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Commitments and Contingencies
12 Months Ended
Dec. 31, 2017
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

NOTE 7 – COMMITMENTS AND CONTINGENCIES

 

Board of Director Arrangements

 

On November 12, 2015, the Company renewed all of its existing Directors’ appointment, and accrued $5,000 to both of the two outside members. Pursuant to the Board of Director agreements, the Company’s “in-house” board members (CEO and Vice-President) waived their annual cash compensation of $5,000. The Board of Directors waived their cash and stock compensation for fiscal year 2017.

 

Fulton Project Lease

 

On July 20, 2010, the Company entered into a 30 year lease agreement with Itawamba County, Mississippi for the purpose of the development, construction, and operation of the Fulton Project. At the end of the primary 30 year lease term, the Company shall have the right for two additional 30 year terms. The current lease rate is computed based on a per acre rate per month that is approximately $10,300 per month. The lease stipulates the lease rate is to be reduced at the time of the construction start by a Property Cost Reduction Formula which can substantially reduce the monthly lease costs. The lease rate shall be adjusted every five years to the Consumer Price Index. The below payout schedule does not contemplate reductions available upon the commencement of construction and commercial operations.

 

On May 1, 2017, the Company received a letter from the County of Itawamba stating that the lease for the Fulton Project would be cancelled unless the current balance outstanding plus default interest were paid in full by May 10, 2017. The Company appealed for an extension or forgiveness of the past due liability but was denied and told “The County is actively marketing the real property through its economic developer. The real property is available on a first-come, first-served basis.” Due to the uncertainty of access to the site, the Company stopped the accrual of lease payments on May 10, 2017 and considers the lease cancelled. The site is still available and the Company will work to reinstate when financing is obtained.

 

Rent expense under non-cancellable leases was approximately $44,600 and $123,000 during the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017 and 2016, $344,320 and $298,468 of the monthly lease payments were included in accounts payable on the accompanying consolidated balance sheets.

 

As of December 31, 2017, the Company has accrued $48,794 of default interest due to the nonpayment of the lease.

 

SEC Notice and Settlement

 

On May 2, 2016, the Company received a written notice from the SEC, as further described elsewhere in this annual report. In connection with such notice, on August 1, 2016, the Company entered into a settlement with the SEC. Pursuant to the settlement, the Company agreed to pay a civil penalty of $25,000 to the SEC. On July 29, 2016, the Company made an initial payment of $5,000 to the SEC. The remaining $20,000 balance will be paid to the SEC over a nine-month period ending on or about June 30, 2017. The Company has yet to make an additional payment due to capital constraints and has received no further communication from the SEC in regards to the settlement or further payment to date. The Company has accrued the balance on the accompanying consolidated financial statements for such settlement.

 

Legal Proceedings

 

We are currently not involved in litigation that we believe will have a materially adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our company’s or our company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision is expected to have a material adverse effect.