Note 5 - Commitments and Contingencies
|9 Months Ended|
Sep. 30, 2018
|Notes to Financial Statements|
|Commitments and Contingencies Disclosure [Text Block]||
5– Commitments and Contingencies
Litigation, Claims, and Assessments
maybe involved in legal proceedings, claims and assessments arising in the ordinary course of business. In the opinion of management, such matters are currently
notexpected to have a material impact on the Company’s consolidated financial statements. The Company records legal costs associated with loss contingencies as incurred and accrues for all probable and estimable settlements.
North Dakota State University Research Foundation License Agreement
Under the terms of the Exclusive License Agreement (the “License Agreement”) signed on
June 16, 2016with North Dakota State University Research Foundation (“NDSU/RF”), the Company was delinquent on payments of
$139,789and unable to meet certain milestones. A dispute arose between the Company and NDSU/RF regarding compensation and deliverables. The License Agreement was renegotiated with NDSU/RF and on
June 29, 2018,the Company entered into a settlement agreement and general release (the “Settlement Agreement”) with NDSU/RF to resolve the dispute, pursuant to which the Company and NDSU/RF fully and forever released each other from the License Agreement and mutually released each other of all claims. Accordingly, the Company recognized a gain of
$139,789for the settlement of accounts payable on
June 25, 2018.
December 13, 2016,the Company entered into a Supply Agreement (the “Supply Agreement”) with Gelest Inc., a Pennsylvania corporation (“Gelest”). This Supply Agreement was for the purchase and sale of Cyclohexasilane (“CHS” or the “Products”) as set forth in the Supply Agreement, pursuant to which the Company agrees to use Gelest as a primary source to manufacture the Products for the duration of
threeyears from the effective date.
Under the terms of the Supply Agreement, Gelest would have scaled-up production of CHS, within their available capacity of
18Kg per year, and further optimize the manufacturing process licensed by the purchaser from NDSU Research Foundation (“NDSU/RF”). The term of this project was
90days from the receipt of the
YSi6Cl14salt from the purchaser. The cost for scale-up and manufacturing optimization was
$180,000to be paid by the purchaser in
twoinstallments. The initial installment of
$18,000was paid upon finalizing this Supply Agreement. The
$162,000was to be paid net
30days from availability for shipment of between
400grams of the initial product of the quality stated in the Supply Agreement.
April 6, 2018,Gelest and the Company mutually agreed to cancel the
December 13, 2016CHS Supply Agreement. The Company is currently negotiating an agreement with Gelest where Gelest will provide CHS storage and handling, website and catalog listings of CHS produced by or for the Company for sale to its customers, and customer service, including trans-fill of customer cylinders.
The Company entered into a lease agreement in
June 2015for office space in North Dakota that was canceled on
April 30, 2017with
nocancellation costs paid or due. The Company has an amended office lease in Tulsa, Oklahoma that expired on
July 31, 2018.Rent expense for operating leases was
nine-month periods ended
September 30, 2018and
2017,respectively. The Company is now on a month to month basis under the terms of the lease.
The entire disclosure for commitments and contingencies.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef