Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jun. 30, 2017 | Aug. 01, 2017 | |
Document and Entity Information: | ||
Entity Registrant Name | TRACK GROUP, INC. | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Amendment Flag | false | |
Entity Central Index Key | 1,045,942 | |
Current Fiscal Year End Date | --09-30 | |
Entity Common Stock, Shares Outstanding | 10,480,984 | |
Trading Symbol | TRCK | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2017 | Sep. 30, 2016 |
Current assets: | ||
Cash | $ 1,893,966 | $ 1,769,921 |
Accounts receivable, net of allowance for doubtful accounts of $3,166,215 and $2,335,508, respectively | 5,847,987 | 6,894,095 |
Note receivable, current portion | 234,733 | 334,733 |
Prepaid expenses and other | 567,933 | 816,708 |
Inventory, net of reserves of $26,934 and $98,150, respectively | 210,574 | 521,851 |
Total current assets | 8,755,193 | 10,337,308 |
Property and equipment, net of accumulated depreciation of $1,674,800 and $1,421,389, respectively | 936,637 | 1,226,461 |
Monitoring equipment, net of accumulated amortization of $4,279,008 and $3,438,074, respectively | 3,758,926 | 4,358,117 |
Intangible assets, net of accumulated amortization of $9,454,908 and $8,233,659, respectively | 25,064,504 | 25,540,650 |
Goodwill | 8,195,103 | 7,955,876 |
Other assets | 3,099,301 | 2,900,911 |
Total assets | 49,809,664 | 52,319,323 |
Current liabilities: | ||
Accounts payable | 2,676,087 | 2,771,101 |
Accrued liabilities | 6,220,197 | 3,976,192 |
Current portion of long-term debt, net of discount of $0 and $222,973, respectively | 62,463 | 3,245,732 |
Total current liabilities | 8,958,747 | 9,993,025 |
Stock payable - related party | 0 | 3,289,879 |
Long-term debt, net of current portion and discount of $241,554 and $185,811, respectively | 33,645,419 | 30,345,803 |
Total liabilities | 42,604,166 | 43,628,707 |
Stockholders' equity: | ||
Common stock, $0.0001 par value: 30,000,000 shares authorized; 10,480,984 outstanding at June 30, 2017 and 10,333,516 at September 30, 2016 | 1,048 | 1,034 |
Additional paid-in capital | 300,607,005 | 298,876,399 |
Accumulated deficit | (292,794,210) | (289,341,503) |
Accumulated other comprehensive income (loss) | (608,345) | (845,314) |
Total equity | 7,205,498 | 8,690,616 |
Total liabilities and stockholders' equity | $ 49,809,664 | $ 52,319,323 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Jun. 30, 2017 | Sep. 30, 2016 |
Condensed Consolidated Balance Sheets Parenthetical | ||
Allowance for doubtful accounts | $ 3,166,215 | $ 2,335,508 |
Reserve for inventory | 26,934 | 98,150 |
Property and equipment accumulated depreciation | 1,674,800 | 1,421,389 |
Monitoring equipment accumulated amortization | 4,279,008 | 3,438,074 |
Intangible assets accumulated amortization | 9,454,908 | 8,233,659 |
Current debt, discount | 0 | 222,973 |
Long-term debt, discount | $ 241,554 | $ 185,811 |
Common stock - par value | $ .0001 | $ .0001 |
Common stock - shares authorized | 30,000,000 | 30,000,000 |
Common stock - shares outstanding | 10,480,984 | 10,333,516 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenue: | ||||
Monitoring services | $ 7,157,424 | $ 6,598,128 | $ 21,577,313 | $ 18,947,752 |
Other | 193,930 | 156,283 | 665,574 | 716,302 |
Total revenues | 7,351,354 | 6,754,411 | 22,242,887 | 19,664,054 |
Cost of revenues: | ||||
Monitoring, analytics & other related services | 2,734,920 | 2,462,281 | 8,936,501 | 7,060,036 |
Depreciation and amortization included in cost of revenues | 672,562 | 488,655 | 1,633,629 | 1,498,407 |
Impairment of monitoring equipment and parts | 210,000 | 60,000 | 344,787 | 180,000 |
Total cost of revenues | 3,617,482 | 3,010,936 | 10,914,917 | 8,738,443 |
Gross profit | 3,733,872 | 3,743,475 | 11,327,970 | 10,925,611 |
Operating expenses: | ||||
General & administrative | 3,611,903 | 3,263,951 | 9,142,113 | 9,240,935 |
(Gain) loss on sale of assets | (2,500) | 0 | 763,531 | 0 |
Restructuring costs | (1,265) | 0 | 569,135 | 0 |
Selling & marketing | 572,334 | 407,829 | 1,786,312 | 1,684,130 |
Research & development | 292,938 | 610,398 | 1,460,354 | 1,741,285 |
Depreciation & amortization | 535,892 | 621,311 | 1,744,276 | 2,055,915 |
Total operating expenses | 5,009,302 | 4,903,489 | 15,465,721 | 14,722,265 |
Loss from operations | (1,275,430) | (1,160,014) | (4,137,751) | (3,796,654) |
Other income (expense): | ||||
Interest expense, net | (672,369) | (683,482) | (2,116,805) | (2,009,399) |
Currency exchange rate gain (loss) | 181,966 | 18,438 | 75,859 | (66,119) |
Gain on settlement of milestone payments | 3,000,000 | 3,213,940 | ||
Other income, net | 4,934 | 41,112 | 13,701 | 40,393 |
Income (loss) before income taxes | 1,239,101 | (1,783,946) | (2,951,056) | (5,831,779) |
Income tax expense | 492,552 | 0 | 501,651 | 0 |
Net income (loss) attributable to common shareholders | 746,549 | (1,783,946) | (3,452,707) | (5,831,779) |
Foreign currency translation adjustments | 746,156 | (280,319) | 236,969 | 689,936 |
Comprehensive income (loss) | $ 1,492,705 | $ (2,064,265) | $ (3,215,738) | $ (5,141,843) |
Basic and diluted loss per common share | $ 0.07 | $ (0.17) | $ (0.33) | $ (0.57) |
Weighted average common shares outstanding, basic and diluted | 10,486,665 | 10,302,136 | 10,384,566 | 10,277,973 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (3,452,707) | $ (5,831,779) |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 3,377,905 | 3,554,322 |
Impairment of monitoring equipment and parts | 344,787 | 180,000 |
Loss on disposal of monitoring equipment included in cost of sales | 0 | 67,097 |
Bad debt expense | 903,081 | 844,968 |
Amortization of debt discount | 167,230 | 167,230 |
Common stock issued for services | 0 | 60,001 |
Stock based compensation | 114,352 | 539,275 |
Vesting and re-pricing of stock options | 790,314 | 437,197 |
Loss on sale of assets | 763,531 | 27,419 |
Gain on settlement of milestone payments | (3,213,940) | 0 |
Change in assets and liabilities: | ||
Accounts receivable, net | 243,597 | (1,430,852) |
Notes receivable | 0 | (28,299) |
Inventories | 57,700 | 161,159 |
Prepaid expenses and other | (190,958) | 581,451 |
Accounts payable | 106,547 | 145,774 |
Accrued expenses | 2,926,074 | 2,489,900 |
Net cash provided by operating activities | 2,937,513 | 1,964,863 |
Cash flow from investing activities: | ||
Purchase of property and equipment | (35,919) | (58,271) |
Capitalized software | (1,933,390) | (1,518,800) |
Purchase of monitoring equipment and parts | (1,305,070) | (2,315,140) |
Proceeds from sale of assets | 512,500 | 0 |
Net cash used in investing activities | (2,761,879) | (3,892,211) |
Cash flow from financing activities: | ||
Principal payments on notes payable | (50,773) | (1,003,976) |
Net cash used in financing activities | (50,773) | (1,003,976) |
Effect of exchange rate changes on cash | (816) | 36,131 |
Net increase (decrease) in cash | 124,045 | (2,895,193) |
Cash, beginning of period | 1,769,921 | 4,903,045 |
Cash, end of period | 1,893,966 | 2,007,852 |
Cash paid for interest | 18,504 | 50,614 |
Supplemental schedule of non-cash investing and financing activities: | ||
Non-cash transfer of inventory to monitoring equipment | $ 309,710 | $ 133,135 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Jun. 30, 2017 | |
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 Reclassifications – |
Principles of Consolidation
Principles of Consolidation | 9 Months Ended |
Jun. 30, 2017 | |
Notes to Financial Statements | |
Principles of Consolidation | The condensed consolidated financial statements include the accounts of Track Group and its subsidiaries. All significant inter-company transactions have been eliminated in consolidation. Certain prior year amounts on the consolidated statement of operations have been reclassified to conform to the current period presentation. These reclassifications have no impact on the previously reported results. |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 9 Months Ended |
Jun. 30, 2017 | |
Notes to Financial Statements | |
Recently Issued Accounting Standards | From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“ FASB In May 2017, the FASB issued Accounting Standards Update (“ ASU In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other: Simplifying the Test for Goodwill Impairment. The new guidance simplifies the subsequent measurement of goodwill by removing the second step of the two-step impairment test. The amendment requires an entity to perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The new guidance will be effective for annual periods or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The amendment should be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. Management does not anticipate that this adoption will have a significant impact on its consolidated financial position, results of operations, or cash flows. In May 2016, the FASB issued ASU 2016-12. The amendments in this update affect the guidance in Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), which is not yet effective. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements for Topic 606 (and any other Topic amended by Update 2014-09). Accounting Standards Update 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year. Management is currently evaluating the impact that this amendment will have on its consolidated financial statements. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. This update was intended to clarify two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. The effective date for ASU 2016-10 is the same as Topic 606, which begins for annual reporting periods beginning after December 15, 2017. Management is currently evaluating the impact of the pending adoption of ASU 2016-10 on the Company’s consolidated financial statements. In March 2016, FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). This update was intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations. The amendments in this update have the same effective date as ASC 606 as discussed above. Management is currently evaluating the impact of the pending adoption of ASU 2016-08 on the Company’s consolidated financial statements. In March 2016, FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amendments in this update change the accounting for certain stock-based compensation transactions, including the income tax consequences and cash flow classification for applicable transactions. The amendments in this update are effective for annual periods beginning after December 31, 2016 and interim periods within those annual periods. Management does not anticipate that this adoption will have a significant impact on its consolidated financial position, results of operations, or cash flows. In February 2016, FASB issued ASU No. 2016-02, Leases (Topic 841). For lessees, the amendments in this update require that for all leases not considered to be short term, a company recognize both a lease liability and right-of-use asset on its balance sheet, representing the obligation to make payments and the right to use or control the use of a specified asset for the lease term. The amendments in this update are effective for annual periods beginning after December 15, 2018 and interim periods within those annual periods. Management does not anticipate that this adoption will have a significant impact on its consolidated financial position, results of operations, or cash flows. |
Immaterial Error Correction
Immaterial Error Correction | 9 Months Ended |
Jun. 30, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Immaterial Error Correction | This Quarterly Report on Form 10-Q of the Company for the period ended June 30, 2017, includes the revision of the Company's previously filed consolidated income statements for the three months and nine months ended June 30, 2016. Management concluded that the general and administrative section of the Condensed Consolidated Income Statement contained an error and that for comparative purposes in 2017 filings, these figures should be revised but that the adjustments are not material modifications. Accordingly, the Company has determined that prior financial statements should be corrected, even though such revisions are immaterial. Furthermore, the Company has determined that correcting prior year financial statements for immaterial changes would not require previously filed reports to be amended. Under general and administrative expense, we have reclassified costs related to repairs and maintenance of monitoring devices and certain other costs, including installation, communications and transportation costs that were previously recorded in general and administrative expense to cost of revenues, selling and marketing, and research and development. Net income (loss) and shareholders’ equity were not affected by the reclassification. The effect of these revisions on the Company's results of operations for the three and nine months ended June 30, 2016 previously reported are as follows: Three months ended June 30, 2016 Previously Reported Net Change Three months ended June 30, 2016 (Revised) Cost of revenues: Monitoring, products & other related services $ 2,008,721 $ 453,560 $ 2,462,281 Total operating expense General and administrative expenses 3,612,957 (349,006 ) 3,263,951 Selling & marketing 470,829 (63,000 ) 407,829 Research & development 651,952 (41,554 ) 610,398 Nine months ended June 30, 2016 Previously Reported Net Change Nine months ended June 30, 2016 (Revised) Cost of revenues: Monitoring, products & other related services $ 5,781,617 $ 1,278,419 $ 7,060,036 Total operating expense General and administrative expenses 10,448,942 (1,208,007 ) 9,240,935 Selling & marketing 1,684,130 - 1,684,130 Research & development 1,811,697 (70,412 ) 1,741,285 |
Impairment of Long-lived Assets
Impairment of Long-lived Assets | 9 Months Ended |
Jun. 30, 2017 | |
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. The Company recorded $210,000 and $60,000 of impairment expenses related to monitoring equipment for the three months ended June 30, 2017 and 2016, respectively. Additionally, the Company recorded $344,787 and $180,000 of impairment expenses related to monitoring equipment for the nine months ended June 30, 2017 and 2016, respectively. |
Business Combinations
Business Combinations | 9 Months Ended |
Jun. 30, 2017 | |
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) | 9 Months Ended |
Jun. 30, 2017 | |
Notes to Financial Statements | |
Accumulated Other Comprehensive Loss | Comprehensive income (loss) includes net income (loss) as currently reported under U.S. 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 June 30, 2017. |
Net Loss Per Common Share
Net Loss Per Common Share | 9 Months Ended |
Jun. 30, 2017 | |
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 June 30, 2017 and 2016, there were 479,310 and 450,991 outstanding common share equivalents, respectively, that were not included in the computation of Diluted EPS for the three and nine months ended June 30, 2017 and 2016, respectively as their effect would be anti-dilutive. The common stock equivalents outstanding as of June 30, 2017 and 2016 consisted of the following: June 30, June 30, 2017 2016 Exercise of outstanding common stock options and warrants 479,310 450,991 Total common stock equivalents 479,310 450,991 At June 30, 2017, all stock option and warrant exercise prices are above the market price of $2.18 and thus have not been included in the basic earnings per share calculation. |
Acquisition
Acquisition | 9 Months Ended |
Jun. 30, 2017 | |
Notes to Financial Statements | |
ACQUISITION | On November 26, 2014, the Company entered into a Share Purchase Agreement to purchase from the shareholders of Track Group Analytics Limited, formerly G2 Research Limited (“ TGA TGA Acquisition The fair value of patents, developed technology, customer contracts/relationship, tradename and trademarks were capitalized as of the acquisition date and are amortized using a straight-line method to depreciation and amortization expense over their estimated useful lives. On March 12, 2014, the Company entered into a Share Purchase Agreement (the “ GPS GlobalSPA GPS Global |
Disposition
Disposition | 9 Months Ended |
Jun. 30, 2017 | |
Disposition | |
Disposition | On March 8, 2017, the Company sold certain non-core assets for $510,000, net, after a payment to a third party for a royalty repurchase. The Company retained other assets acquired at the time of the original acquisition of these non-core assets, consisting of customers generating material revenue, as well as employees considered critical to the maintenance, development and growth of the Company’s business and operations. The Company incurred a loss of $766,031 on the sale, which consists of a sale price of $860,000, less a third-party royalty buyout payment of $350,000, $410,105 of equipment, net of accumulated depreciation, and $865,926 of intangible assets, net of accumulated amortization. |
Prepaid and Other Expenses
Prepaid and Other Expenses | 9 Months Ended |
Jun. 30, 2017 | |
Notes to Financial Statements | |
Prepaid and Other Expenses | The carrying amounts reported in the balance sheets for prepaid expenses and other current assets approximate their fair market value based on the short-term maturity of these instruments. As of June 30, 2017, and September 30, 2016, the outstanding balance of prepaid and other expenses was $567,933 and $816,708, respectively. The $567,933 as of June 30, 2017 is comprised largely of prepayments toward inventory purchases, vendor deposits and other prepaid supplier expenses. The decrease in prepaid and other expenses at June 30, 2017 was primarily due to lower prepaid inventory purchases and lower prepaid software maintenance. |
Inventory
Inventory | 9 Months Ended |
Jun. 30, 2017 | |
Notes to Financial Statements | |
Inventory | Inventory is valued at the lower of the cost or market. Cost is determined using the first-in, first-out (“ FIFO Inventory consists of finished goods that are to be shipped to customers and parts used for minor repairs of ReliAlertTM, Shadow, and other tracking devices. Completed and shipped ReliAlertTM and other tracking devices are reflected in Monitoring Equipment. As of June 30, 2017 and September 30, 2016, respectively, inventory consisted of the following: June 30, September 30, 2017 2016 Finished goods inventory $ 237,508 $ 620,001 Reserve for damaged or obsolete inventory (26,934 ) (98,150 ) Total inventory, net of reserves $ 210,574 $ 521,851 |
Property and Equipment
Property and Equipment | 9 Months Ended |
Jun. 30, 2017 | |
Notes to Financial Statements | |
Property and Equipment | The following table summarizes property and equipment at June 30, 2017 and September 30, 2016, respectively: June 30, September 30, 2017 2016 Equipment and software $ 1,019,664 $ 1,028,173 Automobiles 68,295 87,313 Leasehold improvements 1,261,344 1,279,500 Furniture and fixtures 262,134 252,864 Total property and equipment before accumulated depreciation 2,611,437 2,647,850 Accumulated depreciation (1,674,800 ) (1,421,389 ) Property and equipment, net of accumulated depreciation $ 936,637 $ 1,226,461 Property and equipment depreciation expense for the three months ended June 30, 2017 and 2016 was $70,760 and $93,474, respectively. Depreciation expense for property and equipment for the nine months ended June 30, 2017 and 2016 was $248,348 and $482,464, respectively. |
Monitoring Equipment
Monitoring Equipment | 9 Months Ended |
Jun. 30, 2017 | |
Notes to Financial Statements | |
Monitoring Equipment | The following table summarizes monitoring equipment at June 30, 2017 and September 30, 2016, respectively: June 30, September 30, 2017 2016 Monitoring equipment $ 8,037,934 $ 7,796,191 Less: accumulated amortization (4,279,008 ) (3,438,074 ) Monitoring equipment, net of accumulated depreciation $ 3,758,926 $ 4,358,117 The Company leases monitoring equipment to agencies for offender tracking under contractual service agreements. The monitoring equipment is amortized using the straight-line method over an estimated useful life of one to five years. Depreciation of monitoring equipment for the three months ended June 30, 2017 and 2016 was $560,062 and $376,154, respectively. These expenses were recognized in cost of revenues. Depreciation of monitoring equipment for the nine months ended June 30, 2017 and 2016 was $1,296,129 and $1,160,907, respectively. These expenses were recognized in cost of revenues. As part of the sale of assets described in Note 10, the Company disposed of $771,568 of monitoring equipment and $361,463 of related accumulated amortization in the nine months ended June 30, 2017. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Jun. 30, 2017 | |
Notes to Financial Statements | |
Intangible Assets | The following table summarizes intangible assets at June 30, 2017 and September 30, 2016, respectively: June 30, 2017 September 30, 2016 Other intangible assets: Patent & royalty agreements 21,170,565 21,170,565 Technology 10,379,196 9,651,074 Customer relationships 2,558,747 2,555,086 Trade name 332,703 319,383 Website 78,201 78,201 Total intangible assets 34,519,412 33,774,309 Accumulated amortization (9,454,908 ) (8,233,659 ) Intangible assets, net of accumulated amortization $ 25,064,504 $ 25,540,650 The intangible assets summarized above were purchased or developed on various dates from January 2010 through June 2017. The assets have useful lives ranging from three to twenty years. Amortization expense for the three months ended June 30, 2017 and 2016 was $577,632 and $640,339, respectively. Amortization for the nine months ended June 30, 2017 and 2016 was $1,833,428 and $1,910,950, respectively. The Company disposed of $1,600,000 of intangible assets and $734,074 of accumulated amortization related to the sale of assets during the three and nine months ended June 30, 2017. See Note 10. |
Goodwill
Goodwill | 9 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | The following table summarizes the activity of goodwill at June 30, 2017 and September 30, 2016, respectively: June 30, September 30, 2017 2016 Balance - beginning of period $ 7,955,876 $ 7,782,903 Effect of foreign currency translation on goodwill 239,227 172,973 Balance - end of period $ 8,195,103 $ 7,955,876 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 had been recognized through June 30, 2017. |
Other Assets
Other Assets | 9 Months Ended |
Jun. 30, 2017 | |
Notes to Financial Statements | |
Other Assets | As of June 30, 2017, and September 30, 2016, the outstanding balance of other assets was $3,099,301 and $2,900,911, respectively. Other assets are comprised largely of a cash collateralized performance bond for an international customer. The Company anticipates this restricted cash will be unrestricted and available to the Company upon completion of its relationship with the customer, unless mutually agreed otherwise. |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Jun. 30, 2017 | |
Notes to Financial Statements | |
Accrued Liabilities | Accrued liabilities consisted of the following as of June 30, 2017 and September 30, 2016: June 30, September 30, 2017 2016 Accrued payroll, taxes and employee benefits $ 1,026,825 $ 1,424,812 Accrued consulting 127,070 123,114 Accrued taxes - foreign and domestic 525,668 311,614 Accrued board of directors fees - 96,000 Accrued other expenses 406,489 160,078 Accrued cellular costs 177,522 84 Accrued outside services 44,000 13,768 Accrued restructuring costs 63,480 - Accrued warranty and manufacturing costs 145,000 103,441 Accrued interest 3,704,143 1,743,281 Total accrued liabilities $ 6,220,197 $ 3,976,192 |
Restructuring
Restructuring | 9 Months Ended |
Jun. 30, 2017 | |
Restructuring | |
Restructuring | In the first quarter of fiscal year 2017, the Company approved a plan to restructure its business (the “ Restructuring Plan Total fiscal year 2017 restructuring charges and their utilization are summarized as follows: Employee -related Other costs Total Liability at September 30, 2016 $ - $ - $ - Accrued expenses 435,643 133,492 $ 569,135 Payments (421,104 ) (84,551 ) (505,655 ) Liability at June 30, 2017 $ 14,539 $ 48,941 $ 63,480 |
Debt Obligations
Debt Obligations | 9 Months Ended |
Jun. 30, 2017 | |
Notes to Financial Statements | |
Debt Obligations | On September 25, 2015, the Company entered into a Loan Agreement (the “ Loan Agreement Sapinda Maturity Date On March 13, 2017, the Company and Sapinda entered into Amendment Number One to the Loan Agreement. Amendment Number One extends the maturity date of all loans made pursuant to the Loan Agreement to September 30, 2020. In addition, Amendment Number One eliminates the requirement that the Company pay Sapinda 3% for any undrawn funds under the Loan Agreement (the " 3% Interest Execution Date Lender Penalties On May 1, 2016, the Company entered into an unsecured Loan Agreement with Conrent Invest S.A., acting with respect to its Compartment Safety III (the “ Conrent Loan Agreement” Debt obligations as of June 30, 2017 and September 30, 2016, respectively, are comprised of the following: June 30, 2017 September 30, 2016 Unsecured facility agreement with an entity whereby, as of June 30, 2015, the Company may borrow up to $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 July 31, 2018. A $1.2 million origination fee was paid and recorded as a debt discount and will be amortized as interest expense over the term of the loan. As of June 30, 2017, the remaining debt discount was $241,554. The Company did not pay interest on this loan during the three and nine months ended June 30, 2017. $ 30,158,446 $ 29,991,216 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. 134,240 182,002 Capital lease with effective interest rate of 12%. Lease matures August 15, 2019. 15,552 18,673 Total debt obligations 33,707,882 33,591,535 Less current portion (62,463 ) (3,245,732 ) Long-term debt, net of current portion $ 33,645,419 $ 30,345,803 The following table summarizes the Company’s future maturities of debt obligations, net of the amortization of debt discounts as of June 30, 2017: Fiscal Year Total 2017 $ 62,463 2018 30,442,250 2019 42,137 2020 3,402,586 2021 & thereafter - Debt discount (241,554 ) Total $ 33,707,882 |
Related-party Transactions
Related-party Transactions | 9 Months Ended |
Jun. 30, 2017 | |
Notes to Financial Statements | |
Related-party Transactions | Related-Party Loan Agreement On September 25, 2015, the Company entered into the Loan Agreement with Sapinda, a related party, to provide the Company with a $5.0 million line of credit that accrues 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 Loan Agreement, available funds may be drawn down at the Company’s request at any time until the Maturity Date, when all borrowed funds, plus all accrued but unpaid interest will become due and payable. The Company, however, may elect to satisfy any outstanding obligations under the Loan Agreement prior to the Maturity Date without penalties or fees. The Company did not draw on this line of credit nor did it pay any interest during the nine months ended June 30, 2017. The undrawn balance of this line of credit at June 30, 2017 was $1,600,356. On March 13, 2017, the Company and Sapinda entered into Amendment Number One to the Loan Agreement. Amendment Number One extends the maturity date of all loans made pursuant to the Loan Agreement to September 30, 2020. In addition, Amendment Number One eliminates the requirement that the Company pay Sapinda the 3% Stock Payable – Related Party Changes in the stock payable liability are shown below: June 30, September 30, 2017 2016 Beginning balance $ 3,289,879 $ 3,501,410 Payment of shares for achieving performance milestones (75,939 ) (211,531 ) Adjustment to Track Group Analytics stock payable (213,940 ) - Adjustment to GPS Global stock payable (3,000,000 ) - Ending balance $ - $ 3,289,879 Shares of common stock valued at up to $3,000,000, in the balance shown above, could have been earned by the former owner of GPS Global Tracking and Surveillance System, Ltd., now a wholly-owned subsidiary of the Company, subject to achieving certain milestones under the Share Purchase Agreement dated April 1, 2014. The measurement period of the milestones ended April 1, 2017. On March 30, 2017, the Company informed the seller that neither the Company nor the seller sold or leased the required number of GPS tracking devices, under a revenue generating contract, as defined in the Share Purchase Agreement and no contingent shares had been earned. The Company reversed the $3,000,000 contingent liability in the three months ended June 30, 2017 in “Other Income, net” in the Condensed Consolidated Statement of Operations. In connection with the acquisition of TGA (See Note 9), the Company recognized a liability for stock payable to the former owners of the entity acquired. In conjunction with the respective purchase agreements, shares of the Company’s common stock are payable based on the achievement of certain milestones on or before November 26, 2016. The final milestone payment of 10,602 shares of common stock related to the TGA acquisition was paid in the second fiscal quarter of 2017. Each of the foregoing related-party transactions was reviewed and approved by disinterested and independent members of the Company's Board of Directors. |
Preferred Stock and Common Stoc
Preferred Stock and Common Stock | 9 Months Ended |
Jun. 30, 2017 | |
Notes to Financial Statements | |
Preferred Stock and Common Stock | The Company is authorized to issue up to 30,000,000 shares of common stock, $0.0001 par value per share. During the nine months ended June 30, 2017, the Company issued 94,840 shares of common stock to Board of Director members for their services in fourth fiscal quarter of 2016 and the first three quarters of fiscal 2017. In addition, the Company issued 10,602 shares for achievement of certain milestones (see Note 9) and 30,323 shares to employees. 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 Articles 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 June 30, 2017, there were no shares of preferred stock outstanding. In February 2014, the Company offered certain employees a retention plan which vested evenly over a three-year term. In February 2017, the Company made its final long-term incentive plan payment to certain employees of 11,703 shares of common stock and due to the decrease in the value of common stock and employees no longer with the Company, recorded a $751,045 reduction of general and administrative expenses for the nine-month period ended June 30, 2017. |
Stock Options and Warrants
Stock Options and Warrants | 9 Months Ended |
Jun. 30, 2017 | |
Notes to Financial Statements | |
Stock Options and Warrants | Stock Incentive Plan At the annual meeting of shareholders on March 21, 2011, the shareholders approved the 2012 Equity Compensation Plan (the “ 2012 Plan All Options and Warrants 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 nine months ended June 30, 2017 and 2016, the Company granted 137,268 and 229,528 options and warrants to purchase shares of common stock under the 2012 Plan. At the Company’s May 11, 2017 Board of Directors meeting, the Board of Directors approved a resolution extending the expiration date of 573,663 warrants of five current board members and three members of management that were granted during the fiscal year 2011 and fiscal years 2013 through 2017. These extensions were between one and five years, did not affect the exercise price of the grants and resulted in incremental stock-based compensation of $801,584, of which $790,314 was expensed in the three months ended June 30, 2017. All future grants of warrants and options will have an expiration period of five years. The warrants for Board members vest immediately and warrants issued to employees vest annually over either a two or three year period after the grant date. Excluding the incremental stock-based compensation mentioned above, the Company recorded expense of $154,679 and $160,260 for the nine months ended June 30, 2017 and 2016, respectively, related to the issuance and vesting of outstanding stock options and warrants. The option and warrant grants for nine months ended June 30, 2017 were valued using the Black-Scholes model with the following weighted-average assumptions: Nine Months Ended June 30 2017 2016 Expected stock price volatility 121 % 96 % Risk-free interest rate 1.89 % 0.98 % Expected life of options/warrants 5 years 2 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 activity for the nine months ended June 30, 2017 is presented below: Shares Under Option Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Outstanding as of September 30, 2016 504,991 $ 10.78 1.15 years $ 182,095 Granted 137,268 $ 3.93 Expired/Cancelled (52,949 ) $ (16.16 ) Exercised - $ - Outstanding as of June 30, 2017 589,310 8.71 5.14 years $ - Exercisable as of June 30, 2017 479,310 9.84 5.26 years $ - The intrinsic value of options outstanding and exercisable is based on the Company’s share price of $2.18 at June 30, 2017. |
Income Taxes
Income Taxes | 9 Months Ended |
Jun. 30, 2017 | |
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 nine months ended June 30, 2017 and 2016, the Company incurred a net loss for income tax purposes of $3,452,707 and $5,831,779, respectively. The amount and ultimate realization of the benefits from the net operating losses is dependent, in part, upon the tax laws in effect, the Company's 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 | 9 Months Ended |
Jun. 30, 2017 | |
Notes to Financial Statements | |
Commitments and Contingencies | Legal Matters We are, 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. Track Group Inc. v. I.C.S. of the Bahamas Co. Ltd. John Merrill v. Track Group, Inc. and Guy Dubois. Michael Anthony Johnson v. Community Corrections of Marion County and Track Group, Inc. pro se SecureAlert, Inc v. Federal Government of Mexico (Department of the Interior). Inversiones Tecnologicas SpA v. Track Group Chile SpA. Pablo Gonzalez-Cruz, et al. v. Track Group-Puerto Rico, et al. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Jun. 30, 2017 | |
Notes to Financial Statements | |
Subsequent Events | In accordance with the Subsequent Events Topic of the FASB ASC 855, we have evaluated subsequent events, through the filing date and noted no additional subsequent events that are reasonably likely to impact the financial statements. |
Immaterial Error Correction (Ta
Immaterial Error Correction (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Error Correction | Three months ended June 30, 2016 Previously Reported Net Change Three months ended June 30, 2016 (Revised) Cost of revenues: Monitoring, products & other related services $ 2,008,721 $ 453,560 $ 2,462,281 Total operating expense General and administrative expenses 3,612,957 (349,006 ) 3,263,951 Selling & marketing 470,829 (63,000 ) 407,829 Research & development 651,952 (41,554 ) 610,398 Nine months ended June 30, 2016 Previously Reported Net Change Nine months ended June 30, 2016 (Revised) Cost of revenues: Monitoring, products & other related services $ 5,781,617 $ 1,278,419 $ 7,060,036 Total operating expense General and administrative expenses 10,448,942 (1,208,007 ) 9,240,935 Selling & marketing 1,684,130 - 1,684,130 Research & development 1,811,697 (70,412 ) 1,741,285 |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Net Loss Per Common Share Tables | |
Schedule of common stock equivalents outstanding | June 30, June 30, 2017 2016 Exercise of outstanding common stock options and warrants 479,310 450,991 Total common stock equivalents 479,310 450,991 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Inventory Tables | |
Schedule of Inventory, Current | June 30, September 30, 2017 2016 Finished goods inventory $ 237,508 $ 620,001 Reserve for damaged or obsolete inventory (26,934 ) (98,150 ) Total inventory, net of reserves $ 210,574 $ 521,851 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Notes to Financial Statements | |
Schedule of Property and Equipment | June 30, September 30, 2017 2016 Equipment and software $ 1,019,664 $ 1,028,173 Automobiles 68,295 87,313 Leasehold improvements 1,261,344 1,279,500 Furniture and fixtures 262,134 252,864 Total property and equipment before accumulated depreciation 2,611,437 2,647,850 Accumulated depreciation (1,674,800 ) (1,421,389 ) Property and equipment, net of accumulated depreciation $ 936,637 $ 1,226,461 |
Monitoring Equipment (Tables)
Monitoring Equipment (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Monitoring Equipment Tables | |
Schedule Of Monitoring Property And Equipment | June 30, September 30, 2017 2016 Monitoring equipment $ 8,037,934 $ 7,796,191 Less: accumulated amortization (4,279,008 ) (3,438,074 ) Monitoring equipment, net of accumulated depreciation $ 3,758,926 $ 4,358,117 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Intangible Assets Tables | |
Schedule of Intangible Assets | June 30, 2017 September 30, 2016 Other intangible assets: Patent & royalty agreements 21,170,565 21,170,565 Technology 10,379,196 9,651,074 Customer relationships 2,558,747 2,555,086 Trade name 332,703 319,383 Website 78,201 78,201 Total intangible assets 34,519,412 33,774,309 Accumulated amortization (9,454,908 ) (8,233,659 ) Intangible assets, net of accumulated amortization $ 25,064,504 $ 25,540,650 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | June 30, September 30, 2017 2016 Balance - beginning of period $ 7,955,876 $ 7,782,903 Effect of foreign currency translation on goodwill 239,227 172,973 Balance - end of period $ 8,195,103 $ 7,955,876 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Accrued Expenses Tables | |
Schedule Of Accrued Liabilities | June 30, September 30, 2017 2016 Accrued payroll, taxes and employee benefits $ 1,026,825 $ 1,424,812 Accrued consulting 127,070 123,114 Accrued taxes - foreign and domestic 525,668 311,614 Accrued board of directors fees - 96,000 Accrued other expenses 406,489 160,078 Accrued cellular costs 177,522 84 Accrued outside services 44,000 13,768 Accrued restructuring costs 63,480 - Accrued warranty and manufacturing costs 145,000 103,441 Accrued interest 3,704,143 1,743,281 Total accrued liabilities $ 6,220,197 $ 3,976,192 |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Restructuring Tables | |
Total fiscal year 2017 restructuring charges | Employee -related Other costs Total Liability at September 30, 2016 $ - $ - $ - Accrued expenses 435,643 133,492 $ 569,135 Payments (421,104 ) (84,551 ) (505,655 ) Liability at June 30, 2017 $ 14,539 $ 48,941 $ 63,480 |
Debt Obligations (Tables)
Debt Obligations (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Debt Obligations Tables | |
Schedule of Debt | June 30, 2017 September 30, 2016 Unsecured facility agreement with an entity whereby, as of June 30, 2015, the Company may borrow up to $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 July 31, 2018. A $1.2 million origination fee was paid and recorded as a debt discount and will be amortized as interest expense over the term of the loan. As of June 30, 2017, the remaining debt discount was $241,554. The Company did not pay interest on this loan during the three and nine months ended June 30, 2017. $ 30,158,446 $ 29,991,216 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. 134,240 182,002 Capital lease with effective interest rate of 12%. Lease matures August 15, 2019. 15,552 18,673 Total debt obligations 33,707,882 33,591,535 Less current portion (62,463 ) (3,245,732 ) Long-term debt, net of current portion $ 33,645,419 $ 30,345,803 |
Schedule of Maturities of Long-term Debt | Fiscal Year Total 2017 $ 62,463 2018 30,442,250 2019 42,137 2020 3,402,586 2021 & thereafter - Debt discount (241,554 ) Total $ 33,707,882 |
Related-party Transactions (Tab
Related-party Transactions (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Related-party Transactions Tables | |
Stock payable - related party | June 30, September 30, 2017 2016 Beginning balance $ 3,289,879 $ 3,501,410 Payment of shares for achieving performance milestones (75,939 ) (211,531 ) Adjustment to Track Group Analytics stock payable (213,940 ) - Adjustment to GPS Global stock payable (3,000,000 ) - Ending balance $ - $ 3,289,879 |
Stock Options and Warrants (Tab
Stock Options and Warrants (Tables) | 9 Months Ended |
Jun. 30, 2017 | |
Stock Options And Warrants Tables | |
Schedule of Valuation Assumptions | Nine Months Ended June 30 2017 2016 Expected stock price volatility 121 % 96 % Risk-free interest rate 1.89 % 0.98 % Expected life of options/warrants 5 years 2 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, 2016 504,991 $ 10.78 1.15 years $ 182,095 Granted 137,268 $ 3.93 Expired/Cancelled (52,949 ) $ (16.16 ) Exercised - $ - Outstanding as of June 30, 2017 589,310 8.71 5.14 years $ - Exercisable as of June 30, 2017 479,310 9.84 5.26 years $ - |
Immaterial Error Correction - E
Immaterial Error Correction - Error Correction (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Cost of revenues: | ||||
Monitoring, analytics & other related services | $ 2,734,920 | $ 2,462,281 | $ 8,936,501 | $ 7,060,036 |
Operating expenses: | ||||
General & administrative | 3,611,903 | 3,263,951 | 9,142,113 | 9,240,935 |
Selling & marketing | 572,334 | 407,829 | 1,786,312 | 1,684,130 |
Research & development | $ 292,938 | 610,398 | $ 1,460,354 | 1,741,285 |
Scenario, Previously Reported [Member] | ||||
Cost of revenues: | ||||
Monitoring, analytics & other related services | 2,008,721 | 5,781,617 | ||
Operating expenses: | ||||
General & administrative | 3,612,957 | 10,448,942 | ||
Selling & marketing | 470,829 | 1,684,130 | ||
Research & development | 651,952 | 1,811,697 | ||
Restatement Adjustment [Member] | ||||
Cost of revenues: | ||||
Monitoring, analytics & other related services | 453,560 | 1,278,419 | ||
Operating expenses: | ||||
General & administrative | (349,006) | (1,208,007) | ||
Selling & marketing | (63,000) | 0 | ||
Research & development | $ (41,554) | $ (70,412) |
Impairment Of Long-Lived Asse45
Impairment Of Long-Lived Assets (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Impairment Of Long-lived Assets Details Narrative | ||||
Impairment expenses | $ 210,000 | $ 60,000 | $ 344,787 | $ 180,000 |
Net Loss Per Common Share (Deta
Net Loss Per Common Share (Details) - shares | 9 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Stock equivalents excluded from computation of Diluted EPS | 479,310 | 450,991 |
Options and Warrants [Member[ | ||
Stock equivalents excluded from computation of Diluted EPS | 479,310 | 450,991 |
Net Loss Per Common Share (De47
Net Loss Per Common Share (Details Narrative) - shares | 9 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Net Loss Per Common Share Details Narrative | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 479,310 | 450,991 |
Prepaid and Other Expenses (Det
Prepaid and Other Expenses (Details Narrative) - USD ($) | Jun. 30, 2017 | Sep. 30, 2016 |
Prepaid And Other Expenses Details Narrative | ||
Prepaid expenses and other | $ 567,933 | $ 816,708 |
Inventory (Details)
Inventory (Details) - USD ($) | Jun. 30, 2017 | Sep. 30, 2016 |
Inventory Details | ||
Finished goods inventory | $ 257,508 | $ 620,001 |
Reserve for damaged or obsolete inventory | (26,934) | (98,150) |
Total inventory, net of reserves | $ 210,574 | $ 521,851 |
Property And Equipment (Details
Property And Equipment (Details) - USD ($) | Jun. 30, 2017 | Sep. 30, 2016 |
Property And Equipment Details | ||
Equipment, software and tooling | $ 1,019,664 | $ 1,028,173 |
Automobiles | 68,295 | 87,313 |
Leasehold Improvements | 1,261,344 | 1,279,500 |
Furniture And Fixtures | 262,134 | 252,864 |
Total property and equipment before accumulated depreciation | 2,611,437 | 2,647,850 |
Accumulated Depreciation | (1,674,800) | (1,421,389) |
Property and equipment, net of accumulated depreciation | $ 936,637 | $ 1,226,461 |
Property And Equipment (Detai51
Property And Equipment (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Property And Equipment Details | ||||
Depreciation | $ 70,760 | $ 93,474 | $ 248,348 | $ 482,464 |
Monitoring Equipment (Details)
Monitoring Equipment (Details) - USD ($) | Jun. 30, 2017 | Sep. 30, 2016 |
Monitoring Equipment Details | ||
Monitoring equipment | $ 8,037,934 | $ 7,796,191 |
Less: accumulated amortization | (4,279,008) | (3,438,074) |
Monitoring equipment, net of accumulated amortization | $ 3,758,926 | $ 4,358,117 |
Monitoring Equipment (Details N
Monitoring Equipment (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Depreciation Expense | $ 560,062 | $ 376,154 | $ 1,296,129 | $ 1,160,907 |
Maximum [Member] | ||||
Monitoring equipment useful life | 5 years | |||
Minimum [Member] | ||||
Monitoring equipment useful life | 1 year |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | Jun. 30, 2017 | Sep. 30, 2016 |
Intangible assets: | ||
Intangible assets | $ 34,519,412 | $ 33,774,309 |
Accumulated amortization | (9,454,908) | (8,233,659) |
Intangible assets, net of accumulated amortization | 25,064,504 | 25,540,650 |
Patent & Royalty agreements [Member] | ||
Intangible assets: | ||
Intangible assets | 21,170,565 | 21,170,565 |
Technology [Member] | ||
Intangible assets: | ||
Intangible assets | 10,379,196 | 9,651,074 |
Customer Relationships [Member] | ||
Intangible assets: | ||
Intangible assets | 2,558,747 | 2,555,086 |
Trade Name [Member] | ||
Intangible assets: | ||
Intangible assets | 332,703 | 319,383 |
Website [Member] | ||
Intangible assets: | ||
Intangible assets | $ 78,201 | $ 78,201 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Amortization of Intangible Assets | $ 577,632 | $ 640,339 | $ 1,833,428 | $ 1,910,950 |
Goodwill - Goodwill (Details)
Goodwill - Goodwill (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Balance - beginning of year | $ 7,955,876 | $ 7,782,903 |
Effect of foreign currency translation adjustment on goodwill | 239,227 | 172,973 |
Ending balance | $ 8,195,103 | $ 7,955,876 |
Other Assets (Details Narrative
Other Assets (Details Narrative) - USD ($) | Jun. 30, 2017 | Sep. 30, 2016 |
Other Assets Details Narrative | ||
Other assets | $ 3,099,301 | $ 2,900,911 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) | Jun. 30, 2017 | Sep. 30, 2016 |
Accrued Expenses Details | ||
Accrued payroll, taxes and employee benefits | $ 1,026,825 | $ 1,424,812 |
Accrued consulting | 127,070 | 123,114 |
Accrued taxes - foreign and domestic | 525,668 | 311,614 |
Accrued board of directors fees | 0 | 96,000 |
Accrued other expenses | 406,489 | 160,078 |
Accrued cellular costs | 177,522 | 84 |
Accrued outside service | 44,000 | 13,768 |
Accrued restructuring costs | 63,480 | 0 |
Accrued warranty and manufacturing costs | 145,000 | 103,441 |
Accrued interest | 3,704,143 | 1,743,281 |
Total accrued expenses | $ 6,220,197 | $ 3,976,192 |
Restructuring (Details)
Restructuring (Details) | 9 Months Ended |
Jun. 30, 2017USD ($) | |
Liability at September 30, 2016 | $ 0 |
Accrued expenses | 569,135 |
Payments | (505,655) |
Liability at March 31, 2017 | 63,480 |
Employee Related | |
Liability at September 30, 2016 | 0 |
Accrued expenses | 435,643 |
Payments | (421,104) |
Liability at March 31, 2017 | 14,539 |
Other Costs | |
Liability at September 30, 2016 | 0 |
Accrued expenses | 133,492 |
Payments | (84,551) |
Liability at March 31, 2017 | $ 48,941 |
Debt Obligations (Details)
Debt Obligations (Details) - USD ($) | Jun. 30, 2017 | Sep. 30, 2016 |
Total debt obligations | $ 33,707,882 | $ 33,591,535 |
Less current portion | (62,463) | (3,245,732) |
Long-term debt, net of current portion | 33,645,419 | 30,345,803 |
Long-term debt, discount | 241,554 | 185,811 |
Debt Obligation 1 | ||
Total debt obligations | 30,158,446 | 29,991,216 |
Debt Obligation 2 | ||
Total debt obligations | 3,399,644 | 3,399,644 |
Debt Obligation 3 | ||
Total debt obligations | 134,240 | 182,002 |
Debt Obligation 4 | ||
Total debt obligations | $ 15,552 | $ 18,673 |
Debt Obligations (Details 1)
Debt Obligations (Details 1) | Jun. 30, 2017USD ($) |
Debt Obligations Details 1 | |
2,017 | $ 62,463 |
2,018 | 30,442,250 |
2,019 | 42,137 |
2,020 | 3,402,586 |
2021 & thereafter | 0 |
Debt discount | (241,554) |
Long-term Debt and Capital Lease Obligations, Total | $ 33,707,882 |
Debt Obligations (Details Narra
Debt Obligations (Details Narrative) | Jun. 30, 2017USD ($) |
Debt Obligations Details 1 | |
Undrawn line of credit balance | $ 1,600,356 |
Related-party Transactions (Det
Related-party Transactions (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
Related-party Transactions Details | ||
Stock payable, beginning balance | $ 3,289,879 | $ 3,501,410 |
Payment of shares for achieving performance milestones | (75,939) | (211,531) |
Adjustment to Track Group Analytics stock payable | $ (213,940) | $ 0 |
Adjustment to GPS Global stock payable | (3,000,000) | 0 |
Stock payable, ending balance | $ 0 | $ 3,289,879 |
Preferred And Common Stock (Det
Preferred And Common Stock (Details Narrative) - $ / shares | Jun. 30, 2017 | Sep. 30, 2016 |
Preferred And Common Stock Details Narrative | ||
Common stock - par value | $ .0001 | $ .0001 |
Common stock - shares authorized | 30,000,000 | 30,000,000 |
Preferred stock, par value | $ .0001 | $ .0001 |
Preferred stock, authorized | 20,000,000 | 20,000,000 |
Preferred stock outstanding | 0 | 0 |
Stock Options and Warrants (Det
Stock Options and Warrants (Details) | 9 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Stock Options And Warrants Details | ||
Expected stock price volatility | 121.00% | 96.00% |
Risk free interest rate | 1.89% | 0.98% |
Expected life of options/warrants | 5 years | 2 years |
Stock Options and Warrants (D66
Stock Options and Warrants (Details 1) - USD ($) | 9 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Stock Options And Warrants Details 1 | ||
Shares Under Option/ Warrant outstanding, Beginning Balance | 504,991 | |
Shares Under Option/ Warrant Granted | 137,268 | 229,528 |
Shares Under Option/ Warrant Expired / Cancelled | (52,949) | |
Shares Under Option/ Warrant Exercised | 0 | |
Shares Under Option/ Warrant Outstanding, Ending Balance | 589,310 | |
Shares Under Option/ Warrant Exercisable | 479,310 | |
Weighted Average Exercise Price Outstanding, Beginning Balance | $ 10.78 | |
Weighted Average Exercise Price Granted | 3.93 | |
Weighted Average Exercise Price Expired / Cancelled | (16.16) | |
Weighted Average Exercise Price Exercised | 0 | |
Weighted Average Exercise Price Outstanding, Ending Balance | 8.71 | |
Weighted Average Exercise Price Exercisable | $ 9.84 | |
Weighted Average Remaining Contractual Life Outstanding | 5 years 1 month 20 days | 1 year 1 month 24 days |
Weighted Average Remaining Contractual Life Exercisable | 5 years 3 months 4 days | |
Aggregate Intrinsic Value Outstanding, end | $ 0 | |
Aggregate Intrinsic Value Exercisable | $ 0 |
Stock Options and Warrants (D67
Stock Options and Warrants (Details Narrative) - USD ($) | 9 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Stock Options And Warrants Details Narrative | ||
Shares authorized for issuance under 2012 Plan | 90,000 | |
Shares available for grant | 38,292 | |
Shares Under Option/ Warrant Granted | 137,268 | 229,528 |
Warrant term | 5 years | 2 years |
Expense Related to the Issuance and Vesting of All Stock Options and Warrants | $ 154,679 | $ 160,260 |
Share price | $ 2.18 |