Note

New Accounting Pronouncements

From time to time, new accounting pronouncements are issued by Financial Accounting Standards Board (FASB) and are adopted by us as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued accounting pronouncements will

not

have a material impact on the Company’s consolidated financial position, results of operations, and cash flows, or do

not

apply to our operations.

May 2014,

the FASB issued Accounting Standards Update

No.

2014

“Revenue from Contracts with Customers (Topic

606

),” which supersedes all existing revenue recognition requirements, including most industry-specific guidance. The new standard requires a company to recognize revenue when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. ASU

2014

was originally going to be effective on

January

2017;

however, the FASB issued ASU

2015

14,

“Revenue from Contracts with Customers (Topic

606

) — Deferral of the Effective Date,” which deferred the effective date of ASU

2014

one

year to

January

2018.

March

2016,

the FASB issued ASU

No.

2016

“Revenue from Contracts with Customers (Topic

606

): Principal versus Agent Considerations. The amendments in this ASU do

not

change the core principle of ASU

No.

2014

but the amendments clarify the implementation guidance on reporting revenue gross versus net. The effective date for the amendments in this ASU is the same as the effective date of ASU

No.

2014

09.

April

2016,

the FASB issued ASU

No.

2016

10,

“Revenue from Contracts with Customers (Identifying Performance Obligations and Licensing),” to clarify the implementation guidance on identifying performance obligations and licensing. The standard allows for either “full retrospective” adoption, meaning the standard is applied to all of the periods presented, or “modified retrospective” adoption, meaning the standard is applied only to the most current period presented in the financial statements. The Company is currently evaluating the impact of adopting these standards and at this point, nothing has come to the Company’s attention that would indicate the adoption of these standards will have a material impact on the Company’s consolidated financial statements.

January 2016,

the FASB issued Accounting Standards Update

No.

2016

01,

Recognition and Measurement of Financial Assets and Financial Liabilities, which requires that most equity investments be measured at fair value, with subsequent changes in fair value recognized in net income (other than those accounted for under the equity method of accounting). This guidance is effective for fiscal years, and interim periods within those years, beginning after

December 15, 2017.

The Company is currently assessing the impact of the adoption of this guidance on its consolidated financial statements and disclosures.

February 2016,

the FASB issued Accounting Standards Update

No.

2016

02,

Leases (Topic

842

), which requires that lessees recognize assets and liabilities for leases with lease terms greater than

twelve

months in the statement of financial position. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. This update also requires improved disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases. The update is effective for fiscal years beginning after

December 15, 2018,

including interim reporting periods within that reporting period. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this guidance will have on its consolidated financial statements and disclosures.

March 2016,

the FASB issued Accounting Standards Update

No.

2016

09,

Compensation – Stock Compensation (Topic

718

). The new standard simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The new standard is effective for public companies for annual reporting periods beginning after

December 15, 2016,

including interim periods within those annual reporting periods; however, early adoption is allowed. The Company adopted this standard in

January 2017

and made the election to account for award forfeitures as they occur. The adoption of this standard did

not

have a material impact on the Company’s consolidated financial statements.

August 2016,

the FASB issued Accounting Standard Update

No.

2016

15,

Statement of Cash Flows (Topic

230

): Classification of Certain Cash Receipts and Cash Payments. This update clarifies how certain cash receipts and payments should be presented in the statement of cash flows and is effective for interim and annual reporting periods beginning after

December 15, 2017,

with early adoption permitted. The Company does

not

believe that this guidance will have an impact on the consolidated financial statements and related disclosures.

November 2016,

the FASB issued Accounting Standard Update

No.

2016

18,

Statement of Cash Flows (Topic

230

): Restricted Cash. This update amends the guidance in ASC

230,

including providing additional guidance related to transfers between cash and restricted cash and how entities present, in their statement of cash flows, the cash receipts and cash payments that directly affect the restricted cash accounts. This guidance is effective for annual reporting periods beginning after

December 15, 2017,

and interim periods within those years, with early adoption permitted. The Company is currently evaluating the impact of adoption on its consolidated financial statements.

January 2017,

the FASB issued Accounting Standard Update

No.

2017

01,

Business Combinations (Topic

805

): Clarifying the Definition of a Business, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This guidance is effective for annual reporting periods beginning after

December 15, 2018,

and interim periods within those years, with early adoption permitted. The Company is currently evaluating the impact of adoption on its consolidated financial statements.

January 2017,

the FASB issued Accounting Standard Update

No.

2017

04,

Intangibles-Goodwill and Other, Simplifying the Test for Goodwill impairment, which eliminates Step

from the goodwill impairment test. Under the revised test, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should

not

exceed the total amount of goodwill allocated to that reporting unit. This ASU is effective for any interim or annual impairment tests for fiscal years beginning after

December 15, 2019,

with early adoption permitted. The Company is currently evaluating the impact of adoption on its consolidated financial statements.