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15. LONG TERM LIABILITIES

12 Months Ended

Sep. 30, 2020

In April 2020, we applied for an unsecured loan pursuant to the Paycheck Protection Program (“PPP”) administered by the United States Small Business Administration (the “SBA”) and authorized by the Keeping American Workers Employed and Paid Act, which is part of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). Section 1106 of the Act provides for forgiveness of up to the full principal amount of qualifying loans guaranteed under the Paycheck Protection Program. On April 27, 2020, we received the loan from Truist Bank (the “Lender”) in the principal amount of $1,456,100 (the “SBA Loan”). The SBA Loan is evidenced by a promissory note issued by us (the “Note”) to the Lender.

The term of the Note is two years, though it may be payable sooner in connection with an event of default under the Note. The SBA Loan carries a fixed interest rate of one percent per year, with the first payment due seven months from the date of initial cash receipt. For the fiscal year ended September 30, 2020 we accrued interest expense of $6,343 related to the SBA Loan and this is recorded in accrued expenses on the Consolidated Balance Sheets at September 30, 2020.

Under the CARES Act and the PPP, certain amounts of loans made under the PPP may be forgiven if the recipients use the loan proceeds for eligible purposes, including payroll costs and certain rent or utility costs, and meet other requirements regarding, among other things, the maintenance of employment and compensation levels. We intend to use the SBA Loan for qualifying expenses and to apply for forgiveness of the SBA Loan in accordance with the terms of the CARES Act.

The Note provides for customary events of default, including, among others, those relating to failure to make payment, bankruptcy, materially false or misleading representations to the Lender or the SBA, and adverse changes in our financial condition or business operations that the Lender believes may materially affect our ability to pay the SBA Loan.

PPP Loan payment schedule if not forgiven:

Total Loan Balance

Fiscal

2021

Fiscal

2022

SBA Loan

1,456,100

854,000

602,100

In June 2020, the Company entered into a separation agreement with its President. On September 16, 2020, the Company agreed to a separation agreement with its CFO whereby the Company agreed to pay compensation and benefits through December 31, 2021 and the CFO agreed to provide ongoing transition services through February 2021. Included in Long Term liabilities is $95,911 and in accrued expense is $393,469 related to these separation agreements