11.

DEBT

In connection with the acquisition of Genasys the Company acquired certain debts of Genasys in the aggregate amount of

$1,520,037,

as described in Note

Acquisition. The carrying value of the acquired debt approximates fair value. The balances of the acquired debt consist of loans with governmental agencies of

September 30, 2018.

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

September 30, 2018

are as follows:

Agency	Due Date	Principal
Ministry of Economy and Competitiveness	February 2, 2022		69,811
Ministry of Economy and Competitiveness	February 2, 2024		279,141	(a)
		$	348,952

(a)

This loan is secured by

$279,141

of cash pledged as collateral by Genasys, which is the current balance of the loan. This amount represents

66.6%

of the original principal received. This amount is included in restricted cash at

September 30, 2018.

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

2019

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

2019.

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

September 30, 2018.

The following is a schedule of future annual payments as of

September 30, 2018:

2019	$	296,594
2020		17,453
2021		17,453
2022		17,452
Total	$	348,952

The current portion of debt is

$296,594

and the noncurrent portion of debt is

$52,538.

The Company recorded

$20,949

in interest expense for the year ended

September 30, 2018

related to debt.