NOTE 19 - SUBSEQUENT EVENTS

On May 13, 2020, a commercial bank granted to the Company a loan (the “Loan”) in the amount of $1,040,400, which is administered under the authority and regulations of the U.S. Small Business Administration pursuant to the Paycheck Protection Program (the “PPP”) of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The Loan, which is evidenced by a note dated May 13, 2020, bears interest at an annual rate of 1.0% and matures on May 13, 2022. The Note may be prepaid without penalty, at the option of the Company, at any time prior to maturity. Proceeds from loans granted under the CARES Act are intended to be used for payroll, costs to continue employee group health care benefits, rent, utilities, and certain other qualified costs (collectively, “qualifying expenses”). The Company intends to use the loan proceeds for qualifying expenses. The Company’s borrowings under the Loan may be eligible for loan forgiveness if used for qualifying expenses incurred during the “covered period,” as defined in the CARES Act, except that the amount of loan forgiveness is limited to the amount of qualifying expenses incurred during the 8-week period commencing on the loan effective date. In addition, the amount of any loan forgiveness may be reduced if there is a decrease in the average number of full-time equivalent employees of the Company during the covered period, compared to the comparable period in the prior calendar year. The Company’s indebtedness, after any such loan forgiveness, is payable in 18 equal monthly installments commencing on December 13, 2020, with all amounts due and payable by the maturity date.

As discussed in Note 15, under the terms of the Accommodation Agreement, the Company awarded to the debtor entity, a put option to sell to the Company up to 5.0 million shares of the Company’s common stock at $0.10 per share, subject to certain conditions. Under the terms of the Accommodation Agreement, as amended, during the period from July 1, 2020 to June 30, 2021, the debtor entity has the option to sell to the Company no more than 1,000,000 shares in any 30-day period. Consistent with such terms, effective July 1, 2020, the debtor entity exercised its put option whereas the Company is obligated to purchase 1,000,000 shares on the first day of each month, commencing on July 1, 2020 and ending on November 1, 2020. The Company intends to pay for this share repurchase with cash on hand and future cash flows from operating activities.

As discussed in Note 17, In September 2019, the Company and 212 Technologies, LLC (“212 Technologies”) entered into a Release and Settlement Agreement (the “Settlement Agreement”). Pursuant to the Settlement Agreement, the parties, among other things rescinded a certain “Stakeholder & Investment Agreement” dated May 21, 2017 and 212 Technologies returned 5,628,750 shares of the Company’s Series A Preferred Stock. On July 1, 2020, the Company retired these shares.