Debt assumed from Arcadian Services

As a result of the acquisition of with Arcadian Services, the Company guaranteed Arcadian Services’ then outstanding debt obligations totalling $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 of $104,200 as of December 31, 2017 is classified as long-term in the accompanying condensed consolidated balance sheet because interest is not due until maturity. The Company recorded the debt at its fair value as result of a discount of $145,000 attributable to the difference between the market interest rate and the stated interest rate on the debt. Interest expense of $4,700 was recorded for the three months ended December 31, 2017 related to the accretion of debt discount. There were no debt covenants associated with the debt.

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

Other Notes Payable

Note Payable - finance company, principal is payable over thirty-six equal payments of $1,200 through May 2018. Interest is payable monthly on the unpaid balance at 19% per annum. 

Loan payable to a vendor, principal payments of $5,000 per month, together with interest computed at 6% per annum.  Maturity date is April 2018.