3. FIXED ASSETS
|12 Months Ended|
Mar. 31, 2020
|Property, Plant and Equipment [Abstract]|
During January 2020, the Company reclassified approximately $886,000 of Construction in Process into Machinery and equipment, as the assets had begun to be put into use. The Company also wrote off certain fixed assets which were no longer in use, resulting in a net loss on the disposal of $71,128. The consolidated statements of operations reflect depreciation expense of approximately $100,000 and $30,000 for the years ended March 31, 2020 and 2019, respectively.
On March 18, 2020, the Company’s research and development plant in La Coste, Texas was destroyed by a fire. The Company believes that it was caused by a natural gas leak, but the fire was so extensive that the cause was undetermined. The majority of the damage was to their pilot production plant, which destroyed a large portion of the fixed assets of the Company. The property destroyed had a net book value of $1,909,495, which was written off and recognized as Loss due to fire. The Company filed a claim with their insurance company, and as of June 2, 2020, received all the proceeds, which totaled $917,210. In accordance with ASC 610-30, Other Income: Gains and Losses on Involuntary Conversions, a loss of property due to destruction, such as a fire, which is replaced by another asset such as cash or insurance proceeds is defined as an involuntary conversion, and to the extent the cost of the assets destroyed differs from the amount of monetary assets received, the transaction results in the realization of a gain or loss that shall be recognized.as a separate component of income from continuing operations. Therefore, there was a Loss due to fire of $992,285 recognized on the accompanying Consolidated Statement of Operations. As the proceeds were received subsequent to the year end at March 31, 2020, but prior to the issuance of the financial statements, the $917,210 has been recognized as Insurance settlement on the accompanying Consolidated Balance Sheet.
The entire disclosure for long-lived, physical asset used in normal conduct of business and not intended for resale. Includes, but is not limited to, work of art, historical treasure, and similar asset classified as collections.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef