Note

Recent Accounting Pronouncements

The

Company is an emerging growth company and as such will be subject to the effective dates noted for the private companies if they differ from the effective dates noted for public companies.

FASB ASU

2014

09,

Revenue from Contracts with Customers

May 2014,

the FASB issued

Accounting Standards Update (ASU)

2014

09,

“Revenue from Contracts with Customers,” which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. In

March, 2016

the FASB issued ASU

2016

08,

“Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” which clarifies the guidance in determining revenue recognition as principal versus agent. In

April 2016,

the FASB issued ASU

2016

10,

“Identifying Performance Obligations and Licensing,” which provides guidance in accounting for immaterial performance obligations and shipping and handling. In

May 2016,

the FASB issued ASU

2016

12,

“Narrow-Scope Improvements and Practical Expedients” which provides clarification on assessing the collectability criterion, presentation of sales taxes, measurement date for noncash consideration and completed contracts at transition. This ASU also provides a practical expedient for contract modifications.

The amendments are effective for annual reporting periods beginning after

December 15, 2017

and for interim reporting periods within such annual periods. The Company is currently evaluating the impact of adopting the guidance.

FASB ASU

2016

01,

Recognition and Measurement of Financial Assets and Financial Liabilities

January 2016,

the

FASB issued ASU

2016

01,

“Recognition and Measurement of Financial Assets and Financial Liabilities”. For public business entities, the amendments in this update include the elimination of the requirement to disclose the method(s) and significant assumptions used to estimate fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, the requirement to use the exit price notion when measuring fair value of financial instruments for disclosure purposes, the requirement to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments, the requirement for separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or accompanying notes to the financial statements, and the amendments clarify that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity's other deferred tax assets.

The amendments in this update are effective, as to the Company, for fiscal years beginning after

December 15, 2017

, including interim periods within those fiscal years. Early adoption of the amendments in this update is

not

permitted, except that early application by public business entities to financial statements of fiscal years or interim periods that have

not

yet been issued or, by all other entities, that have

not

yet been made available for issuance are permitted as of the beginning of the fiscal year of adoption for the following amendment: An entity should present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk if the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. An entity should apply the amendments to this update by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. Management is currently evaluating the impact of adopting this guidance on the Company’s financial statements. Adoption of ASU

No.

2016

not

expected to have a material impact on the Company's results of operations or financial position.

FASB ASU

2016

02,

Leases

February 2016

the

FASB issued ASU

2016

02,

“Leases”. Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date:

●

A lease liability, which is a lessee

‘s obligation to make lease payments arising from a lease, measured on a discounted basis; and

●

A right-of-use asset, which is an asset that represents the lessee

’s right to use, or control the use of, a specified asset for the lease term.

Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic

606,

“Revenue from Contracts with Customers”.

The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will

longer be provided with a source of off-balance sheet financing.

The amendments in

ASU

2016

are effective, as to the Company, for years beginning after

December 15, 2019,

and for interim periods for years beginning after

January 1, 2020.

Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would

not

require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors

may

not

apply a full retrospective transition approach. Management is currently evaluating the impact of adopting this guidance on the Company’s financial statements.

FASB ASU

2016

13,

Financial Instruments

– Credit Losses

June 2016,

FASB issued ASU

2016

13,

“Financial Instruments - Credit Losses”. The amendments in this Update replace the incurred loss model with a

methodology that reflects expected credit losses over the life of the loan and requires consideration of a broader range of reasonable and supportable information to calculate credit loss estimates. ASU

No.

2016

replaces the incurred loss impairment methodology with a new methodology that reflects expected credit losses over the lives of the loans and requires consideration of a broader range of information to inform credit loss estimates. The ASU requires an organization to estimate all expected credit losses for financial assets measured at amortized cost, including loans and held-to-maturity debt securities, based on historical experience, current conditions, and reasonable and supportable forecasts. Additional disclosures are required. ASU

No.

2016

is effective, as to the Company, for fiscal years, beginning after

December 15, 2020,

and interim periods within those fiscal years, beginning after

December 15, 2021.

Management expects that the implementation of ASU

No.

2016

may

increase the balance of the allowance for loan losses and is continuing to evaluate the potential impact on the Company's results of operations and financial position.