Note 5 - Paycheck Protection Program (the "PPP") Under the Cares Act
|9 Months Ended|
Dec. 26, 2020
|Notes to Financial Statements|
|Paycheck Protection Program CARES Act [Text Block]||
Paycheck Protection Program (the “PPP”) under the CARES Act
April 23, 2020,the Company borrowed
$786,200from Western Alliance Bank (the “PPP Loan”) pursuant to the Paycheck Protection Program (the “PPP”) under the Coronavirus Aid, Relief, and Economic Security Act. The Company accounted for the PPP Loan as a loan under ASC
470Debt. The PPP Loan had a stated maturity date of
April 23, 2022with interest accruing on the principal balance at the rate of
1.0%per annum, with principal and interest payable monthly commencing on
November 1, 2020.
As a result of the Company's request for loan forgiveness, on
November 19, 2020,the outstanding principal and accrued interest for the PPP Loan was forgiven in full by the U.S. Small Business Administration (“SBA”).
The amount of the PPP Loan forgiven by the SBA is accounted as a gain under ASC
470,which refers to the extinguishment guidance in ASC
: Extinguishment of
.Under this guidance, debt is extinguished when either of the following conditions is met: the debtor pays the creditor or the debtor is legally released from being the primary obligor by the creditor. The Company was legally released from being the primary obligor when the Company's application for forgiveness was approved by the SBA. The amount forgiven was recognized in the statement of operations as gain on extinguishment.
The entire disclosure for loan designed to provide funds for small businesses to keep their employees on the payroll.
No definition available.