Note 8 - Notes Payable
|9 Months Ended|
Sep. 30, 2021
|Notes to Financial Statements|
|Debt Disclosure [Text Block]||
First Insurance Funding
In November 2019, we prepaid $349,000 of insurance premiums through the issuance of a note payable to First Insurance Funding (“FIF”) with an interest rate of 5.0%. The note was payable inmonthly installments of $44,000, with the final payment made in July 2020.
Interest expense related to the FIF note payable totaled $0 and $5,000 during the three-month and nine-month periods ended September 30, 2020, respectively.
In November 2020, we prepaid $442,000 of insurance premiums through the issuance of a note payable to IPFS Corporation (“IPFS”) with an interest rate of 3.5%. The note is payable inmonthly installments of $64,000, with the final payment due in June 2021.
Interest expense related to the IPFS note payable totaled $0 and $4,000 during the three-month and nine-month periods ended September 30, 2021, respectively. The balance of the IPFS note payable was $0 and $379,000 as of September 30, 2021 and December 31, 2020, respectively.
Paycheck Protection Program
The CARES Act was enacted on March 27, 2020. Among the provisions contained in the CARES Act was the creation of the PPP that provides for SBA loans for qualified small businesses. PPP loan proceeds are available to be used to pay for payroll costs, including salaries, commissions, and similar compensation, group health care benefits, and paid leaves; rent; utilities; and interest on certain other outstanding debt. On May 18, 2020, the Lender funded the PPP Loan to the Company in the amount of $366,000. In accordance with the loan forgiveness requirements of the CARES Act, the Company used the proceeds from the PPP Loan primarily for payroll costs, rent and utilities. On February 23, 2021, the Lender notified the Company that the entire PPP Loan amount of $366,000 had been forgiven. See Note 2.
During the three-month periods ended September 30, 2021 and 2020, we recorded interest expense of $0 related to our notes payable in both periods. During the nine-month periods ended September 30, 2021 and 2020, we recorded interest expense of $4,000 and $5,000, respectively, related to our notes payable.
The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef