Quarterly report pursuant to Section 13 or 15(d)

SUBSEQUENT EVENTS

v3.20.1
SUBSEQUENT EVENTS
 3 Months Ended
Mar. 31, 2020
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

8. SUBSEQUENT EVENTS

 

As discussed in Note 4, on April 17, 2020, we entered into the PPP Loan with Whitney Bank for proceeds of $10.0 million pursuant to the PPP, which is sponsored by the SBA and is part of the CARES Act.  The PPP provides for loans to qualifying businesses, the proceeds of which may only be used for payroll costs, rent, utilities, mortgage interest, and interest on other pre-existing indebtedness (the “permissible expenses”).  The PPP Loan matures on April 17, 2022, bears interest at a fixed rate of 1.0 percent per annum, and is payable in monthly installments commencing on November 17, 2020.  The PPP Loan may be prepaid at any time prior to maturity with no prepayment penalties.  The PPP Loan, and accrued interest, may be forgiven partially or in full, if certain conditions are met.  The most significant of the conditions are:

 

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Only amounts expended for permissible expenses during the eight-week period following April 17, 2020 (the “covered period”) are eligible for loan forgiveness;

 

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Of the total amount of permissible expenses for which forgiveness can be granted, at least 75% must be for payroll costs, or a proportionate reduction of the maximum loan forgiveness amount will occur; and

 

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If there are reductions in employee headcount (or employee compensation is reduced by more than 25%) during the covered period, a further reduction of the maximum loan forgiveness amount will occur.

 

In order to obtain full forgiveness of the PPP Loan, we must request forgiveness and provide satisfactory documentation in accordance with applicable SBA guidelines.  We will be obligated to repay any portion of the principal amount of the PPP Loan that is not forgiven, together with accrued interest. We intend to use the PPP Loan proceeds for only permissible purposes; however, we can provide no assurances that we will be eligible for forgiveness of the PPP Loan, in whole or in part.