Note 7 - Property Insurance Settlement

9 Months Ended

Sep. 30, 2018

Business Insurance Recoveries [Text Block]

(

)

Property Insurance Settlement

Subsequent to the transfer of production from the Broadway Plant, the primary water supply and sprinkler pipes within the facility suffered freeze damage during an extended period of extreme cold temperatures. The Company and its insurer reached a full and final settlement agreement with respect to the claim during the

second

quarter of

2018.

Insurance proceeds are recorded to the extent of the losses and then, only if recovery is realized or probable. Any gains in excess of losses are recognized only when the contingencies regarding the recovery are resolved and the amount is fixed or determinable. During the

nine

months ended

September

30,

2018,

the Company received insurance proceeds of

$2,447,000

and recognized an insurance recovery gain of

$2,275,000,

net of expenses incurred for claim related expenses.

The Company is currently evaluating options related to the disposition of the Broadway Plant, including the extent to which repairs, if any, are made to the facility. The Company considered the need for an impairment recognition based on the change in the facility’s physical condition following the freeze damage. Although the fair market value of the facility was reduced by the freeze damage, the Company determined the fair market value of the building and land exceeds the net book value as of

September 30, 2018.