The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The

Company recognizes revenue when it is realized or realizable and earned. The Company considers revenue realized or realizable and

earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the sales price is fixed or

determinable, and (iii) collectability is reasonably assured. More than ninety percent of our revenue, totaling $5,649,713.00 in Q2

and $7,114,022.50 in Q3 comes from distribution agreements where all or some of the revenue earned may be adjusted or refunded

based on product sales, and for accounting purposes should be considered deferred revenue