MEXCO ENERGY CORP Debt Disclosure
15. Paycheck Protection Program (PPP) Loan.
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act commonly referred to as the CARES Act became effective. One component of the CARES Act was the paycheck protection program (“PPP”) which provided small businesses with the resources needed to maintain their payroll and cover applicable overhead. The PPP was implemented by the United States Small Business Administration (“SBA”) with support from the Department of the Treasury. The PPP provided funds to pay up to 24 weeks of payroll costs including benefits. Funds could also be used to pay interest on mortgages, rent, and utilities. The Company applied for, and was accepted to participate in this program. On May 5, 2020, the Company received funding for approximately $68,600.
The loan was a -year loan with a maturity date of May 5, 2022 an annual interest rate of 1% payable monthly with the first six monthly payments deferred. The Company applied for and on November 25, 2020 was approved for loan forgiveness in the amount of $68,957 under the provisions of Section 1106 of the CARES Act. This was for the forgiveness of our PPP loan in the amount of $68,574 and $383 in accrued interest expense. The Company was eligible for loan forgiveness because the Company used all loan proceeds to partially subsidize direct payroll expenses.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2022 | Jun 27, 2022 | Showing above |
| 2021 | Jun 25, 2021 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.