Property and Equipment, Net

6 Months Ended

Mar. 31, 2020

Property and Equipment, Net

Property and Equipment, Net

5.    Property and Equipment, Net

Property and equipment, net, consists of:

	March 31,		September 30,
	2020		2019
Laboratory equipment	$	1,067,351	$	1,067,351
Leasehold improvements		160,086		160,086
Land and building		—		3,000,000
		1,227,437		4,227,437
Less: accumulated depreciation and amortization		(704,028)		(1,051,477)
	$	523,409	$	3,175,960

Depreciation and amortization expense was $63,775 and $816,541  for the three months ended March 31, 2020 and 2019, respectively and $127,551 and $1,639,618 for the six months ended March 31, 2020 and 2019, respectively. 

On October 1, 2019, the Company adopted ASC 842, which resulted in the reclassification of property and equipment under capital leases to finance lease right-of-use assets separately disclosed on the consolidated balance sheets. Refer to Note 9 for the Company’s lease disclosures.

At September 30, 2019,  $3,000,000 represented the Company’s corporate office lease that was classified as a capital lease. The Company’s corporate office lease matures in February 2028 and the effective interest rate on the corporate office lease is 43.9%. At September 30, 2019, $475,000 of accumulated amortization related to capital leases.

Impairment charge

During the three and six months ended March 31, 2020, the Company recorded an impairment charge of $423,328 primarily due to the write-off of assets held for sale after the Company determined that the carrying amount of these assets was not recoverable as result of a lease termination agreement entered into in May 2020. Refer to Note 13 for further details.

During the three and six months ended March 31, 2019, the Company wrote off certain construction in progress and laboratory equipment with a carrying amount of $561,735 and $2,911,138, respectively. The Company determined that the carrying amount of these assets was not recoverable and was less than the fair value less the cost to sell due to the Company changing its operations to outsource the manufacturing of ONS-5010.