. DEBT

In connection with the acquisition of Genasys the Company assumed certain debts of Genasys. The balances of the acquired debt consist of loans with governmental agencies as of

March 31, 2019.

Loans with governmental agencies represent interest free debt granted by ministries within Spain for the purpose of stimulating economic development and promoting research and development. Loans with governmental agencies as of

March 31, 2019

are as follows:

Agency	Due Date	Principal
Ministry of Economy and Competitiveness	February 2, 2022		50,616
Ministry of Economy and Competitiveness	February 2, 2024		269,856	(a)
		$	320,472

(a)

This loan is secured by

$269,856

of cash pledged as collateral by Genasys, which is the current balance of the loan. This amount is included in restricted cash at

March 31, 2019.

The Company expects the Ministry of Economy and Competitiveness to declare the terms of the loan satisfied within fiscal year

2019

and the outstanding balance of the loan will be paid in full during fiscal

2019.

Accordingly, this has been included in the current portion of notes payable as of

March 31, 2019.

The following is a schedule of future annual payments as of

March 31, 2019:

2019	$	286,728
2020		16,872
2021		16,872
2022		-
Total	$	320,472

The current portion of debt is

$286,728

and the noncurrent portion of debt is

$33,744.