Item 2. Properties
ITEM
2.
Properties.
Our
principal executive office is located at 2117 SW Highway 484, Ocala FL 34473 and our finance and human resource office is located
at 604 Main Street, Suite 2, Riverton, NJ 08077. We currently lease our principal executive office for $2,100 per month and our
accounting and human resource office for about $1,500 per month.
On
March 16, 2018, we sold our property located at 783 Jersey Ave., New Brunswick, NJ. This property houses our development and production
facilities. The purchase price was $4,080,000 and purchaser received 3,225,806 warrants to purchase common stock. We believe that
the sale and lease-back of this building will not have a material impact on our business operations. Simultaneously with the closing
of the sale, the purchaser leased the facility back to us. The lease runs for 10 years, with two five-year extensions. The initial
annual base rent is $408,000 and will continue for the first and second year. In the third and fourth it will escalate at the
rate of 2.5% per year. For all subsequent years it will escalate at the rate of 3% per year. We also will be responsible for additional
rent consisting of taxes and certain insurance expenses of the purchaser. The lease contains a repurchase option pursuant to which
we can repurchase the facility within the initial 10 year lease period. The purchase price would be based on a multiple of the
sale price of $4,080,000. The multiple would be 1.05 plus .0025N where N represents the number of months between lease commencement
and closing of repurchase.
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