On the Company borrowed from 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 Debt. The PPP Loan had a stated maturity date of with interest accruing on the principal balance at the rate of per annum, with principal and interest payable monthly commencing on

 

As a result of the Company's request for loan forgiveness, on 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 which refers to the extinguishment guidance in ASC 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.