Quarterly report pursuant to Section 13 or 15(d)

LONG - TERM BORROWINGS AND OTHER NOTE PAYABLES

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LONG - TERM BORROWINGS AND OTHER NOTE PAYABLES
3 Months Ended
Dec. 31, 2018
Debt Disclosure [Abstract]  
LONG - TERM BORROWINGS AND OTHER NOTE PAYABLES

5.     LONG - TERM BORROWINGS AND OTHER NOTES PAYABLE 

 

Debt assumed from Arcadian 

 

As a result of the acquisition of Arcadian, the Company guaranteed Arcadian’s then outstanding debt obligations totaling $700,000 owed to Ben Franklin Technology Partners of Southeastern Pennsylvania (“BFTP”). The maturity date for the debt is September 30, 2021 and interest accrues at an 8% annual rate.  Unpaid interest was $115,800 as of December 31, 2018. The Company recorded the debt at its fair value and recorded a discount of $102,900 as of December 31, 2018 attributable to the difference between the market interest rate and the stated interest rate on the debt. Interest expense related to the accretion of debt discount for the three months ended December 31, 2018 and 2017 was $9,400 and $4,700, respectively. 

 

A balloon payment of $700,000 plus interest will be made on the scheduled maturity date of September 30, 2021. 

 

The changes in carrying amounts of the debt acquired through acquisition for the three months ended December 31, 2018 were as follows: 

 

Beginning balance (September 30, 2018)   $ 587,700  
Accretion of debt discount     9,400  
Ending balance (December 31, 2018)   $ 597,100