Acquisition

9 Months Ended

Jun. 30, 2016

Notes to Financial Statements

ACQUISITION

Track Group Analytics Limited

On November 26, 2014, the Company entered into a Share Purchase Agreement to purchase from the shareholders of Track Group Analytics Limited, formerly G2 Research Limited (“TGA“), all issued and outstanding shares of TGA for an aggregate purchase price of up to CAD$4,600,000 (the “TGA Acquisition“), of which CAD$2,000,000 was paid in cash to the TGA shareholders on the Closing Date with the remainder of the purchase price to be paid as follows: (i) CAD$600,000 to the former TGA shareholders in shares of common stock of which one-half of the shares were issued on the one-year anniversary of the closing and the balance to be issued on the two-year anniversary of the closing; and (ii) the CAD$2,000,000 to the former TGA shareholders in shares of common stock  over a two-year period beginning as of the closing, subject to the achievement of certain milestones set forth in the purchase agreement. As of June 30, 2016, the Company had issued 38,499 shares of common stock in connection with this acquisition, and 70,962 shares of common stock to the TGA shareholders upon achieving certain performance milestones.

The fair value of patents, developed technology, customer contracts/relationship, tradename and trademarks were capitalized as of the acquisition date and will be subsequently amortized using a straight-line method to depreciation and amortization expense over their estimated useful lives.

Summary of Unaudited Pro-Forma Information

The unaudited pro-forma information below for the three and nine months ended June 30, 2016 and 2015 gives effect to each of the acquisitions described herein as if the acquisitions had occurred on October 1, 2013. The pro-forma financial information is not necessarily indicative of the results of operations if the acquisitions had been effective as of this date.

	Three Months Ended						Nine Months Ended
	June 30,			June 30,			June 30,			June 30,
	2016			2015			2016			2015
Revenues:		6,754,411			5,441,669			19,664,054			15,243,552
Loss from operations		(1,160,014	)		(2,481,870	)		(3,796,654	)		(6,401,970	)
Net income (loss) from continuing operations		(1,783,946	)		(2,906,410	)		(5,831,779	)		(1,838,776	)
Basic earnings (loss) per common share	$	(0.17	)	$	(0.29	)	$	(0.57	)	$	(0.18	)
Diluted earnings (loss) per common share	$	(0.17	)	$	(0.29	)	$	(0.57	)	$	(0.18	)
Net income (loss) attributable to common shareholders		(1,783,946	)		(2,906,410	)		(5,831,779	)		(1,838,776	)
Basic earnings (loss) per common share	$	(0.17	)	$	(0.29	)	$	(0.57	)	$	(0.18	)
Diluted earnings (loss) per common share	$	(0.17	)	$	(0.29	)	$	(0.57	)	$	(0.18	)