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 | |
|