. 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

June 30, 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

June 30, 2019

are as follows:

Agency	Due Date	Principal
Ministry of Economy and Competitiveness	February 2, 2022	$	51,295
Ministry of Economy and Competitiveness	February 2, 2024		273,472	(a)
		$	324,767

(a)

This loan is secured by

$273,472

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

June 30, 2019.

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

twelve

months 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

June 30, 2019.

The following is a schedule of future annual payments as of

June 30, 2019:

2020	$	290,571
2021		17,098
2022		17,098
2023		-
Total	$	324,767

The current portion of debt is

$290,571

and the noncurrent portion of debt is

$34,196.