NOTE

Debt

April 17, 2020,

the Company was granted an initial PPP loan from bankHometown in the principal amount of

$474,400

under the Coronavirus Aid, Relief and Economic Security Act (the “ CARES Act”). The loan, which was evidenced by a Note dated

April 17, 2020,

was payable over

months at an annual interest rate of

commencing on

October 17, 2020

to the extent

not

forgiven. The Company used the entire loan amount for qualifying expenses and the loan was forgiven in its entirety on

January 11, 2021.

The AICPA and the SEC Office of the Chief Accountant have indicated that a borrower

may

elect to account for a PPP loan as a government grant in substance by applying the guidance in IAS

20,

Accounting for Government Grants and Disclosure of Government Assistance

by analogy if it is probable that it will meet both (a) the eligibility criteria for a PPP loan, and (b) the loan forgiveness criteria for all or substantially all of the PPP loan. The Company has elected to adopt this method of accounting for this PPP loan under IAS

20,

and has recognized the loan forgiveness as grant income for the full amount of the loan.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Cont'd)

August 10, 2020,

the Company also was granted a loan (the “SBA Loan”) from the SBA in the principal amount of

$150,000

pursuant to the Economic Injury Disaster Loan program. The SBA Loan, which is evidenced by a Promissory Note dated

August 10, 2020,

is payable in monthly installments of

$731,

including principal and interest, over

years at an interest rate of

3.75%

. The SBA Loan

may

be prepaid by the Company at any time prior to maturity with

prepayment penalties. The proceeds from this loan must be used solely as working capital to alleviate economic injury caused by the Covid-

pandemic . Although originally repayable commencing

one

year after grant, on

March 12, 2021

the SBA announced that payments on the SBA Loan would be deferred an additional year. Payments on the loan will now commence on

August 10, 2022.

As part of the SBA Loan, the Company granted the SBA a continuing security interest in and to any and all “Collateral” to secure payment and performance of all debts, liabilities and obligations of the Company to the SBA under the SBA Loan. The Collateral includes all tangible and intangible personal property that the Company owns or acquires or creates immediately upon the acquisition or creation thereof, including, but

not

limited to: (a) inventory, (b) equipment, (c) instruments, including promissory notes, (d) chattel paper, including tangible chattel paper and electronic chattel paper, (e) documents, (f) letter of credit rights, (g) accounts, including health-care insurance receivables and credit card receivables, (h) deposit accounts, (i) commercial tort claims, (j) general intangibles, including payment intangibles and software, and (k) as-extracted collateral, in each case as such terms

may

from time to time be defined in the Uniform Commercial Code.

The aggregate amounts of principal maturities of long-term debt for the following fiscal years are:

2022	$	494
2023		3,032
2024		3,148
2025		3,268
2026		3,392
Thereafter		136,666
	$	150,000

February 1, 2021,

the Company received a

second

PPP loan from bankHometown as authorized under the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the “Economic Aid Act”). The loan, evidenced by a promissory note, is in the principal amount of

$474,405

and all or a portion of the loan is expected to be forgiven under the provisions of the Economic Aid Act. Any amount of the loan

not

forgiven will be paid back over

five

years at an interest rate of

per year.

Program rules provide that loan payments will be deferred for borrowers who apply for loan forgiveness until the SBA remits the borrower's loan forgiveness amount to the lender. If a borrower does

not

apply for loan forgiveness, payments are deferred for

months following the end of the covered period for the borrower's loan forgiveness (between

and

weeks).