NOTE

LONG-TERM DEBT

As at

October 31, 2020,

our long-term debt consisted of the following:

	October 31, 2020		July 31, 2020
Principal amount	$	20,000,000	$	20,000,000
Unamortized discount and accrued fees		313,344		(130,523	)
Long-term debt, net of unamortized discount		20,313,344		19,869,477
Current portion		2,000,000		-
Long-term debt, net of current portion	$	18,313,344	$	19,869,477

During the

three

months ended

October 31, 2020

and

2019,

amortization of debt discount totaled

$443,867

and

$432,221,

respectively, which was recorded as interest expense and included in our Condensed Consolidated Statements of Operations and Comprehensive Loss. During the

three

months ended

October 31, 2020

and

2019,

we paid

$408,889

and

$408,889,

respectively, in cash to our lenders (the “Lenders”) for interest on the long-term debt.

The Company's credit facility (the “Credit Facility”) with our Lenders has a maturity date on

January 31, 2022,

with an interest rate of

per annum and an underlying effective interest rate of

16.67%.

October 31, 2020,

we had a working capital ratio of

4.7:1,

which was in compliance with the debt covenant requirement under our Credit Facility being a working capital ratio of

not

less than

1:1.

The aggregate yearly maturities of long-term debt based on principal amounts outstanding at

October 31, 2020

are as follows:

Fiscal 2021	$	-
Fiscal 2022		20,000,000
Total	$	20,000,000

Subsequent to

October 31, 2020,

we made a voluntary principal repayment of

$2,000,000

one

of our Lenders, which decreased the principal outstanding to

$18,000,000

under the Credit Facility.

Subsequent to

October 31, 2020,

and pursuant to the terms of our Third Amended and Restated Credit Agreement with our Lenders, we issued an aggregate of

1,249,039

shares with a fair value of

$1,170,000,

representing

6.5%

of the

$18,000,000

principal balance outstanding, as payment of anniversary fees to our Lenders.