact on the Company's accumulated deficit.&#160;</font></p> <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)"><td style="width: 49%; padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><font style="font: 10pt Times New Roman, Times, Serif">Furniture and fixtures</font></td> <td style="width: 2%">&#160;</td> <td style="width: 49%; padding-right: -11.7pt; text-align: center; font: 10pt Times New Roman, Times, Serif"><font style="font: 10pt Times New Roman, Times, Serif">5 years</font></td></tr> <tr style="vertical-align: top; font: 10pt Times New Roman, Times, Serif; background-color: White"> <td style="padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><font style="font: 10pt Times New Roman, Times, Serif">Leasehold improvement</font></td> <td>&#160;</td> <td style="padding-right: -11.7pt; text-align: center; font: 10pt Times New Roman, Times, Serif"><font style="font: 10pt Times New Roman, Times, Serif">Lesser of lease life or economic life</font></td></tr> <tr style="vertical-align: top; font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)"> <td style="padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><font style="font: 10pt Times New Roman, Times, Serif">Equipment</font></td> <td>&#160;</td> <td style="padding-right: -11.7pt; text-align: center; font: 10pt Times New Roman, Times, Serif"><font style="font: 10pt Times New Roman, Times, Serif">5 years</font></td></tr> <tr style="vertical-align: top; font: 10pt Times New Roman, Times, Serif; background-color: White"> <td style="padding-right: 0.8pt; font: 10pt Times New Roman, Times, Serif"><font style="font: 10pt Times New Roman, Times, Serif">Computers and software</font></td> <td>&#160;</td> <td style="padding-right: -11.7pt; text-align: center; font: 10pt Times New Roman, Times, Serif"><font style="font: 10pt Times New Roman, Times, Serif">5&#160;years</font></td></tr></table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"><tr style="vertical-align: bottom"><td><b>&#160;</b></td><td><b>&#160;</b></td> <td colspan="2" style="text-align: center"><b>September&#160;30,</b></td><td><b>&#160;</b></td><td><b>&#160;</b></td> <td colspan="2" style="text-align: center"><b>December 31,</b></td><td><b>&#160;</b></td></tr> <tr style="vertical-align: bottom"> <td><b>&#160;</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>2019</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td> <td colspan="2" style="text-align: center; border-bottom: Black 1.5pt solid"><b>2018</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Raw materials</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">705,662</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">591,970</td><td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Work in Progress</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">100,186</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">25,353</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Finished goods</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">233,765</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">430,289</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 4pt">Total inventories</td><td style="padding-bottom: 4pt">&#160;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,039,613</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,047,612</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr></table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"><tr style="vertical-align: bottom"><td style="border-bottom: Black 1.5pt solid; text-align: left"><b>Twelve months ending September 30,</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td> <td colspan="2"><b>&#160;</b></td><td style="padding-bottom: 1.5pt"><b>&#160;</b></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 88%; text-align: left">2020</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">16,875</td><td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1.5pt">2021</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">13,633</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">30,508</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr></table> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"><tr style="vertical-align: bottom"><td style="padding-bottom: 1.5pt"></td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Three Months Ended<br /> September 30,</td><td style="padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="6" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Nine Months Ended<br /> September 30,</td><td style="padding-bottom: 1.5pt">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2018</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td></tr> <tr style="vertical-align: bottom"> <td style="font-weight: bold">Geographical sales</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td> <td colspan="2">&#160;</td><td>&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left; padding-left: 0.125in">North America</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">187,819</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">463,678</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">995,861</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,431,443</td><td style="width: 1%; text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-left: 0.125in">Middle East</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">751,100</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-left: 0.125in">Asia</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">429,536</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">607,408</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">972,154</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">1,055,726</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-left: 0.125in">South America</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">59,929</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">11,576</td><td style="text-align: left">&#160;</td><td>&#160;</td> <td style="text-align: left">&#160;</td><td style="text-align: right">139,237</td><td style="text-align: left">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1.5pt; padding-left: 0.125in">Other</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">41,970</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">14,465</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">88,210</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td> <td style="text-align: left; border-bottom: Black 1.5pt solid">&#160;</td><td style="text-align: right; border-bottom: Black 1.5pt solid">80,379</td><td style="text-align: left; padding-bottom: 1.5pt">&#160;</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">659,325</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">1,145,480</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">2,818,901</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td> <td style="text-align: left; border-bottom: Black 4pt double">$</td><td style="text-align: right; border-bottom: Black 4pt double">2,706,785</td><td style="text-align: left; padding-bottom: 4pt">&#160;</td></tr></table> P5Y P5Y P5Y Lesser of lease life or economic life 356508 5000 5000 969118 442341 1051531 891371 P24M 0 0 591970 705662 25353 100186 430289 233765 1047612 1039613 0 0 0.05 4518 2021-04-15 42805 30508 12297 11280 15155 30159 40174 413555 398551 Robert Goldstein, the CEO and majority shareholder, has loaned funds to the Company from time to time to cover general operating expenses. These loans are evidenced by unsecured, non-interest bearing notes due on December 31, 2020. 400000 0.055 0.115 222490 215197 126000 126000 0 28000 350000 425000 0.10 0.20 0.268 0.30 0.10 US NUCLEAR CORP. 0001543623 false --12-31 10-Q Q3 2019 2019-09-30 Yes Non-accelerated Filer true false true false 19843503 000-54617 Yes DE 730773 618344 1047612 1039613 2500 4500 2750003 2713988 10000 10000 300000 93263 110958 54511 37491 350000 425000 96571 4928 57142 35989 16262 16875 890239 1000065 26543 13633 1330337 1507687 1696 1978 6445625 8843362 -4441727 -6505071 3335931 3847956 0.0001 0.0001 5000000 5000000 0.0001 0.0001 100000000 100000000 16959784 19781371 16959784 19781371 1392608 1429606 336882 633384 3474788 2545379 1729246 834685 1084000 1084000 3474788 3629379 1729246 1918685 -14849 -21910 -3103 -8126 -2063344 -2374110 -1409906 -1414715 17748583 15643639 18654300 16584617 -0.12 -0.15 -0.08 -0.09 1025 59117 7719 -6631 -2073019 -1410016 41900 107443 -112429 334640 -7999 -89671 2000 4261 -38534 -17020 -17507 -75000 -75000 -91643 -36855 -107443 92007 -525311 5777 10000 300000 -300000 -15777 -7293 -27178 325000 1068750 15155 290406 990118 82413 449030 14849 21910 13434 15796 26000 594000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>Note 5 &#8211; Investment</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>&#160;</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On August 3, 2018, the Company closed an agreement by and among, MIFTEC Laboratories, Inc. ("MIFTEC"), a licensee of Magneto-Inertial Fusion Technologies, Inc., ("MIFTI"), and the Company. MIFTEC is a licensee of MIFTI radionuclide technology. MIFTEC will engage the Company to manufacture equipment pursuant to MIFTEC's specifications and designs and have the Company as a sales representative for the manufactured equipment. The Company will be the exclusive manufacturer and supplier to MIFTEC of equipment in North America and Asia. In addition, the Company received a 10% ownership interest in MIFTEC. The consideration for the exclusive manufacturing rights and a 10% ownership interest in MIFTEC was $500,000 and 300,000 shares of the Company's common stock valued at $594,000. The fair value was determined based on the Company's stock price on August 3, 2018. The Company recorded the value of the 10% interest in MIFTEC at $10,000 and recorded $1,084,000 as the acquisition of manufacturing and supply rights in the accompanying consolidated statement of operations during the year ended December 31, 2018. The Company evaluated this investment for impairment and determined that no impairment was necessary during the nine months ended September 30, 2019. The carrying value of this investment at September 30, 2019 and December 31, 2018 was $10,000 and $10,000, respectively.</font></p> EX-101.SCH 8 ucle-20190930.xsd XBRL SCHEMA FILE 00000001 - Document - Document and Entity Information link:presentationLink link:calculationLink link:definitionLink 00000002 - Statement - Consolidated Balance Sheets link:presentationLink link:calculationLink link:definitionLink 00000003 - Statement - Consolidated Balance Sheets (Parenthetical) link:presentationLink link:calculationLink link:definitionLink 00000004 - Statement - Consolidated Statements of Operations (Unaudited) link:presentationLink link:calculationLink link:definitionLink 00000005 - Statement - Consolidated Statement of Changes in Shareholders' Equity (Unaudited) link:presentationLink link:calculationLink link:definitionLink 00000006 - Statement - Consolidated Statements of Cash Flows (Unaudited) link:presentationLink link:calculationLink link:definitionLink 00000007 - Disclosure - Organization link:presentationLink link:calculationLink link:definitionLink 00000008 - Disclosure - Basis Presentation link:presentationLink link:calculationLink link:definitionLink 00000009 - Disclosure - Inventories link:presentationLink link:calculationLink link:definitionLink 00000010 - Disclosure - Property and Equipment link:presentationLink link:calculationLink link:definitionLink 00000011 - Disclosure - Investment link:presentationLink link:calculationLink link:definitionLink 00000012 - Disclosure - Acquisition Deposit link:presentationLink link:calculationLink link:definitionLink 00000013 - Disclosure - Notes Payable link:presentationLink link:calculationLink link:definitionLink 00000014 - Disclosure - Note Payable to Shareholder link:presentationLink link:calculationLink link:definitionLink 00000015 - Disclosure - Line of Credit link:presentationLink link:calculationLink link:definitionLink 00000016 - Disclosure - Leases link:presentationLink link:calculationLink link:definitionLink 00000017 - Disclosure - Shareholders' Equity link:presentationLink link:calculationLink link:definitionLink 00000018 - Disclosure - Segment Reporting link:presentationLink link:calculationLink link:definitionLink 00000019 - Disclosure - Geographical Sales link:presentationLink link:calculationLink link:definitionLink 00000020 - Disclosure - Related Party Transactions link:presentationLink link:calculationLink link:definitionLink 00000021 - Disclosure - Concentrations link:presentationLink link:calculationLink link:definitionLink 00000022 - Disclosure - Fair Value Measurements link:presentationLink link:calculationLink link:definitionLink 00000023 - Disclosure - Commitments link:presentationLink link:calculationLink link:definitionLink 00000024 - Disclosure - Subsequent Events link:presentationLink link:calculationLink link:definitionLink 00000025 - Disclosure - Basis Presentation (Policies) link:presentationLink link:calculationLink link:definitionLink 00000026 - Disclosure - Basis Presentation (Tables) link:presentationLink link:calculationLink link:definitionLink 00000027 - Disclosure - Inventories (Tables) link:presentationLink link:calculationLink link:definitionLink 00000028 - Disclosure - Property and Equipment (Tables) link:presentationLink link:calculationLink link:definitionLink 00000029 - Disclosure - Notes Payable (Table) link:presentationLink link:calculationLink link:definitionLink 00000030 - Disclosure - Leases (Tables) link:presentationLink link:calculationLink link:definitionLink 00000031 - Disclosure - Segment Reporting (Tables) link:presentationLink link:calculationLink link:definitionLink 00000032 - Disclosure - Geographical Sales (Tables) link:presentationLink link:calculationLink link:definitionLink 00000033 - Disclosure - Fair Value Measurements (Tables) link:presentationLink link:calculationLink link:definitionLink 00000034 - Disclosure - Commitments (Table) link:presentationLink link:calculationLink link:definitionLink 00000035 - Disclosure - Basis Presentation (Details) link:presentationLink link:calculationLink link:definitionLink 00000036 - Disclosure - Basis Presentation (Details Textual) link:presentationLink link:calculationLink link:definitionLink 00000037 - Disclosure - Inventories (Details) link:presentationLink link:calculationLink link:definitionLink 00000038 - Disclosure - Inventories (Details Textual) link:presentationLink link:calculationLink link:definitionLink 00000039 - Disclosure - Property and Equipment (Details) link:presentationLink link:calculationLink link:definitionLink 00000040 - Disclosure - Property and Equipment (Details Textual) link:presentationLink link:calculationLink link:definitionLink 00000041 - Disclosure - Investment (Details) link:presentationLink link:calculationLink link:definitionLink 00000042 - Disclosure - Acquisition Deposit (Details) link:presentationLink link:calculationLink link:definitionLink 00000043 - Disclosure - Notes Payable (Details) link:presentationLink link:calculationLink link:definitionLink 00000044 - Disclosure - Notes Payable (Details Textual) link:presentationLink link:calculationLink link:definitionLink 00000045 - Disclosure - Note Payable to Shareholder (Details) link:presentationLink link:calculationLink link:definitionLink 00000046 - Disclosure - Line of Credit (Details) link:presentationLink link:calculationLink link:definitionLink 00000047 - Disclosure - Leases (Details) link:presentationLink link:calculationLink link:definitionLink 00000048 - Disclosure - Leases (Details 1) link:presentationLink link:calculationLink link:definitionLink 00000049 - Disclosure - Leases (Details Textual) link:presentationLink link:calculationLink link:definitionLink 00000050 - Disclosure - Shareholders' Equity (Details) link:presentationLink link:calculationLink link:definitionLink 00000051 - Disclosure - Segment Reporting (Details) link:presentationLink link:calculationLink link:definitionLink 00000052 - Disclosure - Segment Reporting (Details Textual) link:presentationLink link:calculationLink link:definitionLink 00000053 - Disclosure - Geographical Sales (Details) link:presentationLink link:calculationLink link:definitionLink 00000054 - Disclosure - Related Party Transactions (Details) link:presentationLink link:calculationLink link:definitionLink 00000055 - Disclosure - Concentrations (Details) link:presentationLink link:calculationLink link:definitionLink 00000056 - Disclosure - Fair Value Measurements (Details) link:presentationLink link:calculationLink link:definitionLink 00000057 - Disclosure - Fair Value Measurements (Details 1) link:presentationLink link:calculationLink link:definitionLink 00000058 - Disclosure - Commitments (Details) link:presentationLink link:calculationLink link:definitionLink 00000059 - Disclosure - Subsequent Events (Details) link:presentationLink link:calculationLink link:definitionLink EX-101.CAL 9 ucle-20190930_cal.xml XBRL CALCULATION FILE EX-101.DEF 10 ucle-20190930_def.xml XBRL DEFINITION FILE