Cyclo Therapeutics, Inc. - Quarter Report: 2019 March (Form 10-Q)

 

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		March 31, 2019				December 31, 2018
		(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	1,115,133			$	2,217,412
Accounts receivable			74,796				80,044
Inventory, net			413,253				416,531
Current portion of mortgage note receivable			37,439				37,439
Other			46,901				18,185
Total current assets			1,687,522				2,769,611
FURNITURE AND EQUIPMENT, NET			18,411				18,571
RIGHT-TO-USE LEASE ASSET, NET			63,771				-
MORTGAGE NOTE RECEIVABLE, LESS CURRENT PORTION			120,458				129,674
OTHER			15,000				-
TOTAL ASSETS		$	1,905,162			$	2,917,856
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES
Current portion of lease liability		$	14,182			$	-
Accounts payable and accrued expenses			2,622,511				1,925,332
Total current liabilities			2,636,693				1,925,332
LONG-TERM LEASE LIABILITY			50,049				-
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, par value $.0001 per share, 500,000,000 shares authorized, 90,759,324 shares issued and outstanding, at March 31, 2019 and December 31, 2018			9,075				9,075
Preferred stock, par value $.0001 per share, 5,000,000 shares authorized			-				-
Additional paid-in capital			18,701,211				18,701,211
Stock subscription receivable			-				(130,062	)
Accumulated deficit			(19,491,866	)			(17,587,700	)
Total stockholders' equity (deficit)			(781,580	)			992,524
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)		$	1,905,162			$	2,917,856

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		Three Months Ended
		March 31,
		2019				2018
REVENUES
Product sales		$	220,826			$	198,069
EXPENSES
Personnel			409,999				277,567
Cost of products sold (exclusive of depreciation, shown separately below)			20,550				23,672
Research and development			1,342,763				409,198
Repairs and maintenance			1,684				-
Professional fees			214,975				233,976
Office and other			102,642				47,867
Board of Director fees and costs			33,085				15,783
Depreciation			1,484				2,500
Freight and shipping			1,434				1,882
Total operating expenses			2,128,616				1,012,445
LOSS FROM OPERATIONS			(1,907,790	)			(814,376	)
OTHER INCOME
Investment and other			3,624				1,432
LOSS BEFORE INCOME TAXES			(1,904,166	)			(812,944	)
PROVISION FOR INCOME TAXES			-				-
NET LOSS		$	(1,904,166	)		$	(812,944	)
BASIC AND FULLY DILUTED NET LOSS PER COMMON SHARE		$	(.02	)		$	(.01	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING			90,759,324				72,999,361

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		Common Stock								Preferred Stock Series B								Additional												Total
		Shares				Par Value				Units				Par Value				Paid-In Capital				Subscription Receivable				Accumulated Deficit				Stockholders’ Equity
Balance, December 31, 2017			72,999,361			$	7,299				15,500			$	2			$	14,470,984			$	-			$	(13,332,667	)		$	1,145,618
Net loss			-				-				-				-				-				-				(812,944	)			(812,944	)
Balance, March 31, 2018		$	72,999,361			$	7,299			$	15,500			$	2			$	14,470,984			$	-			$	(14,145,611	)		$	332,674

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		Common Stock								Preferred Stock Series B								Additional												Total
		Shares				Par Value				Units				Par Value				Paid-In Capital				Subscription Receivable				Accumulated Deficit				Stockholders’ Equity (Deficit)
Balance, December 31, 2018			90,759,324			$	9,075				-			$	-			$	18,701,211			$	(130,062	)		$	(17,587,700	)		$	992,524
Collection of subscription receivable			-				-				-				-				-				130,062				-				130,062
Net loss			-				-				-				-				-				-				(1,904,166	)			(1,904,166	)
Balance, March 31, 2019			90,759,324			$	9,075				-			$	-			$	18,701,211			$	-			$	(19,491,866	)		$	(781,580	)

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		Three Months Ended
		March 31,
		2019				2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(1,904,166	)		$	(812,944	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation			1,484				2,500
Accrued stock compensation to employees			7,300				3,300
Accrued stock compensation to non-employees			24,090				10,890
Increase or decrease in:
Accounts receivable			5,248				9,178
Inventory			3,278				17,778
Other current assets			(28,716	)			(4,258	)
Other			460				-
Accounts payable and accrued expenses			665,789				35,859
Total adjustments			678,933				75,247
NET CASH USED IN OPERATING ACTIVITIES			(1,225,233	)			(737,697	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment			(1,324	)			(1,634	)
Proceeds from mortgage note receivable			9,216				2,934
NET CASH PROVIDED BY INVESTING ACTIVITIES			7,892				1,300
CASH FLOWS FROM FINANCING ACTIVITIES
Collection of subscription receivable			130,062				-
Advance – private placement			-				74,983
Other			(15,000	)			-
NET CASH PROVIDED BY FINANCING ACTIVITIES			115,062				74,983
NET DECREASE IN CASH AND CASH EQUIVALENTS			(1,102,279	)			(661,414	)
CASH AND CASH EQUIVALENTS, beginning of period			2,217,412				1,270,973
CASH AND CASH EQUIVALENTS, end of period		$	1,115,133			$	609,559
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest		$	-			$	-
Cash paid for income taxes		$	-			$	-
NON-CASH INVESTING AND FINANCING ACTIVITIES
Capitalization of right-to-use asset and lease liability		$	64,231				-

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(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

 

The following is a summary of the more significant accounting policies of CTD Holdings, Inc. and subsidiaries (the “Company,” “we,” “our” or “us”) that affect the accompanying consolidated financial statements.

 

(a) ORGANIZATION AND OPERATIONS––The Company was incorporated in August 1990, as a Florida corporation with operations beginning in July 1992. We are a biotechnology company that develops cyclodextrin-based products for the treatment of disease. We have filed a Type II Drug Master File with the U.S. Food and Drug Administration (“FDA”) for our lead drug candidate, Trappsol® Cyclo™ as a treatment for Niemann-Pick Type C disease (“NPC”), a rare and fatal cholesterol metabolism disease that impacts the brain, lungs, liver, spleen, and other organs. The FDA approved our Investigational New Drug application (IND) which describes our Phase I clinical plans in the U.S. for Trappsol® Cyclo™ and in January 2017 the FDA granted Fast Track designation to Trappsol® Cyclo™ for the treatment of NPC. Initial patient enrollment in the U.S. Phase I study commenced in September 2017. We have also filed Clinical Trial Applications with several European regulatory bodies, including those in the United Kingdom, Sweden and Italy, and in Israel, all of which have approved our applications. The first patient was dosed in our European study in July 2017.

 

We also sell cyclodextrins and related products to the pharmaceutical, nutritional, and other industries, primarily for use in diagnostics and specialty drugs with continuing growth in research and new product development. However, our core business has transitioned to a biotechnology company primarily focused on the development of cyclodextrin-based biopharmaceuticals for the treatment of disease from a business which had been primarily reselling basic cyclodextrin products. 

 

(b) BASIS OF PRESENTATION––The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.

 

Operating results for the three month period ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the Securities and Exchange Commission on March 15, 2019.

 

(c) CASH AND CASH EQUIVALENTS––Cash and cash equivalents consist of cash and any highly liquid investments with an original purchased maturity of three months or less.

 

(d) ACCOUNTS RECEIVABLE––Accounts receivable are unsecured and non-interest bearing and stated at the amount we expect to collect from outstanding balances. Based on our assessment of the credit history with customers having outstanding balances and current relationships with them, an allowance for uncollectible accounts was not deemed necessary at March 31, 2019 and December 31, 2018.

 

(e) INVENTORY AND COST OF PRODUCTS SOLD––Inventory consists of our pharmaceutical drug Trappsol® Cyclo™, cyclodextrin products and chemical complexes purchased for resale recorded at the lower of cost (first-in, first-out) or net realizable value. Cost of products sold includes the acquisition cost of the products sold and does not include any allocation of inbound or outbound freight charges, indirect overhead expenses, warehouse and distribution expenses, or depreciation and amortization expense. The Company records a specific reserve for inventory items that are determined to be obsolete.  The reserve for obsolete inventory was $39,700 at March 31, 2019 and December 31, 2018. 

 

 

CTD HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2019

 

(f) EQUIPMENT––Equipment is recorded at cost, less accumulated depreciation. Depreciation is computed using primarily the straight-line method over the estimated useful lives of the assets (generally three to five years for computers, and seven to ten years for equipment and office furniture).

 

(g) REVENUE RECOGNITION––Effective January 1, 2018, the Company adopted the provisions of ASC 606 using the modified retrospective method. The adoption of the new revenue standards as of January 1, 2018, did not change our revenue recognition as the majority of our revenues continue to be recognized when the customer takes control of our product. As we did not identify any accounting changes that impacted the amount of reported revenues with respect to our product revenues and no adjustment to retained earnings was required upon adoption.

 

Under the new revenue standards, we recognize revenues when our customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. We recognize revenues following the five step model prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation.

 

Product revenues

In the U.S. we sell our products to the end user or wholesale distributors. In other countries, we sell our products primarily to wholesale distributors and other third-party distribution partners. These customers subsequently resell our products to health care providers and patients.

 

Revenues from product sales are recognized when the customer obtains control of our product, which occurs at a point in time, typically upon delivery to the customer. We expense incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that we would have recognized is one year or less or the amount is immaterial.  We treat shipping and handling costs performed after a customer obtains control of the product as a fulfillment cost. We have identified one performance obligation in our contracts with customers which is the delivery of product to our customers.  The transaction price is recognized in full when we deliver the product to our customer, which is the point at which we have satisfied our performance obligation.

 

Reserves for Discounts and Allowances

Revenues from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with our customers, health care providers or payors, including those associated with the implementation of pricing actions in certain of the international markets in which we operate. Our process for estimating reserves established for these variable consideration components do not differ materially from our historical practices.

 

Product revenue reserves, which are classified as a reduction in product revenues, are generally characterized in the following categories: discounts, contractual adjustments and returns.

 

These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to our customer) or a liability (if the amount is payable to a party other than our customer). Our estimates of reserves established for variable consideration typically utilize the most likely method and reflect our historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. The transaction price, which includes variable consideration reflecting the impact of discounts and allowances, may be subject to constraint and is included in the net sales price only to the extent that it is probable that a significant reversal of the amount of the cumulative revenues recognized will not occur in a future period. Actual amounts may ultimately differ from our estimates. If actual results vary, we adjust these estimates, which could have an effect on earnings in the period of adjustment.

 

For additional information on our revenues, please read Note 6, Revenues, to these condensed consolidated financial statements.

 

 

 CTD HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2019

 

(h) RESEARCH AND DEVELOPMENT COSTS––Research and development costs are expensed as incurred.

 

(i) INCOME TAXES––Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. In addition, tax benefits related to positions considered uncertain are recognized only when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions shall initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

  

(j) NET LOSS PER COMMON SHARE––Basic and fully diluted net loss per common share is computed using a simple weighted average of common shares outstanding during the periods presented.  Outstanding warrants to purchase 32,192,294 common shares and 28,500,478 common shares, for the three months ended March 31, 2019 and 2018, respectively, and 1,768,147 common shares that may be issued under warrants to purchase units sold in the Company’s private placements, were antidilutive for the three months ended March 31, 2018 and March 31, 2019, and have been excluded from the calculation of loss per common share.

 

(k) STOCK BASED COMPENSATION––The Company periodically awards stock to employees, directors, and consultants. An expense is recognized equal to the fair value of the stock determined using the closing trading price of the stock on the award date.

 

(l) LIQUIDITY AND GOING CONCERN––For the three months ended March 31, 2019 and 2018, the Company incurred net losses of $1,904,166 and $812,944. At March 31, 2019, the Company had a cash balance of $1,115,133 and its current assets less current liabilities were $(949,171). The Company has an accumulated deficit of $19,491,866 at March 31, 2019. Our recent losses have predominantly resulted from research and development expenses for our Trappsol® Cyclo™ product and other general operating expenses, including board advisory fees. We believe our expenses will continue to increase as we conduct clinical trials and continue to seek regulatory approval for the use of Trappsol® Cyclo™ in the treatment of NPC.

 

For year ended December 31, 2018, our operations used approximately $3,188,000 in cash. This cash was provided primarily by cash on hand and net proceeds of $4,102,000 from equity issuances. At December 31, 2018, the Company had a cash balance of $2,217,000 and current assets less current liabilities of $844,000. We will need additional capital to maintain our operations, continue our research and development programs, conduct clinical trials, seek regulatory approvals and manufacture and market our products.

 

We will need to raise additional capital through the sale of our securities from time to time for the foreseeable future to fund the development of our drug product candidates through clinical development, manufacturing and commercialization. Our ability to obtain such additional capital will likely be subject to various factors, including our overall business performance and market conditions. If we cannot raise the additional funds required for our anticipated operations, we may be required to reduce the scope of or eliminate our research and development programs, delay our clinical trials and the ability to seek regulatory approvals, downsize our general and administrative infrastructure, or seek alternative measures to avoid insolvency. If we raise additional funds through future offerings of shares of our Common Stock or other securities, such offerings would cause dilution of current stockholders’ percentage ownership in the Company, which could be substantial. Future offerings also could have a material and adverse effect on the price of our Common Stock.

 

We have incurred losses from operations in each of our last five fiscal years. Our ability to continue as a going concern is dependent upon the availability of equity financing as noted above. We will need to raise additional capital to support our ongoing operations and continue our clinical trials. There can be no assurance that the Company will be successful with these fundraising endeavors.   These factors raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

 

 

CTD HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2019

 

(m) USE OF 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 amounts reported in the consolidated financial statements and accompanying notes, including contingencies. Although management bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, actual results could significantly differ from these estimates.

 

(n) FAIR VALUE MEASUREMENTS AND DISCLOSURES––The Fair Value Measurements and Disclosures topic of the Accounting Standards Codification (“ASC”) requires companies to determine fair value based on the price that would be received to sell the asset or paid to transfer the liability to a market participant. The Fair Value Measurements and Disclosures topic emphasizes that fair value is a market-based measurement, not an entity-specific measurement.

 

The guidance requires that assets and liabilities carried at fair value be classified and disclosed in one of the following categories:

 

●	Level 1: Quoted market prices in active markets for identical assets or liabilities.

                            

●	Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

                            

●	Level 3: Unobservable inputs that are not corroborated by market data.

 

We have no assets or liabilities that are required to have their fair value measured on a recurring basis at March 31, 2019 or December 31, 2018.  Long-lived assets are measured at fair value on a non-recurring basis and are subject to fair value adjustments when there is evidence of impairment. 

 

For short-term classes of our financial instruments which are not reported at fair value, the carrying amounts approximate fair value due to their short-term nature, which include cash, accounts receivable, and accounts payable.  The fair value of the mortgage note receivable is estimated based on the present value of the underlying cash flows discounted at current rates. At March 31, 2019 and December 31, 2018, the carrying value of the mortgage note receivable approximates fair value. 

 

(o) Accounting Standards Adopted––

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Leases - In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” (“ASU 2016-02”), which amends leasing guidance by requiring companies to recognize a right-of-use asset and a lease liability for all operating and financing leases with lease terms greater than twelve months.  The lease liability is equal to the present value of lease payments. The lease asset is based on the lease liability, subject to adjustment for prepaid and deferred rent and tenant incentives.  For income statement purposes, leases will continue to be classified as operating or financing with lease expense in both cases calculated substantially the same as under the prior leasing guidance.

 

The Company adopted Topic 842 as of January 1, 2019 (the first day of fiscal 2019).  See Note 7

 

(p) Accounting Standards to be Adopted in Future Periods––There are no outstanding accounting standards to be adopted that will have a material effect on the Company’s financial position and operations.

 

(2) MORTGAGE NOTE RECEIVABLE

 

On January 21, 2016, we sold our real property located in High Springs, Florida to an unrelated party. Pursuant to the terms of the sale, at the closing, the buyer paid $10,000 in cash, less selling costs and settlement charges, and delivered to us a promissory note in the principal amount of $265,000, and a mortgage in our favor securing the buyer’s obligations under the promissory note. The promissory note provides for monthly payments of $3,653, including principal and interest at 4.25%, over a seven-year period that commenced March 1, 2016, with the unpaid balance due in February 2023.

 

 

 

CTD HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2019

 

 

(3) EQUITY TRANSACTIONS:

 

The Company expensed $31,390 and $14,190 in employee and board member stock compensation for the three months ended March 31, 2019 and 2018, respectively. These shares were valued using quoted market values. The Company accrues stock compensation expense over the period earned for employees and board members.

 

In April, 2018, the Company completed a private placement resulting in gross proceeds to the Company of $2,010,000. Prior to March 31, 2018, the Company received $74,983 in advance from these investors, which has been recorded as an advance -- private placement in the accompanying statement of cash flows.

 

As of March 31, 2019, the Company had warrants outstanding to purchase 32,192,294 shares of common stock at exercise prices of $0.25 - $1.00 per share that expire at various dates through 2025. An additional 1,768,147 shares of common stock may be issued under warrants outstanding to purchase 480,000 Units sold in the Company’s May 2016 private placement at an exercise price of $0.25 per Unit, 164,074 Units sold in the Company’s February 2017 private placement at an exercise price of $0.35 per Unit, and 600 Units sold in the Company’s October 2017 private placement at an exercise price of $100 per Unit.

 

(4) INCOME TAXES:

 

The Company reported a net loss for the three months ended March 31, 2019 and 2018, respectively. The Company increased its deferred tax asset valuation allowance rather than recognize an income tax benefit.

 

(5) SALES CONCENTRATIONS:

 

Sales to four major customers accounted for 76% of total sales for the three months ended March 31, 2019 and 2018, respectively. A loss of one of these customers could have a significant adverse effect on the Company’s financial condition, results of operations and cash flows.

 

(6) REVENUES:

 

The Company operates in one business segment, which primarily focuses on the development and commercialization of innovative cyclodextrin-based products for the treatment of people with serious and life threatening rare diseases and medical conditions. The Company considers there to be revenue concentration risks for regions where net product revenues exceed 10% of consolidated net product revenues. The concentration of the Company’s net product revenues within the regions below may have a material adverse effect on the Company’s revenues and results of operations if sales in the respective regions experience difficulties. See Note 1(g) – Revenue Recognition for additional discussion.

 

Revenues by product are summarized as follows:

 

 

 

Substantially all of our sales of Trappsol® Cyclo™ for the three months ended March 31, 2019 and March 31, 2018 were to a particular customer who exports the drug to South America. Substantially all of our Aquaplex sales are to one customer.

 

 

CTD HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2019

 

 

(7) LEASES:

 

The Company adopted ASU 2016-02 “Leases (Topic 842)” along with related clarifications and improvements effective at the beginning of fiscal 2019, using the modified retrospective transition method.  There was no cumulative-effect adjustment to the Company's Consolidated Balance Sheet as of December 31, 2018. Comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods, as the Company has elected the package of practical expedients permitted under the transition guidance, which among other things, allows us to carryforward our prior lease classifications under ASC 840, “Leases.”

 

Under the new guidance, right-of-use assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease terms at the commencement dates.  The Company uses its incremental borrowing rates as the discount rate for its leases, which is equal to the rate of interest the Company would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. The incremental borrowing rate for all existing leases as of the opening balance sheet date was based upon the remaining terms of the leases; the incremental borrowing rate for all new or amended leases is based upon the lease terms.  The lease terms for all the Company’s leases include the contractually obligated period of the leases, plus any additional periods covered by a Company options to extend the leases that the Company is reasonably certain to exercise.

 

The Company has elected the package of practical expedients permitted under the transition guidance, which among other things, allows us to carryforward our prior lease classifications under ASC 840, “Leases.”

 

Adoption of Topic 842 did not have a material impact on our annual operating results or cash flows. Operating lease expense is recognized on a straight-line basis over the lease term and is included in operating costs or General and administrative expense.  Variable lease payments are expensed as incurred.

 

The effects of the changes made to the Company’s Consolidated Balance Sheet as of December 31, 2018 for the adoption of Topic 842 is as follows:

 

The Company determines if an arrangement is or contains a lease at contract inception and recognizes a right-of-use asset and a lease liability at the lease commencement date.  Leases with an initial term of 12 months or less but greater than one month are not recorded on the balance sheet for select asset classes.  The lease liability is measured at the present value of future lease payments as of the lease commencement date, or the opening balance sheet date for leases existing at adoption of Topic 842.  The right-of-use asset recognized is based on the lease liability adjusted for prepaid and deferred rent and unamortized lease incentives. 

 

Certain leases provide that the lease payments may be increased annually based on the fixed rate terms or adjustable terms such as the Consumer Price Index.  Future base rent escalations that are not contractually quantifiable as of the lease commencement date are not included in our lease liability. 

 

The Company has one office lease, which is as an operating lease and included in the right-of-use asset, current portion of lease liability, and long-term lease liability captions on the Company’s consolidated balance sheet.

 

Operating lease assets are recorded net of accumulated amortization of $4,251 as of March 31, 2019.

 

Lease expense for lease payments are recognized on a straight-line basis over the lease term.   Lease expense for the first quarter of 2019 was $3,331.

 

 

 

 

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