Inotiv (NOTV) 10-Q 15 Aug 16 2016 Q3 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	9 Months Ended
	Jun. 30, 2016	Aug. 09, 2016
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q3
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
Trading Symbol	BASI
Entity Common Stock, Shares Outstanding		8,107,558

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2016	Sep. 30, 2015
Current assets:
Cash and cash equivalents	$ 492	$ 438
Accounts receivable
Trade, net of allowance of $541 at June 30, 2016 and $559 at September 30, 2015, respectively	2,497	2,904
Unbilled revenues and other	1,025	1,110
Inventories	1,476	1,466
Prepaid expenses	820	773
Refundable income taxes	4	0
Total current assets	6,314	6,691
Property and equipment, net	16,090	15,989
Goodwill	1,009	1,009
Debt issue costs	73	94
Other assets	28	32
Total assets	23,514	23,815
Current liabilities:
Accounts payable	3,950	2,858
Accrued expenses	824	1,710
Customer advances	3,407	3,414
Income tax accruals	16	30
Revolving line of credit	1,551	86
Fair value of warrant liability	0	189
Fair value of interest rate swap	48	50
Current portion of capital lease obligation	152	230
Current portion of long-term debt	3,863	786
Total current liabilities	13,811	9,353
Capital lease obligation, less current portion	232	68
Long-term debt, less current portion	0	3,666
Total liabilities	14,043	13,087
Shareholders’ 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, 2016 and September 30, 2015, respectively	1,185	1,185
Common shares, no par value: Authorized 19,000,000 shares; 8,107,558 shares and 8,105,007 issued and outstanding at June 30, 2016 and September 30, 2015, respectively	1,989	1,988
Additional paid-in capital	21,230	21,193
Accumulated deficit	(14,885)	(13,691)
Accumulated other comprehensive income (loss)	(48)	53
Total shareholders’ equity	9,471	10,728
Total liabilities and shareholders’ equity	$ 23,514	$ 23,815

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2016	Sep. 30, 2015
Allowance for Doubtful Accounts Receivable, Current	$ 541	$ 559
Common Stock, No Par Value	$ 0	$ 0
Common Stock, Shares Authorized	19,000,000	19,000,000
Common Stock, Shares, Issued	8,107,558	8,105,007
Common Stock, Shares, Outstanding	8,107,558	8,105,007
Series A Preferred Stock [Member]
Preferred Stock, Shares Authorized	1,000,000	1,000,000
Preferred Stock, No Par Value	$ 0	$ 0
Preferred Stock, Shares Issued	1,185	1,185
Preferred Stock, Shares Outstanding	1,185	1,185
Preferred Stock, Par or 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, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Service revenue	$ 3,773	$ 5,001	$ 11,881	$ 13,929
Product revenue	1,280	1,149	3,406	3,792
Total revenue	5,053	6,150	15,287	17,721
Cost of service revenue	3,183	3,003	9,838	9,501
Cost of product revenue	697	657	1,976	2,024
Total cost of revenue	3,880	3,660	11,814	11,525
Gross profit	1,173	2,490	3,473	6,196
Operating expenses:
Selling	405	379	1,072	1,141
Research and development	103	160	392	489
General and administrative	1,030	1,037	3,165	3,468
Mediation settlement, net	0	(620)	0	(606)
Total operating expenses	1,538	956	4,629	4,492
Operating (loss) income	(365)	1,534	(1,156)	1,704
Interest expense	(107)	(67)	(243)	(223)
Change in fair value of warrant liability - decrease	21	34	189	353
Other income	1	0	2	1
Net income (loss) before income taxes	(450)	1,501	(1,208)	1,835
Income tax (benefit) expense	(17)	23	(15)	25
Net income (loss)	(433)	1,478	(1,193)	1,810
Other comprehensive income (loss):	(2)	(49)	(101)	19
Comprehensive income (loss)	$ (435)	$ 1,429	$ (1,294)	$ 1,829
Other comprehensive (loss) income :
Basic net income (loss) per share	$ (0.05)	$ 0.18	$ (0.15)	$ 0.22
Diluted net income (loss) per share	$ (0.05)	$ 0.16	$ (0.15)	$ 0.16
Weighted common shares outstanding:
Basic	8,108	8,080	8,107	8,077
Diluted	8,108	8,810	8,107	8,845

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Operating activities:
Net income (loss)	$ (1,193)	$ 1,810
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	1,031	1,069
Change in fair value of warrant liability - (decrease)	(189)	(353)
Employee stock compensation expense	34	67
Provision for doubtful accounts, net	(19)	1
Loss on sale of property and equipment	12	5
Changes in operating assets and liabilities:
Accounts receivable	511	(611)
Inventories	(10)	3
Income tax accruals	(18)	20
Prepaid expenses and other assets	14	146
Accounts payable	990	(226)
Accrued expenses	(886)	(775)
Customer advances	(7)	19
Net cash provided by operating activities	270	1,175
Investing activities:
Capital expenditures	(837)	(666)
Net cash used by investing activities	(837)	(666)
Financing activities:
Payments of long-term debt	(589)	(589)
Payments of debt issuance costs	(41)	0
Proceeds from exercise of stock options	3	0
Payments on revolving line of credit	(7,832)	(5,569)
Borrowings on revolving line of credit	9,297	5,367
Payments on capital lease obligations	(217)	(214)
Net cash (used in) provided by financing activities	621	(1,005)
Effect of exchange rate changes	0	31
Net increase (decrease) in cash and cash equivalents	54	(465)
Cash and cash equivalents at beginning of period	438	981
Cash and cash equivalents at end of period	492	516
Supplemental disclosure of non-cash financing activities:
Equipment financed under capital leases	$ 303	$ 0

DESCRIPTION OF THE BUSINESS AND

DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION	9 Months Ended
	Jun. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [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 by pharmaceutical companies, universities, government research centers and medical research institutions. Our customers are located throughout the world. We have prepared the accompanying unaudited interim condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”), and therefore should be read in conjunction with our audited consolidated financial statements, and the notes thereto, included in the Company’s annual report on Form 10-K for the year ended September 30, 2015. In the opinion of management, the condensed consolidated financial statements for the three and nine months ended June 30, 2016 and 2015 include all adjustments which are necessary for a fair presentation of the results of the interim periods and of our financial position at June 30, 2016. The results of operations for the three and nine months ended June 30, 2016 are not necessarily indicative of the results for the year ending September 30, 2016. We are currently in default with our credit arrangements with Huntington Bank, as more fully described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Credit Facility.” Huntington Bank has reserved all rights with respect to our default, including the ability to accelerate and immediately demand payment of the outstanding debt under our term loan and revolving loan, to exercise its security interest, to take possession of or sell the underlying collateral, to refrain from making additional advances under the revolving loan and to terminate our interest rate swap. Were Huntington Bank to demand payment of the outstanding debt (whether at or prior to the scheduled maturity of the loans on September 30, 2016), we would currently have insufficient funds to satisfy that obligation, and the bank’s exercise of alternative remedies could also have a material adverse effect on our operations and financial condition. We cannot provide assurance that we will be able to resolve our liquidity issues on satisfactory terms, or at all. We have classified the entire term loan payable to Huntington Bank and the interest rate swap agreement with Huntington Bank as current liabilities of the Company

MANAGEMENT'S PLAN

MANAGEMENT'S PLAN	9 Months Ended
	Jun. 30, 2016
Managements Plan [Abstract]
MANAGEMENT'S PLAN	2. MANAGEMENT’S PLAN The Company’s unaudited interim condensed consolidated financial statements were prepared on a going concern basis, which assumes continuity of operations and realization of assets and satisfaction of liabilities in the ordinary course of business. The financial statements do not include any adjustments to reflect possible future effects on the recoverability and classification of assets and liabilities that may result in the event the Company’s plans, including plans to rectify our liquidity issues, are not successful. As noted above, we are currently in default of our credit arrangements and Huntington Bank has reserved all rights with respect to our default. The Company’s liquidity circumstances, including the potential inability to find replacement financing, raise substantial doubt about the Company’s ability to continue as a going concern, and management has and will continue to take measures to mitigate that possibility. The Company is engaged in exploring initiatives to address solutions to our liquidity issues, which include the evaluation and pursuit of various sources of financing, including a sale and leaseback of the West Lafayette facility. Management is also undergoing a detailed review of all current account management and acquisition strategies and market programs and has introduced new initiatives designed to increase revenue around focused strength areas. These key areas of expertise include increasing our IND-enabling studies in nonhuman primates, partnering with clinics for sample analysis and sample kit preparation, offering bioequivalence study expertise to our generics clients and increasing market awareness and adoption of the BASi Culex™ In-vivo Automated Blood Sampling System and related consumables via equipment grants. Management has been, and continues to be, actively engaged in more effectively controlling operating costs in the short term as we strive for long term stabilization and growth.

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	9 Months Ended
	Jun. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
STOCK-BASED COMPENSATON	3. 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, 2015. All options granted under the Plan have 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, 2016, there are 30 19 67 5 34 A summary of our stock option activity for the nine months ended June 30, 2016 is as follows (in thousands except for share prices): Options Weighted- Weighted- Outstanding - October 1, 2015 319 $ 1.73 $ 1.38 Exercised (3) $ 1.14 $ 0.95 Granted 10 $ 0.94 $ 0.79 Terminated (16) $ 2.14 $ 1.78 Outstanding – June 30, 2016 310 $ 1.69 $ 1.34

INCOME (LOSS) PER SHARE

INCOME (LOSS) PER SHARE	9 Months Ended
	Jun. 30, 2016
Earnings Per Share [Abstract]
INCOME (LOSS) PER SHARE	4. INCOME (LOSS) PER SHARE We compute basic income (loss) per share using the weighted average number of common shares outstanding. During the three and nine month period ended June 30, 2015 and 2016, respectively, the Company had three categories of dilutive potential common shares: the Series A preferred shares issued in May 2011 in connection with the Company’s registered direct offering, the warrants issued in connection with the same offering in May 2011 (which expired in May, 2016), 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 Three Months Ended Nine Months Ended 2016 2015 2016 2015 Basic net income (loss) per share: Net income (loss) applicable to common shareholders $ (433) $ 1,478 $ (1,193) $ 1,810 Weighted average common shares outstanding 8,108 8,080 8,107 8,077 Basic net income (loss) per share $ (0.05) $ 0.18 $ (0.15) $ 0.22 Diluted net income (loss) per share: Net income (loss) applicable to common shareholders $ (433) $ 1,478 $ (1,193) $ 1,810 Change in Fair Value of Warrant Liability — (34) — (353) Diluted net income (loss) applicable to common shareholders $ (433) $ 1,444 $ (1,193) $ 1,457 Weighted average common shares outstanding 8,108 8,080 8,107 8,077 Plus: Incremental shares from assumed conversions Series A preferred shares — 592 — 592 Class A warrants — 15 — 48 Dilutive stock options/shares — 123 — 128 Diluted weighted average common shares outstanding 8,108 8,810 8,107 8,845 Diluted net income (loss) per share $ (0.05) $ 0.16 $ (0.15) $ 0.16

INVENTORIES

INVENTORIES	9 Months Ended
	Jun. 30, 2016
Inventory Disclosure [Abstract]
INVENTORIES	5. INVENTORIES June 30, September 30, Raw materials $ 1,174 $ 1,112 Work in progress 233 247 Finished goods 341 408 $ 1,748 $ 1,767 Obsolescence reserve (272) (301) $ 1,476 $ 1,466

SEGMENT INFORMATION

SEGMENT INFORMATION	9 Months Ended
	Jun. 30, 2016
Segment Reporting [Abstract]
SEGMENT INFORMATION	6. SEGMENT INFORMATION We operate in two principal segments - research services and research products. Our Service segment provides research and development support on a contract basis directly to pharmaceutical companies. Our Product segment provides liquid chromatography, electrochemical and physiological monitoring products to pharmaceutical companies, universities, government research centers and medical research institutions. Our accounting policies in these segments are the same as those described in the summary of significant accounting policies found in Note 2 to the Consolidated Financial Statements in our annual report on Form 10-K for the year ended September 30, 2015. Three Months Ended Nine Months Ended 2016 2015 2016 2015 Revenue: Service $ 3,773 $ 5,001 $ 11,881 $ 13,929 Product 1,280 1,149 3,406 3,792 $ 5,053 $ 6,150 $ 15,287 $ 17,721 Operating income (loss): Service $ (364) $ 1,440 $ (962) $ 1,510 Product (1) 94 (194) 194 $ (365) $ 1,534 $ (1,156) $ 1,704 Interest expense (107) (67) (243) (223) Change in fair value of warrant liability – decrease 21 34 189 353 Other income 1 — 2 1 Income (loss) before income taxes $ (450) $ 1,501 $ (1,208) $ 1,835

INCOME TAXES

INCOME TAXES	9 Months Ended
	Jun. 30, 2016
Income Tax Disclosure [Abstract]
INCOME TAXES	7. 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, 2016 and September 30, 2015, we had a $ 16 34 1.2 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 2010.

DEBT

DEBT	9 Months Ended
	Jun. 30, 2016
Debt Disclosure [Abstract]
DEBT	8. DEBT Credit Facility On May 14, 2014, we entered into a Credit Agreement with Huntington Bank, which was subsequently amended on May 14, 2015 (“Agreement”). 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. As of December 31, 2015, we were not in compliance with certain financial covenants of the Agreement. Huntington Bank advised us that the failure to meet these financial covenants constituted an event of default under the Agreement and reserved all of its rights with respect thereto. As of March 31, 2016, we were also in default of the financial covenants covering the period then ended. On April 27, 2016, the Company entered into a Forbearance Agreement and Second Amendment to Credit Agreement with Huntington Bank and on July 1, 2016, the Company entered into a Second Forbearance Agreement and Third Amendment to Credit Agreement (“Second Forbearance Agreement”) with Huntington Bank. Subject to the conditions set forth in the Second Forbearance Agreement, Huntington Bank agreed to continue to forbear from exercising its rights and remedies under the Agreement and from terminating the Company’s related swap agreement with respect to the Company’s non-compliance with applicable financial covenants under the Agreement and any further non-compliance with such covenants during the forbearance period ending September 30, 2016 and to continue to make advances under the Agreement. In exchange for Huntington Bank’s agreement to forbear from exercising its rights and remedies under the Agreement, the Company agreed to, among other things: (i) amend the maturity dates for the term and revolving loans under the Agreement to September 30, 2016, (ii) meet an additional financial covenant during the forbearance period; (iii) take commercially reasonable efforts to obtain financing sufficient to repay indebtedness under the Agreement in full upon the expiration of the forbearance period; (iv) periodically deliver to Huntington Bank certain financial and budget information during the forbearance period; and (v) engage a consultant for purposes of preparing a report to Huntington Bank evaluating various matters concerning the Company. The Second Forbearance Agreement provided for immediate termination of the forbearance period upon the occurrence of, among other events, the failure of the Company to perform, observe or comply with the terms of the Second Forbearance Agreement. As of June 30, 2016, the Company was not in compliance with the additional financial covenant under the Second Forbearance Agreement, resulting in termination of the forbearance period. Huntington Bank has reserved its rights resulting from this default, but as of August 15, 2016, has not exercised any of its remedies. The available remedies include among others, the ability to accelerate and immediately demand payment of the outstanding debt under our term loan and revolving loan, to exercise its security interest, to take possession of or sell the underlying collateral, to refrain from making additional advances under the revolving loan, to increase interest accruing on the debt by five percent ( 5 The term loan for $ 5,500 65 3,863 4,452 2,000 2,000 1,551 86 Were Huntington Bank to demand payment of the outstanding debt (whether at or prior to the scheduled maturity of the loans on September 30, 2016), we would currently have insufficient funds to satisfy that obligation, and the bank’s exercise of alternative remedies could also have a material adverse effect on our operations and financial condition. As an example, in recent periods we have drawn on our revolving facility to supplement cash from operations. Should cash from operating activities remain insufficient to cover expenses and if Huntington Bank determines to refrain from making additional advances under the revolving facility, we may not have the requisite funds to continue operations. We cannot provide assurance that we will be able to complete initiatives to refinance our indebtedness or otherwise resolve our liquidity issues. If we are unable to execute on our initiatives, we may have insufficient funds to both satisfy our debt obligations and operate our business. We incurred $ 134 73 94 Interest Rate Swap 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

RESTRUCTURING

RESTRUCTURING	9 Months Ended
	Jun. 30, 2016
Restructuring and Related Activities [Abstract]
RESTRUCTURING	9. 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 sublease rentals and the estimated cost and number of days it may 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 20 60 1,000 Other costs of $ 117

FAIR VALUE OF FINANCIAL INSTRUM

FAIR VALUE OF FINANCIAL INSTRUMENTS	9 Months Ended
	Jun. 30, 2016
Fair Value Disclosures [Abstract]
FAIR VALUE OF FINANCIAL INSTRUMENTS	10. 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 that are measured at fair value on a recurring basis. We recorded these warrants as a liability determining the fair value at inception on May 11, 2011. Subsequent quarterly fair value measurements, using the Black Scholes model which is considered a level 2 measurement, are calculated with fair value changes charged to the statement of operations and comprehensive income (loss). The Class B Warrants expired in May 2012 and the liability was reduced to zero and the Class A Warrants expired in May, 2016 and the liability was reduced to zero. Therefore no assumptions were used to compute the fair value of the Class A Warrants at June 30, 2016. 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 Level 1 Level 2 Level 3 Interest rate swap agreement $ - $ 48 $ - Class A warrant liability $ - $ - $ - The following table summarizes fair value measurements by level as of September 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 $ - $ 50 $ - Class A warrant liability $ - $ 189 $ -

MEDIATION

MEDIATION	9 Months Ended
	Jun. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
MEDIATION	11. MEDIATION In the third quarter of fiscal 2015, the Company received $ 640 20 34

STOCK-BASED COMPENSATION (Table

STOCK-BASED COMPENSATION (Tables)	9 Months Ended
	Jun. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of Share-based Compensation, Stock Options, Activity	A summary of our stock option activity for the nine months ended June 30, 2016 is as follows (in thousands except for share prices): Options Weighted- Weighted- Outstanding - October 1, 2015 319 $ 1.73 $ 1.38 Exercised (3) $ 1.14 $ 0.95 Granted 10 $ 0.94 $ 0.79 Terminated (16) $ 2.14 $ 1.78 Outstanding – June 30, 2016 310 $ 1.69 $ 1.34

INCOME (LOSS) PER SHARE (Tables

INCOME (LOSS) PER SHARE (Tables)	9 Months Ended
	Jun. 30, 2016
Earnings Per Share [Abstract]
Schedule of Earnings Per Share, Basic and Diluted	The following table reconciles our computation of basic net income (loss) per share to diluted net income (loss) per share: Three Months Ended Nine Months Ended 2016 2015 2016 2015 Basic net income (loss) per share: Net income (loss) applicable to common shareholders $ (433) $ 1,478 $ (1,193) $ 1,810 Weighted average common shares outstanding 8,108 8,080 8,107 8,077 Basic net income (loss) per share $ (0.05) $ 0.18 $ (0.15) $ 0.22 Diluted net income (loss) per share: Net income (loss) applicable to common shareholders $ (433) $ 1,478 $ (1,193) $ 1,810 Change in Fair Value of Warrant Liability — (34) — (353) Diluted net income (loss) applicable to common shareholders $ (433) $ 1,444 $ (1,193) $ 1,457 Weighted average common shares outstanding 8,108 8,080 8,107 8,077 Plus: Incremental shares from assumed conversions Series A preferred shares — 592 — 592 Class A warrants — 15 — 48 Dilutive stock options/shares — 123 — 128 Diluted weighted average common shares outstanding 8,108 8,810 8,107 8,845 Diluted net income (loss) per share $ (0.05) $ 0.16 $ (0.15) $ 0.16

INVENTORIES (Tables)

INVENTORIES (Tables)	9 Months Ended
	Jun. 30, 2016
Inventory Disclosure [Abstract]
Schedule of Inventory, Current	Inventories consisted of the following: June 30, September 30, Raw materials $ 1,174 $ 1,112 Work in progress 233 247 Finished goods 341 408 $ 1,748 $ 1,767 Obsolescence reserve (272) (301) $ 1,476 $ 1,466

SEGMENT INFORMATION (Tables)

SEGMENT INFORMATION (Tables)	9 Months Ended
	Jun. 30, 2016
Segment Reporting [Abstract]
Schedule of Operating Segments	Three Months Ended Nine Months Ended 2016 2015 2016 2015 Revenue: Service $ 3,773 $ 5,001 $ 11,881 $ 13,929 Product 1,280 1,149 3,406 3,792 $ 5,053 $ 6,150 $ 15,287 $ 17,721 Operating income (loss): Service $ (364) $ 1,440 $ (962) $ 1,510 Product (1) 94 (194) 194 $ (365) $ 1,534 $ (1,156) $ 1,704 Interest expense (107) (67) (243) (223) Change in fair value of warrant liability – decrease 21 34 189 353 Other income 1 — 2 1 Income (loss) before income taxes $ (450) $ 1,501 $ (1,208) $ 1,835

FAIR VALUE OF FINANCIAL INSTR21

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)	9 Months Ended
	Jun. 30, 2016
Fair Value Disclosures [Abstract]
Schedule of Financial Liabilities Measured at Fair Value	The following table summarizes fair value measurements by level as of June 30, 2016, for the Company’s financial liabilities measured at fair value on a recurring basis: Level 1 Level 2 Level 3 Interest rate swap agreement $ - $ 48 $ - Class A warrant liability $ - $ - $ - The following table summarizes fair value measurements by level as of September 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 $ - $ 50 $ - Class A warrant liability $ - $ 189 $ -

STOCK-BASED COMPENSATION (Detai

STOCK-BASED COMPENSATION (Details) - Employee Stock Option [Member]	9 Months Ended
	Jun. 30, 2016$ / sharesshares
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Options (shares) Outstanding | shares	319
Options (shares) Exercised | shares	(3)
Options (shares) Granted | shares	10
Options (shares) Terminated | shares	(16)
Options (shares) Outstanding | shares	310
Weighted-Average Exercise Price Outstanding	$ 1.73
Weighted-Average Exercise Price Exercised	1.14
Weighted-Average Exercise Price Granted	0.94
Weighted-Average Exercise Price Terminated	2.14
Weighted-Average Exercise Price Outstanding	1.69
Weighted-Average Grant Date Fair Value Outstanding	1.38
Weighted-Average Grant Date Fair Value Exercised	0.95
Weighted-Average Grant Date Fair Value Granted	0.79
Weighted-Average Grant Date Fair Value Terminated	1.78
Weighted-Average Grant Date Fair Value Outstanding	$ 1.34

STOCK-BASED COMPENSATION (Det23

STOCK-BASED COMPENSATION (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share Based Compensation Options Outstanding Issued Outside Of Stock Option Plan	30		30
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated Share-based Compensation Expense	$ 5	$ 19	$ 34	$ 67

INCOME (LOSS) PER SHARE (Detail

INCOME (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Basic net income (loss) per share:
Net income (loss) applicable to common shareholders	$ (433)	$ 1,478	$ (1,193)	$ 1,810
Weighted average common shares outstanding	8,108	8,080	8,107	8,077
Basic net income (loss) per share	$ (0.05)	$ 0.18	$ (0.15)	$ 0.22
Diluted net income (loss) per share:
Net income (loss) applicable to common shareholders	$ (433)	$ 1,478	$ (1,193)	$ 1,810
Change in Fair Value of Warrant Liability	0	(34)	0	(353)
Diluted net income (loss) applicable to common shareholders	$ (433)	$ 1,444	$ (1,193)	$ 1,457
Weighted average common shares outstanding	8,108	8,080	8,107	8,077
Plus: Incremental shares from assumed conversions
Series A preferred shares	0	592	0	592
Class A warrants	0	15	0	48
Dilutive stock options/shares	0	123	0	128
Diluted weighted average common shares outstanding	8,108	8,810	8,107	8,845
Diluted net income (loss) per share	$ (0.05)	$ 0.16	$ (0.15)	$ 0.16

INCOME (LOSS) PER SHARE (Deta25

INCOME (LOSS) PER SHARE (Details Textual) - shares shares in Thousands	3 Months Ended	9 Months Ended
	Jun. 30, 2016	Jun. 30, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Class of Warrant or Right, Expiration Date		May 31, 2016
Series A Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	592	592
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	799	799

INVENTORIES (Details)

INVENTORIES (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Sep. 30, 2015
Inventory [Line Items]
Raw materials	$ 1,174	$ 1,112
Work in progress	233	247
Finished goods	341	408
Gross inventories	1,748	1,767
Obsolescence reserve	(272)	(301)
Inventories	$ 1,476	$ 1,466

SEGMENT INFORMATION (Details)

SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Segment Reporting Information [Line Items]
Revenue	$ 5,053	$ 6,150	$ 15,287	$ 17,721
Operating income (loss)	(365)	1,534	(1,156)	1,704
Interest expense	(107)	(67)	(243)	(223)
Change in fair value of warrant liability - decrease	21	34	189	353
Other income	1	0	2	1
Income (loss) before income taxes	(450)	1,501	(1,208)	1,835
Services Segment [Member]
Segment Reporting Information [Line Items]
Revenue	3,773	5,001	11,881	13,929
Operating income (loss)	(364)	1,440	(962)	1,510
Products Segment [Member]
Segment Reporting Information [Line Items]
Revenue	1,280	1,149	3,406	3,792
Operating income (loss)	$ (1)	$ 94	$ (194)	$ 194

INCOME TAXES (Details Textual)

INCOME TAXES (Details Textual) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2016	Sep. 30, 2015
Income Taxes [Line Items]
Unrecognized Tax Benefits, Beginning Balance	$ 16	$ 16
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	34.00%
Effective Income Tax Rate Reconciliation, Percent, Total	1.20%

DEBT (Details Textual)

DEBT (Details Textual) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2016	Sep. 30, 2015
Interest Rate Swap [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	60.00%
Huntington Bank [Member]
Debt Instrument [Line Items]
Debt Instrument Maturity Date	Sep. 30, 2016
Debt Issuance Costs	$ 134
Deferred Finance Costs, Net	$ 73	$ 94
Debt Instrument, Interest Rate, Increase (Decrease)	5.00%
Term Loan Payable To Bank [Member] | Interest Rate Swap [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	5.00%
Credit Facility Term Loan [Member] | Huntington Bank [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 5,500
Debt Instrument, Periodic Payment, Principal	65
Long-term Debt, Gross	$ 3,863	4,452
Debt Instrument, Description of Variable Rate Basis	LIBOR plus 325 basis points
Credit Facility Revolving Loan [Member] | Huntington Bank [Member]
Debt Instrument [Line Items]
Debt Instrument, Description of Variable Rate Basis	LIBOR plus 300 basis points
Line of Credit Facility, Maximum Borrowing Capacity	$ 2,000
Line of Credit Facility, Commitment Fee Percentage	0.25%
Line of Credit Facility, 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.
Long-term Line of Credit	$ 1,551	$ 86

RESTRUCTURING (Details Textual)

RESTRUCTURING (Details Textual) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015USD ($)	Dec. 31, 2013USD ($)	Jun. 30, 2016USD ($)ft²	Jun. 30, 2015USD ($)
Restructuring Cost and Reserve [Line Items]
Area of property | ft² | ft²			120,000
Estimated rent income	$ 20	$ 200		$ 60
Other Restructuring Costs			$ 117
Lease Related Costs
Restructuring Cost and Reserve [Line Items]
Restructuring reserves			$ 1,000

FAIR VALUE OF FINANCIAL INSTR31

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands	Jun. 30, 2016	Sep. 30, 2015
Fair Value, Inputs, Level 3 [Member] | Warrant [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liability	$ 0	$ 0
Fair Value, Inputs, Level 2 [Member] | Warrant [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liability	0	189
Fair Value, Inputs, Level 1 [Member] | Warrant [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liability	0	0
Interest Rate Swap [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liability	0	0
Interest Rate Swap [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liability	48	50
Interest Rate Swap [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liability	$ 0	$ 0

FAIR VALUE OF FINANCIAL INSTR32

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details Textual)	Jun. 30, 2016
Percentage of Debt Hedged by Interest Rate Derivatives	60.00%

MEDIATION (Details Textual)

MEDIATION (Details Textual) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Jun. 30, 2015	Jun. 30, 2015
Litigation Settlement, Expense	$ 20	$ 34
Proceeds from Legal Settlements	$ 640