6. Note 6

9 Months Ended

Sep. 30, 2016

Note 6

6. Note 6

In the second quarter ended June 30, 2016, the Company recorded a valuation allowance of $750,659. This valuation allowance reflected the charge off of certain receivables from the operations discontinued in 2008 and was the remaining receivable from the various plaintiffs in the Heyser lawsuit which the Company won by summary judgment dismissing the Company from any liability and after numerous appeals including an appeal to the Indiana Supreme Court by the Heyser plaintiffs, in which the summary judgment was upheld. The Company also won summary judgment on its counterclaims against the various plaintiffs and was awarded a judgment against the plaintiffs in excess of $2 million, which included damages and attorneys' fees. The Company has been pursuing collection since that time. During the second quarter the Company made the decision that it was in its best interest to cease incurring additional legal fees and to settle its pending claims for $350,000, which is evidenced by a promissory note secured by a mortgage on two pieces of real estate.