XML 31 R18.htm IDEA: XBRL DOCUMENT

LINES OF CREDIT AND LONG-TERM LIABILITIES

12 Months Ended

Sep. 30, 2022

LINES OF CREDIT AND LONG-TERM LIABILITIES

NOTE 12 – LINES OF CREDIT AND LONG-TERM LIABILITIES

Lines of credit

The Company currently has a line of credit with Fulton Bank for $3,500,000. The line carried interest of LIBOR plus 2.00% per annum (2.075% as of September 30, 2021). On June 10, 2022, the Company and Fulton Bank agreed to an amendment of the line of credit to carry interest at the Secured Overnight Financing Rate (“SOFR”) plus 2.37% per annum (5.35% as of September 30, 2022). At September 30, 2022 and September 30, 2021, there was no outstanding balance on this line of credit. The terms of this line of credit are subject to the bank’s review annually on February 1.

Loans payable to bank

On December 15, 2015, the Company acquired a loan from Fulton Bank in the amount of $5,250,000 in order to fund the purchase of Advanced Industrial Services, Inc. $5,000,000 of the proceeds went to the direct purchase of AIS. This loan carried interest of LIBOR plus 2.25% per annum (2.325% as of September 30, 2021). On June 10, 2022, The Company and Fulton Bank agreed to an amendment of the loan to carry interest at SOFR plus 2.37% per annum (5.35% as of September 30, 2022). This loan is payable on December 15, 2022. This loan carries loan covenants which the Company was in compliance with as of September 30, 2022. The outstanding balance on this loan was $247,284 and $1,218,680, on September 30, 2022, and September 30, 2021, respectively. This loan is secured by certain assets of the Company.

On May 1, 2018, the Company acquired a loan from Fulton Bank in the amount of $400,000 in order to fund new equipment for Advanced Industrial Services, Inc. This loan carried interest of LIBOR plus 2.00% per annum (2.075% as of September 30, 2021). On June 10, 2022, The Company and Fulton Bank agreed to an amendment of the loan to carry interest at SOFR plus 2.37% per annum (5.35% as of September 30, 2022). This loan is payable on May 1, 2023. This loan carries loan covenants which the Company was in compliance with as of September 30, 2022. The outstanding balance on this loan was $63,281 and $149,914, on September 30, 2022, and September 30, 2021, respectively. This loan is secured by certain assets of the Company

On January 28, 2020, the Company acquired a loan from Fulton Bank in the amount of $360,000 in order to fund new equipment for Advanced Industrial Services, Inc. This loan carried interest of LIBOR plus 2.25% per annum (2.325% as of September 30, 2021). On June 10, 2022, The Company and Fulton Bank agreed to an amendment of the loan to carry interest at SOFR plus 2.37% per annum (5.35% as of September 30, 2022). This loan is payable on May 1, 2023. This loan carries loan covenants which the Company was in compliance with as of September 30, 2022. The outstanding balance on this loan was $183,839 and $258,060, on September 30, 2022, and September 30, 2021, respectively. This loan is secured by certain assets of the Company.

Notes payable

On September 30, 2020, the Company issued a note payable to an independent private lender in the amount of $4,605,000. This note carried interest of 8% and matured on March 30, 2022. After deduction of an original issue discount of $600,000 and legal fees of $5,000, the Company received $4,000,000 in cash. As of September 30, 2022, and September 30, 2021, this note had a balance of $0 and $2,256,448, respectively. As of September 30, 2022, and September 31, 2021, this note had unamortized original issue discount balance of $0 and $200,000, respectively

On October 26, 2020, the Company issued a Note payable in the amount of $439,774 for the purchase of VDI. This note carried interest of 5% and was payable in two installments on October 26, 2021, and October 26, 2022. As of September 30, 2022, and September 30, 2021, this note had a balance of $219,370 and $460,377, respectively. As of the date of this report, all principal and accrued interest on this note have been paid.

On September 30, 2021, the Company issued a note payable to an independent private lender in the amount of $5,755,000. This note carries interest of 8% and matures on March 30, 2023. After deduction of an original issue discount of $750,000 and legal fees of $5,000, the Company received $5,000,000 in cash. As of September 30, 2022, and September 30, 2021, this note had a balance of $4,943,929 and $5,005,000, respectively. As of September 30, 2022, and September 31, 2021, this note had unamortized original issue discount balance of $250,000 and $750,000, respectively.

On February 22, 2022, the Company issued a note payable to an independent private lender in the amount of $9,205,000. This note carries interest of 8% and matures on August 22, 2023. After deduction of an original issue discount of $1,200,000 and legal fees of $5,000, the Company received $8,000,000 in cash. Additionally, the Company issued 1,000,000 shares of its common stock to the lender. The fair market value of the stock of $700,400 was recognized as an additional original issue discount and will be amortized over the life of the loan. As of September 30, 2022, this note had a balance of $9,738,632. As of September 30, 2022, this note had unamortized original issue discount balance of $1,064,778.

On March 30, 2022, Vicon, a subsidiary of the Company, amended the $5,600,000 Term Loan Agreement with NIL Funding Corporation (“NIL”). Upon closing, $500,000 of outstanding borrowings were repaid to NIL. The Agreement requires monthly payments of accrued interest that began on October 1, 2018. This note carries interest of 8.85% and matures on March 30, 2023. This note carries loan covenants which the Company is in compliance with as of September 30, 2022. As of September 30, 2022, and September 30, 2021, this note had a balance of $2,804,743 and $3,604,743, respectively.

Mortgage Payable

On January 28, 2020, the Company’s subsidiary, Advanced Industrial Services, Inc., completed the purchase of two buildings for a total purchase price of $3,381,433. The Company paid $905,433 in cash and acquired a mortgage from Fulton Bank in the amount of $2,476,000. This mortgage carried interest of LIBOR plus 2.50% per annum (2.575% as of September 30, 2021). On June 10, 2022, The Company and Fulton Bank agreed to an amendment of the mortgage to carry interest at SOFR plus 2.62% per annum (5.6% as of September 30, 2022). This mortgage is payable on January 28, 2040. This loan carries loan covenants similar to covenants on the Company’s other loans from Fulton Bank. As of September 30, 2022, the Company was in compliance with these covenants. As of September 30, 2022, and September 30, 2021, this mortgage had a balance of $2,245,664 and $2,339,114, respectively.

Paycheck Protection Program Loans

In April and May of 2020, and January and April of 2021, the Company and its subsidiaries applied for and were granted $6,413,385 in Paycheck Protection Program loans under the CARES Act. These loans bear interest of 2% and mature in two years. The Company has applied for and received loan forgiveness under the provisions of the CARES Act for $6,291,985, recorded as other income on the Company’s consolidated statement of operations and comprehensive income/(loss). The remaining loan of $121,400 has been modified with a maturity date of May 5, 2025 and payments starting in June of 2022 and is recorded under Paycheck Protection Program Loans on our Consolidated Balance Sheet as of September 30, 2022, net of the short-term portion of $24,280. The issuing bank determined that this loan qualifies for loan forgiveness; however the Company is awaiting final approval from the Small Business Administration.

Estimated maturities of our long-term debt over the next 5 years are as follows:

	2023		2024		2025		2026		2027		Thereafter		Total

Fulton Bank - $5,250,000		247,284		-		-		-		-		-	$	247,284
Fulton Bank - $400,000		63,281		-		-		-		-		-	$	63,281
Fulton Bank - $360,000		73,508		72,243		38,088		-		-		-	$	183,839
Fulton Bank - Mortgage payable		85,495		89,482		93,993		98,730		103,706		1,774,258	$	2,245,664
NIL Funding		2,804,743		-		-		-		-		-	$	2,804,743
PPP Loans		24,280		24,280		24,280		24,280		24,280		-	$	121,400
Notes Payable		14,901,930		-		-		-		-		-	$	14,901,930
TOTAL	$	18,200,521	$	186,005	$	156,361	$	123,010	$	127,986	$	1,774,258	$	20,568,141