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:


	March 31,		September 30,
	2019		2018

Raw materials	$	3,280,858	$	2,892,366
Work-in-process		842,986		817,051
Finished goods		446,968		570,691
	$	4,570,812	$	4,280,108

Prepaid expenses and other current assets

Prepaid expenses and other current assets consist of the following:


	March 31,		September 30,
	2019		2018

Prepaid insurance	$	320,407	$	258,015
Other		241,384		286,219
	$	561,791	$	544,234

Property and equipment

Property and equipment, net consists of the following:


	March 31,		September 30,
	2019		2018

Land	$	1,021,245	$	1,021,245
Computer equipment		2,291,809		2,268,969
Corporate airplanes		5,601,039		5,601,039
Furniture and office equipment		1,033,779		1,033,779
Manufacturing facility		5,733,313		5,733,313
Equipment		5,629,438		5,580,083
		21,310,623		21,238,428
Less: accumulated depreciation and amortization		(12,670,091)		(12,451,691)
	$	8,640,532	$	8,786,737

Depreciation and amortization related to property and equipment was approximately $111,000 and $106,000 for the three months ended March 31, 2019 and 2018, 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.

Depreciation and amortization related to property and equipment was approximately $218,000 and $209,000 for the six months ended March 31, 2019 and 2018, respectively.

Other assets

Other assets consist of the following:


	March 31,		September 30,
	2019		2018
Intangible assets, net of accumulated amortization of $543,837 and $531,637 at March 31, 2019 and September 30, 2018, respectively	$	56,400	$	68,600
Other non-current assets		109,147		113,393
	$	165,547	$	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 six months ended March 31, 2019 and 2018.

Intangible asset amortization expense was approximately $5,000 and $0 for the three months ended March 31, 2019 and 2018, respectively. Intangible asset amortization expense was approximately $12,000 and $0 for the six months ended March 31, 2019 and 2018, 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 March 31, 2019 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 March 31, 2019 and September 30, 2018 includes $34,000 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 $2,000 for the three months ended March 31, 2019 and 2018. Other non-current assets amortization expense was approximately $4,000 and $2,000 for the six months ended March 31, 2019 and 2018, respectively.

Accrued expenses

Accrued expenses consist of the following:


	March 31,		September 30,
	2019		2018

Warranty	$	745,896	$	854,952
Salary, benefits and payroll taxes		179,417		143,183
Professional fees		122,137		203,823
Other		411,639		261,063
	$	1,459,089	$	1,463,021

Warranty cost and accrual information for the three and six months ended March 31, 2019 is highlighted below:


	Three Months Ending		Six Months Ending
	March 31, 2019		March 31, 2019

Warranty accrual, beginning of period	$	837,317	$	854,952
Accrued expense		(66,058)		(63,458)
Warranty cost		(25,363)		(45,598)
Warranty accrual, end of period	$	745,896	$	745,896