Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2018 | Jan. 07, 2019 | Mar. 31, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | VICON INDUSTRIES INC /NY/ | ||
Entity Central Index Key | 310,056 | ||
Document Type | 10-K | ||
Document Period End Date | Sep. 30, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | false | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 3,477,000 | ||
Entity Common Stock, Shares Outstanding | 17,552,623 | ||
Trading Symbol | VCON | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,018 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||
Net sales | $ 27,733,367 | $ 26,651,631 |
Cost of sales | 16,528,894 | 16,499,372 |
Gross profit | 11,204,473 | 10,152,259 |
Operating expenses: | ||
Selling, general and administrative expense | 11,783,376 | 11,135,545 |
Engineering and development expense | 4,145,318 | 4,811,465 |
Intangible asset writedown | 838,500 | |
Operating Expenses | 15,928,694 | 16,785,510 |
Operating loss | (4,724,221) | (6,633,251) |
Other income (expense): | ||
Interest expense | (687,016) | (379,767) |
Interest income | 2,090 | 1,438 |
Loss before income taxes | (5,409,147) | (7,011,580) |
Income tax expense | ||
Net loss | $ (5,409,147) | $ (7,011,580) |
Loss per share: | ||
Basic | $ (0.32) | $ (0.75) |
Diluted | $ (0.32) | $ (0.75) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||
Net loss | $ (5,409,147) | $ (7,011,580) |
Other comprehensive income (loss): | ||
Unrealized loss on securities | (508) | (424) |
Foreign currency translation adjustment | (67,194) | 373,225 |
Other comprehensive income (loss) | (67,702) | 372,801 |
Comprehensive loss | $ (5,476,849) | $ (6,638,779) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2018 | Sep. 30, 2017 |
Current Assets: | ||
Cash and cash equivalents | $ 1,957,744 | $ 2,253,952 |
Marketable securities | 13,440 | 13,555 |
Accounts receivable (less allowance of $723,000 in 2018 and $946,000 in 2017) | 3,915,108 | 4,349,733 |
Inventories: | ||
Parts, components and materials | 482,063 | 783,553 |
Work-in-process | 471,248 | 985,934 |
Finished products | 4,364,281 | 4,780,514 |
Inventory net | 5,317,592 | 6,550,001 |
Prepaid expenses and other current assets | 467,384 | 782,128 |
Total current assets | 11,671,268 | 13,949,369 |
Property, plant and equipment: | ||
Leasehold improvements | 165,198 | 195,950 |
Machinery, equipment and vehicles | 5,954,328 | 5,842,970 |
Property, plant and equipment | 6,119,526 | 6,038,920 |
Less accumulated depreciation and amortization | 5,863,795 | 5,637,222 |
Property, plant and equipment, net | 255,731 | 401,698 |
Other assets | 500,972 | 1,116,583 |
TOTAL ASSETS | 12,427,971 | 15,467,650 |
Current Liabilities: | ||
Current maturity of long-term debt | 150,000 | |
Accounts payable | 2,748,614 | 3,138,057 |
Accrued compensation and employee benefits | 1,190,061 | 1,629,175 |
Accrued expenses | 899,136 | 1,169,392 |
Unearned revenue | 415,375 | 500,878 |
Total current liabilities | 5,403,186 | 6,437,502 |
Borrowings under term loan | 5,450,000 | |
Revolving credit borrowings | 4,950,000 | |
Unearned revenue-non current | 346,820 | 139,601 |
Other long-term liabilities | 1,253,613 | 1,570,861 |
Total liabilities | 12,453,619 | 13,097,964 |
Shareholders' (deficit) equity: | ||
Common stock, par value $.01 per share authorized - 25,000,000 shares issued - 18,249,062 and 10,044,827 shares | 182,491 | 100,448 |
Capital in excess of par value | 43,998,942 | 40,999,470 |
Accumulated deficit | (40,545,686) | (35,136,539) |
Treasury stock at cost, 696,439 shares in 2018 and 2017 | (3,437,643) | (3,437,643) |
Accumulated other comprehensive loss | (223,752) | (156,050) |
Total shareholders' (deficit) equity | (25,648) | 2,369,686 |
TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY | $ 12,427,971 | $ 15,467,650 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2018 | Sep. 30, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable, current | $ 723,000 | $ 946,000 |
Common stock, par value per share | $ .01 | $ .01 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares, issued | 18,249,062 | 10,044,827 |
Treasury stock, shares | 696,439 | 696,439 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' (Deficit) Equity - USD ($) | Common Stock [Member] | Capital in Excess of Par Value [Member] | Accumulated Deficit [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Balance at Sep. 30, 2016 | $ 100,488 | $ 40,517,919 | $ (28,124,959) | $ (3,437,643) | $ (528,851) | $ 8,526,914 |
Balance, shares at Sep. 30, 2016 | 10,044,827 | |||||
Net loss | (7,011,580) | (7,011,580) | ||||
Foreign currency translation adjustment | 373,225 | 373,225 | ||||
Unrealized loss on marketable securities | (424) | (424) | ||||
Issuance of warrants | 438,000 | 438,000 | ||||
Stock-based compensation | 42,071 | 42,071 | ||||
Deferred compensation amortization | 1,480 | 1,480 | ||||
Balance at Sep. 30, 2017 | $ 100,448 | 40,999,470 | (35,136,539) | (3,437,643) | (156,050) | 2,369,686 |
Balance, shares at Sep. 30, 2017 | 10,044,827 | |||||
Net loss | (5,409,147) | (5,409,147) | ||||
Foreign currency translation adjustment | (67,194) | (67,194) | ||||
Unrealized loss on marketable securities | (508) | (508) | ||||
Stock-based compensation | 23,053 | 23,053 | ||||
Deferred compensation amortization | 1,481 | 1,481 | ||||
Shares issued in connection with rights offering | $ 82,043 | 2,974,938 | 3,056,981 | |||
Shares issued in connection with rights offering, shares | 8,204,235 | |||||
Balance at Sep. 30, 2018 | $ 182,491 | $ 43,998,942 | $ (40,545,686) | $ (3,437,643) | $ (223,752) | $ (25,648) |
Balance, shares at Sep. 30, 2018 | 18,249,062 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (5,409,147) | $ (7,011,580) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Intangible asset impairment | 838,500 | |
Depreciation and amortization | 197,555 | 528,596 |
Amortization of deferred warrant expense | 230,806 | 99,216 |
Stock compensation expense | 23,053 | 42,071 |
Change in assets and liabilities, net of acquisition: | ||
Accounts receivable, net | 410,337 | 1,820,642 |
Inventories | 1,207,800 | 496,078 |
Prepaid expenses and other current assets | 309,773 | (202,892) |
Other assets | 384,805 | (15,935) |
Accounts payable | (358,058) | 555,832 |
Accrued compensation and employee benefits | (437,256) | (74,723) |
Accrued expenses | (267,234) | (304,136) |
Unearned revenue | 121,716 | 86,964 |
Other liabilities | (315,132) | 46,382 |
Net cash used in operating activities | (3,900,982) | (3,094,985) |
Cash flows from investing activities: | ||
Net increase in marketable securities | (393) | (434) |
Capital expenditures | (51,566) | (138,443) |
Net cash used in investing activities | (51,959) | (138,877) |
Cash flows from financing activities: | ||
Revolving credit borrowings | 650,000 | 3,200,000 |
Net proceeds from rights offering and investment agreement | 3,056,981 | |
Net cash provided by financing activities | 3,706,981 | 3,200,000 |
Effect of exchange rate changes on cash | (50,248) | 333,392 |
Net (decrease) increase in cash | (296,208) | 299,530 |
Cash and cash equivalents at beginning of year | 2,253,952 | 1,954,422 |
Cash and cash equivalents at end of year | 1,957,744 | 2,253,952 |
Cash paid during the fiscal year for: | ||
Income taxes | 21,751 | |
Interest | 411,624 | 231,113 |
Non-cash investing and financing activities: | ||
Warrants issued | $ 438,000 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 1. Summary of Significant Accounting Policies Nature of Business The Company designs, assembles and markets video management and access control systems and system components for use in security, surveillance, safety and control purposes by end users. The Company markets its products worldwide primarily to installing dealers, systems integrators, government entities and distributors. Basis of Presentation and Consolidation The accompanying consolidated financial statements include the accounts of Vicon Industries, Inc. (the Company) and its wholly owned subsidiaries: IQinVision, Inc., Vicon Industries Limited and subsidiary (Vicon Deutschland GmbH) and TeleSite U.S.A., Inc. and subsidiary (Vicon Systems Ltd.). All significant intercompany accounts and transactions have been eliminated in consolidation. See Note 11. Revenue Recognition Revenue is generally recognized when products are sold and title is passed to the customer. Advance service billings are deferred and recognized as revenues on a pro rata basis over the term of the service agreement. Pursuant to Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 605-25-05, the Company evaluates multiple-element revenue arrangements for separate units of accounting, and follows appropriate revenue recognition policies for each separate unit. Elements are considered separate units of accounting provided that (i) the delivered item has stand-alone value to the customer, (ii) there is objective and reliable evidence of the fair value of the delivered and undelivered items, and (iii) if a general right of return exists relative to the delivered item, delivery or performance of the undelivered item is considered probable and substantially within the control of the Company. As applied to the Company, under arrangements involving the sale of product and the provision of services, product sales are recognized as revenue when the products are sold and title is passed to the customer, and service revenue is recognized as services are performed. For products that include software and for separate licenses of the Company’s software products, the Company recognizes revenue in accordance with the provisions of FASB Accounting Standards Update (ASU) 2009-13, “Revenue Recognition (Topic 605) — Multiple-Deliverable Revenue Arrangements” (ASU 2009-13). ASU 2009-13 provides revenue recognition guidance for establishing separate units of accounting in a multiple element arrangement and requires the allocation of arrangement consideration to each deliverable in the arrangement based on the fair value of the elements. The fair value for each deliverable is based on vendor-specific objective evidence (“VSOE”) if available, third-party evidence (“TPE”) if VSOE is not available, or best estimate of selling price (“BESP”) if neither VSOE nor TPE is available. BESP must be determined in a manner that is consistent with that used to determine the price to sell the specific elements on a standalone basis. Cash and Cash Equivalents Cash and cash equivalents include cash on deposit and amounts invested in highly liquid money market funds. Marketable Securities At September 30, 2018, marketable securities consisted of mutual fund investments principally in federal, state and local government debt securities of $13,440. Such mutual fund investments are stated at market value based on quoted market prices (Level 1 inputs) and are classified as available-for-sale under ASC 320, with cumulative unrealized gains and losses reported in accumulated other comprehensive loss as a component of shareholders’ equity. The cost of such securities was $14,507 and $14,114 at September 30, 2018 and 2017, respectively, with $(1,067) and $(559) of cumulative unrealized losses, net of tax where applicable, included in the carrying amounts at September 30, 2018 and 2017, respectively. Allowance for Doubtful Accounts The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. If the financial condition of its customers were to deteriorate, resulting in an impairment of their ability to make payments, an additional allowance may be required. Inventories Inventories are valued at the lower of cost (on a moving average basis which approximates a first-in, first-out method) or net realizable value. When it is determined that a product or product line will be sold below carrying cost, affected on hand inventories are written down to their estimated net realizable values. Long-Lived Assets and Intangible Assets Long-lived assets include reported property, plant, and equipment. The Company reviews its long-lived assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the expected cash flows, undiscounted and without interest, is less than the carrying amount of the asset, an impairment loss is recognized as the amount by which the carrying amount of the asset exceeds its fair value. Property, plant, and equipment are recorded at cost and are being depreciated over periods ranging from 2 to 10 years. Depreciation and amortization expense of property, plant and equipment was $196,075 and $259,116 for the years ended September 30, 2018 and 2017. In fiscal 2017, the Company recorded an $838,500 writeoff of remaining IQinVision merger intangible assets. Engineering and Development Product engineering and development costs are charged to expense as incurred, and amounted to $4,145,318 and $4,811,465 in fiscal 2018 and 2017, respectively. The Company evaluates the establishment of technological feasibility of its software in accordance with ASC 985 (“Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise Marketed”). The Company has determined that technological feasibility for its new products is reached shortly before products are released for field testing. Costs incurred after technological feasibility has been established have not been material and are expensed as incurred. Earnings Per Share Basic EPS is computed based on the weighted average number of common shares outstanding. Diluted EPS reflects the maximum dilution that would have resulted from the exercise of stock options, warrants and incremental shares issuable under a deferred compensation agreement (see Note 6). In periods when losses are incurred, the effects of these securities are antidilutive and, therefore, are excluded from the computation of diluted EPS. Foreign Currency Translation The Company translates the financial statements of its foreign subsidiaries by applying the current rate method under which assets and liabilities are translated at the exchange rate on the balance sheet date, while revenues, costs, and expenses are translated at the average exchange rate for the reporting period. The resulting cumulative translation adjustment of $(222,685) and $(155,491) at September 30, 2018 and 2017, respectively, is recorded as a component of shareholders’ equity in accumulated other comprehensive loss. Income Taxes The Company accounts for income taxes under the provisions of ASC 740 (“Accounting for Income Taxes”), which requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred U.S. income taxes are not provided on undistributed earnings of foreign subsidiaries as the Company presently intends to reinvest such earnings indefinitely, and any plan to repatriate any of such earnings in the future is not expected to result in a material incremental tax liability to the Company. The Company provides for a valuation allowance against its entire net deferred tax asset balance due to the uncertainty of future realization (see Note 2 for further discussion). On December 22, 2017, new tax legislation came into effect. The provisions are generally effective for years beginning on or after January 1, 2018. The most impactful item to the Company in the new law is the change in tax rate from 34% to 21%. This reduced the gross US deferred tax assets prior to existing full valuation allowance from an effective rate of 38% to an effective rate of 25.75%. Given the full valuation allowance, the change did not have a significant impact on the financial statements. In addition, the new legislation requires the payment of transition tax regarding prior earnings of foreign subsidiaries. Due to losses of the Company’s foreign subsidiaries, there is no transition tax due. The Company accrues liabilities for identified tax contingencies that result from positions that are being challenged or could be challenged by tax authorities. The Company believes that its accrual for tax liabilities is adequate for all open years, based on Management’s assessment of many factors, including its interpretations of the tax law and judgments about potential actions by tax authorities. However, it is possible that the ultimate resolution of any tax audit may be materially greater or lower than the amount accrued. Product Warranties The Company provides for the estimated cost of product warranties at the time revenue is recognized. While the Company engages in product quality programs and processes, including monitoring and evaluating the quality of its component suppliers, its warranty obligation is affected by product failure rates, material usage and service delivery costs incurred in correcting a product failure. Should actual product failure rates, material usage or service delivery costs differ from its estimates, revisions to the estimated warranty liability may be required. Changes in the Company’s warranty liability (included in accrued expenses) for the fiscal years ended September 30, 2018 and 2017 were as follows: 2018 2017 Balance at beginning of year $ 431,000 $ 681,000 Provision for warranties 139,000 124,000 Expenses incurred (216,000 ) (374,000 ) Balance at end of year $ 354,000 $ 431,000 Fair Value of Financial Instruments The majority of the Company’s non-financial assets and liabilities are not required to be carried at fair value on a recurring basis, but the Company is required on a non-recurring basis to use fair value measurements when analyzing asset impairment as it relates to long-lived assets. The carrying amounts for trade accounts receivable, other receivables, accounts payable and revolving credit borrowings approximate fair value due to either the short-term maturity of these instruments or the fact that the interest rate of the revolving credit borrowings is based upon current market rates. Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Accounting for Stock-Based Compensation The Company follows ASC 718 (“Share-Based Payment”), which requires that all share based payments to employees, including stock options, stock appreciation rights (SARs) and common stock share awards, be recognized as compensation expense in the consolidated financial statements based on their fair values and over the requisite service period. For the years ended September 30, 2018 and 2017, the Company recorded non-cash compensation expense of $23,053 ($.00 per basic and diluted share) and $42,071 ($.00 per basic and diluted share), respectively, relating to stock-based compensation. No options were granted during the fiscal years ended September 30, 2018 and 2017. The fair value for options granted was determined at the date of grant using a Black-Scholes valuation model and the straight-line attribution approach using the following weighted average assumptions: The risk-free interest rate used in the Black-Scholes valuation method is based on the implied yield currently available in U.S. Treasury securities at maturity with an equivalent term. Other than a one-time special dividend paid in connection with the IQinVision merger, the Company never declared or paid any cash dividends and does not currently expect to do so in the future. Expected volatility is based on the annualized daily historical volatility of the Company’s stock over a representative period. The weighted-average expected life represents the period over which stock-based awards are expected to be outstanding and was determined based on a number of factors, including historical weighted average and projected holding periods for the remaining unexercised shares, the contractual terms of the Company’s stock-based awards, vesting schedules and expectations of future employee behavior. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company’s employee stock options and SARs have characteristics significantly different from traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options and SARs. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Such estimates include, but are not limited to, provisions for doubtful accounts receivable, net realizable value of inventory, warranty obligations, income tax accruals, deferred tax valuation and assessments of the recoverability of the Company’s long-lived assets. Actual results could differ from those estimates. |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 2. Income Taxes No income tax benefit was recognized on losses reported for the years presented due to uncertainty of realization. In fiscal 2011, the Company began providing a full valuation allowance against its net deferred tax assets due to the uncertainty of future realization and, thus, no tax benefit has been recognized on subsequent reported pretax losses. A reconciliation of the U.S. statutory tax rate to the Company’s effective tax rate follows: 2018 2017 Amount Percent Amount Percent U.S. statutory tax $ (1,325,000 ) (24.5 )% $ (2,384,000 ) (34.0 )% (Decrease) increase in valuation allowance (3,030,000 ) (56.0 ) 2,280,000 32.5 Impact of federal rate change on deferred tax balances 4,410,000 81.5 — — Foreign tax rate differences 72,000 1.3 238,000 3.4 Permanent differences 16,000 0.3 18,000 0.3 State tax, net of federal benefit (110,000 ) (2.0 ) (126,000 ) (1.8 ) Other, net (33,000 ) (0.6 ) (26,000 ) (0.4 ) Effective tax rate $ — — % $ — — % The tax effects of temporary differences that give rise to deferred tax assets and liabilities at September 30, 2018 and 2017 are presented below: 2018 2017 Deferred tax assets: Inventories $ 1,029,000 $ 1,543,000 Accrued compensation 348,000 539,000 Warranty accrual 79,000 150,000 Depreciation 61,000 100,000 Allowance for doubtful accounts receivable 149,000 320,000 Unearned revenue 183,000 237,000 U.S. net operating loss carryforwards 7,349,000 8,794,000 Foreign net operating loss carryforwards 2,277,000 1,916,000 Tax credits 989,000 989,000 Other 1,011,000 1,181,000 Gross deferred tax assets 13,475,000 15,769,000 Deferred tax liabilities: Other 38,000 64,000 Gross deferred tax liabilities 38,000 64,000 Total deferred tax assets and liabilities 13,437,000 15,705,000 Less valuation allowance (13,437,000 ) (15,705,000 ) Net deferred tax assets and liabilities $ — $ — Deferred tax assets and liabilities are recognized based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets represent items to be used as a tax deduction or credit in future tax returns for which a tax benefit has been recorded in the income statement. As of September 30, 2018, there were no undistributed earnings of foreign subsidiaries. The Company provides for a valuation allowance against its net deferred tax assets due to the uncertainty of future realization. The full valuation allowance is determined to be appropriate due to the Company’s continuing operating losses since fiscal year 2010 and the inherent uncertainties of predicting future operating results in periods over which such net tax differences become deductible. Pretax domestic loss amounted to approximately $(3,604,000) and ($5,309,000) in fiscal years 2018 and 2017, respectively. Pretax foreign loss amounted to approximately ($1,805,000) and ($1,703,000) in fiscal years 2018 and 2017, respectively. The Company has U.S. and foreign net operating loss carryforwards (NOLs) of approximately $28.7 million and $10.5 million, respectively, available to offset future taxable income. Such NOLs can be carried forward over periods through September 30, 2038 in the U.S. and indefinitely in foreign jurisdictions. On August 29, 2014, the Company merged with IQinVision, Inc. In connection with this merger, the Company’s ability to utilize pre-merger net operating losses and tax credit carryforwards in the future is subject to certain limitations pursuant to Section 382 of the Internal Revenue Code. On November 7, 2017 the Company completed a rights offering that could further limit its ability to utilize prior net operating losses and tax credit carryforwards in the future pursuant to Section 382 of the Internal Revenue Code. This did not materially impact the balance sheet or statement of operations as the net deferred tax asset has a full valuation allowance. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cut and Jobs Act (the “Tax Act”). The Tax Act made broad and complex changes to the U.S. tax code and established new tax laws that affect 2018 and after, including a reduction in the U.S. federal corporate income tax rate from 34% to 21%. In addition, net operating losses generated subsequent to the Tax Act can only be used to offset 80% of taxable income with an indefinite carryforward period for unused carryforwards. On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740, Income Taxes. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. This guidance did not have a material impact on the Company’s operating results or financial condition. The Company follows the provisions of ASC 740 as it relates to uncertain tax positions. Unrecognized tax benefits activity for the years ended September 30, 2018 and 2017 is summarized below: 2018 2017 Beginning balance $ 45,000 $ 45,000 Additions (reductions) based on tax positions related to prior years — — Additions (reductions) based on tax positions related to the current year — — Ending balance $ 45,000 $ 45,000 The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits in income tax expense. At September 30, 2018 and 2017, there was no accrued net interest and penalties related to tax positions taken or to be taken on the Company’s tax returns and recorded as part of the reserves for uncertain tax positions. The Company files U.S. Federal and State income tax returns and foreign tax returns in the United Kingdom, Germany and Israel. The Company is generally no longer subject to tax examinations for fiscal years prior to 2015 in the U.S. and 2012 in the U.K., Germany and Israel. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 12 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | NOTE 3. Accumulated Other Comprehensive Loss The accumulated other comprehensive loss balances at September 30, 2018 and 2017 consisted of the following: 2018 2017 Foreign currency translation adjustment $ (222,685 ) $ (155,491 ) Unrealized loss on marketable securities (1,067 ) (559 ) Accumulated other comprehensive loss $ (223,752 ) $ (156,050 ) |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | NOTE 4. Segment and Geographic Information The Company operates in one business segment which encompasses the design, assembly and marketing of video management and access control systems and system components for the electronic protection segment of the security industry. Its U.S. based operations consist of Vicon Industries, Inc., the Company’s corporate headquarters and principal operating entity. Its Europe-based operation consists of Vicon Industries Limited, which markets and distributes the Company’s products principally within Europe and the Middle East. Net sales and long-lived assets related to operations in the United States and other foreign countries for the fiscal years ended September 30, 2018 and 2017 are as follows: 2018 2017 Net sales U.S. $ 23,048,392 $ 21,698,526 Foreign 4,684,975 4,953,105 Total $ 27,733,367 $ 26,651,631 Long-lived assets U.S. $ 154,218 $ 271,258 Foreign 101,513 130,440 Total $ 255,731 $ 401,698 U.S. sales include $3,384,619 and $3,333,429 for export in fiscal years 2018 and 2017, respectively. Foreign sales principally represent sales from the Company’s Europe based subsidiaries. |
Long-Term Equity Incentive Plan
Long-Term Equity Incentive Plans | 12 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Long-Term Equity Incentive Plans | NOTE 5. Long-Term Equity Incentive Plans The Company maintains stock incentive plans that provide for the grant of incentive and non-qualified options, stock appreciation rights (“SARs”) and common stock awards covering a total of 644,851 shares of common stock reserved for issuance to key employees, including officers and directors, as of September 30, 2018. All options and SARs are issued at fair market value at the grant date and are exercisable in varying installments according to the plans. SARs provide the holder the right to receive, upon exercise, the excess of the exercise date fair market value over the grant date fair market value of a share of the Company’s common stock in the form of equivalent shares of common stock at market value, cash or a combination of both. The plans allow for the payment of option exercises through the surrender of previously owned mature shares based on the fair market value of such shares at the date of surrender. Such surrendering of mature shares by holders results in an increase to treasury stock based on the stock price on date of surrender. There were 330,848 options and SARs available for grant under these plans at September 30, 2018. Changes in outstanding stock options for the two years ended September 30, 2018 are as follows: Number of Options Weighted Average Exercise Weighted Average Remaining Contractual Aggregate Intrinsic Value Outstanding at September 30, 2016 536,230 $ 3.31 Options granted — — Options exercised — — Options forfeited (80,497 ) 2.86 Outstanding at September 30, 2017 455,733 3.39 Options granted — — Options exercised — — Options forfeited (148,291 ) 3.76 Outstanding at September 30, 2018 307,442 $ 3.19 3.2 $ — Exercisable at September 30, 2018 295,192 $ 3.26 3.0 $ — As of September 30, 2018, there was $13,404 of total unrecognized compensation cost, net of estimated forfeitures, related to nonvested stock options, which is expected to be recognized over a weighted-average period of 0.5 years. Changes in outstanding SARs for the two years ended September 30, 2018 are as follows: Number of SARs Weighted Average Base Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding at September 30, 2016 80,796 $ 3.08 SARs granted — — SARs exercised — — SARs forfeited — — Outstanding at September 30, 2017 80,796 $ 3.08 SARs granted — — SARs exercised — — SARs forfeited (80,796 ) $ 3.08 Outstanding at September 30, 2018 — — 0.0 — Exercisable at September 30, 2018 — — 0.0 — As of September 30, 2018, there were no SARs outstanding and no unrecognized compensation cost related to nonvested SARs. |
Loss Per Share
Loss Per Share | 12 Months Ended |
Sep. 30, 2018 | |
Loss per share: | |
Loss Per Share | NOTE 6. Loss Per Share The following table provides the components of the basic and diluted loss per share (EPS) computations: 2018 2017 Basic EPS Computation Net loss $ (5,409,147 ) $ (7,011,580 ) Weighted average shares outstanding 16,700,413 9,348,388 Basic loss per share $ (.32 ) $ (.75 ) Diluted EPS Computation Net loss $ (5,409,147 ) $ (7,011,580 ) Weighted average shares outstanding 16,700,413 9,348,388 Stock options — — Stock compensation arrangements — — Diluted shares outstanding 16,700,413 9,348,388 Diluted loss per share $ (.32 ) $ (.75 ) For fiscal years 2018 and 2017, all outstanding stock options, warrants and shares issuable under stock compensation arrangements totaling 1,814,003 and 2,043,090 shares, respectively, have been omitted from the calculation of diluted EPS as their effect would have been antidilutive. The actual effect of these stock options and shares, if any, on the diluted earnings per share calculation will vary significantly depending on fluctuations in the market price of the Company’s stock. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 7. Commitments and Contingencies The Company leases vehicles and occupies certain facilities under operating leases that expire at various dates through 2021. The leases, which cover periods from three to eight years, generally provide for renewal options at specified rental amounts. The aggregate operating lease commitment at September 30, 2018 was $893,000 with minimum rentals for the fiscal years shown as follows: 2019 - $655,000; 2020 - $181,000; and 2021 - $57,000. Rent expense for fiscal 2018 and 2017 was approximately $626,183 and $696,114, respectively. The Company is a party to employment agreements with certain of its officers that provide for, among other things, the payment of compensation if there is a change in control without Board of Director approval (as defined in the agreements). The contingent liability under such change in control provisions at September 30, 2018 would have been approximately $1.7 million. Certain of the Company’s employment agreements with its officers provide for a severance/retirement benefit upon certain occurrences or at a specified date of retirement, absent a change in control, aggregating $1.0 million at September 30, 2018. The Company is amortizing such obligation to expense on the straight-line method through the specified dates of retirement. Such expense amounted to approximately $38,000 and $38,000 in fiscal 2018 and 2017, respectively. The Company has an agreement with an officer to provide a deferred compensation benefit in the form of 6,561 shares of common stock. Such shares vest upon retirement or earlier under certain occurrences including death, involuntary termination or a change in control of the Company. The market value of such shares approximated $20,000 at the date of grant, which is being amortized on the straight-line method through the specified date of retirement. The unamortized expense of approximately $1,000 will be recognized during fiscal 2019. |
Credit and Term Loan Agreements
Credit and Term Loan Agreements | 12 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Credit and Term Loan Agreements | NOTE 8. Credit and Term Loan Agreements On March 4, 2016, the Company entered into a Credit Agreement (the “Agreement”) with NIL Funding Corporation to provide a $3 million revolving line of credit for working capital purposes, which was subsequently amended and restated on two occasions as described below. The Agreement provided for a borrowing formula based upon eligible accounts receivable and was secured by a first priority security interest in substantially all of the Company’s assets. Borrowings under the Agreement bore interest at a rate of 6.75% per annum. The Agreement also provided for an unused commitment fee equal to .5% per annum. The Agreement included provisions that are customarily found in similar financing agreements. On August 18, 2016, the Company entered into an Amended and Restated Credit Agreement (the “Amended Agreement”) with NIL Funding Corporation which increased the $3 million revolving line of credit to $6 million. Under the Amended Agreement, the facility was to mature on October 2, 2018 and consisted of two credit lines of $4 million and $2 million which bore interest at rates of 6.95% per annum and 8.25% per annum, respectively. The $4 million line of credit was subject to a borrowing formula based upon eligible accounts receivable. The Amended Agreement also provided for an initial commitment fee of $60,000, which was paid at closing, as well as an unused commitment fee equal to .5% per annum. The Amended Agreement included a financial covenant that required the Company to maintain a specified minimum tangible net worth, as defined, and was otherwise substantially similar to the original Agreement with NIL Funding Corporation. On April 20, 2017, the Company entered into the Second Amended and Restated Credit Agreement (the “Second Amended Agreement”) with NIL Funding Corporation, under which only $2 million of the $6 million facility was subject to a borrowing formula, effectively providing the Company with $2 million of additional borrowing availability. The Second Amended Agreement also extended the maturity date of the credit facility to April 2, 2019, and reduced the Company’s minimum tangible net worth requirement, but was otherwise substantially similar to the Amended Agreement. In connection with the Second Amended Agreement, NIL Funding was issued a three-year warrant to purchase 1.5 million shares of the Company’s common stock at a price of $.40 per share. The fair value of the warrant at the date of issuance was $438,000, which is being amortized over the two-year remaining credit facility term from the date of issuance. At September 30, 2018 and 2017, there was approximately $108,000 and $339,000, respectively, of deferred warrant issuance costs included in other assets in the accompanying balance sheets. The fair value for the warrants was determined at the date of issuance using the Black-Scholes valuation model and the straight-line attribution approach using the following weighted average assumptions (see Note 1 for further discussion of Black Scholes valuation method): 2017 Risk-free interest rate 1.4 % Dividend yield 0.0 % Volatility factor 125.6 % Weighted average expected life 3.0 years Changes in outstanding warrants for the two years ended September 30, 2018 are as follows: Warrants Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding at September 30, 2016 — — Warrants granted 1,500,000 $ 0.40 Warrants exercised — — Warrants forfeited — — Outstanding at September 30, 2017 1,500,000 — Warrants granted — — Warrants exercised — — Warrants forfeited — — Outstanding at September 30, 2018 1,500,000 $ 0.40 1.6 $ — Exercisable at September 30, 2018 1,500,000 $ 0.40 1.6 $ — At June 30, 2018, the Company was in violation of the minimum tangible net worth covenant under Section 4.9 of the Second Amended Agreement. On July 27, 2018, the Company entered into an amendment (the “Amendment”) to the Second Amended Agreement with NIL Funding Corporation, which Amendment provided that, among other things, (a) from June 12, 2018 until September 1, 2018, the minimum tangible net worth covenant contained in Section 4.9 of the Second Amended Agreement was of no force or effect, (b) from June 12, 2018 until September 2, 2018, the Company was not permitted to borrow any additional funds under the Second Amended Agreement, and (c) NIL Funding Corporation waived any Event of Default (as defined in the Credit Agreement) with respect to Section 4.9 of the Second Amended Agreement that may have occurred prior to June 12, 2018. The Company paid NIL Funding Corporation a fee of $29,000 in connection with the Amendment, which has been included in interest expense. On September 21, 2018, the Company entered into a $5.6 million Term Loan Agreement (the “Term Loan Agreement”) with NIL Funding Corporation (“NIL”) to replace the $5.8 million outstanding balance on its existing revolving line of credit agreement with a term loan. Upon closing, $5.6 million of outstanding borrowings under its revolving credit agreement were converted to a term loan while the remaining $200,000 of outstanding borrowings were repaid to NIL. The Term Loan Agreement requires monthly payments of accrued interest beginning on October 1, 2018. In addition, the Term Loan Agreement requires equal monthly principal payments of $25,000, plus accrued interest, beginning on April 1, 2019 until the loan maturity date of March 30, 2020, at which point the full outstanding balance of the loan and accrued interest are due. As of September 30, 2018, outstanding borrowings under the Term Loan Agreement of $5.6 million are due in the fiscal years shown as follows: 2019 - $150,000; and 2020 - $5,450,000. The Term Loan Agreement provides for a formula that limits outstanding indebtedness based upon eligible accounts receivable and is secured by a first priority security interest in substantially all of the Company’s assets. Borrowings under the Term Loan Agreement bear interest at a rate of 8.85% per annum. The Term Loan Agreement required additional fees and expenses of approximately $81,000, which was paid at closing, and includes provisions that are customarily found in similar financing agreements, including a financial covenant which requires the Company to maintain a minimum level of inventory and liquid assets as defined therein. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 9. Related Party Transactions On August 8, 2018, the Company entered into a Research and Development Services Agreement (the “Agreement”) with Cemtrex, Inc. (“Cemtrex”) to provide the Company with outsourced software development services. The Company is transitioning its principal Israeli based software development activities to Cemtrex’s India based services group, which has now assumed principal software coding and test responsibilities for the Company. The outsourcing of these activities is expected to materially reduce the Company’s software development costs and provide development efficiencies, which should help expedite its software roadmap. The terms of the Agreement, among other things, set forth the scope of services, consideration, developed technology ownership, non-disclosure and safeguard of the Company’s software code. During fiscal 2018, Cemtrex billed the Company a total of $356,066 in connection with software development activities. Cemtrex beneficially owns 46% of the Company’s common stock. In addition, the Chief Executive Officer of Cemtrex serves as the Chief Executive Officer of the Company, and the principal shareholder of Cemtrex, who serves as a director of Cemtrex, also serves as a director of the Company. Shezhen Infinova Limited (Infinova), a Chinese corporation which beneficially owned 5.8% of the outstanding shares of the Company’s common stock as of September 30, 2017, began serving as a contract manufacturer to the Company for certain of its products in fiscal 2016. The Company procured approximately $3.1 million of products from Infinova in fiscal 2017. Sales of Vicon products to Infinova were $18,000 in 2017. At September 30, 2017, the Company owed $690,000 to Infinova and Infinova owed $14,000 to the Company resulting from purchases and sales of products. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | NOTE 10: Recent Accounting Pronouncements In May 2014, the FASB issued guidance on revenue from contracts with customers. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. Other major provisions include capitalization of certain contract costs, consideration of time value of money in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved, in certain circumstances. The guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. This guidance permits the use of either the retrospective or cumulative effect transition method and is effective for the Company beginning in fiscal 2019. The adoption of this guidance will not have a material effect on the Company’s operating results or financial position. In February 2016, the FASB issued guidance on lease accounting requiring lessees to recognize a right-of-use asset and a lease liability for long-term leases. The liability will be equal to the present value of lease payments. The standard requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP. This guidance must be applied using a modified retrospective transition approach to all annual and interim periods presented and is effective for the Company beginning on October 1, 2019. The Company is currently evaluating the effect of implementing this guidance. In March 2016, the FASB issued guidance on simplifying several aspects of accounting for share-based payment award transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This guidance requires a mix of prospective, modified retrospective, and retrospective transition to all annual and interim periods presented and was effective for the Company beginning in fiscal 2018. The adoption of this guidance did not have a material effect on the Company’s operating results or financial position. In January 2017, the FASB issued guidance that clarifies the definition of a business, which will impact many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The new standard is intended to help companies and other organizations evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This guidance is effective for the Company beginning in fiscal 2019 and will be considered for any future acquisitions. |
Going Concern and Liquidity
Going Concern and Liquidity | 12 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern and Liquidity | NOTE 11. Going Concern and Liquidity The accompanying financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future and, thus, do not include any adjustments relating to the recoverability and classification of assets and liabilities that may be necessary if the Company is unable to continue as a going concern. However, the Company’s ability to continue as a going concern is dependent upon generating profitable operations in the future and obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. The Company has incurred operating losses due to depressed revenue levels and ongoing strategic investments. Since 2012, the Company has made a significant investment in the development of a completely new, and strategically critical, video management system (VMS). The initial release of this product offering was launched in January 2017, and was followed up by important system enhancements released in July 2017, March 2018 and August 2018. The funding of this major development effort has contributed to the ongoing operating losses and depletion of cash reserves. Cash losses over the past several years have been financed by credit facility borrowings, the sale of the Company’s two principal operating facilities, ongoing management of working capital levels and, more recently, the Company’s rights offering and related backstop funding discussed in Note 12 to the financial statements. During the quarter ended September 30, 2018, the Company launched a series of restructuring initiatives, which management expects will substantially reduce operating expenses and help improve operating efficiencies. The full impact of these initiatives are not expected to be reflected in the Company’s financial statements until the onset of the quarter ending December 31, 2018. At September 30, 2018, the Company had approximately $2.0 million of cash and it currently expects to draw on these cash reserves to finance its near term working capital needs while it implements its operating cost restructuring initiatives. Notwithstanding the above ongoing restructuring plans, the Company will likely require additional financing over the next twelve months to implement its planned business objectives and strategies. Accordingly, and in light of the Company’s historic and continuing losses, there is substantial doubt about the Company’s ability to continue as a going concern. |
Rights Offering and Investment
Rights Offering and Investment Agreement | 12 Months Ended |
Sep. 30, 2018 | |
Rights Offering And Investment Agreement | |
Rights Offering and Investment Agreement | NOTE 12. Rights Offering and Investment Agreement On November 7, 2017, the Company completed a rights offering of common stock to its existing shareholders, whereby it raised approximately $282,000 of gross proceeds for the issuance of 704,235 shares of its common stock pursuant to subscription commitments. On November 8, 2017, following the closing of the rights offering, the Company issued 7,500,000 shares of its common stock to NIL Funding Corporation, the Company’s secured lender, for an aggregate purchase price of $3.0 million pursuant to an Investment Agreement between the Company and NIL Funding Corporation dated as of July 27, 2017. The net proceeds from the rights offering and Investment Agreement were used by the Company to pay down interest bearing borrowings under its Credit Agreement. In March 2018, Cemtrex, Inc. acquired NIL Funding’s remaining equity holdings in the Company of 7,284,824 shares of common stock along with 1,500,000 warrants held. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Nature of Business | Nature of Business The Company designs, assembles and markets video management and access control systems and system components for use in security, surveillance, safety and control purposes by end users. The Company markets its products worldwide primarily to installing dealers, systems integrators, government entities and distributors. |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying consolidated financial statements include the accounts of Vicon Industries, Inc. (the Company) and its wholly owned subsidiaries: IQinVision, Inc., Vicon Industries Limited and subsidiary (Vicon Deutschland GmbH) and TeleSite U.S.A., Inc. and subsidiary (Vicon Systems Ltd.). All significant intercompany accounts and transactions have been eliminated in consolidation. See Note 11. |
Revenue Recognition | Revenue Recognition Revenue is generally recognized when products are sold and title is passed to the customer. Advance service billings are deferred and recognized as revenues on a pro rata basis over the term of the service agreement. Pursuant to Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 605-25-05, the Company evaluates multiple-element revenue arrangements for separate units of accounting, and follows appropriate revenue recognition policies for each separate unit. Elements are considered separate units of accounting provided that (i) the delivered item has stand-alone value to the customer, (ii) there is objective and reliable evidence of the fair value of the delivered and undelivered items, and (iii) if a general right of return exists relative to the delivered item, delivery or performance of the undelivered item is considered probable and substantially within the control of the Company. As applied to the Company, under arrangements involving the sale of product and the provision of services, product sales are recognized as revenue when the products are sold and title is passed to the customer, and service revenue is recognized as services are performed. For products that include software and for separate licenses of the Company’s software products, the Company recognizes revenue in accordance with the provisions of FASB Accounting Standards Update (ASU) 2009-13, “Revenue Recognition (Topic 605) — Multiple-Deliverable Revenue Arrangements” (ASU 2009-13). ASU 2009-13 provides revenue recognition guidance for establishing separate units of accounting in a multiple element arrangement and requires the allocation of arrangement consideration to each deliverable in the arrangement based on the fair value of the elements. The fair value for each deliverable is based on vendor-specific objective evidence (“VSOE”) if available, third-party evidence (“TPE”) if VSOE is not available, or best estimate of selling price (“BESP”) if neither VSOE nor TPE is available. BESP must be determined in a manner that is consistent with that used to determine the price to sell the specific elements on a standalone basis. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash on deposit and amounts invested in highly liquid money market funds. |
Marketable Securities | Marketable Securities At September 30, 2018, marketable securities consisted of mutual fund investments principally in federal, state and local government debt securities of $13,440. Such mutual fund investments are stated at market value based on quoted market prices (Level 1 inputs) and are classified as available-for-sale under ASC 320, with cumulative unrealized gains and losses reported in accumulated other comprehensive loss as a component of shareholders’ equity. The cost of such securities was $14,507 and $14,114 at September 30, 2018 and 2017, respectively, with $(1,067) and $(559) of cumulative unrealized losses, net of tax where applicable, included in the carrying amounts at September 30, 2018 and 2017, respectively. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. If the financial condition of its customers were to deteriorate, resulting in an impairment of their ability to make payments, an additional allowance may be required. |
Inventories | Inventories Inventories are valued at the lower of cost (on a moving average basis which approximates a first-in, first-out method) or net realizable value. When it is determined that a product or product line will be sold below carrying cost, affected on hand inventories are written down to their estimated net realizable values. |
Long-Lived Assets and Intangible Assets | Long-Lived Assets and Intangible Assets Long-lived assets include reported property, plant, and equipment. The Company reviews its long-lived assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the expected cash flows, undiscounted and without interest, is less than the carrying amount of the asset, an impairment loss is recognized as the amount by which the carrying amount of the asset exceeds its fair value. Property, plant, and equipment are recorded at cost and are being depreciated over periods ranging from 2 to 10 years. Depreciation and amortization expense of property, plant and equipment was $196,075 and $259,116 for the years ended September 30, 2018 and 2017. In fiscal 2017, the Company recorded an $838,500 writeoff of remaining IQinVision merger intangible assets. |
Engineering and Development | Engineering and Development Product engineering and development costs are charged to expense as incurred, and amounted to $4,145,318 and $4,811,465 in fiscal 2018 and 2017, respectively. The Company evaluates the establishment of technological feasibility of its software in accordance with ASC 985 (“Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise Marketed”). The Company has determined that technological feasibility for its new products is reached shortly before products are released for field testing. Costs incurred after technological feasibility has been established have not been material and are expensed as incurred. |
Earnings Per Share | Earnings Per Share Basic EPS is computed based on the weighted average number of common shares outstanding. Diluted EPS reflects the maximum dilution that would have resulted from the exercise of stock options, warrants and incremental shares issuable under a deferred compensation agreement (see Note 6). In periods when losses are incurred, the effects of these securities are antidilutive and, therefore, are excluded from the computation of diluted EPS. |
Foreign Currency Translation | Foreign Currency Translation The Company translates the financial statements of its foreign subsidiaries by applying the current rate method under which assets and liabilities are translated at the exchange rate on the balance sheet date, while revenues, costs, and expenses are translated at the average exchange rate for the reporting period. The resulting cumulative translation adjustment of $(222,685) and $(155,491) at September 30, 2018 and 2017, respectively, is recorded as a component of shareholders’ equity in accumulated other comprehensive loss. |
Income Taxes | Income Taxes The Company accounts for income taxes under the provisions of ASC 740 (“Accounting for Income Taxes”), which requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred U.S. income taxes are not provided on undistributed earnings of foreign subsidiaries as the Company presently intends to reinvest such earnings indefinitely, and any plan to repatriate any of such earnings in the future is not expected to result in a material incremental tax liability to the Company. The Company provides for a valuation allowance against its entire net deferred tax asset balance due to the uncertainty of future realization (see Note 2 for further discussion). On December 22, 2017, new tax legislation came into effect. The provisions are generally effective for years beginning on or after January 1, 2018. The most impactful item to the Company in the new law is the change in tax rate from 34% to 21%. This reduced the gross US deferred tax assets prior to existing full valuation allowance from an effective rate of 38% to an effective rate of 25.75%. Given the full valuation allowance, the change did not have a significant impact on the financial statements. In addition, the new legislation requires the payment of transition tax regarding prior earnings of foreign subsidiaries. Due to losses of the Company’s foreign subsidiaries, there is no transition tax due. The Company accrues liabilities for identified tax contingencies that result from positions that are being challenged or could be challenged by tax authorities. The Company believes that its accrual for tax liabilities is adequate for all open years, based on Management’s assessment of many factors, including its interpretations of the tax law and judgments about potential actions by tax authorities. However, it is possible that the ultimate resolution of any tax audit may be materially greater or lower than the amount accrued. |
Product Warranties | Product Warranties The Company provides for the estimated cost of product warranties at the time revenue is recognized. While the Company engages in product quality programs and processes, including monitoring and evaluating the quality of its component suppliers, its warranty obligation is affected by product failure rates, material usage and service delivery costs incurred in correcting a product failure. Should actual product failure rates, material usage or service delivery costs differ from its estimates, revisions to the estimated warranty liability may be required. Changes in the Company’s warranty liability (included in accrued expenses) for the fiscal years ended September 30, 2018 and 2017 were as follows: 2018 2017 Balance at beginning of year $ 431,000 $ 681,000 Provision for warranties 139,000 124,000 Expenses incurred (216,000 ) (374,000 ) Balance at end of year $ 354,000 $ 431,000 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The majority of the Company’s non-financial assets and liabilities are not required to be carried at fair value on a recurring basis, but the Company is required on a non-recurring basis to use fair value measurements when analyzing asset impairment as it relates to long-lived assets. The carrying amounts for trade accounts receivable, other receivables, accounts payable and revolving credit borrowings approximate fair value due to either the short-term maturity of these instruments or the fact that the interest rate of the revolving credit borrowings is based upon current market rates. Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. |
Accounting for Stock-Based Compensation | Accounting for Stock-Based Compensation The Company follows ASC 718 (“Share-Based Payment”), which requires that all share based payments to employees, including stock options, stock appreciation rights (SARs) and common stock share awards, be recognized as compensation expense in the consolidated financial statements based on their fair values and over the requisite service period. For the years ended September 30, 2018 and 2017, the Company recorded non-cash compensation expense of $23,053 ($.00 per basic and diluted share) and $42,071 ($.00 per basic and diluted share), respectively, relating to stock-based compensation. No options were granted during the fiscal years ended September 30, 2018 and 2017. The fair value for options granted was determined at the date of grant using a Black-Scholes valuation model and the straight-line attribution approach using the following weighted average assumptions: The risk-free interest rate used in the Black-Scholes valuation method is based on the implied yield currently available in U.S. Treasury securities at maturity with an equivalent term. Other than a one-time special dividend paid in connection with the IQinVision merger, the Company never declared or paid any cash dividends and does not currently expect to do so in the future. Expected volatility is based on the annualized daily historical volatility of the Company’s stock over a representative period. The weighted-average expected life represents the period over which stock-based awards are expected to be outstanding and was determined based on a number of factors, including historical weighted average and projected holding periods for the remaining unexercised shares, the contractual terms of the Company’s stock-based awards, vesting schedules and expectations of future employee behavior. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company’s employee stock options and SARs have characteristics significantly different from traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options and SARs. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Such estimates include, but are not limited to, provisions for doubtful accounts receivable, net realizable value of inventory, warranty obligations, income tax accruals, deferred tax valuation and assessments of the recoverability of the Company’s long-lived assets. Actual results could differ from those estimates. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Changes in Warranty Liability | Changes in the Company’s warranty liability (included in accrued expenses) for the fiscal years ended September 30, 2018 and 2017 were as follows: 2018 2017 Balance at beginning of year $ 431,000 $ 681,000 Provision for warranties 139,000 124,000 Expenses incurred (216,000 ) (374,000 ) Balance at end of year $ 354,000 $ 431,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Tax Rate Reconciliation | A reconciliation of the U.S. statutory tax rate to the Company’s effective tax rate follows: 2018 2017 Amount Percent Amount Percent U.S. statutory tax $ (1,325,000 ) (24.5 )% $ (2,384,000 ) (34.0 )% (Decrease) increase in valuation allowance (3,030,000 ) (56.0 ) 2,280,000 32.5 Impact of federal rate change on deferred tax balances 4,410,000 81.5 — — Foreign tax rate differences 72,000 1.3 238,000 3.4 Permanent differences 16,000 0.3 18,000 0.3 State tax, net of federal benefit (110,000 ) (2.0 ) (126,000 ) (1.8 ) Other, net (33,000 ) (0.6 ) (26,000 ) (0.4 ) Effective tax rate $ — — % $ — — % |
Schedule of Tax Effects of Temporary Differences to Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to deferred tax assets and liabilities at September 30, 2018 and 2017 are presented below: 2018 2017 Deferred tax assets: Inventories $ 1,029,000 $ 1,543,000 Accrued compensation 348,000 539,000 Warranty accrual 79,000 150,000 Depreciation 61,000 100,000 Allowance for doubtful accounts receivable 149,000 320,000 Unearned revenue 183,000 237,000 U.S. net operating loss carryforwards 7,349,000 8,794,000 Foreign net operating loss carryforwards 2,277,000 1,916,000 Tax credits 989,000 989,000 Other 1,011,000 1,181,000 Gross deferred tax assets 13,475,000 15,769,000 Deferred tax liabilities: Other 38,000 64,000 Gross deferred tax liabilities 38,000 64,000 Total deferred tax assets and liabilities 13,437,000 15,705,000 Less valuation allowance (13,437,000 ) (15,705,000 ) Net deferred tax assets and liabilities $ — $ — |
Schedule of Unrecognized Tax Benefits Activity | Unrecognized tax benefits activity for the years ended September 30, 2018 and 2017 is summarized below: 2018 2017 Beginning balance $ 45,000 $ 45,000 Additions (reductions) based on tax positions related to prior years — — Additions (reductions) based on tax positions related to the current year — — Ending balance $ 45,000 $ 45,000 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | The accumulated other comprehensive loss balances at September 30, 2018 and 2017 consisted of the following: 2018 2017 Foreign currency translation adjustment $ (222,685 ) $ (155,491 ) Unrealized loss on marketable securities (1,067 ) (559 ) Accumulated other comprehensive loss $ (223,752 ) $ (156,050 ) |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Net Sales and Long-lived Assets Related to Operations by Geographical Areas | Net sales and long-lived assets related to operations in the United States and other foreign countries for the fiscal years ended September 30, 2018 and 2017 are as follows: 2018 2017 Net sales U.S. $ 23,048,392 $ 21,698,526 Foreign 4,684,975 4,953,105 Total $ 27,733,367 $ 26,651,631 Long-lived assets U.S. $ 154,218 $ 271,258 Foreign 101,513 130,440 Total $ 255,731 $ 401,698 |
Long-Term Equity Incentive Pl_2
Long-Term Equity Incentive Plans (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Schedule of Changes in Outstanding Stock Options and Outstanding SARs | Changes in outstanding stock options for the two years ended September 30, 2018 are as follows: Number of Options Weighted Average Exercise Weighted Average Remaining Contractual Aggregate Intrinsic Value Outstanding at September 30, 2016 536,230 $ 3.31 Options granted — — Options exercised — — Options forfeited (80,497 ) 2.86 Outstanding at September 30, 2017 455,733 3.39 Options granted — — Options exercised — — Options forfeited (148,291 ) 3.76 Outstanding at September 30, 2018 307,442 $ 3.19 3.2 $ — Exercisable at September 30, 2018 295,192 $ 3.26 3.0 $ — |
Stock Appreciation Rights (SARs) [Member] | |
Schedule of Changes in Outstanding Stock Options and Outstanding SARs | Changes in outstanding SARs for the two years ended September 30, 2018 are as follows: Number of SARs Weighted Average Base Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding at September 30, 2016 80,796 $ 3.08 SARs granted — — SARs exercised — — SARs forfeited — — Outstanding at September 30, 2017 80,796 $ 3.08 SARs granted — — SARs exercised — — SARs forfeited (80,796 ) $ 3.08 Outstanding at September 30, 2018 — — 0.0 — Exercisable at September 30, 2018 — — 0.0 — |
Loss Per Share (Tables)
Loss Per Share (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Loss per share: | |
Schedule of Components of Basic and Diluted Loss Per Share (EPS) Computations | The following table provides the components of the basic and diluted loss per share (EPS) computations: 2018 2017 Basic EPS Computation Net loss $ (5,409,147 ) $ (7,011,580 ) Weighted average shares outstanding 16,700,413 9,348,388 Basic loss per share $ (.32 ) $ (.75 ) Diluted EPS Computation Net loss $ (5,409,147 ) $ (7,011,580 ) Weighted average shares outstanding 16,700,413 9,348,388 Stock options — — Stock compensation arrangements — — Diluted shares outstanding 16,700,413 9,348,388 Diluted loss per share $ (.32 ) $ (.75 ) |
Credit and Term Loan Agreemen_2
Credit and Term Loan Agreements (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Fair Value of Warrants Using Black-Scholes Valuation Model and Straight-line Attribution Using Weighted Average Assumptions | The fair value for the warrants was determined at the date of issuance using the Black-Scholes valuation model and the straight-line attribution approach using the following weighted average assumptions (see Note 1 for further discussion of Black Scholes valuation method): 2017 Risk-free interest rate 1.4 % Dividend yield 0.0 % Volatility factor 125.6 % Weighted average expected life 3.0 years |
Schedule of Changes in Outstanding Warrants | Changes in outstanding warrants for the two years ended September 30, 2018 are as follows: Warrants Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding at September 30, 2016 — — Warrants granted 1,500,000 $ 0.40 Warrants exercised — — Warrants forfeited — — Outstanding at September 30, 2017 1,500,000 — Warrants granted — — Warrants exercised — — Warrants forfeited — — Outstanding at September 30, 2018 1,500,000 $ 0.40 1.6 $ — Exercisable at September 30, 2018 1,500,000 $ 0.40 1.6 $ — |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Dec. 22, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Marketable securities | $ 13,440 | $ 13,555 | |
Marketable securities, available-for-sale, cost | 14,507 | 14,114 | |
Marketable securities, available-for-sale, cumulative unrealized losses | (1,067) | (559) | |
Depreciation and amortization expense | 197,555 | 528,596 | |
Intangible asset impairment | 838,500 | ||
Product engineering and development expense | 4,145,318 | 4,811,465 | |
Foreign currency translation adjustment | $ (222,685) | $ (155,491) | |
Effective income tax rate description | On December 22, 2017, new tax legislation came into effect. The provisions are generally effective for years beginning on or after January 1, 2018. The most impactful item to the Company in the new law is the change in tax rate from 34% to 21%. This reduced the gross US deferred tax assets prior to existing full valuation allowance from an effective rate of 38% to an effective rate of 25.75%. | ||
Federal statutory income tax rate | 24.50% | 34.00% | |
Non-cash compensation expense | $ 23,053 | $ 42,071 | |
Non-cash compensation expense per share | $ .00 | $ .00 | |
Federal [Member] | |||
Federal statutory income tax rate | 21.00% | ||
Change in rate of gross deferred tax assets valuation allowance | 38.00% | 25.75% | |
Property, Plant and Equipment [Member] | |||
Depreciation and amortization expense | $ 196,075 | $ 259,116 | |
Minimum [Member] | |||
Estimated useful life | 2 years | ||
Maximum [Member] | |||
Estimated useful life | 10 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Changes in Warranty Liability (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Accounting Policies [Abstract] | ||
Balance at beginning of year | $ 431,000 | $ 681,000 |
Provision for warranties | 139,000 | 124,000 |
Expenses incurred | (216,000) | (374,000) |
Balance at end of year | $ 354,000 | $ 431,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Income (loss) from continuing operations before income taxes, domestic | $ (3,604,000) | $ (5,309,000) |
Income (loss) from continuing operations before income taxes, foreign | $ (1,805,000) | $ (1,703,000) |
Income tax description | U.S. federal corporate income tax rate from 34% to 21%. In addition, net operating losses generated subsequent to the Tax Act can only be used to offset 80% of taxable income with an indefinite carryforward period for unused carryforwards. | |
Federal corporate income tax rate | 24.50% | 34.00% |
Foreign [Member] | ||
Net operating loss carryforward | $ 1,050,000 | |
Federal [Member] | ||
Federal corporate income tax rate | 21.00% | |
U.S. [Member] | ||
Net operating loss carryforward | $ 2,870,000 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Tax Rate Reconciliation (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||
U.S. statutory tax, Amount | $ (1,325,000) | $ (2,384,000) |
(Decrease) increase in valuation allowance, Amount | (3,030,000) | 2,280,000 |
Impact of federal rate change on deferred tax balances, Amount | 4,410,000 | |
Foreign tax rate differences, Amount | 72,000 | 238,000 |
Permanent differences, Amount | 16,000 | 18,000 |
State tax, net of federal benefit, Amount | (110,000) | (126,000) |
Other, net, Amount | (33,000) | (26,000) |
Effective tax rate, Amount | ||
U.S. statutory tax, Percent | (24.50%) | (34.00%) |
(Decrease) increase in valuation allowance, Percent | (56.00%) | 32.50% |
Impact of federal rate change on deferred tax balances, Percent | 81.50% | 0.00% |
Foreign tax rate differences, Percent | 1.30% | 3.40% |
Permanent differences, Percent | 0.30% | 0.30% |
State tax, net of federal benefit, Percent | (2.00%) | (1.80%) |
Other, net, Percent | (0.60%) | (0.40%) |
Effective tax rate, Percent | 0.00% | 0.00% |
Income Taxes - Schedule of Tax
Income Taxes - Schedule of Tax Effects of Temporary Differences to Deferred Tax Assets and Liabilities (Details) - USD ($) | Sep. 30, 2018 | Sep. 30, 2017 |
Income Tax Disclosure [Abstract] | ||
Deferred tax assets, Inventories | $ 1,029,000 | $ 1,543,000 |
Deferred tax assets, Accrued compensation | 348,000 | 539,000 |
Deferred tax assets, Warranty accrual | 79,000 | 150,000 |
Deferred tax assets, Depreciation | 61,000 | 100,000 |
Deferred tax assets, Allowance for doubtful accounts receivable | 149,000 | 320,000 |
Deferred tax assets, Unearned revenue | 183,000 | 237,000 |
Deferred tax assets, U.S. net operating loss carryforwards | 7,349,000 | 8,794,000 |
Deferred tax assets, Foreign net operating loss carryforwards | 2,277,000 | 1,916,000 |
Deferred tax assets, Tax credits | 989,000 | 989,000 |
Deferred tax assets, Other | 1,011,000 | 1,181,000 |
Deferred tax assets, Gross deferred tax assets | 13,475,000 | 15,769,000 |
Deferred tax liabilities, Other | 38,000 | 64,000 |
Deferred tax liabilities, Gross deferred tax liabilities | 38,000 | 64,000 |
Deferred tax liabilities, Total deferred tax assets and liabilities | 13,437,000 | 15,705,000 |
Deferred tax liabilities, Less valuation allowance | (13,437,000) | (15,705,000) |
Deferred tax liabilities, Net deferred tax assets and liabilities |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits Activity (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||
Beginning balance | $ 45,000 | $ 45,000 |
Additions (reductions) based on tax positions related to prior years | ||
Additions (reductions) based on tax positions related to the current year | ||
Ending balance | $ 45,000 | $ 45,000 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Schedule of Accumulated Other Comprehensive Loss (Details) - USD ($) | Sep. 30, 2018 | Sep. 30, 2017 |
Equity [Abstract] | ||
Foreign currency translation adjustment | $ (222,685) | $ (155,491) |
Unrealized loss on marketable securities | (1,067) | (559) |
Accumulated other comprehensive loss | $ (223,752) | $ (156,050) |
Segment and Geographic Inform_3
Segment and Geographic Information (Details Narrative) | 12 Months Ended | |
Sep. 30, 2018USD ($)Integer | Sep. 30, 2017USD ($) | |
Segment Reporting [Abstract] | ||
Number of operating segment | Integer | 1 | |
Revenues from foreign external customers | $ | $ 3,384,619 | $ 3,333,429 |
Segment and Geographic Inform_4
Segment and Geographic Information - Schedule of Net Sales and Long-lived Assets Related to Operations by Geographical Areas (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Net sales | $ 27,733,367 | $ 26,651,631 |
Long-lived assets | 255,731 | 401,698 |
Foreign [Member] | ||
Net sales | 4,684,975 | 4,953,105 |
Long-lived assets | 101,513 | 130,440 |
U.S. [Member] | ||
Net sales | 23,048,392 | 21,698,526 |
Long-lived assets | $ 154,218 | $ 271,258 |
Long-Term Equity Incentive Pl_3
Long-Term Equity Incentive Plans (Details Narrative) | 12 Months Ended |
Sep. 30, 2018USD ($)shares | |
Share based compensation stock option award | 644,851 |
Unrecognized compensation cost | $ | $ 13,404 |
Share based compensation weighted Average Remaining Contractual Term | 6 months |
Stock Appreciation Rights [Member] | |
Share based compensation stock option award | 330,848 |
Long-Term Equity Incentive Pl_4
Long-Term Equity Incentive Plans - Schedule of Changes in Outstanding Stock Options and Outstanding SARs (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Number of Options and SARs Outstanding, beginning balance | 455,733 | 536,230 |
Number of Options and SARs, granted | ||
Number of Options and SARs, exercised | ||
Number of Options and SARs, forfeited | (148,291) | (80,497) |
Number of Options and SARs Outstanding, ending balance | 307,442 | 455,733 |
Number of Options and SARs, Exercisable | 295,192 | |
Weighted Average Exercise Price Options and SARs Outstanding, beginning balance | $ 3.39 | $ 3.31 |
Weighted Average Exercise Price Options and SARs, granted | ||
Weighted Average Exercise Price Options and SARs, exercised | ||
Weighted Average Exercise Price Options and SARs, forfeited | 3.76 | 2.86 |
Weighted Average Exercise Price Options and SARs Outstanding, ending balance | 3.19 | $ 3.39 |
Weighted Average Exercise Price Options and SARs, Exercisable | $ 3.26 | |
Weighted Average Remaining Contractual Term (in years) Options and SARs, Outstanding ending | 3 years 2 months 12 days | |
Weighted Average Remaining Contractual Term (in years) Options and SARs, Exercisable ending | 3 years | |
Aggregate Intrinsic Value Options and SARs, Outstanding | ||
Aggregate Intrinsic Value Options and SARs, Exercisable | ||
Stock Appreciation Rights (SARs) [Member] | ||
Number of Options and SARs Outstanding, beginning balance | 80,796 | 80,796 |
Number of Options and SARs, granted | ||
Number of Options and SARs, exercised | ||
Number of Options and SARs, forfeited | (80,796) | |
Number of Options and SARs Outstanding, ending balance | 80,796 | |
Number of Options and SARs, Exercisable | ||
Weighted Average Exercise Price Options and SARs Outstanding, beginning balance | $ 3.08 | $ 3.08 |
Weighted Average Exercise Price Options and SARs, granted | ||
Weighted Average Exercise Price Options and SARs, exercised | ||
Weighted Average Exercise Price Options and SARs, forfeited | 3.08 | |
Weighted Average Exercise Price Options and SARs Outstanding, ending balance | $ 3.08 | |
Weighted Average Exercise Price Options and SARs, Exercisable | ||
Weighted Average Remaining Contractual Term (in years) Options and SARs, Outstanding ending | 0 years | |
Weighted Average Remaining Contractual Term (in years) Options and SARs, Exercisable ending | 0 years | |
Aggregate Intrinsic Value Options and SARs, Outstanding | ||
Aggregate Intrinsic Value Options and SARs, Exercisable |
Loss Per Share (Details Narrati
Loss Per Share (Details Narrative) - shares | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Loss per share: | ||
Antidilutive securities excluded from computation of earnings per share | 1,814,003 | 2,043,090 |
Loss Per Share - Schedule of Co
Loss Per Share - Schedule of Components of Basic and Diluted Loss Per Share (EPS) Computations (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Loss per share: | ||
Net loss | $ (5,409,147) | $ (7,011,580) |
Basic EPS Computation, Weighted average shares outstanding | 16,700,413 | 9,348,388 |
Basic EPS Computation, Basic loss per share | $ (0.32) | $ (0.75) |
Diluted EPS Computation, Weighted average shares outstanding | 16,700,413 | 9,348,388 |
Diluted EPS Computation, Stock options | ||
Diluted EPS Computation, Stock compensation arrangements | ||
Diluted EPS Computation, Diluted shares outstanding | 16,700,413 | 9,348,388 |
Diluted EPS Computation, Diluted loss per share | $ (0.32) | $ (0.75) |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating lease expiration, description | The Company leases vehicles and occupies certain facilities under operating leases that expire at various dates through 2021. The leases, which cover periods from three to eight years, generally provide for renewal options at specified rental amounts. | |
Operating lease rental payments | $ 893,000 | |
Rent expense | 626,183 | $ 696,114 |
Contingent liability estimation | 1,700,000 | |
Liability under employment agreements | 1,000,000 | |
Amortization of liability under employment agreements | $ 38,000 | $ 38,000 |
Number of share in deferred compensation benefit | 6,561 | |
Market value of shares | $ 20,000 | |
2019 [Member] | ||
Operating lease rental payments | 655,000 | |
Unamortized expense under deferred compensation benefit | 1,000 | |
2020 [Member] | ||
Operating lease rental payments | 181,000 | |
2021 [Member] | ||
Operating lease rental payments | $ 57,000 |
Credit and Term Loan Agreemen_3
Credit and Term Loan Agreements (Details Narrative) - USD ($) | Sep. 30, 2018 | Sep. 21, 2018 | Apr. 20, 2017 | Aug. 18, 2016 | Mar. 04, 2016 | Jun. 30, 2018 | Sep. 30, 2017 |
Accounts receivable current | $ 3,915,108 | $ 4,349,733 | |||||
Credit Agreement [Member] | NIL Funding Corporation [Member] | |||||||
Revolving line of credit | $ 3,000,000 | ||||||
Revolving line of credit interest rate | 6.75% | ||||||
Commitment fee percentage | 5.00% | ||||||
Amended and Restated Credit Agreement [Member] | NIL Funding Corporation [Member] | |||||||
Revolving line of credit | $ 3,000,000 | ||||||
Commitment fee percentage | 5.00% | ||||||
Increase decrease revolving line of credit | $ 6,000,000 | ||||||
Revolving line of credit maturity date | Oct. 2, 2018 | ||||||
Accounts receivable current | $ 4,000,000 | ||||||
Commitment fee amount | 60,000 | ||||||
Amended and Restated Credit Agreement [Member] | NIL Funding Corporation [Member] | 6.95% Interest Rate [Member] | |||||||
Revolving line of credit | $ 4,000,000 | ||||||
Revolving line of credit interest rate | 6.95% | ||||||
Amended and Restated Credit Agreement [Member] | NIL Funding Corporation [Member] | 8.25% Interest Rate [Member] | |||||||
Revolving line of credit | $ 2,000,000 | ||||||
Revolving line of credit interest rate | 8.25% | ||||||
Second Amended and Restated Credit Agreement [Member] | NIL Funding Corporation [Member] | |||||||
Revolving line of credit | $ 6,000,000 | ||||||
Increase decrease revolving line of credit | $ 2,000,000 | ||||||
Revolving line of credit maturity date | Apr. 2, 2019 | ||||||
Line of credit facility additional borrowing | $ 2,000,000 | ||||||
Warrant rights to purchase | 1,500,000 | ||||||
Warrant term | 3 years | ||||||
Common stock price per share | $ .40 | ||||||
Fair value of warrant issuance | $ 438,000 | ||||||
Deferred warrant issuance costs | $ 108,000 | $ 339,000 | |||||
Debt fee | $ 29,000 | ||||||
Term Loan Agreement [Member] | |||||||
Commitment fee percentage | 8.85% | ||||||
Debt fee | $ 81,000 | ||||||
Principal repayments of 2019 | 150,000 | ||||||
Principal repayments of 2020 | $ 5,450,000 | ||||||
Term Loan Agreement [Member] | NIL Funding Corporation [Member] | |||||||
Revolving line of credit | $ 5,600,000 | ||||||
Revolving line of credit maturity date | Mar. 30, 2020 | ||||||
Revolving line of credit outstanding amount | $ 5,800,000 | ||||||
Revolving line of credit remaining borrowing capacity paid | 200,000 | ||||||
Principal payment of line of credit | $ 25,000 |
Credit and Term Loan Agreemen_4
Credit and Term Loan Agreements - Schedule of Fair Value of Warrants Using Black-Scholes Valuation Model and Straight-line Attribution Using Weighted Average Assumptions (Details) - Warrant [Member] | 12 Months Ended |
Sep. 30, 2017 | |
Risk-free interest rate | 1.40% |
Dividend yield | 0.00% |
Volatility factor | 125.60% |
Weighted average expected life | 3 years |
Credit and Term Loan Agreemen_5
Credit and Term Loan Agreements - Schedule of Changes in Outstanding Warrants (Details) - Warrant [Member] - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Number of Warrants, Outstanding | 1,500,000 | |
Number of Warrants, Granted | 1,500,000 | |
Number of Warrants, Exercised | ||
Number of Warrants, Forfeited | ||
Number of Warrants, Outstanding | 1,500,000 | 1,500,000 |
Number of Warrants, Exercisable | 1,500,000 | |
Weighted Average Exercise Price, Outstanding | ||
Weighted Average Exercise Price, Granted | 0.40 | |
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price, Forfeited | ||
Weighted Average Exercise Price, Outstanding | 0.40 | |
Weighted Average Exercise Price, Exercisable | $ 0.40 | |
Weighted Average Remaining Contractual Term (in years), Outstanding | 1 year 7 months 6 days | |
Weighted Average Remaining Contractual Term (in years), Exercisable | 1 year 7 months 6 days | |
Aggregate Intrinsic Value, Outstanding | ||
Aggregate Intrinsic Value, Exercisable |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - Research and Development Services Agreement [Member] - USD ($) | Sep. 30, 2018 | Sep. 30, 2017 |
Cemtrex Inc [Member] | ||
Revenue from related parties | $ 356,066 | |
Non controlling interest owned by related party | 46.00% | |
Shezhen Infinova Limited [Member] | ||
Revenue from related parties | $ 18,000 | |
Non controlling interest owned by related party | 5.80% | |
Related party transaction amount | $ 3,100,000 | |
Due to related parties | 690,000 | |
Due from related parties | $ 14,000 |
Going Concern and Liquidity (De
Going Concern and Liquidity (Details Narrative) | Sep. 30, 2018USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Cash | $ 2,000,000 |
Rights Offering and Investmen_2
Rights Offering and Investment Agreement (Details Narrative) - USD ($) | Mar. 31, 2018 | Nov. 08, 2017 | Nov. 07, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Proceeds from issuance of public offering | $ 3,056,981 | ||||
Stock Issued during period value | $ 3,056,981 | ||||
Common Stock [Member] | |||||
Proceeds from issuance of public offering | $ 282,000 | ||||
Number of common stock issued | 704,235 | 8,204,235 | |||
Stock Issued during period value | $ 82,043 | ||||
Common Stock [Member] | NIL Funding Corporation [Member] | |||||
Number of common stock issued | 7,284,824 | 7,500,000 | |||
Stock Issued during period value | $ 3,000,000 | ||||
Held for warrant | 1,500,000 |