Supplemental Balance Sheet Disclosures

3 Months Ended

Dec. 31, 2021

Supplemental Balance Sheet Disclosures

Supplemental Balance Sheet Disclosures

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,
	2021		2021
Raw materials	$	3,741,707	$	3,729,692
Work-in-process		678,941		629,814
Finished goods		185,827		185,886
	$	4,606,475	$	4,545,392

Prepaid expenses and other current assets

Prepaid expenses and other current assets consist of the following:

	December 31,		September 30,
	2021		2021
Prepaid insurance	$	638,385	$	318,138
Other		243,093		514,938
	$	881,478	$	833,076

Property and equipment

Property and equipment, net consists of the following:

	December 31,		September 30,
	2021		2021
Computer equipment	$	2,294,387	$	2,309,053
Corporate airplanes		5,601,039		5,601,039
Furniture and office equipment		970,725		970,725
Manufacturing facility		5,889,491		5,889,491
Equipment		5,622,877		5,545,529
Land		1,021,245		1,021,245
		21,399,764		21,337,082
Less: accumulated depreciation and amortization		(13,268,315)		(13,193,599)
	$	8,131,449	$	8,143,483

Depreciation and amortization related to property and equipment was $92,372 and $93,051 for the three-month periods ended December 31, 2021 and 2020, 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,
	2021		2021
Intangible assets, net of accumulated amortization of $634,032 at December 31, 2021 and September 30, 2021	$	62,474	$	62,474
Operating lease right-of-use asset		39,336		42,976
Other non-current assets		79,845		82,834
	$	181,655	$	188,284

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-month periods ended December 31, 2021 and 2020.

Intangible asset amortization expense was $0 and $19,914 for the three-month periods ended December 31, 2021 and 2020, 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, 2021 and September 30, 2021 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, 2021 and September 30, 2021 includes $4,545 and $7,535, 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 $2,990 and $717 for the three-month periods ended December 31, 2021 and 2020, respectively.

Accrued expenses

Accrued expenses consist of the following:

	December 31,		September 30,
	2021		2021
Warranty	$	596,436	$	589,260
Salary, benefits and payroll taxes		220,705		385,287
Professional fees		208,680		163,130
Operating lease		14,122		14,296
Other		395,585		279,142
	$	1,435,528	$	1,431,115

Warranty cost and accrual information for the three-month period ended December 31, 2021 is highlighted below:

	Three Months Ending
	December 31, 2021
Warranty accrual, beginning of period	$	589,260
Accrued expense		32,590
Warranty cost		(25,414)
Warranty accrual, end of period	$	596,436