Debt Obligations

6 Months Ended

Mar. 31, 2016

Notes to Financial Statements

Debt Obligations

On July 14, 2015, we entered into an Amended and Restated Facility Agreement (the “Amended Facility Agreement“) with Conrent Invest S.A. (“Conrent“) to amend certain provisions of the Company’s existing $25.0 million unsecured debt facility. Pursuant to the terms and conditions of the Amended Facility Agreement, effective June 30, 2015, the Company was able to borrow an additional $5.4 million of unsecured debt, which, together with the $25.0 million of unsecured debt previously borrowed under the debt facility, now accrues interest at a rate of 8% per annum and mature on July 31, 2018. The Amended Facility Agreement also provides the Company with a voluntary prepayment option, whereby the Company may pay all amounts borrowed, including all accrued but unpaid interest, prior to the maturity date without any penalty or prepayment fee. In connection with the execution of the Amended Facility Agreement, the Company used the available $5.4 million to pay to Conrent an arrangement fee of $500,000 and $822,222 of accrued but unpaid interest. During the year ended September 30, 2015, the Company received the remaining $4.08 million.

On September 25, 2015, the Company entered into a Loan Agreement (the “Loan Agreement“) with one of the Company’s related parties, Sapinda Asia Limited (“Sapinda“) to provide the Company with a $5.0 million line of credit that accrues interest at a rate of 3% per annum for undrawn funds, and 8% per annum for borrowed funds. Pursuant to the terms and conditions of the Loan Agreement, available funds may be drawn down at the Company’s request at any time until the Loan Agreement matures on September 30, 2017 (the “Maturity Date“), when all borrowed funds, plus all accrued but unpaid interest will become due and payable. The Company, however, may elect to satisfy any outstanding obligations under the Loan Agreement prior to the Maturity Date without penalties or fees. The Company drew $1,399,644 on this line of credit during the six months ended March 31, 2016.

Debt obligations as of March 31, 2016 and September 30, 2015, respectively, are comprised of the following: 

	March 31,			September 30,
	2016			2015
Unsecured facility agreement with an entity whereby, as of June 30, 2015, the Company can borrow up to
$30.4 million bearing interest at a rate of 8% per annum, payable in arrears
semi-annually,with all principal and accrued and unpaid interest due on July 31, 2018.
A $1.2 million origination fee was paid and recorded as a debt discount and will be amortized as
interest expense over the term of the loan. The remaining debt discount was $520,270 and
$631,757 at March 31, 2016 and September 30, 2015, respectively.	$	29,879,730		$	29,768,243
The Loan Agreement, whereby the Company can borrow up to $5 million at 8% per annum on borrowed funds maturing on September 30, 2017.		1,399,644			-
The Company entered into an agreement whereby the Company was granted a non-
exclusive, irrevocable, perpetual and royalty-free license to certain patents with an
entity. The Company agreed to pay $4,500,000 over two years or $187,500 per month
through February 2016.		-			937,500
Capital leases with effective interest rates that range between 8.51% and 17.44%.  Leases mature between June 2015 and November 2016.  $154,410 was assumed through the sale of Midwest Monitoring & Surveillance, Inc. to its former owners.		21,383			24,754
Non-interest bearing notes payable to a governmental agency assumed in conjunction with the G2 acquisition.		216,342			254,917
Total debt obligations		31,517,099			30,985,414
Less current portion		(69,672	)		(796,225	)
Long-term portion of related party debt		-			-
Long-term debt, net of current portion	$	31,447,427		$	30,189,189

The following table summarizes the Company’s future maturities of debt obligations, net of the amortization of debt discounts as of March 31, 2016:

Fiscal Year	Total
2016	$	34,836
2017		1,469,317
2018		30,456,140
2019		42,608
2020 & thereafter		34,468
Debt discount		(520,270	)
Total	$	31,517,099

In connection with the TGA Acquisition, as described in Note 8 above, the Company assumed three notes payable to the Atlantic Canada Opportunities Agency (“ACOA“). These notes are non-interest bearing notes and are payable in monthly increments ranging from $3,125 to $4,125.