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Long-Term Debt

9 Months Ended

Jun. 30, 2017

7. Long-Term Debt

Long-term debt consisted of the following (in thousands):

	June 30, 2017			September 30, 2016
Notes payable at 10%-11%, mature August 2022 and December 2024	$	2,437		$	2,662
Note payable at 7%, matures December 2019		105			133
Notes payable at 5.5%, mature January 2023		1,178			1,238
Notes payable at 5.5%, mature January 2023 and January 2022		4,601			4,864
Note payable refinanced at 6.25%, matures July 2018		1,147			1,227
Note payable at 6.3%, matures June 2030, collateralized by aircraft		-			422
Note payable at 9.5%, matures August 2024		9,017			10,642
Notes payable at 9.5%, mature September 2024		5,083			7,040
6% convertible debentures, mature March 2023		-			406
Notes payable at 13%, mature October 2016 and 2017		-			4,000
Notes payable at 5%-7%, mature from 2018 to 2028		1,727			1,867
Note payable at 11%, matures June 2018		-			1,500
9% convertible debentures, mature October 2016		-			452
7.45% note payable collateralized by aircraft, matures 2019		2,810			3,013
Notes payable at 12%, mature December 2017 and September 2018		-			4,000
Non-interest-bearing debt to State of Texas, matures May 2022, interest imputed at 9.6%		5,488			6,201
Note payable at 6.5%, matures January 2020		4,519			4,621
Note payable at 6%, matures January 2019		595			857
Notes payable at 5.5%, mature May 2020		5,364			5,493
Note payable at 6%, matures May 2020		1,126			1,386
Note payable at 5.3%, matures December 2024		1,792			1,842
Note payable at 5.45%, matures July 2020		10,702			10,962
Note payable at the greater of 2% above prime or 5% (5.5% at September 30, 2016), matures October 2025		4,334			4,430
Note payable at 5%, matures January 2026		9,724			9,882
Note payable at 5.25%, matures March 2037		4,684			4,442
Note payable at 5%, matures July 2017		-			2,157
Note payable at 5%, matures February 2018		1,894			1,894
Note payable at 5.95%, matures August 2021		8,438			8,945
Note payable at 12%, matures October 2021		9,736			-
Note payable at 9.58%, matures March 2022		366			-
Note payable at 4.99%, matures April 2037, collateralized by aircraft		948			-
Notes payable at 12%, mature June 2020		5,440			-
Note payable at 5%, matures November 2017		5,000			-
Note payable at 8%, matures May 2029		15,487			-
Note payable at 5%, matures May 2037		2,163			-
Total debt		125,905			106,578
Less unamortized debt issuance costs		(637	)		(692	)
Less current portion		(16,237	)		(9,950	)
Total long-term debt, net	$	109,031		$	95,936

On October 5, 2016, the Company refinanced $8.0 million of long-term debt by borrowing $9.9 million. The new unsecured debt is payable $118,817 per month, including interest at 12%, and matures in five years with a balloon payment for the remaining balance at maturity. The refinanced debt was comprised of interest-only notes that were scheduled to mature with full principal payments in October 2017. The Company paid loan costs amounting to $99,000, which will be amortized for the term of the note, and wrote off unamortized loan costs of $42,000 related to the $8.0 million refinanced debt.

On January 4, 2017, the Company paid off $392,000 of convertible 6% notes, which would have matured on March 4, 2023.

On March 13, 2017, the Company entered into a promissory note with a bank, which provides for a $1.0 million revolving line of credit maturing on March 13, 2018. The interest rate under this revolving line of credit is at 6.5% per annum payable every 13th of each month starting April 13, 2017 for all outstanding borrowings. In an event of a default, as defined in the agreement, the interest rate shall be increased to 17% per annum. As of June 30, 2017, the Company had available borrowing capacity of $1.0 million under the revolving line of credit.

On May 1, 2017, the Company raised $5.4 million through the issuance of 12% unsecured promissory notes to certain investors, which notes mature on May 1, 2020. The notes pay interest-only in equal monthly installments, with a lump sum principal payment at maturity. See Note 14.

On May 4, 2017, the Company entered into a construction loan agreement with a bank for the construction of the Company’s Bombshells Pearland location. The maximum availability of the 5% promissory note is $4.8 million with advances based on the progress of construction. On June 4, 2017, an initial advance of $2.2 million was used to pay off a previous interest-only note for the same construction project. The new loan is payable interest-only until after one year from the date of the initial advance when the construction loan, including all advances as its principal, converts to an amortizing 20-year note with scheduled monthly payments to be determined on the date of conversion. The Company paid loan costs amounting to $24,000, which will be amortized for the term of the note.

On May 8, 2017, in relation to the Scarlett’s acquisition (see Note 4), the Company executed two promissory notes with the sellers: (i) a 5% short-term note for $5.0 million payable in lump sum after six months from closing date and (ii) a 12-year amortizing 8% note for $15.6 million. The 12-year note is payable $168,343 per month, including interest.

As of June 30, 2017, the Company is in compliance with all its debt covenants.

Future maturities of long-term debt consist of the following (in thousands) as of June 30, 2017:

	Regular		Balloon		Total
12-Month Period Ending	Amortization		Payments		Payments
June 30, 2018	$	14,343	$	1,894	$	16,237
June 30, 2019		7,817		3,404		11,221
June 30, 2020		8,729		15,238		23,967
June 30, 2021		8,626		9,572		18,198
June 30, 2022		5,298		22,226		27,524
Thereafter		21,759		6,999		28,758
	$	66,572	$	59,333	$	125,905