What changed in this filing

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Item 1. Financial Statements

2022-05-13 compared with 2022-02-11 · 102 added, 60 removed, 414 unchanged (28% of the section changed)

21 unchanged sentences

Preferred stock, 10,000,000 shares authorized, $ .001 par value, of which 200,000 shares are authorized as Class A Convertible stock.

No shares issued and outstanding at December 31, 2021 and September 30, 2021

No shares issued and outstanding at March 31, 2022 and September 30, 2021

Common stock, $ .001 par value:

75,000,000 shares authorized, 19,342,823 issued at December 31, 2021 and September 30, 2021

75,000,000 shares authorized, 19,368,219 and 19,342,823 issued at March 31, 2022 and September 30, 2021

Additional paid-in capital

2 unchanged sentences

( 5,882,820 )

Treasury stock, at cost, 2,096,451 shares at December 31, 2021 and September 30, 2021

Treasury stock, at cost, 2,096,451 shares at March 31, 2021 and September 30, 2021

( 21,368,537 )

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended December 31,

Three Months Ended March 31,

Six Months Ended March 31,

Engineering development contracts

16 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

Three Months Ended December 31, 2021

Six Months Ended March 31, 2022

Balance, September 30, 2021

5 unchanged sentences

( 21,368,537 )

Issuance of stock to directors

Share-based compensation

Balance, March 31, 2022

( 3,320,192 )

( 21,368,537 )

The accompanying notes are an integral part of these statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

Three Months Ended December 31, 2020

Six Months Ended March 31, 2021

Balance, September 30, 2020

8 unchanged sentences

( 21,368,537 )

Issuance of stock to directors

Share-based compensation

Balance, March 31, 2021

( 10,099,000 )

( 21,368,537 )

The accompanying notes are an integral part of these statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended December 31,

For the Six Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

3 unchanged sentences

Stock options

Excess and obsolete inventory cost

Deferred income taxes

20 unchanged sentences

Cash and cash equivalents, end of year

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Cash paid for income taxes

The accompanying notes are an integral part of these statements.

14 unchanged sentences

The condensed consolidated balance sheet as of September 30, 2021 is derived from the audited financial statements of the Company.

Operating results for the three-month period ended December 31, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2022, including in terms of the impact of the coronavirus pandemic (the “COVID-19 pandemic”), which cannot be determined at this time.

Operating results for the three-and six-month periods ended March 31, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2022, including in terms of the impact of the coronavirus pandemic (the “COVID-19 pandemic”), which cannot be determined at this time.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes of the Company included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2021.

2 unchanged sentences

All intercompany balances and transactions have been eliminated in consolidation.

Impact of the Russia and Ukraine War

The war between Russia and Ukraine and the global response to this war could have an adverse impact on our business and results of operations.

Although the war has not had, and is not expected to have, a material impact on our operating results, it is not possible to predict the broader or long-term consequences of the war between Russia and Ukraine, which may include further sanctions, embargoes, regional instability, geopolitical shifts and adverse effects on macroeconomic conditions, cybersecurity conditions, financial markets and energy markets.

Such geopolitical instability and uncertainty could have a negative impact on our ability to sell and ship products, collect payments from and support customers in certain regions, and could increase the costs, risks and adverse impacts from supply chain and logistics disruptions.

Impact of the COVID-19 Pandemic

2 unchanged sentences

The Company has not yet seen a material impact from the COVID-19 pandemic on its business, financial position, liquidity, or ability to service customers or maintain critical operations.

However, the COVID-19 pandemic, as well as the quarantines and other governmental and non‑governmental restrictions which have been imposed throughout the world in an effort to contain or mitigate the spread of the coronavirus (including recent developments as a result of newer variants or strains of SARS‑CoV‑2), has created significant volatility, uncertainty and disruption which may adversely affect IS&S’ business and has caused and is continuing to cause significant market turbulence and disruption that may continue for some time even after business restrictions are lifted and the threat of the coronavirus diminishes.

However, the COVID-19 pandemic, as well as the quarantines and other governmental and non‑governmental restrictions which have been imposed throughout the world in an effort to contain or mitigate the spread of the coronavirus (including recent developments as a result of newer variants or strains of SARS‑CoV‑2), have created significant volatility, uncertainty and disruption which may adversely affect IS&S’ business and has caused and is continuing to cause significant market turbulence and disruption that may continue for some time even after business restrictions are lifted and the threat of the coronavirus diminishes.

As a result, the Company may face liquidity shortages, weaker product demand from its customers, disruptions in its supply chain, and/or staffing shortages in its workforce for the foreseeable future due to the direct and indirect effects of the COVID-19 pandemic.

6 unchanged sentences

Highly liquid investments, purchased with an original maturity of three months or less, are classified as cash equivalents.

Cash equivalents at December 31, 2021 and September 30, 2021 consist of cash on deposit and cash invested in money market funds with financial institutions.

Cash equivalents at March 31, 2022 and September 30, 2021 consist of cash on deposit and cash invested in money market funds with financial institutions.

Inventory Valuation

10 unchanged sentences

The estimation of fair value is generally measured by discounting expected future cash flows.

No impairment charges were recorded during the three-month periods ended December 31, 2021 or 2020.

No impairment charges were recorded during the three-and six-month periods ended March 31, 2022 or 2021.

Fair Value of Financial Instruments

10 unchanged sentences

These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.

The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2021 and September 30, 2021, according to the valuation techniques the Company used to determine their fair values.

Fair Value Measurement on December 31, 2021

The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2022 and September 30, 2021, according to the valuation techniques the Company used to determine their fair values.

Fair Value Measurement on March 31, 2022

Quoted Price in

39 unchanged sentences

Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised good or service to a customer.

Revenue from products transferred to customers at a point in time accounted for 100 percent of our revenue for the three-month periods ended December 31, 2021 and 2020, respectively, and is typically recognized at the time of shipment of products to the customer.

Revenue from products transferred to customers at a point in time accounted for 100 percent of our revenue for the three-and six-month periods ended March 31, 2022 and 2021, respectively, and is typically recognized at the time of shipment of products to the customer.

The remaining revenue results from EDC contracts and is recognized over time using an input measure (e.g., costs incurred to date relative to total estimated costs at completion) to measure progress.

11 unchanged sentences

The impact of adjustments in contract estimates on our operating earnings can be reflected in either operating costs and expenses or revenue.

The aggregate impact of adjustments in contract estimates did not change our revenue and operating earnings (and diluted earnings per share) for the three-month periods ended December 31, 2021 and 2020, respectively.

Therefore, no adjustment on any contract was material to our unaudited consolidated financial statements for the three-month periods ended December 31, 2021 and 2020, respectively.

The aggregate impact of adjustments in contract estimates did not change our revenue and operating earnings (and diluted earnings per share) for the three-and six-month periods ended March 31, 2022 and 2021, respectively.

Therefore, no adjustment on any contract was material to our unaudited consolidated financial statements for the three-and six-month periods ended March 31, 2022 and 2021, respectively.

Contract Balances

7 unchanged sentences

Increases due to invoicing prior to satisfaction of performance obligations

December 31, 2021

March 31, 2022

Customer Service Revenue

1 unchanged sentence

The Company’s customer service revenue and cost of sales are included in product sales and product cost of sales, respectively, on the accompanying consolidated statements of operations.

The Company’s customer service revenue and cost of sales for the three-month periods ended December 31, 2021 and 2020 respectively are as follows:

For the Three Months Ended December 31,

The Company’s customer service revenue and cost of sales for the three-and six-month periods ended March 31, 2022 and 2021 respectively are as follows:

For the Three Months Ended March 31,

For the Six Months Ended March 31,

Customer Service Sales

16 unchanged sentences

The sources of taxable income that may be available to realize the benefit of deferred tax assets are future reversals of existing taxable temporary differences, future taxable income exclusive of reversing temporary differences and credit carryforwards, taxable income in carry-back years, and tax planning strategies which are both prudent and feasible.

If the Company were to determine that it would be able to realize additional state deferred tax assets in the future, it would make an adjustment to the valuation allowance which would reduce the provision for income taxes.

For the quarter ended June 30, 2021, the valuation allowance was released for all federal and some state deferred tax assets.

This release both increased the deferred tax asset and removed the valuation allowance.

The Company will continue to assess all available evidence during future periods to evaluate any changes to the realization of its deferred tax assets.If the Company were to determine that it would be able to realize additional state deferred tax assets in the future, it would make an adjustment to the valuation allowance which would reduce the provision for income taxes.

The accounting for uncertainty in income taxes requires a more likely than not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return.

13 unchanged sentences

The Company invests a significant percentage of its sales on engineering development, both Research & Development (“R&D”) and EDC.

At December 31, 2021, approximately 18 % of the Company’s employees were engineers engaged in various engineering development projects.

At March 31, 2022, approximately 19 % of the Company’s employees were engineers engaged in various engineering development projects.

Total engineering development expense comprises both internally funded R&D and product development and design charges related to specific customer contracts.

1 unchanged sentence

R&D charges incurred for product design, product enhancements, and future product development are expensed as incurred.

Product development and design charges related to specific customer contracts are charged to cost of sales-EDC based on the method of contract accounting (either percentage-of-completion or completed contract) applicable to such contracts.

Product development

and design charges related to specific customer contracts are charged to cost of sales-EDC based on the method of contract accounting (either percentage-of-completion or completed contract) applicable to such contracts.

Treasury Stock

3 unchanged sentences

Pursuant to FASB ASC Topic 220, “Comprehensive Income,” the Company is required to classify items of other comprehensive income by their nature in a financial statement and display the accumulated balance of other comprehensive income separately from retained earnings and additional paid-in capital in the equity section of its condensed consolidated balance sheets.

For the three-month periods ended December 31, 2021 and 2020, comprehensive income consisted of net income only, and there were no items of other comprehensive income for any of the periods presented.

For the three-and six-month periods ended March 31, 2022 and 2021, comprehensive income consisted of net income only, and there were no items of other comprehensive income for any of the periods presented.

Share-Based Compensation

21 unchanged sentences

Liabilities associated with the risks that are retained by the Company are estimated based upon actuarial assumptions such as historical claims experience and demographic factors.

The Company estimated the total medical claims incurred but not reported and the Company believes that it has adequate reserves for these claims at December 31, 2021 and September 30, 2021, respectively.

The Company estimated the total medical claims incurred but not reported and the Company believes that it has adequate reserves for these claims at March 31, 2022 and September 30, 2021, respectively.

However, the actual value of such claims could be significantly affected if future occurrences and claims differ from these assumptions.

At December 31, 2021 and September 30, 2021, the estimated liability for medical claims incurred but not reported was $ 56,580 and $ 55,934 , respectively.

The Company has recorded the excess of funded premiums over estimated claims incurred but not reported of $ 162,706 and $ 208,651 as a current asset in the accompanying condensed consolidated balance sheets as of December 31, 2021 and September 30, 2021, respectively.

At March 31, 2022 and September 30, 2021, the estimated liability for medical claims incurred but not reported was $ 59,859 and $ 55,934 , respectively.

The Company has recorded the excess of funded premiums over estimated claims incurred but not reported of $ 233,567 and $ 208,651 as a current asset in the accompanying condensed consolidated balance sheets as of March 31, 2022 and September 30, 2021, respectively.

Concentrations

Major Customers and Products

In the three-month period ended December 31, 2021, two customers, Air Transport Services Group, and Pilatus Aircraft Ltd (“Pilatus”), accounted for 25 %, and 24 % of net sales, respectively.

In the three-month period ended December 31, 2020, three customers, Sierra Nevada Corporation, Amazon.com, Inc.

and Textron Aviation,Inc, accounted for 17 %, 12 % and 11 % of net sales, respectively.

In the three-month period ended March 31, 2022, three customers, Pilatus Aircraft Ltd (“Pilatus”), Amazon.com and Textron Aviation, Inc.

(“Textron”), accounted for 29 %, 11 % and 10 % of net sales, respectively.

In the six-month period ended March 31, 2022, two customers, Pilatus, and Air Transport Services Group, accounted for 26 %, and 13 % of net sales, respectively.

In the three-month period ended March 31, 2021, two customers, Pilatus, and Textron, accounted for 25 %, and 16 % of net sales, respectively.

In the six-month period ended March 31, 2021, three customers, Pilatus, Textron, and Sierra Nevada Corporation, accounted for 17 %, 14 % and 12 % of net sales, respectively.

Major Suppliers

1 unchanged sentence

Although there are a limited number of suppliers of particular components, management believes other suppliers could provide similar components on comparable terms.

For the three-month period ended December 31, 2021, the Company had two suppliers that were individually responsible for greater than 10% of the Company’s total inventory related purchases.

For the three-month period ended December 31, 2020, the Company had two suppliers that were individually responsible for greater than 10% of the Company’s total inventory related purchases.

For the three- and six-month periods ended March 31, 2022, the Company had three suppliers, respectively that were individually responsible for greater than 10% of the Company’s total inventory related purchases.

For the three- and six-month periods ended March 31, 2021, the Company had one and two suppliers, respectively that were individually responsible for greater than 10% of the Company’s total inventory related purchases.

Concentration of Credit Risk

37 unchanged sentences

( 13,193,599 )

Depreciation and amortization related to property and equipment was $ 92,372 and $ 93,051 for the three-month periods ended December 31, 2021 and 2020, respectively.

Depreciation and amortization related to property and equipment was $ 88,122 and $ 95,844 for the three-month periods ended March 31, 2022 and 2021, respectively.

The corporate airplanes are utilized primarily in support of product development.

The Pilatus PC-12 airplane, one of the Company’s two corporate airplanes, has been depreciated to its estimated salvage value.

Depreciation and amortization related to property and equipment was approximately $ 180,494 and $ 188,895 for the six-month periods ended March 31, 2022 and 2021, respectively.

Other assets consist of the following:

September 30,

Intangible assets, net of accumulated amortization of $ 634,032 at December 31, 2021 and September 30, 2021

Intangible assets, net of accumulated amortization of $ 635,095 and $ 634,032 at March 31, 2022 and September 30, 2021

Operating lease right-of-use asset

1 unchanged sentence

Intangible assets consist of licensing and certification rights which are amortized over a defined number of units.

No impairment charges were recorded in the three-month periods ended December 31, 2021 and 2020.

Intangible asset amortization expense was $ 0 and $ 19,914 for the three-month periods ended December 31, 2021 and 2020, respectively.

No impairment charges were recorded in the six-month periods ended March 31, 2022 and 2021.

Intangible asset amortization expense was $ 1,063 and $ 12,559 for the three-month periods ended March 31, 2022 and 2021, respectively.

Intangible asset amortization expense was $ 1,063 and $ 32,473 for the six-month periods ended March 31, 2022 and 2021, respectively.

The timing of future amortization expense is not determinable because the intangible assets are being amortized over a defined number of units.

Other non-current assets as of December 31, 2021 and September 30, 2021 include the security deposit for an airplane hangar and a deposit for medical claims required under the Company’s medical plan.

In addition, other non-current assets as of December 31, 2021 and September 30, 2021 includes $ 4,545 and $ 7,535 , respectively, of prepaid software licenses that will be earned upon the shipment of a certain product to a customer.

Other non-current assets amortization expense was $ 2,990 and $ 717 for the three-month periods ended December 31, 2021 and 2020, respectively.

Other non-current assets as of March 31, 2022 and September 30, 2021 include the security deposit for an airplane hangar and a deposit for medical claims required under the Company’s medical plan.

In addition, other non-current assets as of March 31, 2022 and September 30, 2021 includes $ 958 and $ 7,535 , respectively, of prepaid software licenses that will be earned upon the shipment of a certain product to a customer.

Other non-current assets amortization expense was $ 3,557 and $ 2,392 for the three-month periods ended March 31, 2022 and 2021, respectively.

Other non-current assets amortization expense was $ 6,577 and $ 3,110 for the six-month periods ended March 31, 2022 and 2021, respectively.

Accrued expenses

4 unchanged sentences

Operating lease

Warranty cost and accrual information for the three-month period ended December 31, 2021 is highlighted below:

Warranty cost and accrual information for the three-month period ended March 31, 2022 is highlighted below:

Three Months Ending

December 31, 2021

Six Months Ending

March 31, 2022

Warranty accrual, beginning of period

4 unchanged sentences

The income tax expense for the three-month period ended December 31, 2021 was $ 307,490 as compared to an income tax expense of $ 9,497 for the three-month period ended December 31, 2020.

The effective tax rate for the three-month period ended December 31, 2021 was 21.3 % and differs from the statutory tax rate primarily due to permanent items and state taxes.

The effective tax rate for the three-month period ended December 31, 2020 was 3.8 % and differs from the statutory tax rate primarily due to net operating loss realization due to an increase in pretax book income and the release of the valuation allowance.

The income tax expense for the three-month period ended March 31, 2022 was $ 390,110 as compared to an income tax expense of $ 20,165 for the three-month period ended March 31, 2021.

The effective tax rate for the three-month period ended March 31, 2022 was 21.4 % and differs from the statutory tax rate primarily due to permanent items and state taxes.

The effective tax expense rate for the three-month period ended March 31, 2021 was 3.2 % and differs from the statutory tax rate primarily due to net operating loss utilization related to the increase in pretax book income.

This loss utilization both decreased the deferred tax asset and the valuation allowance.

For the three-month period ended December 31, 2020, the valuation allowance decreased by approximately $ 40,000 .

A full valuation allowance exists on all deferred tax assets.

For the three months ended March 31, 2021, the valuation allowance decreased by approximately $ 140,000 .

The income tax expense for the six-month period ended March 31, 2022 was $ 697,600 as compared to an income tax expense of $ 29,662 for the six-month period ended March 31, 2021.

The effective tax rate for the six-month period ended March 31, 2022 was 21.4 % and differs from the statutory tax rate primarily due to permanent items and state taxes.

The effective tax expense rate for the six-month period ended March 31, 2021 was 3.4 % and differs from the statutory tax rate primarily due to net operating loss utilization related to the increase in pretax book income.

This loss utilization both decreased the deferred tax asset and the valuation allowance.

A full valuation allowance exists on all deferred tax assets.

For the six months ended March 31, 2021, the valuation allowance decreased by approximately $ 180,000 .

Shareholders’ Equity and Share-Based Payments

At December 31, 2021, the Company’s Amended and Restated Articles of Incorporation provides the Company authority to issue 75,000,000 shares of common stock and 10,000,000 shares of preferred stock.

At March 31, 2022, the Company’s Amended and Restated Articles of Incorporation provides the Company authority to issue 75,000,000 shares of common stock and 10,000,000 shares of preferred stock.

Share-Based compensation

The Company accounts for share-based compensation under the provisions of ASC Topic 718 by using the fair value method for expensing stock options and stock awards.

Total share-based compensation expense was $ 45,591 for the three-month periods ended December 31, 2021 and 2020, respectively.

Total share-based compensation expense was $ 204,589 and $ 204,574 for the three-month periods ended March 31, 2022 and 2021, respectively.

Total share-based compensation expense was $ 250,180 and $ 250,165 for the six-month periods ended March 31, 2022 and 2021, respectively.

2019 Stock-Based Incentive Compensation Plan

2 unchanged sentences

Options granted under the 2019 Plan may be either “incentive stock options” as defined in section 422 of the Code or nonqualified stock options, as determined by the Compensation Committee.

Subject to an adjustment necessary upon a stock dividend, recapitalization, forward split or reverse split, reorganization, merger, consolidation, spin-off, combination, repurchase or share exchange, extraordinary or unusual cash distribution, or similar corporate transaction or event, the maximum number of shares of common stock available for awards under the 2019 Plan is 750,000 , plus 139,691 shares of common stock that were authorized but unissued under the 2009 Plan as of the effective date of the 2019 Plan (i.e., April 2, 2019), all of which may be issued pursuant to awards of incentive stock options.

139,691 shares of common stock that were authorized but unissued under the 2009 Plan as of the effective date of the 2019 Plan (i.e., April 2, 2019), all of which may be issued pursuant to awards of incentive stock options.

In addition, the 2019 Plan provides that no more than 300,000 shares may be awarded in any calendar year to any employee.

1 unchanged sentence

Winand, the Company’s Chief Financial Officer, under the 2019 Plan.

As of December 31, 2021, there were 689,147 shares of common stock available for awards under the 2019 Plan.

As of March 31, 2022, there were 663,751 shares of common stock available for awards under the 2019 Plan.

If any award is forfeited, terminates or otherwise is settled for any reason without an actual distribution of shares to the participant, the related shares of common stock subject to such award will again be available for future grant.

2 unchanged sentences

In addition, the Compensation Committee may make adjustments in the terms and conditions of any awards, including any performance goals, in recognition of unusual or nonrecurring events affecting the Company or any subsidiary, or in response to changes in applicable laws, regulations, or accounting principles.

The compensation expense under the 2019 Plan related to options issued to employees was $ 45,591 and $ 45,591 for the three-month periods ended December 31, 2021 and 2020, respectively.

The compensation expense under the 2019 Plan related to shares issued to non-employee members of the Board was $ 0 for the three-month periods ended December 31, 2021 and 2020, respectively.

Total compensation expense associated with the 2019 Plan was $ 45,591 and $ 45,591 for the three-month periods ended December 31, 2021 and 2020, respectively.

At December 31, 2021, unrecognized compensation expense of approximately $ 118,422 , net of forfeitures, related to non-vested stock options under the 2019 Plan, will be recognized.

The compensation expense under the 2019 Plan related to options issued to employees was $ 44,594 for each of the three-month periods ended March 31, 2022 and 2021.

The compensation expense under the 2019 Plan related to options issued to employees was $ 90,185 for each of the six-month periods ended March 31, 2022 and 2021.

The compensation expense under the 2019 Plan related to shares issued to non-employee members of the Board was $ 159,995 for each of the three- and six-month periods ended March 31, 2022 and $ 159,980 for each of the three- and six-month periods ended March 31, 2021.

Total compensation expense associated with the 2019 Plan was $ 204,589 and $ 204,574 for the three-month periods ended March 31, 2022 and 2021, respectively.

Total compensation expense associated with the 2019 Plan was $ 250,180 and $ 250,165 for the six-month periods ended March 31, 2022 and 2021, respectively.

At March 31, 2022, unrecognized compensation expense of approximately $ 73,828 , net of forfeitures, related to non-vested stock options under the 2019 Plan, will be recognized.

Earnings Per Share

Three Months Ended December 31,

Three Months Ended March 31,

Six Months Ended March 31,

Basic weighted average shares

6 unchanged sentences

The number of incremental shares from the assumed exercise of stock options and RSUs is calculated by using the treasury stock method.

As of December 31, 2021 and 2020, there were 100,000 and 104,500 options to purchase common stock outstanding, respectively, and no shares subject to vesting of restricted stock units outstanding, respectively.

As of March 31, 2022 and 2021, there were 100,000 and 104,500 options to purchase common stock outstanding, respectively, and no shares subject to vesting of restricted stock units outstanding, respectively.

The average outstanding diluted shares calculation excludes options with an exercise price that exceeds the average market price of shares during the period.

For the three-month periods ended December 31, 2021 and 2020, respectively, 100,000 and 100,000 diluted weighted-average shares outstanding were excluded from the computation of diluted EPS because the effect would be anti-dilutive.

For the three-month periods ended March 31, 2022 and 2021, 100,000 diluted weighted-average shares outstanding were excluded from the computation of diluted EPS because the effect would be anti-dilutive.

For the six-month periods ended March 31, 2022 and 2021, 100,000 diluted weighted-average shares outstanding were excluded from the computation of diluted EPS because the effect would be anti-dilutive.

Contingencies

21 unchanged sentences

In these instances, we utilize an incremental borrowing rate, which represents the rate of interest that we would pay to borrow on a collateralized basis over a similar term.

The following table presents the lease-related assets and liabilities reported in the Consolidated Balance Sheet as of December 31, 2021:

Classification on the Consolidated Balance Sheet on December 31, 2021

The following table presents the lease-related assets and liabilities reported in the Consolidated Balance Sheet as of March 31, 2022:

Classification on the Consolidated Balance Sheet on March 31, 2022

Operating leases

4 unchanged sentences

Total lease liabilities

Rent expense and cash paid for various operating leases in aggregate are $ 3,669 for the three-month period ended December 31, 2021.

The weighted average remaining lease term is 2.9 years and the weighted average discount rate is 5.0 % as of December 31, 2021.

Future minimum lease payments under operating leases are as follows at December 31, 2021:

Rent expense and cash paid for various operating leases in aggregate are $ 3,669 and $ 7,338 for the three- and six-month periods ended March 31, 2022.

The weighted average remaining lease term is 2.7 years and the weighted average discount rate is 5.0 % as of March 31, 2022.

Future minimum lease payments under operating leases are as follows at March 31, 2022:

Twelve Months

5 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements