XML 35 R24.htm IDEA: XBRL DOCUMENT v3.20.2
Note 18 - Payment Protection Program Term Note
6 Months Ended
Jun. 30, 2020
Notes to Financial Statements  
Long-term Debt [Text Block]
18.
PAYMENT PROTECTION PROGRAM TERM NOTE
 
On
April 20, 2020,
the Company entered into a Paycheck Protection Program Term Note (the “SVB Note”) with Silicon Valley Bank (“SVB”) pursuant to the Paycheck Protection Program (the “Program”) of the recently enacted Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) administered by the U.S. Small Business Administration.
 
The Company received total proceeds of approximately
$341,000
which will be used in accordance with the requirements of the CARES Act.  The Company will apply to SVB for forgiveness of amounts due on the SVB Note to the extent they are used for eligible payroll costs, rent obligations, and covered utility payments incurred during the “covered period” following disbursement under the SVB Note.  Until the
six
-month anniversary of the date of the SVB Note (the “Deferral Expiration Date”), neither principal nor interest is due and payable. On the Deferral Expiration Date, the outstanding principal of the SVB Note that is
not
forgiven will convert to an amortizing term loan at an interest rate of
1%
per annum requiring equal monthly payments of principal and interest through
November 20, 2022.
 
The Company has performed initial calculations for the SVB Note forgiveness according to the terms and conditions of the SBA's  Loan Forgiveness Application (Revised
June 16, 2020)
and, based on such calculations, expects that the SVB Note will be forgiven in full. In addition, the Company has determined that it is probable the Company will meet all the conditions of the SVB Note forgiveness. As such, the Company has decided that the SVB Note should be accounted for as a government grant which analogizes with International Accounting Standards (“IAS”)
20,
Accounting for Government Grants and Disclosure of Government Assistance. Under the provisions of IAS
20,
“a forgivable loan from government is treated as a government grant when there is reasonable assurance that the entity will meet the terms for forgiveness of the loan.” IAS
20
does
not
define “reasonable assurance”, however, based on certain interpretations, it is analogous to “probable” in U.S. GAAP under FASB ASC
450
-
20
-
20,
which is the definition the Company has applied to its expectations of the SVB Note forgiveness. In addition, in accordance with the provisions of IAS
20,
government grants shall be recognized in profit or loss on a systematic basis over the periods in which the Company recognizes costs for which the grant is intended to compensate (i.e. qualified expenses). Therefore, the Company recognized the funding during the periods when qualified expenses were incurred.