Annual report pursuant to Section 13 and 15(d)

Notes Payable

v3.20.4
Notes Payable
12 Months Ended
Sep. 30, 2020
Debt Disclosure [Abstract]  
NOTES PAYABLE

5. NOTES PAYABLE

 

Notes Payable – Related Parties

 

A summary of notes payable – related parties outstanding as of September 30, 2020 and 2019 is as follows:

 

    2020     2019  
Demand notes payable – Leonard Mazur   $ 160,470     $ 160,470  
Demand notes payable – Myron Holubiak     12,500       12,500  
Notes payable – related parties   $ 172,970     $ 172,970  

 

On March 30, 2016, the Company assumed $772,970 of demand notes payable in the acquisition of LMB, including $760,470 to its Chairman, Leonard Mazur, and $12,500 to its Chief Executive Officer, Myron Holubiak. In April 2016, $600,000 of demand notes payable was repaid to Leonard Mazur. Notes with a principal balance of $104,000 accrue interest at the prime rate plus 1% and notes with a principal balance of $68,970 accrue interest at 12% per annum.

 

Interest expense on notes payable – related parties for the years ended September 30, 2020 and 2019 was $14,932 and $16,443, respectively.

 

Paycheck Protection Program

 

On April 12, 2020, due to the business disruption caused by the COVID-19 health crisis, the Company applied for a forgivable loan through the Small Business Association's Paycheck Protection Program (the "PPP"). In accordance with the provisions of the PPP, the loan accrues interest at a rate of 1% and a portion of the loan may be forgiven if it is used to pay qualifying costs such as payroll, rent and utilities. Amounts that are not forgiven will be repaid two years from the date of the loan. On April 15, 2020, the Company received funding in the amount of $164,583 from the Paycheck Protection Program through its bank.

 

Interest expense on the PPP loan was $741 for the year ended September 30, 2020.