14. LEASES

6 Months Ended

Mar. 31, 2020

Leases [Abstract]

LEASES

NOTE 14          LEASES

Operating Leases

The Company leases office space for its corporate headquarters in West Palm Beach, Florida under a 90-month agreement expiring in September 2020. The operating lease granted six initial months of free rent and escalates at 3% per year. The monthly rent payment is approximately $7,700, which includes common area maintenance costs. 

The Company leases office space for its Distribution segment sales and administrative office in Cham, Switzerland on a month-to-month basis. The monthly rent payment is $1,599 CHF, which is approximately $1,615. 

IPS leases office space in Hauppauge, New York under a non-cancelable lease agreement expiring in February 2027. The monthly rent payment is approximately $29,000, which includes power utilities.

IPS leases office space in Ronkonkoma, New York under a three-year agreement expiring in January 2022. The monthly rent payment is $4,400.

As of March 31, 2020, the Company did not have additional operating and financing leases that have not yet commenced.

Total operating lease expense for the three months ended March 31, 2020 and 2019 was approximately $122,000 and $134,000, respectively, and is recorded in general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss. Total operating lease expense for the six months ended March 31, 2020 and 2019 were approximately $255,000 and $249,000, respectively, and are recorded in general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss.

Supplemental cash flows information related to leases was as follows:

	Six Months Ended March 31, 2020
Weighted Average Remaining Lease Term
Operating leases		11.51	Years
Finance leases		1.08	Years
Weighted Average Discount Rate
Operating leases		5.75%
Finance leases		5.75%

Future minimum payments under non-cancellable operating leases as of March 31, 2020 were as follows:

For the Years Ending September 30,	Amount
2020	$	249,400
2021		413,332
2022		380,389
2023		375,732
2024		385,640
Thereafter		3,200,193
Total future minimum lease payments	$	5,004,686
Less: amount representing imputed interest		(1,415,047	)
Total		3,589,639

Finance Leases

The Company, specifically IPS, leases computer equipment through various finance lease agreements expiring through January 2022. Amortization expense related to assets under finance leases were $10,982 and $22,989 during the three and six months ended March 31, 2020, respectively. Interest expense related to assets under finance leases were $828 and $1,856 during the three and six months ended March 31, 2020, respectively.

Future minimum payments under non-cancellable operating leases as of March 31, 2020 were as follows:

For the Years Ending September 30,	Amount
2020	$	25,315
2021		22,990
2022		5,632
Total future minimum lease payments		53,937
Less: amount representing imputed interest		(3,956	)
Total		49,981