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LEASES

3 Months Ended

Dec. 31, 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. These 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.

On November 1, 2023, the Company entered a 5-year lease agreement for premises of approximately 122,000 sq. ft. in Fullerton, California, designated for light manufacturing and distribution of electric vehicle batteries. Base rent is $2,992 thousand for the first year (and increases approximately 4% every year) and additional operating expenses are approximately $715 thousand in the first year with subsequent annual recalculation. Security deposit payable to the landlord is approximately $1 million.

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


	December 31, 2023			September 30, 2023
Assets:
Operating lease right-of-use assets	$	13,400,598		$	5,249,417
Liabilities:
Operating lease liabilities, current		(2,137,882)			(2,134,494)
Operating lease liabilities, non-current		(9,230,806)			(3,566,922)
Total lease liabilities	$	(11,368,688)		$	(5,701,416)
Weighted average remaining lease terms:
Operating leases		4.32 years			3.98 years
Weighted average discount rate:
Operating leases		28	%		28	%


Operating lease costs:	For the three months ended December 31,
	2023		2022
Fixed lease cost	$	1,316,045	$	771,771
Variable lease cost		56,696		31,288
Sublease income		(167,163)		(63,857)
Total operating lease costs	$	1,205,578	$	739,202

Operating Lease Commitments

Our leases primarily consist of land, land and building, or equipment leases. 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 December 31, 2023:


Years ending
September 30,
2024 (9 months)	$	2,276,166
2025		5,498,855
2026		4,044,143
2027		3,962,569
2028		3,728,589
Thereafter		1,874,007
Total lease payments	$	21,384,329
Less: imputed interest		(10,015,641)
Present value of lease liabilities	$	11,368,688