5. Notes Payable - Related Party	9 Months Ended
Jul. 31, 2020
Notes
5. Notes Payable - Related Party	5. Notes Payable – Related Party The outstanding amount under the note payable to G.S. Beckwith Gilbert, the Company’s Non-Executive Chairman and significant stockholder (the “Existing Gilbert Note”), was $10,453,000 as of July 31, 2020, including accrued interest, with an interest rate of 9 ¾% and a maturity date of November 1, 2021. Interest payments are due by October 31st of each fiscal year. At July 31, 2020, the notes payable balance included accrued interest on the Existing Gilbert Note of $868,000, representing interest incurred during the fourth quarter of 2019 through and including the third quarter of 2020. During the nine months ended July 31, 2020, Mr. Gilbert loaned the Company an additional $1,435,000 (which amount is included in the outstanding note payable amount as of July 31, 2020 identified above). As of September 14, 2020, the note payable balance, including accrued interest, was $10,570,000. During the nine months ended July 31, 2019, the Company paid interest incurred on the Existing Gilbert Note totaling $516,000. On January 27, 2020, the Company entered into a Sixth Debt Extension Agreement with Mr. Gilbert, effective January 27, 2020, pursuant to which the Company and Mr. Gilbert agreed to modify certain terms and conditions of the Existing Gilbert Note. The maturity date of the Existing Gilbert Note was November 1, 2020, and the total amount of principal and interest due for the fourth quarter of fiscal year 2019 and first quarter of fiscal year 2020 and owing as of January 27, 2020, was $9,071,000. Pursuant to the Sixth Debt Extension Agreement, the Company issued a new note to Mr. Gilbert in the amount of $9,071,000, (the “Sixth Replacement Note”) equal to a principal of $8,670,000 and accrued interest through January 27, 2020 of $401,000, and cancelled the Existing Gilbert Note. The Company agreed to pay accrued interest included in the Sixth Replacement Note, at the time and on the terms set forth in the Sixth Replacement Note. Under the terms of the Sixth Replacement Note, the maturity date was extended to November 1, 2021, and the annual interest rate remained at 9.75%. Interest payments under the Sixth Replacement Note shall be made annually on October 31st of each year. The note payable is secured by the Company’s assets. The Company has evaluated its financial position as of July 31, 2020, including an operating loss of $1,971,000 (before impairment charges) for the nine months ended July 31, 2020 and a working capital deficit of $348,000 (excluding deferred revenues and certain CARES Act grant proceeds accounted for as accrued liabilities) as of July 31, 2020, and has requested and received a commitment from Mr. Gilbert, dated September 14, 2020, that if the Company, at any time, is unable to meet its obligations through September 14, 2021, Mr. Gilbert will provide the Company with the necessary continuing financial support to meet such obligations. Such commitment for financial support may be in the form of additional advances or loans to the Company, in addition to the deferral of principal and/or interest payments due on the existing loans, if deemed necessary.

5. Notes Payable - Related Party

9 Months Ended

Jul. 31, 2020

5. Notes Payable – Related Party

The outstanding amount under the note payable to G.S. Beckwith Gilbert, the Company’s Non-Executive Chairman and significant stockholder (the “Existing Gilbert Note”), was $10,453,000 as of July 31, 2020, including accrued interest, with an interest rate of 9 ¾% and a maturity date of November 1, 2021. Interest payments are due by October 31st of each fiscal year. At July 31, 2020, the notes payable balance included accrued interest on the Existing Gilbert Note of $868,000, representing interest incurred during the fourth quarter of 2019 through and including the third quarter of 2020. During the nine months ended July 31, 2020, Mr. Gilbert loaned the Company an additional $1,435,000 (which amount is included in the outstanding note payable amount as of July 31, 2020 identified above). As of September 14, 2020, the note payable balance, including accrued interest, was $10,570,000. During the nine months ended July 31, 2019, the Company paid interest incurred on the Existing Gilbert Note totaling $516,000.

On January 27, 2020, the Company entered into a Sixth Debt Extension Agreement with Mr. Gilbert, effective January 27, 2020, pursuant to which the Company and Mr. Gilbert agreed to modify certain terms and conditions of the Existing Gilbert Note. The maturity date of the Existing Gilbert Note was November 1, 2020, and the total amount of principal and interest due for the fourth quarter of fiscal year 2019 and first quarter of fiscal year 2020 and owing as of January 27, 2020, was $9,071,000. Pursuant to the Sixth Debt Extension Agreement, the Company issued a new note to Mr. Gilbert in the amount of $9,071,000, (the “Sixth Replacement Note”) equal to a principal of $8,670,000 and accrued interest through January 27, 2020 of $401,000, and cancelled the Existing Gilbert Note. The Company agreed to pay accrued interest included in the Sixth Replacement Note, at the time and on the terms set forth in the Sixth Replacement Note. Under the terms of the Sixth Replacement Note, the maturity date was extended to November 1, 2021, and the annual interest rate remained at 9.75%. Interest payments under the Sixth Replacement Note shall be made annually on October 31st of each year. The note payable is secured by the Company’s assets.

The Company has evaluated its financial position as of July 31, 2020, including an operating loss of $1,971,000 (before impairment charges) for the nine months ended July 31, 2020 and a working capital deficit of $348,000 (excluding deferred revenues and certain CARES Act grant proceeds accounted for as accrued liabilities) as of July 31, 2020, and has requested and received a commitment from Mr. Gilbert, dated September 14, 2020, that if the Company, at any time, is unable to meet its obligations through September 14, 2021, Mr. Gilbert will provide the Company with the necessary continuing financial support to meet such obligations. Such commitment for financial support may be in the form of additional advances or loans to the Company, in addition to the deferral of principal and/or interest payments due on the existing loans, if deemed necessary.