Innovative Solutions and Support (ISSC) 10-K 21 Dec 18 2018 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2018	Nov. 30, 2018	Mar. 31, 2018
Document and Entity Information
Entity Registrant Name	INNOVATIVE SOLUTIONS & SUPPORT INC
Entity Central Index Key	836,690
Document Type	10-K
Document Period End Date	Sep. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--09-30
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Public Float			$ 44.7
Entity Common Stock, Shares Outstanding		16,840,599
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	FY

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2018	Sep. 30, 2017
Current assets
Cash and cash equivalents	$ 20,390,713	$ 24,680,301
Accounts receivable	3,449,893	2,748,597
Unbilled receivables		1,480,822
Inventories	4,280,108	4,179,654
Prepaid expenses and other current assets	544,234	1,092,064
Total current assets	28,664,948	34,181,438
Property and equipment, net	8,786,737	6,669,011
Other assets	181,993	187,315
Total assets	37,633,678	41,037,764
Current liabilities
Accounts payable	1,529,792	1,321,251
Accrued expenses	1,463,021	1,760,037
Deferred revenue	356,801	280,354
Total current liabilities	3,349,614	3,361,642
Non-current deferred income taxes	129,594	67,742
Total liabilities	3,479,208	3,429,384
Commitments and contingencies (See Note 14)
Shareholders' equity
Preferred stock, 10,000,000 shares authorized, $.001 par value, of which 200,000 shares are authorized as Class A Convertible stock. No shares issued and outstanding at September 30, 2018 and 2017
Common stock, $.001 par value: 75,000,000 shares authorized, 18,937,050 and 18,879,580 issued at September 30, 2018 and 2017, respectively	18,937	18,880
Additional paid-in capital	51,783,779	51,583,841
Retained earnings	3,720,291	7,374,196
Treasury stock, at cost, 2,096,451 shares at September 30, 2017 and September 30, 2018	(21,368,537)	(21,368,537)
Total shareholders' equity	34,154,470	37,608,380
Total liabilities and shareholders' equity	$ 37,633,678	$ 41,037,764

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2018	Sep. 30, 2017
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	75,000,000	75,000,000
Common stock, shares issued	18,937,050	18,879,580
Treasury stock, shares	2,096,451	2,096,451
Class A Convertible stock
Preferred stock, shares authorized	200,000	200,000

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Net sales:
Product	$ 13,450,803	$ 16,133,371	$ 26,985,899
Engineering development contracts	399,569	653,303	983,804
Total net sales	13,850,372	16,786,674	27,969,703
Cost of sales:
Product	7,120,731	8,294,228	11,112,339
Engineering development contracts	191,192	374,121	369,984
Total cost of sales	7,311,923	8,668,348	11,482,323
Gross profit	6,538,449	8,118,326	16,487,380
Operating expenses:
Research and development	3,575,801	4,456,657	4,873,328
Selling, general and administrative	6,674,187	3,739,234	9,170,865
Total operating expenses	10,249,988	8,195,891	14,044,193
Operating (loss) income	(3,711,539)	(77,565)	2,443,187
Interest income	53,561	35,888	33,504
Other income	67,724	4,858,224	78,440
(Loss) income before income taxes	(3,590,254)	4,816,547	2,555,131
Income tax expense	63,651	247,920	568,330
Net (loss) income	$ (3,653,905)	$ 4,568,627	$ 1,986,801
Net (loss) income per common share:
Basic (in dollars per share)	$ (0.22)	$ 0.27	$ 0.12
Diluted (in dollars per share)	$ (0.22)	$ 0.27	$ 0.12
Weighted average shares outstanding:
Basic (in shares)	16,805,991	16,742,461	16,927,055
Diluted (in shares)	16,805,991	16,855,644	17,039,296

CONSOLIDATED STATEMENTS OF SHAR

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($)	Common Stock	Additional Paid-In Capital	Retained Earnings	Treasury Stock	Total
Balance at Sep. 30, 2015	$ 18,756	$ 51,148,722	$ 818,768	$ (20,643,760)	$ 31,342,486
Increase (Decrease) in Stockholders' Equity
Share-based compensation		60,272			60,272
Issuance of stock to directors	57	183,165			183,222
Purchase of treasury stock				(724,777)	(724,777)
Net income (loss)			1,986,801		1,986,801
Balance at Sep. 30, 2016	18,813	51,392,159	2,805,569	(21,368,537)	32,848,004
Increase (Decrease) in Stockholders' Equity
Issuance of stock to directors	67	191,682			191,749
Net income (loss)			4,568,627		4,568,627
Balance at Sep. 30, 2017	18,880	51,583,841	7,374,196	(21,368,537)	37,608,380
Increase (Decrease) in Stockholders' Equity
Issuance of stock to directors	57	199,938			199,995
Net income (loss)			(3,653,905)		(3,653,905)
Balance at Sep. 30, 2018	$ 18,937	$ 51,783,779	$ 3,720,291	$ (21,368,537)	$ 34,154,470

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$ (3,653,905)	$ 4,568,627	$ 1,986,801
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	436,208	449,189	493,361
Share-based compensation expense:
Stock options			68,172
Stock awards	199,995	191,749	183,222
Tax adjustment from share-based compensation			(7,899)
(Gain) loss on disposal of property and equipment			3,605
Excess and obsolete inventory cost		92,829
Deferred income taxes	61,852	41	494,016
(Increase) decrease in:
Accounts receivable	225,336	1,762,494	(2,116,941)
Unbilled receivables, net	554,190	116,850	2,322,537
Inventories	(100,454)	(626,655)	951,488
Prepaid expenses and other current assets	288,899	(91,280)	371,684
Other non-current assets		(32,967)
Increase (decrease) in:
Accounts payable	208,541	(182,520)	67,790
Accrued expenses	(297,016)	(129,871)	(678,623)
Income taxes	258,931	(153,577)
Deferred revenue	76,447	100,769	(577,160)
Net cash (used in) provided by operating activities	(1,740,976)	6,065,678	3,562,053
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(2,548,612)	(153,038)	(352,762)
Proceeds from the sale of property and equipment			1,108
Net cash (used in) investing activities	(2,548,612)	(153,038)	(351,654)
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock			(724,777)
Net cash (used in) financing activities			(724,777)
Net increase in cash and cash equivalents	(4,289,588)	5,912,640	2,485,622
Cash and cash equivalents, beginning of year	24,680,301	18,767,661	16,282,039
Cash and cash equivalents, end of year	20,390,713	24,680,301	18,767,661
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for income tax		$ 400,000	175,000
Cash received from income tax refund	265,588		$ 364,836
SUPPLEMENTAL DISCLOSURE OF NONCASH INFORMATION
Transfer from unbilled to accounts receivable	$ 926,632

Background

Background	12 Months Ended
	Sep. 30, 2018
Background
Background	1. Background Innovative Solutions and Support, Inc. (the “Company,” “IS&S,” “we” or “us”) was incorporated in Pennsylvania on February 12, 1988. The Company operates in one business segment as a systems integrator that designs, develops, manufactures, sells, and services air data equipment, engine display systems, standby equipment, primary flight guidance and cockpit display systems for retrofit applications and original equipment manufacturers (“OEMs”). The Company supplies integrated Flight Management Systems (“FMS”), Flat Panel Display Systems (“FPDS”), FPDS with Autothrottle, air data equipment, Integrated Standby Units (“ISU”), ISU with Autothrottle and advanced Global Positioning System (“GPS”) receivers that enable reduced carbon footprint navigation. The Company has continued to position itself as a system integrator, which capability provides the Company with the potential to generate more substantive orders over a broader product base. The strategy, as both a manufacturer and integrator, is designed to leverage the latest technologies developed for the computer and telecommunications industries into advanced and cost-effective solutions for the general aviation, commercial air transport, United States Department of Defense (“DoD”)/governmental, and foreign military markets. This approach, combined with the Company’s industry experience, is designed to enable IS&S to develop high-quality products and systems, to reduce product time to market, and to achieve cost advantages over products offered by its competitors. Customers include various OEMs, commercial air transport carriers and corporate/general aviation companies, DoD and its commercial contractors, aircraft operators, aircraft modification centers, and foreign militaries.

Concentrations

Concentrations	12 Months Ended
	Sep. 30, 2018
Concentrations
Concentrations	2. Concentrations Major Customers and Products In fiscal 2018, 2017 and 2016, the Company derived 48%, 54% and 51%, respectively, of total sales from five customers, although not all the same customers in each year. Accounts receivable and unbilled receivables related to those top five customers was $1.4 million, $1.3 million and $1.6 million as of September 30, 2018, 2017 and 2016, respectively. The Company had one customer that accounted for 27% of the Company’s accounts receivable balance as of September 30, 2018. Due to contractual terms with this customer, the amount will not be paid within their normal 45 day payment terms. In fiscal 2018, the largest customer, Pilatus accounted for 20% of total sales. In fiscal 2017, the three largest customers, Sierra Nevada, Pilatus and DHL accounted for 16%, 12% and 10% of total sales, respectively. In fiscal 2016, the three largest customers, Sierra Nevada, Jet2.com and DHL accounted for 13%, 12% and 11% of total sales, respectively. Flat panel sales were 75%, 89% and 95% of total sales in the years ended September 30, 2018, 2017 and 2016, respectively. Sales of air data systems and components were 25%, 11% and 5% of total sales for the years ended September 30, 2018, 2017 and 2016, respectively. Sales to government contractors and agencies accounted for approximately 32%, 53% and 32% of total sales during fiscal years 2018, 2017 and 2016, respectively. The government agency or general contractor typically retains the right to terminate the contract at any time at its convenience. Upon alteration or termination of these contracts, IS&S is typically entitled to an equitable adjustment to the contract price so that it would be compensated for delivered items and allowable costs incurred. Accordingly, because these contracts can be terminated, the Company cannot be assured that its backlog will result in sales. Major Suppliers The Company buys several of its components from sole source suppliers. Although there are a limited number of suppliers of particular components, management believes other suppliers could provide similar components on comparable terms. During fiscal 2018 the Company had one supplier that accounted for 11% of the Company’s total inventory related purchases. During fiscal 2017 the Company had three suppliers that accounted for 33% of the Company’s total inventory related purchases. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash balances and accounts receivable. The Company invests its excess cash where preservation of principal is the major consideration. Cash balances are maintained with two major banks. Balances on deposit with certain money market accounts and operating accounts may exceed the Federal Deposit Insurance Corporation (“FDIC”) limits. The Company’s customer base consists principally of companies within the aviation industry. The Company requests advance payments and/or letters of credit from customers that it considers to be credit risks. The Company recorded a charge for impairment for unbilled receivables in the amount of $3.7 million related to the Delta contract as of September 30, 2014, (See Note 5. Unbilled Receivable in Notes to Consolidated Financial Statements).

Summary of Significant Accounti

Summary of Significant Accounting Policies	12 Months Ended
	Sep. 30, 2018
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	3. Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company balances and transactions have been eliminated in consolidation. Use of Estimates The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America, which require management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. Estimates are used in accounting for, among other items, long term contracts, allowances for doubtful accounts, inventory obsolescence, product warranty cost liabilities, income taxes, engineering and material costs on EDC programs, percentage of completion on EDC contracts, recoverability of long-lived assets and contingencies. Estimates and assumptions are reviewed periodically and the effects of changes, if any, are reflected in the Consolidated Statements of Operations in the period they are determined. Cash and Cash Equivalents Highly liquid investments purchased with an original maturity of three months or less are classified as cash equivalents. Cash equivalents at September 30, 2018 and 2017 consist of cash on deposit and cash invested in money market funds with financial institutions. Inventory valuation Inventories are stated at the lower of cost (first-in, first-out) or net realizable value and consist of the following: September 30, September 30, 2018 2017 Raw materials $ 2,892,366 $ 2,920,209 Work-in-process 817,051 794,756 Finished goods 570,691 464,689 $ 4,280,108 $ 4,179,654 Property and Equipment Property and equipment are stated at cost. Depreciation is provided using an accelerated method over the estimated useful lives of the assets (the lesser of three to seven years or over the lease term), except for the manufacturing facility and the corporate airplanes, which are depreciated using the straight-line method over their estimated useful lives of thirty-nine years and ten years, respectively. Major additions and improvements are capitalized, while maintenance and repairs that do not improve or extend the life of assets are charged to expense as incurred. During fiscal 2018, the Company purchased an aircraft for approximately $2.4 million. This aircraft will serve as a test bed for the Company’s new products and also as a sales/marketing tool for demonstrating its products to its aviation customers. Long-Lived Assets The Company assesses the impairment of long-lived assets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 360-10, “ Property, Plant and Equipment.” This statement requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. In addition, long-lived assets to be disposed of should be reported at the lower of the carrying amount or fair value less cost to sell. The Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount of the asset to estimated future cash flows expected to result from use of the asset. If the carrying amount of the asset exceeds the estimated expected undiscounted future cash flows, the Company measures the amount of the impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is generally measured by discounting expected future cash flows. No impairment charges were recorded in fiscal years 2018, 2017 or 2016. Revenue Recognition The Company enters into sales arrangements with customers that, in general, provide for the Company to design, develop, manufacture and deliver large flat-panel display systems, flight information computers and advanced monitoring systems that measure and display critical flight information, including data relative to aircraft separation, airspeed, altitude, and engine and fuel data measurements. The Company’s sales arrangements may include multiple deliverables as defined in FASB ASC Topic 605-25 “ Multiple-Element Arrangements ” (“ASC Topic 605-25”), which typically include design and engineering services and the production and delivery of the flat panel display and related components. The Company includes any design and engineering development services elements in EDC sales and any functional upgrade and product elements in product sales on the accompanying consolidated statements of operations. To the extent that an arrangement contains software elements that are essential to the functionality of tangible products sold in the arrangement, the Company recognizes revenue for the deliverables in accordance with the guidance included in FASB Accounting Standards Update 2009-14, “ Revenue Arrangements That Include Software Elements” (“ASU 2009-14”); and FASB Accounting Standards Update 2009-13, “Multiple-Deliverable Revenue Arrangements-a consensus of the FASB Emerging Issues Task Force” (“ASU 2009-13”); and FASB ASC Topic 605, “Revenue Recognition” (“ASC Topic 605”). To the extent that an arrangement contains software components, which include functional upgrades that the Company sells on a standalone basis and which the Company has deemed outside the scope of the exception defined by ASU 2009-14, the Company recognizes software revenue in accordance with ASC Topic 985, “Software” (“ASC Topic 985”). Multiple Element Arrangements The Company identifies all goods and/or services that are to be delivered separately under a sales arrangement and allocates sales to each deliverable (if more than one) based on that deliverable’s fair value. The Company then considers the appropriate recognition method for each deliverable. The Company’s multiple element arrangements can include defined design and development activities, and/or functional upgrades, and product sales. The Company had no multiple element arrangements for all periods presented. The Company utilizes the selling price hierarchy that has been established by ASU 2009-13, which requires that the selling price for each deliverable be based on vendor-specific objective evidence if available, third-party evidence if vendor-specific objective evidence is not available, or estimated selling price if neither vendor-specific objective evidence nor third-party evidence is available. To the extent that an arrangement includes a deliverable for which estimated selling price is used, the Company determines the best estimate of selling price by applying the same pricing policies and methodologies that it would use to determine the price to sell the deliverable on a standalone basis. To the extent that an arrangement contains defined design and EDC activities as identified deliverables in addition to products (resulting in a multiple element arrangement), the Company recognizes as EDC sales amounts earned during the design and development phase of the contract following the guidance included in FASB ASC Topic 605-35, “ Construction-Type and Production-Type Contracts ” (“ASC Topic 605-35”) under the percentage-of-completion method. To the extent that multiple element arrangements include product sales, sales are generally recognized once revenue recognition criteria for the product deliverables have been met based on the provisions of ASC Topic 605. Single Element Arrangements Products To the extent that a single element arrangement provides for product sales and repairs, the Company recognizes sales when revenue recognition criteria for the product deliverable have been met based on the provisions of ASC Topic 605. In addition, the Company also receives orders for equipment and parts, and in general, recognizes revenue upon shipment to customers. The Company may offer its customers extended warranties for additional fees, which it records as deferred revenue and recognizes as sales on a straight-line basis over the warranty periods. Engineering Development Contracts The Company may enter into contracts to perform specified design and EDC services related to its products. The Company recognizes revenue from these arrangements as EDC sales, following the guidance included in ASC Topic 605-35, and considers the nature of these contracts (including term, size of contract, and level of effort) when determining the appropriate accounting treatment for a particular contract. Certain of these contracts are accounted for under the percentage-of-completion method of accounting when the Company determines that progress toward completion is reasonably estimable, and the contract is long-term in nature. The Company uses the completed contract method for all other contracts. Sales and profit margins under the percentage-of-completion method are recorded based on the ratio of actual costs incurred to total estimated costs expected to be incurred related to the contract under the cost-to-cost method. The percentage-of-completion method of accounting requires the Company to estimate the profit margin for each individual contract or contract segment, and to apply that profit margin on a uniform basis as sales are recorded under the contract. The estimation of profit margin requires the Company to make projections of the total sales to be generated and the total costs that will be incurred under a contract. These projections require the Company to make numerous assumptions and estimates relating to items such as the complexity of design and related development costs, performance of subcontractors, availability and cost of materials, engineering productivity, prototype costs, overhead costs, and capital costs. These contracts sometimes include purchase options for additional quantities and for customer change orders for additional or revised product functionality. Revenues and costs related to profitable purchase options are included in the Company’s estimates only when the options are exercised, while revenues and costs related to unprofitable purchase options are included in the Company’s estimates when exercise is determined to be probable. Revenues related to change orders are included in profit estimates only if they can be estimated reliably and collectability is reasonably assured. Purchase options and change orders are accounted for either as an integral part of the original contract or separately, depending upon the nature and value of the item, in the period in which any change order or purchase option becomes effective. Anticipated losses on contracts are recognized in full in the period in which losses become probable and estimable. The Company reviews estimates of profit margins for contracts on a quarterly basis. Assuming the initial estimates of revenue and costs under a contract are accurate, the percentage-of-completion method results in the profit margin being recorded evenly as revenue is recognized under the contracts. Changes in these underlying estimates due to revisions in revenues and cost estimates or the exercise of contract options may result in profit margins being recognized unevenly over a contract as such changes are accounted for on a cumulative basis in the period in which the estimates are revised. Significant changes in estimates related to accounting for long-term contracts may have a material effect on the Company’s results of operations in the period in which the revised estimates are made. Cumulative catch-up adjustments (loss contracts), if any, resulting from changes in estimates are included in results of operations and disclosed in the notes to the consolidated financial statements of the Company. Customer Service Revenue The Company enters into sales arrangement with customers for the repair or upgrade of its various products that are not under warranty. The Company’s customer service revenue and cost of sales are included in product sales and product cost of sales, respectively, on the accompanying consolidated statements of operations. The Company’s customer service revenue and cost of sales for the fiscal years ended 2018, 2017 and 2016 are as follows: For the Fiscal Year Ended September 30, 2018 2017 2016 Customer Service Sales $ 4,047,265 $ 3,232,712 $ 3,597,828 Customer Service Cost of Sales 1,724,167 1,520,146 1,271,022 Gross Profit $ 2,323,098 $ 1,712,566 $ 2,326,806 Income Taxes Income taxes are recorded in accordance with ASC Topic 740, “Income Taxes” (“ASC Topic 740”) , which utilizes a balance sheet approach to provide for income taxes. Under this method, the Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of the Company’s assets, liabilities, and expected benefits of utilizing net operating losses (“NOL”) and tax credit carry-forwards. The impact on deferred taxes of changes in tax rates and laws, if any, are applied to the years during which temporary differences are expected to be settled, and are reflected in the consolidated financial statements in the period of enactment. At the end of each interim and year-end reporting period, the Company prepares an estimate of the annual effective income tax rate and applies that annual effective income tax rate to ordinary year-to-date pre-tax income for the interim period. Specific tax items discrete to a particular quarter are recorded in income tax expense for that quarter. The estimated annual effective tax rate used in providing for income taxes on a year-to-date basis may change in subsequent periods. Deferred tax assets are reduced by a valuation allowance if, based on the consideration of all available evidence, it is more likely than not that some portion of the deferred tax asset will not be realized. Significant weight is given to evidence that can be verified objectively, and significant management judgment is required in determining any valuation allowance recorded against net deferred tax assets. The Company evaluates deferred income taxes on a quarterly basis to determine if a valuation allowance is required by considering available evidence. Deferred tax assets are recognized when expected future taxable income is sufficient to allow the related tax benefits to reduce taxes that would otherwise be payable. The sources of taxable income that may be available to realize the benefit of deferred tax assets are future reversals of existing taxable temporary differences, future taxable income exclusive of reversing temporary differences and credit carryforwards, taxable income in carry-back years, and tax planning strategies which are both prudent and feasible. The Company’s current balance of the deferred tax valuation allowance is recorded against all of its federal and state deferred tax assets. The Company will continue to assess all available evidence during future periods to evaluate any changes to the realization of its deferred tax assets. If the Company were to determine that it would be able to realize additional federal or state deferred tax assets in the future, it would make an adjustment to the valuation allowance which would reduce the provision for income taxes. The accounting for uncertainty in income taxes requires a more likely than not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. The Company records a liability for the difference between the (i) benefit recognized and measured for financial statement purposes and (ii) the tax position taken or expected to be taken on the Company’s tax return. To the extent that the Company’s assessment of such tax positions changes, the change in estimate is recorded in the period in which the determination is made. The Company has elected to record any interest or penalties associated with uncertain tax positions as income tax expense. The Company files a consolidated United States federal income tax return. The Company prepares and files tax returns based on the interpretation of tax laws and regulations, and records estimates based on these judgments and interpretations. In the normal course of business, the tax returns are subject to examination by various taxing authorities. Such examinations may result in future tax and interest assessments by these taxing authorities, and the Company records a liability when it is probable that there will be an assessment. The Company adjusts the estimates periodically as a result of ongoing examinations by and settlements with the various taxing authorities, and changes in tax laws, regulations and precedent. The consolidated tax provision of any given year includes adjustments to prior years’ income tax accruals that are considered appropriate, and any related estimated interest. Management believes that it has made adequate accruals for income taxes. Differences between estimated and actual amounts determined upon ultimate resolution, individually or in the aggregate, are not expected to have a material effect on the Company’s consolidated financial position, but could possibly be material to its consolidated results of operations or cash flow of any one period. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code that will affect 2017, including, but not limited to, (1) reducing the U.S. federal corporate tax rate from 34 percent to 21 percent; (2) bonus depreciation that will allow for full expensing of qualified property; (3) elimination of the corporate alternative minimum tax (AMT) and changing how existing AMT credits can be realized; (4) a new limitation on deductible interest expense; (5) the repeal of the domestic production activity deduction; and (6) limitations on net operating losses (NOLs) generated after December 31, 2017, to 80 percent of taxable income. The Tax Act reduced the corporate tax rate to 21 percent, effective January 1, 2018. Consequently, we have recorded a decrease related to DTAs and DTLs with a corresponding net adjustment to deferred income tax expense of $321,038 for the year ended December 31, 2017. This expense is offset fully by a change in the valuation allowance. The $321,038 is a provisional amount. Engineering Development Total engineering development expense is comprised of both internally funded R&D and product development and design charges related to specific customer contracts. Engineering development expense consists primarily of payroll-related expenses of employees engaged in EDC projects, engineering related product materials and equipment, and subcontracting costs. R&D charges incurred for product design, product enhancements, and future product development are expensed as incurred. Product development and design charges related to specific customer contracts are charged to cost of sales-EDC based on the method of contract accounting (either percentage-of-completion or completed contract) applicable to such contracts. Comprehensive Income Pursuant to FASB ASC Topic 220, “ Comprehensive Income ” (“ASC Topic 220”), the Company is required to classify items of other comprehensive income by their nature in a financial statement and display the accumulated balance of other comprehensive income separately from retained earnings and additional paid-in capital in the equity section of its condensed consolidated balance sheets. For fiscal 2018, 2017 and 2016 comprehensive income consisted of net income only, and there were no items of other comprehensive income for any of the periods presented. Fair Value of Financial Instruments The net carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and short-term debt approximate their fair value because of the short-term nature of these instruments. For financial assets and liabilities measured at fair value on a recurring basis, fair value is the price the Company would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value as follows: Level 1 — Unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date. Level 2 — Other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including: · Quoted prices for similar assets or liabilities in active markets; · Quoted prices for identical or similar assets in non-active markets; · Inputs other than quoted prices that are observable for the asset or liability; and · Inputs that are derived principally from or corroborated by other observable market data. Level 3 — Unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions. The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2018 and 2017, according to the valuation techniques the Company used to determine their fair values. Fair Value Measurement on September 30, 2018 Quoted Price in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Assets Cash and cash equivalents: Money market funds $ 19,725,474 $ — $ — Fair Value Measurement on September 30, 2017 Quoted Price in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Assets Cash and cash equivalents: Money market funds $ 23,897,092 $ — $ — Share-Based Compensation The Company accounts for share-based compensation under FASB ASC Topic 505-50, “Equity-Based Payments to Non-Employees” (“ASC Topic 505-50”), and ASC Topic 718, “Stock Compensation” (“ASC Topic 718”), which require the Company to measure the cost of employee or non-employee director services received in exchange for an award of equity instruments based on the grant-date fair value of the award using an option pricing model. The Company recognizes such cost over the period during which an employee or non-employee director is required to provide service in exchange for the award. Warranty The Company offers warranties on some products of various lengths, however the standard warranty is twenty-four months. At the time of shipment, the Company establishes a reserve for estimated costs of warranties based on its best estimate of the amounts necessary to settle future and existing claims using historical data on products sold as of the balance sheet date. The length of the warranty period, the product’s failure rates, and the customer’s usage affect warranty cost. If actual warranty costs differ from the Company’s estimated amounts, future results of operations could be affected adversely. Warranty cost is recorded as cost of sales, and the reserve balance recorded as an accrued expense. While the Company maintains product quality programs and processes, its warranty obligation is affected by product failure rates and the related corrective costs. If actual product failure rates and/or corrective costs differ from the estimates, the Company revises the estimated warranty liability accordingly. Self-Insurance Reserves Since January 1, 2014, the Company has self-insured a significant portion of its employee medical insurance. The Company maintains a stop-loss insurance policy that limits its losses both on a per employee basis and an aggregate basis. Liabilities associated with the risks that are retained by the Company are estimated based upon actuarial assumptions such as historical claims experience, demographic factors and other actuarial assumptions. The Company estimated the total medical claims incurred but not reported and the Company believes that it has adequate reserves for these claims at September 30, 2018 and 2017. However, the actual value of such claims could be significantly affected if future occurrences and claims differ from these assumptions. At September 30, 2018 and 2017, the estimated liability for medical claims incurred but not reported was $60,200 and $53,200, respectively. The Company has recorded the excess of funded premiums over estimated claims incurred but not reported of $102,000 as a current asset in the accompanying consolidated balance sheet. During the year ended September 30, 2018, the Company has used the excess of funded premiums to reduce amounts payable for claims incurred. Treasury Stock We account for treasury stock purchased under the cost method and include treasury stock as a component of stockholder’s equity. Treasury stock purchased with intent to retire (whether or not the retirement is actually accomplished) is charged to common stock. New Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, Improvements to Employer Share-Based Payment Accounting, which simplifies the tax treatment of stock “shortfalls” and “windfalls.” Previous guidance required excess tax benefits (“windfalls”) to be recorded in equity. Tax deficiencies (“shortfalls”) were recorded in equity to the extent of previous windfalls then to the income statement. The new guidance simplifies this treatment by having all “windfalls” and “shortfalls” recorded through the income statement. This guidance became effective for us beginning on October 1, 2017. Adoption of this standard did not have a material effect upon the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). Under this guidance, an entity is required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. This guidance offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. This guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, and requires a modified retrospective adoption, with early adoption permitted. The Company is currently evaluating the impacts of adoption of this guidance. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which simplifies balance sheet presentation of deferred income taxes. Previous guidance required an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position; however, the new guidance requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The updated standard is effective for the Company beginning October 1, 2017, with early adoption permitted as of the beginning of any interim or annual reporting period. The Company early adopted this standard retrospectively and reclassified its current deferred tax balances to noncurrent deferred tax for all periods presented. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. In July 2015, the FASB issued Accounting Standards Update (“ASU”) No. 2015-11, Simplifying the Measurement of Inventory. ASU 2015-11 simplifies the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value. ASU 2015-11 applies only to inventories for which cost is determined by methods other than last-in first-out and the retail inventory method. ASU 2015-11 is effective for public companies for annual reporting periods beginning after December 15, 2016, and interim periods within those fiscal years. We adopted ASU 2015-11 effective October 1, 2017 and the implementation had no material impact on the consolidated financial statements. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40) (ASU 2014-15). The objective of ASU 2014-15 is to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and provide related disclosures. Previously, GAAP did not provide guidance to evaluate whether there was substantial doubt regarding an organization’s ability to continue as a going concern. This ASU provides guidance to an organization’s management, with principles and definitions to reduce diversity in the timing and content of financial statement disclosures commonly provided by organizations. This standard was adopted by the Company at September 30, 2017, and the adoption of this ASU did not have a material impact on the consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers,” which provides a single, comprehensive revenue recognition model for all contracts with customers, and contains principles to determine the measurement of revenue and timing of when it is recognized. The model will supersede most existing revenue recognition guidance, and also requires enhanced revenue-related disclosures. Under the new standard and its related amendments (collectively known as ASC 606), revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized will reflect the consideration that the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). We anticipate using the modified retrospective method of adoption when the Company adopts this standard in fiscal year 2019. While we are still the process of assessing the impact of this standard on the Company’s financial statements, we do not currently expect that the adoption of ASC 606 will have a material effect on the Company’s consolidated financial statements. The actual impact of ASC 606 is subject to change from these estimates and such change may be significant, pending the completion of the Company’s assessment in the first quarter of 2019. In order to complete this assessment, the Company is continuing to update and enhance its internal accounting systems and internal controls over financial reporting. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement which modifies the disclosures on fair value measurements by removing the requirement to disclose the amount and reason for transfers between Level 1 and Level 2 of the fair value hierarchy and the policy for timing of such transfers. The ASU expands the disclosure requirements for Level 3 fair value measurements, primarily focused on changes in unrealized gains and losses included in other comprehensive income. For public entities, the standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for any removed or modified disclosures and adoption of the additional disclosures can be delayed until the effective date. The Company does not currently expect the adoption of ASU 2018-13 to have a material impact on its consolidated financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable.

Net Income Per Share

Net Income Per Share	12 Months Ended
	Sep. 30, 2018
Net Income Per Share
Net Income Per Share	4. Net Income Per Share For the Fiscal Year Ended September 30, 2018 2017 2016 Numerator: Net income (loss) $ (3,653,905) $ 4,568,627 $ 1,986,801 Denominator: Basic weighted average shares 16,805,991 16,742,461 16,927,055 Dilutive effect of share-based awards — 113,182 112,241 Diluted weighted average shares 16,805,991 16,855,644 17,039,296 Net income (loss) per common share: Basic $ (0.22) $ 0.27 $ 0.12 Diluted $ (0.22) $ 0.27 $ 0.12 Net income per share is calculated pursuant to ASC Topic 260, Earnings per Share (“ASC Topic 260”). Basic earnings per share (“EPS”) excludes potentially dilutive securities and is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS is computed assuming the conversion or exercise of all dilutive securities such as employee stock options and restricted stock units (“RSUs”). The number of incremental shares from the assumed exercise of stock options and RSUs is calculated by using the treasury stock method. As of September 30, 2018, 2017 and 2016, there were 550,834, 586,834 and 589,168 options to purchase common stock outstanding, respectively, and no shares subject to vesting of restricted stock units outstanding, respectively. The average outstanding diluted shares calculation excludes options with an exercise price that exceeds the average market price of shares during the period. For fiscal year 2018, all options to purchase common stock were excluded from the computation of diluted earnings per share because the effect would be anti-dilutive. For fiscal years 2017 and 2016, 336,961 and 339,581 shares, respectively were excluded from the calculation of earnings per share as their effect would be anti-dilutive. Net income and EPS in the period ended September 30, 2017 were positively impacted by approximately $4.1 million of other income related to the Company’s settlement agreement with Delta Air Lines, Inc., (See Note 5. Unbilled Receivable in Notes to Consolidated Financial Statements).

Unbilled Receivables

Unbilled Receivables	12 Months Ended
	Sep. 30, 2018
Unbilled Receivables
Unbilled Receivables	5. Unbilled Receivables Unbilled receivables principally represent sales recorded under the percentage-of-completion method of accounting that have not been billed to customers in accordance with applicable contract terms. Unbilled receivables were $0 and $1.5 million at September 30, 2018 and 2017, respectively. On February 23, 2017 the Company entered into a settlement agreement with Delta. Under the terms of the settlement, Delta paid the Company $7.75 million resulting in the reversal of the $3.6 million reserve and the collection of the unbilled receivable in the fiscal year ended September 30, 2017. The reversal of the reserve is reflected in the selling, general and administrative expenses in the Consolidated Statements of Operations in the fiscal year ended September 30, 2017. The remainder of the amount paid to the Company, approximately $4.1 million is reflected in other income in the fiscal year ended September 30, 2017. The percentage-of-completion method of accounting for EDC revenue, requires estimates of profit margins for contracts be reviewed by the Company on a quarterly basis. If the initial estimates of revenues and costs under a contract are accurate, the percentage-of-completion method results in the profit margin being recorded evenly as revenue is recognized under the contract. Changes in these underlying estimates because of revisions in revenue and cost estimates or the exercise of contract options may result in profit margins being recognized unevenly over a contract because such changes are accounted for on a cumulative basis in the period in which the estimates are revised. Significant changes in estimates related to accounting for long-term contracts may have a material effect on the Company’s results of operations in the period in which the revised estimates are made. Net cumulative catch-up adjustments resulting from changes in estimates increased operating income by $0 and $61,000 during the fiscal years ended September 30, 2018 and 2017, respectively, and reduced operating income by $58,000 during the fiscal year ended September 30, 2016.

Prepaid Expenses and Other Curr

Prepaid Expenses and Other Current Assets	12 Months Ended
	Sep. 30, 2018
Prepaid Expenses and Other Current Assets
Prepaid Expenses and Other Current Assets	6. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following: September 30, September 30, 2018 2017 Prepaid insurance $ 258,015 $ 402,300 Income tax refund receivable 1,578 260,509 Other 284,641 429,255 $ 544,234 $ 1,092,064

Property and Equipment

Property and Equipment	12 Months Ended
	Sep. 30, 2018
Property and Equipment
Property and Equipment	7. Property and Equipment Property and equipment, net consists of the following balances: September 30, September 30, 2018 2017 Computer equipment $ 2,268,969 $ 2,247,866 Corporate airplanes 5,601,039 3,194,571 Furniture and office equipment 1,033,779 1,051,637 Manufacturing facility 5,733,313 5,733,313 Equipment 5,580,083 5,507,774 Land 1,021,245 1,021,245 21,238,428 18,756,406 Less accumulated depreciation and amortization (12,451,691) (12,087,395) $ 8,786,737 $ 6,669,011 Depreciation related to property and equipment was approximately $0.4 million, $0.4 million and $0.5 million in fiscal years 2018, 2017 and 2016, respectively. The corporate airplanes are utilized primarily in support of product development. The Pilatus PC-12 airplane, one of the Company’s two corporate airplanes, has been depreciated to its estimated salvage value.

Other Assets

Other Assets	12 Months Ended
	Sep. 30, 2018
Other Assets
Other Assets	8. Other Assets Other assets consist of the following: September 30, September 30, 2018 2017 Intangible assets, net of accumulated amortization of $531,637 at September 30, 2018 and September 30, 2017 $ 68,600 $ 68,600 Other non-current assets 113,393 118,715 $ 181,993 $ 187,315 Intangible assets consist of licensing and certification rights which are amortized over a defined number of units. No impairment charges were recorded in fiscal 2018, 2017 or 2016. Total intangible amortization expense was approximately $0, $2,600 and $12,000 in fiscal years 2018, 2017 and 2016, respectively. The timing of future amortization expense is not determinable because the intangible assets are being amortized over a defined number of units. Other non-current assets as of September 30, 2018 and September 30, 2017 include the security deposit for an airplane hangar, and a deposit for medical claims required under the Company’s medical plan. In addition, other non-current assets as of September 30, 2018 includes $38,000 of prepaid software licenses that will be earned upon the shipment of a certain product to a customer.

Accrued Expenses

Accrued Expenses	12 Months Ended
	Sep. 30, 2018
Accrued Expenses
Accrued Expenses	9. Accrued Expenses Accrued expenses consist of the following: September 30, September 30, 2018 2017 Warranty $ 854,952 $ 1,013,461 Salary, benefits and payroll taxes 143,183 258,688 Professional fees 203,823 219,331 Other 261,063 268,557 $ 1,463,021 $ 1,760,037

Warranty

Warranty	12 Months Ended
	Sep. 30, 2018
Warranty
Warranty	10. Warranty The Company provides for the estimated cost of product warranties at the time revenue is recognized. Warranty cost is recorded as cost of sales and the reserve balance is recorded as an accrued expense in the financial statements. While the Company engages in extensive product quality programs and processes, the Company’s warranty obligation is affected by product failure rates and by the related material, labor, and delivery costs incurred in correcting a product failure. If actual product failure rates, material, or labor costs differ from the Company’s estimates, further revisions to the estimated warranty liability would be recorded. Warranty cost and accrual information for fiscal years ended September 30, 2018 and 2017: 2018 2017 Warranty accrual as of October 1, $ 1,013,461 $ 1,009,368 Accrued expense for fiscal year (5,926) 219,390 Warranty cost incurred for fiscal year (152,583) (215,297) Warranty accrual as of September 30, $ 854,952 $ 1,013,461

Income Taxes

Income Taxes	12 Months Ended
	Sep. 30, 2018
Income Taxes
Income Taxes	11. Income Taxes The components of income taxes are as follows: For the Fiscal Year Ended September 30, 2018 2017 2016 Current provision (benefit): Federal $ (3,440) $ 244,794 $ 77,244 State 5,239 3,082 (2,930) Total current provision (benefit) 1,799 247,876 74,314 Deferred provision (benefit): Federal 61,799 — 493,989 State 53 44 27 Total deferred provision (benefit) 61,852 44 494,016 Total current and deferred provision (benefit) $ 63,651 $ 247,920 $ 568,330 Following is a reconciliation of the statutory federal rate to the Company’s effective income tax rate: For the Fiscal Year Ended September 30, 2018 2017 2016 U.S. Federal statutory tax rate 24.3 % 34.0 % 34.0 % Rate change due to tax reform (9.0) % — — State income taxes, net of federal benefit 1.9 % (0.4) % 0.2 % Permanent items (0.1) % 0.2 % (0.2) % Research and development tax credits 1.3 % 8.1 % (12.6) % Valuation allowance (20.3) % (35.9) % (2.9) % Change in unrecognized tax benefits 0.9 % (0.9) % (0.1) % 123R cancellations and forfeitures (0.8) % 0.1 % 3.8 % Effective income tax rate (1.8) % 5.2 % 22.3 % The Company’s U.S. Federal statutory tax rate was impacted by the Tax Act. On December 18, 2015, the Protecting Americans from Tax Hikes (PATH) Act was enacted, which retroactively and permanently extended the U.S. R&D Tax Credit. As a result, the Company’s effective income tax rate in fiscal year 2016 reflects an R&D Tax Credit for twelve months from the fiscal year ended September 30, 2015. The deferred tax effect of temporary differences giving rise to the Company’s deferred tax assets and liabilities consists of the components below: As of September 30, 2018 2017 2016 Non Current Non Current Non Current Deferred tax assets: Reserves and accruals $ 730,015 $ 1,275,427 $ 2,539,117 Research and development credit 1,318,977 $ 1,236,365 $ 1,742,627 NOL carryforwards -fed/state 2,982,246 $ 1,208,592 $ 1,206,476 Depreciation (863,796) $ (690,774) $ (725,018) Stock options 345,608 $ 609,016 $ 603,881 4,513,050 3,638,626 5,367,083 Less: Valuation allowance (4,296,553) (3,568,459) (5,297,757) Total deferred tax assets 216,497 70,167 69,326 Deferred tax liabilities: Depreciation (346,091) (137,909) (137,027) Total deferred tax liabilities (346,091) (137,909) (137,027) Net deferred tax asset (liability) $ (129,594) $ (67,742) $ (67,701) At September 30, 2018 and 2017, the Company had state NOL carryforwards of $23.8 million and $21.2 million, respectively, which begin to expire in varying amounts after the fiscal year ending September 30, 2026. The Company has federal R&D Tax Credit carryforwards of approximately $1,319,000 and $1,236,000 in fiscal 2018 and 2017, respectively, which begin to expire in varying amounts after fiscal year ending September 30, 2033. In fiscal 2017, all state R&D tax credits were sold and the resultant gain of $669,000 was recognized in other income on the Consolidated Statements of Operations. Deferred tax assets are reduced by valuation allowances if, based on the consideration of all available evidence, it is more likely than not that some portion of the deferred tax asset will not be realized. Significant weight is given to evidence that can be verified objectively, and significant management judgment is required in determining any valuation allowances recorded against net deferred tax assets. The Company evaluates deferred income taxes on a quarterly basis to determine if valuation allowances are required by considering available evidence, including historical and projected taxable income and tax planning strategies which are both prudent and feasible. ASC Topic 740 requires the consideration of a valuation allowance to reflect the likelihood of realization of deferred tax assets. Significant management judgment is required in determining any valuation allowance recorded against net deferred tax assets. The change in the valuation allowance for the period ended September 30, 2018 and September 30, 2017 was approximately $0.7 million and $1.7 million, respectively. The Company will continue to maintain the balance of the valuation allowance until an appropriate level of profitability is sustained to warrant a conclusion that it is no longer more likely than not that a portion of these net deferred tax assets will not be realized in future periods. There is currently no assurance of such future income before taxes. The Company believes that its estimate of future taxable income is inherently uncertain, and if its current or future operations generate losses, further adjustments to the valuation allowance are possible. Following is a reconciliation of beginning and ending balances of total amounts of gross unrecognized tax benefits: For the Fiscal Year Ended September 30, 2018 2017 2016 Balance at beginning of year $ 570,000 $ 615,000 $ 615,000 Unrecognized tax benefits related to prior years 52,000 — (2,000) Unrecognized tax benefits related to current year 11,000 18,000 26,000 Decrease in unrecognized tax benefits due to the lapse of applicable statute of limitations (93,000) (63,000) (24,000) Balance at end of year $ 540,000 $ 570,000 $ 615,000 The total liabilities associated with the unrecognized tax benefits that, if recognized, would impact the Company’s effective tax rate were $540,000, $570,000 and $615,000 at September 30, 2018, 2017 and 2016, respectively. It is not anticipated that the balance of unrecognized tax benefits at September 30, 2018 will change significantly over the next twelve months. The balance of unrecognized tax benefits as reflected in the table above at September 30, 2018 are recorded on the balance sheet as a reduction to deferred tax assets. The Company’s policy is to recognize interest accrued and, if applicable, penalties related to unrecognized tax benefits in income tax expense for all periods presented. At September 30, 2018, the Company currently has no unrecognized tax benefits against which interest has been accrued, and there is no accrual recorded for penalties. For the fiscal year ended September 30, 2018, 2017 and 2016, the Company recognized (benefit) expense of $0, $0 and $(3,000), respectively, for interest (net of federal impact) within income tax expense. The Company is subject to income taxes in the U.S. federal and various state jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of related tax laws and regulations and require significant judgment to apply. The Company’s federal income tax returns for the fiscal years ended September 30, 2015 and thereafter are open years subject to examination by the Internal Revenue Service (“IRS”). The Company files income tax returns in various state jurisdictions, as appropriate, with varying statutes of limitation. During fiscal year 2012, the IRS examined the Company’s income tax return for the year ended September 30, 2010, and no adjustments resulted from this examination. There are no state income tax examinations in process at this time.

Savings Plan

Savings Plan	12 Months Ended
	Sep. 30, 2018
Savings Plan
Savings Plan	12. Savings Plan The Company sponsors a voluntary defined contribution savings plan covering all employees. The Company made contributions of $105,000, $120,000 and $127,000 for the fiscal years ended September 30, 2018, 2017 and 2016, respectively.

Share-Based Compensation

Share-Based Compensation	12 Months Ended
	Sep. 30, 2018
Share-Based Compensation
Share-Based Compensation	13. Share-Based Compensation The Company accounts for share-based compensation under the provisions of ASC Topic 505-50 and ASC Topic 718 by using the fair value method for expensing stock options and stock awards. Total share-based compensation expense was approximately $200,000, $203,000 and $251,000 for the fiscal years ended September 30, 2018, 2017 and 2016, respectively. The income tax impact recognized as a (charge) credit to additional paid in capital in the statement of shareholders’ equity related to share-based compensation arrangements was $0, $0 and ($8,000) for the fiscal years ended September 30, 2018, 2017 and 2016, respectively. Compensation expense related to share-based awards is recorded as a component of selling, general and administrative expenses. The Company has three share-based compensation plans, the 1998 Stock Option Plan (the “1998 Plan”), the 2003 Restricted Stock Plan (the “Restricted Plan”) and the 2009 Stock-Based Incentive Compensation Plan (the “2009 Plan”), each of which the shareholders approved. The 1998 Plan expired on November 13, 2008. The last awards under the Restricted Plan were made in 2010, and no further shares remain to be awarded under the Restricted Plan. 1998 Stock Option Plan The 1998 Plan allowed the granting of incentive and nonqualified stock options to employees, officers, directors and independent contractors, and consultants. No stock options were granted to independent contractors or consultants under this plan. Incentive stock options granted under the 1998 Plan have exercise prices that are at least equal to the fair value of the common stock on grant date. Nonqualified stock options granted under the plan have exercise prices that are less than, equal to or greater than the fair value of the common stock on the date of grant. The Company reserved 3,389,000 shares of common stock for awards under the plan. On November 13, 2008, the 1998 Plan expired and no additional shares were granted under the 1998 Plan after that date. Following is a summary of option activity under the 1998 Plan for fiscal years ended September 30, 2018, 2017 and 2016 and changes during the periods then ended: Weighted Average Aggregate Exercise Intrinsic Options Price Value Outstanding at September 30, 2015 53,000 $ 8.83 $ — Granted — — — Exercised — — — Cancelled (23,000) 12.17 — Outstanding at September 30, 2016 30,000 $ 6.27 — Granted — — — Exercised — — — Cancelled — — — Outstanding at September 30, 2017 30,000 $ 6.27 $ — Granted — — — Exercised — — — Cancelled (30,000) 6.27 — Outstanding at September 30, 2018 — $ — $ — Vested — $ — $ — Options exercisable at September 30, 2018 — $ — $ — In fiscal 2018 and 2017 and 2016, no options were granted under the 1998 Plan. Therefore, there is no weighted-average grant date fair value and no intrinsic value attributable to individual options granted. No options were exercised during fiscal years 2018, 2017 and 2016. The following table summarizes information about stock options under the 1998 Plan at September 30, 2018: Options Outstanding Options Exercisable Weighted- Average Weighted- Remaining Weighted- Average Range of Exercise Outstanding Contractual Average As of September Exercise Prices As of September 30, 2018 Life Exercise Price 30, 2018 Price $ 5.01 - $ 10.00 — — — — — — — $ — — $ — Fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. Options are exercisable over a maximum term of ten years from date of grant and vest typically over periods of three to five years from the grant date. The expected term of options represents the period of time that options granted are expected to be outstanding and is based on historical experience. Expected volatility is based on historical volatility of the Company’s stock price. The risk free interest rate is based on U.S. Treasuries with maturities consistent with the expected life of the options in effect at the time of grant. Compensation expense for employee stock options includes an estimate for forfeitures, and is recognized ratably over the vesting term. Because no options were granted from the 1998 Plan in fiscal 2018, 2017 and 2016, the data for expected dividend, expected volatility, weighted average risk-free interest rate and expected lives is not applicable. Total compensation expense associated with stock option awards to employees under the 1998 Plan was $0 for fiscal years ended September 30, 2018, 2017 and 2016. At September 30, 2018, there is no unrecognized compensation expense related to non-vested stock options under the 1998 Plan that is expected to be recognized during fiscal 2019. 2009 Stock-Based Incentive Compensation Plan The 2009 Plan authorizes the grant of stock appreciation rights, restricted stock, options, RSUs and other equity-based awards (collectively referred to as “Awards”). Options granted under the 2009 Plan may be either “incentive stock options” as defined in section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), or nonqualified stock options, as determined by the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”). Subject to an adjustment necessary upon a stock dividend, recapitalization, forward split or reverse split, reorganization, merger, consolidation, spin-off, combination, repurchase or share exchange, extraordinary or unusual cash distribution, or other similar corporate transaction or event, the maximum number of shares of common stock available for Awards under the 2009 Plan shall be 1,200,000, all of which may be issued pursuant to Awards of incentive stock options. In addition, the Plan provides that no more than 300,000 shares of common stock per year may be awarded to any employee as a performance-based Award under Section 162(m) of the Code. At September 30, 2018 there were 208,128 shares of common stock available for awards under the plan. If any Award is forfeited, or if any option terminates, expires or lapses without being exercised, the related shares of common stock subject to such Award will again be available for future grant. Any shares tendered by a participant in payment of the exercise price of an option or the tax liability with respect to an Award (including, in any case, shares withheld from any such Award) will not be available for future grant under the 2009 Plan. If there is any change in the Company’s corporate capitalization, the Compensation Committee must proportionately and equitably adjust the number and kind of shares of common stock which may be issued in connection with future Awards, the number and type of shares of common stock covered by Awards then outstanding under the 2009 Plan, the number and type of shares of common stock available under the 2009 Plan, the exercise or grant price of any Award, or if deemed appropriate, make provision for a cash payment with respect to any outstanding Award, provided that no adjustment may be made that would adversely affect the status of any Award that is intended to be a performance-based Award under Section 162(m) of the Code, unless otherwise determined by the Compensation Committee. In addition, the Compensation Committee may make adjustments in the terms and conditions of any Awards, including any performance goals, in recognition of unusual or nonrecurring events affecting the Company or any subsidiary, or in response to changes in applicable laws, regulations or accounting principles, provided that no adjustment may be made that would adversely affect the status of any Award that is intended to be a performance-based Award under Section 162(m) of the Code, unless otherwise determined by the Compensation Committee. Following is a summary of option activity under the 2009 Plan for the fiscal years ended September 30, 2018, 2017 and 2016, and changes during the periods then ended: Weighted Average Aggregate Exercise Intrinsic Options Price Value Outstanding at September 30, 2015 592,168 $ 3.35 $ — Granted 67,115 2.81 25,504 Exercised — — — Cancelled (33,000) 3.78 — Outstanding at September 30, 2016 626,283 $ 3.35 $ — Granted — 2.81 25,504 Exercised (67,115) — 55,705 Cancelled (2,334) 3.78 — Outstanding at September 30, 2017 556,834 $ 3.32 177,043 Granted — — — Exercised — — — Cancelled (6,000) 3.78 — Outstanding at September 30, 2018 550,834 $ 3.32 $ 15,000 Vested and expected to vest 550,834 $ 3.32 $ 15,000 Options exercisable at September 30, 2018 550,834 $ 3.32 $ 15,000 The following table summarizes information about stock options under the 2009 Plan at September 30, 2018: Options Outstanding Options Exercisable Outstanding Weighted- As of Average Weighted- Weighted- Range of Exercise September 30, Remaining Average As of September Average Prices 2018 Contractual Life Exercise Price 30, 2018 Exercise Price $ 0.00 - $ 5.00 550,834 3.8 $ 3.32 550,834 $ 3.32 Fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. Options are exercisable over a maximum term of ten years from date of grant and vest typically over periods of three to five years from the grant date. The expected term of options represents the period of time that options granted are expected to be outstanding and is based on historical experience and the expected turnover rate of the employees receiving the options. Expected volatility is based on historical volatility of the Company’s stock. The risk free interest rate is based on U.S. Treasuries with maturities consistent with the expected life of the options in effect at the time of grant. Compensation expense for employee stock options includes an estimate for forfeitures and is recognized ratably over the vesting term. The Company did not grant any options in fiscal years 2018, 2017 and 2016, and therefore did not record any compensation expense related to the 2009 Plan during such periods. Total compensation expense associated with stock option awards to employees under the 2009 Plan was $0, $0 and $68,000 for fiscal years ended September 30, 2018, 2017 and 2016, respectively. Total share-based compensation expense associated with the annual grant of stock awards to non-employee directors under the 2009 Plan was approximately $200,000, $203,000 and $178,000 for the fiscal years ended September 30, 2018, 2017 and 2016, respectively. At September 30, 2018, no unrecognized compensation expense, net of forfeitures, related to non-vested stock options under the 2009 Plan, will be recognized. Restricted Stock Units During fiscal 2016, the Company’s Board of Directors (the “Board”) a pproved grants of RSUs to the non-employee directors on the Board as compensation for their services during calendar year 2016. Under the terms of the awards, at the conclusion of the vesting period on January 2, 2017, the grants of RSUs were settled in shares of the Company’s common stock at a rate of one share of stock for each unit, provided that if a director resigns from the Board prior to January 1, 2017, such director shall only receive a pro rata portion of such award for time served. As of September 30, 2016, there were 67,115 unvested restricted stock units outstanding under the 2009 Plan, all of which were issued during the fiscal year ended September 30, 2016. There were no such awards outstanding as of September 30, 2018 and 2017, and no such activity under the 2009 Plan during the fiscal year ended September 30, 2018 and 2017.

Commitments and Contingencies

Commitments and Contingencies	12 Months Ended
	Sep. 30, 2018
Commitments and Contingencies
Commitments and Contingencies	14. Commitments and Contingencies Operating Leases Rent expense under operating leases totaled approximately $113,000, $94,000 and $83,000 for the years ended September 30, 2018, 2017 and 2016, respectively. Future minimum lease payments under non-cancelable operating leases are $62,000 for the year ended September 30, 2018. Purchase Obligations A “purchase obligation” is defined as an agreement to purchase goods or services that is enforceable and legally binding on the Company and that specifies all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable price provisions, and the approximate timing of the transaction. These amounts are comprised primarily of open purchase order commitments entered in the ordinary course of business with vendors and subcontractors pertaining to fulfillment of the Company’s current order backlog. The purchase obligations on open purchase orders were $0.7 million, $0.9 million and $0.9 million as of September 30, 2018, 2017 and 2016, respectively. Product Liability The Company has product liability insurance of $50,000,000. The Company has not experienced any material product liability claims. Legal Proceedings In the ordinary course of business, IS&S is at times subject to various legal proceedings and claims. The Company believes it is not reasonably possible that such matters that are currently pending will, individually or in the aggregate, have a material effect on the results of operations or financial position.

Related Party Transactions

Related Party Transactions	12 Months Ended
	Sep. 30, 2018
Related Party Transactions
Related Party Transactions	15. Related Party Transactions The Company incurred legal fees of $0 and $121,000 for the fiscal years ended September 30, 2018 and 2017, respectively with a law firm in which a lawyer of the firm is a shareholder of the Company.

Quarterly Financial Data (unaud

Quarterly Financial Data (unaudited)	12 Months Ended
	Sep. 30, 2018
Quarterly Financial Data (unaudited)
Quarterly Financial Data (unaudited)	16. Quarterly Financial Data (unaudited) Summarized quarterly results of operations of the Company for the years ended September 30, 2018 and September 30, 2017 are presented below: Fiscal Year Ended September 30, 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 3,087,984 $ 3,727,204 $ 3,389,663 $ 3,645,521 Cost of sales 1,593,268 2,082,347 1,806,980 1,829,328 Gross profit 1,494,716 1,644,857 1,582,683 1,816,193 Operating (loss) income (1,051,560) (1,143,511) (1,072,228) (444,240) Net (loss) income (881,619) (1,316,871) (1,041,037) (414,378) Net income (loss) per common share Basic $ (0.05) $ (0.08) $ (0.06) $ (0.03) Diluted $ (0.05) $ (0.08) $ (0.06) $ (0.03) Fiscal Year Ended September 30, 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 3,365,866 $ 4,653,902 $ 4,541,421 $ 4,225,484 Cost of sales 1,828,052 2,302,431 2,164,140 2,373,726 Gross profit 1,537,814 2,351,471 2,377,281 1,851,758 Operating (loss) income (1,595,295) 2,985,918 (541,189) (926,999) Net (loss) income (1,194,974) 5,930,425 19,220 (186,045) Net income (loss) per common share Basic $ (0.07) $ 0.35 $ — $ (0.01) Diluted $ (0.07) $ 0.35 $ — $ (0.01) Quarterly and full fiscal year EPS are calculated independently based on the weighted average number of shares outstanding during each period. As a result, the sum of each quarter’s per share amount may not equal the total per share amount for the respective year. Net income and EPS in the second quarter of fiscal 2017 were positively impacted by approximately $4.1 million of other income related to the Company’s settlement agreement with Delta Air Lines, Inc., (See Note 5. Unbilled Receivable in Notes to Consolidated Financial Statements).

Business Segments

Business Segments	12 Months Ended
	Sep. 30, 2018
Business Segments
Business Segments	17. Business Segments The Company operates in one business segment which designs, manufactures and sells flat panel displays, flight information computers, and advanced monitoring systems to the DoD, the Department of Interior (“DOI”), other government agencies, commercial air transport carriers, and corporate/general aviation markets. The Company currently derives virtually all of its revenues from the sale of this equipment and related EDC. Most of the Company’s sales, operating results, and identifiable assets are in the United States. During fiscal 2018, 2017 and 2016, IS&S derived 75%, 89% and 95%, respectively, of its total product revenues from the sale of FPDS. During fiscal 2018, 2017 and 2016, the Company derived 25%, 11% and 5%, respectively, of total product revenues from the sale of air data systems related products. During fiscal 2018, 2017 and 2016, the Company derived 3%, 4% and 4%, respectively, of total revenues from the sale of EDC services. Geographic Data Most of the Company’s sales, operating results and identifiable assets are generated in the United States. In fiscal years 2018, 2017 and 2016, net sales outside the United States amounted to $4.7 million, $2.6 million and $8.2 million, respectively. Product Data The Company’s current product line includes FPDS, flight management systems, and air data systems and components. During fiscal 2018, 2017 and 2016, the Company derived 75%, 89% and 95%, respectively, of its revenue from sales of FPDS. The remaining revenue for each of the fiscal years was from sales of air data systems and components.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	12 Months Ended
	Sep. 30, 2018
Summary of Significant Accounting Policies
Principles of Consolidation	Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company balances and transactions have been eliminated in consolidation.
Use of Estimates	Use of Estimates The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America, which require management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. Estimates are used in accounting for, among other items, long term contracts, allowances for doubtful accounts, inventory obsolescence, product warranty cost liabilities, income taxes, engineering and material costs on EDC programs, percentage of completion on EDC contracts, recoverability of long-lived assets and contingencies. Estimates and assumptions are reviewed periodically and the effects of changes, if any, are reflected in the Consolidated Statements of Operations in the period they are determined.
Cash and Cash Equivalents	Cash and Cash Equivalents Highly liquid investments purchased with an original maturity of three months or less are classified as cash equivalents. Cash equivalents at September 30, 2018 and 2017 consist of cash on deposit and cash invested in money market funds with financial institutions.
Inventory valuation	Inventory valuation Inventories are stated at the lower of cost (first-in, first-out) or net realizable value and consist of the following: September 30, September 30, 2018 2017 Raw materials $ 2,892,366 $ 2,920,209 Work-in-process 817,051 794,756 Finished goods 570,691 464,689 $ 4,280,108 $ 4,179,654
Property and Equipment	Property and Equipment Property and equipment are stated at cost. Depreciation is provided using an accelerated method over the estimated useful lives of the assets (the lesser of three to seven years or over the lease term), except for the manufacturing facility and the corporate airplanes, which are depreciated using the straight-line method over their estimated useful lives of thirty-nine years and ten years, respectively. Major additions and improvements are capitalized, while maintenance and repairs that do not improve or extend the life of assets are charged to expense as incurred. During fiscal 2018, the Company purchased an aircraft for approximately $2.4 million. This aircraft will serve as a test bed for the Company’s new products and also as a sales/marketing tool for demonstrating its products to its aviation customers.
Long-Lived Assets	Long-Lived Assets The Company assesses the impairment of long-lived assets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 360-10, “ Property, Plant and Equipment.” This statement requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. In addition, long-lived assets to be disposed of should be reported at the lower of the carrying amount or fair value less cost to sell. The Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount of the asset to estimated future cash flows expected to result from use of the asset. If the carrying amount of the asset exceeds the estimated expected undiscounted future cash flows, the Company measures the amount of the impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is generally measured by discounting expected future cash flows. No impairment charges were recorded in fiscal years 2018, 2017 or 2016.
Revenue Recognition	Revenue Recognition The Company enters into sales arrangements with customers that, in general, provide for the Company to design, develop, manufacture and deliver large flat-panel display systems, flight information computers and advanced monitoring systems that measure and display critical flight information, including data relative to aircraft separation, airspeed, altitude, and engine and fuel data measurements. The Company’s sales arrangements may include multiple deliverables as defined in FASB ASC Topic 605-25 “ Multiple-Element Arrangements ” (“ASC Topic 605-25”), which typically include design and engineering services and the production and delivery of the flat panel display and related components. The Company includes any design and engineering development services elements in EDC sales and any functional upgrade and product elements in product sales on the accompanying consolidated statements of operations. To the extent that an arrangement contains software elements that are essential to the functionality of tangible products sold in the arrangement, the Company recognizes revenue for the deliverables in accordance with the guidance included in FASB Accounting Standards Update 2009-14, “ Revenue Arrangements That Include Software Elements” (“ASU 2009-14”); and FASB Accounting Standards Update 2009-13, “Multiple-Deliverable Revenue Arrangements-a consensus of the FASB Emerging Issues Task Force” (“ASU 2009-13”); and FASB ASC Topic 605, “Revenue Recognition” (“ASC Topic 605”). To the extent that an arrangement contains software components, which include functional upgrades that the Company sells on a standalone basis and which the Company has deemed outside the scope of the exception defined by ASU 2009-14, the Company recognizes software revenue in accordance with ASC Topic 985, “Software” (“ASC Topic 985”). Multiple Element Arrangements The Company identifies all goods and/or services that are to be delivered separately under a sales arrangement and allocates sales to each deliverable (if more than one) based on that deliverable’s fair value. The Company then considers the appropriate recognition method for each deliverable. The Company’s multiple element arrangements can include defined design and development activities, and/or functional upgrades, and product sales. The Company had no multiple element arrangements for all periods presented. The Company utilizes the selling price hierarchy that has been established by ASU 2009-13, which requires that the selling price for each deliverable be based on vendor-specific objective evidence if available, third-party evidence if vendor-specific objective evidence is not available, or estimated selling price if neither vendor-specific objective evidence nor third-party evidence is available. To the extent that an arrangement includes a deliverable for which estimated selling price is used, the Company determines the best estimate of selling price by applying the same pricing policies and methodologies that it would use to determine the price to sell the deliverable on a standalone basis. To the extent that an arrangement contains defined design and EDC activities as identified deliverables in addition to products (resulting in a multiple element arrangement), the Company recognizes as EDC sales amounts earned during the design and development phase of the contract following the guidance included in FASB ASC Topic 605-35, “ Construction-Type and Production-Type Contracts ” (“ASC Topic 605-35”) under the percentage-of-completion method. To the extent that multiple element arrangements include product sales, sales are generally recognized once revenue recognition criteria for the product deliverables have been met based on the provisions of ASC Topic 605. Single Element Arrangements Products To the extent that a single element arrangement provides for product sales and repairs, the Company recognizes sales when revenue recognition criteria for the product deliverable have been met based on the provisions of ASC Topic 605. In addition, the Company also receives orders for equipment and parts, and in general, recognizes revenue upon shipment to customers. The Company may offer its customers extended warranties for additional fees, which it records as deferred revenue and recognizes as sales on a straight-line basis over the warranty periods. Engineering Development Contracts The Company may enter into contracts to perform specified design and EDC services related to its products. The Company recognizes revenue from these arrangements as EDC sales, following the guidance included in ASC Topic 605-35, and considers the nature of these contracts (including term, size of contract, and level of effort) when determining the appropriate accounting treatment for a particular contract. Certain of these contracts are accounted for under the percentage-of-completion method of accounting when the Company determines that progress toward completion is reasonably estimable, and the contract is long-term in nature. The Company uses the completed contract method for all other contracts. Sales and profit margins under the percentage-of-completion method are recorded based on the ratio of actual costs incurred to total estimated costs expected to be incurred related to the contract under the cost-to-cost method. The percentage-of-completion method of accounting requires the Company to estimate the profit margin for each individual contract or contract segment, and to apply that profit margin on a uniform basis as sales are recorded under the contract. The estimation of profit margin requires the Company to make projections of the total sales to be generated and the total costs that will be incurred under a contract. These projections require the Company to make numerous assumptions and estimates relating to items such as the complexity of design and related development costs, performance of subcontractors, availability and cost of materials, engineering productivity, prototype costs, overhead costs, and capital costs. These contracts sometimes include purchase options for additional quantities and for customer change orders for additional or revised product functionality. Revenues and costs related to profitable purchase options are included in the Company’s estimates only when the options are exercised, while revenues and costs related to unprofitable purchase options are included in the Company’s estimates when exercise is determined to be probable. Revenues related to change orders are included in profit estimates only if they can be estimated reliably and collectability is reasonably assured. Purchase options and change orders are accounted for either as an integral part of the original contract or separately, depending upon the nature and value of the item, in the period in which any change order or purchase option becomes effective. Anticipated losses on contracts are recognized in full in the period in which losses become probable and estimable. The Company reviews estimates of profit margins for contracts on a quarterly basis. Assuming the initial estimates of revenue and costs under a contract are accurate, the percentage-of-completion method results in the profit margin being recorded evenly as revenue is recognized under the contracts. Changes in these underlying estimates due to revisions in revenues and cost estimates or the exercise of contract options may result in profit margins being recognized unevenly over a contract as such changes are accounted for on a cumulative basis in the period in which the estimates are revised. Significant changes in estimates related to accounting for long-term contracts may have a material effect on the Company’s results of operations in the period in which the revised estimates are made. Cumulative catch-up adjustments (loss contracts), if any, resulting from changes in estimates are included in results of operations and disclosed in the notes to the consolidated financial statements of the Company. Customer Service Revenue The Company enters into sales arrangement with customers for the repair or upgrade of its various products that are not under warranty. The Company’s customer service revenue and cost of sales are included in product sales and product cost of sales, respectively, on the accompanying consolidated statements of operations. The Company’s customer service revenue and cost of sales for the fiscal years ended 2018, 2017 and 2016 are as follows: For the Fiscal Year Ended September 30, 2018 2017 2016 Customer Service Sales $ 4,047,265 $ 3,232,712 $ 3,597,828 Customer Service Cost of Sales 1,724,167 1,520,146 1,271,022 Gross Profit $ 2,323,098 $ 1,712,566 $ 2,326,806
Income Taxes	Income Taxes Income taxes are recorded in accordance with ASC Topic 740, “Income Taxes” (“ASC Topic 740”) , which utilizes a balance sheet approach to provide for income taxes. Under this method, the Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of the Company’s assets, liabilities, and expected benefits of utilizing net operating losses (“NOL”) and tax credit carry-forwards. The impact on deferred taxes of changes in tax rates and laws, if any, are applied to the years during which temporary differences are expected to be settled, and are reflected in the consolidated financial statements in the period of enactment. At the end of each interim and year-end reporting period, the Company prepares an estimate of the annual effective income tax rate and applies that annual effective income tax rate to ordinary year-to-date pre-tax income for the interim period. Specific tax items discrete to a particular quarter are recorded in income tax expense for that quarter. The estimated annual effective tax rate used in providing for income taxes on a year-to-date basis may change in subsequent periods. Deferred tax assets are reduced by a valuation allowance if, based on the consideration of all available evidence, it is more likely than not that some portion of the deferred tax asset will not be realized. Significant weight is given to evidence that can be verified objectively, and significant management judgment is required in determining any valuation allowance recorded against net deferred tax assets. The Company evaluates deferred income taxes on a quarterly basis to determine if a valuation allowance is required by considering available evidence. Deferred tax assets are recognized when expected future taxable income is sufficient to allow the related tax benefits to reduce taxes that would otherwise be payable. The sources of taxable income that may be available to realize the benefit of deferred tax assets are future reversals of existing taxable temporary differences, future taxable income exclusive of reversing temporary differences and credit carryforwards, taxable income in carry-back years, and tax planning strategies which are both prudent and feasible. The Company’s current balance of the deferred tax valuation allowance is recorded against all of its federal and state deferred tax assets. The Company will continue to assess all available evidence during future periods to evaluate any changes to the realization of its deferred tax assets. If the Company were to determine that it would be able to realize additional federal or state deferred tax assets in the future, it would make an adjustment to the valuation allowance which would reduce the provision for income taxes. The accounting for uncertainty in income taxes requires a more likely than not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. The Company records a liability for the difference between the (i) benefit recognized and measured for financial statement purposes and (ii) the tax position taken or expected to be taken on the Company’s tax return. To the extent that the Company’s assessment of such tax positions changes, the change in estimate is recorded in the period in which the determination is made. The Company has elected to record any interest or penalties associated with uncertain tax positions as income tax expense. The Company files a consolidated United States federal income tax return. The Company prepares and files tax returns based on the interpretation of tax laws and regulations, and records estimates based on these judgments and interpretations. In the normal course of business, the tax returns are subject to examination by various taxing authorities. Such examinations may result in future tax and interest assessments by these taxing authorities, and the Company records a liability when it is probable that there will be an assessment. The Company adjusts the estimates periodically as a result of ongoing examinations by and settlements with the various taxing authorities, and changes in tax laws, regulations and precedent. The consolidated tax provision of any given year includes adjustments to prior years’ income tax accruals that are considered appropriate, and any related estimated interest. Management believes that it has made adequate accruals for income taxes. Differences between estimated and actual amounts determined upon ultimate resolution, individually or in the aggregate, are not expected to have a material effect on the Company’s consolidated financial position, but could possibly be material to its consolidated results of operations or cash flow of any one period. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code that will affect 2017, including, but not limited to, (1) reducing the U.S. federal corporate tax rate from 34 percent to 21 percent; (2) bonus depreciation that will allow for full expensing of qualified property; (3) elimination of the corporate alternative minimum tax (AMT) and changing how existing AMT credits can be realized; (4) a new limitation on deductible interest expense; (5) the repeal of the domestic production activity deduction; and (6) limitations on net operating losses (NOLs) generated after December 31, 2017, to 80 percent of taxable income. The Tax Act reduced the corporate tax rate to 21 percent, effective January 1, 2018. Consequently, we have recorded a decrease related to DTAs and DTLs with a corresponding net adjustment to deferred income tax expense of $321,038 for the year ended December 31, 2017. This expense is offset fully by a change in the valuation allowance. The $321,038 is a provisional amount.
Engineering Development	Engineering Development Total engineering development expense is comprised of both internally funded R&D and product development and design charges related to specific customer contracts. Engineering development expense consists primarily of payroll-related expenses of employees engaged in EDC projects, engineering related product materials and equipment, and subcontracting costs. R&D charges incurred for product design, product enhancements, and future product development are expensed as incurred. Product development and design charges related to specific customer contracts are charged to cost of sales-EDC based on the method of contract accounting (either percentage-of-completion or completed contract) applicable to such contracts.
Comprehensive Income	Comprehensive Income Pursuant to FASB ASC Topic 220, “ Comprehensive Income ” (“ASC Topic 220”), the Company is required to classify items of other comprehensive income by their nature in a financial statement and display the accumulated balance of other comprehensive income separately from retained earnings and additional paid-in capital in the equity section of its condensed consolidated balance sheets. For fiscal 2018, 2017 and 2016 comprehensive income consisted of net income only, and there were no items of other comprehensive income for any of the periods presented.
Fair Value of Financial Instruments	Fair Value of Financial Instruments The net carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and short-term debt approximate their fair value because of the short-term nature of these instruments. For financial assets and liabilities measured at fair value on a recurring basis, fair value is the price the Company would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value as follows: Level 1 — Unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date. Level 2 — Other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including: · Quoted prices for similar assets or liabilities in active markets; · Quoted prices for identical or similar assets in non-active markets; · Inputs other than quoted prices that are observable for the asset or liability; and · Inputs that are derived principally from or corroborated by other observable market data. Level 3 — Unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions. The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2018 and 2017, according to the valuation techniques the Company used to determine their fair values. Fair Value Measurement on September 30, 2018 Quoted Price in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Assets Cash and cash equivalents: Money market funds $ 19,725,474 $ — $ — Fair Value Measurement on September 30, 2017 Quoted Price in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Assets Cash and cash equivalents: Money market funds $ 23,897,092 $ — $ —
Share-Based Compensation	Share-Based Compensation The Company accounts for share-based compensation under FASB ASC Topic 505-50, “Equity-Based Payments to Non-Employees” (“ASC Topic 505-50”), and ASC Topic 718, “Stock Compensation” (“ASC Topic 718”), which require the Company to measure the cost of employee or non-employee director services received in exchange for an award of equity instruments based on the grant-date fair value of the award using an option pricing model. The Company recognizes such cost over the period during which an employee or non-employee director is required to provide service in exchange for the award.
Warranty	Warranty The Company offers warranties on some products of various lengths, however the standard warranty is twenty-four months. At the time of shipment, the Company establishes a reserve for estimated costs of warranties based on its best estimate of the amounts necessary to settle future and existing claims using historical data on products sold as of the balance sheet date. The length of the warranty period, the product’s failure rates, and the customer’s usage affect warranty cost. If actual warranty costs differ from the Company’s estimated amounts, future results of operations could be affected adversely. Warranty cost is recorded as cost of sales, and the reserve balance recorded as an accrued expense. While the Company maintains product quality programs and processes, its warranty obligation is affected by product failure rates and the related corrective costs. If actual product failure rates and/or corrective costs differ from the estimates, the Company revises the estimated warranty liability accordingly.
Self-Insurance Reserves	Self-Insurance Reserves Since January 1, 2014, the Company has self-insured a significant portion of its employee medical insurance. The Company maintains a stop-loss insurance policy that limits its losses both on a per employee basis and an aggregate basis. Liabilities associated with the risks that are retained by the Company are estimated based upon actuarial assumptions such as historical claims experience, demographic factors and other actuarial assumptions. The Company estimated the total medical claims incurred but not reported and the Company believes that it has adequate reserves for these claims at September 30, 2018 and 2017. However, the actual value of such claims could be significantly affected if future occurrences and claims differ from these assumptions. At September 30, 2018 and 2017, the estimated liability for medical claims incurred but not reported was $60,200 and $53,200, respectively. The Company has recorded the excess of funded premiums over estimated claims incurred but not reported of $102,000 as a current asset in the accompanying consolidated balance sheet. During the year ended September 30, 2018, the Company has used the excess of funded premiums to reduce amounts payable for claims incurred.
Treasury Stock	Treasury Stock We account for treasury stock purchased under the cost method and include treasury stock as a component of stockholder’s equity. Treasury stock purchased with intent to retire (whether or not the retirement is actually accomplished) is charged to common stock.
New Accounting Pronouncements	New Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, Improvements to Employer Share-Based Payment Accounting, which simplifies the tax treatment of stock “shortfalls” and “windfalls.” Previous guidance required excess tax benefits (“windfalls”) to be recorded in equity. Tax deficiencies (“shortfalls”) were recorded in equity to the extent of previous windfalls then to the income statement. The new guidance simplifies this treatment by having all “windfalls” and “shortfalls” recorded through the income statement. This guidance became effective for us beginning on October 1, 2017. Adoption of this standard did not have a material effect upon the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). Under this guidance, an entity is required to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. This guidance offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. This guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, and requires a modified retrospective adoption, with early adoption permitted. The Company is currently evaluating the impacts of adoption of this guidance. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which simplifies balance sheet presentation of deferred income taxes. Previous guidance required an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position; however, the new guidance requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The updated standard is effective for the Company beginning October 1, 2017, with early adoption permitted as of the beginning of any interim or annual reporting period. The Company early adopted this standard retrospectively and reclassified its current deferred tax balances to noncurrent deferred tax for all periods presented. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. In July 2015, the FASB issued Accounting Standards Update (“ASU”) No. 2015-11, Simplifying the Measurement of Inventory. ASU 2015-11 simplifies the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value. ASU 2015-11 applies only to inventories for which cost is determined by methods other than last-in first-out and the retail inventory method. ASU 2015-11 is effective for public companies for annual reporting periods beginning after December 15, 2016, and interim periods within those fiscal years. We adopted ASU 2015-11 effective October 1, 2017 and the implementation had no material impact on the consolidated financial statements. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40) (ASU 2014-15). The objective of ASU 2014-15 is to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and provide related disclosures. Previously, GAAP did not provide guidance to evaluate whether there was substantial doubt regarding an organization’s ability to continue as a going concern. This ASU provides guidance to an organization’s management, with principles and definitions to reduce diversity in the timing and content of financial statement disclosures commonly provided by organizations. This standard was adopted by the Company at September 30, 2017, and the adoption of this ASU did not have a material impact on the consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers,” which provides a single, comprehensive revenue recognition model for all contracts with customers, and contains principles to determine the measurement of revenue and timing of when it is recognized. The model will supersede most existing revenue recognition guidance, and also requires enhanced revenue-related disclosures. Under the new standard and its related amendments (collectively known as ASC 606), revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized will reflect the consideration that the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). We anticipate using the modified retrospective method of adoption when the Company adopts this standard in fiscal year 2019. While we are still the process of assessing the impact of this standard on the Company’s financial statements, we do not currently expect that the adoption of ASC 606 will have a material effect on the Company’s consolidated financial statements. The actual impact of ASC 606 is subject to change from these estimates and such change may be significant, pending the completion of the Company’s assessment in the first quarter of 2019. In order to complete this assessment, the Company is continuing to update and enhance its internal accounting systems and internal controls over financial reporting. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement which modifies the disclosures on fair value measurements by removing the requirement to disclose the amount and reason for transfers between Level 1 and Level 2 of the fair value hierarchy and the policy for timing of such transfers. The ASU expands the disclosure requirements for Level 3 fair value measurements, primarily focused on changes in unrealized gains and losses included in other comprehensive income. For public entities, the standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for any removed or modified disclosures and adoption of the additional disclosures can be delayed until the effective date. The Company does not currently expect the adoption of ASU 2018-13 to have a material impact on its consolidated financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	12 Months Ended
	Sep. 30, 2018
Summary of Significant Accounting Policies
Schedule of inventories	September 30, September 30, 2018 2017 Raw materials $ 2,892,366 $ 2,920,209 Work-in-process 817,051 794,756 Finished goods 570,691 464,689 $ 4,280,108 $ 4,179,654
Schedule of customer service revenue and cost of sales	For the Fiscal Year Ended September 30, 2018 2017 2016 Customer Service Sales $ 4,047,265 $ 3,232,712 $ 3,597,828 Customer Service Cost of Sales 1,724,167 1,520,146 1,271,022 Gross Profit $ 2,323,098 $ 1,712,566 $ 2,326,806
Schedule of financial assets and liabilities accounted for at fair value on a recurring basis	Fair Value Measurement on September 30, 2018 Quoted Price in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Assets Cash and cash equivalents: Money market funds $ 19,725,474 $ — $ — Fair Value Measurement on September 30, 2017 Quoted Price in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Assets Cash and cash equivalents: Money market funds $ 23,897,092 $ — $ —

Net Income Per Share (Tables)

Net Income Per Share (Tables)	12 Months Ended
	Sep. 30, 2018
Net Income Per Share
Schedule of net income per share	For the Fiscal Year Ended September 30, 2018 2017 2016 Numerator: Net income (loss) $ (3,653,905) $ 4,568,627 $ 1,986,801 Denominator: Basic weighted average shares 16,805,991 16,742,461 16,927,055 Dilutive effect of share-based awards — 113,182 112,241 Diluted weighted average shares 16,805,991 16,855,644 17,039,296 Net income (loss) per common share: Basic $ (0.22) $ 0.27 $ 0.12 Diluted $ (0.22) $ 0.27 $ 0.12

Prepaid Expenses and Other Cu_2

Prepaid Expenses and Other Current Assets (Tables)	12 Months Ended
	Sep. 30, 2018
Prepaid Expenses and Other Current Assets
Schedule of prepaid expenses and other current assets	September 30, September 30, 2018 2017 Prepaid insurance $ 258,015 $ 402,300 Income tax refund receivable 1,578 260,509 Other 284,641 429,255 $ 544,234 $ 1,092,064

Property and Equipment (Tables)

Property and Equipment (Tables)	12 Months Ended
	Sep. 30, 2018
Property and Equipment
Schedule of property and equipment, net	September 30, September 30, 2018 2017 Computer equipment $ 2,268,969 $ 2,247,866 Corporate airplanes 5,601,039 3,194,571 Furniture and office equipment 1,033,779 1,051,637 Manufacturing facility 5,733,313 5,733,313 Equipment 5,580,083 5,507,774 Land 1,021,245 1,021,245 21,238,428 18,756,406 Less accumulated depreciation and amortization (12,451,691) (12,087,395) $ 8,786,737 $ 6,669,011

Other Assets (Tables)

Other Assets (Tables)	12 Months Ended
	Sep. 30, 2018
Other Assets
Schedule of other assets	September 30, September 30, 2018 2017 Intangible assets, net of accumulated amortization of $531,637 at September 30, 2018 and September 30, 2017 $ 68,600 $ 68,600 Other non-current assets 113,393 118,715 $ 181,993 $ 187,315

Accrued Expenses (Tables)

Accrued Expenses (Tables)	12 Months Ended
	Sep. 30, 2018
Accrued Expenses
Schedule of accrued expenses	September 30, September 30, 2018 2017 Warranty $ 854,952 $ 1,013,461 Salary, benefits and payroll taxes 143,183 258,688 Professional fees 203,823 219,331 Other 261,063 268,557 $ 1,463,021 $ 1,760,037

Warranty (Tables)

Warranty (Tables)	12 Months Ended
	Sep. 30, 2018
Warranty
Schedule of warranty cost and accrual information	2018 2017 Warranty accrual as of October 1, $ 1,013,461 $ 1,009,368 Accrued expense for fiscal year (5,926) 219,390 Warranty cost incurred for fiscal year (152,583) (215,297) Warranty accrual as of September 30, $ 854,952 $ 1,013,461

Income Taxes (Tables)

Income Taxes (Tables)	12 Months Ended
	Sep. 30, 2018
Income Taxes
Schedule of components of income taxes	For the Fiscal Year Ended September 30, 2018 2017 2016 Current provision (benefit): Federal $ (3,440) $ 244,794 $ 77,244 State 5,239 3,082 (2,930) Total current provision (benefit) 1,799 247,876 74,314 Deferred provision (benefit): Federal 61,799 — 493,989 State 53 44 27 Total deferred provision (benefit) 61,852 44 494,016 Total current and deferred provision (benefit) $ 63,651 $ 247,920 $ 568,330
Schedule of reconciliation of the statutory federal rate to the Company's effective income tax rate	For the Fiscal Year Ended September 30, 2018 2017 2016 U.S. Federal statutory tax rate 24.3 % 34.0 % 34.0 % Rate change due to tax reform (9.0) % — — State income taxes, net of federal benefit 1.9 % (0.4) % 0.2 % Permanent items (0.1) % 0.2 % (0.2) % Research and development tax credits 1.3 % 8.1 % (12.6) % Valuation allowance (20.3) % (35.9) % (2.9) % Change in unrecognized tax benefits 0.9 % (0.9) % (0.1) % 123R cancellations and forfeitures (0.8) % 0.1 % 3.8 % Effective income tax rate (1.8) % 5.2 % 22.3 %
Schedule of deferred tax assets and liabilities	As of September 30, 2018 2017 2016 Non Current Non Current Non Current Deferred tax assets: Reserves and accruals $ 730,015 $ 1,275,427 $ 2,539,117 Research and development credit 1,318,977 $ 1,236,365 $ 1,742,627 NOL carryforwards -fed/state 2,982,246 $ 1,208,592 $ 1,206,476 Depreciation (863,796) $ (690,774) $ (725,018) Stock options 345,608 $ 609,016 $ 603,881 4,513,050 3,638,626 5,367,083 Less: Valuation allowance (4,296,553) (3,568,459) (5,297,757) Total deferred tax assets 216,497 70,167 69,326 Deferred tax liabilities: Depreciation (346,091) (137,909) (137,027) Total deferred tax liabilities (346,091) (137,909) (137,027) Net deferred tax asset (liability) $ (129,594) $ (67,742) $ (67,701)
Schedule of reconciliation of beginning and ending balances of total amounts of gross unrecognized tax benefits	For the Fiscal Year Ended September 30, 2018 2017 2016 Balance at beginning of year $ 570,000 $ 615,000 $ 615,000 Unrecognized tax benefits related to prior years 52,000 — (2,000) Unrecognized tax benefits related to current year 11,000 18,000 26,000 Decrease in unrecognized tax benefits due to the lapse of applicable statute of limitations (93,000) (63,000) (24,000) Balance at end of year $ 540,000 $ 570,000 $ 615,000

Share-Based Compensation (Table

Share-Based Compensation (Tables)	12 Months Ended
	Sep. 30, 2018
1998 Plan
Share-based compensation
Summary of option activity	Weighted Average Aggregate Exercise Intrinsic Options Price Value Outstanding at September 30, 2015 53,000 $ 8.83 $ — Granted — — — Exercised — — — Cancelled (23,000) 12.17 — Outstanding at September 30, 2016 30,000 $ 6.27 — Granted — — — Exercised — — — Cancelled — — — Outstanding at September 30, 2017 30,000 $ 6.27 $ — Granted — — — Exercised — — — Cancelled (30,000) 6.27 — Outstanding at September 30, 2018 — $ — $ — Vested — $ — $ — Options exercisable at September 30, 2018 — $ — $ —
Summary of information about stock options	Options Outstanding Options Exercisable Weighted- Average Weighted- Remaining Weighted- Average Range of Exercise Outstanding Contractual Average As of September Exercise Prices As of September 30, 2018 Life Exercise Price 30, 2018 Price $ 5.01 - $ 10.00 — — — — — — — $ — — $ —
2009 Plan
Share-based compensation
Summary of option activity	Weighted Average Aggregate Exercise Intrinsic Options Price Value Outstanding at September 30, 2015 592,168 $ 3.35 $ — Granted 67,115 2.81 25,504 Exercised — — — Cancelled (33,000) 3.78 — Outstanding at September 30, 2016 626,283 $ 3.35 $ — Granted — 2.81 25,504 Exercised (67,115) — 55,705 Cancelled (2,334) 3.78 — Outstanding at September 30, 2017 556,834 $ 3.32 177,043 Granted — — — Exercised — — — Cancelled (6,000) 3.78 — Outstanding at September 30, 2018 550,834 $ 3.32 $ 15,000 Vested and expected to vest 550,834 $ 3.32 $ 15,000 Options exercisable at September 30, 2018 550,834 $ 3.32 $ 15,000
Summary of information about stock options	Options Outstanding Options Exercisable Outstanding Weighted- As of Average Weighted- Weighted- Range of Exercise September 30, Remaining Average As of September Average Prices 2018 Contractual Life Exercise Price 30, 2018 Exercise Price $ 0.00 - $ 5.00 550,834 3.8 $ 3.32 550,834 $ 3.32

Quarterly Financial Data (una_2

Quarterly Financial Data (unaudited) (Tables)	12 Months Ended
	Sep. 30, 2018
Quarterly Financial Data (unaudited)
Summary of quarterly results of operations of the Company	Fiscal Year Ended September 30, 2018 First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 3,087,984 $ 3,727,204 $ 3,389,663 $ 3,645,521 Cost of sales 1,593,268 2,082,347 1,806,980 1,829,328 Gross profit 1,494,716 1,644,857 1,582,683 1,816,193 Operating (loss) income (1,051,560) (1,143,511) (1,072,228) (444,240) Net (loss) income (881,619) (1,316,871) (1,041,037) (414,378) Net income (loss) per common share Basic $ (0.05) $ (0.08) $ (0.06) $ (0.03) Diluted $ (0.05) $ (0.08) $ (0.06) $ (0.03) Fiscal Year Ended September 30, 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 3,365,866 $ 4,653,902 $ 4,541,421 $ 4,225,484 Cost of sales 1,828,052 2,302,431 2,164,140 2,373,726 Gross profit 1,537,814 2,351,471 2,377,281 1,851,758 Operating (loss) income (1,595,295) 2,985,918 (541,189) (926,999) Net (loss) income (1,194,974) 5,930,425 19,220 (186,045) Net income (loss) per common share Basic $ (0.07) $ 0.35 $ — $ (0.01) Diluted $ (0.07) $ 0.35 $ — $ (0.01)

Background (Details)

Background (Details)	12 Months Ended
	Sep. 30, 2018segment
Background
Number of business segments	1

Concentrations (Details)

Concentrations (Details) $ in Millions	12 Months Ended
	Sep. 30, 2018USD ($)customeritem	Sep. 30, 2017USD ($)customeritem	Sep. 30, 2016USD ($)customer	Sep. 30, 2014USD ($)
Concentration of Credit Risk
Number of banks for maintenance of cash balances | item	2
Customer one
Concentrations
Number of customers	1
Net sales | Major Customers and Products
Concentrations
Concentration of risk (as a percent)	48.00%	54.00%	51.00%
Number of major customers	5	5	5
Number of major annual customers		3	3
Accounts receivable and unbilled receivables | $	$ 1.4	$ 1.3	$ 1.6
Net sales | Major Customers and Products | Sierra Nevada
Concentrations
Concentration of risk (as a percent)		16.00%	13.00%
Net sales | Major Customers and Products | Pilatus
Concentrations
Concentration of risk (as a percent)	20.00%	12.00%
Net sales | Major Customers and Products | Jet2
Concentrations
Concentration of risk (as a percent)			12.00%
Net sales | Major Customers and Products | DHL
Concentrations
Concentration of risk (as a percent)		10.00%	11.00%
Net sales | Major Customers and Products | Government contractors and Agencies
Concentrations
Concentration of risk (as a percent)	32.00%	53.00%	32.00%
Net sales | Major Products | FPDS
Concentrations
Concentration of risk (as a percent)	75.00%	89.00%	95.00%
Net sales | Major Products | Air data systems and components
Concentrations
Concentration of risk (as a percent)	25.00%	11.00%	5.00%
Accounts receivable | Major Customers and Products | Customer one
Concentrations
Concentration of risk (as a percent)	27.00%
Inventory | Major Suppliers
Concentrations
Concentration of risk (as a percent)	11.00%	33.00%
Number of major suppliers | item	1	3
Delta
Concentration of Credit Risk
Provision for loss on unbilled receivables | $				$ 3.7

Summary of Significant Accoun_4

Summary of Significant Accounting Policies (Details)	3 Months Ended	9 Months Ended	12 Months Ended
	Dec. 31, 2017	Sep. 30, 2018USD ($)	Sep. 30, 2018USD ($)item	Dec. 31, 2017USD ($)	Sep. 30, 2017USD ($)	Sep. 30, 2016USD ($)
Inventory valuation
Raw materials		$ 2,892,366	$ 2,892,366		$ 2,920,209
Work-in-process		817,051	817,051		794,756
Finished goods		570,691	570,691		464,689
Inventories		$ 4,280,108	4,280,108		4,179,654
Property and Equipment
Aircraft purchase			2,400,000
Long-Lived Assets
Impairment charges			$ 0		0	$ 0
Revenue Recognition
Minimum number of deliverable for allocating revenue to each deliverable | item			1
Customer Service Revenue
Customer Service Sales			$ 4,047,265		3,232,712	3,597,828
Customer Service Cost of Sales			1,724,167		1,520,146	1,271,022
Gross Profit			$ 2,323,098		$ 1,712,566	$ 2,326,806
Income taxes
U.S. Federal statutory tax rate (as a percent)	34.00%	21.00%	24.30%		34.00%	34.00%
Percentage of limitation on net operating losses		80.00%
Deferred income tax expense due to Tax Cuts and Jobs Act				$ 321,038
Property and equipment except manufacturing facility and the corporate airplane | Minimum
Property and Equipment
Estimated useful lives			3 years
Property and equipment except manufacturing facility and the corporate airplane | Maximum
Property and Equipment
Estimated useful lives			7 years
Corporate airplane and manufacturing facility | Minimum
Property and Equipment
Estimated useful lives			39 years
Corporate airplane and manufacturing facility | Maximum
Property and Equipment
Estimated useful lives			10 years

Summary of Significant Accoun_5

Summary of Significant Accounting Policies - Fair Value (Details) - USD ($)	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Warranty
Length of warranty period	24 months
Self-Insurance Reserves
Estimated liability for medical claims incurred but not reported	$ 60,200	$ 53,200
Excess of funded premiums over estimated claims incurred but not reported	102,000
Fair value on a recurring basis | Quoted Price in Active Markets for Identical Assets (Level 1) | Money market funds
Assets
Cash and cash equivalents	$ 19,725,474	$ 23,897,092

Net Income Per Share (Details)

Net Income Per Share (Details) - USD ($)	3 Months Ended								12 Months Ended
	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Numerator:
Net income (loss)	$ (414,378)	$ (1,041,037)	$ (1,316,871)	$ (881,619)	$ (186,045)	$ 19,220	$ 5,930,425	$ (1,194,974)	$ (3,653,905)	$ 4,568,627	$ 1,986,801
Denominator:
Basic weighted average shares									16,805,991	16,742,461	16,927,055
Dilutive effect of share-based awards										113,182	112,241
Diluted weighted average shares									16,805,991	16,855,644	17,039,296
Net income (loss) per common share:
Basic (in dollars per share)	$ (0.03)	$ (0.06)	$ (0.08)	$ (0.05)	$ (0.01)		$ 0.35	$ (0.07)	$ (0.22)	$ 0.27	$ 0.12
Diluted (in dollars per share)	$ (0.03)	$ (0.06)	$ (0.08)	$ (0.05)	$ (0.01)		$ 0.35	$ (0.07)	$ (0.22)	$ 0.27	$ 0.12
Options to purchase common stock outstanding (in shares)	550,834				586,834				550,834	586,834	589,168
Anti-dilutive options to purchase common stock excluded from the computation of diluted earnings per share (in shares)										336,961	339,581
Delta | Other income
Net income (loss) per common share:
Reminder of amount paid									$ 4,100,000	$ 4,100,000
RSU
Net income (loss) per common share:
Restricted stock units outstanding ( in shares)	0				0				0	0	0

Unbilled Receivables (Details)

Unbilled Receivables (Details) - USD ($)	3 Months Ended								12 Months Ended
	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016	Feb. 23, 2017
Unbilled Receivables
Unbilled receivables, net of progress payments					$ 1,480,822					$ 1,480,822
Cumulative change in operating income resulting from changes in estimates	$ (444,240)	$ (1,072,228)	$ (1,143,511)	$ (1,051,560)	$ (926,999)	$ (541,189)	$ 2,985,918	$ (1,595,295)	$ (3,711,539)	(77,565)	$ 2,443,187
Long-term contracts accounted for under percentage-of-completion
Unbilled Receivables
Cumulative change in operating income resulting from changes in estimates									0	61,000	$ (58,000)
Delta
Unbilled Receivables
Amount paid												$ 7,750,000
Delta | Selling, general and administrative expenses
Unbilled Receivables
Reversal of reserve									3,600,000
Delta | Other income
Unbilled Receivables
Reminder of amount paid									$ 4,100,000	$ 4,100,000

Prepaid Expenses and Other Cu_3

Prepaid Expenses and Other Current Assets (Details) - USD ($)	Sep. 30, 2018	Sep. 30, 2017
Prepaid Expenses and Other Current Assets
Prepaid insurance	$ 258,015	$ 402,300
Income tax refund receivable	1,578	260,509
Other	284,641	429,255
Total prepaid expenses and other current assets	$ 544,234	$ 1,092,064

Property and Equipment (Details

Property and Equipment (Details)	12 Months Ended
	Sep. 30, 2018USD ($)aircraft	Sep. 30, 2017USD ($)	Sep. 30, 2016USD ($)
Property and equipment
Property and equipment, gross	$ 21,238,428	$ 18,756,406
Less: accumulated depreciation and amortization	(12,451,691)	(12,087,395)
Property and equipment, net	8,786,737	6,669,011
Depreciation	$ 400,000	400,000	$ 500,000
Number of corporate airplanes, depreciated | aircraft	2
Computer equipment
Property and equipment
Property and equipment, gross	$ 2,268,969	2,247,866
Corporate airplanes
Property and equipment
Property and equipment, gross	5,601,039	3,194,571
Furniture and office equipment
Property and equipment
Property and equipment, gross	1,033,779	1,051,637
Manufacturing facility
Property and equipment
Property and equipment, gross	5,733,313	5,733,313
Equipment
Property and equipment
Property and equipment, gross	5,580,083	5,507,774
Land
Property and equipment
Property and equipment, gross	$ 1,021,245	$ 1,021,245

Other Assets (Details)

Other Assets (Details) - USD ($)	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Other Assets
Intangible assets, net of accumulated amortization of $531,637 and $531,637 at September 30, 2018 and September 30, 2017	$ 68,600	$ 68,600
Other non-current assets	113,393	118,715
Total other assets	181,993	187,315
Accumulated amortization of intangible assets	531,637	531,637
Impairment charges	0	0	$ 0
Impairment charges	0	$ 2,600	$ 12,000
Prepaid software licenses	$ 38,000

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($)	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Accrued Expenses
Warranty	$ 854,952	$ 1,013,461	$ 1,009,368
Salary, benefits and payroll taxes	143,183	258,688
Professional fees	203,823	219,331
Other	261,063	268,557
Total accrued expenses	$ 1,463,021	$ 1,760,037

Warranty (Details)

Warranty (Details) - USD ($)	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Warranty cost and accrual information
Warranty accrual, beginning of period	$ 1,013,461	$ 1,009,368
Accrued expense for fiscal year	(5,926)	219,390
Warranty cost incurred for fiscal year	(152,583)	(215,297)
Warranty accrual, end of period	$ 854,952	$ 1,013,461

Income Taxes (Details)

Income Taxes (Details) - USD ($)	3 Months Ended	9 Months Ended	12 Months Ended
	Dec. 31, 2017	Sep. 30, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Current provision (benefit):
Federal			$ (3,440)	$ 244,794	$ 77,244
State			5,239	3,082	(2,930)
Total current provision (benefit)			1,799	247,876	74,314
Deferred provision (benefit):
Federal			61,799		493,989
State			53	44	27
Total deferred provision (benefit)			61,852	44	494,016
Total current and deferred provision (benefit)			$ 63,651	$ 247,920	$ 568,330
Reconciliation of the statutory federal rate to the Company's effective income tax rate
U.S. Federal statutory tax rate (as a percent)	34.00%	21.00%	24.30%	34.00%	34.00%
Rate change due to tax reform (as a percent)			(9.00%)
State income taxes, net of federal benefit (as a percent)			1.90%	(0.40%)	0.20%
Permanent items (as a percent)			(0.10%)	0.20%	(0.20%)
Research and development tax credits (as a percent)			1.30%	8.10%	(12.60%)
Valuation allowance (as a percent)			(20.30%)	(35.90%)	(2.90%)
Change in unrecognized tax benefits (as a percent)			0.90%	(0.90%)	(0.10%)
123R cancellations and forfeitures			(0.80%)	0.10%	3.80%
Effective income tax rate (as a percent)			(1.80%)	5.20%	22.30%

Income Taxes - Deferred tax ass

Income Taxes - Deferred tax assets and liabilities component (Details) - USD ($)	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Deferred tax assets:
Reserves and accruals	$ 730,015	$ 1,275,427	$ 2,539,117
Research and development credit	1,318,977	1,236,365	1,742,627
NOL carryforward - fed/state	2,982,246	1,208,592	1,206,476
Depreciation	(863,796)	(690,774)	(725,018)
Stock options	345,608	609,016	603,881
Gross non current deferred tax assets	4,513,050	3,638,626	5,367,083
Less : Valuation allowance	(4,296,553)	(3,568,459)	(5,297,757)
Total deferred tax assets	216,497	70,167	69,326
Deferred tax liabilities:
Depreciation	(346,091)	(137,909)	(137,027)
Total deferred tax liabilities	(346,091)	(137,909)	(137,027)
Net deferred tax asset (liability)	$ (129,594)	$ (67,742)	$ (67,701)

Income Taxes - Net operating lo

Income Taxes - Net operating loss (Details) - USD ($) $ in Millions	Sep. 30, 2018	Sep. 30, 2017
State
Operating loss carryforward
Net operating loss	$ 23.8	$ 21.2

Income Taxes - Tax carryforward

Income Taxes - Tax carryforward and reconciliation of unrecognized tax benefit (Details) - USD ($)	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Tax credit carryforward
Change in valuation allowance	$ 700,000	$ 1,700,000
Valuation allowance	4,296,553	3,568,459	$ 5,297,757
Reconciliation of beginning and ending balances of total amounts of gross unrecognized tax benefits
Balance at beginning of year	570,000	615,000	615,000
Unrecognized tax benefits related to prior years	52,000		(2,000)
Unrecognized tax benefits related to current year	11,000	18,000	26,000
Decrease in unrecognized tax benefits due to the lapse of applicable statute of limitations	(93,000)	(63,000)	(24,000)
Balance at end of year	540,000	570,000	615,000
Unrecognized tax benefits , if recognized, would impact effective tax rate	540,000	570,000	615,000
Unrecognized tax benefits against accrued interest	0
Accrual recorded for penalties	0
(Benefit) expense for interest (net of federal impact) recognized	0	0	$ (3,000)
Adjustments resulting from IRS examination	0
R&D | Federal
Tax credit carryforward
Tax Credit carryforwards	$ 1,319,000	1,236,000
R&D | State
Tax credit carryforward
Gain on sale of Tax credits		$ 669,000

Savings Plan (Details)

Savings Plan (Details) - USD ($)	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Savings Plan
Contributions made to defined contribution savings plan	$ 105,000	$ 120,000	$ 127,000

Share-Based Compensation - Stoc

Share-Based Compensation - Stock option plan (Details)	12 Months Ended
	Sep. 30, 2018USD ($)item	Sep. 30, 2017USD ($)	Sep. 30, 2016USD ($)
Share-based compensation
Share-based compensation expense	$ 200,000	$ 203,000	$ 251,000
Income tax effect recognized as a credit to additional paid-in capital related to share-based compensation	$ 0	0	(8,000)
Number of share-based compensation plans maintained by the company | item	3
2009 Plan
Share-based compensation
Share-based compensation expense	$ 0	$ 0	$ 68,000
2009 Plan | Options
Share-based compensation
Unrecognized compensation cost, related to non-vested stock options	$ 0

Share-Based Compensation - 1998

Share-Based Compensation - 1998 Stock-Based Incentive Compensation Plan (Details) - USD ($)	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Share-based compensation
Share-based compensation expense	$ 200,000	$ 203,000	$ 251,000
Options
Outstanding at the beginning of the period (in shares)	586,834	589,168
Outstanding at the end of the period (in shares)	550,834	586,834	589,168
1998 Plan
Share-based compensation
Number of shares of common stock reserved for awards	3,389,000
Share-based compensation expense	$ 0	$ 0	$ 0
1998 Plan | Options
Options
Outstanding at the beginning of the period (in shares)	30,000	30,000	53,000
Granted (in shares)	0	0	0
Exercised (in shares)	0	0	0
Cancelled (in shares)	(30,000)		(23,000)
Outstanding at the end of the period (in shares)		30,000	30,000
Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)	$ 6.27	$ 6.27	$ 8.83
Granted (in dollars per share)	0	0	0
Cancelled (in dollars per share)	6.27		12.17
Outstanding at the end of the period (in dollars per share)		6.27	6.27
Aggregate Intrinsic Value
Intrinsic value of options granted (in dollars per share)	$ 0	$ 0	$ 0

Share-Based Compensation - Summ

Share-Based Compensation - Summary of information about stock options 1998 plan (Details) - 1998 Plan - Range of Exercise Price - $5.01 - $10.00 - Options	12 Months Ended
	Sep. 30, 2018$ / shares
Information about stock options, by exercise price range
Exercise price, low end of range (in dollars per share)	$ 5.01
Exercise price, high end of range (in dollars per share)	$ 10

Share-Based Compensation - Fair

Share-Based Compensation - Fair Value assumptions for 1998 stock option plan (Details) - USD ($)	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Share-based compensation
Share-based compensation expense	$ 200,000	$ 203,000	$ 251,000
1998 Plan
Share-based compensation
Share-based compensation expense	0	$ 0	$ 0
1998 Plan | Options
Share-based compensation
Unrecognized compensation cost, related to non-vested stock options	$ 0
1998 Plan | Options | Minimum
Share-based compensation
Vesting period	3 years
1998 Plan | Options | Maximum
Share-based compensation
Expiration term	10 years
Vesting period	5 years

Share-Based Compensation - 2009

Share-Based Compensation - 2009 Stock-Based Incentive Compensation Plan (Details) - USD ($)	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Options
Outstanding at the beginning of the period (in shares)	586,834	589,168
Outstanding at the end of the period (in shares)	550,834	586,834	589,168
2009 Plan
Share-based compensation
Number of shares of common stock reserved for awards	1,200,000
Number of shares of common stock available for awards under the plan	208,128
2009 Plan | Options
Options
Outstanding at the beginning of the period (in shares)	556,834	626,283	592,168
Granted (in shares)			67,115
Exercised (in shares)		(67,115)
Cancelled (in shares)	(6,000)	(2,334)	(33,000)
Outstanding at the end of the period (in shares)	550,834	556,834	626,283
Vested and expected to vest (in shares)	550,834
Options exercisable at the end of the period (in shares)	550,834
Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)	$ 3.32	$ 3.35	$ 3.35
Granted (in dollars per share)		2.81	2.81
Cancelled (in dollars per share)	3.78	3.78	3.78
Outstanding at the end of the period (in dollars per share)	3.32	$ 3.32	$ 3.35
Vested and expected to vest (in dollars per share)	3.32
Options exercisable at the end of the period (in dollars per share)	$ 3.32
Aggregate Intrinsic Value
Granted (in dollars)		$ 25,504	$ 25,504
Exercised (in dollars)		55,705
Outstanding at the end of the period (in dollars)	$ 15,000	$ 177,043
Vested and expected to vest (in dollars)	15,000
Options exercisable at the end of the period (in dollars)	$ 15,000
2009 Plan | Performance-based Award | Employee
Share-based compensation
Maximum award (in shares)	300,000

Share-Based Compensation - Su_2

Share-Based Compensation - Summary of information about stock options 2009 plan (Details) - 2009 Plan - Range of Exercise Price - $0.00 - $5.00 - Options	12 Months Ended
	Sep. 30, 2018$ / sharesshares
Information about stock options, by exercise price range
Exercise price, low end of range (in dollars per share)	$ 0
Exercise price, high end of range (in dollars per share)	$ 5
Options outstanding at the end of the period (in shares) | shares	550,834
Options Outstanding - Weighted-Average Remaining Contractual Life	3 years 9 months 18 days
Options Outstanding - Weighted-Average Exercise Price (in dollars per share)	$ 3.32
Options exercisable at the end of the period (in shares) | shares	550,834
Options Exercisable - Weighted-Average Exercise Price (in dollars per share)	$ 3.32

Share-Based Compensation - Fa_2

Share-Based Compensation - Fair Value assumptions for 2009 stock option plan (Details) - USD ($)	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Share-based compensation
Share-based compensation expense	$ 200,000	$ 203,000	$ 251,000
2009 Plan
Share-based compensation
Share-based compensation expense	0	0	68,000
2009 Plan | Non-employee director
Share-based compensation
Share-based compensation expense	200,000	$ 203,000	$ 178,000
2009 Plan | Options
Share-based compensation
Unrecognized compensation cost, related to non-vested stock options	$ 0
2009 Plan | Options | Minimum
Share-based compensation
Vesting period	3 years
2009 Plan | Options | Maximum
Share-based compensation
Expiration term	10 years
Vesting period	5 years

Share-Based Compensation -Fair

Share-Based Compensation -Fair Value of 2009 stock option plan and Restricted Stock Units (Details) - USD ($)	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Share-based compensation
Share-based compensation expense	$ 200,000	$ 203,000	$ 251,000
RSU
Share-based compensation
Restricted stock units outstanding ( in shares)	0	0	0
2009 Plan
Share-based compensation
Share-based compensation expense	$ 0	$ 0	$ 68,000
2009 Plan | Non-employee director
Share-based compensation
Share-based compensation expense	$ 200,000	$ 203,000	$ 178,000
2009 Plan | RSU | Non-employee director
Share-based compensation
Restricted stock units outstanding ( in shares)	0	0	67,115
2009 Plan | RSU | Director
Share-based compensation
Shares settled in pro rata basis	1

Commitments and Contingencies -

Commitments and Contingencies - Operating leases and purchase obligations (Details) - USD ($)	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Operating Leases
Rent expense under operating leases	$ 113,000	$ 94,000	$ 83,000
Operating leases
Future minimum lease payments due in year one	62,000
Purchase Obligations
Purchase obligations on open purchase orders	700,000	$ 900,000	$ 900,000
Product Liability
Product liability insurance	$ 50,000,000

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($)	12 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Shareholder
Related Party Transactions
Legal fees	$ 0	$ 121,000

Quarterly Financial Data (una_3

Quarterly Financial Data (unaudited) (Details) - USD ($)	3 Months Ended								12 Months Ended
	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2016
Net sales	$ 3,645,521	$ 3,389,663	$ 3,727,204	$ 3,087,984	$ 4,225,484	$ 4,541,421	$ 4,653,902	$ 3,365,866	$ 13,850,372	$ 16,786,674	$ 27,969,703
Cost of sales	1,829,328	1,806,980	2,082,347	1,593,268	2,373,726	2,164,140	2,302,431	1,828,052	7,311,923	8,668,348	11,482,323
Gross profit	1,816,193	1,582,683	1,644,857	1,494,716	1,851,758	2,377,281	2,351,471	1,537,814	6,538,449	8,118,326	16,487,380
Operating (loss) income	(444,240)	(1,072,228)	(1,143,511)	(1,051,560)	(926,999)	(541,189)	2,985,918	(1,595,295)	(3,711,539)	(77,565)	2,443,187
Net (loss) income	$ (414,378)	$ (1,041,037)	$ (1,316,871)	$ (881,619)	$ (186,045)	$ 19,220	$ 5,930,425	$ (1,194,974)	$ (3,653,905)	$ 4,568,627	$ 1,986,801
Net income (loss) per common share
Basic (in dollars per share)	$ (0.03)	$ (0.06)	$ (0.08)	$ (0.05)	$ (0.01)		$ 0.35	$ (0.07)	$ (0.22)	$ 0.27	$ 0.12
Diluted (in dollars per share)	$ (0.03)	$ (0.06)	$ (0.08)	$ (0.05)	$ (0.01)		$ 0.35	$ (0.07)	$ (0.22)	$ 0.27	$ 0.12
Other income | Delta
Net income (loss) per common share
Reminder of amount paid									$ 4,100,000	$ 4,100,000

Business Segments (Details)

Business Segments (Details) $ in Millions	12 Months Ended
	Sep. 30, 2018USD ($)segment	Sep. 30, 2017USD ($)	Sep. 30, 2016USD ($)
Business segments
Number of business segments | segment	1
Outside the United States
Geographic Data
Net sales from outside the United States | $	$ 4.7	$ 2.6	$ 8.2
FPDS | Net sales
Business segments
Sales percentage	75.00%	89.00%	95.00%
Air data systems and components | Net sales
Business segments
Sales percentage	25.00%	11.00%	5.00%
Engineering development contracts | Net sales
Business segments
Sales percentage	3.00%	4.00%	4.00%