SEGMENTS AND CONCENTRATIONS

3 Months Ended

Dec. 31, 2024

Segment Reporting [Abstract]

SEGMENTS AND CONCENTRATIONS

NOTE 5 SEGMENTS AND CONCENTRATIONS

The Company has two reportable segments: OEM distribution and design.

Our chief operating decision maker (“CODM”) regularly reviews revenue and operating income for each segment to assess financial results and allocate resources. For our OEM distribution segment, we exclude general and administrative and general corporate expenses from its measure of profitability as these expenses are not allocated to the segments and therefore not included in the measure of profitability used by the CODM. For the design segment, general and administrative expenses directly attributable to that segment are included in its measure of profitability as these expenses are included in the measure of its profitability reviewed by the CODM. We do not include intercompany activity in our segment results shown below to be consistent with the information that is presented to the CODM. Segment assets consist of accounts receivable and inventory, which are regularly reviewed by the CODM, as well as goodwill and intangible assets resulting from design segment acquisitions.

Information by segment and related reconciliations are shown in tables below:

	For the Three Months Ended December 31,
	2024			2023
Revenues:
OEM distribution	$	1,991,000		$	2,010,000
Design		4,625,000			5,142,000
Total segment revenues	$	6,616,000		$	7,152,000
Operating income / (loss):
OEM distribution	$	223,000		$	41,000
Design		(260,000	)		266,000
Total segment operating (loss)/income		(37,000	)		307,000
General corporate expenses		(671,000	)		(687,000	)
Operating loss from continuing operations before income taxes		(708,000	)		(380,000	)
Other expense / (income), net		–			1,000
Loss from continuing operations before income taxes	$	(708,000	)	$	(381,000	)
Depreciation and amortization:
OEM distribution	$	–		$	1,000
Design		84,000			80,000
Total depreciation and amortization	$	84,000		$	81,000

	December 31, 2024		September 30, 2024
Segment Assets:
OEM distribution	$	2,230,000	$	2,614,000
Design		5,346,000		5,820,000
Total segment assets		7,576,000		8,434,000
General corporate assets		5,916,000		6,334,000
Total assets	$	13,492,000	$	14,768,000

The Company had certain customers whose individual percentage of the Company’s consolidated revenues and accounts receivable was 10% or greater. Revenues from one customer in the design segment represented 22.6% and 27.5% of the Company’s consolidated net revenues for the three months ended December 31, 2024 and 2023, respectively. There were no customers in the OEM distribution segment whose individual percentage of the Company’s consolidated revenues was 10% or greater during the three months ended December 31, 2024 or 2023.

Accounts receivable from three customers in the design segment represented 40.2% of the Company’s consolidated accounts receivable at December 31, 2024 and accounts receivable from one customer in the design segment represented 19.0% of the Company’s consolidated accounts receivable at September 30, 2024. One customer in the OEM segment, or its affiliates or contract manufacturers, represented 11.4% and 14.5% of the Company’s consolidated accounts receivable at December 31, 2024 and September 30, 2024, respectively.

In December 2024, our largest design customer notified us of its plan to discontinue their insulin patch pump program, on which we were working. The Company expects this to cause a material decrease in design segment revenues beginning in the second quarter of Fiscal 2025.