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Note 10 - Accrued Liabilities | 3 Months Ended
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Dec. 31, 2019
Notes to Financial Statements |
Current and Noncurrent Accrued Liabilities [Text Block] |
10 . | ACCRUED LIABILITIES
Accrued liabilities consisted of the following:
|  | December 31, |  |  | September 30, |
|  | 2019 |  |  | 2019 |
Payroll and related |  | $ | 993,089 |  |  | $ | 2,050,324 |
Deferred revenue |  |  | 369,253 |  |  |  | 508,522 |
Customer deposits |  |  | 4,446,761 |  |  |  | 5,063,091 |
Accrued contract costs |  |  | 391,083 |  |  |  | 252,833 |
Warranty reserve |  |  | 128,032 |  |  |  | 150,229 |
Deferred rent |  |  | - |  |  |  | 109,342 |
Total |  | $ | 6,328,218 |  |  | $ | 8,134,341 |
Other liabilities-noncurrent consisted of the following:
|  | December 31, |  |  | September 30, |
|  | 2019 |  |  | 2019 |
Deferred rent |  | $ | - |  |  | $ | 1,881,387 |
Deferred extended warranty revenue |  |  | 490,794 |  |  |  | 550,885 |
Total |  | $ | 490,794 |  |  | $ | 2,432,272 |
Payroll and related Payroll and related consisted primarily of accrued vacation, bonus, sales commissions, and benefits. Deferred Revenue Deferred revenue at December 31, 2019 included prepayments from customers for services, including extended warranty, scheduled to be performed in the twelve months ended December 31, 2020. Accrued contract costs Accrued contract costs consist of accrued expenses for contracting a third -party service provider to fulfill repair and maintenance obligations required under a contract with a foreign military for units sold in the year ended September 30, 2011. Payments to the service provider will be made annually upon completion of each year of service. A new contract was signed with the customer in May 2019 to continue repair and maintenance services through May 2024. These services are being recorded in cost of revenues to correspond with the revenues for these services. W arranty Reserve Changes in the warranty reserve and extended warranty were as follows:
|  | December 31, |  |  | September 30, |
|  | 2019 |  |  | 2019 |
Beginning balance |  | $ | 150,229 |  |  | $ | 99,216 |
Warranty provision |  |  | (19,516 | ) |  |  | 85,078 |
Warranty settlements |  |  | (2,681 | ) |  |  | (34,065 | )
Ending balance |  | $ | 128,032 |  |  | $ | 150,229 |
The Company establishes a warranty reserve based on anticipated warranty claims at the time product revenue is recognized. Factors affecting warranty reserve levels include the number of units sold, anticipated cost of warranty repairs and anticipated rates of warranty claims. The Company evaluates the adequacy of the provision for warranty costs each reporting period and adjusts the accrued warranty liability to an amount equal to estimated warranty expense for products currently under warranty. Deferred Rent Deferred rent liability as of September 30, 2019 consists of the difference between the average rental amount charged to expense and amounts payable under the lease for the Company’s operating facility. Deferred rent also includes cash and leasehold incentives from the landlord in the aggregate amount of $1,990,729 as of September 30, 2019 to compensate for costs incurred by the Company to make the office space ready for operation (leasehold incentives). Prior to the adoption of Topic 842, leasehold incentives received from a landlord are deferred and recognized on a straight-line basis as a reduction to rent expense over the lease term. Upon adoption of Topic 842, the leasehold incentives were a reduction to the measurement of the operating lease ROU asset. Refer to Note 3, Recent Accounting Pronouncements and Note12, Leases for further detail on the adoption of Topic 842. Deferred Extended Warranty Revenue Deferred extended warranty revenue consists of warranties purchased in excess of the Company’s standard warranty. Extended warranties typically range from one to two years.

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