November 28, To the Trustee of the Chicago West Side Energy Owner Trust and Subsidiary 30 N LaSalle St. Chicago, Illinois 60602

Transcription

1 November 28, 2016 To the Trustee of the Chicago West Side Energy Owner Trust and Subsidiary 30 N LaSalle St. Chicago, Illinois We have audited the consolidated financial statements of the Chicago West Side Energy Owner Trust and Subsidiary (the Trust ) for the year ended September 30, 2016, and have issued our report thereon dated November 28, Professional standards require that we provide you with the information about our responsibilities under generally accepted auditing standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated October 25, Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the Chicago West Side Enhanced Use Trust and Subsidiary are described in the notes to consolidated financial statements. As described in the summary of accounting policy footnote, the Trust changed accounting policies related to presentation of debt issuance costs by adopting FASB Accounting Standards Update No , Interest-Imputation of Interest (Subtopic ): Simplifying the Presentation of Debt Costs, in Accordingly, the accounting change has been retrospectively applied to prior periods presented as if the policy had always been used. We noted no transactions entered into by the Trust during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the consolidated financial statements in the proper period. Accounting estimates are an integral part of the consolidated financial statements and are based on management s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the consolidated financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements are described in the notes to consolidated financial statements. The consolidated financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit.

2 To the Trustee of the Chicago West Side Energy Owner Trust Subsidiary Page 2 of 2 Corrected and Uncorrected Misstatements Professional standards require us to accumulate all misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the consolidated financial statements or the auditor s report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated November 28, Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a second opinion on certain situations. If a consultation involves application of an accounting principle to the Trust s consolidated financial statements or a determination of the type of auditor s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the Trust s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. This information is intended solely for the use of the Trustee and management of the Chicago West Side Energy Owner Trust and Subsidiary and is not intended to be and should not be used by anyone other than these specified parties. Very truly yours, Kutchins, Robbins & Diamond, Ltd. Certified Public Accountants

3 CHICAGO WEST SIDE ENERGY OWNER TRUST AND SUBSIDIARY Consolidated Financial Statements September 30, 2016 and 2015

4 CHICAGO WEST SIDE ENERGY OWNER TRUST AND SUBSIDIARY CONSOLIDATED FINANCIAL STATEMENTS TABLE OF CONTENTS PAGE(S) Independent Auditors Report 3-4 Consolidated Balance Sheets 5 Consolidated Statements of Trust Activities 6 Consolidated Statements of Changes in Trust Equity (Deficit) 7 Consolidated Statements of Cash Flows 8 Notes to Consolidated Financial Statements 9 15

5 INDEPENDENT AUDITORS REPORT To the Trustee of the Chicago West Side Energy Owner Trust and Subsidiary Chicago, Illinois Report on Financial Statements We have audited the accompanying consolidated financial statements of the Chicago West Side Energy Owner Trust and Subsidiary (the Trust ), which comprise the consolidated balance sheets as of September 30, 2016 and 2015, and the related consolidated statements of trust activities, changes in trust equity (deficit) and cash flows for the years then ended, and the related notes to consolidated financial statements. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

6 Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Chicago West Side Energy Owner Trust and Subsidiary as of September 30, 2016 and 2015, and the changes in their trust deficit and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. November 28, 2016

7 CHICAGO WEST SIDE ENERGY OWNER TRUST AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS See notes to consolidated financial statements. ASSETS CURRENT ASSETS Cash and cash equivalents $ 952,612 $ 952,554 Accounts receivable 780, ,716 Total current assets 1,732,873 1,708,270 PROPERTY AND EQUIPMENT, NET 8,609,748 8,584,974 CASH AND CASH EQUIVALENTS, RESTRICTED 771, ,314 LIABILITIES AND TRUST EQUITY (DEFICIT) $ 11,113,816 $ 11,029,558 CURRENT LIABILITIES Current maturities of bonds payable $ 649,872 $ 610,034 Accounts payable 635, ,547 Accrued interest 50,133 53,383 Total current liabilities 1,335,284 1,289,964 BONDS PAYABLE, NET OF CURRENT MATURITIES 9,469,368 10,119,240 Total liabilities 10,804,652 11,409,204 TRUST EQUITY (DEFICIT) 309,164 (379,646) $ 11,113,816 $ 11,029,558

8 CHICAGO WEST SIDE ENERGY OWNER TRUST AND SUBSIDIARY CONSOLIDATED STATEMENTS OF TRUST ACTIVITIES YEARS ENDED See notes to consolidated financial statements INCOME Energy services $ 6,019,923 $ 6,059,630 Interest and dividend income 2, Total income 6,021,935 6,059,777 EXPENSES Depreciation 403, ,229 Interest expense 700, ,520 Management fees 4,181,467 4,483,467 Professional fees 26,000 52,371 Repairs and maintenance 8,379 44,138 Trustee's fees 13,708 30,169 Total expenses 5,333,125 5,746,894 NET INCOME $ 688,810 $ 312,883

9 CHICAGO WEST SIDE ENERGY OWNER TRUST AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CHANGES IN TRUST EQUITY (DEFICIT) YEARS ENDED See notes to consolidated financial statements. Trust Accumulated Trust Corpus Equity (Deficit) Equity (Deficit) BALANCE AT SEPTEMBER 30, 2014 $ - $ (692,529) $ (692,529) Net income - 312, ,883 BALANCE AT SEPTEMBER 30, (379,646) (379,646) Net income - 688, ,810 BALANCE AT SEPTEMBER 30, 2016 $ - $ 309,164 $ 309,164

10 CHICAGO WEST SIDE ENERGY OWNER TRUST AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED See notes to consolidated financial statements CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 688,810 $ 312,883 Adjustments to reconcile net income to net cash provided by operating activities Depreciation 403, ,229 Interest expense, debt issuance costs 44,966 49,718 Change in assets and liabilities Accounts receivable (24,545) (39,926) Accounts payable 8,733 1,907 Accrued interest (3,250) (3,029) Net cash provided by operating activities 1,117, ,782 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property and equipment (427,868) - CASH FLOWS FROM FINANCING ACTIVITIES Principal payments of bonds payable (655,000) (620,000) NET INCREASE IN CASH AND CASH EQUIVALENTS 34,939 97,782 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 1,688,868 1,591,086 CASH AND CASH EQUIVALENTS AT END OF YEAR $ 1,723,807 $ 1,688,868 CASH AND CASH EQUIVALENTS CONSISTED OF Cash and cash equivalents $ 952,612 $ 952,554 Cash and cash equivalents, restricted 771, ,314 $ 1,723,807 $ 1,688,868

11 CHICAGO WEST SIDE ENERGY OWNER TRUST AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NATURE OF ACTIVITIES Chicago West Side Energy Owner Trust ( Owner Trust ), a grantor trust, was created on August 1, 2002 for the purpose of entering into an agreement to develop, finance, construct, refurbish, equip, operate, and maintain an energy center that is to provide chilled water, electricity, and/or steam to the Veterans Affair Medical Center at West Chicago, Illinois ( VAMC ). Effective February 2004, the energy facility began providing the VAMC with all of its requirements of chilled water, electricity, and steam. The Owner Trust is also obligated to use its commercially reasonable best efforts to obtain customers in addition to the VAMC. Amalgamated Bank of Chicago is the Trustee for the Owner Trust. Chicago West Side Energy Bond Indenture of Trust ( Indenture of Trust ) was created on August 1, 2002, between the Illinois Development Finance Authority ( State of Illinois ) and BankOne, National Association ( former Trustee ). The Trustee has since changed to Bank of New York ( Trustee ). The Indenture of Trust was created in connection with the Owner Trust. The Indenture of Trust holds funds collected from the borrower, the Owner Trust, to meet interest and maturities of the State of Illinois 2002 Taxable Series Revenue Bonds ( Revenue Bonds ), and for other purposes as described in the note on Restricted Funds. Once the Indenture of Trust has satisfied its purpose, any remaining funds held in the Indenture of Trust will be transferred to the Owner Trust. All receipts and disbursements of cash by the Indenture of Trust have been recorded as agency transactions. Therefore, all income and expense is recorded by the Owner Trust. The Indenture of Trust has met the definition of a special purpose entity and, as a variable interest entity, is required to be consolidated with the Owner Trust. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation: The consolidated financial statements include the accounts of the Owner Trust and the Indenture of Trust (collectively, the Trust ). All significant intercompany accounts and transactions have been eliminated in consolidation. Basis of Presentation: The Trust utilizes the accrual method of accounting whereby revenues and expenses are recorded when earned and incurred, respectively. Cash Equivalents: The Trust considers all investments with an original maturity date of three months or less to be cash equivalents. Concentrations of Credit Risk: The Trust s cash balances at financial institutions exceed Federal Deposit Insurance Corporation ( FDIC ) insurance limits. Management does not believe this presents a significant risk to the Trust. Uncollectible Accounts Receivable: The direct charge-off method is used to account for losses in collection of accounts receivable. An allowance for uncollectible accounts receivable is considered unnecessary by management because all significant accounts expected to be uncollectible have been written-off.

12 CHICAGO WEST SIDE ENERGY OWNER TRUST AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Property and Equipment: Property and equipment are stated at cost. Depreciation is computed on the straight-line method over the following estimated useful lives: Years Building and parking garage 33 Equipment 5-33 Income Taxes: The Owner Trust, a grantor trust, has determined that no outside agency meets the definition of a component unit and, therefore, is includable as a component unit in the Department s Comprehensive Annual Financial Report, and is not subject to income taxes. Estimates: The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. New Accounting Pronouncement: In April 2015, the FASB (Financial Accounting Standards Board) issued ASU (Accounting Standards Update) No , Interest Imputation of Interest (Subtopic ): Simplifying the Presentation of Debt Issuance Costs ( ASU ). ASU requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. Prior to the issuance of the standard, debt issuance costs were required to be presented in the balance sheet as an asset. Early adoption is permitted and ASU has been adopted for the year ended September 30, For the year ended September 30, 2015, the balance sheet was retrospectively adjusted by decreasing other assets by $210,726 and long-term debt by $210,729. Reclassification: Certain amounts in the prior-year financial statement have been reclassified for comparative purposes to conform with the presentation in the current-year financial statement. Subsequent Events: Management has evaluated subsequent events through November 28, 2016, the date the consolidated financial statements were available to be issued. RESTRICTED FUNDS The Trust is restricted in its selection of investments. Permitted investments include obligations of, or guaranteed by the United States, various short-term investments meeting minimum rating requirements set forth in the Trust Agreement, and other obligations or securities approved in writing by the Trust beneficiary, the U.S. Department of Veterans Affairs ( VA ). All investments are held in U.S. government money market funds which are considered cash equivalents. Investments are kept in various funds held by the Trustee, each restricted in its use by the Indenture of Trust Agreement. The funds and their respective restricted uses are as follows:

13 CHICAGO WEST SIDE ENERGY OWNER TRUST AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS RESTRICTED FUNDS (CONTINUED) Revenue Fund: All receipts received with respect to the operation of the energy facility are to be given to the Trustee within three days of receipt to be deposited in the Revenue Fund. Investments in the Revenue Fund are transferred to other funds to provide for the Trust's obligations. Total investments held in the Revenue Fund at September 30, 2016 and 2015, were $ 9 and $401, respectively. Interest Account of Bond Fund: Transfers from the Revenue Fund are to be made each month to the Interest Account of Bond Fund for 1/6 of the amount of interest that will become due on the notes payable to the State of Illinois on the next succeeding interest payment date. Total investments held in the Interest Account of Bond Fund at September 30, 2016 and 2015, were $59,499 and $59,410, respectively. Principal Account of Bond Fund: Transfers from the Revenue Fund are to be made in equal monthly amounts to accumulate the next principal payment by the next principal payment due date. Total investments held in the Principal Account of Bond Fund at September 30, 2016 and 2015, were $399,966 and $379,186, respectively. Expense Fund: Funds will be transferred to the Expense Fund, from the Revenue Fund, in the amount needed to increase the amount therein to cover all expenses associated with operating the facility. Total investments held in the Expense Fund at September 30, 2016 and 2015, were $ 2 for both years, respectively. Debt Service Reserve Fund: A balance of $1,333,713 is required in this fund. If necessary, funds will be transferred from the Revenue Fund to satisfy the requirement. The requirement of the Bond Service Reserve Fund is met by a surety bond policy purchased by the Owner Trust. The surety bond will cover up to $1,333,713 of the Bond Service Reserve Fund. No investments were held in the Bond Service Reserve Fund at September 30, 2016 and Maintenance Reserve Fund: Transfers from the Revenue Fund are to be made to the Maintenance Reserve Fund in amounts that cover maintenance cost requirements. Total investments held in the Maintenance Reserve Fund at September 30, 2016 and 2015, were $202,491 and $200,639, respectively. Trust Expense Fund: Investments in the Trust Expense Fund are used to pay only Trust expenses. Total investments held in the Trust Expense Fund at September 30, 2016 and 2015, were $108,445 and $95,894, respectively. Enhanced Use Trust Fund: Investments in the Enhanced Use Trust Fund represent excess monies from the Revenue Fund after all monthly deposits have been made. These funds should be utilized by the Trustee upon the direction of the authorized representative of the borrower to make payments on subordinate indebtedness incurred. Total investments held in the Enhanced Use Trust Fund at September 30, 2016 and 2015, were $0 for both years, respectively. Contingency Account of Project Fund: Investments in the Contingency Account of Project Fund are in the event the energy center would require additional post-closing work to either make it more visually pleasing or to sound proof the energy center. Total investments held in the Contingency Account of Project fund at September 30, 2016 and 2015, were $783 and $782, respectively.

14 CHICAGO WEST SIDE ENERGY OWNER TRUST AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OTHER FUNDS Department of Veterans Affairs Chicago West Side Energy Center Owner Trust Funds: Funds from the Enhanced Use Trust Fund were transferred into the Department of Veterans Affairs Chicago West Side Energy Center Owner Trust Funds. The funds are to be used as described in the Enhanced Use Trust above. Total investments held in the Department of Veterans Affairs Chicago West Side Energy Center Owner Trust Funds at September 30, 2016 and 2015, were $952,612 and $952,554, respectively. PROPERTY AND EQUIPMENT Property and equipment consisted of the following at September 30, 2016 and 2015: Building $ 1,452,750 $ 1,114,990 Equipment 12,248,808 12,158,700 13,701,558 13,273,690 Less: accumulated depreciation 5,091,810 4,688,716 BONDS PAYABLE AND DEBT ISSUANCE COSTS $ 8,609,748 $ 8,584,974 During 2002, the Trust issued a bond to finance the construction to develop, finance, construct, refurbish, equip, operate, and maintain an energy center that is to provide chilled water, electricity, and/or steam to the VAMC. The trust received $16,480,000 on September 1, 2002 (2002 series) under the terms of a bond indenture and related loan agreement with the Illinois Development Finance Authority. Total bond discounts, issuance costs and insurance premium associated with the debt series amounted to $1,329,661, all of which has been capitalized and netted with bonds payable as reported in the accompanying consolidated balance sheets. These costs are being amortized on the effective interest method over the 24 year life of the 2002 series bond. The Trustee serves as paying agent for the bonds. The bonds indenture includes a mandatory redemption provision enabling bondholders to redeem their bonds at a date earlier than the scheduled maturity date. Semi-annual payments of interest on the bonds are due through March of 2027.

15 CHICAGO WEST SIDE ENERGY OWNER TRUST AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS BONDS PAYABLE AND DEBT ISSUANCE COSTS (CONTINUED) At September 30, 2016 and 2015, bonds payable consisted of the following: Bonds payable to the State of Illinois, 2.9% - 6.3%, interest semiannually with annual principal payments beginning March 1, 2005, secured by the Trust estate, due various dates through March 1, $ 10,370,000 $ 11,025,000 Less: unamortized debt issuance costs 250, ,726 Net, bonds payable $ 10,119,240 $ 10,729,274 The bond series are presented in the financial statements as follows: Current Long-term Total September 30, 2016 Bond, principal $ 690,000 $ 9,680,000 $ 10,370,000 Less unamortized debt issuance costs 40, , ,760 Total bonds payable $ 649,872 $ 9,469,368 $ 10,119,240 Current Long-term Total September 30, 2015 Bond, principal $ 655,000 $ 10,370,000 $ 11,025,000 Less unamortized debt issuance costs 44, , ,726 Total bonds payable $ 610,034 $ 10,119,240 $ 10,729,274 Amortization of debt issuance costs are included in interest expense. Amortization of debt issuance costs for the years ended September 30, 2016 and 2015, was $44,966 and $49,718, respectively. Accumulated amortization of debt issuance costs as of September 30, 2016 and 2015, was $1,078,902 and $1,033,936, respectively.

16 CHICAGO WEST SIDE ENERGY OWNER TRUST AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS BONDS PAYABLE AND DEBT ISSUANCE COSTS (CONTINUED) Future maturities are as follows: Years Ending September 30, Bond Payable Principal Debt Issuance Costs Amortization 2017 $ 690,000 $ 40, , , , ,503 Thereafter 9,680,000 81,241 $ 10,370,000 $ 250,760 The Trust has purchased both an insurance policy and surety bond from National Public Finance Guarantee Corporation, a wholly-owned subsidiary of MBIA, Inc. ( MBIA ), to unconditionally guarantee the payment of the notes payable to the State of Illinois. The surety has a maximum one time coverage of $1,333,713 and is part of the Debt Service Reserve Fund. The surety bond will be utilized in the event a principal payment on the notes payable to the State of Illinois becomes due but cannot be paid by the Trust. If the Trust is unable to generate and maintain sufficient revenues to fund the operations of the energy center and consequently cannot make scheduled principal and interest payments on the notes payable to the State of Illinois, the insurance policy guarantees payment by the insurance company of all principal and interest amounts as they become due. Beginning in 2018, the Trust is required to maintain a Sinking Fund and make periodic payments to such fund in amounts that will ensure redemption of the notes payable to the State of Illinois maturing in 2022 and Total interest expense and bond payable discount, bond issuance costs and issuance premium amortized for the years ended September 30, 2016 and 2015, were $700,478 and $740,520, respectively. RISKS AND UNCERTAINTIES As further discussed in the Notes to Consolidated Financial Statements the Trust has purchased both an insurance policy and surety bond from National Public Finance Guarantee Corporation, a wholly-owned subsidiary of MBIA, to unconditionally guarantee the payment of the notes payable to the State of Illinois and for the $1,333,713 requirement of the Bond Service Reserve Fund. MAJOR CUSTOMER AND LARGE TRADE RECEIVABLES The Trust will derive the majority of its revenues from one customer. Although this concentration increases the Trust's credit risk, management believes the Trust is exposed to minimal risk because the customer is a department of the U.S. Government. To further reduce credit risk, the Trust will actively pursue other customers. During the years ended September 30, 2016 and 2015, the Trust derived approximately 100% of its energy services revenue from the VA, which is the Grantor and Beneficiary. For the years ended September 30, 2016 and 2015, the Trust had a receivable of $780,261 and $755,716, respectively, from the VA, which is the Grantor and Trust Beneficiary.

17 CHICAGO WEST SIDE ENERGY OWNER TRUST AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS COMMITMENTS Management Agreement: The Trust has an agreement with the developer of the energy center to operate and maintain the facility. Monthly management fees are paid from the Trust, to the developer, for fixed costs relating to salary and maintenance, as well as reimbursement for certain variable costs. Total management fees incurred to the developer for the years ended September 30, 2016 and 2015, were $4,181,467 and $4,483,467, respectively. The agreement was renewed on January 1, 2015, and expires on January 1, 2027, with a renewal period every two years, whereby the developer has right to terminate the agreement. Enhanced-Use Lease: In exchange for the development, construction, and operation of the energy center, the Trust beneficiary, VA, is leasing to the Trust the property on which the energy center was built through an enhanced-use lease ( lease ). No rent is being charged to the Trust for use of the land. The lease expires April 17, Upon termination of the lease, the Trust will surrender to the VA possession of all assets constituting the energy center. The VA may terminate the lease before it expires if there has occurred a material failure on the part of the Trust to furnish to the VA on a timely basis all its requirements of electricity and steam. The VA has no right to terminate the lease for convenience. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid for interest during the years ended September 30, 2016 and 2015 was as follows: Interest paid $ 658,762 $ 693,832