Note 5 - Short-term Contract Obligations

3 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Short-term Debt [Text Block]

5. SHORT TERM CONTRACT OBLIGATION

On

November 30, 2018

the Company completed the purchase of a

six

acre production and research facility from Cellana LLC (“Cellana”) under a purchase agreement that was signed

August 31, 2018.

In accordance with the terms of the

third

amendment to the asset purchase agreement, the Company acquired the asset for

$495,000

with a cash down payment of

$100,000

leaving a short-term obligation of

$395,000

on the asset purchase.

The short term obligation is comprised of

two

separate loans in the principal amount of

$180,000

and

$215,000.

The

first

loan of

$180,000

bears an interest rate of

6.25%

and is payable in

four

monthly installments which includes principal and interest. The loan commenced on

December 1, 2018

and initially matured on

March 31, 2019

but was extended to

July 15, 2019.

At

June 30, 2019,

there was

no

outstanding principal.

The

second

loan has a principal amount of

$215,000

and is a non-interest bearing loan that is payable in

twelve

monthly installments comprised of

two

monthly payments of

$10,000

and

ten

monthly payments of

$19,543.

The loan commenced on

December 1, 2018

and matures on

October 15, 2019.

This contract contains a hold back of

$38,000

pending resolution of certain closing items by the seller. The principal amount outstanding at

June 30, 2019

was

$101,000.