STORM DAMAGE AND INSURANCE PROCEEDS

9 Months Ended

Sep. 30, 2018

STORM DAMAGE AND INSURANCE PROCEEDS

STORM DAMAGE AND INSURANCE PROCEEDS

11.  STORM DAMAGE AND INSURANCE PROCEEDS

On March 26, 2017, a hail storm passed through Little Elm, Texas, resulting in damage to the Company’s two buildings.  During April 2017, the Company performed an inspection of its facilities and determined that possible roof damage had been sustained.  In late April 2017, the Company’s insurance carrier inspected the two buildings and confirmed that damage occurred from the hail storm.  This damage was principally to the roofs of the buildings but also many of the HVAC units and a wall alongside one of the buildings were also damaged.

The Company’s insurance carrier has assessed damages of $1,009,960 and the Company’s deductible is $5,000.  The Company received these funds from its carrier in the second quarter of 2017. Repairs commenced during the third quarter of 2017 .  The Company expects that all repairs will be completed in the fourth quarter.

During 2017, the Company incurred and recognized $538,667 in repairs due to the storm damage. Repairs during the first nine months of 2018 were $203,289. This repair expense was offset by the insurance proceeds, resulting in no impact to the Statement of Operations.  These costs and offsets are included in General and administrative expense in the Statement of Operations. The remaining insurance proceeds are expected to be recognized as income in the fourth quarter of 2018.