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Note 10 - Payroll Protection Program (PPP) Loan
3 Months Ended
Jun. 30, 2021
Notes to Financial Statements  
Long-term Debt [Text Block]

NOTE 10 – PAYROLL PROTECTION PROGRAM (PPP) Loan   

 

In May 2020, the Company obtained funding through the Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) of $381,000.  In February 2021,  a second PPP loan was obtained in the amount of $332,542, for a total of $713,542.  The loans will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities, with at least 60% being used for payroll.  The Company did use the funds for these expenses during the year ended March 31, 2021. The Company applied for loan forgiveness of the first PPP funds on August 3, 2021. The Company anticipates that the entire loan balance will be forgiven and will be recognized as income at that time.  Principal and interest payments on any unforgiven portion of the PPP loan will be deferred to the date the SBA remits the borrower’s loan forgiveness amount to the lender or, ten months after the end of the borrower’s loan forgiveness covered period.  No collateral or personal guarantees were required for the loan.  This PPP loan would bear an interest rate of 1% and a maturity of two years, which can be extended to up to five years if the Company and the lender agree. We have elected to treat the loan under FASB ASC 470, Debt. When the Company is successful in obtaining forgiveness, the loan will be treated as a gain upon extinguishment of debt under ASC 405, Liabilities.