Annual report pursuant to Section 13 and 15(d)

15. Commitments and Contingencies

15. Commitments and Contingencies
12 Months Ended
Sep. 30, 2018
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

Note 15:       Commitments and Contingencies




On February 21, 2018, the Company received a subpoena from the Securities and Exchange Commission (“SEC”) and a letter from the SEC stating that it is conducting an investigation. The subpoena requests documents and information concerning, among other things, the restatement of the Company’s financial statements for the quarterly periods ended December 31, 2016, March 31, 2017, and June 30, 2017, the acquisition of Marquis Industries, Inc., Vintage Stock, Inc., and ApplianceSmart, Inc., and the change in auditors. The letter from the SEC states that “this inquiry does not mean that the SEC has concluded that the Company or any of its officers and directors has broken the law or that the SEC has a negative opinion of any person, entity, or security.”  The Company is cooperating with the SEC in its investigation.


On October 1, 2018, the Company received a letter from the SEC requesting information regarding a potential violation of Section 13(a) of the Securities Exchange Act of 1934, based upon the timing of the Company’s Form 8-K filed on February 14, 2018.  The Company provided a response to the SEC on October 26, 2018.  The Company is cooperating with the SEC in its inquiry.


We are involved in various claims and lawsuits arising in the normal course of business. The ultimate results of claims and litigation cannot be predicted with certainty. We currently believe that the ultimate outcome of such lawsuits and proceedings will not, individually or in the aggregate, have a material adverse effect on our consolidated financial position, results of operations or cash flows.


Operating Leases and Service Contracts


The Company leases its office space, certain equipment and a building (from a related party) under long-term operating leases expiring through fiscal year 2018. Rent expense under these leases was $13,541,827 and $8,329,186 for the years ended September 30, 2018 and 2017, respectively. The Company has also entered into several non-cancelable service contracts. Rent expense may include certain common area charges.


As of September 30, 2018, future minimum annual payments under operating lease agreements for fiscal years ending September 30 are as follows:


2019   $ 3,136,734  
2020     2,637,822  
2021     2,099,939  
2022     1,595,455  
2023     1,062,557  
Thereafter     2,648,943  
    $ 13,181,450