Note 14 – Paycheck Protection Program



The CARES Act established the Paycheck Protection Program (PPP), which authorizes forgivable loans to small businesses. Pursuant to the CARES Act, the PPP loan will be fully forgiven if the funds are used for payroll costs, rent and utilities, subject to certain conditions, including maintaining employees and maintaining salary levels. In April 2020, the Company applied for a PPP loan and received funding of approximately $540,000. During the three-month period ended June 30, 2020, the Company expended the funds received under the PPP in full on qualifying expenses, and maintained the conditions set forth by the CARES Act. The Company, given its use of the funds, believes it is probable that the PPP loan will be forgiven. As a result, the Company recorded a reduction to selling, general and administrative expenses of approximately $420,000 and a reduction to payroll-related research and development expenses of approximately $120,000 related to these funds within the unaudited condensed consolidated statement of operations for the three and nine months ended June 30, 2020.



The Company does not anticipate taking any action that would cause any portion of the PPP loan to be ineligible for forgiveness. However, to the extent that any amount is deemed unforgivable, such amount is payable over two years at an interest rate of 1% per annum, with a deferral of payments for the first six months.