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Government Loans and Note Payable and Government Subsidy
12 Months Ended
Aug. 31, 2021
Government Loans And Note Payable And Government Subsidy  
Government Loans and Note Payable and Government Subsidy

Note 10 – Government Loans and Note Payable and Government Subsidy

 

Governmental loans and note payable at August 31, 2021 and 2020 consisted of the following:

 Schedule of Governmental Loans and Note Payable

   2021   2020 
Note payable issued under the Paycheck Protection Program of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. The loan has terms of 24 months and accrues interest at 1% per annum. The full note balance was forgiven in fiscal year 2021.  $-   $21,900 
Note payable issued under the Paycheck Protection Program of the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. The loan has terms of 24 months and accrues interest at 1% per annum. The full note balance was forgiven in fiscal year 2021.  $-   $21,900 
           
Government loans issued under the Government of Canada’s Canada Emergency Business Account (“CEBA”) program (A).   63,336    61,392 
           
Note payable to the Small Business Administration (“SBA”). The note bears interest at 3.75% per annum, requires monthly payments of $190 after 12 months from funding and is due 30 years from the date of issuance and is secured by certain equipment of PRO-DIP.   40,320    - 
           
Note payable dated December 3, 2019; accrues interest at 3% per annum; secured by land, building and personal property; due June 30, 2022.   5,069,858    - 
           
Note payable dated December 3, 2018; accrues interest at 4.53% per annum; unsecured; annual payments of approximately $4,000; due December 2, 2028.   30,739    - 
           
Note payable dated June 24, 2021; accrues interest at 9% per annum; secured by real property of Acenzia; lender at its sole discretion may require monthly principal payments of $950,000 after December 24, 2021; any unpaid principal and interest due on June 24, 2022.   4,415,000    - 
Total government loans and notes payable   9,619,253    83,292 
Less current portion   (4,485,649)   (83,292)
Long-term portion  $5,133,604   $- 
           

 

(A) The Government of Canada launched the Canada Emergency Business Account loan to ensure that small businesses have access to the capital that they need during the current challenges faced due to the COVID-19 virus. The Company obtained CAD$80,000 loan (US$63,336 at August 31, 2021), which is unsecured, non-interest bearing and due on or before December 31, 2022. If the loan amount is paid on or before December 31, 2022, 25% of the loan will be forgiven (“Early Payment Credit”). In the event that the Company does not repay 75% of such term debt on or before December 31, 2022, the Early Payment Credit will not apply and the lender will automatically extend the term of the loan by three years until December 31, 2025 and will accrue on the outstanding amount of the CEBA Loan at a fixed rate of 5% per year, calculated daily and compounded monthly.

 

Government Subsidy

 

In 2020, the Government of Canada announced the Canada Emergency Wage Subsidy (“CEWS”) for Canadian employers whose businesses were affected by the COVID-19 pandemic. The CEWS provides a subsidy of up to 75% of eligible employees’ employment insurable remuneration, subject to certain criteria. Accordingly, the Company applied for the CEWS to the extent it met the requirements to receive the subsidy and during the year ended August 31, 2021, recorded a total of approximately $731,000 in government subsidies as a reduction to the associated wage costs recorded in cost of revenues and general and administrative expenses in the consolidated statement of operations and comprehensive loss.

 

 

Future scheduled maturities of outstanding government loans and notes payable are as follows:

 Schedule of Future Maturities Outstanding of Governmental Loans and Note Payable

2022  $4,485,649 
Years Ending August 31,    
2022  $4,485,649 
2023   5,074,763 
2024   5,346 
2025   5,793 
2026   6,247 
Thereafter   41,455 
Total  $9,619,253