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:


	June 30,		September 30,
	2019		2018

Raw materials	$	3,252,289	$	2,892,366
Work-in-process		816,081		817,051
Finished goods		376,814		570,691
	$	4,445,184	$	4,280,108

Prepaid expenses and other current assets

Prepaid expenses and other current assets consist of the following:


	June 30,		September 30,
	2019		2018

Prepaid insurance	$	249,012	$	258,015
Other		327,830		286,219
	$	576,842	$	544,234

Property and equipment

Property and equipment, net consists of the following:


	June 30,		September 30,
	2019		2018

Land	$	1,021,245	$	1,021,245
Computer equipment		2,285,152		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
		21,303,966		21,238,428
Less: accumulated depreciation and amortization		(12,762,168)		(12,451,691)
	$	8,541,798	$	8,786,737

Depreciation and amortization related to property and equipment was approximately $103,000 and $105,000 for the three months ended June 30, 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 $321,000 and $314,000 for the nine months ended June 30, 2019 and 2018, respectively.

Other assets

Other assets consist of the following:


	June 30,		September 30,
	2019		2018
Intangible assets, net of accumulated amortization of $546,237 and $531,637 at June 30, 2019 and September 30, 2018, respectively	$	54,000	$	68,600
Other non-current assets		106,157		113,393
	$	160,157	$	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 nine months ended June 30, 2019 and 2018.

Intangible asset amortization expense was approximately $3,000 and $0 for the three months ended June 30, 2019 and 2018, respectively. Intangible asset amortization expense was approximately $15,000 and $0 for the nine months ended June 30, 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 June 30, 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 June 30, 2019 and September 30, 2018 includes $31,000 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 $3,000 and $2,000 for the three months ended June 30, 2019 and 2018. Other non-current assets amortization expense was approximately $7,000 and $3,000 for the nine months ended June 30, 2019 and 2018, respectively.

Accrued expenses

Accrued expenses consist of the following:


	June 30,		September 30,
	2019		2018

Warranty	$	723,194	$	854,952
Salary, benefits and payroll taxes		336,186		143,183
Professional fees		159,591		203,823
Other		193,608		261,063
	$	1,412,579	$	1,463,021

Warranty cost and accrual information for the three and nine months ended June 30, 2019 is highlighted below:


	Three Months Ending		Nine Months Ending
	June 30, 2019		June 30, 2019

Warranty accrual, beginning of period	$	745,896	$	854,952
Release of accrual, net		(664)		(64,123)
Warranty cost		(22,038)		(67,635)
Warranty accrual, end of period	$	723,194	$	723,194