Annual report pursuant to Section 13 and 15(d)

NOTES PAYABLE, LONG TERM DEBT AND LINE OF CREDIT - RELATED PARTY

v2.4.0.6
NOTES PAYABLE, LONG TERM DEBT AND LINE OF CREDIT - RELATED PARTY
12 Months Ended
Sep. 30, 2011
Debt Disclosure [Abstract]  
Debt and Capital Leases Disclosures [Text Block]
NOTE 10 —
NOTES PAYABLE, LONG TERM DEBT AND LINE OF CREDIT – RELATED PARTY
 
The following is a summary of our notes payable and long term debt:
 
   
As of
   
As of
 
   
September 30,
   
September 30,
 
   
2011
   
2010
 
             
Bridge Note
  $ 100     $ 100  
                 
Senior secured notes, net of unamortized deferred discount of $48
  $ 2,952     $ -  
                 
Integra Bank
  $ -     $ 323  
                 
Acquistion notes (payable to the sellers of the acquired businesses):
               
                 
CETCON
    162       290  
Strategic Secured Note
    42       169  
                 
      204       782  
                 
Less: current portion
    (180 )     (379 )
                 
Non-current portion
  $ 24     $ 403  
                 
Long term Line of Credit - related party
  $ -     $ 630  
 
Short –Term Lines of Credit and Notes Payable
 
On February 8, 2010, we received $40 in loan proceeds and issued a related short-term promissory note with a 4% per annum interest rate and 1% origination fee.  The note was paid in full on March 19, 2010.
 
On February 26, 2010, we received $500 in loan proceeds and issued a related short-term, non-interest bearing promissory note, which was secured but subordinate to all existing senior debt outstanding.  Terms of the note included a principal payment of $250 on March 31, 2010 with the balance of $250, in addition to a $10 origination fee, to be paid on April 30, 2010.  In agreement with the note holder, the March 31, 2010 payment was extended through and paid on April 1, 2010.  The remaining $250 plus $10 origination fee was paid on April 30, 2010.
  
Convertible Notes Payable
 
On January 22, 2009, Beacon entered into convertible notes payable with a group of private investors (the “Notes”) facilitated by a broker/dealer. Proceeds of the Notes were $500 in the aggregate. The Notes had an original maturity date of July 21, 2009 with interest payable at a fixed annual rate of 12.5% due monthly. The maturity date of the Notes was extended to January 21, 2010 with interest payable at a fixed annual rate of 15% per annum on the unpaid balance due on the note, which amounted to $298 at September 30, 2009.  Each of the note holders also received a five-year warrant to purchase one share of Beacon Common Stock (the “Note Warrants”) at a purchase price of $1.00 per share per $10 of note principal (50,000 shares in the aggregate).  We recorded aggregate discounts of $74 to the face value of the Notes based upon the relative fair values of the notes and the warrants and the effects of a beneficial conversion feature. The discount is being accreted over the life of the Notes which amounted to $74 through September 30, 2009 and is included as a component of interest expense in the accompanying Statement of Operations.
 
  During the year ended September 30, 2010 we repaid the remaining principal and $1 of interest expense.
 
Bridge Notes
 
On March 31, 2010, a non-director Bridge Note holder elected to convert a convertible, demand note and accrued interest of $110 to 183,620 common shares.  A remaining $100 note, held by a Director of the company, is presented as a current liability in our consolidated balance sheet as of September 30, 2011 and 2010, respectively.
 
 We recorded contractual interest expense of approximately $3 and $5 for the years ended September 30, 2011 and 2010, respectively.  We recorded aggregate accretion of the discount on these notes of approximately $0 and $33 for years ended September 30, 2011 and 2010, respectively which is classified as a component of interest expense in the accompanying Consolidated Statement of Operations.  The discount relating to a beneficial conversion feature was recorded upon the original issuance of these notes and is fully amortized.
 
Integra Bank
 
On March 14, 2008, Beacon and Integra Bank entered into a credit facility, under which we borrowed $600 at a 6.25% annual interest rate with monthly payments of $12 over a 60 month term that matures March 12, 2013 and collateralized by all business assets of the Company.  On November 23, 2010 the note was paid in full.  We recorded contractual interest expense of approximately $4 and $24 for the years ended September 30, 2011 and 2010, respectively.
 
Notes Payable
 
On November 23, 2010, we initiated a private placement (the “Placement”) of up to $3,000 of 12 month Senior Secured Notes (“Notes”) with warrants to purchase 150 shares of Beacon’s common stock at $0.40 per share for every $1 in principal invested and bear interest at 9% APR due on various dates through March 30, 2012.  The Placement was made on a "best efforts" basis with a Minimum of $600 and a Maximum of $3,000.  Net proceeds have been used to repay and replace an existing Senior Secured Bank Note totaling approximately $300 and will also be used for additional working capital.  The Placement expired on March 30, 2011, when the Maximum was attained.  The notes are secured by all business assets of the Company, as defined.  As of September 30, 2011 we have issued $3,000 of notes, 449,999 warrants and have recorded interest expense of $229.  We incurred financing fees of $333 which have been recognized as deferred finance fees as part of prepaid expenses and are be amortized ratably over the life of the debt.
 
Using the Black-Scholes model we have determined the fair value of the issued warrants to be $205 and allocated the debt proceeds in accordance with the relative fair value method.  The notes payable have been recorded on the consolidated balance sheet as of September 30, 2011 at $2,952 which is net of the discount representing the allocation of the $180 relative fair value to the warrants. For the year ended September 30, 2011, we recorded interest of $132 in the consolidated statements of operations as accretion of the note discount.
 
Long Term Line of Credit – Related Party
 
On August 17, 2010 we entered into a long term line of credit facility with one of our directors for $4,000, the facility has an annual interest rate of 7.73% on any outstanding balance and a facility fee of the greater of $40 or 1% of the unused balance.  Additionally, 15,000 warrants, with a five year term at $1.00 per share, per month will be paid for each month the facility is outstanding.  As of September 30, 2011 and 2010, we have an outstanding balance of $0 and $630, respectively leaving an unused amount of $4,000 and $3,370, which is presented as a non-current liability in our Consolidated Balance Sheet, as terms of the facility call for an 18 month maturity date.  As of September 30, 2011, we have issued 165,000 warrants.  Using the Black Scholes prices model, we determined the fair value of the warrants and recorded as other expense of $71 for the year ended September 30, 2011.
 
On August 12, 2011, the Company modified the agreement, extending the term another 24 months, and reducing the credit facility to $2,000, with an annual interest rate of 7.75% on any outstanding balance.  For any outstanding balance at month end under the credit facility, the director will receive warrant coverage of 15% to purchase common shares of the Company at an exercise price of the then current stock price.
  
Additionally under the revised agreement, during the next 24 months the Company may require the director to purchase shares of Common Stock at the then current stock price.   The aggregate purchase price of all shares purchased shall not exceed $2,000.  For the dollar amount of Common Stock purchased, the director will receive warrant coverage of 15% to purchase shares of Common stock of the Company at an exercise price of the then current stock price.  Finally, the Company’s Chief Executive Officer (CEO) agreed that, upon the exercise of the share purchase commitment in whole or in part by the Company, the director shall have the right to purchase up to 1,200,000 shares of Common Stock from the CEO for a purchase price of $0.01 per share.
 
On October 26, 2011, the Company elected to terminate this long term line of credit facility and associated put right.
 
Term Debt
 
During the years ended September 30, 2011 and 2010, Beacon paid approximately $578 and $379 in principal payments on our term debt. We recorded interest expense of approximately $32 and $73 for the years ended September 30, 2011 and 2010, respectively.
 
The following table summarizes the remaining debt principal payment obligations by year for the long-term debt:
 
For the Year ended
 
September 30,
 
       
2012
  $ 3,280  
2013
    24  
    $ 3,304