NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER
30, 2017 (UNAUDITED)
NOTE A
- ORGANIZATION AND OPERATIONS
Organization
Enviro Technologies, Inc., an
Idaho corporation (the “Company”), is a provider of environmental and industrial separation technology. The Company
developed, and now manufactures and sells the Voraxial
®
Separator, a patented technology that efficiently separates
liquid/liquid, liquid/solid or liquid/liquid/solid fluid streams with distinct specific gravities. The technology was patented
by the Company and sold to
Schlumberger Technology Corporation, a Texas corporation, Schlumberger
Canada Limited, a Canadian entity, and Schlumberger B.V., an entity organized under the laws of the Netherlands (collectively,
“Schlumberger”) on June 8, 2017.
Current and potential commercial applications and markets include oil exploration
and production, oil refineries, oil spill, mining, sewage, manufacturing, waste-to-energy and food processing industry.
Florida Precision Aerospace, Inc.,
a Florida corporation (“FPA”), is the wholly-owned subsidiary of the Company and is used to manufacture, assemble
and test the Voraxial Separator. Effective November 10, 2017 the Company filed Articles of Amendment to its Articles of Incorporation
changing the Company’s name from “Enviro Voraxial Technology, Inc.” to “Enviro Technologies, Inc.”
and increasing its authorized common stock to 250,000,000 shares.
NOTE B
- LIQUIDITY
While the Company has historically
experienced recurring net losses, on June 8, 2017, the Company completed a Technology Purchase Agreement with Schlumberger for
the sale of the Company’s intellectual property in consideration of up to $4,000,000, of which $3,000,000 was paid at closing
and $1,000,000 is payable upon the completion of both: (i) the complete transfer of the intellectually property to Schlumberger;
and (ii) the provision to transfer information, assets and services to Schlumberger, which is estimated to be approximately 12
months from the closing date. In addition, at closing FPA entered into a Framework Agreement (the “Supply Agreement”)
with Cameron Solutions, Inc. (“Cameron Solutions”), a Houston, Texas-based company engaged in the development, manufacture
and sale of equipment used in the oil and gas industry. Under the terms of the three-year Supply Agreement, FPA is the exclusive
supplier to Cameron Solutions of certain Voraxial series products for use in the oil and gas industry. Pursuant to the Technology
Purchase Agreement, Schlumberger also granted us a non-exclusive, worldwide, royalty-free licenses (the “Grant Back Licenses”)
for the sale of Voraxial products outside the oil and gas industry. Our management believes that the Grant Back License will provide
us the opportunity to possibly leverage future Schlumberger sales in the oil and gas market to penetrate the sale and use of licensed
Voraxial products to other industries, including, but not limited to mining, sewage and wastewater. We believe that including
our current cash resources and anticipated revenue to be generated under the Grant Back Licenses and Supply Agreement, we will
have sufficient resources to continue business operations in excess of 12 months.
NOTE C
- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Interim
Financial Statements
The
interim financial statements presented herein have been prepared pursuant to the rules and regulations of the Securities and Exchange
Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared
in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant
to such rules and regulations. The interim financial statements should be read in conjunction with the company’s annual
financial statements, notes and accounting policies included in the company’s annual report on Form 10-K for the year ended
December 31, 2016, as filed
with the SEC. In the opinion
ENVIRO
TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER
30, 2017 (UNAUDITED)
of management, all adjustments, which are necessary to provide a fair presentation of financial position
as of September 30, 2017, and the related operating results and cash flows for the interim period presented, have been made. The
results of operations, for the period presented are not necessarily indicative of the results to be expected for the year.
Principles
of Consolidation
The unaudited condensed consolidated
financial statements include the accounts of the parent company, Enviro Voraxial Technology, Inc., and its wholly-owned subsidiary,
Florida Precision Aerospace, Inc. All significant intercompany accounts and transactions have been eliminated.
Estimates
The preparation of consolidated financial
statements in conformity with accounting principles generally accepted in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets
and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting
period. Actual results may differ. Significant estimates include allowance for doubtful accounts, deferred tax asset, allowance
for inventory obsolescence and valuation of stock-based compensation.
Revenue
Recognition
The Company derives its revenue from
the sale and short-term rental of the Voraxial Separator. The Company presents revenue in accordance with FASB new codification
of “Revenue Recognition in Financial Statements”. Under Revenue Recognition in Financial Statements, revenue is realized
when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable and collectability
is reasonably assured.
Revenues that are generated from
sales of equipment are typically recognized upon shipment. Our standard agreements generally do not include customer acceptance
or post shipment installation provisions. However, if such provisions have been included or there is an uncertainty about customer
order, revenue is deferred until we have evidence of customer order and all terms of the agreement have been complied with. As
of September 30, 2017 and December 31, 2016, there was $32,090 and $95,690, respectively, of deposits from customers.
The Company recognizes revenue from
the short term rental of equipment, ratably over the life of the agreement, which is usually one to twelve months.
Fair
Value of Instruments
The carrying amounts of the Company's
financial instruments, including cash and cash equivalents, inventory, accounts payable and accrued expenses at September 30,
2017 and December 31, 2016, approximate their fair value because of their relatively short-term nature.
“Disclosures about Fair Value
of Financial Instruments,” requires disclosures of information regarding the fair value of certain financial instruments
for which it is practicable to estimate the value. For purpose of this disclosure, the fair value of a financial instrument is
the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced
sale of liquidation.
ENVIRO
TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER
30, 2017 (UNAUDITED)
The company accounts for certain
assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs
used in measuring fair value is observable in the market. We categorize each of our fair value measurements in one of these
three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are:
Level 1—inputs are based upon
unadjusted quoted prices for identical instruments traded in active markets. We have no Level 1 instruments as of September 30,
2017 and December 31, 2016.
Level 2—inputs are based upon
quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are
not active, and model-based valuation techniques (e.g. the Black-Scholes model) for which all significant inputs are observable
in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where
applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable
inputs including interest rate curves, foreign exchange rates, and forward and spot prices for currencies and commodities. We
have no Level 2 instruments as of September 30, 2017 and December 31, 2016.
Level 3—inputs are generally
unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the
asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and
discounted cash flow models. We have no Level 3 instruments as of September 30, 2017 and December 31, 2016.
Cash
and Cash Equivalents
The Company considers all highly
liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. The Company maintains
its cash balances with various financial institutions. Balances at these institutions may at times exceed the Federal Deposit
Insurance Corporate (“FDIC”) limits. As of September 30, 2017 the Company has a cash concentration of $1,641,798 in
excess of FDIC limits.
Inventory
Inventory consists of components
for the Voraxial Separator and is priced at lower of cost or market. Inventory may include units being rented on a short term
basis or components held by third parties in connection with pilot programs as part of the continuing evaluation by such third
parties as to the effectiveness and usefulness of the service to be incorporated into their respective operations. The third parties
do not have a contractual obligation to purchase the equipment. The Company maintains the title and risk of loss. Therefore, these
units are included in the inventory of the Company. As of September 30, 2017 and December 31, 2016:
|
|
September 30, 2017
|
|
December 31, 2016
|
Raw materials
|
|
$
|
70,770
|
|
|
$
|
64,847
|
|
Work in process
|
|
|
88,017
|
|
|
|
—
|
|
Finished goods
|
|
|
8,471
|
|
|
|
12,050
|
|
Total
|
|
$
|
167,258
|
|
|
$
|
76,897
|
|
Fixed
Assets
Fixed assets are stated at cost less
accumulated depreciation. The cost of maintenance and repairs is expensed to operations as incurred. Depreciation is computed
by the straight-line method over the estimated economic useful life of the assets (5-10 years). Gains and losses recognized from
the sales or disposal of assets is the
difference between the
ENVIRO
TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER
30, 2017 (UNAUDITED)
sales price and the recorded cost less accumulated depreciation
less costs of disposal.
Net
INCOME (Loss) Per Share
In accordance with the accounting
guidance now codified as FASB ASC Topic 260, “
Earnings per Share”
basic earnings (loss) per share is computed
by dividing net income (loss) by weighted average number of shares of common stock outstanding during each period. Diluted earnings
(loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock
equivalents and potentially dilutive securities outstanding during the period.
Due to the Company reflecting net
income for the nine months ended September 30, 2017 the effect of 13,465,000 options are dilutive. A separate computation of diluted
earnings (loss) per share is presented using the treasury stock method. Since the Company reflected a net loss for the nine months
ended September 30, 2016, the 13,465,000 options are anti-dilutive.
Income Taxes
The Company accounts for income taxes
under FASB Codification Topic 740-10-25 (“ASC 740-10-25”). Under ASC 740-10-25, deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or
settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income
in the period that includes the enactment date.
Business Segments
The Company operates in one segment
and therefore segment information is not presented.
Research
and Development Expenses
Research and development costs, which
includes travel expenses, consulting fees, subcontractors and salaries are expensed as incurred.
Advertising
Costs
Advertising costs are expensed as
incurred and are included in general and administrative expenses.
Stock-Based
Compensation
The Company adopted ASC Topic 718
formerly Statement of Financial Account Standard (SFAS) No. 123(R) effective January 1, 2006. This statement requires compensation
expense relating to share-based payments to be recognized in net income using a fair-value measurement method. Under the fair
value method, the estimated fair value of awards is charged to income on a straight-line basis over the requisite service period,
which is generally the vesting period.
Reclassifications
Certain amounts from prior periods
have been reclassified to conform to the current period presentation. These reclassifications had no impact on the Company’s
net loss or cashflows.
ENVIRO
TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER
30, 2017 (UNAUDITED)
Recent
Accounting Pronouncements
In February 2016, the FASB issued
ASU 2016-02, Leases, which will amend current lease accounting to require lessees to recognize (i) a lease liability, which is
a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) 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. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes
were made to align, where necessary, lessor accounting with the lessee accounting model. This standard will be effective for fiscal
years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently reviewing the provisions
of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.
Recent accounting pronouncements
issued by the FASB, the AICPA and the SEC, did not, or are not believed by management, to have a material impact on the Company’s
present or future financial statements, except as follows:
In August 2015, FASB issued Accounting
Standards Update (“ASU”) No. 2015-14, “
Revenue from Contracts with Customers (Topic 606): Deferral of the
Effective Date”
defers the effective date ASU No. 2014-09 for all entities by one year. Public business entities, certain
not-for-profit entities, and certain employee benefit plans should apply the guidance in Update 2014-09 to annual reporting periods
beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted
only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting
period. All other entities should apply the guidance in Update 2014-09 to annual reporting periods beginning after December 15,
2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. All other entities may
apply the guidance in ASU No. 2014-09 earlier as of an annual reporting period beginning after December 15, 2016, including interim
reporting periods within that reporting period. All other entities also may apply the guidance in Update 2014-09 earlier as of
an annual reporting period beginning after December 15, 2016, and interim reporting periods within annual reporting periods beginning
one year after the annual reporting period in which the entity first applies the guidance in ASU No. 2014-09.
We
are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash
flows or financial condition.
All other newly issued accounting
pronouncements, but not yet effective, have been deemed either immaterial or not applicable.
NOTE D
- RELATED PARTY TRANSACTIONS
For the nine months ended September
30, 2017, the Company incurred salary expenses from the Chief Executive Officer of the Company of $228,750. Of these amounts,
$25,000 has been paid for the nine months ended September 30, 2017. The total unpaid balance as of September 30, 2017 is $1,668,511
and is included in accrued expenses – related party. For the nine months ended September 30, 2016, the Company incurred
salary expenses from the Chief Executive Officer of the Company of $228,750. Of these amounts, $7,500 had been paid for the nine
months ended September 30, 2016. The total unpaid balance as of September 30, 2016 is $1,547,409 and is included in accrued expenses
– related party.
During the nine months ended September
30, 2017, the CEO advanced $46,354 to the company for working capital, of which 46,354 was repaid. This advance was non-interest
bearing and due on demand.
ENVIRO
TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER
30, 2017 (UNAUDITED)
NOTE E – NOTES PAYABLE
On February 3, 2017, the Company
received an advance of $150,000 from a third party investor pursuant to a $165,000 discounted promissory note. The company shall
pay interest to the noteholder on the principal face amount of $165,000 at a rate of 2.5% per month in the event the note is not
repaid on or before May 31, 2017. As additional consideration for the advance, the Company issued the third party 50,000 shares
of the Company’s common stock. As of September 30, 2017, this notes had been repaid in full. See Note F.
On May 15, 2017, the Company received
an advance of $35,000 from two third-party investors pursuant to two $37,000 discounted promissory notes. The Company shall pay
interest to the noteholder on the principal face amount of $37,000 at a rate of 2.5% per month in the event the note is not repaid
on or before May 14, 2018. As additional consideration for the advance, the Company issued the third parties 10,000 shares each
of the Company’s common stock. As of September 30, 2017, both notes have been repaid in full. See Note F.
NOTE F
-- CAPITAL TRANSACTIONS
As disclosed under Note E, on February
3, 2017, the Company received an advance of $150,000 from a third party investor pursuant to a $165,000 discounted promissory
note. As additional consideration for the advance, the Company issued the third party 50,000 shares of the Company’s common
stock. The shares were recorded at their fair value of $1,000 on the date of issuance.
As disclosed under Note E, on May
15, 2017, the Company received an advance of $35,000 from two third-party investors pursuant to a $37,000 discounted promissory
note. As additional consideration for the advance, the Company issued each third party 10,000 shares of the Company’s common
stock. The shares were recorded at their fair value of $500 per issuance on the date of issuance.
Warrants
and Stock Options
The Company follows the provisions
of ASC Topic 718, “Compensation – Stock Compensation.” ASC Topic 718 establishes standards surrounding the accounting
for transactions in which an entity exchanges its equity instruments for goods or services. ASC Topic 718 focuses primarily on
accounting for transactions in which an entity obtains employee services in share-based payment transactions.
The
Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options, which have no vesting
restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions
including the expected stock price volatility. Because the Company’s stock options and warrants have characteristics different
from those of its traded stock, and because changes in the subjective input assumptions can materially affect the fair value estimate,
in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of such
stock options. The risk free interest rate is based upon quoted market yields for United States Treasury debt securities with
a term similar to the expected term. The expected dividend yield is based upon the Company’s history of having never issued
a dividend and management’s current expectation of future action surrounding dividends. Expected volatility was based on
historical data for the
trading
of
our stock on the open market. The expected lives for such grants were based on the simplified method for employees and officers.
ENVIRO
TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER
30, 2017 (UNAUDITED)
Information with respect to options
outstanding and exercisable at September 30, 2017 is as follows:
|
Number
Outstanding
|
|
Exercise
Price
|
|
Number
Exercisable
|
Balance,
December 31, 2016
|
|
|
13,465,000
|
|
$
|
0.01
|
|
|
13,465,000
|
Issued
|
|
|
—
|
|
|
—
|
|
|
—
|
Expired
|
|
|
—
|
|
|
—
|
|
|
—
|
Forfeited
|
|
|
—
|
|
|
—
|
|
|
—
|
Balance,
September 30, 2017
|
|
|
13,465,000
|
|
$
|
0.01
|
|
|
13,465,000
|
Exercise
Price
|
|
Number Outstanding
at September 30, 2017
|
|
Weighted Average
Remaining Contractual Life
|
|
Weighted Average
Exercise Price
|
|
Number Exercisable
at September 30, 2017
|
|
Weighted Average
Exercise Price
|
|
0.01
|
|
|
13,465,000
|
|
|
6.17
|
|
|
0.01
|
|
|
13,465,000
|
|
|
0.01
|
|
Total
|
|
|
13,465,000
|
|
|
—
|
|
|
—
|
|
|
13,465,000
|
|
|
—
|
The following table summarizes information
about the stock options outstanding at December 31, 2016:
Exercise
Price
|
|
Number
Outstanding
December 31, 2016
|
|
Weighted Average
Remaining
Contractual Life
|
|
Weighted
Average
Exercise Price
|
|
Number
Exercisable
at
December 31, 2015
|
|
Weighted
Average
Exercise Price
|
$
|
0.01
|
|
|
13,465,000
|
|
|
8.0
|
|
|
0.01
|
|
|
13,465,000
|
|
$
|
0.01
|
|
NOTE G
– COMMITMENTS AND CONTINGENCIES
Operating Lease
In
October 2015, the Company entered into a three (3) year lease for an office and manufacturing facility located at 821 NW 57
th
Place, Fort Lauderdale, FL 33309. The lease is $6,100 per month, which includes common area maintenance, taxes and insurance.
The Company has the option to terminate the lease with three months’ notice.
Equipment Financing
In July 2017, the Company entered into a financing agreement for
the purchase of CNC machining equipment valued at approximately $426,000. We financed $340,644 for a period of 5 years at a rate
of 6.75%. Our monthly payment is $6,788. The first payment shall be made 90 days after installation is completed. Although the
CNC machining equipment was received in July 2017 it is not considered fully installed. The CNC machining equipment will be used
for the manufacture of additional Voraxial Separators in preparation of potential future orders under the Supply Agreement and
Grant Back Licenses.
Litigation
On or about November 17, 2011, a claim was filed in the Broward
County Circuit Court in Fort Lauderdale, Florida against the Company by Raw Energy Tech, LLC. The plaintiff alleged breach of an
oral contract between the parties for the alleged design, fabrication and construction of a prototype power pack. Amount of damages
sought were approximately $58,000. Effective August 22, 2017 we settled the claim for a nominal cash amount and the plaintiff accepted
the prototype power pack. Effective October 5, 2017 the lawsuit by Raw Energy Tech, LLC against the Company was voluntarily dismissed
by the plaintiff.
ENVIRO
TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER
30, 2017 (UNAUDITED)
SALE OF INTELLECTUAL PROPERTY
On June 8, 2017, the Company and
FPA, our wholly owned subsidiary (collectively, the “Sellers”), closed the transactions contemplated by the Technology
Purchase Agreement dated March 13, 2017 with Schlumberger Technology Corporation, a Texas corporation, Schlumberger Canada Limited,
a Canadian entity, and Schlumberger B.V., an entity organized under the laws of the Netherlands (collectively, (“Schlumberger”).
At closing, we sold our intellectual
property (the “Purchased Intellectual Property”), substantially consisting of the Voraxial patents, marks, software
and copyrights, to Schlumberger in consideration of up to $4,000,000, of which $3,000,000 was paid to us at closing and $1,000,000
is payable upon the completion of both: (i) the complete transfer of the Purchased Intellectually Property to Schlumberger; and
(ii) the provision to transfer information, assets and services to Schlumberger, which is estimated to be approximately 12 months
from the closing date. We recognized a gain on the sale of our intellectual property of $3,000,000 less direct costs of $80,000.
We utilized a portion of the proceeds
from this transaction to pay some of our outstanding debt and are using the balance for general working capital. We are also using
some of the proceeds to buy additional manufacturing equipment to meet potential future sales.
As part of the agreement, Schlumberger
granted us a non-exclusive, worldwide, royalty-free licenses (the “Grant Back Licenses”), to make, use, sell, offer
for sale, and import products and processes embodying the Purchase Intellectual Property outside the oil and gas market. In addition
to the proceeds from the sale of our intellectual property, our management believes that the Grant Back License will provide for
the potential increase of revenues through the sale of Voraxial Separators, possibly leveraging future sales by Schlumberger in
the oil and gas market to penetrate the sale and use of licensed Voraxial products to other industries, including, but not limited
to mining, sewage and wastewater.
In addition, at closing FPA entered
into a Framework Agreement (the “Supply Agreement”) with Cameron Solutions, Inc. (“Cameron Solutions”),
a Houston, Texas-based company engaged in the development, manufacture and sale of equipment used in the oil and gas industry.
Under the terms of the three-year Supply Agreement, FPA is the exclusive supplier to Cameron Solutions of certain Voraxial series
products for use in the oil and gas industry. Sales will be made from time to time in accordance with the terms of purchase orders.
The Supply Agreement is cancellable by Cameron Solutions upon 15 days’ notice if FPA fails to meet delivery or performance
schedules or breaches any of the terms of the agreement, including the warranties. Cameron Solutions may also cancel the Supply
Agreement without notice in the event FPA becomes insolvent or commits any act of bankruptcy. The Supply Agreement contains customary
indemnification and confidentiality provisions.
For a period of three years following
the closing of the Agreement, the Company and Raynard Veldman and John Di Bella have agreed to not participate or cause participation
in the oil-and-gas market in relation to phase or constituent sensing or separation which is defined as, liquid-liquid, liquid-solid
or liquid-gas separation and gas or liquid sensing, including all product lines and services related thereto and including the
Voraxial product line and services, except to the extent necessary to: (i) repair or service, but not remanufacture, any goods
the Company sold to third persons prior to closing; (ii) fulfill, on or after closing, any customer obligation; or (iii) comply
with any term or condition of the Agreement. In addition the Company shall take all reasonable measures to ensure the confidentiality
and prevent the improper use of all trade secrets.
ENVIRO
TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER
30, 2017 (UNAUDITED)
NOTE H
– MAJOR CUSTOMERS
During the nine months ended September
30, 2017, we recorded 77% of our revenue from one customer.
During the nine months ended September
30, 2016, we recorded 95% of our revenue from one customer.
NOTE I – SUBSEQUENT EVENTS
We have evaluated subsequent events
through November 13, 2017 and have found no items for disclosure.