14. LEASES

9 Months Ended

Jun. 30, 2020

Leases [Abstract]

LEASES

NOTE 14 LEASES

Operating Leases

The Company leases office space 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 escalated at 3% per year. The monthly rent payment was $7,700, which included common area maintenance costs.

In June 2020, the Company signed a lease for new office space in West Palm Beach, Florida. This lease is for a 24-month term commencing in October 2020 and expiring in September 2022. Rent payments under the new operating lease escalate 4% each year and the agreement contains two annual renewal options. The monthly rent payment is $3,500, which includes taxes and operating expenses as defined in the agreement.

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 Swiss Francs, which is approximately $1,600. 

IPS leases office space in Hauppauge, New York under a non-cancelable lease agreement expiring in February 2027. The monthly rent payment is $29,000, which includes power utilities, and the Company has the option to renew the lease for an additional five years in accordance with the terms of the lease. 

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

At June 30, 2020, other than the aforementioned new lease in West Palm Beach, Florida, the Company did not have additional operating and financing leases that have not yet commenced.

Total operating lease expense was $127,000 and $117,000 for the three months ended June 30, 2020 and 2019, respectively, and $382,000 and $366,000, for the nine months ended June 30, 2020 and 2019, respectively, and is recorded in general and administrative expenses on the condensed consolidated statements of operations.

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 $5,500 and $28,500 for the three and nine months ended June 30, 2020, respectively. Interest expense related to assets under finance leases were $650 and $2,500 for the three and nine months ended June 30, 2020, respectively.

At June 30, 2020, additional information related to operating and finance leases was as follows:

Weighted Average Remaining Lease Term:
Operating leases	11.4	years
Finance leases	1.1	years
Weighted Average Discount Rate:
Operating leases	5.75	%
Finance leases	5.75	%

 Future minimum payments under non-cancellable operating and finance leases as of June 30, 2020 were as follows:

For the Years Ending September 30,	Operating Leases			Finance Leases
Remainder of 2020	$	125,825		$	13,621
2021		413,332			24,214
2022		380,389			5,606
2023		375,732			–
2024		385,640			–
Thereafter		3,200,192			–
Total future minimum lease payments	$	4,881,110		$	43,441
Less: amount representing imputed interest		(1,363,789	)		(3,306	)
Total	$	3,517,321		$	40,135