11. Long-Term Debt
|12 Months Ended|
Mar. 31, 2021
|Debt Disclosure [Abstract]|
NOTE 11 – Long-Term Debt
Financing of Insurance Premiums
On February 1, 2020, the Company entered into a note agreement for $534,000 with an interest rate of 5.48% per annum with final payment on December 1, 2019. This instrument was issued in connection with financing insurance premiums. The note is payable in monthly installments of $53,000. During the year ended March 31, 2020, the Company made principal and interest payments in the amounts of $53,000 and $2,000, respectively. The note was paid during the fiscal year 2021.
On February 1, 2021, the Company entered into a note agreement for $584,000 with an interest rate of 4.98% per annum with final payment on October 1, 2021. This instrument was issued in connection with financing insurance premiums. The note is payable in three quarterly installment payments of principal and interest of $199,000, with the first installment beginning April 1, 2021.
Paycheck Protection Program Loan
On May 1, 2020, the Company received loan proceeds in the amount of $1,310,000 under the Paycheck Protection Program (“PPP”), from Coastal States Bank in Atlanta, Georgia. The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act, “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 loans and accrued interest are forgivable after eight or 24 weeks as long as the Company uses the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains payroll levels. The amount of loan forgiveness will be reduced if the Company terminated employees or reduced salaries during the applicable period.
The unsecured loan, which is in the form of a note dated April 29, 2020, matures on April 29, 2022 and bears interest at a rate of 1% per annum, payable monthly commencing on May 1, 2021. The note may be prepaid at any time prior to maturity with no prepayment penalties. The Company has used the loan amount for eligible purposes, such as payroll expenses. The Company currently believes that its use of the loan proceeds will meet the conditions for $730,000 in forgiveness of the loan.
The entire disclosure for long-term debt.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef