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Notes Payable
 6 Months Ended
Mar. 31, 2022
Debt Disclosure [Abstract]  
NOTES PAYABLE

4. NOTES PAYABLE

 

Notes Payable – Related Parties

 

Prior to June 31, 2021, we had outstanding notes payable held by our Chairman, Leonard Mazur, in the amount of $160,470 and notes payable held by our then Chief Executive Officer, Myron Holubiak, in the amount of $12,500. Notes with a principal balance of $104,000 accrued interest at the prime rate plus 1.0% per annum and notes with a principal balance of $68,970 accrued interest at 12% per annum.

 

In June 2021, we repaid the $172,970 principal balance of these notes and paid accrued interest of $38,917. Accrued interest of $59,917 was forgiven and was recorded as other income in the year ended September 30, 2021.

 

Interest expense on notes payable – related parties was $3,533 and $7,096 for the three and six months ended March 31, 2021, respectively.

 

Paycheck Protection Program

 

On April 12, 2020, the Company applied for a forgivable loan through the Small Business Association’s Paycheck Protection Program (the “PPP”). The loan accrued interest at a rate of 1% and was forgivable if it was used to pay qualifying costs such as payroll, rent and utilities. On April 15, 2020, the Company received $164,583 from the PPP.

 

On July 28, 2021, the Small Business Administration gave full forgiveness of the PPP loan and the Company recorded a gain from debt extinguishment of $166,557 consisting of the principal balance and related accrued interest expense.

 

Interest expense was $406 and $811 for the three and six months ended March 31, 2021, respectively.