Termination of a Material Definitive Agreement.
As previously reported in a Current Report on Form 8-K filed with the Securities and Exchange Commission on April 23, 2020 (the 'April 2020 Form 8-K'), Janel Corporation ('we' or the 'Company') entered into a Paycheck Protection Program Promissory Note and Agreement (the 'Agreement') on April 19, 2020 evidencing an unsecured $2,725,893 loan (the 'PPP Loan') under the Paycheck Protection Program (or 'PPP') made through Santander Bank, N.A., a national banking association and the Company's existing lender (the 'Lender'). The PPP was established under the Coronavirus Aid, Relief, and Economic Security Act (the 'CARES Act') and is administered by the U.S. Small Business Administration (the 'SBA').
Under the terms of the CARES Act, PPP loan recipients can apply for, and the SBA can grant forgiveness of, all or a portion of loans made under the PPP if the recipients use the PPP loan proceeds for eligible purposes, including payroll costs, mortgage interest, rent or utility costs and meet other requirements regarding, among other things, the maintenance of employment and compensation levels. The Company used the PPP Loan proceeds for qualifying expenses and applied for forgiveness of the PPP Loan in accordance with the terms of the CARES Act.
On July 22, 2021, we received a notification from the Lender that the SBA approved our PPP Loan forgiveness application and that the forgiveness payment date was July 20, 2021 for the entire PPP Loan balance of $2,725,893, including all accrued interest thereon, and that the remaining PPP Loan balance is zero. The forgiveness of the PPP Loan will be recognized during the Company's fourth fiscal quarter ending September 30, 2021.
The disclosure in of the April 2020 Form 8-K is incorporated into this Item 1.02 by reference.