Inotiv (NOTV) 10-Q 14 Aug 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Jun. 30, 2015	Aug. 07, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3
Trading Symbol	BASI
Entity Registrant Name	BIOANALYTICAL SYSTEMS INC
Entity Central Index Key	720,154
Current Fiscal Year End Date	--09-30
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		8,105,007

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2015	Sep. 30, 2014
Current assets:
Cash and cash equivalents	$ 516	$ 981
Accounts receivable
Trade, net of allowance $54 at June 30, 2015 and September 30, 2014, respectively	3,227	2,557
Unbilled revenues and other	819	878
Inventories	1,561	1,564
Prepaid expenses	551	675
Total current assets	6,674	6,655
Property and equipment, net	15,546	15,949
Goodwill	1,009	1,009
Debt issue costs	101	122
Other assets	34	39
Total assets	23,364	23,774
Current liabilities:
Accounts payable	2,446	2,672
Accrued expenses	1,067	1,842
Customer advances	3,009	2,990
Income tax accruals	$ 40	20
Revolving line of credit		202
Fair value of warrant liability	$ 323	676
Current portion of capital lease obligation	262	279
Current portion of long-term debt	786	786
Total current liabilities	7,933	9,467
Fair value of interest rate swap	35	21
Capital lease obligation, less current portion	101	298
Long-term debt, less current portion	3,863	4,452
Total liabilities	11,932	14,238
Stockholders' equity:
Preferred shares, authorized 1,000,000 shares, no par value: 1,185 Series A shares at $1,000 stated value issued and outstanding at June 30, 2015 and September 30, 2014, respectively	1,185	1,185
Common shares, no par value: Authorized 19,000,000 shares; 8,104,944 shares and 8,075,335 issued and outstanding at June 30, 2015 and September 30, 2014, respectively	1,988	1,980
Additional paid-in capital	21,214	21,154
Accumulated deficit	(12,979)	(14,790)
Accumulated other comprehensive income	24	7
Total shareholders' equity	11,432	9,536
Total liabilities and shareholders' equity	23,364	23,774
Series A Preferred Stock [Member]
Stockholders' equity:
Preferred shares, authorized 1,000,000 shares, no par value: 1,185 Series A shares at $1,000 stated value issued and outstanding at June 30, 2015 and September 30, 2014, respectively	$ 1,185	$ 1,185

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2015	Sep. 30, 2014
Allowance for doubtful accounts	$ 54	$ 54
Common stock, no par value
Common stock, shares authorized	19,000,000	19,000,000
Common stock, shares issued	8,104,944	8,075,335
Common stock, shares outstanding	8,104,944	8,075,335
Series A Preferred Stock [Member]
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, no par value
Preferred stock, shares issued	1,185	1,185
Preferred stock, shares outstanding	1,185	1,185
Preferred stock, stated value per share	$ 1,000	$ 1,000

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) [Abstract]
Service revenue	$ 5,001	$ 4,754	$ 13,929	$ 14,196
Product revenue	1,149	1,278	3,792	3,968
Total revenue	6,150	6,032	17,721	18,164
Cost of service revenue	3,003	3,368	9,501	10,021
Cost of product revenue	657	680	2,024	2,002
Total cost of revenue	3,660	4,048	11,525	12,023
Gross profit	2,490	1,984	6,196	6,141
Operating expenses:
Selling	379	399	1,141	1,315
Research and development	160	167	489	480
General and administrative	1,037	$ 1,162	3,468	$ 3,523
Mediation settlement, net	(620)		(606)
Total operating expenses	956	$ 1,728	4,492	$ 5,318
Operating income	1,534	256	1,704	823
Interest expense	(67)	(123)	(223)	(408)
Change in fair value of warrant liability - decrease (increase)	$ 34	66	353	(1,095)
Other income		1	1	6
Net income (loss) before income taxes	$ 1,501	200	1,835	(674)
Income tax(benefit) expense	23	(15)	25	(8)
Net income (loss)	1,478	215	1,810	(666)
Other comprehensive income (loss):
Fair value adjustment of interest rate swap	11	(41)	(14)	(41)
Foreign currency translation adjustment	(60)	(31)	33	(65)
Comprehensive income (loss)	$ 1,429	$ 143	$ 1,829	$ (772)
Basic net income (loss) per share	$ 0.18	$ 0.03	$ 0.22	$ (0.08)
Diluted net income (loss) per share	$ 0.16	$ 0.02	$ 0.16	$ (0.08)
Weighted common shares outstanding:
Basic	8,080	8,068	8,077	7,922
Diluted	8,810	9,015	8,845	7,922

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Operating activities:
Net income (loss)	$ 1,810	$ (666)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	1,069	1,195
Change in fair value of warrant liability - (decrease) increase	(353)	1,095
Employee stock compensation expense	67	65
Provision for doubtful accounts	1	2
Loss on sale of property and equipment	5	1
Changes in operating assets and liabilities:
Accounts receivable	(611)	361
Inventories	3	(156)
Income tax accruals	20	(25)
Prepaid expenses and other assets	146	(641)
Accounts payable	(226)	(166)
Accrued expenses	(775)	(357)
Customer advances	19	507
Net cash provided by operating activities	1,175	1,215
Investing activities:
Capital expenditures	(666)	(343)
Net cash used by investing activities	(666)	(343)
Financing activities:
Payments of long-term debt	$ (589)	(5,319)
Borrowings on long-term debt		5,500
Payments of debt issuance costs		(121)
Proceeds from exercise of stock options		1
Payments on revolving line of credit	$ (5,569)	(9,543)
Borrowings on revolving line of credit	$ 5,367	8,128
Proceeds from Class A warrant exercises		183
Payments on capital lease obligations	$ (214)	(203)
Net cash used by financing activities	(1,005)	(1,374)
Effect of exchange rate changes	31	(66)
Net decrease in cash and cash equivalents	(465)	(568)
Cash and cash equivalents at beginning of period	981	1,304
Cash and cash equivalents at end of period	$ 516	736
Supplemental disclosure of non-cash financing activities:
Preferred stock dividends paid in common shares		44
Fair value of warrants exercised		854
Conversion of preferred shares to common shares		$ 150

DESCRIPTION OF THE BUSINESS AND

DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION	9 Months Ended
	Jun. 30, 2015
DESCRIPTION OF THE BUSINESS [Abstract]
DESCRIPTION OF THE BUSINESS	1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION Bioanalytical Systems, Inc. and its subsidiaries (“We,” the “Company” or “BASi”) engage in contract laboratory research services and other services related to pharmaceutical development. We also manufacture scientific instruments for life sciences research, which we sell with related software for use in industrial, governmental and academic laboratories. Our customers are located throughout the world. We have prepared the accompanying unaudited interim condensed

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	9 Months Ended
	Jun. 30, 2015
STOCK-BASED COMPENSATION [Abstract]
STOCK-BASED COMPENSATON	2. STOCK-BASED COMPENSATION The 2008 Stock Option Plan (“the Plan”) is used to promote our long-term interests by providing a means of attracting and retaining officers, directors and key employees and aligning their interests with those of our shareholders. The Plan is described more fully in Note 9 in the Notes to the Consolidated Financial Statements in our Form 10-K for the year ended September 30, 2014. All options granted under the Plan had an exercise price equal to the market value of the underlying common shares on the date of grant. We expense the estimated fair value of stock options over the vesting periods of the grants. We recognize expense for awards subject to graded vesting using the straight-line attribution method, reduced for estimated forfeitures. Forfeitures are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates and an adjustment is recognized at that time. The Compensation Committee may also issue non-qualified stock option grants with vesting periods different from the Plan. As of June 30, 2015, there are 30 19 67 19 65 A summary of our stock option activity for the nine months ended June 30, 2015 is as follows (in thousands except for share prices): Options Weighted- Weighted- Outstanding - October 1, 2014 426 $ 1.83 $ 1.41 Exercised (128 ) 1.38 1.12 Granted 35 2.38 1.98 Foreitures (26 ) 4.21 2.91 Outstanding -June 30, 2015 307 $ 1.88 $ 1.48 During the nine months ended June 30, 2015, 128 35 Risk-free interest rate 1.93 2.13 % Dividend yield 0.00 % Expected volatility 88.00 100.06 % Expected life of the options (years) 8.0 Forfeitures 3.00 %

INCOME (LOSS) PER SHARE

INCOME (LOSS) PER SHARE	9 Months Ended
	Jun. 30, 2015
INCOME (LOSS) PER SHARE [Abstract]
INCOME (LOSS) PER SHARE	3. INCOME (LOSS) PER SHARE We compute basic income (loss) per share using the weighted average number of common shares outstanding. The Company has three categories of dilutive potential common shares: the Series A preferred shares issued in May 2011 in connection with the registered direct offering, the Warrants issued in connection with the same offering in May 2011, and shares issuable upon exercise of options. We compute diluted earnings per share using the if-converted method for preferred stock and the treasury stock method for stock options and warrants. Shares issuable upon exercise of options, warrants for 799 592 The following table reconciles our computation of basic net income (loss) per share to diluted net loss per share: Three Months Ended Nine Months Ended 2015 2014 2015 2014 Basic net income (loss) per share: Net income (loss) applicable to common shareholders $ 1,477 $ 215 $ 1,810 $ (666 ) Weighted average common shares outstanding 8,080 8,068 8,077 7,922 Basic net income (loss) per share $ 0.18 $ 0.03 $ 0.22 $ (0.08 ) Diluted net income (loss) per share: Net income (loss) applicable to common shareholders $ 1,477 $ 215 $ 1,810 $ (666 ) Change in fair value of warrant liability (34 ) (66 ) (353 ) - Diluted net income (loss) applicable to common shareholders $ 1,443 $ 149 $ 1,457 $ (666 ) Weighted average common shares outstanding 8,080 8,068 8,077 7,922 Plus: Incremental shares from assumed conversions: Series A preferred shares 592 592 592 - Class A warrants 15 200 48 - Stock options/shares 123 155 128 - Diluted weighted average common shares outstanding 8,810 9,015 8,845 7,922 Diluted net income (loss) per share: $ 0.16 $ 0.02 $ 0.16 $ (0.08 )

INVENTORIES

INVENTORIES	9 Months Ended
	Jun. 30, 2015
INVENTORIES [Abstract]
INVENTORIES	4. INVENTORIES Inventories consisted of the following: June 30, September 30, Raw materials $ 1,081 $ 1,228 Work in progress 327 295 Finished goods 422 340 $ 1,830 $ 1,863 Obsolescence reserve (269 ) (299 ) $ 1,561 $ 1,564

SEGMENT INFORMATION

SEGMENT INFORMATION	9 Months Ended
	Jun. 30, 2015
SEGMENT INFORMATION [Abstract]
SEGMENT INFORMATION	5. SEGMENT INFORMATION We operate in two 2 Three Months Ended Nine Months Ended 2015 2014 2015 2014 Revenue: Service $ 5,001 $ 4,754 $ 13,929 $ 14,196 Product 1,149 1,278 3,792 3,968 $ 6,150 $ 6,032 $ 17,721 $ 18,164 Operating income (loss): Service $ 1,440 $ 293 $ 1,510 $ 669 Product 94 (37 ) 194 154 $ 1,534 $ 256 $ 1,704 $ 823 Interest expense (67 ) (123 ) (223 ) (408 ) Change in fair value of warrant liability – decrease (increase) 34 66 353 (1,095 ) Other income — 1 1 6 Net income (loss) before income taxes $ 1,501 $ 200 $ 1,835 $ (674 )

INCOME TAXES

INCOME TAXES	9 Months Ended
	Jun. 30, 2015
INCOME TAXES [Abstract]
INCOME TAXES	6. INCOME TAXES We use the asset and liability method of accounting for income taxes. We recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. We recognize the effect on deferred tax assets and liabilities of a change in tax rates in income in the period that includes the enactment date. We record valuation allowances based on a determination of the expected realization of tax assets. We recognize the tax benefit from an uncertain tax position only if it is more likely than not to be sustained upon examination based on the technical merits of the position. We measure the amount of the accrual for which an exposure exists as the largest amount of benefit determined on a cumulative probability basis that we believe is more likely than not to be realized upon ultimate settlement of the position. At June 30, 2015 and September 30, 2014, we had a $ 16 34 1.4 is due to changes in our valuation allowance on our net deferred tax assets We record interest and penalties accrued in relation to uncertain income tax positions as a component of income tax expense. Any changes in the liability for uncertain tax positions would impact our effective tax rate. We do not expect the total amount of unrecognized tax benefits to significantly change in the next twelve months. We file income tax returns in the U.S and several U.S. states. We remain subject to examination by taxing authorities in the jurisdictions in which we have filed returns for years after 2009.

DEBT

DEBT	9 Months Ended
	Jun. 30, 2015
DEBT [Abstract]
DEBT	7. DEBT Note payable Prior to obtaining the new credit facility described below, we had a term loan from Regions Bank (“Regions”), which was secured by mortgages on our facilities in West Lafayette and Evansville, Indiana. On October 31, 2013, we executed a seventh amendment with Regions to extend the note payable maturity date to October 31, 2014. The unpaid principal on the note was incorporated into a replacement note payable for $ 5,205 400 6.0 47 Regions required us to maintain a fixed charge coverage ratio of not less than 1.25 2.10 Revolving Line of Credit On January 31, 2014, we paid off the remaining balance on our $ 3,000 During the first four months of fiscal 2014, borrowings under the Credit Agreement bore interest at an annual rate equal to Citibank's Prime Rate plus five percent ( 5 15 2 0.2 65 75 8,000 Current Credit Facility On May 14, 2014, we entered into a Credit Agreement (“Agreement”) with Huntington Bank. The Agreement includes both a term loan and a revolving loan and is secured by mortgages on our facilities in West Lafayette and Evansville, Indiana and liens on our personal property. The term loan for $ 5,500 325 65 4,649 5,238 The revolving loan for $ 2,000 300 25 20 2,000 30 0 202 On May 14, 2015, we executed a first amendment to the Agreement with Huntington Bank. As amended, the Agreement requires us to maintain a fixed charge coverage ratio of not less than 1.05 1.10 1,000 3.00 2.50 We entered into an interest rate swap agreement with respect to the above loans to fix the interest rate with respect to 60 5.0 We incurred $ 134 five 101 122

RESTRUCTURING

RESTRUCTURING	9 Months Ended
	Jun. 30, 2015
RESTRUCTURING [Abstract]
RESTRUCTURING	8. RESTRUCTURING In March 2012, we announced a plan to restructure our bioanalytical laboratory operations. We consolidated our laboratory in McMinnville, Oregon into our 120,000 We reserved for lease payments at the cease use date for our UK facility and have considered free rent, sublease rentals and the number of days it would take to restore the space to its original condition prior to our improvements. In the first quarter of fiscal 2013, we began amortizing into general and administrative expense, equally through the cease use date, the estimated rent income of $ 200 1,019 The following table sets forth the roll forward of the restructuring activity for the nine months ended June 30, 2015. Balance, Total Cash Other Balance, Lease related costs $ 961 $ 58 $ - $ - $ 1,019 Other costs 117 - - - 117 Total $ 1,078 $ 58 $ - $ - $ 1,136 Other costs include legal and professional fees and other costs incurred in connection with transitioning services from sites being closed as well as costs incurred to remove improvements previously made to the UK facility.

FAIR VALUE OF FINANCIAL INSTRUM

FAIR VALUE OF FINANCIAL INSTRUMENTS	9 Months Ended
	Jun. 30, 2015
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]
FAIR VALUE OF FINANCIAL INSTRUMENTS	9. FAIR VALUE OF FINANCIAL INSTRUMENTS The provisions of the Fair Value Measurements and Disclosure Topic defines fair value, establishes a consistent framework for measuring fair value and provides the disclosure requirements about fair value measurements. This Topic also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's judgment about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the inputs as follows: • Level 1 – Valuations based on quoted prices for identical assets or liabilities in active markets that the Company has the ability to access. • Level 2 – Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. • Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement. In May 2011, we issued Class A and B Warrants. The Class B Warrants expired in May 2012 and the liability was reduced to zero June 30, 2015 September 30, 2014 Risk-free interest rate 0.23 % 0.41 % Dividend yield 0.00 % 0.00 % Volatility of the Company's common stock 53.98 % 63.58 % Expected life of the warrants (years) .87 1.6 Fair value per unit $ 0.404 $ 0.846 The carrying amounts for cash and cash equivalents, accounts receivable, inventories, prepaid expenses and other assets, accounts payable and other accruals approximate their fair values because of their nature and respective duration. The carrying value of the note payable approximates fair value due to the variable nature of the interest rates. We use an interest rate swap, designated as a hedge, to fix 60 The following table summarizes fair value measurements by level as of June 30, 2015, for the Company's financial liabilities measured at fair value on a recurring basis: Level 1 Level 2 Level 3 Interest rate swap agreement $ - $ 35 $ - Class A warrant liability $ - $ 323 $ - The following table summarizes fair value measurements by level as of September 30, 2014, for the Company's financial liabilities measured at fair value on a recurring basis: Level 1 Level 2 Level 3 Interest rate swap agreement $ - $ 21 $ - Class A warrant liability $ - $ 676 $ -

ACCUMULATED OTHER COMPREHENSIVE

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)	9 Months Ended
	Jun. 30, 2015
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) [Abstract]
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)	10. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The changes in accumulated other comprehensive income (loss) by component were as follows: Three Months Ended Nine Months Ended 2015 2014 2015 2014 Foreign currency translation Balance, beginning of period $ 120 $ (2 ) $ 27 $ 32 Other comprehensive income (loss): Foreign currency translation adjustments (60 ) (31 ) 33 (65 ) Balance, end of period $ 60 $ (33 ) $ 60 $ (33 ) Interest rate swap Balance, beginning of period $ (46 ) $ - $ (21 ) $ - Other comprehensive (income) loss: Fair value adjustment 11 (41 ) (14 ) (41 ) Balance, end of period $ (35 ) $ (41 ) $ (35 ) $ (41 ) Total accumulated other comprehensive income (loss) $ 25 $ (74 ) $ 25 $ (74 ) No amounts have been reclassified from accumulated other comprehensive income (loss) into the condensed consolidated statement of operations.

MEDIATION

MEDIATION	9 Months Ended
	Jun. 30, 2015
MEDIATION [Abstract]
MEDIATION	11. MEDIATION In the third quarter of fiscal 2015, the Company received $ 640 20 34

MANAGEMENT'S PLAN

MANAGEMENT'S PLAN	9 Months Ended
	Jun. 30, 2015
MANAGEMENT'S PLAN [Abstract]
MANAGEMENT'S PLAN	11. MANAGEMENT'S PLAN Our long-term strategic objective is to maximize the Company's intrinsic value per share. While we remain focused on reducing our costs through productivity and better processes and a continued emphasis on generating free cash flow, we are dedicated to the strategies that drive our top-line growth. We recognize that our growth depends upon our ability to continually improve and create new client relationships. In the remainder of fiscal 2015 and beyond, we will continue our focus on sales execution, operational excellence and building strategic partnerships with pharmaceutical and biotechnology companies, to differentiate the Company and create value for our clients and shareholders. We are expanding our marketing efforts by building on the Company's inherent strengths in specialty assay and drug discovery, regulatory excellence, and our Culex® automated sampling system. We continue to visit existing and potential clients in addition to our expanded marketing efforts to increase revenue. We have taken several steps to strengthen our leadership team in roles that will be vital to helping drive our top line performance. Strengthening the overall leadership team represents an important step forward in the Company's continuing program to build a management team with the depth, experience and dedication to position the Company to deliver profitable growth over the long-term. In January 2015, we entered into a lease agreement with an initial term of approximately ten years for approximately 51,000 50 57 $ 800 300 These efforts, combined with the availability of our credit facility with Huntington Bank with substantially more favorable terms than the long-term debt and line of credit it replaced, will enhance our ability to implement our growth plan. We are determined to follow through on the initiatives that support our strategy to strengthen the Company for fiscal 2015 and beyond.

STOCK-BASED COMPENSATION (Table

STOCK-BASED COMPENSATION (Tables)	9 Months Ended
	Jun. 30, 2015
STOCK-BASED COMPENSATION [Abstract]
Summary of Stock Option Activity	Options Weighted- Weighted- Outstanding - October 1, 2014 426 $ 1.83 $ 1.41 Exercised (128 ) 1.38 1.12 Granted 35 2.38 1.98 Foreitures (26 ) 4.21 2.91 Outstanding -June 30, 2015 307 $ 1.88 $ 1.48
Schedule of Fair Value Assumptions	Risk-free interest rate 1.93 2.13 % Dividend yield 0.00 % Expected volatility 88.00 100.06 % Expected life of the options (years) 8.0 Forfeitures 3.00 %

INCOME (LOSS) PER SHARE (Tables

INCOME (LOSS) PER SHARE (Tables)	9 Months Ended
	Jun. 30, 2015
INCOME (LOSS) PER SHARE [Abstract]
Reconciliation of Computation of Basic Loss Per Share to Diluted Net Loss Per Share	Three Months Ended Nine Months Ended 2015 2014 2015 2014 Basic net income (loss) per share: Net income (loss) applicable to common shareholders $ 1,477 $ 215 $ 1,810 $ (666 ) Weighted average common shares outstanding 8,080 8,068 8,077 7,922 Basic net income (loss) per share $ 0.18 $ 0.03 $ 0.22 $ (0.08 ) Diluted net income (loss) per share: Net income (loss) applicable to common shareholders $ 1,477 $ 215 $ 1,810 $ (666 ) Change in fair value of warrant liability (34 ) (66 ) (353 ) - Diluted net income (loss) applicable to common shareholders $ 1,443 $ 149 $ 1,457 $ (666 ) Weighted average common shares outstanding 8,080 8,068 8,077 7,922 Plus: Incremental shares from assumed conversions: Series A preferred shares 592 592 592 - Class A warrants 15 200 48 - Stock options/shares 123 155 128 - Diluted weighted average common shares outstanding 8,810 9,015 8,845 7,922 Diluted net income (loss) per share: $ 0.16 $ 0.02 $ 0.16 $ (0.08 )

INVENTORIES (Tables)

INVENTORIES (Tables)	9 Months Ended
	Jun. 30, 2015
INVENTORIES [Abstract]
Summary of Inventories	June 30, September 30, Raw materials $ 1,081 $ 1,228 Work in progress 327 295 Finished goods 422 340 $ 1,830 $ 1,863 Obsolescence reserve (269 ) (299 ) $ 1,561 $ 1,564

SEGMENT INFORMATION (Tables)

SEGMENT INFORMATION (Tables)	9 Months Ended
	Jun. 30, 2015
SEGMENT INFORMATION [Abstract]
Schedule of Operating Segments	Three Months Ended Nine Months Ended 2015 2014 2015 2014 Revenue: Service $ 5,001 $ 4,754 $ 13,929 $ 14,196 Product 1,149 1,278 3,792 3,968 $ 6,150 $ 6,032 $ 17,721 $ 18,164 Operating income (loss): Service $ 1,440 $ 293 $ 1,510 $ 669 Product 94 (37 ) 194 154 $ 1,534 $ 256 $ 1,704 $ 823 Interest expense (67 ) (123 ) (223 ) (408 ) Change in fair value of warrant liability – decrease (increase) 34 66 353 (1,095 ) Other income — 1 1 6 Net income (loss) before income taxes $ 1,501 $ 200 $ 1,835 $ (674 )

RESTRUCTURING (Tables)

RESTRUCTURING (Tables)	9 Months Ended
	Jun. 30, 2015
RESTRUCTURING [Abstract]
Summary of Restructuring Activity	Balance, Total Cash Other Balance, Lease related costs $ 961 $ 58 $ - $ - $ 1,019 Other costs 117 - - - 117 Total $ 1,078 $ 58 $ - $ - $ 1,136

FAIR VALUE OF FINANCIAL INSTR23

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)	9 Months Ended
	Jun. 30, 2015
FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]
Summary of Assumptions Used to Compute Fair Value of Warrants	June 30, 2015 September 30, 2014 Risk-free interest rate 0.23 % 0.41 % Dividend yield 0.00 % 0.00 % Volatility of the Company's common stock 53.98 % 63.58 % Expected life of the warrants (years) .87 1.6 Fair value per unit $ 0.404 $ 0.846
Schedule of Financial Liabilities Measured at Fair Value	Level 1 Level 2 Level 3 Interest rate swap agreement $ - $ 35 $ - Class A warrant liability $ - $ 323 $ - Level 1 Level 2 Level 3 Interest rate swap agreement $ - $ 21 $ - Class A warrant liability $ - $ 676 $ -

ACCUMULATED OTHER COMPREHENSI24

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)	9 Months Ended
	Jun. 30, 2015
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) [Abstract]
Schedule of Changes in Accumulated Other Comprehensive Income (Loss)	Three Months Ended Nine Months Ended 2015 2014 2015 2014 Foreign currency translation Balance, beginning of period $ 120 $ (2 ) $ 27 $ 32 Other comprehensive income (loss): Foreign currency translation adjustments (60 ) (31 ) 33 (65 ) Balance, end of period $ 60 $ (33 ) $ 60 $ (33 ) Interest rate swap Balance, beginning of period $ (46 ) $ - $ (21 ) $ - Other comprehensive (income) loss: Fair value adjustment 11 (41 ) (14 ) (41 ) Balance, end of period $ (35 ) $ (41 ) $ (35 ) $ (41 ) Total accumulated other comprehensive income (loss) $ 25 $ (74 ) $ 25 $ (74 )

STOCK-BASED COMPENSATION (Narra

STOCK-BASED COMPENSATION (Narrative) (Details) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding that were granted outside of the plan	30		30
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 19	$ 19	$ 67	$ 65

STOCK-BASED COMPENSATION (Summa

STOCK-BASED COMPENSATION (Summary of Stock Option Activity) (Details) - 9 months ended Jun. 30, 2015 - Employee Stock Option [Member] - $ / shares shares in Thousands	Total
Options (shares)
Outstanding - beginning of period	426
Exercised	(128)
Granted	35
Forfeitures	(26)
Outstanding - end of period	307
Weighted-Average Exercise Price
Outstanding - beginning of period	$ 1.83
Exercised	1.38
Granted	2.38
Forfeitures	4.21
Outstanding - end of period	1.88
Weighted-Average Grant Date Fair Value
Outstanding - beginning of period	1.41
Exercised	1.12
Granted	1.98
Forfeitures	2.91
Outstanding - end of period	$ 1.48

STOCK-BASED COMPENSATION (Fair

STOCK-BASED COMPENSATION (Fair Value Assumptions) (Details) - 9 months ended Jun. 30, 2015 - Stock Options [Member]	Total
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate, minimum	1.93%
Risk-free interest rate, maximum	2.13%
Dividend yield	0.00%
Expected volatility, minimum	88.00%
Expected volatility, maximum	100.06%
Expected life of the options (years)	8 years
Forfeitures	3.00%

INCOME (LOSS) PER SHARE (Narrat

INCOME (LOSS) PER SHARE (Narrative) (Details) shares in Thousands	9 Months Ended
	Jun. 30, 2014shares
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares not considered in computing diluted earnings per share	799
Series A Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares not considered in computing diluted earnings per share	592

INCOME (LOSS) PER SHARE (Reconc

INCOME (LOSS) PER SHARE (Reconciliation of Computation of Basic Income or Loss Per Share to Diluted Income or Loss Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Basic net income (loss) per share:
Net income (loss) applicable to common shareholders	$ 1,477	$ 215	$ 1,810	$ (666)
Weighted average common shares outstanding	8,080	8,068	8,077	7,922
Basic net income (loss) per share	$ 0.18	$ 0.03	$ 0.22	$ (0.08)
Diluted net income (loss) per share:
Net income (loss) applicable to common shareholders	$ 1,477	$ 215	$ 1,810	$ (666)
Change in fair value of warrant liability	(34)	(66)	(353)
Diluted net income (loss) applicable to common shareholders	$ 1,443	$ 149	$ 1,457	$ (666)
Weighted average common shares outstanding	8,080	8,068	8,077	7,922
Plus: Incremental shares from assumed conversions
Series A preferred shares	592	592	592
Class A warrants	15	200	48
Stock options/shares	123	155	128
Diluted weighted average common shares outstanding	8,810	9,015	8,845	7,922
Diluted net income (loss) per share	$ 0.16	$ 0.02	$ 0.16	$ (0.08)

INVENTORIES (Details)

INVENTORIES (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Sep. 30, 2014
INVENTORIES [Abstract]
Raw materials	$ 1,081	$ 1,228
Work in process	327	295
Finished goods	422	340
Gross inventories	1,830	1,863
Obsolescence reserve	(269)	(299)
Inventories	$ 1,561	$ 1,564

SEGMENT INFORMATION (Details)

SEGMENT INFORMATION (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015USD ($)	Jun. 30, 2014USD ($)	Jun. 30, 2015USD ($)segments	Jun. 30, 2014USD ($)
Segment Reporting Information [Line Items]
Number of segments | segments			2
Revenue	$ 6,150	$ 6,032	$ 17,721	$ 18,164
Operating income (loss)	1,534	256	1,704	823
Interest expense	(67)	(123)	(223)	(408)
Change in fair value of warrant liability - decrease (increase)	$ 34	66	353	(1,095)
Other income		1	1	6
Net income (loss) before income taxes	$ 1,501	200	1,835	(674)
Service [Member]
Segment Reporting Information [Line Items]
Revenue	5,001	4,754	13,929	14,196
Operating income (loss)	1,440	293	1,510	669
Product [Member]
Segment Reporting Information [Line Items]
Revenue	1,149	1,278	3,792	3,968
Operating income (loss)	$ 94	$ (37)	$ 194	$ 154

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2015	Sep. 30, 2014
INCOME TAXES [Abstract]
Liability for other uncertain income tax positions	$ 16	$ 16
Statutory federal income tax rate	34.00%
Effective income tax rate	1.40%

DEBT (Note Payable) (Details)

DEBT (Note Payable) (Details) - Replacement Note Payable Two [Member] - Scenario, Unspecified [Domain] $ in Thousands	9 Months Ended
	Jun. 30, 2015USD ($)	Oct. 31, 2013USD ($)
Debt Instrument [Line Items]
Debt instrument, maturity date	Oct. 31, 2014
Debt instrument, principal payment	$ 47
Debt instrument, face amount		$ 5,205
Debt instrument, basis spread on variable rate	4.00%
Debt instrument, minimum interest rate	6.00%
Fixed charge coverage ratio	1.25
Total liabilities to tangible net worth ratio	2.10

DEBT (Revolving Line of Credit)

DEBT (Revolving Line of Credit) (Details) - Revolving Line of Credit [Member] - EGC [Member] - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2015	Jan. 31, 2014
Debt Instrument [Line Items]
Line of credit, maximum borrowing capacity		$ 3,000
Expiration date of credit agreement	Jan. 31, 2014
Debt instrument, variable interest reference rate	Citibank's Prime Rate
Debt instrument, basis spread on variable rate	5.00%
Line of credit, frequency of facilities fee payments	annually
Line of credit, facilities fee, percentage	2.00%
Line of credit, collateral monitoring fee, percentage	0.20%
Line of credit, collateral	Borrowings under the Credit Agreement were secured by a blanket lien on our personal property, including certain eligible accounts receivable, inventory, and intellectual property assets, a second mortgage on our West Lafayette and Evansville real estate and all common stock of our U.S. subsidiaries and 65% of the common stock of our non-United States subsidiary. Borrowings were calculated based on 75% of eligible accounts receivable.
Minimum net worth covenant requirement	$ 8,000
Minimum [Member]
Debt Instrument [Line Items]
Line of credit, frequency of periodic payments	monthly
Line of credit, periodic interest payments	$ 15

DEBT (New Credit Facility) (Det

DEBT (New Credit Facility) (Details) - Credit Facility [Domain] - Range [Domain] $ in Thousands	3 Months Ended	9 Months Ended	12 Months Ended
	Mar. 31, 2016	Jun. 30, 2015USD ($)	Sep. 30, 2014USD ($)	Oct. 01, 2015
Huntington Bank [Member]
Debt Instrument [Line Items]
Debt issuance costs			$ 134
Facility term		5 years
Unamortized debt issuance costs		$ 101	122
Swap [Member]
Debt Instrument [Line Items]
Percentage of debt covered by swap		60.00%
Fixed interest rate		5.00%
New Credit Facility Term Loan [Member] | Huntington Bank [Member]
Debt Instrument [Line Items]
Debt instrument, face amount		$ 5,500
Debt instrument, principal payment		65
Debt instrument, carrying amount		$ 4,649	5,238
Debt instrument, variable interest reference rate		LIBOR
Debt instrument, basis spread on variable rate		3.25%
New Credit Facility Revolving Loan [Member] | Huntington Bank [Member]
Debt Instrument [Line Items]
Line of credit, maximum borrowing capacity		$ 2,000
Debt instrument, variable interest reference rate		LIBOR
Debt instrument, basis spread on variable rate		3.00%
Line of credit, facilities fee, percentage		0.25%
Line of credit, amount outstanding		$ 0	$ 202
Covenant terms		The revolving loan includes an annual clean-up provision that requires the Company to maintain a balance of not more than 20% of the maximum loan of $2,000 for a period of 30 days in any 12 month period while the revolving loan is outstanding.
Fixed charge coverage ratio		1.05
Leverage ratio		3
Amount of capital expenditures excluded from debt covenant		$ 1,000
New Credit Facility Revolving Loan [Member] | Scenario, Forecast [Member] | Huntington Bank [Member]
Debt Instrument [Line Items]
Fixed charge coverage ratio	1.10
Leverage ratio				2.50

RESTRUCTURING (Narrative) (Deta

RESTRUCTURING (Narrative) (Details) $ in Thousands	9 Months Ended
	Jun. 30, 2015USD ($)ft²	Sep. 30, 2014USD ($)
Restructuring Cost and Reserve [Line Items]
Area of property | ft²	120,000
Restructuring reserves	$ 1,136	$ 1,078
Scenario, Forecast [Member]
Restructuring Cost and Reserve [Line Items]
Estimated rent income	200
Lease Related Costs [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring reserves	$ 1,019	$ 961

RESTRUCTURING (Summary of Restr

RESTRUCTURING (Summary of Restructuring Activity) (Details) $ in Thousands	9 Months Ended
	Jun. 30, 2015USD ($)
Restructuring Cost and Reserve [Line Items]
Balance	$ 1,078
Total Charges	$ 58
Cash Payments
Other
Balance	$ 1,136
Lease Related Costs [Member]
Restructuring Cost and Reserve [Line Items]
Balance	961
Total Charges	$ 58
Cash Payments
Other
Balance	$ 1,019
Other Costs [Member]
Restructuring Cost and Reserve [Line Items]
Balance	$ 117
Total Charges
Cash Payments
Other
Balance	$ 117

FAIR VALUE OF FINANCIAL INSTR38

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - Derivative, Name [Domain] - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Jun. 30, 2015	Sep. 30, 2014	May. 31, 2012
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair value of warrant liability	$ 323	$ 676
Interest Rate Swap [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Percentage of debt covered by swap	60.00%
Interest Rate Swap [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Derivative liability
Interest Rate Swap [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Derivative liability	$ 35	$ 21
Interest Rate Swap [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Derivative liability
Warrant [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Derivative liability
Warrant [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Derivative liability	$ 323	$ 676
Warrant [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Derivative liability
Class B Warrant [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair value of warrant liability			$ 0
Derivative Financial Instruments, Liabilities [Member] | Class A Warrant [Member]
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Risk-free interest rate	0.23%	0.41%
Dividend yield	0.00%	0.00%
Volatility of the Company's common stock	53.98%	63.58%
Expected life of the options	10 months 13 days	1 year 7 months 6 days
Fair value per unit	$ 0.404	$ 0.846

ACCUMULATED OTHER COMPREHENSI39

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance			$ 9,536
Balance	$ 11,432		11,432
Foreign Currency Translation [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	120	$ (2)	27	$ 32
Other comprehensive income (loss)	(60)	(31)	33	(65)
Balance	60	$ (33)	60	$ (33)
Interest Rate Swap [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	(46)		(21)
Other comprehensive income (loss)	11	$ (41)	(14)	$ (41)
Balance	(35)	(41)	(35)	(41)
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	$ 25	$ (74)	$ 25	$ (74)

MEDIATION (Details)

MEDIATION (Details) - Jun. 30, 2015 - USD ($) $ in Thousands	Total	Total
MEDIATION [Abstract]
Mediation settlement	$ 640
Mediation legal expenses	$ 20	$ 34

MANAGEMENT'S PLAN (Details)

MANAGEMENT'S PLAN (Details) $ in Thousands	1 Months Ended
	Jan. 31, 2015USD ($)ft²	Jun. 30, 2015USD ($)ft²
Concentration Risk [Line Items]
Area of property | ft²		120,000
Expected costs		$ 800
Costs incurred to date		$ 300
Property Subject to Operating Lease [Member]
Concentration Risk [Line Items]
Term of lease	10 years
Area of property | ft²	51,000
Initial base rent	$ 50
Final base rent	$ 57