NOTE 17 – BAD DEBTS

For the years ended December 31, 2019 and 2018, the Company recorded bad debt expense of approximately $44.5 million and $150,000, respectively.

The amount recorded in 2019 included (i) the write off of the accounts receivable balance due from GenCanna of approximately $29.0 million following GenCanna’s Chapter 11 filing, and (ii) the recording of bad debt reserves against the accounts receivable and working capital balances due from Kind of approximately $9.7 million and approximately $1.5 million, respectively, in light of the current litigation between the Company and Kind.

Additionally, 2019 bad debt expense included the following amounts that were based on the Company’s expectation of the negative impact of the coronavirus pandemic on the operations of certain of the Company’s debtors, and therefore the collectibility thereof: (i) the recording of bad debt reserves against the accounts receivable and working capital balances due from Harvest of approximately $239,000 and $1.9 million, respectively, and (ii) the write off of notes receivable and accrued interest balances due from Atalo of approximately $1.0 million and two other entities of approximately $650,000 in the aggregate.