Vicon Industries (VCON) 10-Q 23 May 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information Document - shares	6 Months Ended
	Mar. 31, 2016	May. 13, 2016
Entity Information [Line Items]
Entity Registrant Name	VICON INDUSTRIES INC /NY/
Entity Central Index Key	310,056
Current Fiscal Year End Date	--09-30
Entity Filer Category	Smaller Reporting Company
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		9,341,038

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2016	Sep. 30, 2015
CURRENT ASSETS
Cash and cash equivalents	$ 2,171,510	$ 2,390,409
Marketable securities	13,294	13,047
Accounts receivable, net	6,290,603	10,816,348
Inventories:
Parts, components, and materials	2,113,258	2,074,389
Work-in-process	951,539	981,878
Finished products	6,091,047	5,557,556
Inventory net	9,155,844	8,613,823
Prepaid expenses and other current assets	762,168	501,497
Assets Held-for-sale, Long Lived, Fair Value Disclosure	0	800,902
TOTAL CURRENT ASSETS	18,393,419	23,136,026
Property, plant and equipment	5,867,498	5,812,517
Less accumulated depreciation and amortization	(5,231,399)	(5,117,570)
Property, Plant and Equipment Net	636,099	694,947
Goodwill	0	6,016,469
Intangible assets, net	3,344,167	3,602,667
Other assets	745,862	722,022
TOTAL ASSETS	23,119,547	34,172,131
CURRENT LIABILITIES
Accounts payable	4,543,208	5,688,424
Accrued compensation and employee benefits	2,114,184	2,923,474
Accrued expenses	1,412,854	1,653,333
Unearned revenue	353,300	829,138
TOTAL CURRENT LIABILITIES	8,423,546	11,094,369
Unearned revenue	73,228	104,779
Other long-term liabilities	1,516,402	1,508,801
TOTAL LIABILITIES	10,013,176	12,707,949
SHAREHOLDERS’ EQUITY
Common stock, par value $.01	100,375	100,109
Capital in excess of par value	40,734,436	40,972,206
Retained earnings	(23,986,483)	(15,350,975)
Less treasury stock, at cost	(3,437,643)	(3,979,852)
Accumulated other comprehensive loss	(304,314)	(277,306)
TOTAL SHAREHOLDERS’ EQUITY	13,106,371	21,464,182
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 23,119,547	$ 34,172,131

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Document Period End Date			Mar. 31, 2016
Net sales	$ 7,998,124	$ 10,269,129	$ 18,878,680	$ 20,445,575
Cost of sales	5,359,153	6,364,110	11,968,535	12,769,865
Gross profit	2,638,971	3,905,019	6,910,145	7,675,710
Operating expenses:
Selling, general and administrative expense	3,726,200	4,084,681	7,656,350	8,382,570
Engineering & development expense	1,339,658	1,225,405	2,658,054	2,531,982
Goodwill, Impairment Loss	6,016,469	0	6,016,469	0
Restructuring Charges	0	224,127	0	572,913
Operating Expenses	11,082,327	5,534,213	16,330,873	11,487,465
Operating loss	(8,443,356)	(1,629,194)	(9,420,728)	(3,811,755)
Gain (Loss) on Disposition of Assets	784,896	0	784,896	0
Interest income	160	247	324	1,373
Other expense	0	(140,853)	0	(140,853)
Loss before income taxes	(7,658,300)	(1,769,800)	(8,635,508)	(3,951,235)
Income tax expense	0	0	0	0
Net loss	$ (7,658,300)	$ (1,769,800)	$ (8,635,508)	$ (3,951,235)
Loss per share:
Earnings Per Share, Basic	$ (0.82)	$ (0.19)	$ (0.92)	$ (0.43)
Earnings Per Share, Diluted	$ (0.82)	$ (0.19)	$ (0.92)	$ (0.43)
Weighted average shares outstanding:
Basic	9,341,038	9,153,651	9,335,880	9,126,581
Diluted	9,341,038	9,153,651	9,335,880	9,126,581

Condensed Consolidated Stateme4

Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Net loss	$ (7,658,300)	$ (1,769,800)	$ (8,635,508)	$ (3,951,235)
Other comprehensive income (loss):
Unrealized loss on securities, net of tax	159	1,645	74	2,994
Foreign currency translation adjustment	(184,391)	62,518	27,082	207,747
Other comprehensive loss	(184,232)	(60,873)	(27,008)	(204,753)
Comprehensive loss	$ (7,842,532)	$ (1,830,673)	$ (8,662,516)	$ (4,155,988)

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Document Period End Date	Mar. 31, 2016
Cash flows from operating activities:
Net loss	$ (8,635,508)	$ (3,951,235)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Goodwill, Impairment Loss	6,016,469	0
Gain (Loss) on Disposition of Assets	(784,896)	0
Depreciation and amortization	425,565	313,089
Amortization of deferred compensation	742	2,170
Stock compensation expense	298,778	311,345
Change in assets and liabilities:
Accounts receivable, net	4,407,978	(189,953)
Inventories	(623,947)	(519,285)
Prepaid expenses and other current assets	(271,183)	(297,793)
Other assets	(23,840)	185,103
Accounts payable	(1,073,879)	(939,806)
Accrued compensation and employee benefits	(796,443)	(361,711)
Accrued expenses	(233,268)	(467,230)
Unearned revenue	(507,389)	487,204
Other liabilities	11,443	23,575
Net cash provided by (used in)	(1,789,378)	(5,404,527)
Cash flows from investing activities:
Proceeds from sale of building, net	1,512,320	3,325,000
Increase (Decrease) in Trading Securities	(173)	110,311
Payments to Acquire Property, Plant, and Equipment	(112,619)	(105,272)
Net Cash Provided by (Used in) Investing Activities	1,399,528	3,330,039
Net Cash Provided by (Used in) Financing Activities [Abstract]
Proceeds from Stock Options Exercised	5,184	48,106
Net Cash Provided by (Used in) Financing Activities	5,184	48,106
Effect of Exchange Rate on Cash and Cash Equivalents	165,767	(114,266)
Cash and Cash Equivalents, Period Increase (Decrease)	(218,899)	(2,140,648)
Cash at beginning of year	2,390,409	$ 2,390,409
Cash at end of period	$ 2,171,510

Basis of Presentation

Basis of Presentation	6 Months Ended
	Mar. 31, 2016
Basis of Presentation [Abstract]
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]	Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ended September 30, 2016 . For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the fiscal year ended September 30, 2015 .

Marketable Securities

Marketable Securities	6 Months Ended
	Mar. 31, 2016
Marketable Securities [Abstract]
Cash, Cash Equivalents, and Marketable Securities [Text Block]	Marketable Securities Marketable securities consist of mutual fund investments principally in federal, state and local government debt securities of $13,294 as of March 31, 2016 . 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 the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 320, with unrealized gains and losses reported in accumulated other comprehensive loss as a component of shareholders’ equity. The cost of such securities at March 31, 2016 was $13,528 , with $234 of cumulative unrealized losses reported at March 31, 2016 .

Accounts Receivable

Accounts Receivable	6 Months Ended
	Mar. 31, 2016
Accounts Receivable [Abstract]
Schedule of Valuation and Qualifying Accounts Disclosure [Text Block]	Accounts Receivable Accounts receivable is stated net of an allowance for uncollectible accounts of $979,000 and $993,000 as of March 31, 2016 and September 30, 2015 , respectively.

Loss per Share

Loss per Share	6 Months Ended
	Mar. 31, 2016
Loss per Share [Abstract]
Earnings Per Share [Text Block]	Loss per Share Basic loss per share (EPS) is computed based on the weighted average number of common shares outstanding for the period. Diluted EPS reflects the maximum dilution that would have resulted from incremental common shares issuable upon the exercise of stock options and under deferred compensation agreements. The following tables provide the components of the basic and diluted EPS computations for the three and six month periods ended March 31, 2016 and 2015 : Three Months Ended Six Months Ended March 31, March 31, 2016 2015 2016 2015 Basic EPS Computation Net loss $ (7,658,300 ) $ (1,769,800 ) $ (8,635,508 ) $ (3,951,235 ) Weighted average shares outstanding 9,341,038 9,153,651 9,335,880 9,126,581 Basic loss per share $ (.82 ) $ (.19 ) $ (.92 ) $ (.43 ) Three Months Ended Six Months Ended March 31, March 31, 2016 2015 2016 2015 Diluted EPS Computation Net loss $ (7,658,300 ) $ (1,769,800 ) $ (8,635,508 ) $ (3,951,235 ) Weighted average shares outstanding 9,341,038 9,153,651 9,335,880 9,126,581 Stock options — — — — Stock compensation arrangements — — — — Diluted shares outstanding 9,341,038 9,153,651 9,335,880 9,126,581 Diluted loss per share $ (.82 ) $ (.19 ) $ (.92 ) $ (.43 ) For the for the three and six month periods ended March 31, 2016 and 2015 , all outstanding stock options and shares issuable under stock compensation arrangements totaling 670,300 and 686,858 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.

Accumulated Other Comprehensive

Accumulated Other Comprehensive Loss	6 Months Ended
	Mar. 31, 2016
Comprehensive Loss [Abstract]
Comprehensive Income (Loss) Note [Text Block]	Accumulated Other Comprehensive Loss The Company's accumulated other comprehensive loss balances at March 31, 2016 and September 30, 2015 consisted of the following: March 31, 2016 September 30, 2015 Foreign currency translation adjustment $ (304,080 ) $ (276,998 ) Unrealized loss on marketable securities (234 ) (308 ) Accumulated other comprehensive loss $ (304,314 ) $ (277,306 )

Goodwill and Intangible Assets

Goodwill and Intangible Assets	6 Months Ended
	Mar. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Intangible Assets Disclosure [Text Block]	The Company’s goodwill represents the excess of the purchase price over the fair value of net identifiable assets acquired in the August 29, 2014 IQinVision business combination. Goodwill is not amortized and is tested for impairment on an annual basis during the Company's fourth quarter, or more frequently if circumstances indicate impairment might exist. Goodwill is evaluated for impairment through the comparison of fair value of reporting units to their carrying values. When evaluating goodwill for impairment, the Company may first perform an assessment of qualitative factors to determine if the fair value of the reporting unit is more-likely-than-not greater than its carrying amount. This qualitative assessment is referred to as a "step zero" approach. If, based on the review of the qualitative factors, the Company determines it is not more-likely-than-not that the fair value of a reporting unit is less than its carrying value, the required two-step impairment test can be bypassed. If the Company does not perform a qualitative assessment or if the fair value of the reporting unit is not more-likely-than-not greater than its carrying value, the Company must perform the first step of the two-step impairment test, and calculate the estimated fair value of the reporting unit. If the carrying value of the reporting unit exceeds the estimated fair value, there is an indication that impairment may exist and the second step must be performed to measure the amount of impairment. The amount of impairment is determined by comparing the implied fair value of the reporting unit goodwill to the carrying value of the goodwill in the same manner as if the reporting unit was being acquired in a business combination. If the implied fair value of goodwill is less than the recorded goodwill, an impairment loss for the difference would be recorded. In considering the step zero approach to testing goodwill for impairment, a qualitative analysis is performed evaluating factors including, but not limited to, macro-economic conditions, market and industry conditions, internal cost factors, competitive environment, share price fluctuations, results of past impairment tests, and the operational stability and the overall financial performance of the reporting units. The Company conducted an impairment test at March 31, 2016 using the income approach and determined that its goodwill carrying value was fully impaired. As a result, the Company recorded an impairment charge of $6.0 million in the quarter ended March 31, 2016. This noncash charge was principally based upon an updated assessment of the Company's continuing depressed market valuation and operating losses. The components and estimated useful lives of intangible assets as of March 31, 2016 and September 30, 2015 are stated below. Amortization is provided on a straight line method, or in the case of customer relationships, on an accelerated method, over the following estimated useful lives: March 31, 2016 September 30, 2015 Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization Estimated Useful Life Definite-lived intangibles: Technology $ 2,500,000 $ 395,833 $ 2,500,000 $ 270,833 10 years Customer relationships 910,000 260,333 910,000 148,833 7 years Tradenames 660,000 69,667 660,000 47,667 15 years $ 4,070,000 $ 725,833 $ 4,070,000 $ 467,333 The activity in the goodwill balance consists of the following: Balance at October 1, 2013 $ — Acquisition of IQinVision 6,016,469 Balance at September 30, 2014 6,016,469 Changes in Goodwill — Balance at September 30, 2015 6,016,469 Goodwill impairment (6,016,469 ) Balance at March 31, 2016 $ — Amortization expense was $129,250 and $258,500 for the three and six month periods ended March 31, 2016 . Future amortization expense for intangible assets over the next five years ending September 30 and thereafter is summarized as follows: Fiscal Year Amount Remainder of 2016 $ 258,500 2017 518,000 2018 427,000 2019 373,000 2020 341,000 Thereafter $ 1,426,667

Stock Based Compensation

Stock Based Compensation	6 Months Ended
	Mar. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]	Stock-Based Compensation The Company maintains stock option plans that include both incentive and non-qualified options reserved for issuance to key employees, including officers and directors. All options are issued at fair market value at the grant date and are exercisable in varying installments according to the plans. 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. The Company follows ASC 718 (“Share-Based Payment”), which requires that all share based payments to employees, including stock options, be recognized as compensation expense in the consolidated financial statements based on their grant date fair values and over the requisite service period. For the three month periods ended March 31, 2016 and 2015 , the Company recorded non-cash compensation expense of $145,580 and $164,515 , respectively ( $.02 and $.02 per basic and diluted share, respectively), relating to stock compensation. For the six month periods ended March 31, 2016 and 2015 , the Company recorded non-cash compensation expense of $298,778 and $311,345 , respectively ( $.03 and $.03 per basic and diluted share, respectively), relating to stock compensation.

Recent Accounting Pronouncement

Recent Accounting Pronouncements	6 Months Ended
	Mar. 31, 2016
Recent Accounting Pronouncements [Abstract]
Description of New Accounting Pronouncements Not yet Adopted [Text Block]	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 2019; early adoption is not permitted prior to 2018. The Company has not yet evaluated the impact of this guidance on the Company's financial condition, results of operations and related disclosures. In August 2014, the FASB issued guidance on management's responsibility in evaluating whether there is substantial doubt about a company's ability to continue as a going concern and related footnote disclosures. Management will be required to evaluate, at each reporting period, whether there are conditions or events that raise substantial doubt about a company's ability to continue as a going concern within one year from the date the financial statements are issued. This guidance is effective prospectively for annual and interim reporting period beginning in 2017. The Company has not yet evaluated the impact of this guidance on the Company’s financial condition, results of operations and related disclosures. 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. 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 in fiscal 2019. The Company has not yet evaluated the impact of this guidance on the Company's financial condition, results of operations and related disclosures.

Income Taxes

Income Taxes	6 Months Ended
	Mar. 31, 2016
Income Taxes [Abstract]
Income Tax Disclosure [Text Block]	Income Taxes 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. The Company has a valuation allowance against its deferred tax assets due to the uncertainty of future realization. The full valuation allowance is determined to be appropriate due to the Company's 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. At September 30, 2015, the Company had $11.1 million of unrecognized net deferred tax assets available, which includes approximately $7.0 million of tax effected U.S. and foreign net operating loss carryforwards. 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. The annual limitation on utilization of the Company's U.S. net operating loss carryforwards is presently estimated at $500,000 based on a preliminary entity valuation. The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits in income tax expense. 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 in such jurisdictions for fiscal years prior to 2011 in the U.S. and 2009 in the U.K., Germany and Israel.

Fair Value

Fair Value	6 Months Ended
	Mar. 31, 2016
Fair Value [Abstract]
Fair Value Disclosures [Text Block]	Fair Value 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 and other receivables and accounts payable approximate fair value due to the short-term maturity of these instruments. 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.

Restructuring Charges (Notes)

Restructuring Charges (Notes)	6 Months Ended
	Mar. 31, 2016
Restructuring and Related Activities [Abstract]
Restructuring and Related Activities Disclosure [Text Block]	Restructuring Charges Pursuant to the August 29, 2014 IQinVision merger, the Company initiated certain integration and restructuring activities pursuant to an approved plan (the "Plan"). For the three and six month periods ended March 31, 2015, the Company recognized $224,000 and $573,000, respectively, of severance charges in connection with the Plan pursuant to notification of termination benefits to fourteen affected employees. As of March 31, 2016, the Company had paid out approximately $440,000 of such severance. Accounting for restructuring activities, as compared to regular operating cost management activities, requires an evaluation of formally committed and approved plans. Restructuring activities have comparatively greater strategic significance and materiality and may involve exit activities, whereas regular cost containment activities are more tactical in nature and are rarely characterized by formal and integrated action plans or exiting a particular product, facility or service.

Product Warranties (Notes)

Product Warranties (Notes)	6 Months Ended
	Mar. 31, 2016
Product Warranties [Abstract]
Standard Product Warranty, Policy [Policy Text Block]	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 three and six month periods ended March 31, 2016 and 2015 were as follows: Three Months Ended March 31, Six Months Ended March 31, 2016 2015 2016 2015 Balance at beginning of period $ 650,000 $ 837,000 $ 650,000 $ 849,000 Provision for warranties 110,000 121,000 218,000 249,000 Expenses incurred (110,000 ) (122,000 ) (218,000 ) (262,000 ) Balance at end of period $ 650,000 $ 836,000 $ 650,000 $ 836,000

Operating Facility Sale (Notes)

Operating Facility Sale (Notes)	6 Months Ended
	Mar. 31, 2016
Long Lived Assets Held-for-sale [Line Items]
Schedule of Realized Gain (Loss) [Table Text Block]	Operating Facility Sale In January 2016, the Company sold its United Kingdom based operating facility at a gross sales price of $1.5 million. The facility was classified as an asset held for sale in the accompanying consolidated balance sheets as of September 30, 2015. A gain of approximately $785,000 was recognized on the sale in the March 31, 2016 quarter after factoring in selling and transaction costs.

Credit Agreement (Notes)

Credit Agreement (Notes)	6 Months Ended
	Mar. 31, 2016
Line of Credit Facility [Line Items]
Schedule of Line of Credit Facilities [Table Text Block]	Credit Agreement 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 matures in June 2017. The Agreement provides for a borrowing formula 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 Agreement bear interest at a rate of 6.75% per annum. The Agreement also provides for an initial commitment fee of $37,500, which was paid at closing, as well as an unused commitment fee equal to .5% per annum. The Agreement includes provisions that are customarily found in similar financing agreements, but does not include any financial covenants. NIL Funding Corporation is an affiliate of The InterTech Group, whose Executive Vice President and Chief Operating Officer, Julian A. Tiedemann, serves as the Chairman of the Company’s Board of Directors. As of March 31, 2016, there were no outstanding borrowings under the Agreement.

Loss per Share (Tables)

Loss per Share (Tables)	6 Months Ended
	Mar. 31, 2016
Loss per Share [Abstract]
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]	The following tables provide the components of the basic and diluted EPS computations for the three and six month periods ended March 31, 2016 and 2015 : Three Months Ended Six Months Ended March 31, March 31, 2016 2015 2016 2015 Basic EPS Computation Net loss $ (7,658,300 ) $ (1,769,800 ) $ (8,635,508 ) $ (3,951,235 ) Weighted average shares outstanding 9,341,038 9,153,651 9,335,880 9,126,581 Basic loss per share $ (.82 ) $ (.19 ) $ (.92 ) $ (.43 ) Three Months Ended Six Months Ended March 31, March 31, 2016 2015 2016 2015 Diluted EPS Computation Net loss $ (7,658,300 ) $ (1,769,800 ) $ (8,635,508 ) $ (3,951,235 ) Weighted average shares outstanding 9,341,038 9,153,651 9,335,880 9,126,581 Stock options — — — — Stock compensation arrangements — — — — Diluted shares outstanding 9,341,038 9,153,651 9,335,880 9,126,581 Diluted loss per share $ (.82 ) $ (.19 ) $ (.92 ) $ (.43 )

Accumulated Other Comprehensi21

Accumulated Other Comprehensive Loss (Tables)	6 Months Ended
	Mar. 31, 2016
Comprehensive Loss [Abstract]
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]	The Company's accumulated other comprehensive loss balances at March 31, 2016 and September 30, 2015 consisted of the following: March 31, 2016 September 30, 2015 Foreign currency translation adjustment $ (304,080 ) $ (276,998 ) Unrealized loss on marketable securities (234 ) (308 ) Accumulated other comprehensive loss $ (304,314 ) $ (277,306 )

Goodwill and Intangible Assets

Goodwill and Intangible Assets (Tables)	6 Months Ended
	Mar. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Schedule of Goodwill [Table Text Block]	The activity in the goodwill balance consists of the following: Balance at October 1, 2013 $ — Acquisition of IQinVision 6,016,469 Balance at September 30, 2014 6,016,469 Changes in Goodwill — Balance at September 30, 2015 6,016,469 Goodwill impairment (6,016,469 ) Balance at March 31, 2016 $ —
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]	Future amortization expense for intangible assets over the next five years ending September 30 and thereafter is summarized as follows: Fiscal Year Amount Remainder of 2016 $ 258,500 2017 518,000 2018 427,000 2019 373,000 2020 341,000 Thereafter $ 1,426,667
Schedule of Finite-Lived Intangible Assets [Table Text Block]	The components and estimated useful lives of intangible assets as of March 31, 2016 and September 30, 2015 are stated below. Amortization is provided on a straight line method, or in the case of customer relationships, on an accelerated method, over the following estimated useful lives: March 31, 2016 September 30, 2015 Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization Estimated Useful Life Definite-lived intangibles: Technology $ 2,500,000 $ 395,833 $ 2,500,000 $ 270,833 10 years Customer relationships 910,000 260,333 910,000 148,833 7 years Tradenames 660,000 69,667 660,000 47,667 15 years $ 4,070,000 $ 725,833 $ 4,070,000 $ 467,333

Product Warranties (Tables)

Product Warranties (Tables)	6 Months Ended
	Mar. 31, 2016
Product Warranties [Abstract]
Schedule of Product Warranty Liability [Table Text Block]	Changes in the Company's warranty liability (included in accrued expenses) for the three and six month periods ended March 31, 2016 and 2015 were as follows: Three Months Ended March 31, Six Months Ended March 31, 2016 2015 2016 2015 Balance at beginning of period $ 650,000 $ 837,000 $ 650,000 $ 849,000 Provision for warranties 110,000 121,000 218,000 249,000 Expenses incurred (110,000 ) (122,000 ) (218,000 ) (262,000 ) Balance at end of period $ 650,000 $ 836,000 $ 650,000 $ 836,000

Marketable Securities (Details)

Marketable Securities (Details) - USD ($)	Mar. 31, 2016	Sep. 30, 2015
Marketable Securities [Abstract]
Available-for-sale Securities, Amortized Cost Basis	$ 13,528
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax	234	$ 308
Available-for-sale Securities, Debt Securities	$ 13,294

Accounts Receivable (Details)

Accounts Receivable (Details) - USD ($)	Mar. 31, 2016	Sep. 30, 2015
Accounts Receivable [Abstract]
Allowance for Doubtful Accounts Receivable, Current	$ 979,000	$ 993,000

Loss per Share (Details)

Loss per Share (Details) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net Income (Loss) Attributable to Parent	$ (7,658,300)	$ (1,769,800)	$ (8,635,508)	$ (3,951,235)
Weighted Average Number of Shares Outstanding, Basic	9,341,038	9,153,651	9,335,880	9,126,581
Earnings Per Share, Basic	$ (0.82)	$ (0.19)	$ (0.92)	$ (0.43)

Loss per Share schedule of earn

Loss per Share schedule of earnings per share diluted (Details) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount			670,300	686,858
Net Income (Loss) Attributable to Parent	$ (7,658,300)	$ (1,769,800)	$ (8,635,508)	$ (3,951,235)
Weighted Average Number of Shares Outstanding, Basic	9,341,038	9,153,651	9,335,880	9,126,581
Incremental Common Shares Attributable to Call Options and Warrants	0	0	0	0
Incremental Common Shares Attributable to Share-based Payment Arrangements	0	0	0	0
Weighted Average Number of Shares Outstanding, Diluted	9,341,038	9,153,651	9,335,880	9,126,581
Earnings Per Share, Diluted	$ (0.82)	$ (0.19)	$ (0.92)	$ (0.43)

Accumulated Other Comprehensi28

Accumulated Other Comprehensive Loss (Details) - USD ($)	Mar. 31, 2016	Sep. 30, 2015
Comprehensive Loss [Abstract]
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax	$ (304,080)	$ (276,998)
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax	(234)	(308)
Accumulated Other Comprehensive Income (Loss), Net of Tax	$ (304,314)	$ (277,306)

Goodwill and Intangible Asset29

Goodwill and Intangible Assets (Details) - USD ($)	3 Months Ended	6 Months Ended	12 Months Ended
	Mar. 31, 2016	Mar. 31, 2016	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2013
Finite-Lived Intangible Assets [Line Items]
Goodwill	$ 0	$ 0	$ 6,016,469	$ 6,016,469	$ 0
Goodwill, Impairment Loss		(6,016,469)
Finite-Lived Patents, Gross	2,500,000	2,500,000	2,500,000
finite lived patents, accumulated amortization	395,833	395,833	270,833
Finite-Lived Customer Relationships, Gross	910,000	910,000	910,000
finite lived customer relationships, accumulated amortization	260,333	260,333	148,833
Finite-Lived Trade Names, Gross	660,000	660,000	660,000
finite lived tradenames, accumulated amortization	69,667	69,667	47,667
Finite-Lived Intangible Assets, Gross	4,070,000	4,070,000	4,070,000
Finite-Lived Intangible Assets, Accumulated Amortization	725,833	725,833	467,333
Goodwill, Acquired During Period			$ 0	$ 6,016,469
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months	258,500	258,500
Amortization of Intangible Assets	129,250	258,500
Finite-Lived Intangible Assets, Amortization Expense, Year Two	518,000	518,000
Finite-Lived Intangible Assets, Amortization Expense, Year Three	427,000	427,000
Finite-Lived Intangible Assets, Amortization Expense, Year Four	373,000	373,000
Finite-Lived Intangible Assets, Amortization Expense, Year Five	341,000	341,000
Finite-Lived Intangible Assets, Amortization Expense, Rolling after Year Five	$ 1,426,667	$ 1,426,667

Stock Based Compensation (Detai

Stock Based Compensation (Details) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation	$ 145,580	$ 164,515	$ 298,778	$ 311,345
Share Based Compensation per share	$ 0.02	$ 0.02	$ 0.03	$ 0.03

Income Taxes (Details)

Income Taxes (Details) $ in Millions	Sep. 30, 2015USD ($)
Valuation Allowance [Line Items]
Deferred tax assets net of liabilities before valuation allowance	$ 11.1
Deferred Tax Assets, Operating Loss Carryforwards	$ 7

Product Warranties (Details)

Product Warranties (Details) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014
Product Warranties [Abstract]
Balance at beginning of period	$ 650,000	$ 836,000	$ 650,000	$ 836,000	$ 650,000	$ 650,000	$ 837,000	$ 849,000
Provision for warranties	110,000	121,000	218,000	249,000
Expenses incurred	$ (110,000)	$ (122,000)	$ (218,000)	$ (262,000)

Credit Agreement (Details)

Credit Agreement (Details) $ in Millions	6 Months Ended
	Mar. 31, 2016USD ($)Rate
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity | $	$ 3
Line of Credit Facility, Interest Rate During Period	6.75%
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.50%