Casino-sector product supplier TransAct Technologies Inc says it received on Tuesday a near US$2.2-million loan under the Paycheck Protection Program administered by the United States Small Business Administration.
The money is part of support for such enterprises amid the Covid-19 pandemic, under the U.S. federal government’s Coronavirus Aid, Relief and Economic Security Act – also known as the CARES Act – a measure which came into effect on March 27.
“This funding is expected to help the company maintain its operations and meet its payroll obligations in this time of unprecedented uncertainty, related to the impact that the novel coronavirus (Covid-19) pandemic is having on the food service and casino industries,” stated the firm in a Tuesday press release.
The group’s core business has been casino player rewards and player tracking software; and ticket printers for electronic gaming machines. More recently it has been developing sales of its food inventory monitoring and food safety tracking system known as Boha.
TransAct added in a filing to Nasdaq on Tuesday, that on May 1 – the date the payroll loan had been confirmed – it had issued a note due to mature on May 1, 2022. It bears 1.0 percent fixed interest from the loan date, with interest payable monthly. The firm added that while no payments were due on the loan for six months from the date of first disbursement, interest would “continue to accrue” during the deferment period.
TransAct further stated it intended to “maximise the use of loan proceeds for qualifying expenses and intends to apply for forgiveness of the loan in accordance with the terms of the CARES Act”.
The group noted: “Whether forgiveness will be granted and in what amount is subject to an application to, and approval by, the Small Business Administration and may also be subject to further requirements in any regulations and guidelines the Small Business Administration may adopt.”
At least 75 percent of any forgiven amount in regard to the loan, must be used for eligible payroll costs the company observed.
Bart Shuldman, chairman and chief executive of TransAct, said in prepared remarks in the press statement, that the funding “provides financial flexibility and enhances our liquidity position so that we can retain our employees, which allows us to keep important projects going and support ongoing operations at a time when the world is experiencing great volatility”.
He added: “We expect to use the proceeds of the loan for purposes that will permit most of the loan to be forgiven, and we look forward to bringing back our furloughed workers.”
In late March TransAct had said it was seeking to “reduce overhead and operating expenses by approximately US$1.75-million” – including via furlough of some staff – regarding the firm’s previously-estimated first-quarter 2020 costs.
On March 10 the group said it had swung to a loss in the fourth quarter of 2019, and that full-year profit had fallen by nearly 91 percent.
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