Opening of Bids - Martin Luther King Jr. Center Demolition Proj No. 121-066 - Green Demolition Contractors, Inc.

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Green Demolition Contractors, Inc. Notes to the Financial Statements (cont'd) 2. Summary of Significant Accounting Policies (cont'd) Paycheck Protection Program Revenue — The Company accounts for Paycheck Protection Program loan proceeds as a grant under Accounting Standards Codification (ASC) Subtopic 958-605, which allows for revenue to be recognized when conditions surrounding the cancellation of a liability, such as a forgivable loan have been substantially met or have been explicitly waived by the resource provider. In March 2021, the Company received $653,764 of proceeds in the form of a potentially forgivable loan under the Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). ' Under the terms of the PPP, as subsequently modified by the Paycheck Program Flexibility Act (PPPFA), principal and interest payments are deferred until a forgiveness determination is made and any amounts not forgiven can be repaid over two years at an annual interest rate of 1%. Conditions of forgiveness include incurring qualified expenditures within an 8 -week or maximum 24 -week timeframe beginning with the date the loan proceeds are received, maintaining payroll levels on an employee -by -employee basis, and maintaining headcount, within PPP parameters. The Company believes they incurred $653,764 of qualified expenditures over a 24 -week period and that the conditions relating to maintaining payroll levels were substantially met as of December 31, 2021. As such, the Company has recognized the related forgiveness as Paycheck Protection Program revenue in the accompanying financial statements. Subsequent to year end, in March 2022, the Company received formal notification that their application for forgiveness had been approved by the United States Small Business Administration. The application for loan forgiveness is subject to audit by the Internal Revenue Service. Any disallowed credits as a result of an audit would become a liability to the Company. Variable Interest Entities — The Company does not to evaluate qualifying entities, who are under common control, under FASB Accounting Standards Update (ASU) 2018-17, Consolidation (Topic 810). Targeted Improvements to Related Party Guidance for Variable Interest Entities, which provides private companies with an accounting alternative for certain commonly controlled entities. Income Taxes — The Company with consent of its stockholder elected to be taxed under the Internal Revenue Service as an S Corporation. In lieu of corporate income taxes, the stockholders of an S corporation are taxed on their proportionate share of the Company's taxable income or loss. Therefore, no provision or liability for current federal income taxes has been included in the financial statements. The Company will be subject to Illinois replacement tax at a rate of 1.5% of net taxable income.