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LEASES

9 Months Ended

Jun. 30, 2023

NOTE 17 – LEASES

We have entered into various operating lease agreements for certain offices, manufacturing and warehouse facilities, and corporate aircraft. Operating leases led to recognition of right-of-use assets, and current and noncurrent portion of lease liabilities, as appropriate. The right-of-use assets also include any lease payments made and initial direct costs incurred at lease commencement and exclude lease incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. We have lease agreements which require payments for both lease and non-lease components and have elected to account for these as a single lease component. Certain leases provide for annual increases to lease payment based on an index or rate. We calculate the present value of future lease payments based on the index or at the lease commencement date for new leases.

The table below presents information regarding our lease assets and liabilities:


	June 30, 2023			September 30, 2022
Assets:
Operating lease right-of-use assets	$	5,504,851		$	4,597,052
Liabilities:
Operating lease liabilities, current		(2,217,059)			(1,428,474)
Operating lease liabilities, non-current		(3,709,616)			(3,359,354)
Total lease liabilities	$	(5,926,675)		$	(4,787,828)
Weighted average remaining lease terms:
Operating leases		2.66 years			2.63 years
Weighted average discount rate:
Operating leases		28	%		28	%


Operating lease costs:	For the three months ended June 30,				For the nine months ended June 30,
	2023		2022		2023		2022
Fixed lease cost	$	330,175	$	327,409	$	887,294	$	1,066,680
Variable lease cost		85,298		158,399		147,120		418,999
Short-term lease cost		—		34,473		—		160,250
Sublease income		(108,127)		(46,144)		(201,875)		(152,431)
Total operating lease costs	$	307,346	$	474,137	$	832,539	$	1,493,498

Operating Lease Commitments

Our lease obligations are based upon contractual minimum rates. Most leases provide that we pay taxes, maintenance, insurance and operating expenses applicable to the premises. The initial term for most real property leases is typically 1 to 3 years, with renewal options of 1 to 5 years, and may include rent escalation clauses.

The following table reflects maturities of operating lease liabilities at June 30, 2023:


Years ending
June 30,
2023 (3 months)	$	874,278
2024		3,074,497
2025		2,423,880
2026		610,913
2027		417,425
Thereafter		115,668
Total lease payments	$	7,516,661
Less: imputed interest		(1,589,986)
Present value of lease liabilities	$	5,926,675