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Commitments and Contingencies
6 Months Ended
Jun. 30, 2021
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Disclosure [Text Block]

Note 11 Commitments and Contingencies

 

Legal

 

There is no pending or anticipated legal actions at this time except as noted below in “Other”.

 

PPP Loan

 

On May 4, 2020, we received a loan in the amount of $460,406 from the United States Small Business Administration under the Payroll Protection Program. Subsequent to June 30, 2020, we determined that errors had been made in the application submitted to obtain the loan. On July 21, 2020, Bank of America notified the Company in writing that it should not have received $440,000 of the loan proceeds, representing an amount for the refinancing of an Economic Injury Disaster Loan which we did receive. Bank of America has requested that we remit such funds back to Bank of America. We are presently attempting to negotiate repayment or a restructure of the loan. If we are not successful in negotiating repayment terms, it could have a material adverse effect on our financial condition.

 

Smith Matter

 

During management's review of the Company’s recent PPP loan application after the loan had been disbursed to the Company, it was determined that the information provided by Ms. Julie R. Smith, the Company’s former President and COO, was not representative of the Company’s situation. After consulting with legal counsel, the Board of Directors voted to remove Ms. Smith from its Board of Directors, and all other capacities due to the misstatements she made in the loan application. Subsequent to that decision, effective July 1, 2020, Ms. Smith submitted a resignation from all positions with the Company, which was accepted by the Board and management. Ms. Smith subsequently retained counsel and has indicated her intent to file an administrative charge of discrimination in Colorado under certain provisions of the anti-discrimination laws of that state.

 

On August 18, 2020, the Company received formal notice that a complaint has been filed with the Colorado Civil Rights Division by Ms. Smith naming the Company as the Respondent. As of the date of this filing the Company has been advised that the Colorado Civil Rights Division has dismissed this matter effective March 1, 2021. Ms. Smith requested a “Right-to-Sue” letter, which she received, giving her a right to sue in District Court for 90 days from the date of the dismissed action.

 

On June 23, 2021, the Company and the former President and COO reached a confidential settlement and release agreement releasing both parties of any future claims.

 

Terra Nova Matter

 

On May 4, 2021, we were served with a Statement of Nature of Dispute, Claims and Issues to be Arbitrated in which Claimant Terra Nova makes claims related to alleged breach of an agreement between the Parties dated August 17, 2020.  Terra Nova claims damages in the amount of $385,000.  Although we intend to vigorously defend against the claims, there can be no assurance that we will be successful.