NOTE 17 – BAD DEBTS

The Company maintains two types of reserves to address uncertain collections of amounts due—an allowance against trade accounts receivable (the “AR Allowance”), and a reserve against cash advanced by the Company to its cannabis-licensed clients for working capital purposes (the WC Reserve”).

During the six months ended June 30, 2021, the Company increased the AR Allowance by $1,400,000, and the WC Reserve by approximately $419,000. The aggregate of these two amounts of approximately $1,819,000 was charged to Bad Debts on the statement of operations during this period. During the six months ended June 30, 2020, the Company increased the AR Allowance by $450,000 with a corresponding charge to Bad Debts.