| ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Modular Medical, Inc. (the “Company”)
was organized under the laws of the State of Nevada on October 22, 1998, to engage in any lawful purpose. The Company has at the
present time, not paid any dividends and any dividends that may be paid in the future will depend upon the financial requirements
of the Company and other relevant factors. Quasuras, Inc. (“Quasuras”) was
incorporated in Delaware on April 20, 2015. Quasuras has developed a hardware technology
allowing people with insulin dependent diabetes to receive their daily insulin in two ways, through a continuous “basal”
delivery allowing a small amount of insulin to be in the blood at all times and a “bolus” delivery to address meal
time glucose input and to address when the blood glucose level becomes too high. By addressing the time and effort required to
effectively treat their condition, Quasuras believes it can address the less technically savvy, less motivated part of the market. Reorganization On July 24, 2017, pursuant to a Reorganization
and Share Exchange Agreement, by and among the Company and Quasuras, the Company acquired one hundred percent (100%) of the issued
and outstanding shares of Quasuras for 7,582,060 shares of the Company, resulting in Quasuras becoming a wholly-owned subsidiary
of the Company. Since the major shareholder of Quasuras retained control of both the Company and Quasuras, the share exchange was
accounted for as a reverse merger. As such, the Company recognized the assets and liabilities of Quasuras, acquired in the Reorganization,
at their historical carrying amounts. Pursuant to the reorganization, the Company
changed the fiscal year end from June 30 to March 31, to coincide with the year end for Quasuras. The consolidated financial statements of the
Company have been prepared in accordance with accounting principles generally accepted in the United States of America. The following
summarizes the more significant of such policies: Basis of Presentation The preparation of the consolidated financial
statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates
and assumptions that affect reported amounts and related disclosures. Principles of Consolidation The consolidated financial statements include
the accounts of Modular Medical, Inc. and its wholly-owned subsidiary Quasuras, Inc., and are collectively referred to as the “Company”.
All material intercompany accounts, transactions and profits were eliminated in consolidation. Use of Estimates The preparation of the accompanying financial
statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the
reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. Reportable Segment The Company has one reportable segment. The
Company’s activities are interrelated and each activity is dependent upon and supportive of the other. Accordingly, all significant
operating decisions are based on analysis of financial products provided as a single global business. Professional Fees The Company expenses the cost of legal, accounting,
audit, tax and other professional services. Research and Development The Company expenses the cost of research and
development as incurred. Research and development costs charged to operations were approximately $703,783 and $135,789 for the
fiscal quarter ended June 30, 2019 and 2018, respectively. General and Administration General and administrative expense consists
primarily of payroll and benefit related costs, rent, office expenses, equipment supplies and meetings and travel. Income Taxes The Company utilizes Financial Accounting Standards
Board (FASB) Accounting Standards Codification (ASC) Topic 740, Income Taxes, which requires recognition of deferred tax assets
and liabilities for the expected future tax consequences of events that were included in the consolidated financial statements
or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences
between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws
and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances
are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company accounts for uncertain tax positions
in accordance with FASB ASC Topic 740. When tax returns are filed, it is likely that some positions taken would be sustained upon
examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount
of the position that would be ultimately sustained. The benefit of a tax position is recognized in the consolidated financial statements
in the period during which, based on all available evidence, management believes it is more likely than not that the position will
be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not
offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured
as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable
taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described
above is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any
associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized
tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in
the consolidated statements of income. At June 30, 2019 and 2018, the Company had not
taken any significant uncertain tax positions on its tax returns for periods ended June 30, 2019 and prior years or in computing
its tax provision for 2019. Management has considered its tax positions and believes that all of the positions taken by the Company
in its Federal and State tax returns are more likely than not to be sustained upon examination. The Company is subject to examination
by U.S. Federal and State tax authorities for the period ended March 31, 2017 to the present, generally for three years after they
are filed. Concentration of Credit Risk Financial instruments that potentially subject
the Company to concentration of credit risk consist primarily of cash and accounts receivable. The Company maintains cash balances
at financial institutions within the United States, which are insured by the Federal Deposit Insurance Corporation (FDIC) up to
limits of approximately $250,000. The Company has not experienced any losses with regard to its bank accounts and believes it is
not exposed to any risk of loss on its cash bank accounts. Risks and Uncertainties The Company is subject to risks from, among
other things, competition associated with the industry in general, other risks associated with financing, liquidity requirements,
rapidly changing customer requirements, limited operating history and the volatility of public markets. Contingencies Certain conditions may exist as of the date
the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when
one or more future events occur or fail to occur. The Company’s management and legal counsel assess such contingent liabilities,
and such assessment inherently involves judgment. In assessing loss contingencies related to legal proceedings that are pending
against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived
merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected
to be sought. If the assessment of a contingency indicates
it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability
would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material
loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent
liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. Loss contingencies
considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would
be disclosed. Cash and Cash Equivalents Cash and cash equivalents include cash in hand
and cash in demand deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months
or less. At June 30, 2019 and March 31, 2019, the Company had $5,706,628 and $6,553,768, respectively, in cash. Deposits at the
bank are insured up to $250,000 by the Federal Deposit Insurance Corporation. The Company’s uninsured portion of the balances
held at the bank aggregated to approximately $5,421,940 and $6,269,116 respectively. No reserve has been made in the financial
statements for any possible loss due to any financial institution failure. The Company has not experienced any losses in such
accounts and believes we are not exposed to any significant risk on cash and cash equivalents. Property, Plant & Equipment Property and equipment is stated at cost and
depreciated using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. The estimated
useful lives of our property and equipment are generally as follows: computer equipment& software developed or acquired for
internal use, three to ten years; office equipment, two to three years; buildings and improvements, five to fifteen years; leasehold
improvements, two to ten years; and machinery and equipment, one to five years. As of June 30, 2019 and March 31, 2019, property, plant and equipment
amounted to:
June 30, 2019 (UNAUDITED) March 31, 2019
Computer equipment and software $ 25,028 $ 20,565
Office equipment 49,724 49,724
Machinery and equipment 24,194 21,937
Less: accumulated depreciation (22,985 ) (16,278 )
$ 75,961 $ 75,948 Depreciation expenses for the quarter ended June 30, 2019 and March
31, 2019 was $6,707 and $1,387 respectively. Fair Value of Financial Instrument For certain of the Company’s financial
instruments, including cash and equivalents, accrued liabilities and short-term debt, the carrying amounts approximate their fair
values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure
of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair
value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements
for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities
each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between
the origination of such instruments and their expected realization and their current market rate of interest. The three levels
of valuation hierarchy are defined as follows: Level 1 inputs to the valuation methodology
are quoted prices for identical assets or liabilities in active markets. Level 2 inputs to the valuation methodology
include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability,
either directly or indirectly, for substantially the full term of the financial instrument. Level 3 inputs to the valuation methodology
are unobservable and significant to the fair value measurement. Due to their short-term nature, the carrying
values of cash and equivalents, accounts receivable, accounts payable, and accrued expenses, approximate fair value. Based on borrowing
rates currently available to the Company for loans with similar terms, the carrying value of the notes payable approximates fair
value. Earnings Per Share (“EPS”) Basic earnings per share are computed by dividing
earnings available to common stockholders by the weighted average number of outstanding common shares during the period. Diluted
earnings per share are computed by dividing net income by the weighted average number of shares outstanding during the period increased
to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities
had been issued. During the fiscal quarter ended June 30, 2019 and 2018 we incurred losses. Therefore, the effects of any common
stock equivalent were anti-dilutive during those periods. The following table sets for the computation
of basic and diluted earnings per share for the fiscal quarters ended June 30, 2019 and June 30, 2018:
June 30, 2019 (UNAUDITED) June 30, 2018 (UNAUDITED)
Net Loss $ (1,122,198 ) $ (249,566 )
Net Loss Per Share
Basic and Diluted: $ (0.06 ) $ (0.02 )
Weighted average number of shares used in computing basic and diluted net loss per share:
Basic 17,847,740 15,983,273
Diluted 17,847,740 15,983,273 Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue
from Contracts with Customers In January 2016, The FASB issued ASU No. 2016-01, Financial
Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities (Topic 825) In August 2016, the FASB issued ASU No. 2016-15,
Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This update addresses a diversity
in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic
230, Statement of Cash Flows, and other Topics. The amendments in this Update are effective for public business entities for fiscal
years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, including
adoption in an interim period. We adopted this ASU in 2016 and the implementation did not have a material impact on our financial
position or statement of operations. In August 2018, the FASB issued guidance that
eases certain documentation and assessment requirements of hedge effectiveness and modifies the accounting for components excluded
from the assessment. Some of the modifications include the ineffectiveness of derivative gain/loss in highly effective cash flow
hedge to be recorded in other comprehensive income, the change in fair value of derivative to be recorded in the same income statement
line as hedged item, and additional disclosures required on the cumulative basis adjustment in fair value hedges and the effect
of hedging on financial statement lines for components excluded from the assessment. The amendment also simplifies the application
of hedge accounting in certain situations to permit new hedging strategies to be eligible for hedge accounting. The guidance is
effective for annual reporting periods and interim periods within those annual reporting periods beginning after December 15, 2018,
our fiscal 2020. Early adoption is permitted, and the modified retrospective transition method should be applied. We do not expect
the adoption of this guidance to have a material impact on our consolidated financial statements. In February 2016, FASB issued ASU No. 2016-02,
Leases (“Topic 842”). Topic 842 requires an entity to recognize right-of -use assets and lease liability on its balance
sheet and disclosure key information about leasing arrangements. For public companies, Topic 842 is effective for annual reporting
periods beginning after December 15, 2018, including interim periods within that reporting period, with early adoption permitted.
We have evaluated this ASU and believe this guidance will not have a material impact on our financial position and statement of
operations. Other recent accounting pronouncements issued
by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities
and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future
consolidated financial statements. Reclassification Certain prior year amounts have been reclassified
for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations
or cash flow. | Modular Medical, Inc. (the “Company”)
was organized under the laws of the State of Nevada on October 22, 1998, to engage in any lawful purpose. The Company has at the
present time, not paid any dividends and any dividends that may be paid in the future will depend upon the financial requirements
of the Company and other relevant factors. Quasuras, Inc. (“Quasuras”) was
incorporated in Delaware on April 20, 2015. Quasuras has developed a hardware technology
allowing people with diabetes to receive their daily insulin in two ways, through a continuous “basal” delivery allowing
a small amount of insulin to be in the blood at all times and a “bolus” delivery to address meal time glucose input
and to address when the blood glucose level becomes too high. By addressing the time and effort required to effectively treat their
condition, Quasuras believes it can address the less technically savvy, less motivated part of the market. Reorganization On July 24, 2017, pursuant to a Reorganization
and Share Exchange Agreement, by and among the Company and Quasuras, the Company acquired one hundred percent (100%) of the issued
and outstanding shares of Quasuras for 7,582,060 shares of the Company, resulting in Quasuras becoming a wholly-owned subsidiary
of the Company. Since the major shareholder of Quasuras retained control of both the Company and Quasuras, the share exchange was
accounted for as a reverse merger. As such, the Company recognized the assets and liabilities of Quasuras, acquired in the Reorganization,
at their historical carrying amounts. Pursuant to the reorganization, the Company
changed the fiscal year end from June 30 to March 31, to coincide with the year end for Quasuras. The consolidated financial statements of the
Company have been prepared in accordance with accounting principles generally accepted in the United States of America. The following
summarizes the more significant of such policies: Basis of Presentation The preparation of the consolidated financial
statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates
and assumptions that affect reported amounts and related disclosures. Principles of Consolidation The consolidated financial statements include
the accounts of Modular Medical, Inc. and its wholly-owned subsidiary Quasuras, Inc., and are collectively referred to as the “Company”.
All material intercompany accounts, transactions and profits were eliminated in consolidation. Use of Estimates The preparation of the accompanying financial
statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the
reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. Reportable Segment The Company has one reportable segment. The
Company’s activities are interrelated and each activity is dependent upon and supportive of the other. Accordingly, all significant
operating decisions are based on analysis of financial products provided as a single global business. Professional Fees The Company expenses the cost of legal, accounting,
audit, tax and other professional services. Research and Development The Company expenses the cost of research and
development as incurred. Research and development costs charged to operations were approximately $ 1,882,345 and $332,642 for the
fiscal year ended March 31, 2019 and 2018, respectively. General and Administration General and administrative expense consists
primarily of payroll and benefit related costs, rent, office expenses, equipment supplied and meetings and travel. Income Taxes The Company utilizes Financial Accounting Standards
Board (FASB) Accounting Standards Codification (ASC) Topic 740, Income Taxes, which requires recognition of deferred tax assets
and liabilities for the expected future tax consequences of events that were included in the consolidated financial statements
or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences
between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws
and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances
are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company accounts for uncertain tax positions
in accordance with FASB ASC Topic 740. When tax returns are filed, it is likely that some positions taken would be sustained upon
examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount
of the position that would be ultimately sustained. The benefit of a tax position is recognized in the consolidated financial statements
in the period during which, based on all available evidence, management believes it is more likely than not that the position will
be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not
offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured
as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable
taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described
above is reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any
associated interest and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized
tax benefits is classified as interest expense and penalties are classified in selling, general and administrative expenses in
the consolidated statements of income. At March 31, 2019 and 2018, the Company had
not taken any significant uncertain tax positions on its tax returns for periods ended March 31, 2019 and prior years or in computing
its tax provision for 2019. Management has considered its tax positions and believes that all of the positions taken by the Company
in its Federal and State tax returns are more likely than not to be sustained upon examination. The Company is subject to examination
by U.S. Federal and State tax authorities for the period ended March 31, 2016 to the present, generally for three years after they
are filed. Concentration of Credit Risk Financial instruments that potentially subject
the Company to concentration of credit risk consist primarily of cash and accounts receivable. The Company maintains cash balances
at financial institutions within the United States, which are insured by the Federal Deposit Insurance Corporation (FDIC) up to
limits of approximately $250,000. The Company has not experienced any losses with regard to its bank accounts and believes it is
not exposed to any risk of loss on its cash bank accounts. Risks and Uncertainties The Company is subject to risks from, among
other things, competition associated with the industry in general, other risks associated with financing, liquidity requirements,
rapidly changing customer requirements, limited operating history and the volatility of public markets. Contingencies Certain conditions may exist as of the date
the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when
one or more future events occur or fail to occur. The Company’s management and legal counsel assess such contingent liabilities,
and such assessment inherently involves judgment. In assessing loss contingencies related to legal proceedings that are pending
against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived
merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected
to be sought. If the assessment of a contingency indicates
it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability
would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material
loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent
liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. Loss contingencies
considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would
be disclosed. Cash and Cash Equivalents Cash and cash equivalents include cash in hand
and cash in demand deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months
or less. At March 31, 2019 and March 31, 2018, the Company had $6,553,768 and $4,296,676, respectively, in cash. Deposits at the
bank are insured up to $250,000 by the Federal Deposit Insurance Corporation. The Company’s uninsured portion of the balances
held at the bank aggregated to approximately $6,269,116 and $3,933,002, respectively. No reserve has been made in the financial
statements for any possible loss due to any financial institution failure. The Company has not experienced any losses in such
accounts and believes we are not exposed to any significant risk on cash and cash equivalents. Property, Plant & Equipment Property and equipment is stated at cost and
depreciated using the straight-line method over the shorter of the estimated useful life of the asset or the lease term. The estimated
useful lives of our property and equipment are generally as follows: computer equipment & software developed or acquired for
internal use, three to ten years; office equipment, two to three years; buildings and improvements, five to fifteen years; leasehold
improvements, two to ten years; and machinery and equipment, one to five years. As of March 31, 2019 and March 31, 2018, property, plant and equipment
amounted to:
March 31, 2019 March 31, 2018
Computer equipment and software $ 20,565 $ 15,103
Office equipment 49,724 —
Machinery and equipment 21,937 —
Less: accumulated depreciation (16,278 ) (1,844 )
$ 75,948 $ 13,259 Depreciation expenses for the year ended March 31, 2019 and 2018
was $14,435 and $1,844, respectively. Fair Value of Financial Instrument For certain of the Company’s financial
instruments, including cash and equivalents, accrued liabilities and short-term debt, the carrying amounts approximate their fair
values due to their short maturities. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure
of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair
value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements
for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities
each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between
the origination of such instruments and their expected realization and their current market rate of interest. The three levels
of valuation hierarchy are defined as follows: Level 1 inputs to the valuation methodology
are quoted prices for identical assets or liabilities in active markets. Level 2 inputs to the valuation methodology
include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability,
either directly or indirectly, for substantially the full term of the financial instrument. Level 3 inputs to the valuation methodology
are unobservable and significant to the fair value measurement. Due to their short-term nature, the carrying
values of cash and equivalents, accounts receivable, accounts payable, and accrued expenses, approximate fair value. Based on borrowing
rates currently available to the Company for loans with similar terms, the carrying value of the notes payable approximates fair
value. Earnings Per Share (“EPS”) Basic earnings per share are computed by dividing earnings available to common stockholders by the weighted average number
of outstanding common shares during the period. Diluted earnings per share are computed by dividing net income by the weighted
average number of shares outstanding during the period increased to include the number of additional shares of common stock
that would have been outstanding if the potentially dilutive securities had been issued. During the fiscal years ended March
31, 2019 and 2018 we incurred losses. Therefore, the effects of any common stock equivalent were antidilutive during those
periods. The following table sets for the computation
of basic and diluted earnings per share for the fiscal years ended March 31, 2019 and 2018:
March 31, 2019 March 31, 2018
Net Loss $ (2,539,498 ) $ (659,246 )
Net Loss Per Share
Basic and Diluted: $ (0.15 ) $ (0.05 )
Weighted average number of shares used in computing basic and diluted net loss per share:
Basic 16,589,633 13,336,309
Diluted 16,589,633 13,336,309 Recently Issued Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue
from Contracts with Customers In January 2016, The FASB issued ASU No. 2016-01, Financial
Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities (Topic 825) In August 2016, the FASB issued ASU No. 2016-15,
Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This update addresses a diversity
in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic
230, Statement of Cash Flows, and other Topics. The amendments in this Update are effective for public business entities for fiscal
years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, including
adoption in an interim period. We adopted this ASU in 2016 and the implementation did not have a material impact on our financial
position or statement of operations. In August 2018, the FASB issued guidance that
eases certain documentation and assessment requirements of hedge effectiveness and modifies the accounting for components excluded
from the assessment. Some of the modifications include the ineffectiveness of derivative gain/loss in highly effective cash flow
hedge to be recorded in other comprehensive income, the change in fair value of derivative to be recorded in the same income statement
line as hedged item, and additional disclosures required on the cumulative basis adjustment in fair value hedges and the effect
of hedging on financial statement lines for components excluded from the assessment. The amendment also simplifies the application
of hedge accounting in certain situations to permit new hedging strategies to be eligible for hedge accounting. The guidance is
effective for annual reporting periods and interim periods within those annual reporting periods beginning after December 15, 2018,
our fiscal 2020. Early adoption is permitted and the modified retrospective transition method should be applied. We do not expect
the adoption of this guidance to have a material impact on our consolidated financial statements. In February 2016, FASB issued ASU No. 2016-02,
Leases (“Topic 842”). Topic 842 requires an entity to recognize right-of -use assets and lease liability on its balance
sheet and disclosure key information about leasing arrangements. For public companies, Topic 842 is effective for annual reporting
periods beginning after December 15, 2018, including interim periods within that reporting period, with early adoption permitted.
We have evaluated this ASU and believe this guidance will not have a material impact on our financial position and statement of
operations. Other recent accounting pronouncements issued
by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities
and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future
consolidated financial statements. Reclassification Certain prior year amounts have been reclassified
for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations
or cash flow. |
