Debt

12 Months Ended

Jul. 31, 2022

Debt Disclosure [Abstract]

Debt

5. Debt

Receipt of CARES funding

In April 2021, we were funded $239,000 under the Paycheck Protection Program or the PPP through California Bank and Trust. The PPP was established pursuant to the Coronavirus Aid, Relief and Economic Security Act or the CARES Act and is administered by the U.S. Small Business Administration. The CARES Act was established in order to enable small businesses to pay employees during the economic slowdown caused by COVID-19 by providing forgivable loans to qualifying businesses for up to 2.5 times their average monthly payroll costs. The amount borrowed under the CARES Act is eligible to be forgiven provided that (a) the Company uses the aforesaid PPP funds during the eight week period after receipt thereof, and (b) the aforesaid PPP funds are only used to cover payroll costs (including benefits), rent, mortgage interest, and utility costs. The amount of loan forgiveness will be reduced if, among other reasons, the Company does not maintain staffing or payroll levels. Principal and interest payments on any unforgiven portion of the aforesaid PPP Funds or the PPP Loan will be deferred for six months and will accrue interest at a fixed annual rate of 1.0% and carry a two year maturity date. There is no prepayment penalty on the PPP Loan.

During the fiscal year ended July 31, 2022, we applied and received loan forgiveness under the provisions of the CARES Act for the entire $239,000 loan. This amount was recorded as a gain on extinguishment of indebtedness in the Consolidated Statement of Operations during the fiscal year ended July 31, 2022.