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15. NOTES PAYABLE, CAPITALIZED LEASES AND LONG TERM DEBT
 3 Months Ended
Dec. 31, 2016
Notes to Financial Statements  
15. NOTES PAYABLE, CAPITALIZED LEASES AND LONG TERM DEBT

Notes payable, capitalized leases and long term debt as of December 31, 2016 and September 30, 2016 consisted of the following:

 

    December 31,     September 30,  
    2016     2016  
             
Capital Source Business Finance Group   $ 300,136     $ 370,404  
Note payable to Umpqua Bank     199,935       199,935  
Secured note payable to J3E2A2Z LP - related party     600,000       600,000  
Total debt     1,100,071       1,170,339  
Less current portion of long term debt     (1,100,071 )     (1,170,339 )
Long term debt   $ -     $ -  

 

Capital Source Business Finance Group

 

The Company finances its TransTech operations from operations and a Secured Credit Facility with Capital Source Business Finance Group. On December 9, 2008, TransTech entered into a $1,000,000 secured credit facility with Capital Source to fund its operations.   On December 12, 2016, the secured credit facility was renewed for an additional six months, with a floor for prime interest of 4.5% (currently 4.5%) plus 2.5%. The eligible borrowing is based on 80% of eligible trade accounts receivable, not to exceed $1,000,000. The secured credit facility is collateralized by the assets of TransTech, with a guarantee by Visualant, including a security interest in all assets of Visualant. Availability under this Secured Credit ranges from $0 to $175,000 ($10,000 as of September 30, 2016) on a daily basis. The remaining balance on the accounts receivable line of $300,136 as of September 30, 2016 must be repaid by the time the secured credit facility expires on June 12, 2017, or we renew by automatic extension for the next successive six-month term.

 

Note Payable to Umpqua Bank

 

The Company has a $199,935 Business Loan Agreement with Umpqua Bank (the “Umpqua Loan”), which matures on December 31, 2017 and provides for interest at 3.25% per year. Related to this Umpqua Loan, the Company entered into a demand promissory note for $200,000 on January 10, 2014 with an entity affiliated with Ronald P. Erickson, our Chief Executive Officer. This demand promissory note will be effective in case of a default by the Company under the Umpqua Loan. The Company recorded accrued interest of $17,852 as of December 31, 2016.

 

Note Payables to Ronald P. Erickson or J3E2A2Z LP

 

The Company also has two other demand promissory notes payable to entities affiliated with Mr. Erickson, totaling $600,000. Each of these notes were issued between January and July 2014, provide for interest of 3% per year and now mature on March 31, 2017. The notes payable also provide for a second lien on our assets if not repaid by March 31, 2017 or converted into convertible debentures or equity on terms acceptable to the Mr. Erickson. The Company recorded accrued interest of $44,704 as of December 31, 2016.