Vicon Industries (VCON) 10-Q 20 Aug 18 2018 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information Document - shares	9 Months Ended
	Jun. 30, 2018	Aug. 14, 2018
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	Jun. 30, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		17,552,623

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2018	Sep. 30, 2017
CURRENT ASSETS
Cash and cash equivalents	$ 2,374,125	$ 2,253,952
Marketable securities	13,459	13,555
Accounts receivable, net	4,304,908	4,349,733
Inventories:
Parts, components, and materials	496,359	783,553
Work-in-process	885,458	985,934
Finished products	4,115,812	4,780,514
Inventory net	5,497,629	6,550,001
Prepaid expenses and other current assets	536,095	782,128
TOTAL CURRENT ASSETS	12,726,216	13,949,369
Property, plant and equipment	6,065,029	6,038,920
Less accumulated depreciation and amortization	(5,778,252)	(5,637,222)
Property, Plant and Equipment Net	286,777	401,698
Other assets	918,331	1,116,583
TOTAL ASSETS	13,931,324	15,467,650
CURRENT LIABILITIES
Line of Credit, Current	5,800,000	0
Accounts payable	2,041,554	3,138,057
Accrued compensation and employee benefits	1,705,454	1,629,175
Accrued expenses	1,066,459	1,169,392
Unearned revenue	483,236	500,878
TOTAL CURRENT LIABILITIES	11,096,703	6,437,502
Long-term Line of Credit, Noncurrent	0	4,950,000
Unearned revenue	264,126	139,601
Other long-term liabilities	1,580,393	1,570,861
TOTAL LIABILITIES	12,941,222	13,097,964
SHAREHOLDERS’ EQUITY
Common stock, par value $.01	182,491	100,448
Capital in excess of par value	43,993,617	40,999,470
Retained earnings	(39,562,191)	(35,136,539)
Less treasury stock, at cost	(3,437,643)	(3,437,643)
Accumulated other comprehensive loss	(186,172)	(156,050)
TOTAL SHAREHOLDERS’ EQUITY	990,102	2,369,686
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 13,931,324	$ 15,467,650

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Document Period End Date			Jun. 30, 2018
Net sales	$ 6,168,791	$ 7,382,367	$ 21,237,500	$ 19,990,727
Cost of sales	3,567,853	4,538,524	12,678,223	12,328,480
Gross profit	2,600,938	2,843,843	8,559,277	7,662,247
Operating expenses:
Selling, general and administrative expense	2,890,849	2,886,799	9,001,010	8,369,195
Engineering & development expense	1,189,367	1,234,780	3,510,633	3,664,230
Operating Expenses	4,080,216	4,121,579	12,511,643	12,033,425
Operating loss	(1,479,278)	(1,277,736)	(3,952,366)	(4,371,178)
Interest income	664	353	1,351	756
Interest expense	(178,455)	(120,056)	(474,637)	(232,127)
Loss before income taxes	(1,657,069)	(1,397,439)	(4,425,652)	(4,602,549)
Income tax expense	0	0	0	0
Net loss	$ (1,657,069)	$ (1,397,439)	$ (4,425,652)	$ (4,602,549)
Loss per share:
Earnings Per Share, Basic	$ (0.09)	$ (0.15)	$ (0.27)	$ (0.49)
Earnings Per Share, Diluted	$ (0.09)	$ (0.15)	$ (0.27)	$ (0.49)
Weighted average shares outstanding:
Basic	17,552,623	9,348,388	16,413,221	9,348,388
Diluted	17,552,623	9,348,388	16,413,221	9,348,388

Condensed Consolidated Stateme4

Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Net loss	$ (1,657,069)	$ (1,397,439)	$ (4,425,652)	$ (4,602,549)
Other comprehensive income (loss):
Unrealized loss on securities, net of tax	(52)	12	(389)	(437)
Foreign currency translation adjustment	(139,084)	(19,532)	29,733	(295,702)
Other comprehensive loss	(139,136)	19,544	(30,122)	295,265
Comprehensive loss	$ (1,796,205)	$ (1,377,895)	$ (4,455,774)	$ (4,307,284)

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Stock and Warrants Issued During Period, Value, Preferred Stock and Warrants	$ 0	$ 438,000
Revolving credit borrowings	850,000	1,950,000
Proceeds from Issuance or Sale of Equity	$ 3,056,981	0
Document Period End Date	Jun. 30, 2018
Cash flows from operating activities:
Net loss	$ (4,425,652)	(4,602,549)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	156,593	436,781
Amortization of Other Deferred Charges	173,676	0
Stock compensation expense	18,101	34,585
Change in assets and liabilities:
Accounts receivable, net	31,607	1,234,503
Inventories	1,038,770	191,202
Prepaid expenses and other current assets	243,025	82,545
Other assets	24,576	(18,209)
Accounts payable	(1,079,272)	350,578
Accrued compensation and employee benefits	78,530	178,871
Accrued expenses	(100,893)	(85,454)
Unearned revenue	106,883	44,284
Other liabilities	10,721	63,235
Net cash provided by (used in)	(3,723,335)	(2,089,628)
Cash flows from investing activities:
Increase (Decrease) in Trading Securities	(293)	(340)
Payments to Acquire Property, Plant, and Equipment	(41,118)	(130,971)
Net Cash Provided by (Used in) Investing Activities	(41,411)	(131,311)
Net Cash Provided by (Used in) Financing Activities [Abstract]
Net Cash Provided by (Used in) Financing Activities	3,906,981	1,950,000
Effect of Exchange Rate on Cash and Cash Equivalents	(22,062)	315,483
Cash and Cash Equivalents, Period Increase (Decrease)	120,173	44,544
Cash at beginning of year	2,253,952	$ 1,954,422
Cash at end of period	$ 2,374,125

Basis of Presentation

Basis of Presentation	9 Months Ended
	Jun. 30, 2018
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 nine months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the fiscal year ended September 30, 2018 . 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, 2017 .

Marketable Securities

Marketable Securities	9 Months Ended
	Jun. 30, 2018
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 $13,459 as of June 30, 2018 . 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 June 30, 2018 was $14,407 , with $948 of cumulative unrealized losses reported at June 30, 2018 .

Accounts Receivable

Accounts Receivable	9 Months Ended
	Jun. 30, 2018
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 $713,000 and $946,000 as of June 30, 2018 and September 30, 2017 , respectively.

Loss per Share

Loss per Share	9 Months Ended
	Jun. 30, 2018
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 nine month periods ended June 30, 2018 and 2017 : Three Months Ended Nine Months Ended June 30, June 30, 2018 2017 2018 2017 Basic EPS Computation Net loss $ (1,657,069 ) $ (1,397,439 ) $ (4,425,652 ) $ (4,602,549 ) Weighted average shares outstanding 17,552,623 9,348,388 16,413,221 9,348,388 Basic loss per share $ (.09 ) $ (.15 ) $ (.27 ) $ (.49 ) Three Months Ended Nine Months Ended June 30, June 30, 2018 2017 2018 2017 Diluted EPS Computation Net loss $ (1,657,069 ) $ (1,397,439 ) $ (4,425,652 ) $ (4,602,549 ) Weighted average shares outstanding 17,552,623 9,348,388 16,413,221 9,348,388 Stock options — — — — Stock compensation arrangements — — — — Warrants — — — — Diluted shares outstanding 17,552,623 9,348,388 16,413,221 9,348,388 Diluted loss per share $ (.09 ) $ (.15 ) $ (.27 ) $ (.49 ) For the three and nine month periods ended June 30, 2018 and 2017 , all outstanding stock options, warrants and shares issuable under stock compensation arrangements totaling 1,855,634 and 2,048,590 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	9 Months Ended
	Jun. 30, 2018
Comprehensive Loss [Abstract]
Comprehensive Income (Loss) Note [Text Block]	Accumulated Other Comprehensive Loss The Company's accumulated other comprehensive loss balances at June 30, 2018 and September 30, 2017 consisted of the following: June 30, 2018 September 30, 2017 Foreign currency translation adjustment $ (185,224 ) $ (155,491 ) Unrealized loss on marketable securities (948 ) (559 ) Accumulated other comprehensive loss $ (186,172 ) $ (156,050 )

Stock Based Compensation

Stock Based Compensation	9 Months Ended
	Jun. 30, 2018
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 June 30, 2018 and 2017 , the Company recorded non-cash compensation expense of $5,595 and $10,791 , respectively ( $.00 and $.00 per basic and diluted share, respectively), relating to stock compensation. For the nine month periods ended June 30, 2018 and 2017 , the Company recorded non-cash compensation expense of $18,101 and $34,585 , respectively ( $.00 and $.00 per basic and diluted share, respectively), relating to stock compensation.

Recent Accounting Pronouncement

Recent Accounting Pronouncements	9 Months Ended
	Jun. 30, 2018
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 fiscal 2019; early adoption is not permitted prior to the first quarter of fiscal 2018. The Company is currently evaluating the effect of implementing this guidance. 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 in fiscal 2020. The Company is currently in the initial stages of 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.

Income Taxes

Income Taxes	9 Months Ended
	Jun. 30, 2018
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 December 31, 2017, the Company had, as adjusted for the Tax Act (see below), approximately $11.5 million of unrecognized net deferred tax assets available, which includes approximately $7.7 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. 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 will not materially impact the balance sheet or statement of operations as all deferred tax assets have 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 makes broad and complex changes to the U.S. tax code that affects 2017. The Tax Act also establishes new tax laws that will affect 2018 and after, including a reduction in the U.S. federal corporate income tax rate from 34% to 21%. 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. The Company is still evaluating whether certain tax credits will be recoverable but does not believe that it will have a material impact on the Company's operating results or financial condition. 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 2014 in the U.S. and 2011 in the U.K., Germany and Israel.

Fair Value

Fair Value	9 Months Ended
	Jun. 30, 2018
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, 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.

Product Warranties (Notes)

Product Warranties (Notes)	9 Months Ended
	Jun. 30, 2018
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 nine month periods ended June 30, 2018 and 2017 were as follows: Three Months Ended June 30, Nine Months Ended June 30, 2018 2017 2018 2017 Balance at beginning of period $ 431,000 $ 650,000 $ 431,000 $ 650,000 Provision for warranties 68,000 107,000 221,000 323,000 Expenses incurred (68,000 ) (107,000 ) (221,000 ) (323,000 ) Balance at end of period $ 431,000 $ 650,000 $ 431,000 $ 650,000

Credit Agreement (Notes)

Credit Agreement (Notes)	9 Months Ended
	Jun. 30, 2018
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 was subsequently amended and restated on two occasions as described below. 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 bore interest at a rate of 6.75% per annum. The Agreement also provides for an unused commitment fee equal to .5% per annum. The Agreement includes 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 includes a financial covenant that requires the Company to maintain a specified minimum tangible net worth, as defined, and is 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 is subject to a borrowing formula, effectively providing the Company with $2 million of additional borrowing availability. The Second Amended Agreement also extends the maturity date of the credit facility to April 2, 2019, and reduces the Company’s minimum tangible net worth requirement, but is otherwise substantially similar to the Amended Agreement. As of June 30, 2018, outstanding borrowings under the Second Amended Agreement were $5.8 million. 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 June 30, 2018 and September 30, 2017, there was $165,000 and $339,000, respectively, of deferred warrant issuance costs included in other assets in the accompanying balance sheets. 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 provides 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 will be of no force or effect, (b) from June 12, 2018 until September 2, 2018, the Company will not be permitted to borrow any additional funds under the Second Amended Agreement, and (c) NIL Funding Corporation waives 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.

Going Concern and Liquidity (No

Going Concern and Liquidity (Notes)	9 Months Ended
	Jun. 30, 2018
Risks and Uncertainties [Abstract]
Substantial Doubt about Going Concern [Text Block]	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 and March 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 13 to the financial statements. Subsequent to quarter end, 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 June 30, 2018, the Company had $2.4 million of cash reserves and was in violation of a financial covenant under the Second Amended Agreement as described above. On July 27, 2018, the Company entered into the Amendment which, among other things, provides a waiver of its default with respect to this financial covenant, and prohibits further borrowings until September 2, 2018. The Company is presently in negotiations with its lender to formalize a longer term remedy to this violation. However, there are no assurances that these negotiations will be successful. The Company currently expects to draw on its cash reserves to finance its near term working capital needs while it implements its operating cost restructuring initiatives. Notwithstanding 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.

Subsequent Event (Notes)

Subsequent Event (Notes)	9 Months Ended
	Jun. 30, 2018
Subsequent Event [Line Items]
Subsequent Events [Text Block]	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.

Loss per Share (Tables)

Loss per Share (Tables)	9 Months Ended
	Jun. 30, 2018
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 nine month periods ended June 30, 2018 and 2017 : Three Months Ended Nine Months Ended June 30, June 30, 2018 2017 2018 2017 Basic EPS Computation Net loss $ (1,657,069 ) $ (1,397,439 ) $ (4,425,652 ) $ (4,602,549 ) Weighted average shares outstanding 17,552,623 9,348,388 16,413,221 9,348,388 Basic loss per share $ (.09 ) $ (.15 ) $ (.27 ) $ (.49 ) Three Months Ended Nine Months Ended June 30, June 30, 2018 2017 2018 2017 Diluted EPS Computation Net loss $ (1,657,069 ) $ (1,397,439 ) $ (4,425,652 ) $ (4,602,549 ) Weighted average shares outstanding 17,552,623 9,348,388 16,413,221 9,348,388 Stock options — — — — Stock compensation arrangements — — — — Warrants — — — — Diluted shares outstanding 17,552,623 9,348,388 16,413,221 9,348,388 Diluted loss per share $ (.09 ) $ (.15 ) $ (.27 ) $ (.49 )

Accumulated Other Comprehensi20

Accumulated Other Comprehensive Loss (Tables)	9 Months Ended
	Jun. 30, 2018
Comprehensive Loss [Abstract]
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]	The Company's accumulated other comprehensive loss balances at June 30, 2018 and September 30, 2017 consisted of the following: June 30, 2018 September 30, 2017 Foreign currency translation adjustment $ (185,224 ) $ (155,491 ) Unrealized loss on marketable securities (948 ) (559 ) Accumulated other comprehensive loss $ (186,172 ) $ (156,050 )

Product Warranties (Tables)

Product Warranties (Tables)	9 Months Ended
	Jun. 30, 2018
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 nine month periods ended June 30, 2018 and 2017 were as follows: Three Months Ended June 30, Nine Months Ended June 30, 2018 2017 2018 2017 Balance at beginning of period $ 431,000 $ 650,000 $ 431,000 $ 650,000 Provision for warranties 68,000 107,000 221,000 323,000 Expenses incurred (68,000 ) (107,000 ) (221,000 ) (323,000 ) Balance at end of period $ 431,000 $ 650,000 $ 431,000 $ 650,000

Marketable Securities (Details)

Marketable Securities (Details) - USD ($)	Jun. 30, 2018	Sep. 30, 2017
Marketable Securities [Abstract]
Available-for-sale Securities, Amortized Cost Basis	$ 14,407
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax	948	$ 559
Available-for-sale Securities, Debt Securities	$ 13,459

Accounts Receivable (Details)

Accounts Receivable (Details) - USD ($)	Jun. 30, 2018	Sep. 30, 2017
Accounts Receivable [Abstract]
Allowance for Doubtful Accounts Receivable, Current	$ 713,000	$ 946,000

Loss per Share (Details)

Loss per Share (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net Income (Loss) Attributable to Parent	$ (1,657,069)	$ (1,397,439)	$ (4,425,652)	$ (4,602,549)
Weighted Average Number of Shares Outstanding, Basic	17,552,623	9,348,388	16,413,221	9,348,388
Earnings Per Share, Basic	$ (0.09)	$ (0.15)	$ (0.27)	$ (0.49)

Loss per Share schedule of earn

Loss per Share schedule of earnings per share diluted (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount			1,855,634	2,048,590
Net Income (Loss) Attributable to Parent	$ (1,657,069)	$ (1,397,439)	$ (4,425,652)	$ (4,602,549)
Weighted Average Number of Shares Outstanding, Basic	17,552,623	9,348,388	16,413,221	9,348,388
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	17,552,623	9,348,388	16,413,221	9,348,388
Earnings Per Share, Diluted	$ (0.09)	$ (0.15)	$ (0.27)	$ (0.49)

Accumulated Other Comprehensi26

Accumulated Other Comprehensive Loss (Details) - USD ($)	Jun. 30, 2018	Sep. 30, 2017
Comprehensive Loss [Abstract]
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax	$ (185,224)	$ (155,491)
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax	(948)	(559)
Accumulated Other Comprehensive Income (Loss), Net of Tax	$ (186,172)	$ (156,050)

Stock Based Compensation (Detai

Stock Based Compensation (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation	$ 5,595	$ 10,791	$ 18,101	$ 34,585
Share Based Compensation per share	$ 0	$ 0	$ 0	$ 0

Income Taxes (Details)

Income Taxes (Details) $ in Millions	Sep. 30, 2017USD ($)
Valuation Allowance [Line Items]
Deferred tax assets net of liabilities before valuation allowance	$ 11.5
Deferred Tax Assets, Operating Loss Carryforwards	$ 7.7

Product Warranties (Details)

Product Warranties (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017	Sep. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016
Product Warranties [Abstract]
Balance at beginning of period	$ 431,000		$ 431,000		$ 431,000	$ 431,000	$ 650,000	$ 650,000	$ 650,000
Provision for warranties	68,000	$ 107,000	221,000	$ 323,000
Expenses incurred	$ (68,000)	$ (107,000)	$ (221,000)	$ (323,000)

Credit Agreement (Details)

Credit Agreement (Details) - USD ($)	Jun. 30, 2018	Sep. 30, 2017
Line of Credit Facility [Line Items]
Line of Credit, Current	$ 5,800,000	$ 0