2. Supplemental Balance Sheet Disclosures

Inventories

Inventories are stated at the lower of cost (first-in, first-out) or net realizable value, net of write-downs for excess and obsolete inventory, and consist of the following:


	December 31,		September 30,
	2018		2018

Raw materials	$	3,153,742	$	2,892,366
Work-in-process		716,059		817,051
Finished goods		426,187		570,691
	$	4,295,988	$	4,280,108

Prepaid expenses and other current assets

Prepaid expenses and other current assets consist of the following:


	December 31,		September 30,
	2018		2018

Prepaid insurance	$	376,586	$	258,015
Income tax refund receivable		2,056		1,578
Other		251,689		284,641
	$	630,331	$	544,234

Property and equipment

Property and equipment, net consists of the following:


	December 31,		September 30,
	2018		2018

Land	$	1,021,245	$	2,268,969
Computer equipment		2,273,709		5,601,039
Corporate airplanes		5,601,039		1,033,779
Furniture and office equipment		1,033,779		5,733,313
Manufacturing facility		5,733,313		5,580,083
Equipment		5,615,118		1,021,245
		21,278,203		21,238,428
Less: accumulated depreciation and amortization		(12,558,954)		(12,451,691)
	$	8,719,249	$	8,786,737

Depreciation and amortization related to property and equipment was approximately $107,000 and $103,000 for the three months ended December 31, 2018 and 2017, respectively. The corporate airplanes are utilized primarily in support of product development. The Pilatus PC-12 airplane, one of the Company’s two corporate airplanes, has been depreciated to its estimated salvage value.

Other assets

Other assets consist of the following:


	December 31,		September 30,
	2018		2018
Intangible assets, net of accumulated amortization of $538,837 and $531,637 at December 31, 2018 and September 30, 2018, respectively	$	61,400	$	68,600
Other non-current assets		111,778		113,393
	$	173,178	$	181,993

Intangible assets consist of licensing and certification rights which are amortized over a defined number of units. No impairment charges were recorded in the three months ended December 31, 2018 and 2017.

Intangible asset amortization expense was approximately $7,000 and $0 for the three months ended December 31, 2018 and 2017, respectively. The timing of future amortization expense is not determinable because the intangible assets are being amortized over a defined number of units.

Other non-current assets as of December 31, 2018 and September 30, 2018 include the security deposit for an airplane hangar, and a deposit for medical claims required under the Company’s medical plan. In addition, other non-current assets as of December 31, 2018 and September 30, 2018 includes $36,000 and $38,000, respectively, of prepaid software licenses that will be earned upon the shipment of a certain product to a customer. Other non-current assets amortization expense was approximately $2K and $0 for the three months ended December 31, 2018 and 2017, respectively.

Accrued expenses

Accrued expenses consist of the following:


	December 31,		September 30,
	2018		2018

Warranty	$	837,317	$	854,952
Salary, benefits and payroll taxes		314,563		143,183
Professional fees		271,204		203,823
Other		326,604		261,063
	$	1,749,688	$	1,463,021

Warranty cost and accrual information for the three months ended December 31, 2018 is highlighted below:


	Three Months Ending
	December 31, 2018

Warranty accrual, beginning of period	$	854,952
Accrued expense		2,600
Warranty cost		(20,235)
Warranty accrual, end of period	$	837,317