2.	COVID- 19 Pandemic

The outbreak of coronavirus (“COVID-

19”

) which was declared by the World Health Organization to be a pandemic, has, and is expected to continue to impact worldwide economic activity. While our domestic business has been deemed an essential business and we continue to provide services to our customers, COVID-

has had a significant impact on our entire operations. Additionally, COVID-

19's

effect on the overall economy has had an adverse impact on hiring, which is having a negative impact on our testing volume. Due to COVID-

19,

the Brazilian government closed all driver license bureaus and extended the renewal period for all drivers licenses, which has, and will continue to have a material adverse impact on expected testing volume in Brazil for the next year.

The Coronavirus Aid, Relief and Economic Security Act (“CARES”) Act, enacted on

March 27, 2020,

was an emergency economic stimulus package that included spending provisions and tax cuts to strengthen the United States economy and to fund a nationwide effort to curtail the effect of COVID-

19.

The principal impact of the CARES Act was the adoption of the Paycheck Protection Program described below. The CARES Act also provided sweeping tax changes in response to the COVID-

pandemic, including amendments to certain provisions of the previously enacted Tax Cuts and Jobs Act (“TCJA”). The Company recognized a benefit of

$1.3

and

$1.5

million for the

three

and

six

months ended

June 20, 2020,

respectively, as a component of income tax expense from continuing operations related to the tax provisions in the CARES Act. Based on the Company's initial assessments, the Company anticipates that the CARES Act will allow the Company to defer the employer portion of its FICA taxes to

2021

and

2022

and allow the Company to fully carryback the anticipated

2020

net operating loss, if any, for a refund of taxes previously paid. The Company continues to review the tax-related provisions of the CARES Act and its potential impact on the Company.

Paycheck Protection Program Loan

May 1, 2020,

the Company entered into a term loan with Bank of America N.A. under the Paycheck Protection Program (“PPP”) administered by the United States Small Business Administration (“SBA”) under the CARES Act. The principal amount of the loan was

$2,181,157,

which is evidenced by a promissory note with a maturity date of

May 4, 2022.

The note bears interest on the unpaid balance at the rate of

one

percent (

) per annum. The note contains a deferral period of

six

months, for which

interest or principal payments are due. The Company is in the process of applying for loan forgiveness with the SBA and expects a final approval by the end of the year.

Accounts Receivable

We believe our allowance for credit losses related to our accounts receivable remained adequate as of

June 30, 2020,

due to the essential nature of our customers business, as well as the diversity of our large customer base. While we anticipate there could be an increase in the aging of our accounts receivable, we do

not

anticipate a significant increase in default risk.

Risk and Uncertainties

The duration and severity of COVID-

-related potential disruptions involve risks and uncertainties and it is

not

possible at this time to estimate the full impact on our business and could adversely affect our estimates, results of operations and financial condition.

To help mitigate potential effects of the pandemic on the Company, there are several safety measures that have been implemented to ensure the safety of our employees as well as maintaining our staff and business continuity. One of these measures was to split personnel into

two

-week shifts, with some personnel paid to stay home to minimize and mitigate any disruption. The Company is also providing personal protection equipment and implemented policies at our laboratory including temperature checks and physical distancing.