XML 28 R16.htm IDEA: XBRL DOCUMENT

LEASES

9 Months Ended

Jun. 30, 2022

NOTE 10 – LEASES

ASC 842, “Leases”, requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at either the effective date (the “effective date method”) or the beginning of the earliest period presented (the “comparative method”) using a modified retrospective approach. Under the effective date method, the Company’s comparative period reporting is unchanged. In contrast, under the comparative method, the Company’s date of initial application is the beginning of the earliest comparative period presented, and the Topic 842 transition guidance is then applied to all comparative periods presented. Further, under either transition method, the standard includes certain practical expedients intended to ease the burden of adoption. The Company adopted ASC 842 October 1, 2019, using the effective date method and elected certain practical expedients allowing the Company not to reassess:

	●	whether expired or existing contracts contain leases under the new definition of a lease;
	●	lease classification for expired or existing leases; and
	●	whether previously capitalized initial direct costs would qualify for capitalization under Topic 842.

The Company also made the accounting policy decision not to recognize lease assets and liabilities for leases with a term of 12 months or less.

The Company entered into operating leases for its facilities in New York, United Kingdom, and India, as well as for vehicles for use in our Industrial Services segment. The operating lease terms range from 1 to 7 years. The Company excluded the renewal option on its applicable facility leases from the calculation of its right-of-use assets and lease liabilities.

Finance and operating lease liabilities consist of the following:

	June 30,		September 30,
	2021		2021
Lease liabilities - current
Finance leases	$	-	$	-
Operating leases		819,488		830,791
		819,488		830,791

Lease liabilities - net of current portion
Finance leases	$	-	$	-
Operating leases		1,799,002		2,017,408
	$	1,799,002	$	2,017,408

A reconciliation of undiscounted cash flows to finance and operating lease liabilities recognized in the condensed consolidated balance sheet at June 30, 2022, is set forth below:

Years ending September 30,	Finance leases		Operating Leases			Total
2022		-		275,319			275,319
2023		-		834,504			834,504
2024		-		660,865			660,865
2025		-		638,531			638,531
2026 & Thereafter		-		702,252			702,252
Undiscounted lease payments		-		3,111,471			3,111,471
Amount representing interest		-		(492,981	)		(492,981	)
Discounted lease payments	$	-	$	2,618,490		$	2,618,490

Additional disclosures of lease data are set forth below:

SCHEDULE OF LEASE COSTS

	Nine months ended
	June 30, 2022			June 30, 2021
Lease costs:
Finance lease costs:
Depreciation of finance lease assets	$	-		$	17,184
Interest on lease liabilities		-			88

Operating lease costs:
Operating lease expense	$	686,124		$	727,374

Other information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating leases	$	546,896		$	650,535
Finance leases		-			28,535
	$	546,896		$	679,070

Weighted-average remaining lease term - finance leases (months)		0			3
Weighted-average remaining lease term - operating leases (months)		33			58

Weighted-average discount rate - finance leases		N/A			3.63	%
Weighted-average discount rate - operating leases		5.66	%		6.85	%

The Company used the rate implicit in the lease, where known, or its incremental borrowing rate as the rate used to discount the future lease payments.