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Commitments and contingencies
 3 Months Ended
Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments and contingencies

Note 13— Commitments and contingencies

 

Lease commitments

 

The Company has adopted ASC 842 since its inception date.

 

The Company has entered into a lease agreement for office and production space in Texas with a lease period from December 1, 2019 until December 31, 2024 at a rent rate of $4,129 to $5,089 per month.

 

The Company has also entered into a lease agreement for office and production space in Corona, California with a lease period from May 1, 2022 until April 30, 2027 at a rate of $6,617 to $7,740 per month. In August 2023, the Company relocated its California office from Corona to Diamond Bar. The Company is obligated to pay the monthly rent for the office in Corona California until the landlord finds a new lessee to occupy the facility. The new lease in Diamond Bar, California has a term of 24 months from August 1, 2023 to July 31, 2025 at a rate of $4,730 to $4,926 per month.

 

In addition, the Company will be responsible for its pro rata share of certain costs, including utility costs, insurance and common area costs, as further detailed in the lease agreements.

 

 

Total commitment for the full term of these leases is $710,116. $394,657 and $437,770 of operating lease right-of-use assets and $466,858 and $488,094 of operating lease liabilities were reflected on the December 31, 2023 and September 30, 2023 consolidated balance sheets, respectively.

 

The three months ended December 31, 2023 and 2022:

 

 

Lease cost  2023   2022 
Operating lease cost (included in G&A in the Company’s statement of operations)  $51,705   $36,351 
Other information          
Cash paid for amounts included in the measurement of lease liabilities  $24,726   $35,115 
Remaining term in years   1.0 – 3.33    2.0 – 4.33 
Average discount rate – operating leases   8.5%   8%

 

The supplemental balance sheet information related to leases is as follows:

 

 

Operating leases  December 31, 2023   September 30, 2023 
Right of use asset – non-current  $394,657   $437,770 
Lease Liability – current   237,563    212,277 
Lease Liability – non-current   229,295    275,817 
Total operating lease liabilities  $466,858   $488,094 

 

Maturities of the Company’s lease liabilities are as follows:

 

 

  

Operating Lease

 
For periods subsequent to December 31, 2023:     
The remaining nine months ended September 30, 2024  $231,693 
2025   154,532 
2026   90,800 
2027   54,183 
Less: Imputed interest/present value discount   (64,350)
Present value of lease liabilities  $466,858 

 

Contingencies

 

A garnishment order on December 27, 2023 resulting from a legal action initiated by a creditor against the Company was issued by a court in the state of Ohio. The Creditor is seeking a total amount of $67,978 (owed amount plus interest and other expenses). Because of the garnishment order, the Company’s bank account was debited in the amount of $17,330. Except the garnishment order, the Company is not currently a party to any material legal proceedings, investigations or claims. As the Company may, from time to time, be involved in legal matters arising in the ordinary course of its business, there can be no assurance that such matters will not arise in the future or that any such matters in which the Company is involved, or which may arise in the ordinary course of the Company’s business, will not at some point proceed to litigation or that such litigation will not have a material adverse effect on the business, financial condition or results of operations of the Company.