Quarterly report pursuant to Section 13 or 15(d)

Notes Payable

Notes Payable
6 Months Ended
Jan. 31, 2021
Debt Disclosure [Abstract]  
Notes Payable

Note 5—Notes Payable


On April 27, 2020, the Company was granted a loan (the “Loan”) from the Banc of California in the aggregate amount of $952,744, pursuant to the Paycheck Protection Program (the “PPP”) under the CARES Act, which was enacted March 27, 2020. The term of the loan is two years. Monthly payments will be due beginning August 15, 2021 if the Loan is not forgiven. Interest accrues at 1% per year, effective on the date of initial disbursement. The outstanding principal balance on the loan as of January 31, 2021 was $952,744.


The Company submitted its application for full loan forgiveness on January 6, 2021. The Company believes that it has used the proceeds from the Loan for purposes consistent with the PPP. If the Loan is not forgiven the entire principal balance remaining unpaid, along with all accrued and unpaid interest, shall be due and payable on April 30, 2022.


On February 12, 2021, the Company received notice that the full Loan amount of $952,744 had been forgiven.


On June 18, 2020, the Company entered into a finance agreement with AFCO Premium Credit LLC (“AFCO”). Pursuant to the terms of the agreement, AFCO loaned the Company the principal amount of $551,803, which accrues interest at 3.381% per annum, to partially fund the payment of the premium of the Company’s director & officer insurance. The agreement requires the Company to make ten monthly payments of $56,039, including interest, starting on July 18, 2020. At January 31, 2021, the outstanding balance related to this finance agreement was $167,174.


Future minimum payments under note payable liabilities as of January 31, 2021 are as follows:


Years ending July 31,      
2021 (remainder of fiscal year)   $ 167,174  
2022     952,744  
Total   $ 1,119,918