PROCYON CORP - Quarter Report: 2021 March (Form 10-Q)

 

 

UNITED STATES SECURITIES & EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

☒           QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarterly Period Ended March 31, 2021

 

or

 

☐           TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from         to

 

Commission File Number: 0-17449

 

PROCYON CORPORATION

(Exact Name of Registrant as specified in its charter)

 

COLORADO	59-3280822
(State of Incorporation)	(I.R.S. Employer Identification Number)

 

164 Douglas Road East, Oldsmar, FL 34677

(Address of Principal Executive Offices)

 

(727) 447-2998

(Registrant’s Telephone Number, Including Area Code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	None	None

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

YES ☒ NO ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and “emerging growth company” in Rule 12b-2 of the Exchange Act.

	Large accelerated filer ☐	Accelerated filer ☐
	Non-accelerated filer ☐	Smaller reporting company ☒
	Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ☐ NO ☒

 

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: Common stock, no par value; 8,087,388 shares outstanding as of May 17, 2021.

 

 

PART I. - FINANCIAL INFORMATION

 

 

 

Item	Page
ITEM 1. FINANCIAL STATEMENTS	3
Index to Financial Statements
Financial Statements:
Consolidated Balance Sheets	3
Consolidated Statements of Operations	4
Consolidated Statements of Changes in Stockholders’ Equity	5
Consolidated Statements of Cash Flows	6
Notes to Consolidated Financial Statements	7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	13
ITEM 4. CONTROLS AND PROCEDURES	17
PART II. - OTHER INFORMATION
ITEM 5. OTHER INFORMATION	18
ITEM 6. EXHIBITS	18
SIGNATURES	19

 

 

 

		(unaudited)				(audited)
		March 31,				June 30,
		2021				2020
ASSETS
CURRENT ASSETS
Cash		$	509,211			$	665,834
Certificates of Deposit, plus accrued interest			280,425				155,132
Accounts Receivable, less allowance for doubtful accounts of $9,408 and $9,408, respectively.			449,414				311,043
Inventories			595,659				758,516
Prepaid Expenses			262,342				183,138
TOTAL CURRENT ASSETS			2,097,051				2,073,663
PROPERTY AND EQUIPMENT, NET			437,384				452,855
OTHER ASSETS
Deposits			6,635				4,192
Inventories			275,531				83,812
Intangible Asset			17,000				17,000
ROU Assets - Operating Leases			928,234				30,245
Deferred Tax Asset, net valuation allowance of $87,981 and $144,619, respectively.			149,981				159,874
			1,377,381				295,123
TOTAL ASSETS		$	3,911,816			$	2,821,641
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable		$	156,789			$	167,459
Lease Liability, Current			141,186				33,750
PPP Loan			65,992				57,028
Accrued Expenses			240,744				255,716
TOTAL CURRENT LIABILITIES			604,711				513,953
LONG TERM LIABILITIES
Lease Liability, Non-Current			693,258				-
PPP Loan			135,008				143,972
TOTAL LONG TERM LIABILITIES			828,266				143,972
TOTAL LIABILITIES			1,432,977				657,925
COMMITMENTS AND CONTINGENCIES (NOTE I)			-				-
STOCKHOLDERS' EQUITY
Preferred Stock, 496,000,000 shares authorized, none issued.			-				-
Series A Cumulative Convertible Preferred Stock, no par value; 4,000,000 shares authorized; 167,100 shares issued and outstanding.			126,860				126,860
Common Stock, no par value, 80,000,000 shares authorized; 8,087,388 shares issued and outstanding.			4,444,766				4,444,766
Paid-in Capital			15,885				15,885
Accumulated Deficit			(2,108,672	)			(2,423,795	)
TOTAL STOCKHOLDERS' EQUITY			2,478,839				2,163,716
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	3,911,816			$	2,821,641

 

		(unaudited)				(unaudited)				(unaudited)				(unaudited)
		Three Months				Three Months				Nine Months				Nine Months
		Ended				Ended				Ended				Ended
		Mar. 31, 2021				Mar. 31, 2020				Mar. 31, 2021				Mar. 31, 2020
NET SALES		$	1,033,498			$	1,139,115			$	3,454,147			$	3,450,107
COST OF SALES			286,608				288,501				949,499				934,068
GROSS PROFIT			746,890				850,614				2,504,648				2,516,039
OPERATING EXPENSES
Salaries and Benefits			407,290				457,153				1,234,012				1,267,860
Selling, General and Administrative			335,458				326,682				945,070				1,063,419
			742,748				783,835				2,179,082				2,331,279
INCOME FROM OPERATIONS			4,142				66,779				325,566				184,760
OTHER INCOME (EXPENSE)
Other Income			-				10,000				-				10,000
Interest Income / (Expense)			184				93				(549	)			1,669
			184				10,093				(549	)			11,669
INCOME BEFORE INCOME TAXES			4,326				76,872				325,017				196,429
INCOME TAX (EXPENSE) / BENEFIT			17,388				(20,942	)			(9,893	)			(56,864	)
NET INCOME			21,714				55,930				315,124				139,565
Dividend requirements on preferred stock			(4,179	)			(4,179	)			(12,533	)			(12,533	)
Basic net income available to common shares		$	17,535			$	51,751			$	302,591			$	127,032
Basic net income per common share		$	0.00			$	0.01			$	0.04			$	0.02
Weighted average number of common shares outstanding			8,087,388				8,087,388				8,087,388				8,087,388
Diluted net income per common share		$	0.00			$	0.01			$	0.04			$	0.02
Weighted average number of common shares outstanding, diluted			8,319,488				8,319,488				8,319,488				8,319,488

 

																										Total
Nine Months Ended March 31, 2021		Preferred Stock								Common Stock								Paid-In				Accumulated				Stockholders'
		Shares				Amount				Shares				Amount				Capital				Deficit				Equtiy
Balance, June 30, 2020			167,100			$	126,860				8,087,388			$	4,444,766			$	15,885			$	(2,423,795	)		$	2,163,716
Net Income			-				-				-				-				-				219,096				219,096
Balance, September 30, 2020			167,100				126,860				8,087,388				4,444,766				15,885				(2,204,699	)		$	2,382,812
Net Income (Loss)			-				-				-				-				-				74,313				74,313
Balance, December 31, 2020			167,100			$	126,860				8,087,388			$	4,444,766			$	15,885			$	(2,130,386	)		$	2,457,125
Net Income (Loss)			-				-				-				-				-				21,714				21,714
Balance, March 31, 2021			167,100			$	126,860				8,087,388			$	4,444,766			$	15,885			$	(2,108,672	)		$	2,478,839

																										Total
Nine Months Ended March 31, 2020		Preferred Stock								Common Stock								Paid-In				Accumulated				Stockholders'
		Shares				Amount				Shares				Amount				Capital				Deficit				Equtiy
Balance, June 30, 2019			167,100			$	126,860				8,087,388			$	4,444,766			$	15,885			$	(2,528,514	)		$	2,058,997
Cumulative adjustments from adoption of ASC 842			-				-				-				-				-				(6,938	)			(6,938	)
Net Income			-				-				-				-				-				83,840				83,840
Balance, September 30, 2019			167,100			$	126,860				8,087,388			$	4,444,766			$	15,885			$	(2,451,612	)		$	2,135,899
Net Income (Loss)			-				-				-				-				-				(204	)			(204	)
Balance, December 31, 2019			167,100			$	126,860				8,087,388			$	4,444,766			$	15,885			$	(2,451,816	)		$	2,135,695
Stock Options Issued			-				-				-				-				-				-				-
Net Income (Loss)			-				-				-				-				-				55,930				55,930
Balance, March 31, 2020			167,100			$	126,860				8,087,388			$	4,444,766			$	15,885			$	(2,395,886	)		$	2,191,625

 

		(unaudited)				(unaudited)
		March 31,				March 31,
		2021				2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income		$	315,124			$	139,565
Adjustments to reconcile net income to net cash provided by / (used in) operating activities:
Depreciation			34,623				40,943
Allowance for Doubtful Accounts			-				2,689
Right of Use Asset Amortization			75,092				32,369
Deferred Income Taxes			66,532				56,864
Valuation Allowance			(56,639	)			-
Decrease (increase) in:
Accounts Receivable			(138,371	)			(121,646	)
Deposits			(2,443	)			-
Inventory			(28,862	)			(195,860	)
Prepaid Expenses			(79,204	)			(57,843	)
Increase (decrease) in:
Accounts Payable			(10,669	)			16,266
Accrued Expenses			(14,972	)			(23,762	)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES			160,211				(110,415	)
CASH FLOW FROM INVESTING ACTIVITIES
Interest Earned on CD's			(293	)
Purchase of CD			(125,000	)			(1,181	)
Purchase of property & equipment			(19,155	)			(22,370	)
NET CASH (USED IN) INVESTING ACTIVITIES			(144,448	)			(23,551	)
CASH FLOW FROM FINANCING ACTIVITIES
Payment on Operating Lease Liability			(172,386	)			(34,793	)
NET CASH (USED IN) FINANCING ACTIVITIES			(172,386	)			(34,793	)
NET CHANGE IN CASH			(156,623	)			(168,759	)
CASH AT BEGINNING OF PERIOD			665,834				290,287
CASH AT END OF PERIOD		$	509,211			$	121,528
SUPPLEMENTAL DISCLOSURES
Interest Paid		$	-			$	-
Taxes Paid		$	-			$	-

 

NONCASH DISCLOSURE

 

During the nine months ended March 31, 2021, we increased Right of Use Asset and corresponding lease laibilities in the amount of $973,080.

 

During the nine months ended March 31, 2020, we established a Right of Use Asset in the amount of $73,719 and corresponding Lease Liability in the amount of $80,659. The cumulative adjustment of $6,938 at July 1, 2019 was made to the accumulated deficit pursuant to ASC 842.

 

 

The accompanying notes are an integral part of these financial statements.

 

 

NOTE A - SUMMARY OF ACCOUNTING POLICIES

 

The interim consolidated financial statements included herein have been prepared by the Company without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles ("GAAP") have been condensed or omitted as allowed by such rules and regulations. The Company believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements dated June 30, 2020. The results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year.

 

Management of the Company has prepared the accompanying unaudited condensed consolidated financial statements prepared in conformity with generally accepted accounting principles, which require the use of management estimates, contain all adjustments (including normal recurring adjustments) necessary to present fairly the operations and cash flows for the period presented and to make the financial statements not misleading.

 

STOCK-BASED COMPENSATION

 

Stock based compensation is accounted for in accordance with Topic 718 - Compensation - Stock Compensation in the Accounting Standards Codification. Pursuant to Topic 718, all share-based payments to employees, including grants of employee stock options, are to be recognized in the statement of operations based upon their fair values. Topic 718 rescinds the acceptance of pro forma disclosure. In December 2020, our shareholders approved the adoption of the 2020 Stock Option and Incentive Plan, providing the Company a continued means of offering stock-based compensation.

 

On March 31, 2021, there were 65,000 outstanding options to purchase shares of our common stock granted under our prior 2009 Stock Option Plan, which expired in December 2019.

 

The fair value of a stock option is determined using the Black-Scholes option-pricing model, which values options based on the stock price at the grant date, the expected life of the option, the estimated volatility of the stock, the expected dividend payments, and the risk-free interest rate over the life of the option. There were no options granted year to date.

 

The Black-Scholes option valuation model was developed for estimating the fair value of traded options that have no vesting restrictions and are fully transferable. Because option valuation models require the use of subjective assumptions, changes in these assumptions can materially affect the fair value of the options. Our options do not have the characteristics of traded options, therefore, the option valuation models do not necessarily provide a reliable measure of the fair value of our options.

 

EARNINGS PER SHARE

 

Basic earnings per share (EPS) is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that would occur if dilutive securities such as stock options and other contracts to issue Common Stock were exercised or converted into Common Stock or resulted in the issuance of Common Stock that then shared in earnings. We use the treasury stock method to compute potential common shares from stock options and the as-if-converted method to compute potential common shares from Preferred Stock.

 

For the nine months ended March 31, 2021, and 2020, the potential dilutive effects of the preferred stock and stock options were included in the weighted-average shares outstanding.

 

 

NOTE B - INVENTORIES

 

 

At March 31, 2021 and June 30, 2020, respectively, $275,531 and $83,812 of our inventory was considered non-current as it will not be used within a one year period.

 

NOTE C - STOCKHOLDERS' EQUITY

 

During January 1995, the Company's Board of Directors authorized the issuance of up to 4,000,000 shares of Series A Cumulative Convertible Preferred Stock ("Series A Preferred Stock"). The preferred stockholders are entitled to receive, as and if declared by the board of directors, quarterly dividends at an annual rate of $.10 per share of Series A Preferred Stock per annum. Dividends will accrue without interest and will be cumulative from the date of issuance of the Series A Preferred Stock and will be payable quarterly in arrears in cash or publicly traded common stock when and if declared by the Board of Directors. As of March 31, 2021, no dividends have been declared. Dividends in arrears on the outstanding preferred shares total $399,840 as of March 31, 2021.

 

Holders of the Preferred Stock have the right to convert their shares of Preferred Stock into an equal number of shares of Common Stock of the Company. In addition, Preferred Stock holders have the right to vote the number of shares into which their shares are convertible into Common Stock. Such preferred shares will automatically convert into one share of Common Stock at the close of a public offering of Common Stock by the Company provided the Company receives gross proceeds of at least $1,000,000, and the initial offering price of the Common Stock sold in such offering is equal to or in excess of $1 per share. The Company is obligated to reserve an adequate number of shares of its common stock to satisfy the conversion of all the outstanding Series A Preferred Stock. There were no shares converted during the reporting period. So long as any share of Series A Preferred Stock is outstanding, the Company is prohibited from declaring dividends or other distributions related to its Common Stock or purchasing, redeeming or otherwise acquiring any of the Common Stock.

 

NOTE D - INCOME TAXES AND AVAILABLE CARRYFORWARD

 

As of March 31, 2021, the Company had consolidated income tax net operating loss ("NOL") carryforwards for federal income tax purposes of approximately $918,000. The NOL will expire in various years ending through the year 2035. The utilization of certain loss carryforwards are limited under Section 382 of the Internal Revenue Code.

 

 

The components of the provision for income tax (expense) attributable to continuing operations are as follows:

 

 

Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities are as follows:

 

 

 

Management believes it is more likely than not that the tax benefit of approximately $352,000 of NOL carryforwards will not be realized because management estimates that they will expire prior to their utilization. Therefore, management provided a valuation allowance of $87,981 against its deferred tax asset. Management will continue to evaluate its operating results each reporting period and assess whether it will be able to utilize all available NOL carryforwards before expiration.

 

Income taxes for the nine months ended March 31, 2021 and 2020 differ from the amounts computed by applying the effective income tax rate of 25.35%, to income before income taxes as a result of the following:

 

 

The earliest tax year still subject to examination by a major taxing jurisdiction is fiscal year end June 30, 2018.

 

The Company performed a review of its uncertain tax positions in accordance with Accounting Standards Codification ASC 740-10 "Uncertainty in Income Taxes". In this regard, an uncertain tax position represents the Company's expected treatment of a tax position taken in a filed tax return, or planned to be taken in a future tax return, that has not been reflected in measuring income tax expense for financial reporting purposes. As a result of this review, the Company concluded that at this time there are no uncertain tax positions, and there has been no cumulative effect on retained earnings.

 

During the year ended June 30, 2020, the Company obtained a $201,000 loan from the Paycheck Protection Program as a result of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) enacted by Congress in response to the COVID-19 pandemic. Under the program, any loan forgiveness would be excluded from the borrower’s taxable income. We have subsequently applied for forgiveness of the PPP Loan on May 3, 2021.

 

On December 27, 2020, the "Consolidated Appropriations Act, 2021" was signed into law which clarified that no deduction is denied, no tax attribute is reduced, and no basis increase is denied by reason of the exclusion from gross income from forgiveness of PPP loans.

 

 

NOTE E - LINE OF CREDIT

 

In fiscal 2019, the Company entered into an agreement for a new line of credit with a limit of $250,000 from a financial institution. The line of credit is collateralized by all accounts and general intangibles, matured on October 9, 2020, accrued interest at the prime rate and guaranteed by Justice Anderson, President and Chief Executive Officer. The Company did not renew this line of credit and is currently seeking a line of credit with a new financial institution.

 

NOTE F - PAYCHECK PROTECTION PROGRAM LOAN

 

The Company applied for a loan with the Small Business Administration (the "SBA") Paycheck Protection Program ("PPP") of the Coronavirus Aid, Relief and Economic Security Act of 2020 (the "CARES Act") in the amount of $201,000 (the "Loan"). The Loan was funded on April 13, 2020. The Company has used the proceeds of the Loan for covered payroll costs, rent and utilities in accordance with the relevant terms and conditions of the CARES Act.

 

The Loan, which is evidenced by a promissory note (the "Note"), has a two-year term, matures on April 13, 2022, and bear interests at a rate of 1.00% per annum. Monthly principal and interest payments, less the amount of any potential forgiveness (discussed below), will commence seven months from the date the Note was signed and funded. The Company did not provide any collateral or guarantees for the Loan, nor did they pay any facility charge to obtain the Loan. The Note provides for customary events of default, including, among others, those relating to failure to make payment, bankruptcy, breaches of representations and material adverse effects. The Company may prepay the principal of the Loan at any time without incurring any prepayment charges.

 

The Loan may be forgiven partially or fully if the Loan proceeds are used for covered payroll costs, rent and utilities, provided that such amounts are incurred during the eight-week period that commenced on April 13, 2020. Any forgiveness of the Loan will be subject to approval by the SBA and will require the Companies to apply for such treatment. The Company applied for forgiveness of the PPP Loan on May 3, 2021.

 

If the loan is not forgiven, principal payments of $65,992 and $135,008 are due during the period ended March 31, 2021 and 2022, respectively.

 

NOTE G - RECENT ACCOUNTING PRONOUNCEMENTS

 

On June 16, 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments - Credit Losses (Topic 326) (the "ASU"), which introduces new guidance for the accounting for credit losses on instruments within its scope. This ASU was updated by ASU 2019-10 issued in November 2019, which extended the effective date for entities qualifying as smaller reporting companies for fiscal years beginning after December 15, 2022, including interim periods within those years. Given the breadth of that scope, the new ASU will impact both financial services and non-financial services entities. The guidance in this ASU is effective for public entities that meet the definition of an SEC filer for fiscal years beginning after December 15, 2019, including interim periods within those years. Early adoption is permitted in annual periods beginning after December 15, 2018. Based on management's current understanding of this standard, along with the underlying substance of our operations, management believes it will not have a material impact on our consolidated financial statements.

 

Other recent accounting pronouncements issued by the FASB, the AICPA and the SEC did not or are not believed by management to have a material effect, if any, on the Company's financial statements.

 

 

NOTE H - RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

 

Operating leases

 

In June 2015, the Company entered into a lease agreement to lease certain office equipment with a lease term of 63 months. The lease contains a renewal option to extend the term for successive one year periods. The Company is not reasonably certain that it will renew the lease when it expires. Initial rent amount was $1,079 per month, with increases each year no more than 3%. In applying ASC 842, the Company uses a lease term of 63 months and an incremental borrowing rate of 5.5% which was the borrowing rate on the Company’s line of credit with a financial institution with all accounts and general intangibles. This lease expired in September 2020. As such, the right-of-use asset has been fully amortized and its related lease liability extinguished at September 30, 2020.

 

In February 2018, the Company entered in a lease agreement to lease warehouse space with a lease term of 39 months. The Company pays no rent for the first three months of the lease, pays $2,936 per month for the next 12 months, $3,024 per month for the next 8 months, $3,019 per month for the next 4 months, and $3,109 for the last 12 months. In applying ASC 842, the Company uses a lease term of 39 months and an incremental borrowing rate of 5.5% which was the borrowing rate on the Company’s line of credit with a financial institution.

 

In August 2020, the Company entered into a lease agreement to lease certain office equipment with a lease term of 63 months. The lease renews on a month-to-month basis and contains an option to purchase the equipment at fair market value or return the equipment. Historically, the Company has not exercised the option to purchase at the end of the initial lease term for similar leases and simply returned the equipment at the end of the initial lease term. Initial rent amount was $574 per month. In applying ASC 842, the Company uses a lease term of 63 months and an incremental borrowing rate of 4.25% which was the borrowing rate on the Company’s line of credit with a financial institution.

 

In January 2021, the Company entered in a lease agreement to lease warehouse space with a lease term of 64 months. The Company pays no rent for the first four months of the lease and pays $4,792.50 per month beginning the 5th month of the lease. Rent will increase each succeeding year by no less than 2% but not more than 5%. The rent amount includes common area maintenance charges which are considered nonlease components. In applying ASC 842, the Company is electing to account for nonlease components as being related to the lease component. In addition, the Company uses a lease term of 64 months and an incremental borrowing rate at prime rate of 3.25% which was the borrowing rate on the Company’s recent line of credit with a financial institution.

 

In January 2021, the Company entered in a lease agreement to lease office space with a lease term of 64 months. The Company pays no rent for the first four months of the lease and pays $9,372 per month beginning the 5th month of the lease. Rent will increase each succeeding year by no less than 2% but not more than 5%. The rent amount includes common area maintenance charges which are considered nonlease components. In applying ASC 842, the Company is electing to account for nonlease components as being related to the lease component. The Company also incurred initial direct cost of $114,083 related to existing improvements in the leased space. This initial direct cost has been included in determining the initial ROU asset and liability amounts. In addition, the Company uses a lease term of 64 months and an incremental borrowing rate at prime rate of 3.25% which was the borrowing rate on the Company’s recent line of credit with a financial institution.

 

 

The following is information related to the Company’s right-of-use assets and liabilities for its operating leases:

 

 

Variable lease expense was $58,406 and $11,666 for the three months ended March 31, 2021 and 2020, respectively.

 

Weighted average remaining lease term was 4.97 years and weighted average discount rate was 3.30% at March 31, 2021.

 

NOTE I - CONTINGENCY

 

At the time of release of these financial statements, the United States is experiencing a National Emergency related to persistent health issues. Management is unable to quantify the potential duration and economic impact of mandated closures by our National, State or Local governments.

 

NOTE J - SUBSEQUENT EVENTS

 

We have evaluated subsequent events through May 19, 2021, which is the date the financial statements were available to be issued.

 

In April 2021, the Company entered into a purchase sale and purchase agreement to sell the office previously occupied by the Company. The sale was finalized on May 6, 2021. The Company was paid $740,000 by the purchaser.