NOTE

LONG-TERM DEBT

As at

January 31, 2021,

our long-term debt consisted of the following:

	January 31, 2021			July 31, 2020
Principal amount	$	18,000,000		$	20,000,000
Unamortized discount and accrued fees		(474,828	)		(130,523	)
Long-term debt, net of unamortized discount		17,525,172			19,869,477
Current portion		17,525,172			-
Long-term debt, net of current portion	$	-		$	19,869,477

For the

three

and

six

months ended

January 31, 2021,

amortization of debt discount totaled

$381,828

and

$825,695,

(

three

and

six

months ended

January 31, 2020:

$412,580

and

$844,801

), respectively, which was recorded as interest expense and included in our condensed consolidated statements of operations and comprehensive loss. During the

three

and

six

months ended

January 31, 2021,

we paid

$368,000

and

$776,889

(

three

and

six

months ended

January 31, 2020:

$408,889

and

$817,778

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

During the

three

months ended

January 31, 2021,

we made a voluntary principal payment of

$2,000,000

one

of our Lenders, which decreased the principal balance outstanding to

$18,000,000

under our credit facility (the “Credit Facility”).

During the

three

months ended

January 31, 2021,

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.

The Company's 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

16.48%.

January 31, 2021,

our working capital ratio, excluding the current portion of the long-term debt, was

7.4:1,

which was in compliance with the debt covenant requirement under our Credit Facility being a working capital ratio, excluding any current portion of the long-term debt, of

not

less than

1:1.

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

January 31, 2021

are as follows:

Fiscal 2021	$	-
Fiscal 2022		18,000,000
Total	$	18,000,000

Subsequent to

January 31, 2021,

we made further voluntary principal payment of

$8,000,000

to our Lenders, which decreased the principal balance outstanding to

$10,000,000.