Quarterly report pursuant to Section 13 or 15(d)


9 Months Ended
Jun. 30, 2020
Debt Disclosure [Abstract]  
(6) Debt


Related-party notes


During the nine months ended June 30, 2020 and 2019, the Company issued unsecured notes payable to various related parties resulting in cash proceeds of $55,000 and $89,367, respectively. These notes are payable on demand and payments of $46,461 and $854,554 were made during the nine months ended June 30, 2020 and 2019, respectively. The interest on these notes was de minimis during each of those periods.


In October 2019 and December 2018, the Company issued 8,526 and 29,307 shares of common stock to settle $200,000 and $220,000 of related party notes, respectively.


PPP Loan


On March 27, 2020, the U.S. federal government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The CARES Act includes a provision for a Paycheck Protection Program (“PPP”) administered by the U.S. Small Business Administration (“SBA”) and further amended by the Paycheck Protection Program Flexibility Act of 2020 (“PPP Flexibility Act”), which was enacted on June 5, 2020.


In May 2020, the Company received a PPP Loan of $124,375. The application for these funds required the Company to certify in good faith that current economic uncertainty made the loan request necessary to support the ongoing operations of the Company. The Company was also required to certify that the loan funds would be used to retain workers and maintain payroll or make mortgage payments, lease payments, and utility payments. The PPP Loan has a two-year term and bears interest at a rate of 1.0% per year.


Under the terms of the CARES Act, the Company can apply for and be granted forgiveness for all or a portion of the PPP Loan. Such forgiveness, if any, will be determined, subject to limitations, based on the use of loan proceeds for payroll costs, rent and utility costs and provided that only a portion of the use of proceeds are for non-payroll costs. The unforgiven portion of the PPP Loan may be repaid by the Company at any time prior to maturity with no prepayment penalty. While the Company believes that its use of the loan proceeds will meet the conditions for forgiveness of the PPP Loan, at this time there can be no assurance that the Company will obtain forgiveness of the loan in whole or in part.


Loan recipients may elect an eight week or 24 week forgiveness period and the repayment period begins on the date which the amount of forgiveness is determined. In the event that a loan recipient has not applied for forgiveness within 10 months of the end of its covered forgiveness period, the loan recipient must begin making principal and interest payments on that date. As of June 30, 2020, the full amount of the PPP Loan is classified as a note payable within the Company’s consolidated balance sheets.