Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Jun. 30, 2019 | Aug. 07, 2019 | |
Document And Entity Information | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | DYNASIL CORP OF AMERICA | |
Entity Current Reporting Status | Yes | |
Entity Central Index Key | 0000030831 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Non-accelerated Filer | |
Trading Symbol | DYSL | |
Entity Common Stock, Shares Outstanding | 17,618,173 | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2019 | Sep. 30, 2018 |
Current Assets | ||
Cash and cash equivalents | $ 519,000 | $ 2,327,000 |
Accounts receivable, net of allowances of $274,000 and $262,000 at June 30, 2019 and September 30, 2018, respectively | 5,347,000 | 4,069,000 |
Unbilled receivables | 2,422,000 | 1,214,000 |
Contract assets | 62,000 | 1,000 |
Inventories, net of reserves | 4,544,000 | 4,106,000 |
Prepaid expenses and other current assets | 717,000 | 664,000 |
Total current assets | 13,611,000 | 12,381,000 |
Property, Plant and Equipment, net | 7,762,000 | 8,098,000 |
Other Assets | ||
Intangibles, net | 665,000 | 755,000 |
Deferred tax asset | 4,128,000 | 4,333,000 |
Goodwill | 5,864,000 | 5,900,000 |
Long term contract assets | 7,000 | 7,000 |
Security deposits | 53,000 | 58,000 |
Total other assets | 10,717,000 | 11,053,000 |
Total Assets | 32,090,000 | 31,532,000 |
Current Liabilities | ||
Line of credit | 961,000 | 0 |
Current portion of long-term debt | 1,431,000 | 1,246,000 |
Capital lease obligations, current portion | 33,000 | 40,000 |
Accounts payable | 2,544,000 | 2,355,000 |
Contract liabilities | 33,000 | 253,000 |
Accrued expenses and other liabilities | 2,667,000 | 2,803,000 |
Total current liabilities | 7,669,000 | 6,697,000 |
Long-term Liabilities | ||
Long-term debt, net of current portion | 1,797,000 | 2,075,000 |
Capital lease obligations, net of current portion | 30,000 | 52,000 |
Deferred tax liability, net | 200,000 | 205,000 |
Other Liabilities, Noncurrent | 181,000 | 175,000 |
Total long-term liabilities | 2,208,000 | 2,507,000 |
Stockholders' Equity | ||
Common Stock, $0.0005 par value, 40,000,000 shares authorized, 18,377,083 and 18,152,074 shares issued, 17,566,923 and 17,341,914 shares outstanding at June 30, 2019 and September 30, 2018, respectively. | 9,000 | 9,000 |
Additional paid in capital | 22,153,000 | 21,865,000 |
Accumulated other comprehensive income (loss) | (832,000) | (700,000) |
Retained earnings | 599,000 | 841,000 |
Less 810,160 shares of treasury stock - at cost | (986,000) | (986,000) |
Total Dynasil stockholders' equity | 20,943,000 | 21,029,000 |
Noncontrolling interest | 1,270,000 | 1,299,000 |
Total stockholders' equity | 22,213,000 | 22,328,000 |
Total Liabilities and Stockholders' Equity | $ 32,090,000 | $ 31,532,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Jun. 30, 2019 | Sep. 30, 2018 |
CONSOLIDATED BALANCE SHEETS | ||
Allowance for doubtful accounts (in dollars) | $ 274,000 | $ 262,000 |
Common stock, par value (in dollars per share) | $ 0.0005 | $ 0.0005 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares issued | 18,377,083 | 18,152,074 |
Common stock, shares outstanding | 17,566,923 | 17,341,914 |
Treasury stock, shares | 810,160 | 810,160 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | ||||
Net revenue | $ 11,090,000 | $ 10,542,000 | $ 32,650,000 | $ 29,985,000 |
Cost of revenue | 6,984,000 | 6,367,000 | 20,494,000 | 18,326,000 |
Gross profit | 4,106,000 | 4,175,000 | 12,156,000 | 11,659,000 |
Operating expenses: | ||||
Sales and marketing | 425,000 | 288,000 | 1,300,000 | 955,000 |
Research and development | 162,000 | 177,000 | 486,000 | 701,000 |
General and administrative | 3,665,000 | 3,100,000 | 10,317,000 | 9,519,000 |
Total operating expenses | 4,252,000 | 3,565,000 | 12,103,000 | 11,175,000 |
Income (loss) from operations | (146,000) | 610,000 | 53,000 | 484,000 |
Interest expense, net | 56,000 | 44,000 | 144,000 | 132,000 |
Income (loss) before taxes | (202,000) | 566,000 | (91,000) | 352,000 |
Income tax (benefit) | 66,000 | 190,000 | 207,000 | (404,000) |
Net income (loss) | (268,000) | 376,000 | (298,000) | 756,000 |
Less: Net loss attributable to noncontrolling interest | (5,000) | (15,000) | (18,000) | (124,000) |
Net income (loss) attributable to common stockholders | (263,000) | 391,000 | (280,000) | 880,000 |
Net income (loss) | (268,000) | 376,000 | (298,000) | 756,000 |
Other comprehensive income (loss): | ||||
Foreign currency translation | (136,000) | (384,000) | (132,000) | (127,000) |
Total comprehensive income (loss) | (404,000) | (8,000) | (430,000) | 629,000 |
Less: comprehensive income (loss) attributable to noncontrolling interest | (5,000) | (15,000) | (18,000) | (124,000) |
Total comprehensive income (loss) attributable to common stockholders | $ (399,000) | $ 7,000 | $ (412,000) | $ 753,000 |
Basic net income (loss) per common share | $ (0.02) | $ 0.02 | $ (0.02) | $ 0.05 |
Diluted net income (loss) per common share | $ (0.02) | $ 0.02 | $ (0.02) | $ 0.05 |
Weighted average shares outstanding | ||||
Basic | 17,522,644 | 17,203,965 | 17,426,316 | 17,127,834 |
Diluted | 17,522,644 | 17,221,199 | 17,426,316 | 17,147,228 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Other Comprehensive Income (Loss) | Retained Earnings [Member] | Treasury Stock [Member] | Noncontrolling Interest [Member] | Total |
Balance at Sep. 30, 2017 | $ 9,000 | $ 21,406,000 | $ (539,000) | $ (919,000) | $ (986,000) | $ 1,454,000 | |
Balance (in shares) at Sep. 30, 2017 | 17,893,763 | 810,160 | |||||
Impact of change in accounting policy | 0 | ||||||
Issuance of shares of common stock under employee stock purchase plan | 13,000 | ||||||
Issuance of shares of common stock under employee stock purchase plan (in shares) | 11,593 | ||||||
Stock-based compensation costs | 337,000 | 14,000 | |||||
Stock-based compensation costs (in shares) | 186,575 | ||||||
Foreign currency translation adjustment | (127,000) | ||||||
Xcede stock surrender of Series A Preferred | 0 | 0 | $ 0 | ||||
Net income (loss) | 880,000 | (124,000) | 756,000 | ||||
Balance at Jun. 30, 2018 | $ 9,000 | 21,756,000 | (666,000) | (39,000) | $ (986,000) | 1,344,000 | 21,418,000 |
Balance (in shares) at Jun. 30, 2018 | 18,091,931 | 810,160 | |||||
Balance at Mar. 31, 2018 | $ 9,000 | 21,635,000 | (282,000) | (430,000) | $ (986,000) | 1,355,000 | |
Balance (in shares) at Mar. 31, 2018 | 18,008,871 | 810,160 | |||||
Impact of change in accounting policy | 0 | ||||||
Issuance of shares of common stock under employee stock purchase plan | 5,000 | ||||||
Issuance of shares of common stock under employee stock purchase plan (in shares) | 3,637 | ||||||
Stock-based compensation costs | 116,000 | 4,000 | |||||
Stock-based compensation costs (in shares) | 79,423 | ||||||
Foreign currency translation adjustment | (384,000) | ||||||
Xcede stock surrender of Series A Preferred | 0 | 0 | |||||
Net income (loss) | 391,000 | (15,000) | 376,000 | ||||
Balance at Jun. 30, 2018 | $ 9,000 | 21,756,000 | (666,000) | (39,000) | $ (986,000) | 1,344,000 | 21,418,000 |
Balance (in shares) at Jun. 30, 2018 | 18,091,931 | 810,160 | |||||
Balance at Sep. 30, 2018 | $ 9,000 | 21,865,000 | (700,000) | 841,000 | $ (986,000) | 1,299,000 | 22,328,000 |
Balance (in shares) at Sep. 30, 2018 | 18,152,074 | 810,160 | |||||
Impact of change in accounting policy | 22,000 | ||||||
Issuance of shares of common stock under employee stock purchase plan | 14,000 | ||||||
Issuance of shares of common stock under employee stock purchase plan (in shares) | 17,453 | ||||||
Stock-based compensation costs | 274,000 | 5,000 | |||||
Stock-based compensation costs (in shares) | 207,556 | ||||||
Foreign currency translation adjustment | (132,000) | ||||||
Xcede stock surrender of Series A Preferred | 16,000 | (16,000) | (18,000) | ||||
Net income (loss) | (280,000) | (18,000) | (298,000) | ||||
Balance at Jun. 30, 2019 | $ 9,000 | 22,153,000 | (832,000) | 599,000 | $ (986,000) | 1,270,000 | 22,213,000 |
Balance (in shares) at Jun. 30, 2019 | 18,377,083 | 810,160 | |||||
Balance at Mar. 31, 2019 | $ 9,000 | 22,060,000 | (696,000) | 862,000 | $ (986,000) | 1,274,000 | |
Balance (in shares) at Mar. 31, 2019 | 18,301,216 | 810,160 | |||||
Impact of change in accounting policy | 0 | ||||||
Issuance of shares of common stock under employee stock purchase plan | 4,000 | ||||||
Issuance of shares of common stock under employee stock purchase plan (in shares) | 5,623 | ||||||
Stock-based compensation costs | 89,000 | 1,000 | |||||
Stock-based compensation costs (in shares) | 70,244 | ||||||
Foreign currency translation adjustment | (136,000) | ||||||
Xcede stock surrender of Series A Preferred | 0 | 0 | |||||
Net income (loss) | (263,000) | (5,000) | (268,000) | ||||
Balance at Jun. 30, 2019 | $ 9,000 | $ 22,153,000 | $ (832,000) | $ 599,000 | $ (986,000) | $ 1,270,000 | $ 22,213,000 |
Balance (in shares) at Jun. 30, 2019 | 18,377,083 | 810,160 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (298,000) | $ 756,000 |
Adjustments to reconcile net income (loss) to net cash: | ||
Stock compensation expense | 279,000 | 351,000 |
Foreign exchange loss (gain) | 26,000 | 13,000 |
Depreciation and amortization | 1,056,000 | 927,000 |
Deferred income taxes | 205,000 | (524,000) |
Non Cash R & D Services | 0 | 209,000 |
Other | 34,000 | (6,000) |
Other changes in assets and liabilities: | ||
Accounts receivable, net | (1,321,000) | (362,000) |
Unbilled receivables | (1,168,000) | 253,000 |
Contract assets | (61,000) | 0 |
Inventories | (503,000) | (153,000) |
Prepaid expenses and other assets | (55,000) | 42,000 |
Accounts payable | 203,000 | (447,000) |
Accrued expenses and other liabilities | (129,000) | 55,000 |
Contract liabilities | (219,000) | (20,000) |
Net cash from operating activities | (1,951,000) | 1,094,000 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (679,000) | (1,788,000) |
Purchase of intangibles | (65,000) | |
Net cash from investing activities | (679,000) | (1,853,000) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 14,000 | 13,000 |
Principal payments on capital leases | (29,000) | (72,000) |
Proceeds from (payments of) line of credit, net | 961,000 | 0 |
Proceeds from (payments of) equipment line of credit, net | 484,000 | 281,000 |
Proceeds from (payments of) bank and subordinated debt, net | (584,000) | (329,000) |
Net cash from financing activities | 846,000 | (107,000) |
Effect of Exchange Rate on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | (24,000) | (38,000) |
Net change in cash and cash equivalents | (1,808,000) | (904,000) |
Cash and cash equivalents, beginning | 2,327,000 | 2,415,000 |
Cash and cash equivalents, ending | 519,000 | 1,511,000 |
Supplemental disclosures of cash flow information: | ||
Cash paid (received) during the year for: Interest | 132,000 | 109,000 |
Cash paid (received) during the year for: Tax payments (refunds) | (5,000) | 7,000 |
Non cash activities: | ||
Equipment Line of credit to term note conversion | 484,000 | 0 |
Xcede stock surrender of Series A Preferred | 18,000 | 0 |
Assets purchased under capital leases | $ 0 | $ 12,000 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Jun. 30, 2019 | |
Basis of Presentation | |
Basis of Presentation | Note 1 - Basis of Presentation The accompanying consolidated balance sheet as of June 30, 2019, the consolidated statements of operations and comprehensive income (loss) for the three and nine months ended June 30, 2019 and 2018, changes in stockholders’ equity for the three and nine months ended June 30, 2019 and 2018, and cash flows for the nine months ended June 30, 2019 and 2018 of Dynasil Corporation of America and subsidiaries (the “Company”), and the related information contained in these notes have been prepared by management and are unaudited. Xcede Technologies, Inc. (“Xcede”) is a joint venture between Dynasil Biomedical and Mayo Clinic to spin out and separately fund the development of a tissue sealant technology. As of June 30, 2019, Dynasil Biomedical owned 63% of Xcede’s stock and, as a result, Xcede is included in the Company’s consolidated balance sheets, results of operations and cash flows. The remaining 37% of Xcede’s stock is owned by others and is accounted for under the rules applicable to non-controlling interest. Certain prior year balances have been reclassified to conform to the current year presentation. These reclassifications did not affect previously reported net income or stockholders’ equity. In the opinion of management, all adjustments (which include normal recurring and nonrecurring items) necessary to present fairly the Company’s financial position, results of operations and cash flows in conformity with generally accepted accounting principles for the periods presented have been made. Interim operating results are not necessarily indicative of operating results for a full year. The preparation of our unaudited consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Certain information and note disclosures normally included in the Company’s annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s September 30, 2018 Annual Report on Form 10‑K previously filed by the Company with the Securities and Exchange Commission. The Company considers events or transactions that have occurred after the unaudited consolidated balance sheet date of June 30, 2019, but prior to the filing of the unaudited consolidated financial statements with the SEC on this Quarterly Report on Form 10‑Q, to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure, as applicable. Subsequent events have been evaluated through the date of the filing of this Quarterly Report on Form 10‑Q with the SEC. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Jun. 30, 2019 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | Note 2 – Recent Accounting Pronouncements Revenue from Contracts with Customers . Effective October 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers , and all the related amendments using the modified retrospective transition method. Under the modified retrospective approach, the Company applied the standards to new contracts and those that were not completed as of October 1, 2018 which resulted in a cumulative adjustment to increase the retained earnings in the amount of $22,000. Prior periods will not be retrospectively adjusted, but the Company will maintain dual reporting for the year of initial application in order to maintain comparability of the periods presented. The cumulative effect of the changes made to the October 1, 2018 unaudited consolidated balance sheet for the adoption of Topic 606 was as follows: Balance at Adjustment for Adjusted balance at September 30, 2018 Topic 606 October 1, 2018 Assets: Unbilled receivables 1,214,000 40,000 1,254,000 Inventories, net of reserves 4,106,000 (18,000) 4,088,000 Liabilities: Contract liabilities 253,000 — 253,000 Stockholders’ equity: Retained earnings 841,000 22,000 863,000 Contract assets were formerly reported within costs in excess of billings and unbilled receivables. Contract liabilities were formerly reported as deferred revenue. The titles have been changed in the table below to be consistent with accounts currently used under the new standard. September 30, 2018 As Reported As Adopted Unbilled receivables 1,215,000 1,214,000 Contract assets — 1,000 Security and other deposits 65,000 58,000 Long term contract assets — 7,000 Deferred revenue 253,000 — Contract liabilities — 253,000 The Company receives payments from customers based on a billing schedule as established in our contracts. Contract asset relates to our conditional right to consideration for our completed performance under the contract. Accounts receivable are recorded when the right to consideration becomes unconditional. Contract liability relates to payments received in advance of performance under the contract. Contract liabilities are recognized as revenue as (or when) we perform under the contract. The Company recognized revenue in the amount of $0 during the three months ended June 30, 2019 and $253,000 during the nine months ended June 30, 2019 for amounts included in the contract liability balance at September 30, 2018. Under the new standard, most contracts in the Innovation and Development (formerly Contract Research) segment, which primarily provide contract research services, were not materially impacted upon the adoption of Topic 606 as revenue will continue to be recognized over time. Contracts in the Optics segment generally provide for the following revenue sources: standard product sales, custom product development and sales, and non-recurring engineering contracts. Revenues for this segment are recognized using either the “point in time” or “over time” methods of Topic 606, depending upon the revenue source. The change in revenue recognition for the Optics segment related to certain custom optics products and the related non-recurring engineering costs which changed from “point in time” to “over time” upon the adoption of Topic 606. This change will result in the recognition of revenue over time when compared to existing standards with the cumulative adjustment relating to contracts that are not complete as of September 30, 2018 recognized as an adjustment of $22,000 to opening retained earnings on October 1, 2018. The revenue for the standard products will be recognized using the "point in time" model of Topic 606, and the timing of such revenue recognition is not expected to differ materially from the historical revenue recognition. Other immaterial adjustments related to the Optics segment that are sometimes offered to customers include customer rights of return and volume discounts. The Company has elected the practical expedient that the Company will not be required to adjust promised amounts of consideration for the effects of a significant financing component if the transfer of promised goods or services will occur in one year or less. The impact of the adoption of ASC 606 on the Company’s consolidated financial statements for the three and nine months ended June 30, 2019 was immaterial as compared to what would have been reported under the previous guidance. Innovation and Development Segment Revenues The Company performs research and development for U.S. Federal government agencies, educational institutions and commercial organizations. The Company accounts for a research contract when a contract has been executed, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of the contract price is considered probable. Revenue is earned under reimbursement of costs plus fees, fixed price, or time and material type contracts. The Company’s contracts with agencies of the U.S. government are subject to periodic funding by the respective contracting agency. Funding for a contract may be provided in full at inception of the contract or ratably throughout the contract as the services are provided. In evaluating the probability of funding for purposes of assessing collectability of the contract price, the Company considers previous experience with the customers, communication with the customers regarding funding status, and knowledge of available funding for the contract or program. If funding is not assessed as probable, revenue recognition is deferred until realization is reasonably assured. Under the typical payment terms of the Company’s U.S. government contracts, the customer pays either performance-based payments or progress payments. Performance-based payments, which are typically used in the firm fixed price contracts, are interim payments based on quantifiable measures of performance or on the achievement of specified events or milestones. Progress payments, which are typically used in the Company’s cost-plus type contracts, are interim payments based on costs incurred as the work progresses. For the Company’s U.S. government cost-plus contracts, the customer generally pays during the performance period for 80%‑90% of the actual costs incurred. Because the customer retains a small portion of the contract price until completion of the contract and audit of allowable costs, cost-plus type contracts generally result in revenue recognized in excess of billings which the Company presents as contract assets on the balance sheet. Amounts billed and due from customers are classified as receivables on the balance sheet, whereas amounts earned, but not yet billed to the Company’s customers due to timing, are classified as unbilled receivables on the balance sheet. The Company recognizes a liability for performance-based payments paid in advance which are in excess of the revenue recognized and presents these amounts as contract liabilities on the balance sheet. To determine the proper revenue recognition method for research and development contracts, the Company evaluates whether two or more contracts should be combined and accounted for as one single modified contract and whether the combined or single contract should be accounted for as more than one performance obligation. For instances where a contract has options that were bid with the initial contract and awarded at a later date, the Company combines the options with the original contract when options are awarded. For most contracts, the customer contracts for research with multiple milestones that are interdependent, thus, the entire contract is accounted for as one performance obligation. The effect of the combined or modified contract on the transaction price and measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis. Contract revenue recognition is measured over time as the Company performs the work because of continuous transfer of knowledge and control to the customer. For U.S. government contracts which are typically subject to the Federal Acquisition Regulation ("FAR"), this continuous transfer of knowledge and control to the customer is supported by clauses in the contract that allow the customer to unilaterally terminate the contract for convenience, pay for cost incurred plus a reasonable profit, and take control of any work in process. From time to time, as part of normal management processes, facts may change, causing revisions to estimated total costs or revenues expected. The cumulative impact of any revisions to estimates and the full impact of anticipated losses on any type of contract are recognized in the period in which they become known. Because of knowledge and control transferring over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the services to be provided. The Company generally uses the input method, more specifically the cost-to-cost measure of progress for the contracts because it best depicts the transfer of knowledge and control to the customer which occurs as the Company incur costs on these contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. The underlying bases for estimating contract research revenues are measurable expenses, such as labor, subcontractor costs and materials, and data that are updated on a regular basis for purposes of preparing cost estimates. The Company’s research contracts generally have a period of performance of nine months to three years, and estimates of contract costs have historically been consistent with actual results. Revisions in these estimates between accounting periods to reflect changing facts and circumstances have not had a material impact on operating results, and the Company does not expect future changes in these estimates to be material. The cumulative impact of any revisions to estimates and the full impact of anticipated losses on any type of contract are recognized in the period in which they become known. Under cost-plus contracts, the Company is reimbursed for costs that are determined to be reasonable, allowable and allocable to the contract and paid a fixed fee representing the profit negotiated between the Company and the contracting agency. Revenue from cost-plus contracts is recognized as costs are incurred plus an estimate of applicable fees earned. The Company considers fixed fees under cost-plus contracts to be earned in proportion to the allowable costs incurred in performance of the contract. Revenue from time and materials contracts is recognized based on direct labor hours expended at contract billing rates plus other billable direct costs. The Company has elected the practical expedient to recognize revenue in the amount for which it has the right to invoice the customer, provided that invoiced amount corresponds directly with the value to the customer of the Company’s performance to date. Fixed price contracts may include either a product delivery or specific service performance throughout a period. For fixed price contracts that are based on the proportional performance method and involve a specified number of deliverables, the Company recognizes revenue based on the proportion of the cost of the deliverables compared to the cost of all deliverables included in the contract as this method more accurately measures performance under these arrangements. For fixed price contracts that provide for the development and delivery of a specific prototype or product, revenue is recognized based upon the performance completed to date, using an output method of revenue recognition based on milestones reached. Whether certain costs under government contracts are allowable is subject to audit by the government. Certain indirect costs are charged to contracts using provisional or estimated indirect rates, which are subject to later revision based on government audits of those costs. Management is of the opinion that costs subsequently disallowed, if any, would not likely have a significant impact on revenues recognized for those contracts. Optics Segment Revenues The Company produces standard and customized products for commercial organizations, educational institutions, and U.S. Federal government agencies. In addition, the Company also offers services which include non-recurring engineering services. To determine the proper revenue recognition method for Optics contracts, the Company evaluates whether two or more contracts should be combined and accounted for as one single contract and whether the combined or single contract should be accounted for as more than one performance obligation. The Company recognizes revenue when the performance obligation has been satisfied by transferring the control of the product or service to the customer. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation based on their relative stand-alone selling prices. In such circumstances, the Company uses the observable price of goods or services which are sold separately in similar circumstances to similar customers. If these prices are not observable, then the Company will estimate the stand-alone selling price using information that is reasonably available. For the majority of the Company’s standard products and services, price list, and discount structures related to customer type are available. For products and services that do not have price list and discount structures, the Company may use one or more of the following: (i) adjusted market assessment approach or (ii) expected cost plus a margin approach. The adjusted market approach requires evaluation of the market in which the Company sells goods or services and estimates the price that a customer in that market would be willing to pay for those goods or services. The expected cost plus margin approach requires the Company to forecast expected costs of satisfying the performance obligation and then add a reasonable margin for that good or service. Shipping and handling activities primarily occur after a customer obtains control and are considered fulfillment cost rather than separate performance obligations. Similarly, sales and similar taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer are excluded from the measurement of the transaction price. Unfulfilled Performance Obligations For standard products, the Company recognizes revenue at a point in time when control passes to the customer. Absent substantial product acceptance clauses, this is based on the shipping terms. For custom products that require engineering and development based on customer requirements and provide for cost plus reasonable margin throughout the contract, the Company recognizes revenue over time using the output method for any items shipped and any finished goods or work in process that is produced for balances of open sales orders. For any finished goods or work in process that has been produced for the balance of open sales orders the Company recognizes revenue by applying the average selling price for such open order to the lesser of the on hand balance in finished goods or open sales order quantity which the Company presents as a contract asset on the balance sheet. Cost of sales is recognized based on the standard cost of the finished goods and work in process associated with this revenue and inventory balances are reduced accordingly. Unfulfilled performance obligations represent amounts expected to be earned on executed contracts. Indefinite delivery and quantity contracts and unexercised options are not reported in total unfulfilled performance obligations. Unfulfilled performance obligations include funded obligations, which is the amount for which money has been directly authorized by the U.S. government and by a commercial customer for which a purchase order has been received, and unfunded obligations, representing firm orders for which funding has not yet been appropriated. The approximate value of our Innovation and Development segment unfulfilled performance obligations was $38.3 million at June 30, 2019. The Company expects to satisfy 34% of the performance obligations in fiscal year 2019, 55% in fiscal year 2020, and the remaining amount by fiscal year 2021. The approximate value of our Optics segment unfulfilled performance obligations was $7.0 million at June 30, 2019. The Company expects to satisfy 53% of the performance obligations in fiscal year 2019 and 47% in fiscal year 2020. The Company disaggregates revenue from contracts with customers by geographic locations, customer-type, contract type, timing of recognition, and major categories for each segments, as the Company believes it best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. See details in the tables below. Three Months Ended June 30, 2019 Nine Months Ended June 30, 2019 Innovation & Innovation & Optics Development Total Optics Development Total Total Revenue by Geographic Location United States $ 3,688,000 $ 4,981,000 $ 8,669,000 $ 10,567,000 $ 14,334,000 $ 24,901,000 Asia 667,000 — 667,000 2,440,000 22,000 2,462,000 Europe 1,422,000 46,000 1,468,000 4,608,000 97,000 4,705,000 Other 122,000 164,000 286,000 231,000 351,000 582,000 Total $ 5,899,000 $ 5,191,000 $ 11,090,000 $ 17,846,000 $ 14,804,000 $ 32,650,000 Total Revenue by Contract Type Firm-fixed price $ 5,899,000 $ 500,000 $ 6,399,000 $ 17,846,000 $ 1,663,000 $ 19,509,000 Non-Firm Fixed price — 4,691,000 4,691,000 — 13,141,000 13,141,000 Total $ 5,899,000 $ 5,191,000 $ 11,090,000 $ 17,846,000 $ 14,804,000 $ 32,650,000 Total Revenue by Major Customer Type U.S. government revenue $ 53,000 $ 4,856,000 $ 4,909,000 $ 56,000 $ 14,072,000 $ 14,128,000 U.S. commercial revenue 3,634,000 125,000 3,759,000 10,511,000 262,000 10,773,000 Foreign commercial and other revenue 2,212,000 210,000 2,422,000 7,279,000 470,000 7,749,000 Total $ 5,899,000 $ 5,191,000 $ 11,090,000 $ 17,846,000 $ 14,804,000 $ 32,650,000 Total Revenue by Major Products/Services Optical components $ 5,850,000 $ — $ 5,850,000 $ 17,682,000 $ — $ 17,682,000 Contract research — 5,009,000 5,009,000 — 14,430,000 14,430,000 Other products and services 49,000 182,000 231,000 164,000 374,000 538,000 Total $ 5,899,000 $ 5,191,000 $ 11,090,000 $ 17,846,000 $ 14,804,000 $ 32,650,000 Total Revenue by Timing of Recognition Goods/services transferred over time $ 712,000 $ 5,017,000 $ 5,729,000 $ 1,780,000 $ 14,456,000 $ 16,236,000 Goods transferred at a point in time 5,187,000 174,000 5,361,000 16,066,000 348,000 16,414,000 Total $ 5,899,000 $ 5,191,000 $ 11,090,000 $ 17,846,000 $ 14,804,000 $ 32,650,000 Service Concession Arrangements (Topic 853): Determining the Customer of the Operation Services. In May 2017, the FASB issued ASU 2017‑10 which provides guidance for operating entities when they enter into a service concession arrangement with a public-sector grantor. This update is effective for the Company in the fiscal year beginning October 1, 2018, at the time the Company adopted Accounting Standards Update No. 2014‑09, Revenue from Contracts with Customers (Topic 606). The Company implemented this ASU on October 1, 2018 and it did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows. Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. In October 2016, the FASB issued ASU 2016‑16 which eliminates the exception, other than for inventory transfers, under current U.S. GAAP under which the tax effects of intra-entity asset transfers (intercompany sales) are deferred until the transferred asset is sold to a third party or otherwise recovered through use. Upon adoption of ASU 2016‑16, the Company will recognize the tax expense from the sale of that asset in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. Modified retrospective adoption is required with any cumulative-effect adjustment recorded to retained earnings as of the beginning of the period of adoption. The cumulative-effect adjustment, if any, would consist of the net impact from (1) the write-off of any unamortized tax expense previously deferred and (2) recognition of any previously unrecognized deferred tax assets, net of any necessary valuation allowances. The impact of the adoption of this standard on future periods will be dependent on future asset transfers, which generally occur in connection with acquisitions and other business structuring activities. The Company implemented this ASU on October 1, 2018 and it did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows. Business Combinations (Topic 805): Clarifying the Definition of a Business. In January 2017, the FASB issued ASU 2017‑01 which clarifies the definition of a business for determining whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The Company implemented this ASU on October 1, 2018 and it did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows. Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting. In May 2017, the FASB issued ASU No. 2017‑09 which was issued to clarify and reduce both (i) diversity in practice and (ii) cost and complexity when applying the guidance in Topic 718, “Compensation – Stock Compensation” to changes in the terms and conditions of a share-based payment award. This update is effective for the Company in the fiscal year beginning October 1, 2018. The adoption of this standard did not have a material impact on the Company’s consolidated financial position, results of operations, or cash flows. Leases (Topic 842). In February 2016, the FASB issued ASU 2016‑02 (as subsequently amended by ASU 2018‑01, ASU 2018‑10, ASU 2018‑11 and ASU 2018‑20) which requires that a lessee recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. As with previous guidance, there continues to be a differentiation between finance leases and operating leases, however this distinction now primarily relates to differences in the manner of expense recognition over time and in the classification of lease payments in the statement of cash flows. Lease assets and liabilities arising from both finance and operating leases will be recognized in the statement of financial position. ASU 2016‑02 leaves the accounting for leases by lessors largely unchanged from previous GAAP. The transitional guidance for adopting the requirements of ASU 2016‑02 calls for a modified retrospective approach that includes a number of optional practical expedients that entities may elect to apply. In addition, ASU 2018‑11 provides for an additional (and optional) transition method by which entities may elect to initially apply the transition requirements in Topic 842 at that Topic’s effective date with the effects of initially applying Topic 842 recognized as a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption and without retrospective application to any comparative prior periods presented. Also, ASU 2018‑20 provides certain narrow-scope improvements to Topic 842 as it relates to lessors. The guidance in ASU 2016‑02 will become effective for the Company as of the beginning of the 2020 fiscal year. The Company is reviewing vendor relationships and assessing the impact of this ASU on its consolidated financial statements with the intention to adopt this ASU in fiscal year 2020. Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . In January 2017, the FASB issued ASU 2017‑04 which simplifies the test for goodwill impairment by eliminating Step 2 from the Goodwill impairment test. This new guidance is effective for the Company beginning in fiscal year 2021. The adoption of this standard is not expected to have a material impact on the Company’s financial statements. Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, including Accounting Standards Update (ASU) 2016-13. In June 2016, the FASB issued ASU 2016-13 which significantly changes how entities account for credit losses for financial assets and certain other instruments, including trade receivables and contract assets that are not measured at fair value through net income. The ASU requires a number of changes to the assessment of credit losses, including the utilization of an expected credit loss model, which requires consideration of a broader range of information to estimate expected credit losses over the entire lifetime of the asset, including losses where probability is considered remote. Additionally, the standard requires the estimation of lifetime expected losses for trade receivables and contract assets that are classified as current. The Company is reviewing the effect of the ASU on its results of operations, financial condition, and cash flows. |
Xcede Technologies, Inc. Joint
Xcede Technologies, Inc. Joint Venture | 9 Months Ended |
Jun. 30, 2019 | |
Xcede Technologies, Inc. Joint Venture | |
Xcede Technologies, Inc. Joint Venture | Note 3 – Xcede Technologies, Inc. Joint Venture In October 2013, the Company, through its subsidiary Dynasil Biomedical (“DBM”), formed Xcede, a joint venture with Mayo Clinic, in order to spin out and separately fund the development of its hemostatic tissue sealant technology, which formerly comprised the majority of its expense within the biomedical segment. Beginning at its inception and through November 2016, Xcede funded its pre-clinical research activities through the issuance of $5.2 million in the aggregate principal amount of convertible notes bearing interest at 5% (“the Notes”). In November of 2016, the Notes were converted into Series A convertible preferred stock of Xcede (“Series A Preferred”). Series A Preferred participants include both outside investors (accounted for as noncontrolling interest) and DBM. The outside investors converted $3.1 million of Notes and accrued interest into 3,055,551 shares of Series A Preferred. DBM converted the remaining $2.4 million of Notes and accrued interest into 2,338,569 shares of Series A Preferred. Additionally, DBM invested $1.2 million of cash into Xcede in exchange for Series B convertible preferred stock of Xcede (“Series B Preferred”). Series A Preferred was issued at a 20% discount to the price per share of the Series B Preferred, in accordance with the amended provisions of the Notes. The value of DBM’s Series A Preferred and Series B Preferred, as they are wholly owned by DBM, is eliminated in consolidation. Each share of Series A Preferred and Series B Preferred (together “the Preferred Stock”) is convertible, at the option of the holder, into such number of fully paid and non-assessable shares of Xcede common stock (“Common Stock”) as determined by dividing the original issue price, as defined, by the conversion price in effect on the date of conversion, which is 1:1. Each holder of the Preferred Stock is entitled to one vote for each share of Common Stock that the holder of the Preferred Stock would be entitled to receive upon the conversion of the holder’s Preferred Stock into Common Stock. Upon any liquidation event, which includes certain change of control events, following payment of pre-equity distributions, the remaining proceeds or net assets of Xcede shall be paid and distributed in the following amounts and order of priority: (1) to satisfy the liquidation preference payment due to each holder of Series B Preferred, (2) to satisfy the liquidation preference payment due to each holder of Series A Preferred, (3) payment in full of any acquisition transaction payment, and (4) the remaining assets available to be distributed ratably among the holders of the Common Stock. If a liquidation event were to occur, the Series A Preferred’s liquidation value would be $1.016 per share and Series B Preferred’s liquidation value would be $1.27 per share. As of June 30, 2019, the liquidation value of the Series B Preferred would be approximately $1.5 million and the Series A Preferred would be approximately $5.5 million, of which $2.4 million is DBM’s portion and $3.1 million would be attributed to noncontrolling shareholders. As of June 30, 2019, DBM owned approximately 63% of Xcede’s outstanding Common Stock and Preferred Stock and, as a result, Xcede is included in the Company’s consolidated balance sheets, results of operations and cash flows. Due to the Series A Preferred having a liquidation preference and therefore not representing a residual interest, cumulative net losses of Xcede are attributed only to common stockholders in accordance with common stock ownership. Noncontrolling interest represents the value of the Series A Preferred and common stock not owned by DBM plus 17% of cumulative losses of Xcede based on the 17% common stock ownership held by noncontrolling interests. In 2016, Xcede signed agreements with Cook Biotech Inc. (“CBI”) in connection with the development, regulatory approval and production of Xcede’s hemostatic patch (the “Xcede Patch”) in which CBI committed to fund up to $1.5 million for the pre-clinical testing for the Xcede Patch. Xcede utilized $0.5 million in CBI services in exchange for a note that is currently outstanding. On July 20, 2018, Xcede received a notice of termination from CBI claiming that the results of a recent animal study showed that it is not commercially reasonable, in CBI’s assessment, to continue to the next development phase of the Patch. In light of the foregoing, Xcede has halted clinical trial preparations at this time and has curtailed its operations to a minimal level while the Board of Directors of Xcede evaluates alternatives, including the viability of modifying the Xcede Patch to address the shortcomings cited by CBI and/or the possible sale or license of Xcede IP assets, subject to amending CBI’s security interest. Additionally, Xcede and the Company’s RMD subsidiary have begun an investigation of possible continued development of the Xcede Patch, which includes seeking government funding of this development. In September 2019, Xcede and RMD plan to resubmit an application for a Phase I SBIR grant for $225,000. There can be no assurances with respect to any such alternatives or that any additional outside funding to continue development of the Xcede Patch will be available to Xcede. |
Inventories
Inventories | 9 Months Ended |
Jun. 30, 2019 | |
Inventories | |
Inventories | Note 4 - Inventories Inventories, net of reserves, consists of the following: June 30, September 30, 2019 2018 Raw Materials $ 2,482,000 $ 2,362,000 Work-in-Process 1,073,000 890,000 Finished Goods 989,000 854,000 $ 4,544,000 $ 4,106,000 |
Intangible Assets
Intangible Assets | 9 Months Ended |
Jun. 30, 2019 | |
Intangible Assets | |
Intangible Assets | Note 5 – Intangible Assets Intangible assets at June 30, 2019 and September 30, 2018 consist of the following: Useful Gross Accumulated June 30, 2019 Life (years) Amount Amortization Net Acquired Customer Base 5 to 15 $ 703,000 $ 635,000 $ 68,000 Know How 15 512,000 376,000 136,000 Trade Names Indefinite 266,000 — 266,000 Patents 20 223,000 28,000 195,000 Biomedical Technologies 5 260,000 260,000 — $ 1,964,000 $ 1,299,000 $ 665,000 Useful Gross Accumulated September 30, 2018 Life (years) Amount Amortization Net Acquired Customer Base 5 to 15 $ 719,000 $ 601,000 $ 118,000 Know How 15 512,000 350,000 162,000 Trade Names Indefinite 272,000 — 272,000 Patents 20 223,000 20,000 203,000 Biomedical Technologies 5 260,000 260,000 — $ 1,986,000 $ 1,231,000 $ 755,000 Amortization expense for the three months ended June 30, 2019 and 2018 was $27,000 and $28,000, respectively. Amortization expense for the nine months ended June 30, 2019 and 2018 was $82,000 and $84,000, respectively. Estimated amortization expense for each of the next five fiscal years and thereafter is as follows: 2019 (3 months) 2020 2021 2022 2023 Thereafter Total Acquired Customer Base $ 20,000 $ 48,000 $ — $ — $ — $ — $ 68,000 Know How 9,000 34,000 34,000 34,000 25,000 — 136,000 Patents 3,000 11,000 11,000 11,000 11,000 148,000 195,000 $ 32,000 $ 93,000 $ 45,000 $ 45,000 $ 36,000 $ 148,000 $ 399,000 The Company continually assesses whether events or changes in circumstances have occurred that may warrant revision of the estimated useful lives of its long-lived assets or whether the remaining balances of those assets should be evaluated for possible impairment. There were no changes, aside from foreign exchange rate fluctuations, in the carrying value of long-lived assets, during the nine months ended June 30, 2019 and 2018. |
Goodwill
Goodwill | 9 Months Ended |
Jun. 30, 2019 | |
Goodwill | |
Goodwill | Note 6 – Goodwill Goodwill is subject to an annual impairment test. The Company considers many factors which may indicate the requirement to perform additional, interim impairment tests. These include: · A significant adverse long term outlook for any of its industries; · An adverse finding or rejection from a regulatory body involved in new product regulatory approvals; · Failure of an anticipated commercialization of a product or product line; · Unanticipated competition or the introduction of a disruptive technology; · The testing for recoverability under the Impairment or Disposal of Long-Lived Assets Subsections of Subtopic 360‑10 of a significant asset group within a reporting unit; · A loss of key personnel; and · An expectation that a reporting unit carrying goodwill, or a significant portion of a reporting unit, will be sold or otherwise disposed of. There were no changes, aside from foreign exchange rate fluctuations, in the carrying value of goodwill, during the nine months ended June 30, 2019 and 2018. |
Debt
Debt | 9 Months Ended |
Jun. 30, 2019 | |
Debt | |
Debt | Note 7 – Debt Senior Debt On April 30, 2019, the Company converted the outstanding balance on the equipment line of credit with Middlesex Savings Bank (“Middlesex”) of approximately $484,000 into a five year term note with an interest rate of 5.17%, which will be repaid in equal monthly installments from May 2019 through April 2024. Additionally, on May 1, 2019, the Company’s equipment line of credit was renewed for $750,000 through April 30, 2020, at which time the outstanding balance will be converted into a five year term note . Subordinated Debt On November 27, 2018, the Company amended the Note Purchase Agreement (the “Note”) with Massachusetts Capital Resource Company (“MCRC”) to reinstate the interest only payment requirements of the loan and defer principal repayment requirements to November 30, 2019. Such amendment also extended the maturity date from July 31, 2019 to November 30, 2021. On May 7, 2019, the Company received a waiver from MCRC to terms of the Note to allow and permit the Company’s proposed transaction to delist its Common Stock from the Nasdaq Stock Market, including the 1-for-8,000 reverse stock split on its outstanding shares of Common Stock (the “Reverse Split”), the payment of cash to stockholders subsequent to the Reverse Split who hold only a fractional interest, and the subsequent forward stock split of 8,000-for-1 to restore the remaining shareholders to their original share ownership as of immediately prior to the Reverse Split. In connection with the events described above, on August 6, 2019, the Company entered into an Note Purchase Agreement with MCRC, the Company’s subordinated lender, in which the Company borrowed an additional $2,000,000 in cash and replaced the existing Note which has an outstanding principal amount of $865,216, for an aggregate principal amount of $2,865,216 which will be due July 31, 2026 and bears eight percent interest per annum. Until August 31, 2022 this loan will require interest only payments, followed by principal and interest payments for the remaining four years of the loan. Until August 31, 2021, the Company is subject to early-payback penalties. As a result of this amendment to the Note, the debt balance as of June 30, 2019 with MCRC was classified as long-term. |
Earnings (Loss) Per Common Shar
Earnings (Loss) Per Common Share | 9 Months Ended |
Jun. 30, 2019 | |
Earnings (Loss) Per Common Share | |
Earnings (Loss) Per Common Share | Note 8 – Earnings (Loss) Per Common Share Basic earnings (loss) per common share is computed by dividing the net income or loss attributable to common shares by the weighted average number of common shares outstanding. Diluted earnings per common share adjusts basic earnings per share for the effects of common stock options, common stock warrants, convertible preferred stock and other potential dilutive common shares outstanding during the periods. For the three and nine months ended June 30, 2019 and 2018, no common share equivalents related to stock options were included in the calculation of dilutive shares, as all of the 95,602 and 160,537 common stock options outstanding, respectively, had exercise prices above the applicable period’s average market price per share and the inclusion of common share equivalents would be anti-dilutive. Additionally, for the three and nine months ended June 30, 2019 and 2018, 25,000 and 60,000 shares of restricted common stock were excluded from the calculation of dilutive shares, respectively, as the effect of their inclusion would be anti-dilutive. The computation of the weighted shares outstanding for the three months ended June 30, 2019 and 2018 is as follows: June 30, 2019 June 30, 2018 Weighted average shares outstanding Basic 17,522,644 17,203,965 Effect of dilutive securities Stock Options — — Restricted Stock — 17,234 Dilutive Average Shares Outstanding 17,522,644 17,221,199 The computation of the weighted shares outstanding for the nine months ended June 30, 2019 and 2018 is as follows: June 30, 2019 June 30, 2018 Weighted average shares outstanding Basic 17,426,316 17,127,834 Effect of dilutive securities Stock Options — — Restricted Stock — 19,394 Dilutive Average Shares Outstanding 17,426,316 17,147,228 |
Stock Based Compensation
Stock Based Compensation | 9 Months Ended |
Jun. 30, 2019 | |
Stock Based Compensation | |
Stock Based Compensation | Note 9 - Stock Based Compensation The fair value of the stock options granted is estimated at the date of grant using the Black-Scholes option pricing model. The expected volatility was determined with reference to the historical volatility of the Company’s stock. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The expected term of options granted represents the period of time that the options granted are expected to be outstanding. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury rate in effect at the time of grant. The dividend yield is expected to be zero because historically the Company has not paid dividends on common stock. The Company’s Xcede joint venture adopted an Equity Incentive Plan in 2013 which provides for, among other incentives, the granting of options to purchase shares in Xcede’s common stock to officers, directors, employees and consultants. The options granted generally vest over a three year period. The fair value of the stock options granted is estimated at the date of grant using the Black-Scholes option pricing model using assumptions generally consistent with those used for Company stock options. Because Xcede is not publicly traded, the expected volatility is estimated with reference to the average historical volatility of a group of publicly traded companies that are believed to have similar characteristics to Xcede. As of June 30, 2019, DBM owned approximately 63% of Xcede’s outstanding Common Stock and Preferred Stock. No significant change in the Company’s position with respect to the ownership of Xcede’s stock occurred during the three months ended June 30, 2019. Stock compensation expense for the three and nine months ended June 30, 2019 and 2018 is as follows: Three Months Ended Three Months Ended June 30, 2019 June 30, 2018 Stock Grants $ 73,000 $ 78,000 Restricted Stock Grants 6,000 14,000 Option Grants — — Employee Stock Purchase Plan 1,000 1,000 Subsidiary Option Grants 10,000 27,000 Total $ 90,000 $ 120,000 Nine Months Ended Nine Months Ended June 30, 2019 June 30, 2018 Stock Grants $ 215,000 $ 209,000 Restricted Stock Grants 29,000 40,000 Option Grants — 17,000 Employee Stock Purchase Plan 3,000 2,000 Subsidiary Option Grants 32,000 83,000 Total $ 279,000 $ 351,000 At June 30, 2019, there was approximately $32,000 in unrecognized stock compensation cost for Dynasil, which is expected to be recognized over a weighted average period of approximately thirteen months. Restricted Stock Grants A summary of restricted stock activity for the nine months ended June 30, 2019 is presented below: Restricted Stock Activity for the Nine Months Weighted-Average ended June 30, 2019 Shares Grant-Date Fair Value Nonvested at September 30, 2018 60,000 $ 1.61 Granted — — Vested (35,000) 1.68 Cancelled — — Nonvested and expected to vest at June 30, 2019 25,000 $ 1.50 Stock Option Grants During the nine months ended June 30, 2019, no Dynasil stock options were granted. A summary of stock option activity for the nine months ended June 30, 2019 is presented below: Weighted Average Weighted Average Remain Options Exercise Price per Contractual Term Outstanding Share (in Years) Balance at September 30, 2018 160,537 $ 2.01 0.93 Outstanding and exercisable at September 30, 2018 160,537 $ 2.01 0.93 Granted — — Exercised — — Cancelled (64,935) 2.33 Balance at June 30, 2019 95,602 $ 1.80 0.59 Outstanding and exercisable at June 30, 2019 95,602 $ 1.80 0.59 Subsidiary Stock Option Grants During the nine months ended June 30, 2019, no Xcede stock options were granted. A summary of Xcede stock option activity for the nine months ended June 30, 2019 is presented below: Weighted Average Weighted Average Remain Options Exercise Price per Contractual Term Outstanding Share (in Years) Balance at September 30, 2018 1,300,956 $ 1.00 7.10 Outstanding and exercisable at September 30, 2018 1,229,685 1.00 7.11 Granted — — Exercised — — Cancelled — — Balance at June 30, 2019 1,300,956 1.00 6.35 Outstanding and exercisable at June 30, 2019 1,283,768 $ 1.00 6.35 At June 30, 2019, the Company’s Xcede joint venture had approximately $10,000 of unrecognized stock compensation expense associated with stock options expected to be recognized over a period of three months. |
Segment, Customer and Geographi
Segment, Customer and Geographical Reporting | 9 Months Ended |
Jun. 30, 2019 | |
Segment, Customer and Geographical Reporting | |
Segment, Customer and Geographical Reporting | Note 10 – Segment, Customer and Geographical Reporting Segment Financial Information Dynasil reports three reportable segments: innovation and development (“Innovation and Development”), (formerly known as the Contract Research segment), optics (“Optics”) and biomedical (“Biomedical”). Within these segments, there is a segregation of operating segments based upon the organizational structure used to evaluate performance and make decisions on resource allocation, as well as availability and materiality of separate financial results consistent with that structure. The Optics segment aggregates four operating segments – Dynasil Fused Silica, Optometrics, Hilger Crystals (“Hilger”), and Evaporated Metal Films – that manufacture commercial products, including optical crystals for sensing in the security and medical imaging markets, as well as optical components, optical coatings and optical materials for scientific instrumentation and other applications. The Innovation and Development segment is one of the largest small business participants in U.S. government-funded research. The Biomedical segment consists of a single operating segment, Dynasil Biomedical Corporation (“Dynasil Biomedical”), a medical technology incubator which owns rights to certain early stage medical technologies. Dynasil Biomedical holds common and preferred stock in the Xcede joint venture which is developing a tissue sealant technology and currently has no other operations. The Company’s segment information for the three months ended June 30, 2019 and 2018 is summarized below: Results of Operations for the Three Months Ended June 30, 2019 Innovation and Optics Development* Biomedical Total Revenue $ 5,899,000 $ 5,191,000 $ — $ 11,090,000 Gross profit 2,112,000 1,994,000 — 4,106,000 GM % 36 % 38 % — 37 % Operating expenses 2,237,000 1,992,000 23,000 4,252,000 Operating income (loss) (125,000) 2,000 (23,000) (146,000) Depreciation and amortization 297,000 63,000 3,000 363,000 Capital expenditures 90,000 29,000 — 119,000 Intangibles, net 334,000 136,000 195,000 665,000 Goodwill 925,000 4,939,000 — 5,864,000 Total assets $ 21,084,000 $ 10,805,000 $ 201,000 $ 32,090,000 Results of Operations for the Three Months Ended June 30, 2018 Innovation and Optics Development* Biomedical Total Revenue $ 6,159,000 $ 4,383,000 $ — $ 10,542,000 Gross profit 2,299,000 1,876,000 — 4,175,000 GM % 37 % 43 % — 40 % Operating expenses 1,721,000 1,760,000 84,000 3,565,000 Operating income (loss) 578,000 116,000 (84,000) 610,000 Depreciation and amortization 261,000 53,000 3,000 317,000 Capital expenditures 707,000 76,000 20,000 803,000 Intangibles, net 408,000 171,000 380,000 959,000 Goodwill 968,000 4,939,000 — 5,907,000 Total assets $ 21,117,000 $ 8,018,000 $ 507,000 $ 29,642,000 *Formerly Contract Research The Company’s segment information for the nine months ended June 30, 2019 and 2018 is summarized below: Results of Operations for the Nine Months Ended June 30, 2019 Innovation and Optics Development* Biomedical Total Revenue $ 17,846,000 $ 14,804,000 $ — $ 32,650,000 Gross profit 6,121,000 6,035,000 — 12,156,000 GM % 34 % 41 % — 37 % Operating expenses 5,993,000 6,012,000 98,000 12,103,000 Operating income (loss) 128,000 23,000 (98,000) 53,000 Depreciation and amortization 863,000 183,000 10,000 1,056,000 Capital expenditures 586,000 93,000 — 679,000 Intangibles, net 334,000 136,000 195,000 665,000 Goodwill 925,000 4,939,000 — 5,864,000 Total assets $ 21,084,000 $ 10,805,000 $ 201,000 $ 32,090,000 Results of Operations for the Nine Months Ended June 30, 2018 Innovation and Optics Development* Biomedical Total Revenue $ 17,011,000 $ 12,974,000 $ — $ 29,985,000 Gross profit 6,038,000 5,621,000 — 11,659,000 GM % 35 % 43 % — 39 % Operating expenses 5,154,000 5,297,000 724,000 11,175,000 Operating income (loss) 884,000 324,000 (724,000) 484,000 Depreciation and amortization 738,000 179,000 10,000 927,000 Capital expenditures 1,635,000 153,000 65,000 1,853,000 Intangibles, net 408,000 171,000 380,000 959,000 Goodwill 968,000 4,939,000 — 5,907,000 Total assets $ 21,117,000 $ 8,018,000 $ 507,000 $ 29,642,000 *Formerly Contract Research Customer Financial Information For three and nine months ended June 30, 2019, one customer in the Optics segment represented more than 10% of the total segment revenue. For the three and nine months ended June 30, 2018, no customer in the Optics segment represented more than 10% of the total segment revenue. For the three and nine months ended June 30, 2019, three customers of the Innovation and Development segment, all various agencies of the U.S. Government, each represented more than 10% of the total segment revenue. For the three months ended June 30, 2018, four customers of the Innovation and Development segment, three various agencies of the U.S. Government and one commercial customer, each represented more than 10% of the total segment revenue. For the nine months ended June 30, 2018, three customers of the Innovation and Development segment, all various agencies of the U.S. Government, each represented more than 10% of the total segment revenue. Geographic Financial Information Revenue by geographic location in total and as a percentage of total revenue, for the three months ended June 30, 2019 and 2018 are as follows: Three Months Ended Three Months Ended June 30, 2019 June 30, 2018 Geographic Location Revenue % of Total Revenue % of Total United States $ 8,669,000 78 % $ 7,512,000 71 % Asia 667,000 6 % 877,000 9 % Europe 1,468,000 13 % 2,029,000 19 % Other 286,000 3 % 124,000 1 % $ 11,090,000 100 % $ 10,542,000 100 % Revenue by geographic location in total and as a percentage of total revenue, for the nine months ended June 30, 2019 and 2018 are as follows: Nine Months Ended Nine Months Ended June 30, 2019 June 30, 2018 Geographic Location Revenue % of Total Revenue % of Total United States $ 24,901,000 76 % $ 22,993,000 76 % Asia 2,462,000 8 % 877,000 3 % Europe 4,705,000 14 % 4,662,000 16 % Other 582,000 2 % 1,453,000 5 % $ 32,650,000 100 % $ 29,985,000 100 % |
Income Taxes
Income Taxes | 9 Months Ended |
Jun. 30, 2019 | |
Income Taxes | |
Income Taxes | Note 11 - Income Taxes The Company uses the asset and liability approach to account for income taxes. Under this approach, deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and net operating loss and tax credit carry forwards. The amount of deferred taxes on these temporary differences is determined using the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, as applicable, based on tax rates, and tax laws, in the respective tax jurisdiction then in effect. Dynasil Corporation of America and its wholly-owned U.S. subsidiaries file a consolidated federal income tax return and various state returns. The Company’s U.K. subsidiary files tax returns in the U.K. Prior to November 18, 2016, the Company’s subsidiary, Xcede was included in the federal and state tax returns filed by Dynasil. As of November 18, 2016, Dynasil’s ownership in Xcede was reduced to approximately 59%. As a result, Xcede is no longer included in Dynasil’s federal consolidated tax return and files a separate federal return. Xcede continues to be included in the Dynasil consolidated state tax filings pursuant to the respective state tax requirements. In assessing the ability to realize the net deferred tax assets, management considers various factors including taxable income in carryback years, future reversals of existing taxable temporary differences, tax planning strategies and projections of future taxable income, to determine whether it is more likely than not that some portion or all of the net deferred tax assets will not be realized. As a result of Xcede’s de-consolidation from the Company’s federal tax returns, the Company is no longer able to offset taxable income with Xcede’s current or cumulative net operating losses. Upon review of relevant criteria for the new Dynasil federal consolidated group, it was determined that it is more likely than not that the federal deferred tax assets of the new Dynasil federal consolidated group will be realized based upon positive earnings history and expected future profits of the group. As a result, the federal deferred tax asset valuation allowance associated with the Dynasil federal consolidated group was reversed resulting in an income tax benefit in the amount of $2.7 million during the quarter ending December 31, 2016. Going forward, as the Company records income, it will be able to utilize the NOLs (net operating losses) within its deferred tax assets. Based upon the Company’s recent losses and uncertainty of future profits, the Company has determined that the uncertainty regarding the realization of the Company’s state and separate Xcede deferred tax assets is sufficient to warrant the continued need for a valuation allowance against these deferred tax assets. As a result of Xcede’s decision to halt clinical trial preparations and curtail operations to a minimal level while the Board of Directors of Xcede evaluates alternative avenues to develop the Xcede Patch, following the July 2018 notice of termination from Cook Biotech Inc. (“CBI”) claiming that the results of a recent animal study showed that it is not commercially reasonable, in CBI’s assessment, to continue to the next development phase of the Xcede Patch, the Company has concluded that it is more likely than not that the deferred tax assets associated with the Company’s unitary state filings will be realized based on future profit for the group and thus has reversed the related valuation allowance on the Company’s NOLs of approximately $0.6 million. In addition, the Company conducted a research and experimentation study which released the tax valuation allowance and increased deferred tax assets by $0.6 million. The reversal resulted in an income tax benefit of approximately $1.2 million recorded during the year ended September 30, 2018. The Company applies the authoritative provisions related to accounting for uncertainty in income taxes. As required by these provisions, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more-likely-than-not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being reached upon ultimate settlement with the relevant tax authority. As of June 30, 2019 and September 30, 2018, the Company has no liabilities for uncertain tax positions. Interest and penalty charges, if any, related to uncertain tax positions would be classified as income tax expense in the accompanying consolidated statement of operations. As of June 30, 2019 and September 30, 2018, the Company had no accrued interest or penalties related to uncertain tax positions. The Company currently has no federal or state tax examinations in progress. On December 22, 2017, the 2017 Tax Act was signed into law. The 2017 Tax Act, which was effective on December 22, 2017, significantly revised the U.S. tax code by, among other changes, lowering the corporate income tax rate from 35% to 21%, requiring a one-time transition tax on accumulated foreign earnings of certain foreign subsidiaries that were previously tax deferred and creating new taxes on certain foreign sourced earnings. The Company has completed its accounting for the tax effects of the 2017 Tax Act. The Company re-measured certain U.S. deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%, and recorded an income tax expense of $0.7 million related to such re-measurement in the quarter ended December 31, 2018. The one-time transition tax was based on the total unremitted earnings of the Company’s foreign subsidiary, Hilger, which had previously been deferred from U.S. income taxes. The Company recorded a provision for its one-time transition liability of its foreign subsidiary resulting in additional income tax expense of $0.2 million in fiscal year 2018. During the fiscal year ended, September 30, 2018, the Company has federal research credits of $2.9 million, primarily resulted from a benefit in the third quarter of fiscal year 2018 related to R&E tax credits for the years ended 2013 through 2016. The federal credits begin expiring in fiscal year 2030. During the fiscal year ended September 30, 2018, the Company had state research credits of $852,000 which begin expiring in fiscal year 2027. The effective tax rates were (33%) and 34% for the three months ended June 30, 2019 and 2018, respectively. The effective tax rates were (227%) and (115%) for the nine months ended June 30, 2019 and 2018, respectively. The results for both nine month periods ended June 30, 2019 and 2018 had significant events which resulted in an extreme variation in tax rates. The effective tax rate for the three and nine months ended June 30, 2019 were a result of the anticipated non-deductible transaction costs resulting from the Board of Directors’ plan to cease the registration of the Company’s common stock under federal securities laws (see Note 12 – Subsequent Events). The effective tax rate for the nine months ended, June 30, 2018 was primarily driven by the recently signed 2017 Tax Act, as well as the R&E tax credit study completed in the third quarter of fiscal year 2018. The effective tax rate excluding the impact of the 2017 Tax Act and the PATH 2015 R&E Tax Credit was 69% for the nine months ended June 30, 2018. The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. The Company’s tax filings for federal and state jurisdictions for the tax years beginning with 2013 are still subject to examination. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Jun. 30, 2019 | |
Subsequent Events | |
Subsequent Events | Note 12 – Subsequent Events On August 7, 2019, the Company held a special meeting of stockholders (the “Special Meeting”). At the Special Meeting, the holders of a majority of the Company’s issued and outstanding shares of common stock entitled to vote approved amendments to the Company’s certificate of incorporation, as amended (the “Certificate of Incorporation”), to effect a 1-for-8,000 reverse stock split of the Company’s common stock (the “Reverse Stock Split”), followed immediately by a 8,000-for-1 forward stock split of the Company’s common stock (the “Forward Stock Split,” and together with the Reverse Stock Split, the “Transaction”). Following the Special Meeting, the Company filed certificates of amendment to the Certificate of Incorporation with the State of Delaware to effect the Reverse Stock Split, followed immediately by the Forward Stock Split, both effective on August 7, 2019 at 5:01 and 5:02 p.m., respectively. As a result of the Transaction, each stockholder owning fewer than 8,000 shares of the Company’s common stock immediately prior to the effective time of the Reverse Stock Split became entitled to receive $1.15 per share, without interest, in cash for each share of the Company’s common stock held by such stockholder at the effective time of the Reverse Stock Split. As a result of the Transaction, based on information provided to the Company by its transfer agent, Continental Stock Transfer & Trust Company, and the Depository Trust Company (DTC), 2,825,268 pre-split shares of common stock are due to be exchanged for cash, and the aggregate amount payable by the Company to the former holders of such shares is approximately $3,249,000. Stockholders who owned 8,000 or more shares of the Company’s common stock immediately prior to the effective time of the Reverse Stock Split were not entitled to receive any cash for their fractional share interests resulting from the Reverse Stock Split, if any. The Forward Stock Split that immediately followed the Reverse Stock Split reconverted whole shares and fractional share interests held by such stockholders back into the same number of shares of the Company’s common stock held by such stockholders immediately before the effective time of the Reverse Stock Split. As a result, the total number of shares of the Company’s common stock held by such stockholders did not change. The Company has given notice to The Nasdaq Stock Market (“Nasdaq”) of its intent to voluntarily delist its common stock and to withdraw the registration of its common stock with the Securities and Exchange Commission (SEC). The Company intends to file a Form 25 Notification of Removal From Listing with the SEC on or about August 19, 2019. As a result, the Company expects that listing of its shares on Nasdaq will be terminated on or about August 29, 2019, at which time the Company intends to file a Form 15 with the SEC to suspend the Company’s reporting obligations under Section 15(d) of the Exchange Act. In connection with the events described above, on August 5, 2019, the Company entered into a Loan Modification Agreement with Middlesex, the Company’s senior lender, to modify the Loan and Security Agreement dated May 1, 2014, by and between the Company and Middlesex, to allow for the exclusion of certain transaction-related expenses from the calculation of EBITDA. In connection with the events described above, on August 6, 2019, the Company entered into an Note Purchase Agreement with MCRC, the Company’s subordinated lender, in which the Company borrowed an additional $2,000,000 in cash and replaced the existing Note, which has an outstanding principal amount of $865,216, for an aggregate principal amount of $2,865,216, which will be due July 31, 2026 and bears eight percent interest per annum. Until August 31, 2022 this loan will require interest only payments, followed by principal and interest payments for the remaining four years of the loan. Until August 31, 2021, the Company is subject to early-payback penalties. The Company has evaluated subsequent events through the date the financial statements were released. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Tables) | 9 Months Ended |
Jun. 30, 2019 | |
Schedule of Contract With Customer Asset And Liability | Contract assets were formerly reported within costs in excess of billings and unbilled receivables. Contract liabilities were formerly reported as deferred revenue. The titles have been changed in the table below to be consistent with accounts currently used under the new standard. September 30, 2018 As Reported As Adopted Unbilled receivables 1,215,000 1,214,000 Contract assets — 1,000 Security and other deposits 65,000 58,000 Long term contract assets — 7,000 Deferred revenue 253,000 — Contract liabilities — 253,000 |
Schedule of Disaggregation of Revenue | The Company disaggregates revenue from contracts with customers by geographic locations, customer-type, contract type, timing of recognition, and major categories for each segments, as the Company believes it best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. See details in the tables below. Three Months Ended June 30, 2019 Nine Months Ended June 30, 2019 Innovation & Innovation & Optics Development Total Optics Development Total Total Revenue by Geographic Location United States $ 3,688,000 $ 4,981,000 $ 8,669,000 $ 10,567,000 $ 14,334,000 $ 24,901,000 Asia 667,000 — 667,000 2,440,000 22,000 2,462,000 Europe 1,422,000 46,000 1,468,000 4,608,000 97,000 4,705,000 Other 122,000 164,000 286,000 231,000 351,000 582,000 Total $ 5,899,000 $ 5,191,000 $ 11,090,000 $ 17,846,000 $ 14,804,000 $ 32,650,000 Total Revenue by Contract Type Firm-fixed price $ 5,899,000 $ 500,000 $ 6,399,000 $ 17,846,000 $ 1,663,000 $ 19,509,000 Non-Firm Fixed price — 4,691,000 4,691,000 — 13,141,000 13,141,000 Total $ 5,899,000 $ 5,191,000 $ 11,090,000 $ 17,846,000 $ 14,804,000 $ 32,650,000 Total Revenue by Major Customer Type U.S. government revenue $ 53,000 $ 4,856,000 $ 4,909,000 $ 56,000 $ 14,072,000 $ 14,128,000 U.S. commercial revenue 3,634,000 125,000 3,759,000 10,511,000 262,000 10,773,000 Foreign commercial and other revenue 2,212,000 210,000 2,422,000 7,279,000 470,000 7,749,000 Total $ 5,899,000 $ 5,191,000 $ 11,090,000 $ 17,846,000 $ 14,804,000 $ 32,650,000 Total Revenue by Major Products/Services Optical components $ 5,850,000 $ — $ 5,850,000 $ 17,682,000 $ — $ 17,682,000 Contract research — 5,009,000 5,009,000 — 14,430,000 14,430,000 Other products and services 49,000 182,000 231,000 164,000 374,000 538,000 Total $ 5,899,000 $ 5,191,000 $ 11,090,000 $ 17,846,000 $ 14,804,000 $ 32,650,000 Total Revenue by Timing of Recognition Goods/services transferred over time $ 712,000 $ 5,017,000 $ 5,729,000 $ 1,780,000 $ 14,456,000 $ 16,236,000 Goods transferred at a point in time 5,187,000 174,000 5,361,000 16,066,000 348,000 16,414,000 Total $ 5,899,000 $ 5,191,000 $ 11,090,000 $ 17,846,000 $ 14,804,000 $ 32,650,000 |
Accounting Standards Update 2014-09 [Member] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The cumulative effect of the changes made to the October 1, 2018 unaudited consolidated balance sheet for the adoption of Topic 606 was as follows: Balance at Adjustment for Adjusted balance at September 30, 2018 Topic 606 October 1, 2018 Assets: Unbilled receivables 1,214,000 40,000 1,254,000 Inventories, net of reserves 4,106,000 (18,000) 4,088,000 Liabilities: Contract liabilities 253,000 — 253,000 Stockholders’ equity: Retained earnings 841,000 22,000 863,000 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Jun. 30, 2019 | |
Inventories | |
Schedule of Inventory, Current | Inventories, net of reserves, consists of the following: June 30, September 30, 2019 2018 Raw Materials $ 2,482,000 $ 2,362,000 Work-in-Process 1,073,000 890,000 Finished Goods 989,000 854,000 $ 4,544,000 $ 4,106,000 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Jun. 30, 2019 | |
Intangible Assets | |
Schedule of Finite-Lived Intangible Assets | Intangible assets at June 30, 2019 and September 30, 2018 consist of the following: Useful Gross Accumulated June 30, 2019 Life (years) Amount Amortization Net Acquired Customer Base 5 to 15 $ 703,000 $ 635,000 $ 68,000 Know How 15 512,000 376,000 136,000 Trade Names Indefinite 266,000 — 266,000 Patents 20 223,000 28,000 195,000 Biomedical Technologies 5 260,000 260,000 — $ 1,964,000 $ 1,299,000 $ 665,000 Useful Gross Accumulated September 30, 2018 Life (years) Amount Amortization Net Acquired Customer Base 5 to 15 $ 719,000 $ 601,000 $ 118,000 Know How 15 512,000 350,000 162,000 Trade Names Indefinite 272,000 — 272,000 Patents 20 223,000 20,000 203,000 Biomedical Technologies 5 260,000 260,000 — $ 1,986,000 $ 1,231,000 $ 755,000 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated amortization expense for each of the next five fiscal years and thereafter is as follows: 2019 (3 months) 2020 2021 2022 2023 Thereafter Total Acquired Customer Base $ 20,000 $ 48,000 $ — $ — $ — $ — $ 68,000 Know How 9,000 34,000 34,000 34,000 25,000 — 136,000 Patents 3,000 11,000 11,000 11,000 11,000 148,000 195,000 $ 32,000 $ 93,000 $ 45,000 $ 45,000 $ 36,000 $ 148,000 $ 399,000 |
Earnings (Loss) Per Common Sh_2
Earnings (Loss) Per Common Share (Tables) | 9 Months Ended |
Jun. 30, 2019 | |
Earnings (Loss) Per Common Share | |
Schedule of Earnings per share, basic and diluted | The computation of the weighted shares outstanding for the three months ended June 30, 2019 and 2018 is as follows: June 30, 2019 June 30, 2018 Weighted average shares outstanding Basic 17,522,644 17,203,965 Effect of dilutive securities Stock Options — — Restricted Stock — 17,234 Dilutive Average Shares Outstanding 17,522,644 17,221,199 The computation of the weighted shares outstanding for the nine months ended June 30, 2019 and 2018 is as follows: June 30, 2019 June 30, 2018 Weighted average shares outstanding Basic 17,426,316 17,127,834 Effect of dilutive securities Stock Options — — Restricted Stock — 19,394 Dilutive Average Shares Outstanding 17,426,316 17,147,228 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 9 Months Ended |
Jun. 30, 2019 | |
Schedule of Stock compensation expense | Stock compensation expense for the three and nine months ended June 30, 2019 and 2018 is as follows: Three Months Ended Three Months Ended June 30, 2019 June 30, 2018 Stock Grants $ 73,000 $ 78,000 Restricted Stock Grants 6,000 14,000 Option Grants — — Employee Stock Purchase Plan 1,000 1,000 Subsidiary Option Grants 10,000 27,000 Total $ 90,000 $ 120,000 Nine Months Ended Nine Months Ended June 30, 2019 June 30, 2018 Stock Grants $ 215,000 $ 209,000 Restricted Stock Grants 29,000 40,000 Option Grants — 17,000 Employee Stock Purchase Plan 3,000 2,000 Subsidiary Option Grants 32,000 83,000 Total $ 279,000 $ 351,000 |
Schedule of Nonvested restricted stock units activity | A summary of restricted stock activity for the nine months ended June 30, 2019 is presented below: Restricted Stock Activity for the Nine Months Weighted-Average ended June 30, 2019 Shares Grant-Date Fair Value Nonvested at September 30, 2018 60,000 $ 1.61 Granted — — Vested (35,000) 1.68 Cancelled — — Nonvested and expected to vest at June 30, 2019 25,000 $ 1.50 |
Stock Option Grants [Member] | |
Schedule of Stock option grants and Subsidiary stock option grants | During the nine months ended June 30, 2019, no Dynasil stock options were granted. A summary of stock option activity for the nine months ended June 30, 2019 is presented below: Weighted Average Weighted Average Remain Options Exercise Price per Contractual Term Outstanding Share (in Years) Balance at September 30, 2018 160,537 $ 2.01 0.93 Outstanding and exercisable at September 30, 2018 160,537 $ 2.01 0.93 Granted — — Exercised — — Cancelled (64,935) 2.33 Balance at June 30, 2019 95,602 $ 1.80 0.59 Outstanding and exercisable at June 30, 2019 95,602 $ 1.80 0.59 |
Subsidiary option grants [Member] | |
Schedule of Stock option grants and Subsidiary stock option grants | During the nine months ended June 30, 2019, no Xcede stock options were granted. A summary of Xcede stock option activity for the nine months ended June 30, 2019 is presented below: Weighted Average Weighted Average Remain Options Exercise Price per Contractual Term Outstanding Share (in Years) Balance at September 30, 2018 1,300,956 $ 1.00 7.10 Outstanding and exercisable at September 30, 2018 1,229,685 1.00 7.11 Granted — — Exercised — — Cancelled — — Balance at June 30, 2019 1,300,956 1.00 6.35 Outstanding and exercisable at June 30, 2019 1,283,768 $ 1.00 6.35 |
Segment, Customer and Geograp_2
Segment, Customer and Geographical Reporting (Tables) | 9 Months Ended |
Jun. 30, 2019 | |
Segment, Customer and Geographical Reporting | |
Schedule of Segment reporting information | The Company’s segment information for the three months ended June 30, 2019 and 2018 is summarized below: Results of Operations for the Three Months Ended June 30, 2019 Innovation and Optics Development* Biomedical Total Revenue $ 5,899,000 $ 5,191,000 $ — $ 11,090,000 Gross profit 2,112,000 1,994,000 — 4,106,000 GM % 36 % 38 % — 37 % Operating expenses 2,237,000 1,992,000 23,000 4,252,000 Operating income (loss) (125,000) 2,000 (23,000) (146,000) Depreciation and amortization 297,000 63,000 3,000 363,000 Capital expenditures 90,000 29,000 — 119,000 Intangibles, net 334,000 136,000 195,000 665,000 Goodwill 925,000 4,939,000 — 5,864,000 Total assets $ 21,084,000 $ 10,805,000 $ 201,000 $ 32,090,000 Results of Operations for the Three Months Ended June 30, 2018 Innovation and Optics Development* Biomedical Total Revenue $ 6,159,000 $ 4,383,000 $ — $ 10,542,000 Gross profit 2,299,000 1,876,000 — 4,175,000 GM % 37 % 43 % — 40 % Operating expenses 1,721,000 1,760,000 84,000 3,565,000 Operating income (loss) 578,000 116,000 (84,000) 610,000 Depreciation and amortization 261,000 53,000 3,000 317,000 Capital expenditures 707,000 76,000 20,000 803,000 Intangibles, net 408,000 171,000 380,000 959,000 Goodwill 968,000 4,939,000 — 5,907,000 Total assets $ 21,117,000 $ 8,018,000 $ 507,000 $ 29,642,000 *Formerly Contract Research The Company’s segment information for the nine months ended June 30, 2019 and 2018 is summarized below: Results of Operations for the Nine Months Ended June 30, 2019 Innovation and Optics Development* Biomedical Total Revenue $ 17,846,000 $ 14,804,000 $ — $ 32,650,000 Gross profit 6,121,000 6,035,000 — 12,156,000 GM % 34 % 41 % — 37 % Operating expenses 5,993,000 6,012,000 98,000 12,103,000 Operating income (loss) 128,000 23,000 (98,000) 53,000 Depreciation and amortization 863,000 183,000 10,000 1,056,000 Capital expenditures 586,000 93,000 — 679,000 Intangibles, net 334,000 136,000 195,000 665,000 Goodwill 925,000 4,939,000 — 5,864,000 Total assets $ 21,084,000 $ 10,805,000 $ 201,000 $ 32,090,000 Results of Operations for the Nine Months Ended June 30, 2018 Innovation and Optics Development* Biomedical Total Revenue $ 17,011,000 $ 12,974,000 $ — $ 29,985,000 Gross profit 6,038,000 5,621,000 — 11,659,000 GM % 35 % 43 % — 39 % Operating expenses 5,154,000 5,297,000 724,000 11,175,000 Operating income (loss) 884,000 324,000 (724,000) 484,000 Depreciation and amortization 738,000 179,000 10,000 927,000 Capital expenditures 1,635,000 153,000 65,000 1,853,000 Intangibles, net 408,000 171,000 380,000 959,000 Goodwill 968,000 4,939,000 — 5,907,000 Total assets $ 21,117,000 $ 8,018,000 $ 507,000 $ 29,642,000 *Formerly Contract Research |
Schedule Of Segment revenue | Revenue by geographic location in total and as a percentage of total revenue, for the three months ended June 30, 2019 and 2018 are as follows: Three Months Ended Three Months Ended June 30, 2019 June 30, 2018 Geographic Location Revenue % of Total Revenue % of Total United States $ 8,669,000 78 % $ 7,512,000 71 % Asia 667,000 6 % 877,000 9 % Europe 1,468,000 13 % 2,029,000 19 % Other 286,000 3 % 124,000 1 % $ 11,090,000 100 % $ 10,542,000 100 % Revenue by geographic location in total and as a percentage of total revenue, for the nine months ended June 30, 2019 and 2018 are as follows: Nine Months Ended Nine Months Ended June 30, 2019 June 30, 2018 Geographic Location Revenue % of Total Revenue % of Total United States $ 24,901,000 76 % $ 22,993,000 76 % Asia 2,462,000 8 % 877,000 3 % Europe 4,705,000 14 % 4,662,000 16 % Other 582,000 2 % 1,453,000 5 % $ 32,650,000 100 % $ 29,985,000 100 % |
Basis of Presentation (Details)
Basis of Presentation (Details) - Xcede Technologies, Inc [Member] | Jun. 30, 2019 | Nov. 18, 2016 |
Noncontrolling Interest, Ownership Percentage by Parent | 63.00% | 59.00% |
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 37.00% |
Recent Accounting Pronounceme_3
Recent Accounting Pronouncements - Unaudited Consolidated Balance Sheet (Details) - USD ($) | Jun. 30, 2019 | Oct. 01, 2018 | Sep. 30, 2018 |
Assets: | |||
Unbilled receivables | $ 2,422,000 | $ 1,214,000 | |
Inventories, net of reserves | 4,544,000 | 4,106,000 | |
Liabilities [Abstract] | |||
Contract liabilities | 33,000 | 253,000 | |
Stockholders' equity: | |||
Retained earnings | $ 599,000 | 841,000 | |
Adjustment for Topic 606 [Member] | |||
Assets: | |||
Unbilled receivables | 40,000 | ||
Inventories, net of reserves | (18,000) | ||
Liabilities [Abstract] | |||
Contract liabilities | 0 | ||
Stockholders' equity: | |||
Retained earnings | $ 22,000 | ||
Adjusted balance at 1-Oct-18 | |||
Assets: | |||
Unbilled receivables | $ 1,254,000 | ||
Inventories, net of reserves | 4,088,000 | ||
Liabilities [Abstract] | |||
Contract liabilities | 253,000 | ||
Stockholders' equity: | |||
Retained earnings | $ 863,000 |
Recent Accounting Pronounceme_4
Recent Accounting Pronouncements - Contract Assets and Contract Liabilities (Details) - USD ($) | Jun. 30, 2019 | Sep. 30, 2018 |
Unbilled receivables | $ 2,422,000 | $ 1,214,000 |
Contract assets | 62,000 | 1,000 |
Security and other deposits | 53,000 | 58,000 |
Long term contract assets | 7,000 | 7,000 |
Deferred revenue | 0 | |
Contract liabilities | $ 33,000 | 253,000 |
Previously Reported [Member] | ||
Unbilled receivables | 1,215,000 | |
Contract assets | 0 | |
Security and other deposits | 65,000 | |
Long term contract assets | 0 | |
Deferred revenue | 253,000 | |
Contract liabilities | $ 0 |
Recent Accounting Pronounceme_5
Recent Accounting Pronouncements - Disaggregation of Revenue (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues | $ 11,090,000 | $ 10,542,000 | $ 32,650,000 | $ 29,985,000 |
Geographic Location [Member] | ||||
Revenues | 11,090,000 | 32,650,000 | ||
Contract Type [Member] | ||||
Revenues | 11,090,000 | 32,650,000 | ||
Major Customer Type [Member] | ||||
Revenues | 11,090,000 | 32,650,000 | ||
Products/Services [Member] | ||||
Revenues | 11,090,000 | 32,650,000 | ||
Timing of Recognition [Member] | ||||
Revenues | 11,090,000 | 32,650,000 | ||
Optics [Member] | Geographic Location [Member] | ||||
Revenues | 5,899,000 | 17,846,000 | ||
Optics [Member] | Contract Type [Member] | ||||
Revenues | 5,899,000 | 17,846,000 | ||
Optics [Member] | Major Customer Type [Member] | ||||
Revenues | 5,899,000 | 17,846,000 | ||
Optics [Member] | Products/Services [Member] | ||||
Revenues | 5,899,000 | 17,846,000 | ||
Optics [Member] | Timing of Recognition [Member] | ||||
Revenues | 5,899,000 | 17,846,000 | ||
Innovation and Development [Member] | Geographic Location [Member] | ||||
Revenues | 5,191,000 | 14,804,000 | ||
Innovation and Development [Member] | Contract Type [Member] | ||||
Revenues | 5,191,000 | 14,804,000 | ||
Innovation and Development [Member] | Major Customer Type [Member] | ||||
Revenues | 5,191,000 | 14,804,000 | ||
Innovation and Development [Member] | Products/Services [Member] | ||||
Revenues | 5,191,000 | 14,804,000 | ||
Innovation and Development [Member] | Timing of Recognition [Member] | ||||
Revenues | 5,191,000 | 14,804,000 | ||
Goods/services transferred over time [Member] | Timing of Recognition [Member] | ||||
Revenues | 5,729,000 | 16,236,000 | ||
Goods/services transferred over time [Member] | Optics [Member] | Timing of Recognition [Member] | ||||
Revenues | 712,000 | 1,780,000 | ||
Goods/services transferred over time [Member] | Innovation and Development [Member] | Timing of Recognition [Member] | ||||
Revenues | 5,017,000 | 14,456,000 | ||
Goods transferred at a point in time [Member] | Timing of Recognition [Member] | ||||
Revenues | 5,361,000 | 16,414,000 | ||
Goods transferred at a point in time [Member] | Optics [Member] | Timing of Recognition [Member] | ||||
Revenues | 5,187,000 | 16,066,000 | ||
Goods transferred at a point in time [Member] | Innovation and Development [Member] | Timing of Recognition [Member] | ||||
Revenues | 174,000 | 348,000 | ||
Optical components [Member] | Products/Services [Member] | ||||
Revenues | 5,850,000 | 17,682,000 | ||
Optical components [Member] | Optics [Member] | Products/Services [Member] | ||||
Revenues | 5,850,000 | 17,682,000 | ||
Optical components [Member] | Innovation and Development [Member] | Products/Services [Member] | ||||
Revenues | 0 | 0 | ||
Contract research [Member] | Products/Services [Member] | ||||
Revenues | 5,009,000 | 14,430,000 | ||
Contract research [Member] | Optics [Member] | Products/Services [Member] | ||||
Revenues | 0 | 0 | ||
Contract research [Member] | Innovation and Development [Member] | Products/Services [Member] | ||||
Revenues | 5,009,000 | 14,430,000 | ||
Other products and services [Member] | Products/Services [Member] | ||||
Revenues | 231,000 | 538,000 | ||
Other products and services [Member] | Optics [Member] | Products/Services [Member] | ||||
Revenues | 49,000 | 164,000 | ||
Other products and services [Member] | Innovation and Development [Member] | Products/Services [Member] | ||||
Revenues | 182,000 | 374,000 | ||
U.S. government revenue [Member] | Major Customer Type [Member] | ||||
Revenues | 4,909,000 | 14,128,000 | ||
U.S. government revenue [Member] | Optics [Member] | Major Customer Type [Member] | ||||
Revenues | 53,000 | 56,000 | ||
U.S. government revenue [Member] | Innovation and Development [Member] | Major Customer Type [Member] | ||||
Revenues | 4,856,000 | 14,072,000 | ||
U.S. commercial revenue [Member] | Major Customer Type [Member] | ||||
Revenues | 3,759,000 | 10,773,000 | ||
U.S. commercial revenue [Member] | Optics [Member] | Major Customer Type [Member] | ||||
Revenues | 3,634,000 | 10,511,000 | ||
U.S. commercial revenue [Member] | Innovation and Development [Member] | Major Customer Type [Member] | ||||
Revenues | 125,000 | 262,000 | ||
Foreign commercial and other revenue [Member] | Major Customer Type [Member] | ||||
Revenues | 2,422,000 | 7,749,000 | ||
Foreign commercial and other revenue [Member] | Optics [Member] | Major Customer Type [Member] | ||||
Revenues | 2,212,000 | 7,279,000 | ||
Foreign commercial and other revenue [Member] | Innovation and Development [Member] | Major Customer Type [Member] | ||||
Revenues | 210,000 | 470,000 | ||
Firm-fixed price [Member] | Contract Type [Member] | ||||
Revenues | 6,399,000 | 19,509,000 | ||
Firm-fixed price [Member] | Optics [Member] | Contract Type [Member] | ||||
Revenues | 5,899,000 | 17,846,000 | ||
Firm-fixed price [Member] | Innovation and Development [Member] | Contract Type [Member] | ||||
Revenues | 500,000 | 1,663,000 | ||
Non-Firm Fixed price [Member] | Contract Type [Member] | ||||
Revenues | 4,691,000 | 13,141,000 | ||
Non-Firm Fixed price [Member] | Optics [Member] | Contract Type [Member] | ||||
Revenues | 0 | 0 | ||
Non-Firm Fixed price [Member] | Innovation and Development [Member] | Contract Type [Member] | ||||
Revenues | 4,691,000 | 13,141,000 | ||
United States [Member] | Geographic Location [Member] | ||||
Revenues | 8,669,000 | 24,901,000 | ||
United States [Member] | Optics [Member] | Geographic Location [Member] | ||||
Revenues | 3,688,000 | 10,567,000 | ||
United States [Member] | Innovation and Development [Member] | Geographic Location [Member] | ||||
Revenues | 4,981,000 | 14,334,000 | ||
Asia [Member] | Geographic Location [Member] | ||||
Revenues | 667,000 | 2,462,000 | ||
Asia [Member] | Optics [Member] | Geographic Location [Member] | ||||
Revenues | 667,000 | 2,440,000 | ||
Asia [Member] | Innovation and Development [Member] | Geographic Location [Member] | ||||
Revenues | 0 | 22,000 | ||
Europe [Member] | Geographic Location [Member] | ||||
Revenues | 1,468,000 | 4,705,000 | ||
Europe [Member] | Optics [Member] | Geographic Location [Member] | ||||
Revenues | 1,422,000 | 4,608,000 | ||
Europe [Member] | Innovation and Development [Member] | Geographic Location [Member] | ||||
Revenues | 46,000 | 97,000 | ||
Other [Member] | Geographic Location [Member] | ||||
Revenues | 286,000 | 582,000 | ||
Other [Member] | Optics [Member] | Geographic Location [Member] | ||||
Revenues | 122,000 | 231,000 | ||
Other [Member] | Innovation and Development [Member] | Geographic Location [Member] | ||||
Revenues | $ 164,000 | $ 351,000 |
Recent Accounting Pronounceme_6
Recent Accounting Pronouncements - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Oct. 01, 2018 | |
Deferred Revenue, Revenue Recognized | $ 0 | $ 253,000 | |||
Impact of Restatement on Opening Retained Earnings, Net of Tax | $ 22,000 | ||||
Revenue, Performance Obligation, Description of Payment Terms | cost-plus contracts, the customer generally pays during the performance period for 80%-90% of the actual costs incurred. | ||||
Innovation and Development Segment [Member] | |||||
Revenue, Remaining Performance Obligation, Amount | $ 38,300,000 | 38,300,000 | |||
Optics [Member] | |||||
Revenue, Remaining Performance Obligation, Amount | $ 7,000,000 | $ 7,000,000 | |||
Scenario, Forecast [Member] | Innovation and Development Segment [Member] | |||||
Revenue, Remaining Performance Obligation, Percentage | 55.00% | 34.00% | |||
Scenario, Forecast [Member] | Optics [Member] | |||||
Revenue, Remaining Performance Obligation, Percentage | 47.00% | 53.00% |
Xcede Technologies, Inc. Join_2
Xcede Technologies, Inc. Joint Venture (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |
Apr. 30, 2019 | Nov. 30, 2016 | Jun. 30, 2019 | |
Cook Biotech Inc [Member] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 1,500,000 | ||
Long-term Line of Credit | $ 500,000 | ||
Noncontrolling Interest [Member] | |||
Debt Conversion, Original Debt, Amount | $ 3,100,000 | ||
Debt Conversion, Converted Instrument, Shares Issued | 3,100,000 | ||
Xcede Technologies, Inc [Member] | |||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | ||
Committed Investment In Cash | $ 1,200,000 | ||
Debt Conversion, Converted Instrument, Shares Issued | 3,055,551 | ||
Capital Stock Financing Discount Percentage | 20.00% | ||
Noncontrolling Interest, Description | Noncontrolling interest represents the value of the Series A Preferred and common stock not owned by DBM plus 17% of cumulative losses of Xcede based on the 17% common stock ownership held by noncontrolling interests. | ||
Equity Method Investment, Ownership Percentage | 63.00% | ||
Dynasil Biomedical [Member] | |||
Debt Conversion, Original Debt, Amount | $ 2,400,000 | ||
Debt Conversion, Converted Instrument, Shares Issued | 2,338,569 | ||
Phase I SBIR [Member] | |||
Application Grant Value | $ 225,000 | ||
External Funding [Member] | Convertible Debt [Member] | |||
Debt Conversion, Original Debt, Amount | $ 5,200,000 | ||
Series B Preferred Stock [Member] | |||
Preferred Stock, Liquidation Preference Per Share | $ 1.27 | ||
Preferred Stock, Liquidation Preference, Value | $ 1,500,000 | ||
Series A Preferred Stock [Member] | |||
Preferred Stock, Liquidation Preference Per Share | $ 1.016 | ||
Preferred Stock, Liquidation Preference, Value | $ 5,500,000 | ||
Series A Preferred Stock [Member] | Dynasil Biomedical [Member] | |||
Preferred Stock, Liquidation Preference, Value | $ 2,400,000 |
Inventories (Details)
Inventories (Details) - USD ($) | Jun. 30, 2019 | Sep. 30, 2018 |
Inventories | ||
Raw Materials | $ 2,482,000 | $ 2,362,000 |
Work-in-Process | 1,073,000 | 890,000 |
Finished Goods | 989,000 | 854,000 |
Inventory, Net, Total | $ 4,544,000 | $ 4,106,000 |
Intangible Assets - Useful Life
Intangible Assets - Useful Life (Details) - USD ($) | 3 Months Ended | ||
Jun. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Amount | $ 1,964,000 | $ 1,986,000 | |
Accumulated Amortization | 1,299,000 | 1,231,000 | |
Net | 665,000 | 755,000 | $ 959,000 |
Acquired Customer Base [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Amount | 703,000 | 719,000 | |
Accumulated Amortization | 635,000 | 601,000 | |
Net | $ 68,000 | $ 118,000 | |
Acquired Customer Base [Member] | Minimum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life (years) | 5 years | 5 years | |
Acquired Customer Base [Member] | Maximum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life (years) | 15 years | 15 years | |
Know How [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life (years) | 15 years | 15 years | |
Gross Amount | $ 512,000 | $ 512,000 | |
Accumulated Amortization | 376,000 | 350,000 | |
Net | 136,000 | 162,000 | |
Trade Names [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Amount | 266,000 | 272,000 | |
Accumulated Amortization | 0 | 0 | |
Net | $ 266,000 | $ 272,000 | |
Patents [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life (years) | 20 years | 20 years | |
Gross Amount | $ 223,000 | $ 223,000 | |
Accumulated Amortization | 28,000 | 20,000 | |
Net | $ 195,000 | $ 203,000 | |
Biomedical Technologies [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life (years) | 5 years | 5 years | |
Gross Amount | $ 260,000 | $ 260,000 | |
Accumulated Amortization | 260,000 | 260,000 | |
Net | $ 0 | $ 0 |
Intangible Assets - Estimated A
Intangible Assets - Estimated Amortization Expense (Details) | Jun. 30, 2019USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
2019 (3 months) | $ 32,000 |
2020 | 93,000 |
2021 | 45,000 |
2022 | 45,000 |
2023 | 36,000 |
Thereafter | 148,000 |
Total | 399,000 |
Acquired Customer Base [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
2019 (3 months) | 20,000 |
2020 | 48,000 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
Thereafter | 0 |
Total | 68,000 |
Know How [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
2019 (3 months) | 9,000 |
2020 | 34,000 |
2021 | 34,000 |
2022 | 34,000 |
2023 | 25,000 |
Thereafter | 0 |
Total | 136,000 |
Patents [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
2019 (3 months) | 3,000 |
2020 | 11,000 |
2021 | 11,000 |
2022 | 11,000 |
2023 | 11,000 |
Thereafter | 148,000 |
Total | $ 195,000 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Intangible Assets | ||||
Amortization of Intangible Assets | $ 27,000 | $ 28,000 | $ 82,000 | $ 84,000 |
Debt (Details)
Debt (Details) | Aug. 06, 2019USD ($) | May 07, 2019 | May 01, 2019USD ($) | Jun. 30, 2019USD ($) | Apr. 30, 2019USD ($) | Sep. 30, 2018USD ($) |
Debt [Line Items] | ||||||
Line of Credit, Current | $ 961,000 | $ 0 | ||||
Stockholders' Equity Note, Stock Split, Conversion Ratio | 0.000125 | |||||
Subordinated Debt [Member] | ||||||
Debt [Line Items] | ||||||
Subordinated Debt | $ 865,216 | |||||
Subordinated Debt [Member] | Loan Modification Agreement [Member] | ||||||
Debt [Line Items] | ||||||
Debt Instrument, Maturity Date, Description | July 31, 2026 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | |||||
Proceeds from Issuance of Subordinated Long-term Debt | $ 2,000,000 | |||||
Subordinated Debt | $ 2,865,216 | |||||
Debt Instrument Remaining Term | 7 years | |||||
Middle sex Savings Bank [Member] | ||||||
Debt [Line Items] | ||||||
Line of Credit, Current | $ 484,000 | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 750,000 | |||||
Middle sex Savings Bank [Member] | Equipment Line of Credit [Member] | ||||||
Debt [Line Items] | ||||||
Debt Instrument, Term | 5 years | |||||
Common Stock [Member] | ||||||
Debt [Line Items] | ||||||
Share Holders Equity Forward Split | 8,000-for-1 |
Earnings (Loss) Per Common Sh_3
Earnings (Loss) Per Common Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Weighted average shares outstanding | ||||
Basic | 17,522,644 | 17,203,965 | 17,426,316 | 17,127,834 |
Effect of dilutive securities | ||||
Dilutive average shares outstanding | 17,522,644 | 17,221,199 | 17,426,316 | 17,147,228 |
Employee stock purchase plan [Member] | ||||
Effect of dilutive securities | ||||
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 0 | 0 | 0 | 0 |
Restricted stock [Member] | ||||
Effect of dilutive securities | ||||
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 0 | 17,234 | 0 | 19,394 |
Earnings (Loss) Per Common Sh_4
Earnings (Loss) Per Common Share - Additional Information (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Loss Per Common Share [Line Items] | ||||
Weighted Average Number of Shares Outstanding, Diluted | 17,522,644 | 17,221,199 | 17,426,316 | 17,147,228 |
Restricted stock [Member] | ||||
Earnings Loss Per Common Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 25,000 | 60,000 | 25,000 | 60,000 |
Employee stock purchase plan [Member] | ||||
Earnings Loss Per Common Share [Line Items] | ||||
Weighted Average Number of Shares Outstanding, Diluted | 95,602 | 160,537 | 95,602 | 160,537 |
Stock Based Compensation - Stoc
Stock Based Compensation - Stock compensation expenses (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Stock Based Compensation [Line Items] | ||||
Stock Compensation Expense | $ 90,000 | $ 120,000 | $ 279,000 | $ 351,000 |
Common Stock [Member] | ||||
Stock Based Compensation [Line Items] | ||||
Stock Compensation Expense | 73,000 | 78,000 | 215,000 | 209,000 |
Restricted stock [Member] | ||||
Stock Based Compensation [Line Items] | ||||
Stock Compensation Expense | 6,000 | 14,000 | 29,000 | 40,000 |
Equity Option [Member] | ||||
Stock Based Compensation [Line Items] | ||||
Stock Compensation Expense | 0 | 0 | 0 | 17,000 |
Employee stock purchase plan [Member] | ||||
Stock Based Compensation [Line Items] | ||||
Stock Compensation Expense | 1,000 | 1,000 | 3,000 | 2,000 |
Subsidiary option grants [Member] | ||||
Stock Based Compensation [Line Items] | ||||
Stock Compensation Expense | $ 10,000 | $ 27,000 | $ 32,000 | $ 83,000 |
Stock Based Compensation - Nonv
Stock Based Compensation - Nonvested restricted stock unit activity (Details) - Restricted stock [Member] | 9 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Nonvested, Beginning Balance | shares | 60,000 |
Shares, Granted | shares | 0 |
Shares, Vested | shares | (35,000) |
Shares, Cancelled | shares | 0 |
Shares, Nonvested and expected to vest, Ending Balance | shares | 25,000 |
Weighted-Average Grant-Date Fair Value, Nonvested, Beginning Balance | $ / shares | $ 1.61 |
Weighted-Average Grant-Date Fair Value, Granted | $ / shares | |
Weighted-Average Grant-Date Fair Value, Vested | $ / shares | 1.68 |
Weighted-Average Grant-Date Fair Value, Cancelled | $ / shares | 0 |
Weighted-Average Grant-Date Fair Value, Nonvested and expected to vest, Ending Balance | $ / shares | $ 1.50 |
Stock Based Compensation - St_2
Stock Based Compensation - Stock option grants (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Sep. 30, 2018 | |
Stock Option Grants [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Balance, Options Outstanding | 160,537 | |
Outstanding and exercisable, Options Outstanding | 160,537 | |
Granted, Options Outstanding | 0 | |
Exercised, Options Outstanding | 0 | |
Cancelled, Options Outstanding | (64,935) | |
Balance, Options Outstanding | 95,602 | 160,537 |
Outstanding and exercisable, Options Outstanding | 95,602 | 160,537 |
Beginning Balance, Weighted Average Exercise Price per Share | $ 2.01 | |
Outstanding and exercisable, Weighted Average Exercise Price per Share | 2.01 | |
Granted, Weighted Average Exercise Price per Share | 0 | |
Exercised, Weighted Average Exercise Price per Share | 0 | |
Cancelled, Weighted Average Exercise Price per Share | 2.33 | |
Ending Balance, Weighted Average Exercise Price per Share | 1.80 | $ 2.01 |
Outstanding and exercisable, Weighted Average Exercise Price per Share | $ 1.80 | $ 2.01 |
Balance, Weighted Average Remain Contractual Term (in Years) | 7 months 2 days | 11 months 5 days |
Outstanding and exercisable, Weighted Average Remain Contractual Term (in Years) | 7 months 2 days | 11 months 5 days |
Subsidiary option grants [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Balance, Options Outstanding | 1,300,956 | |
Outstanding and exercisable, Options Outstanding | 1,229,685 | |
Granted, Options Outstanding | 0 | |
Exercised, Options Outstanding | 0 | |
Cancelled, Options Outstanding | 0 | |
Balance, Options Outstanding | 1,300,956 | 1,300,956 |
Outstanding and exercisable, Options Outstanding | 1,283,768 | 1,229,685 |
Beginning Balance, Weighted Average Exercise Price per Share | $ 1 | |
Outstanding and exercisable, Weighted Average Exercise Price per Share | 1 | |
Granted, Weighted Average Exercise Price per Share | 0 | |
Exercised, Weighted Average Exercise Price per Share | 0 | |
Cancelled, Weighted Average Exercise Price per Share | 0 | |
Ending Balance, Weighted Average Exercise Price per Share | 1 | $ 1 |
Outstanding and exercisable, Weighted Average Exercise Price per Share | $ 1 | $ 1 |
Balance, Weighted Average Remain Contractual Term (in Years) | 6 years 4 months 6 days | 7 years 1 month 6 days |
Outstanding and exercisable, Weighted Average Remain Contractual Term (in Years) | 6 years 4 months 6 days | 7 years 1 month 10 days |
Stock Based Compensation - Addi
Stock Based Compensation - Additional Information (Details) | Jun. 30, 2019USD ($) |
Xcede Technologies, Inc [Member] | |
Class of Stock [Line Items] | |
Equity Method Investment, Ownership Percentage | 63.00% |
Xcede joint venture [Member] | Subsidiary option grants [Member] | |
Class of Stock [Line Items] | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 10,000 |
Employee Stock Plan [Member] | |
Class of Stock [Line Items] | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 32,000 |
Segment, Customer and Geograp_3
Segment, Customer and Geographical Reporting - Segment reporting information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2018 | |
Segment Reporting Information [Line Items] | |||||
Revenue | $ 11,090,000 | $ 10,542,000 | $ 32,650,000 | $ 29,985,000 | |
Gross profit | $ 4,106,000 | $ 4,175,000 | $ 12,156,000 | $ 11,659,000 | |
GM % | 37.00% | 40.00% | 37.00% | 39.00% | |
Operating expenses | $ 4,252,000 | $ 3,565,000 | $ 12,103,000 | $ 11,175,000 | |
Operating income (loss) | (146,000) | 610,000 | 53,000 | 484,000 | |
Depreciation and amortization | 363,000 | 317,000 | 1,056,000 | 927,000 | |
Capital expenditures | 119,000 | 803,000 | 679,000 | 1,853,000 | |
Intangibles, net | 665,000 | 959,000 | 665,000 | 959,000 | $ 755,000 |
Goodwill | 5,864,000 | 5,907,000 | 5,864,000 | 5,907,000 | 5,900,000 |
Total assets | 32,090,000 | 29,642,000 | 32,090,000 | 29,642,000 | $ 31,532,000 |
Optics [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 5,899,000 | 6,159,000 | 17,846,000 | 17,011,000 | |
Gross profit | $ 2,112,000 | $ 2,299,000 | $ 6,121,000 | $ 6,038,000 | |
GM % | 36.00% | 37.00% | 34.00% | 35.00% | |
Operating expenses | $ 2,237,000 | $ 1,721,000 | $ 5,993,000 | $ 5,154,000 | |
Operating income (loss) | (125,000) | 578,000 | 128,000 | 884,000 | |
Depreciation and amortization | 297,000 | 261,000 | 863,000 | 738,000 | |
Capital expenditures | 90,000 | 707,000 | 586,000 | 1,635,000 | |
Intangibles, net | 334,000 | 408,000 | 334,000 | 408,000 | |
Goodwill | 925,000 | 968,000 | 925,000 | 968,000 | |
Total assets | 21,084,000 | 21,117,000 | 21,084,000 | 21,117,000 | |
Innovation and Development [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 5,191,000 | 4,383,000 | 14,804,000 | 12,974,000 | |
Gross profit | $ 1,994,000 | $ 1,876,000 | $ 6,035,000 | $ 5,621,000 | |
GM % | 38.00% | 43.00% | 41.00% | 43.00% | |
Operating expenses | $ 1,992,000 | $ 1,760,000 | $ 6,012,000 | $ 5,297,000 | |
Operating income (loss) | 2,000 | 116,000 | 23,000 | 324,000 | |
Depreciation and amortization | 63,000 | 53,000 | 183,000 | 179,000 | |
Capital expenditures | 29,000 | 76,000 | 93,000 | 153,000 | |
Intangibles, net | 136,000 | 171,000 | 136,000 | 171,000 | |
Goodwill | 4,939,000 | 4,939,000 | 4,939,000 | 4,939,000 | |
Total assets | 10,805,000 | 8,018,000 | 10,805,000 | 8,018,000 | |
Biomedical [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 0 | 0 | 0 | 0 | |
Gross profit | $ 0 | $ 0 | $ 0 | $ 0 | |
GM % | 0.00% | 0.00% | 0.00% | 0.00% | |
Operating expenses | $ 23,000 | $ 84,000 | $ 98,000 | $ 724,000 | |
Operating income (loss) | (23,000) | (84,000) | (98,000) | (724,000) | |
Depreciation and amortization | 3,000 | 3,000 | 10,000 | 10,000 | |
Capital expenditures | 0 | 20,000 | 0 | 65,000 | |
Intangibles, net | 195,000 | 380,000 | 195,000 | 380,000 | |
Goodwill | 0 | 0 | 0 | 0 | |
Total assets | $ 201,000 | $ 507,000 | $ 201,000 | $ 507,000 |
Segment, Customer and Geograp_4
Segment, Customer and Geographical Reporting - Segment revenue (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 11,090,000 | $ 10,542,000 | $ 32,650,000 | $ 29,985,000 |
% of Total | 100.00% | 100.00% | 100.00% | 100.00% |
United States [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 8,669,000 | $ 7,512,000 | $ 24,901,000 | $ 22,993,000 |
% of Total | 78.00% | 71.00% | 76.00% | 76.00% |
Asia [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 667,000 | $ 877,000 | $ 2,462,000 | $ 877,000 |
% of Total | 6.00% | 9.00% | 8.00% | 3.00% |
Europe [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 1,468,000 | $ 2,029,000 | $ 4,705,000 | $ 4,662,000 |
% of Total | 13.00% | 19.00% | 14.00% | 16.00% |
Other Credit Derivatives [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue | $ 286,000 | $ 124,000 | $ 582,000 | $ 1,453,000 |
% of Total | 3.00% | 1.00% | 2.00% | 5.00% |
Segment, Customer and Geograp_5
Segment, Customer and Geographical Reporting - Additional Information (Details) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Segment Reporting [Line Items] | ||||
Concentration Risk, Percentage | 10.00% | 10.00% | ||
Customer Three [Member] | ||||
Segment Reporting [Line Items] | ||||
Concentration Risk, Percentage | 10.00% | 10.00% | ||
Customer Four [Member] | ||||
Segment Reporting [Line Items] | ||||
Concentration Risk, Percentage | 10.00% | 10.00% | ||
Customer One [Member] | ||||
Segment Reporting [Line Items] | ||||
Concentration Risk, Percentage | 10.00% | 10.00% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2016 | Jun. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Nov. 18, 2016 | |
Income Tax [Line Items] | |||||||||
Income Tax Expense (Benefit) | $ 66,000 | $ 190,000 | $ 2,700,000 | $ 207,000 | $ (404,000) | $ 1,200,000 | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 35.00% | |||||||
Provision for Income Tax Expense | $ 700,000 | ||||||||
Additional Income Tax Expense | $ 200,000 | ||||||||
Effective Income Tax Rate Reconciliation, Percent | 33.00% | 34.00% | 227.00% | 115.00% | |||||
Deferred Tax Assets, Operating Loss Carryforwards, Domestic | 600,000 | 600,000 | |||||||
Excluding The Impact Of The 2017 Tax Act [Member] | |||||||||
Income Tax [Line Items] | |||||||||
Effective Income Tax Rate Reconciliation, Percent | 69.00% | ||||||||
Xcede Technologies, Inc [Member] | |||||||||
Income Tax [Line Items] | |||||||||
Noncontrolling Interest, Ownership Percentage by Parent | 63.00% | 63.00% | 59.00% | ||||||
Federal [Member] | |||||||||
Income Tax [Line Items] | |||||||||
Deferred Tax Assets, Tax Credit Carryforwards, Research | 2,900,000 | 2,900,000 | |||||||
State and Local Jurisdiction [Member] | |||||||||
Income Tax [Line Items] | |||||||||
Deferred Tax Assets, Tax Credit Carryforwards, Research | $ 852,000 | $ 852,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Aug. 07, 2019 | Aug. 06, 2019 | May 07, 2019 |
Subordinated Debt [Member] | |||
Subsequent Event [Line Items] | |||
Subordinated Debt | $ 865,216 | ||
Subordinated Debt [Member] | Loan Modification Agreement [Member] | |||
Subsequent Event [Line Items] | |||
Proceeds from Issuance of Subordinated Long-term Debt | 2,000,000 | ||
Subordinated Debt | $ 2,865,216 | ||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | ||
Debt Instrument, Maturity Date, Description | July 31, 2026 | ||
Debt Instrument Remaining Term | 7 years | ||
Subsequent Event [Member] | Subordinated Debt [Member] | |||
Subsequent Event [Line Items] | |||
Subordinated Debt | $ 865,216 | ||
Subsequent Event [Member] | Subordinated Debt [Member] | Loan Modification Agreement [Member] | |||
Subsequent Event [Line Items] | |||
Proceeds from Issuance of Subordinated Long-term Debt | 2,000,000 | ||
Subordinated Debt | $ 2,865,216 | ||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | ||
Debt Instrument, Maturity Date, Description | July 31, 2026 | ||
Debt Instrument Remaining Term | 7 years | ||
Common Stock [Member] | |||
Subsequent Event [Line Items] | |||
Share Holders Equity Forward Split | 8,000-for-1 | ||
Common Stock [Member] | Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Stock Issued During Period, Shares, Reverse Stock Splits | 8,000 | ||
Shares Holders Equity Reverse Stock Split Minimum Shares | 8,000 | ||
Reverse Stock Split Cash Payout Per Fractional Share | $ 1.15 | ||
Share Holders Equity Forward Split | 8,000-for-1 | ||
Reverse Stock Split Stock Exchanged for Cash Number of Shares | 2,825,268 | ||
Reverse Stock Split Stock Exchanged for Cash Value | $ 3,249,000 |