Annual report pursuant to Section 13 and 15(d)

CONSOLIDATED STATEMENTS OF CASH FLOWS

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
 12 Months Ended
Sep. 30, 2017
Sep. 30, 2016
OPERATING ACTIVITIES:    
Net income $ 6,501,780 $ 17,954,051
Adjustments to reconcile net income to net cash provided by (used in) operating activities, net of acquisition:    
Depreciation and amortization 5,025,548 3,125,311
(Gain) on Bargain purchase of acquisition 0 (1,499,345)
(Gain) Loss on disposal of property and equipment (33,452) 71,670
Amortization of debt issuance cost 215,673 0
Stock based compensation expense 203,690 256,146
Non-cash interest expense associated with convertible debt and warrants 0 4,749
Non-cash interest expense associated with loan fees 0 2,801,732
Non-cash note and agreement reductions due to settlement 0 (962,941)
Non-cash write-down of inventory 0 1,080,051
Non-cash issuance of common stock for services 0 19,999
Change in reserve for uncollectible accounts (211) 53,727
Change in reserve for obsolete inventory (926,163) 703,532
Change in contingent liability 0 (316,000)
Change in deferred income taxes 3,524,572 (15,599,205)
Changes in assets and liabilities:    
Accounts receivable (2,856,612) (144,536)
Prepaid expenses and other current assets (1,646,527) (1,606,795)
Inventories (3,811,361) 1,578,981
Deposits and other assets (57,755) 16,325
Accounts payable (2,344,209) (134,142)
Accrued liabilities 3,727,670 851,323
Income tax payable 351,689 (376,000)
Net cash provided by operating activities 7,874,332 7,878,633
INVESTING ACTIVITIES:    
Acquisition of business, net of cash acquired and seller financing provided (47,381,108) 0
Purchase of intangible assets - Software (95,976) 0
Proceeds from the sale of property and equipment 159,911 653,857
Purchases of property and equipment (6,414,971) (3,193,540)
Net cash used in investing activities (53,732,144) (2,539,683)
FINANCING ACTIVITIES:    
Net borrowings under revolver loans 17,148,662 1,739,825
Payments on debt issue costs (1,155,000) (415,757)
Payment for the purchase of the noncontrolling interest 0 (2,000,000)
Proceeds from issuance of notes payable 36,984,434 15,287,078
Payment of Series E preferred stock dividends (959) (1,917)
Purchase of treasury stock (699,557) (300,027)
Payments on notes payable (3,218,124) (17,109,250)
Payments on notes payable, related party 0 (4,495,825)
Net cash provided by (used in) financing activities 49,059,456 (7,295,873)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3,201,644 (1,956,923)
CASH AND CASH EQUIVALENTS, beginning of period 770,895 2,727,818
CASH AND CASH EQUIVALENTS, end of period 3,972,539 770,895
Supplemental cash flow disclosures:    
Interest paid 5,325,964 1,247,659
Income taxes paid (refunded) (149,307) 466,000
Non-cash changes in Fair Value of Assets Acquired - Marquis Industries    
Goodwill 0 (800,000)
Intangible - Customer Relationships 0 439,039
Inventory 0 1,080,051
Prepaid expenses 0 114,304
Deferred taxes 0 (3,074,623)
Machinery and Equipment 0 2,659,104
Buildings and Land 0 1,081,470
Total Non-cash changes in Fair Value of Assets Acquired - Marquis Industries 0 1,499,345
Notes payable issued to sellers of Vintage Stock 10,000,000 0
Conversion of accrued expense liabilities into common stock 584,500 0
Conversion of accrued expense liability to Series B preferred stock 2,800,000 0
Accrued and unpaid dividends 959 959
Note payable issued for purchase of noncontrolling interest 0 500,000
Restated equipment deposit as a purchase of equipment in fiscal year 2016 $ (1,816,555) $ 1,816,555