NOTE

LONG-TERM DEBT

As at

July 31, 2021,

our long-term debt consisted of the following:

	July 31, 2021		July 31, 2020
Principal amount	$	10,000,000	$	20,000,000
Unamortized discount and accrued fees		75,231		(130,523	)
Long-term debt, net of unamortized discount	$	10,075,231	$	19,869,477
Current portion		10,075,231		-
Long-term debt, net of current portion	$	-	$	19,869,477

During Fiscal

2021,

we made voluntary principal payments totaling

$10,000,000

to certain Lenders, which decreased the principal balance outstanding to

$10,000,000

under our Credit Facility.

Pursuant to the terms of our Third Amended and Restated Credit Agreement, during Fiscal

2021,

we issued an aggregate of

1,249,039

shares with a fair value of

$1,170,000,

representing

6.5%

of the

$18,000,000

principal balance outstanding at the time; and during Fiscal

2020,

we issued an aggregate of

1,743,462

shares with a fair value of

$1,400,000,

representing

of the

$20,000,000

principal balance outstanding at the time; as payments of anniversary fees to the Lenders.

During Fiscal

2021

and Fiscal

2020,

the amortization of debt discount and accrued fees totaled

$1,375,754

and

$1,669,514,

respectively, which was recorded as interest expense and included in our Consolidated Statements of Operations and Comprehensive Loss. During Fiscal

2021

and Fiscal

2020,

we paid

$1,255,556

and

$1,626,667,

respectively, in cash for interest on our long-term debt.

The shares issued to the Lenders either as the

third

extension fees or the anniversary fees have been recorded as discounts on long-term debt, which are amortized using the respective effective interest rates at the time of issuance over the remaining contractual life of the long-term debt.

The Company's Credit Facility with our remaining Lender has a maturity date on

January 31, 2022,

with an interest rate of

per annum and an underlying effective interest rate of

18.10%.

As of

July 31, 2021,

our working capital ratio, excluding the current portion of the long-term debt, was

23:1,

which was in compliance with the debt covenant requirement under our Credit Facility being a working capital ratio, excluding any current portion of the long-term debt, of

not

less than

1:1.

The Credit Facility is secured against all of the Company's current and after-acquired assets until terminated in accordance with its terms.