When did Itan receive forgiveness for the full portion of its PPP loan?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
come taxes in the United States of America and the State of California.
NOTE 10 NOTE PAYABLE
Note payable represents a five year vehicle loan received in December 2023. Principal and interest payments of $1,690 are due monthly with interest stated at 5.84%.
The future principal payments required under the notes payable for the years ended December 31 are as follows:
| 2024 | $ 15,038 | |------|--------------| | 2025 | 17,413 | | 2026 | 18,458 | | 2027 | 19,565 | | 2028 | 1,538 $ 72,012 | Page 15
NOTE 11 COMMON STOCK
There are 1,500 shares of no-par common stock authorized with 1,500 shares issued and outstanding as of December 31, 2023 and 2022.
NOTE 12 GOVERNMENT GRANTS
On February 12, 2021 the Company entered into a note payable agreement with Northeast Bank for $74,517, pursuant to the Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The note matures two years from the disbursement date and bears interest at a rate of 1.000% per annum, with the first six months of interest deferred. Principal and interest are payable monthly commencing six months after the disbursement date and may be prepaid by the Company at any time prior to maturity with no prepayment penalties. Under the terms of the CARES Act, PPP loan recipients can apply for and be granted forgiveness for all or a portion of loans granted under the PPP. The note is subject to forgiveness to the extent proceeds are used for payroll costs, including payments required to continue group health care benefits, and certain rent, utility, and mortgage interest expenses (qualifying expenses), pursuant to the terms and limitations of the PPP.
On February 7, 2022, the Company received forgiveness for the full portion of the PPP loan above. The Company has decided to account for it as a government grant. While GAAP does not contain guidance on the accounting for government grant
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the company entered into a note payable agreement for $74,517 on February 12, 2021, through the Paycheck Protection Program (PPP). This loan had a 1.000% interest rate per annum and a two-year maturity from the disbursement date.
The document states that Itan received forgiveness for the full portion of this PPP loan on February 7, 2022. The company accounted for this forgiveness as a government grant, following the guidance in International Accounting Standards (IAS) 20. Under IAS 20, the full amount of the PPP loan, $74,517, was included in other income on the statement of earnings for the year ended December 31, 2022.
For a prospective franchisee, this indicates that Itan successfully managed its financial obligations and benefited from government assistance programs during the specified period. It also demonstrates the company's adherence to accounting standards in handling such financial transactions. No liability for the PPP loan is reflected in the balance sheet as of December 31, 2022.