11. SMALL BUSINESS ADMINISTRATION'S PAYCHECK PROTECTION PROGRAM LOAN

9 Months Ended

Sep. 30, 2020

Small Business Administrations Paycheck Protection Program Loan

SMALL BUSINESS ADMINISTRATION’S PAYCHECK PROTECTION PROGRAM LOAN

NOTE 11. SMALL BUSINESS ADMINISTRATION’S PAYCHECK PROTECTION PROGRAM LOAN

As a result of the abrupt decline in oil prices and global economic activity caused by COVID-19, the Company applied for a loan under the Small Business Administration’s (“SBA”) Paycheck Protection Program, and on April 29, 2020, the Company received a loan (“PPP loan”) in the amount of $1,111, which was used to finance payroll during the second and third quarters of 2020. The PPP loan is evidenced by a promissory note, dated to be effective as of April 27, 2020, between the Company and the lender. The promissory note matures on April 27, 2022 and bears interest at a fixed rate of 1.00 percent per annum, payable in 18 monthly payments commencing on November 27, 2020.

Subsequent to the effective date of the Company’s PPP loan, the U.S. Treasury and SBA refined its payment deferral guidance whereas payments for PPP loans are to be deferred for at least ten months after the end of the loan forgiveness covered period. Additionally, if the loan forgiveness application is submitted within ten months after the end of the loan forgiveness covered period, payments will be further deferred until such loan forgiveness application is processed by the SBA. The Company applied for forgiveness of its PPP loan in its entirety in October 2020, which falls within ten months after the end of the Company’s loan forgiveness covered period. The Company has not received guidance from its lender regarding the timing or ultimate outcome of its forgiveness application. Therefore, due to the uncertain timing of payments, the Company did not carry a portion of its PPP loan balance as a current liability at September 30, 2020.