NOTE B: RECENT ACCOUNTING PRONOUNCEMENTS

May 2014,

the Financial Accounting Standards Board, (“FASB”), issued Accounting Standards Update, (“ASU”)

No.

2014

09,

(“ASU

2014

09”

Revenue from Contracts with Customers

. The objective of ASU

2014

and subsequent amendments is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most of the existing revenue recognition guidance, including industry-specific guidance. The core principle of ASU

2014

is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying the new guidance, an entity will (

) identify the contract(s) with a customer; (

) identify the performance obligations in the contract; (

) determine the transaction price; (

) allocate the transaction price to the contract’s performance obligations; and (

) recognize revenue when (or as) the entity satisfies a performance obligation. ASU

2014

applies to all contracts with customers except those that are within the scope of other topics in the FASB Accounting Standards Codification, (“ASC”). The new guidance, as amended, is effective for annual reporting periods (including interim periods within those periods) beginning after

December

15,

2017

for public companies. Early adoption is

not

permitted prior to annual periods beginning after

December 31, 2016.

Entities have the option of using either a full retrospective or modified approach to adopt ASU

2014

09.

The Company has performed an analysis of the effects of adopting this guidance. The analysis included the following items:

● identifying what constitutes a contract within the Company’s business practices,

● identifying performance obligations within our contracts,

● determining transaction prices,

● allocating the transaction price to performance obligations,

● determination of when performance obligations are satisfied and revenue is earned,

● disaggregation of revenue by source within segments, and

● principal versus agent considerations.

Based upon this evaluation, the adoption of this guidance is

not

expected to have a significant impact on the Company’s financial condition, results of operations, or cash flows.

January 2016,

the FASB issued ASU

2016

01,

(“ASU

2016

01”

Financial Instruments - Overall (Subtopic

825

): Recognition and Measurement of Financial Assets and Financial Liabilities

. The updated guidance enhances the reporting model for financial instruments, which includes amendments to address aspects of recognition, measurement, presentation and disclosure. ASU

2016

is effective for annual and interim periods beginning after

December

15,

2017.

With certain exceptions, early adoption is

not

permitted.

The Company has performed a preliminary analysis of the effects of adopting this guidance. This analysis consisted of the following items:

●

categorize securities as either equity securities or debt securities,

●

determine which securities held by the Company have readily determinable fair values,

●

determine that the exit price notion will be used when measuring the fair value of financial instruments for disclosure purposes,

●

consider the need for a valuation allowance related to a deferred tax asset on available-for-sale securities in combination with the Company’s other deferred tax assets.

Based upon this evaluation, the adoption of this guidance is

not

expected to have a significant impact on the Company’s financial condition or cash flows, but it is expected to have a significant impact on the Company’s results of operations through the recognition of changes in market value each reporting period rather than recognizing them through comprehensive income.

February

2016,

the FASB issued ASU

No.

2016

02,

(“ASU

2016

02”

Leases (Topic

842

)

. This update seeks to increase the transparency and comparability among entities by requiring public entities to recognize lease assets and lease liabilities on the balance sheet and disclose key information about leasing arrangements. To satisfy the standard’s objective, a lessee will recognize a right-of-use asset representing its right to use the underlying asset for the lease term and a lease liability for the obligation to make lease payments. Both the right-of-use asset and lease liability will initially be measured at the present value of the lease payments, with subsequent measurement dependent on the classification of the lease as either a finance or an operating lease. For leases with a term of

months or less, a lessee is permitted to make an accounting policy election by class of underlying asset

not

to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. Accounting by lessors will remain mostly unchanged from current U.S. GAAP.

In transition, lessees and lessors will be required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that companies

may

elect to apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. The transition guidance also provides specific guidance for sale and leaseback transactions, build-to-suit leases, leveraged leases, and amounts previously recognized in accordance with the business combinations guidance for leases. The new standard is effective for public companies for annual periods beginning after

December

15,

2018,

and interim periods within those years, with early adoption permitted. The Company is evaluating the new guidance, but does

not

expect it to have a material impact on its financial condition, results of operations, or cash flows since the Company’s current leases will expire prior to the effective date of this guidance.

March 2016,

the FASB issued ASU

No.

2016

08,

(“ASU

2016

08”

Revenue from Contracts with Customers (Topic

606

): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)

. ASU

2016

clarifies the implementation guidance on principal versus agent considerations. The guidance includes indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to the customers.

The new guidance is effective for public companies for annual periods beginning after

December

15,

2017,

and interim periods within those years. Early adoption is

not

permitted. The Company has evaluated the effects of adopting this guidance and it is

not

expected to have a significant impact on the Company’s financial condition, results of operations, or cash flows.

March 2016,

the FASB issued ASU

No.

2016

09,

(“ASU

2016

09”

Compensation – Stock Compensation (Topic

718

)

. ASU

2016

identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liability, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows.

ASU

2016

is effective for annual and interim periods beginning after

December

15,

2017,

with early adoption permitted. The adoption of this guidance on

January 1, 2017,

did

not

have a significant impact on the Company’s financial condition, results of operations, or cash flows.

June 2016,

the FASB issued ASU

No.

2016

13,

(“ASU

2016

13”

Accounting for Credit Losses (Topic

326

)

. ASU

2016

requires the use of an “expected loss” model on certain types of financial instruments. The standard also amends the impairment model for available-for-sale debt securities and requires estimated credit losses to be recorded as allowances instead of reductions to amortized cost of the securities. ASU

2016

is effective for fiscal years, and interim periods within those years, beginning after

December 15, 2019,

with early adoption permitted. The Company is evaluating the new guidance, but does

not

expect it to have a material impact on its financial condition, results of operations, or cash flows.

August 2016,

the FASB issued ASU

No.

2016

15,

(“ASU

2016

15”

Statement of Cash Flows (Topic

230

): Classification of Certain Cash Receipts and Cash Payments

. ASU

2016

amends the guidance in ASC

230,

Statement of Cash Flows, and clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows with the objective of reducing the existing diversity in practice related to

eight

specific cash flow issues. The amendments in this update are effective for annual periods beginning after

December

15,

2017,

and interim periods within those fiscal years. Early adoption is permitted. The Company has evaluated the effects of adopting ASU

2016

and does

not

expect it to have a material impact on its financial condition, results of operations, or cash flows.

November 2016,

the FASB issued ASU

No.

2016

18,

(“ASU

2016

18”

Statement of Cash Flows (Topic

230

)

. ASU

2016

requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This standard is intended to reduce diversity in practice in how restricted cash or restricted cash equivalents are presented and classified in the statement of cash flows. ASU

No.

2016

is effective for fiscal years, and interim periods, beginning after

December 15, 2017,

with early adoption permitted. The standard requires application using a retrospective transition method. The adoption of ASU

No.

2016

will change the presentation and classification of restricted cash and restricted cash equivalents in our consolidated statements of cash flows but is

not

expected to have a material impact on our financial condition, results of operations, or cash flows.

May 2017,

the FASB issued ASU

No.

2017

09,

("ASU

2017

09"

Compensation – Stock Compensation (Topic

718

)

which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic

718.

ASU

2017

is effective for fiscal years beginning after

December 15, 2017

and interim periods within those fiscal years, and early adoption is permitted, including in an interim period. ASU

2017

is to be applied on a prospective basis to an award modified on or after the adoption date. We do

not

intend to early adopt ASU

2017

and do

not

expect the adoption of ASU

2017

to have a material impact on our financial condition, results of operations, or cash flows.

With the exception of the new standards discussed above, there have been

recent accounting pronouncements or changes in accounting pronouncements during the

six

months ended

June 30, 2017,

as compared to the recent accounting pronouncements described in our Annual Report on Form

-K for the fiscal year ended

December

31,

2016,

that are of significance or potential significance to the Company.