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Note 5 - Government Relief Funding

9 Months Ended

Sep. 30, 2021

(5)

Government Relief Funding

Paycheck Protection Program

On April 11, 2020, the Company entered into a Note Agreement (“Note”) with PNC amounting to $6.9 million pursuant to the Coronavirus Aid, Relief, and Economic Security Act’s (“CARES Act”) Paycheck Protection Program (“PPP”). Amounts outstanding under this Note bore interest at 1% per annum as of the date of disbursement. The Note was scheduled to mature in two years after the receipt of the loan proceeds. On June 16, 2021, the Company received the notice of forgiveness from the Small Business Administration for the full amount of the Note including all accrued interest.

The Company recognized the Note of $6.9 million as a deferred income liability during 2020 and fully amortized to other income in the condensed consolidated income statements for the nine months ended September 30, 2020, as the related expenses it was intended to offset were incurred from April 2020 to June 2020.

Employee Retention Credit

The Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted December 27, 2020, made a number of changes to the employee retention tax credits previously made available under the CARES Act, including modifying and extending the Employee Retention Credit ("ERC") through December 31, 2021. As a result of the new legislation, eligible employers can now claim a refundable tax credit against the employer share of Social Security tax equal to 70% of the qualified wages they pay to employees after December 31, 2020 through December 31, 2021. This resulted in an ERC of $4.8 million for the nine months ended September 30, 2021, $3.2 million of which has been received as of the third quarter 2021 and the remaining $1.6 million is expected to be received during the fourth quarter 2021. The Company will continue to monitor the availability of the ERC for the fourth quarter of 2021 which, if available, would be received during the first quarter of 2022.