12. Related Party Transactions |
3 Months Ended |
|---|---|
Dec. 31, 2015 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions |
The Company entered into a Note Purchase Agreement with ICG, an entity owned by Jon Isaac, the Company’s President and Chief Executive Officer and a director of the Company, and subsequently issued a series of Subordinated Convertible Notes thereunder to ICG. In connection with these transactions, the Company received gross proceeds of $500,000 during the year ended September 30, 2014.
Because the conversion price under ICG’s notes was less than the fair market value of the stock on the date of issuance, the Company recognized a beneficial conversion feature which was treated as a debt discount and amortized on a straight line basis as interest expense until the date of conversion, at which time all remaining debt discount was recognized as interest expense. Additionally, the fair value of the warrants that were contingently issuable to ICG upon conversion were recognized as additional interest expense.
During the three months ended December 31, 2015 and 2014, the Company recognized total interest expense of $0 and $2,018,803, respectively, associated with the ICG notes.
The Company leases a building from a related party under long-term operating lease. The building lease from a related party is $18,562 per month and expires in July 2020.
In connection with the purchase of the noncontrolling interest the Company issued a note payable of $500,000 due on February 1, 2016 with interest at 2% per annum. The $500,000 note payable was paid on January 20, 2016.
Also see Note 6 and 7. |