Note 7 - Debt

3 Months Ended

Dec. 26, 2020

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE 7. Debt

On

April 17, 2020,

the Company

was granted a loan (the “Loan”) from bankHometown in the principal amount of

$474,400

pursuant to the Paycheck Protection Program (the “PPP”) under the

Coronavirus Aid, Relief and Economic Security Act (the “

CARES Act”).

The PPP, established as part of the CARES Act, provides for loans to qualifying businesses for amounts up to

2.5

times of the average monthly payroll expenses of the qualifying business.

The Loan, which was in the form of a Note dated

April 17, 2020,

was

payable over

eighteen

months at an annual interest rate of

1%

commencing on

October 17, 2020

to the extent

not

forgiven. The Company used the entire Loan amount for qualifying expenses and the Loan was forgiven in its entirety on

January 11, 2021.

The AICPA and the SEC Office of the Chief Accountant have indicated a borrower

may

elected to account for a PPP loan as a government grant in substance by applying the guidance in IAS

20

by analogy if it is probable that it will meet both (a) the eligibility criteria for a PPP loan, and (b) the loan forgiveness criteria for all or substantially all of the PPP loan. The Company has elected to adopt this method of accounting for this PPP loan under IAS

20,

and has recognized the loan forgiveness as grant income for the full amount of the Loan.

On

August 10, 2020,

the Company

also was granted a loan (the “SBA Loan”) from the SBA in the principal amount of

$150,000,

pursuant to the Economic Injury Disaster Loan program. The SBA Loan, which is in the form of a Promissory Note dated

August 10, 2020,

is

payable in monthly installments of

$731,

including principal and interest, over

30

years at an interest rate of

3.75%

commencing on

August 10, 2021.

The SBA Loan

may

be prepaid by the Company at any time prior to maturity with

no

prepayment penalties. The proceeds from this loan must be used

solely as working capital to alleviate economic injury caused by the Covid-

19

pandemic

.

As part of the SBA Loan, the Company

granted the SBA a continuing security interest in and to any and all “Collateral” to secure payment and performance of all debts, liabilities and obligations of the Company to the SBA under the SBA Loan. The Collateral includes all tangible and intangible personal property that the Company owns or acquires or creates immediately upon the acquisition or creation thereof, including, but

not

limited to: (a) inventory, (b) equipment, (c) instruments, including promissory notes, (d) chattel paper, including tangible chattel paper and electronic chattel paper, (e) documents, (f) letter of credit rights, (g) accounts, including health-care

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)

insurance receivables and credit card receivables, (h) deposit accounts, (i) commercial tort claims, (j) general intangibles, including payment intangibles and software, and (k) as-extracted collateral, in each case as such terms

may

from time to time be defined in the Uniform Commercial Code.

The aggregate amounts of principal maturities of long-term debt as of

December 26, 2020

were as follows:

2021	$	992
2022		3,051
2023		3,167
2024		3,288
2025		3,414
Thereafter		136,088
	$	150,000