Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 31, 2018 | Feb. 13, 2019 | |
Document and Entity Information: | ||
Entity Registrant Name | TRACK GROUP, INC. | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2018 | |
Amendment Flag | false | |
Entity Central Index Key | 1,045,942 | |
Current Fiscal Year End Date | --09-30 | |
Entity Common Stock, Shares Outstanding | 11,401,650 | |
Trading Symbol | TRCK | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Current Reporting Status | Yes | |
Document Fiscal Year Focus | 2,019 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2018 | Sep. 30, 2018 |
Current assets: | ||
Cash | $ 5,865,546 | $ 5,446,557 |
Accounts receivable, net of allowance for doubtful accounts of $3,218,902 and $3,152,966, respectively | 6,192,940 | 5,978,896 |
Note receivable, net of allowance for doubtful accounts of $234,733, respectively | 0 | 0 |
Prepaid expenses and other | 1,337,300 | 1,270,043 |
Inventory, net of reserves of $26,934, respectively | 154,408 | 277,119 |
Total current assets | 13,550,194 | 12,972,615 |
Property and equipment, net of accumulated depreciation of $2,034,514 and $1,999,222, respectively | 781,704 | 745,475 |
Monitoring equipment, net of accumulated amortization of $5,693,930 and $5,325,654, respectively | 2,968,188 | 3,162,542 |
Intangible assets, net of accumulated amortization of $12,455,608 and $12,016,512, respectively | 22,537,375 | 23,253,054 |
Goodwill | 7,892,845 | 8,076,759 |
Other assets | 124,237 | 145,839 |
Total assets | 47,854,543 | 48,356,284 |
Current liabilities: | ||
Accounts payable | 2,346,015 | 2,518,030 |
Accrued liabilities | 11,664,052 | 10,333,103 |
Current portion of long-term debt | 30,437,810 | 30,437,810 |
Total current liabilities | 44,447,877 | 43,288,943 |
Long-term debt, net of current portion | 3,416,296 | 3,428,975 |
Total liabilities | 47,864,173 | 46,717,918 |
Commitments and contingencies (Note 21) | 0 | 0 |
Stockholders' equity (deficit): | ||
Common stock, $0.0001 par value: 30,000,000 shares authorized; 11,401,650 shares outstanding, respectively | 1,140 | 1,140 |
Series A Convertible Preferred stock, $0.0001 par value: 1,200,000 shares authorized; 0 shares outstanding | 0 | 0 |
Additional paid-in capital | 302,186,084 | 302,102,866 |
Accumulated deficit | (301,323,257) | (299,495,370) |
Accumulated other comprehensive loss | (873,597) | (970,270) |
Total equity (deficit) | (9,630) | 1,638,366 |
Total liabilities and stockholders' equity (deficit) | $ 47,854,543 | $ 48,356,284 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2018 | Sep. 30, 2018 |
Condensed Consolidated Balance Sheets Parenthetical | ||
Allowance for doubtful accounts, accounts receivable | $ 3,218,902 | $ 3,152,966 |
Allowance for doubtful accounts, note receivable | 234,733 | 234,733 |
Reserve for inventory | 26,934 | 26,934 |
Property and equipment accumulated depreciation | 2,034,514 | 1,999,222 |
Monitoring equipment accumulated amortization | 5,693,930 | 5,325,654 |
Intangible assets accumulated amortization | $ 12,455,608 | $ 12,016,512 |
Common Stock - par value | $ .0001 | $ 0.0001 |
Common Stock - shares authorized | 30,000,000 | 30,000,000 |
Common Stock - shares outstanding | 11,401,650 | 11,401,650 |
Series A Convertible Preferred Stock - par value | $ 0.0001 | $ .0001 |
Series A Convertible Preferred Stock - shares authorized | 1,200,000 | 1,200,000 |
Series A Convertible Preferred Stock - shares outstanding | 0 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue: | ||
Monitoring services | $ 8,060,328 | $ 7,350,805 |
Product sales and other | 151,207 | 139,889 |
Total revenue | 8,211,535 | 7,490,694 |
Cost of revenues: | ||
Monitoring, products & other related services | 3,100,193 | 2,542,007 |
Depreciation & amortization included in cost of revenue | 478,289 | 477,142 |
Total cost of revenues | 3,578,482 | 3,019,149 |
Gross profit | 4,633,053 | 4,471,545 |
Operating expenses: | ||
General & administrative | 3,422,272 | 3,657,738 |
Selling & marketing | 503,930 | 409,737 |
Research & development | 248,865 | 163,946 |
Depreciation & amortization | 514,981 | 564,740 |
Total operating expense | 4,690,048 | 4,796,161 |
Loss from operations | (56,995) | (324,616) |
Other income (expense): | ||
Interest expense, net | (601,239) | (673,827) |
Currency exchange rate gain (loss) | (932,677) | (55,072) |
Other income/expense, net | 0 | 10,924 |
Total other expense | (1,533,916) | (717,975) |
Loss before income taxes | (1,590,911) | (1,042,591) |
Income tax expense | 144,007 | 0 |
Net loss attributable to common shareholders | (1,734,918) | (1,042,591) |
Foreign currency translation adjustments | 96,673 | 188,725 |
Comprehensive loss | $ (1,638,245) | $ (853,866) |
Net loss per common share, basic and diluted | $ (0.16) | $ (0.10) |
Weighted average common shares outstanding, basic and diluted | 11,101,650 | 10,476,346 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (1,734,918) | $ (1,042,591) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 993,270 | 1,041,882 |
Bad debt expense | 90,400 | 186,910 |
Accretion of debt discount | 0 | 55,744 |
Stock based compensation | 83,217 | 787,590 |
Loss on monitoring equipment included in cost of sales | 104,079 | 95,817 |
Foreign currency exchange loss | 932,677 | 55,072 |
Change in assets and liabilities: | ||
Accounts receivable, net | (380,133) | (354,633) |
Inventories | 0 | 69,836 |
Prepaid expenses and other assets | (106,071) | (1,009,813) |
Accounts payable | (153,689) | (238,490) |
Accrued liabilities | 1,309,601 | 680,886 |
Net cash provided by operating activities | 1,138,433 | 328,210 |
Cash flow from investing activities: | ||
Purchase of property and equipment | (141,595) | (28,685) |
Capitalized software | (275,623) | (254,899) |
Purchase of monitoring equipment and parts | (133,981) | (311,142) |
Net cash used in investing activities | (551,199) | (594,726) |
Cash flow from financing activities: | ||
Principal payments on long-term debt | (9,357) | (17,289) |
Net cash used in financing activities | (9,357) | (17,289) |
Effect of exchange rate changes on cash | (158,888) | 11,921 |
Net increase (decrease) in cash | 418,989 | (271,884) |
Cash, beginning of period | 5,446,557 | 2,027,321 |
Cash, end of period | 5,865,546 | 1,755,437 |
Cash paid for interest | 8,858 | 10,708 |
Supplemental schedule of non-cash investing and financing activities: | ||
Non-cash transfer of inventory to monitoring equipment | $ 128,044 | $ 81,893 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Basis of Presentation | The unaudited interim condensed consolidated financial information of Track Group, Inc. and subsidiaries (collectively, the “ Company Track Group SEC GAAP As of December 31, 2018 and 2017, the Company had an accumulated deficit of $301,323,257 and $295,109,920, respectively. The Company incurred a net loss of $1,734,918 and $1,042,591 for the three months ended December 31, 2018 and 2017, respectively. The Company also has debt maturing in the next 12 months. The Company’s successful development and transition to attaining profitable operations is dependent upon achieving a level of revenue adequate to support its cost structure. Management has evaluated the significance of these conditions and has determined that the Company can meet its operating obligations for a reasonable period of time. The Company expects to fund operations using cash on hand, through operational cash flows and the extension of its existing debt agreement. Management of the Company believes that the availability of financing from these sources is adequate to fund operations through the upcoming twelve months. |
Principles of Consolidation
Principles of Consolidation | 3 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Principles of Consolidation | The consolidated financial statements include the accounts of Track Group, Inc. and its active subsidiaries, Track Group Analytics Limited, Track Group Americas, Inc., Track Group International LTD., and Track Group - Chile SpA. All significant inter-company transactions have been eliminated in consolidation. |
Recent Accounting Standards
Recent Accounting Standards | 3 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Recently Issued Accounting Standards | From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“ FASB Recently Adopted Accounting Standards In May 2014, the FASB issued Accounting Standards Update (“ ASU Revenue from Contracts with Customers (Topic 606)” ASC 606 In May 2017, the FASB issued ASU 2017-09, “Compensation - Stock Compensation: Scope of Modification Accounting” In August 2016, the FASB issued ASU 2016-15, “ Statement of Cash Flows (Topic 230) Recently Issued Accounting Standards In January 2017, the FASB issued ASU 2017-04, “ Intangibles – Goodwill and Other: Simplifying the Test for Goodwill Impairment In February 2016, FASB issued ASU No. 2016-02, “ Leases (Topic 841) |
Impairment of Long-lived Assets
Impairment of Long-lived Assets | 3 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Impairment of Long-lived Assets | The Company reviews its long-lived assets for impairment when events or changes in circumstances indicate that the book value of an asset may not be recoverable and in the case of goodwill, at least annually. The Company evaluates whether events and circumstances have occurred which indicate possible impairment as of each balance sheet date. If the carrying amount of an asset exceeds its fair value, an impairment charge is recognized for the amount by which the carrying amount exceeds the estimated fair value of the asset. Impairment of long-lived assets is assessed at the lowest levels for which there is an identifiable fair value that is independent of other groups of assets. |
Business Combinations
Business Combinations | 3 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Business Combinations | The Company accounts for its business acquisitions under the acquisition method of accounting as indicated in ASC 805, Business Combinations, which requires the acquiring entity in a business combination to recognize the fair value of all assets acquired, liabilities assumed, and any non-controlling interest in the acquiree, and establishes the acquisition date as the fair value measurement point. Accordingly, the Company recognizes assets acquired and liabilities assumed in business combinations, including contingent assets and liabilities and non-controlling interest in the acquiree, based on fair value estimates as of the date of acquisition. In accordance with ASC 805, the Company recognizes and measures goodwill as of the acquisition date, as the excess of the fair value of the consideration paid over the fair value of the identified net assets acquired. Acquired Assets and Assumed Liabilities Pursuant to ASC No. 805-10-25, if the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, but during the allowed measurement period not to exceed one year from the acquisition date, the Company retrospectively adjusts the provisional amounts recognized at the acquisition date, by means of adjusting the amount recognized for goodwill. Contingent Consideration In certain acquisitions, the Company has agreed to pay additional amounts to sellers contingent upon achievement by the acquired businesses of certain future goals, which may include revenue milestones, new customer accounts, and earnings targets. The Company records contingent consideration based on its estimated fair value as of the date of the acquisition. The Company evaluates and adjusts the value of contingent consideration, if necessary, at each reporting period based on the progress toward and likely achievement of certain targets on which issuance of the contingent consideration is based. Any differences between the acquisition-date fair value and the changes in fair value of the contingent consideration subsequent to the acquisition date are recognized in current period earnings until the arrangement is settled. If there is uncertainty surrounding the value of contingent consideration, then the Company’s policy is to wait until the end of the measurement period before making an adjustment. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Accumulated Other Comprehensive Income (Loss) | Comprehensive income (loss) includes net income (loss) as currently reported under GAAP and other comprehensive income (loss). Other comprehensive income (loss) considers the effects of additional economic events, such as foreign currency translation adjustments, that are not required to be recorded in determining net income (loss), but rather are reported as a separate component of stockholders’ equity. The Chilean Peso, New Israeli Shekel and the Canadian Dollar are used as functional currencies of the following operating subsidiaries: (i) Track Group Chile SpA; (ii) Track Group International Ltd.; and (iii) Track Group Analytics Limited, respectively. The balance sheets of all subsidiaries have been converted into United States Dollars (USD) at the prevailing exchange rate at December 31, 2018. |
Net Income (Loss) Per Common Sh
Net Income (Loss) Per Common Share | 3 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Net Income (Loss) Per Common Share | Basic net income (loss) per common share (“ Basic EPS Diluted net income (loss) per common share (“ Diluted EPS Common share equivalents consist of shares issuable upon the exercise of common stock options and warrants. As of December 31, 2018 and 2017, there were 681,926 and 570,467 outstanding common share equivalents, respectively, that were not included in the computation of Diluted EPS for the three months ended December 31, 2018 and 2017, respectively, as their effect would be anti-dilutive. The common stock equivalents outstanding as of December 31, 2018 and 2017 consisted of the following: December 31, December 31, 2018 2017 Exercisable common stock options and warrants 681,926 570,467 Total common stock equivalents 681,926 570,467 At December 31, 2018 and 2017, all stock option and warrant exercise prices were above the market price of $0.51 and $1.05, respectively, and thus have not been included in the basic earnings per share calculation. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Dec. 31, 2018 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | In May 2014, the FASB issued ASU 2014-09 and related amendments, which superseded all prior revenue recognition methods and industry-specific guidance. The principle of ASC 606 is that an entity should recognize revenue to depict the transfer of control for promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying the revenue principles, an entity is required to identify the contract(s) with a customer, identify the performance obligations, determine the transaction price, allocate the transaction price to the performance obligations and recognize revenue when the performance obligation is satisfied (i.e., either over time or at a point in time). ASC 606 further requires that companies disclose sufficient information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. On October 1, 2018, the Company adopted ASC 606 using the modified retrospective method, whereby the adoption does not impact any prior periods. Monitoring and Other Related Services. Product Sales and Other. Multiple Element Arrangements. The standalone selling price for each performance obligation is an amount that depicts the amount of consideration to which the entity expects to be entitled in exchange for transferring the good or service. When there is only one performance obligation associated with a contract, the entire sale value is attributed to that obligation. When a contract contains multiple performance obligations the transaction value is first allocated using the observable price, which is generally a list price net of applicable discount or the price used to sell in similar circumstances. In circumstances when a selling price is not directly observable, we will estimate the standalone selling price using information available to us. Effect of Adopting ASC 606. The cumulative effect of the changes made to the Company's Consolidated October 1, 2018 Balance Sheet for the adoption of ASC 606 is as follows: Balance Sheet As Reported at September 30, 2018 Adjustments Balance as of October 1, 2018 LIABILITIES Accrued liabilities 10,333,103 92,969 10,426,072 Total current liabilities 43,288,943 92,969 43,381,912 Total liabilities 46,717,918 92,969 46,810,887 STOCKHOLDERS' EQUITY Accumulated deficit (299,495,370 ) (92,969 ) (299,588,339 ) Total equity 1,638,366 (92,969 ) 1,545,397 Total liabilities and stockholders’ equity 48,356,284 (92,969 ) 48,263,315 The following tables present the Company’s revenue disaggregated by geography, based on management’s assessment of available data: Three months ended December 31, 2018 Three months ended December 31, 2017 Total Revenue % of Total Revenue Total Revenue % of Total Revenue United States $ 5,061,559 62 % $ 4,929,390 66 % Latin America 3,107,553 38 % 2,506,023 33 % Other 42,423 0 % 55,281 1 % Total $ 8,211,535 100 % $ 7,490,694 100 % The above table includes total revenue for the Company, of which monitoring and other related services is the majority (approximately 98%) of the Company’s revenue. Other revenue, including product sales, license renewals and parts, is considered immaterial to the Company’s overall revenue. |
Prepaid Expense and Other
Prepaid Expense and Other | 3 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Prepaid Expense and Other | As of December 31, 2018, and September 30, 2018, the outstanding balance of prepaid and other expense was $1,337,300 and $1,270,043, respectively. These balances are comprised largely of a performance bond deposit, tax deposits, vendor deposits and other prepaid supplier expense. |
Inventory
Inventory | 3 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Inventory | Inventory is valued at the lower of the cost or net realizable value. Cost is determined using the standard costing method. Net realizable value is determined based on the item selling price. Inventory is periodically reviewed in order to identify obsolete or damaged items or impaired values. The Company did not record impairment of inventory during the quarters ended December 31, 2018 and 2017, respectively. Inventory consists of finished goods that are to be shipped to customers and parts used for minor repairs of ReliAlert™, Shadow, and other tracking devices. Completed and shipped ReliAlert™ and other tracking devices are reflected in Monitoring Equipment. As of December 31, 2018 and September 30, 2018, inventory consisted of the following: December 31, 2018 September 30, 2018 Finished goods inventory $ 181,342 $ 304,053 Reserve for damaged or obsolete inventory (26,934 ) (26,934 ) Total inventory, net of reserves $ 154,408 $ 277,119 The Company uses a third-party fulfillment service provider. As a result of this service, the Company’s employees do not actively assemble new product or repair damaged inventory or monitoring equipment shipped directly from suppliers. Purchases of monitoring equipment are recognized directly. Management believes this process reduces maintenance and fulfillment costs associated with inventory and monitoring equipment. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Property and Equipment | Property and equipment consisted of the following as of December 31, 2018 and September 30, 2018, respectively: December 31, 2018 September 30, 2018 Equipment, software and tooling $ 1,128,701 $ 1,074,471 Automobiles 5,834 6,153 Leasehold improvements 1,376,603 1,358,984 Furniture and fixtures 305,080 305,089 Total property and equipment before accumulated depreciation 2,816,218 2,744,697 Accumulated depreciation (2,034,514 ) (1,999,222 ) Property and equipment, net of accumulated depreciation $ 781,704 $ 745,475 Property and equipment depreciation expense for the three months ended December 31, 2018 and 2017 was $79,636 and $114,417, respectively. |
Monitoring Equipment
Monitoring Equipment | 3 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Monitoring Equipment | The Company leases monitoring equipment to agencies for offender tracking under contractual service agreements. The monitoring equipment is depreciated using the straight-line method over an estimated useful life of between one and five years. Monitoring equipment as of December 31, 2018 and September 30, 2018 was as follows: December 31, 2018 September 30, 2018 Monitoring equipment $ 8,662,118 $ 8,488,196 Less: accumulated amortization (5,693,930 ) (5,325,654 ) Monitoring equipment, net of accumulated depreciation $ 2,968,188 $ 3,162,542 Depreciation of monitoring equipment for the three months ended December 31, 2018 and 2017 was $354,626 and $353,027, respectively. Depreciation expense for monitoring devices is recognized in cost of revenue. During the three months ended December 31, 2018 and December 31, 2017, the Company recorded charges of $104,079 and $95,817, respectively, for devices that were lost, stolen, damaged or otherwise impaired. Lost, stolen and damaged items are included in Monitoring, products & other related services in the Condensed Consolidated Statement of Operations. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Intangible Assets | The following table summarizes intangible assets at December 31, 2018 and September 30, 2018, respectively: December 31, 2018 September 30, 2018 Other intangible assets: Patent & royalty agreements $ 21,170,565 $ 21,170,565 Developed technology 11,566,373 11,835,293 Customer relationships 1,860,000 1,860,000 Trade name 317,844 325,507 Website 78,201 78,201 Total intangible assets 34,992,983 35,269,566 Accumulated amortization (12,455,608 ) (12,016,512 ) Intangible assets, net $ 22,537,375 $ 23,253,054 The intangible assets summarized above were purchased or developed on various dates from January 2010 through December 31, 2018. The assets have useful lives ranging from three to twenty years. Amortization expense for the three months ended December 31, 2018 and 2017 was $559,008 and $574,438, respectively. |
Goodwill
Goodwill | 3 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | The following table summarizes the activity of goodwill at December 31, 2018 and September 30, 2018, respectively: December 31, September 30, 2018 2018 Balance - beginning of period $ 8,076,759 $ 8,226,714 Effect of foreign currency translation on goodwill (183,914 ) (149,955 ) Balance - end of period $ 7,892,845 $ 8,076,759 Goodwill is recognized in connection with acquisition transactions in accordance with ASC 805. The Company performs an impairment test for goodwill annually or more frequently if indicators of potential impairment exist. No impairment of goodwill was recognized through December 31, 2018. |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Accrued Liabilities | Accrued liabilities consisted of the following as of December 31, 2018 and September 30, 2018, respectively: December 31, 2018 September 30, 2018 Accrued payroll, taxes and employee benefits $ 2,206,196 $ 1,937,021 Deferred revenue 234,012 150,604 Deposits payable 54,504 54,504 Accrued taxes - foreign and domestic 363,397 351,469 Accrued other expense 309,962 298,268 Accrued legal costs 607,376 473,777 Accrued costs of revenue 460,784 230,514 Accrued bond guarantee 149,059 157,199 Accrued interest 7,278,762 6,679,747 Total accrued liabilities $ 11,664,052 $ 10,333,103 |
Debt Obligations
Debt Obligations | 3 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Debt Obligations | Debt obligations as of December 31, 2018 and September 30, 2018, respectively, are comprised of the following: December 31, 2018 September 30, 2018 Unsecured facility agreement with Conrent S.A. whereby, as of June 30, 2015, the Company had borrowed $30.4 million, bearing interest at a rate of 8% per annum, payable in arrears semi-annually, with all principal and accrued and unpaid interest due on April 1, 2019. The Company did not pay interest on this loan during the three months ended December 31, 2018. $ 30,400,000 $ 30,400,000 Loan Agreement whereby the Company can borrow up to $5.0 million at 8% interest per annum on borrowed funds maturing on September 30, 2020. 3,399,644 3,399,644 Non-interest bearing notes payable to a Canadian governmental agency assumed in conjunction with the G2 acquisition. 54,462 67,141 Total debt obligations 33,854,106 33,866,785 Less current portion (30,437,810 ) (30,437,810 ) Long-term debt, net of current portion $ 3,416,296 $ 3,428,975 The following table summarizes future maturities of debt obligations as of December 31, 2018: Twelve-month period ended December 31, Total 2019 $ 30,437,810 2020 3,416,296 Thereafter - Total $ 33,854,106 |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Related-Party Transactions | Related-Party Loan Agreement On September 25, 2015, the Company entered into the Sapinda Loan Agreement with Sapinda, a related party at that time, to provide the Company with a $5.0 million line of credit that accrued interest at a rate of 3% per annum for undrawn funds, and 8% per annum for borrowed funds. Pursuant to the terms and conditions of the Sapinda Loan Agreement, available funds could be drawn down at the Company’s request at any time prior to the maturity date of September 30, 2017 (the “ Maturity Date On March 13, 2017, the Company and Sapinda entered into Amendment Number One to the Sapinda Loan Agreement. Amendment Number One extended the maturity date of all loans made pursuant to the Sapinda Loan Agreement to September 30, 2020. In addition, Amendment Number One eliminated the requirement that the Company pay Sapinda the 3% interest, and forgave the 3% interest due to Sapinda for all undrawn funds under the Sapinda Loan Agreement through the Execution Date. Further, Amendment Number One provided that all Lender Penalties accrued under the Sapinda Loan Agreement through the Execution Date were forgiven. Per Amendment Number One, Lender Penalties began to accrue again because Sapinda failed to fund the amount of $1.5 million on or before March 31, 2017. The Company formally notified Sapinda of the breach by letter dated April 4, 2017. The Company is again accruing Lender Penalties, amounting to $640,000 at , under Section 6.3 of the Sapinda Loan Agreement, as amended, and the Company intends to offset Lender Penalties against future payments due. Further advances under the Sapinda Loan Agreement are not currently expected to be forthcoming, and therefore no assurances can be given that the Company will obtain additional funds to which it is entitled under the Sapinda Loan Agreement, or that the penalties accruing will ever be paid. Additional Related-Party Transactions and Summary of All Related-Party Obligations December 31, 2018 September 30, 2018 Related party loan with an interest rate of 8% per annum for borrowed funds. Principal and interest due September 30, 2020. $ 3,399,644 $ 3,399,644 Total related-party debt obligations $ 3,399,644 $ 3,399,644 Each of the foregoing related-party transactions was reviewed and approved by disinterested and independent members of the Company’s Board of Directors. |
Preferred and Common Stock
Preferred and Common Stock | 3 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Preferred and Common Stock | The Company is authorized to issue up to 30,000,000 shares of common stock, $0.0001 par value per share. The Company is authorized to issue up to 20,000,000 shares of preferred stock, $0.0001 par value per share. The Company’s Board of Directors has the authority to amend the Company’s Certificate of Incorporation, without further shareholder approval, to designate and determine, in whole or in part, the preferences, limitations and relative rights of the preferred stock before any issuance of the preferred stock, and to create one or more series of preferred stock. As of December 31, 2018, there were no shares of preferred stock outstanding. Series A Preferred Stock On October 12, 2017, the Company filed a Certificate of Designation of the Relative Rights and Preferences (“ Certificate of Designation Except with respect to transactions upon which holders of the Series A Preferred are entitled to vote separately as a class under the terms of the Certificate of Designation, the Series A Preferred has no voting rights. The Series A Preferred has no separate dividend rights; however, whenever the Board declares a dividend on the Company’s Common Stock, if ever, each holder of record of a share of Series A Preferred shall be entitled to receive an amount equal to such dividend declared on one share of common stock multiplied by the number of shares of common stock into which such share of Series A Preferred could be converted on the Record Date. Each share of Series A Preferred has a Liquidation Preference of $35.00 per share, and is convertible, at the holder’s option, into ten shares of the Company’s Common Stock, subject to adjustments as set forth in the Certificate of Designation, at any time beginning five hundred and forty days after the date of issuance. As of December 31, 2018, no shares of Series A Preferred were issued and outstanding. |
Stock Options and Warrants
Stock Options and Warrants | 3 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Stock Options and Warrants | Stock Incentive Plan At the annual meeting of shareholders on March 21, 2011, our shareholders approved the 2012 Equity Compensation Plan (the “ 2012 Plan As of December 31, 2018, the Board of Directors suspended further awards under the 2012 Plan until further notice. The Company recorded expense of $65,312 and $149,088 for the three months ended December 31, 2018 and 2017, respectively, related to the vesting of Common Stock. There were 27,218 shares of common stock available for issuance under the 2012 Plan. All Options and Warrants On November 30, 2017, the Board of Directors unanimously approved the adjustment of the exercise price of 605,678 unexercised warrants issued under the 2012 Plan, with original exercise prices ranging from $1.81 to $19.46, to $1.24, resulting in incremental stock-based compensation of $149,088, which was expensed in the three-month period ending December 31, 2017. The fair value of each stock option and warrant grant is estimated on the date of grant using the Black-Scholes option-pricing model. During the three months ended December 31, 2018 and 2017, the Company granted 0 and 30,797 options and warrants to purchase shares of common stock under the 2012 Plan. The warrants for Board members vest immediately and expire five years from grant date and warrants or options issued to employees vest annually over either a two to three-year period and expire five years after the final vesting date of the grant. The Company recorded expense of $17,905 and $638,502 for the three months ended December 31, 2018 and 2017, respectively, related to the issuance and vesting of outstanding stock options and warrants. The option and warrant grants for three months ended December 31, 2018 and 2017 were valued using the Black-Scholes model with the following weighted-average assumptions: Three Months Ended December 31 2018 2017 Expected stock price volatility N/A 120 % Risk-free interest rate N/A 1.92 % Expected life of options/warrants 5 Years 5 Years The expected life of stock options (warrants) represents the period of time that the stock options or warrants are expected to be outstanding based on the simplified method allowed under GAAP. The expected volatility is based on the historical price volatility of the Company’s common stock. The risk-free interest rate represents the U.S. Treasury bill rate for the expected life of the related stock options (warrants). The dividend yield represents the Company’s anticipated cash dividends over the expected life of the stock options (warrants). A summary of stock option (warrant) activity for the three months ended December 31, 2018 is presented below: Shares Under Option Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Outstanding as of September 30, 2018 685,259 $ 1.56 3.90 years $ - Granted - $ - Expired/Cancelled - $ - Exercised - $ - Outstanding as of December 31, 2018 685,259 $ 1.56 3.65 years $ - Exercisable as of December 31, 2018 681,926 $ 1.57 3.65 years $ - The intrinsic value of options and warrants outstanding and exercisable is based on the Company’s share price of $0.51 at December 31, 2018. |
Income Taxes
Income Taxes | 3 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | The Company recognizes deferred income tax assets or liabilities for the expected future tax consequences of events that have been recognized in the financial statements or income tax returns. Deferred income tax assets or liabilities are determined based upon the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates expected to apply when the differences are expected to be settled or realized. Deferred income tax assets are reviewed periodically for recoverability and valuation allowances are provided as necessary. Interest and penalties related to income tax liabilities, when incurred, are classified in interest expense and income tax provision, respectively. For the three months ended December 31, 2018 and 2017, the Company incurred a net loss for income tax purposes of $1,734,918 and $1,042,591, respectively. The amount and ultimate realization of the benefits from the net operating losses is dependent, in part, upon the tax laws in effect, our future earnings, and other future events, the effects of which cannot be determined. The Company has established a valuation allowance for all deferred income tax assets not offset by deferred income tax liabilities due to the uncertainty of their realization. Accordingly, there is no benefit for income taxes in the accompanying statements of operations. In computing income tax, we recognize an income tax provision in tax jurisdictions in which we have pre-tax income for the period and are expecting to generate pre-tax book income during the fiscal year. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Commitments and Contingencies | Legal Matters The Company is, from time to time, involved in various legal proceedings incidental to the conduct of our business. Historically, the outcome of all such legal proceedings has not, in the aggregate, had a material adverse effect on our business, financial condition, results of operations or liquidity. Other than as set forth below, there are no additional pending or threatened legal proceedings at this time. Lazar Leybovich et al. v. SecureAlert, Inc. Boggs et al. v. Judicial Electronic Monitoring, SecureAlert, Inc. et al. Track Group, Inc. v. I.C.S. of the Bahamas Co. Ltd. ICS Track Group Inc. v. I.C.S. of the Bahamas Co. Ltd. “C&M Agreement” John Merrill v. Track Group, Inc. and Guy Dubois. SecureAlert, Inc. v. Federal Government of Mexico (Department of the Interior). Eli Sabag v. Track Group, Inc., Sapinda Asia Limited and Lars Windhorst . SPA” Erick Cerda v. Track Group, Inc. Operating Lease Obligations The following table summarizes our contractual lease obligations as of December 31, 2018: Fiscal Year Total 2019 (nine months) $ 246,857 2020 255,646 2021 183,131 2022 167,345 2023 3,612 Thereafter - Total $ 856,591 The total operating lease obligations of $856,591 is largely related to facilities operating leases. During the three months ended December 31, 2018 and 2017, the Company paid $111,973 and $107,974, in lease payment obligations, respectively. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Subsequent Events | On November 14, 2018, the Company requested that Conrent extend the maturity of the Amended Facility Agreement from April 1, 2019 to April 1, 2020. On December 3, 2018, Conrent agreed to convene meetings of the investors who purchased the securities from Conrent to finance the debt (the “ Noteholders In accordance with the Subsequent Events Topic of the FASB ASC 855, we have evaluated subsequent events, through the filing date and noted that, other than as disclosed above, no additional subsequent events have occurred that are reasonably likely to impact the financial statements. |
Principles of Consolidation (Po
Principles of Consolidation (Policies) | 3 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Principles of Consolidation | The consolidated financial statements include the accounts of Track Group, Inc. and its active subsidiaries, Track Group Analytics Limited, Track Group Americas, Inc., Track Group International LTD., and Track Group - Chile SpA. All significant inter-company transactions have been eliminated in consolidation. |
Recent Accounting Standards (Po
Recent Accounting Standards (Policies) | 3 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Recent Accounting Standards | From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“ FASB Recently Adopted Accounting Standards In May 2014, the FASB issued Accounting Standards Update (“ ASU Revenue from Contracts with Customers (Topic 606)” ASC 606 In May 2017, the FASB issued ASU 2017-09, “Compensation - Stock Compensation: Scope of Modification Accounting” In August 2016, the FASB issued ASU 2016-15, “ Statement of Cash Flows (Topic 230) Recently Issued Accounting Standards In January 2017, the FASB issued ASU 2017-04, “ Intangibles – Goodwill and Other: Simplifying the Test for Goodwill Impairment In February 2016, FASB issued ASU No. 2016-02, “ Leases (Topic 841) |
Net Income (Loss) Per Common _2
Net Income (Loss) Per Common Share (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Net Loss Per Common Share Tables | |
Schedule of common stock equivalents outstanding | December 31, December 31, 2018 2017 Exercisable common stock options and warrants 681,926 570,467 Total common stock equivalents 681,926 570,467 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Revenue Recognition [Abstract] | |
Effect of accounting policy | Balance Sheet As Reported at September 30, 2018 Adjustments Balance as of October 1, 2018 LIABILITIES Accrued liabilities 10,333,103 92,969 10,426,072 Total current liabilities 43,288,943 92,969 43,381,912 Total liabilities 46,717,918 92,969 46,810,887 STOCKHOLDERS' EQUITY Accumulated deficit (299,495,370 ) (92,969 ) (299,588,339 ) Total equity 1,638,366 (92,969 ) 1,545,397 Total liabilities and stockholders’ equity 48,356,284 (92,969 ) 48,263,315 |
Disaggregation of revenue | Three months ended December 31, 2018 Three months ended December 31, 2017 Total Revenue % of Total Revenue Total Revenue % of Total Revenue United States $ 5,061,559 62 % $ 4,929,390 66 % Latin America 3,107,553 38 % 2,506,023 33 % Other 42,423 0 % 55,281 1 % Total $ 8,211,535 100 % $ 7,490,694 100 % |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Inventory Tables | |
Schedule of inventory | December 31, 2018 September 30, 2018 Finished goods inventory $ 181,342 $ 304,053 Reserve for damaged or obsolete inventory (26,934 ) (26,934 ) Total inventory, net of reserves $ 154,408 $ 277,119 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
Schedule of property and equipment | December 31, 2018 September 30, 2018 Equipment, software and tooling $ 1,128,701 $ 1,074,471 Automobiles 5,834 6,153 Leasehold improvements 1,376,603 1,358,984 Furniture and fixtures 305,080 305,089 Total property and equipment before accumulated depreciation 2,816,218 2,744,697 Accumulated depreciation (2,034,514 ) (1,999,222 ) Property and equipment, net of accumulated depreciation $ 781,704 $ 745,475 |
Monitoring Equipment (Tables)
Monitoring Equipment (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Monitoring Equipment Tables | |
Schedule of monitoring property and equipment | December 31, 2018 September 30, 2018 Monitoring equipment $ 8,662,118 $ 8,488,196 Less: accumulated amortization (5,693,930 ) (5,325,654 ) Monitoring equipment, net of accumulated depreciation $ 2,968,188 $ 3,162,542 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Intangible Assets Tables | |
Schedule of intangible assets | December 31, 2018 September 30, 2018 Other intangible assets: Patent & royalty agreements $ 21,170,565 $ 21,170,565 Developed technology 11,566,373 11,835,293 Customer relationships 1,860,000 1,860,000 Trade name 317,844 325,507 Website 78,201 78,201 Total intangible assets 34,992,983 35,269,566 Accumulated amortization (12,455,608 ) (12,016,512 ) Intangible assets, net $ 22,537,375 $ 23,253,054 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | December 31, September 30, 2018 2018 Balance - beginning of period $ 8,076,759 $ 8,226,714 Effect of foreign currency translation on goodwill (183,914 ) (149,955 ) Balance - end of period $ 7,892,845 $ 8,076,759 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Accrued Expenses Tables | |
Schedule of accrued liabilities | December 31, 2018 September 30, 2018 Accrued payroll, taxes and employee benefits $ 2,206,196 $ 1,937,021 Deferred revenue 234,012 150,604 Deposits payable 54,504 54,504 Accrued taxes - foreign and domestic 363,397 351,469 Accrued other expense 309,962 298,268 Accrued legal costs 607,376 473,777 Accrued costs of revenue 460,784 230,514 Accrued bond guarantee 149,059 157,199 Accrued interest 7,278,762 6,679,747 Total accrued liabilities $ 11,664,052 $ 10,333,103 |
Debt Obligations (Tables)
Debt Obligations (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Debt Obligations Tables | |
Schedule of debt | December 31, 2018 September 30, 2018 Unsecured facility agreement with Conrent S.A. whereby, as of June 30, 2015, the Company had borrowed $30.4 million, bearing interest at a rate of 8% per annum, payable in arrears semi-annually, with all principal and accrued and unpaid interest due on April 1, 2019. The Company did not pay interest on this loan during the three months ended December 31, 2018. $ 30,400,000 $ 30,400,000 Loan Agreement whereby the Company can borrow up to $5.0 million at 8% interest per annum on borrowed funds maturing on September 30, 2020. 3,399,644 3,399,644 Non-interest bearing notes payable to a Canadian governmental agency assumed in conjunction with the G2 acquisition. 54,462 67,141 Total debt obligations 33,854,106 33,866,785 Less current portion (30,437,810 ) (30,437,810 ) Long-term debt, net of current portion $ 3,416,296 $ 3,428,975 |
Schedule of maturities of long-term debt | Twelve-month period ended December 31, Total 2019 $ 30,437,810 2020 3,416,296 Thereafter - Total $ 33,854,106 |
Related-Party Transactions (Tab
Related-Party Transactions (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Related-party Transactions Tables | |
Stock payable - related party | December 31, 2018 September 30, 2018 Related party loan with an interest rate of 8% per annum for borrowed funds. Principal and interest due September 30, 2020. $ 3,399,644 $ 3,399,644 Total related-party debt obligations $ 3,399,644 $ 3,399,644 |
Stock Options and Warrants (Tab
Stock Options and Warrants (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Stock Options And Warrants Tables | |
Schedule of valuation assumptions | Three Months Ended December 31 2018 2017 Expected stock price volatility N/A 120 % Risk-free interest rate N/A 1.92 % Expected life of options/warrants 5 Years 5 Years |
Schedule of stock option activity | Shares Under Option Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Outstanding as of September 30, 2018 685,259 $ 1.56 3.90 years $ - Granted - $ - Expired/Cancelled - $ - Exercised - $ - Outstanding as of December 31, 2018 685,259 $ 1.56 3.65 years $ - Exercisable as of December 31, 2018 681,926 $ 1.57 3.65 years $ - |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies Tables | |
Operating lease obligations | Fiscal Year Total 2019 (nine months) $ 246,857 2020 255,646 2021 183,131 2022 167,345 2023 3,612 Thereafter - Total $ 856,591 |
Basis of Presentation (Details
Basis of Presentation (Details Narrative) - USD ($) | 3 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2018 | |
Notes to Financial Statements | |||
Accumulated deficit | $ (301,323,257) | $ (299,495,370) | |
Net loss attributable to common shareholders | $ (1,734,918) | $ (1,042,591) |
Net Income (Loss) Per Common _3
Net Income (Loss) Per Common Share (Details) - shares | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Stock equivalents excluded from computation of Diluted EPS | 681,926 | 570,467 |
Options and Warrants [Member[ | ||
Stock equivalents excluded from computation of Diluted EPS | 681,926 | 570,467 |
Net Income (Loss) Per Common _4
Net Income (Loss) Per Common Share (Details Narrative) - shares | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Net Loss Per Common Share Details Narrative | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 681,926 | 570,467 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) | Dec. 31, 2018 | Sep. 30, 2018 |
LIABILITIES | ||
Accrued liabilities | $ 11,664,052 | $ 10,333,103 |
Total current liabilities | 44,447,877 | 43,288,943 |
Total liabilities | 47,864,173 | 46,717,918 |
STOCKHOLDERS' EQUITY | ||
Accumulated deficit | (301,323,257) | (299,495,370) |
Total equity | (9,630) | 1,638,366 |
Total liabilities and stockholders' equity | $ 47,854,543 | 48,356,284 |
Adjustments | ||
LIABILITIES | ||
Accrued liabilities | 92,969 | |
Total current liabilities | 92,969 | |
Total liabilities | 92,969 | |
STOCKHOLDERS' EQUITY | ||
Accumulated deficit | (92,969) | |
Total equity | (92,969) | |
Total liabilities and stockholders' equity | (92,969) | |
As Reported | ||
LIABILITIES | ||
Accrued liabilities | 10,426,072 | |
Total current liabilities | 43,381,912 | |
Total liabilities | 46,810,887 | |
STOCKHOLDERS' EQUITY | ||
Accumulated deficit | (299,588,339) | |
Total equity | 1,545,397 | |
Total liabilities and stockholders' equity | $ 48,263,315 |
Revenue Recognition (Details 1)
Revenue Recognition (Details 1) - USD ($) | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue | $ 8,211,535 | $ 7,490,694 |
Percentage of revenue | 100.00% | 100.00% |
United States | ||
Revenue | $ 5,061,559 | $ 4,929,390 |
Percentage of revenue | 62.00% | 66.00% |
Latin America | ||
Revenue | $ 3,107,553 | $ 2,506,023 |
Percentage of revenue | 38.00% | 33.00% |
Other | ||
Revenue | $ 42,423 | $ 55,281 |
Percentage of revenue | 0.00% | 1.00% |
Prepaid Expense and Other (Deta
Prepaid Expense and Other (Details Narrative) - USD ($) | Dec. 31, 2018 | Sep. 30, 2018 |
Prepaid And Other Expenses Details Narrative | ||
Prepaid expenses and other | $ 1,337,300 | $ 1,270,043 |
Inventory (Details)
Inventory (Details) - USD ($) | Dec. 31, 2018 | Sep. 30, 2018 |
Inventory Details | ||
Finished goods inventory | $ 181,342 | $ 304,053 |
Reserve for damaged or obsolete inventory | (26,934) | (26,934) |
Total inventory, net of reserves | $ 154,408 | $ 277,119 |
Property And Equipment (Details
Property And Equipment (Details) - USD ($) | Dec. 31, 2018 | Sep. 30, 2018 |
Property And Equipment Details | ||
Equipment, software and tooling | $ 1,128,701 | $ 1,074,471 |
Automobiles | 5,834 | 6,153 |
Leasehold improvements | 1,376,603 | 1,358,984 |
Furniture and fixtures | 305,080 | 305,089 |
Total property and equipment before accumulated depreciation | 2,816,218 | 2,744,697 |
Accumulated depreciation | (2,034,514) | (1,999,222) |
Property and equipment, net of accumulated depreciation | $ 781,704 | $ 745,475 |
Property And Equipment (Detai_2
Property And Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property And Equipment Details | ||
Depreciation | $ 79,636 | $ 114,417 |
Monitoring Equipment (Details)
Monitoring Equipment (Details) - USD ($) | Dec. 31, 2018 | Sep. 30, 2018 |
Monitoring Equipment Details | ||
Monitoring equipment | $ 8,662,118 | $ 8,488,196 |
Less: accumulated amortization | (5,693,930) | (5,325,654) |
Monitoring equipment, net of accumulated amortization | $ 2,968,188 | $ 3,162,542 |
Monitoring Equipment (Details N
Monitoring Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Depreciation expense | $ 354,626 | $ 353,027 |
Impairment of monitoring equipment | $ 104,079 | $ 95,817 |
Minimum [Member] | ||
Monitoring equipment useful life | 1 year | |
Maximum [Member] | ||
Monitoring equipment useful life | 5 years |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Dec. 31, 2018 | Sep. 30, 2018 |
Intangible assets: | ||
Intangible assets | $ 34,992,983 | $ 35,296,566 |
Accumulated amortization | (12,455,608) | (12,016,512) |
Intangible assets, net of accumulated amortization | 22,537,375 | 23,253,054 |
Patent & Royalty agreements [Member] | ||
Intangible assets: | ||
Intangible assets | 21,170,565 | 325,507 |
Technology [Member] | ||
Intangible assets: | ||
Intangible assets | 11,566,373 | 1,860,000 |
Customer Relationships [Member] | ||
Intangible assets: | ||
Intangible assets | 1,860,000 | 11,835,293 |
Trade Name [Member] | ||
Intangible assets: | ||
Intangible assets | 317,844 | 21,170,565 |
Website [Member] | ||
Intangible assets: | ||
Intangible assets | $ 78,201 | $ 78,201 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Amortization of intangible assets | $ 559,008 | $ 574,438 |
Minimum [Member] | ||
Intangible assets, useful life | 3 years | |
Maximum [Member] | ||
Intangible assets, useful life | 20 years |
Goodwill (Details)
Goodwill (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Balance - beginning of year | $ 8,076,759 | $ 8,226,714 |
Effect of foreign currency translation adjustment on goodwill | (183,914) | (149,955) |
Ending balance | $ 7,892,845 | $ 8,076,759 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) | Dec. 31, 2018 | Sep. 30, 2018 |
Accrued Expenses Details | ||
Accrued payroll, taxes and employee benefits | $ 2,206,196 | $ 1,937,021 |
Deferred revenue | 234,012 | 150,604 |
Deposits payable | 54,504 | 54,504 |
Accrued taxes - foreign and domestic | 363,397 | 351,469 |
Accrued other expenses | 309,962 | 298,268 |
Accrued legal costs | 607,376 | 473,777 |
Accrued costs of revenue | 460,784 | 230,514 |
Accrued bond guarantee | 149,059 | 157,199 |
Accrued interest | 7,278,762 | 6,679,747 |
Total accrued liabilities | $ 11,664,052 | $ 10,333,103 |
Debt Obligations (Details)
Debt Obligations (Details) - USD ($) | Dec. 31, 2018 | Sep. 30, 2018 |
Total debt obligations | $ 33,854,106 | $ 33,866,785 |
Less current portion | (30,437,810) | (30,437,810) |
Long-term debt, net of current portion | 3,416,296 | 3,428,975 |
Debt Obligation 1 | ||
Total debt obligations | 30,400,000 | 30,400,000 |
Debt Obligation 2 | ||
Total debt obligations | 3,399,644 | 3,399,644 |
Debt Obligation 3 | ||
Total debt obligations | $ 54,462 | $ 67,141 |
Debt Obligations (Details 1)
Debt Obligations (Details 1) | Dec. 31, 2018USD ($) |
Debt Obligations Details 1 | |
September 30, 2019 | $ 30,437,810 |
September 30, 2020 | 3,416,296 |
Thereafter | 0 |
Total | $ 33,854,106 |
Related-Party Transactions (Det
Related-Party Transactions (Details) - USD ($) | Dec. 31, 2018 | Sep. 30, 2018 |
Related-party debt obligations | $ 33,854,106 | $ 33,866,785 |
Related party debt | ||
Related-party debt obligations | $ 3,399,644 | $ 3,399,644 |
Stock Options and Warrants (Det
Stock Options and Warrants (Details) | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Stock Options And Warrants Details | ||
Expected stock price volatility | 120.00% | |
Risk free interest rate | 1.92% | |
Expected life of options/warrants | 5 years | 5 years |
Stock Options and Warrants (D_2
Stock Options and Warrants (Details 1) | 3 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Stock Options And Warrants Details 1 | |
Shares Under Option/ Warrant Outstanding, Beginning Balance | shares | 685,259 |
Shares Under Option/ Warrant Granted | shares | 0 |
Shares Under Option/ Warrant Expired / Cancelled | shares | 0 |
Shares Under Option/ Warrant Exercised | shares | 0 |
Shares Under Option/ Warrant Outstanding, Ending Balance | shares | 685,259 |
Shares Under Option/ Warrant Exercisable | shares | 681,926 |
Weighted Average Exercise Price Outstanding, Beginning Balance | $ / shares | $ 1.56 |
Weighted Average Exercise Price Granted | $ / shares | .00 |
Weighted Average Exercise Price Expired / Cancelled | $ / shares | (.00) |
Weighted Average Exercise Price Exercised | $ / shares | .00 |
Weighted Average Exercise Price Outstanding, Ending Balance | $ / shares | 1.56 |
Weighted Average Exercise Price Exercisable | $ / shares | $ 1.57 |
Weighted Average Remaining Contractual Life Outstanding, Beginning Balance | 3 years 10 months 24 days |
Weighted Average Remaining Contractual Life Outstanding, Ending Balance | 3 years 7 months 24 days |
Weighted Average Remaining Contractual Life Exercisable | 3 years 7 months 24 days |
Aggregate Intrinsic Value Outstanding, Beginning Balance | $ | $ 0 |
Aggregate Intrinsic Value Outstanding, Ending Balance | $ | 0 |
Aggregate Intrinsic Value Exercisable | $ | $ 0 |
Stock Options and Warrants (D_3
Stock Options and Warrants (Details Narrative) - USD ($) | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Stock Options And Warrants Details Narrative | ||
Shares authorized for issuance under 2012 Plan | 27,218 | |
Stock option expense | $ 17,905 | $ 638,502 |
Vesting common stock expense | $ 65,312 | $ 149,088 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | Dec. 31, 2018USD ($) |
Commitments And Contingencies Details | |
2019 (nine months) | $ 246,857 |
2,020 | 255,646 |
2,021 | 183,131 |
2,022 | 167,345 |
2,023 | 3,612 |
Thereafter | 0 |
Total | $ 856,591 |
Commitments and Contingencies_3
Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Commitments And Contingencies Details | ||
Operating lease obligations | $ 856,591 | |
Lease payment obligations | $ 111,973 | $ 107,974 |