Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2020 | Nov. 30, 2020 | Mar. 31, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | INNOVATIVE SOLUTIONS & SUPPORT INC | ||
Entity Central Index Key | 0000836690 | ||
Document Type | 10-K | ||
Document Period End Date | Sep. 30, 2020 | ||
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 | $ 41.4 | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 17,214,384 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Interactive Data Current | Yes | ||
Title of 12(b) Security | Common Stock par value $.001 per share | ||
Security Exchange Name | NASDAQ | ||
Trading Symbol | ISSC |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Current assets | ||
Cash and cash equivalents | $ 12,603,967 | $ 22,416,830 |
Restricted cash | 11,180,900 | 0 |
Accounts receivable | 4,369,111 | 2,348,537 |
Contract asset | 0 | 80,182 |
Inventories | 4,291,335 | 4,470,694 |
Prepaid expenses and other current assets | 675,109 | 642,049 |
Total current assets | 33,120,422 | 29,958,292 |
Property and equipment, net | 8,175,872 | 8,444,692 |
Other assets | 249,543 | 154,041 |
Total assets | 41,545,837 | 38,557,025 |
Current liabilities | ||
Accounts payable | 790,892 | 1,079,073 |
Dividends payable | 11,180,900 | |
Accrued expenses | 1,361,960 | 1,110,918 |
Contract liability | 313,365 | 29,231 |
Total current liabilities | 13,647,117 | 2,219,222 |
Non-current deferred income taxes | 129,689 | 129,651 |
Total liabilities | 13,776,806 | 2,348,873 |
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, 2020 and 2019 | ||
Common stock, $.001 par value: 75,000,000 shares authorized, 19,310,835 and 19,005,487 issued at September 30, 2020 and 2019, respectively | 19,311 | 19,006 |
Additional paid-in capital | 51,458,787 | 51,987,096 |
(Accumulated deficit) retained earnings | (2,340,530) | 5,570,587 |
Treasury stock, at cost, 2,096,451 shares at September 30, 2020 and at September 30, 2019 | (21,368,537) | (21,368,537) |
Total shareholders' equity | 27,769,031 | 36,208,152 |
Total liabilities and shareholders' equity | $ 41,545,837 | $ 38,557,025 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2020 | Sep. 30, 2019 |
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 | 19,310,835 | 19,005,487 |
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, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Net sales: | |||
Total net sales | $ 21,595,199 | $ 17,572,589 | $ 13,850,372 |
Cost of sales: | |||
Total cost of sales | 9,793,224 | 7,676,119 | 7,311,923 |
Gross profit | 11,801,975 | 9,896,470 | 6,538,449 |
Operating expenses: | |||
Research and development | 2,955,976 | 2,489,806 | 3,575,801 |
Selling, general and administrative | 6,100,545 | 5,877,920 | 6,674,187 |
Total operating expenses | 9,056,521 | 8,367,726 | 10,249,988 |
Operating income (loss) | 2,745,454 | 1,528,744 | (3,711,539) |
Interest income | 154,950 | 249,620 | 53,561 |
Other income | 60,497 | 73,737 | 67,724 |
Income (loss) before income taxes | 2,960,901 | 1,852,101 | (3,590,254) |
Income tax (benefit) expense | (308,882) | 1,805 | 63,651 |
Net income (loss) | $ 3,269,783 | $ 1,850,296 | $ (3,653,905) |
Net income (loss) per common share: | |||
Basic (in dollars per share) | $ 0.19 | $ 0.11 | $ (0.22) |
Diluted (in dollars per share) | $ 0.19 | $ 0.11 | $ (0.22) |
Weighted average shares outstanding: | |||
Basic (in shares) | 16,939,302 | 16,867,550 | 16,805,991 |
Diluted (in shares) | 17,114,191 | 16,942,447 | 16,805,991 |
Product | |||
Net sales: | |||
Total net sales | $ 20,806,121 | $ 16,165,333 | $ 13,450,803 |
Cost of sales: | |||
Total cost of sales | 9,568,553 | 7,038,717 | 7,120,731 |
Engineering development contracts | |||
Net sales: | |||
Total net sales | 789,078 | 1,407,256 | 399,569 |
Cost of sales: | |||
Total cost of sales | $ 224,671 | $ 637,402 | $ 191,192 |
CONSOLIDATED STATEMENT OF SHARE
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY - USD ($) | Common Stock | Additional Paid-In Capital | (Accumulated Deficit) Retained Earnings | Treasury Stock | Total |
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 |
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of stock to directors | 69 | 203,317 | 203,386 | ||
Net income (loss) | 1,850,296 | 1,850,296 | |||
Balance at Sep. 30, 2019 | 19,006 | 51,987,096 | 5,570,587 | (21,368,537) | 36,208,152 |
Increase (Decrease) in Stockholders' Equity | |||||
Share-based compensation | 17,337 | 17,337 | |||
Exercise of stock options | 232 | 174,911 | 175,143 | ||
Issuance of stock to directors | 73 | 159,919 | 159,992 | ||
Tax withholding related to cashless exercise of stock options | (880,476) | (880,476) | |||
Dividends declared | (11,180,900) | (11,180,900) | |||
Net income (loss) | 3,269,783 | 3,269,783 | |||
Balance at Sep. 30, 2020 | $ 19,311 | $ 51,458,787 | $ (2,340,530) | $ (21,368,537) | $ 27,769,031 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income (loss) | $ 3,269,783 | $ 1,850,296 | $ (3,653,905) |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 433,510 | 451,278 | 436,208 |
Share-based compensation expense: | |||
Stock options | 17,337 | ||
Stock awards | 160,006 | 173,492 | 199,995 |
Excess and obsolete inventory cost | 66,511 | 98,728 | |
Deferred income taxes | 38 | 57 | 61,852 |
(Increase) decrease in: | |||
Accounts receivable | (2,020,574) | 1,101,356 | 225,336 |
Contract asset | 80,182 | (80,182) | 554,190 |
Inventories | 112,848 | (289,314) | (100,454) |
Prepaid expenses and other current assets | (33,060) | (99,393) | 288,899 |
Other non-current assets | (96,269) | ||
Increase (decrease) in: | |||
Accounts payable | (288,181) | (450,719) | 208,541 |
Accrued expenses | 207,568 | (323,972) | (297,016) |
Income taxes | (1,666) | 3,341 | 258,931 |
Contract liability | 284,134 | (327,570) | 76,447 |
Net cash provided by (used in) operating activities | 2,192,167 | 2,107,398 | (1,740,976) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchases of property and equipment | (118,797) | (81,281) | (2,548,612) |
Net cash (used in) investing activities | (118,797) | (81,281) | (2,548,612) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from paycheck protection program | 1,203,900 | ||
Repayment of paycheck protection program | (1,203,900) | ||
Proceeds from exercise of stock options | 175,143 | ||
Tax withholding related to cashless exercise of stock options | (880,476) | ||
Net cash (used in) financing activities | (705,333) | ||
Net increase (decrease) in cash and cash equivalents and restricted cash | 1,368,037 | 2,026,117 | (4,289,588) |
Cash and cash equivalents and restricted cash, beginning of year | 22,416,830 | 20,390,713 | 24,680,301 |
Cash and cash equivalents and restricted cash, end of year | 23,784,867 | 22,416,830 | 20,390,713 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||
Cash paid for income taxes | 2,456 | 456 | 8,456 |
Cash received from income tax refund | 309,712 | $ 2,049 | 265,588 |
SUPPLEMENTAL DISCLOSURE OF NONCASH INFORMATION | |||
Transfer from unbilled to accounts receivable | $ 926,632 | ||
Cashless exercise of stock options | 1,635,000 | ||
Accrual of dividends payable | $ 11,180,900 |
Background
Background | 12 Months Ended |
Sep. 30, 2020 | |
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 provides the Company with the capability and potential to generate more substantive orders over a broader product base. This 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, 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, government agencies, and foreign militaries. |
Concentrations
Concentrations | 12 Months Ended |
Sep. 30, 2020 | |
Concentrations | |
Concentrations | 2. Concentrations Major Customers and Products In fiscal 2020, 2019 and 2018, the Company derived 63%, 53% and 48%, respectively, of total sales from five customers, although not all the same customers in each year. Accounts receivable and contract assets related to those top five customers was $3.4 million, $1.3 million and $1.4 million as of September 30, 2020, 2019 and 2018, respectively. The largest customer, Pilatus, accounted for 33% of total revenue in fiscal year 2020, 25% of total revenue in fiscal year 2019, and 20% of total revenue in fiscal year 2018. Flat panel sales were 80%, 90% and 75% of total sales in the years ended September 30, 2020, 2019 and 2018, respectively. Sales of air data systems and components were 20%, 10% and 25% of total sales for the years ended September 30, 2020, 2019 and 2018, respectively. Sales to government contractors and agencies accounted for approximately 32%, 20% and 32% of total sales during fiscal years 2020, 2019 and 2018, 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 2020 the Company had two suppliers that accounted for 32.8% of the Company's total inventory related purchases. During fiscal 2019 the Company had two suppliers that accounted for 23.4% 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 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2020 | |
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. Impact of the COVID-19 Pandemic The ongoing global outbreak of coronavirus, which was declared a pandemic by the World Health Organization on March 11, 2020 and a national emergency by the President of the United States on March 13, 2020, has caused and is continuing to cause business slowdowns and shutdowns and turmoil in the financial markets both in the United States and abroad. IS&S is monitoring the impact of the COVID-19 pandemic on its business, including how it has impacted and will impact the Company's employees, customers, suppliers and distribution channels. The Company has not yet seen a material impact from the COVID-19 pandemic on its business, financial position, liquidity, or ability to service customers or maintain critical operations. However, the COVID-19 pandemic, as well as the quarantines and other governmental and non-governmental restrictions which have been imposed throughout the world in an effort to contain or mitigate the spread of the coronavirus, has created significant volatility, uncertainty and disruption which may adversely affect IS&S’ business and has caused and is continuing to cause significant market turbulence and disruption that may continue for some time even after business restrictions are lifted and the threat of the coronavirus diminishes. As a result, the Company may face liquidity shortages, weaker product demand from its customers, disruptions in its supply chain, and/or staffing shortages in its workforce for the foreseeable future due to the direct and indirect effects of the COVID-19 pandemic. 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, 2020 and 2019 consist of cash on deposit and cash invested in money market funds with financial institutions. Restricted Cash On September 4, 2020, the Company's Board of Directors declared a special cash dividend in the amount of $0.65 per share, payable on October 1, 2020 to shareholders of record as of the close of business on September 15, 2020. The total dividend payment was approximately $11.2 million and is included in restricted cash on the accompanying consolidated balance sheets. The Company did not pay dividends in fiscal 2019 or fiscal 2018. The declaration and payment of any dividend in the future will be at the discretion of the Company's Board of Directors. As of September 30, 2020, the Company had $12.6 million in cash and cash and equivalents and $11.2 million in restricted cash. Total cash and cash and equivalents and restricted cash as of September 30, 2020 was $23.8 million. As of September 30, 2019, the Company had $22.4 million in cash and cash and equivalents and $0 in restricted cash. Total cash and cash equivalents and restricted cash as of September 30, 2019 was $22.4 million. Inventory Valuation Inventories are stated at the lower of cost (first-in, first-out) or net realizable value, net of write-downs for excess and obsolete inventory, and consist of the following: September 30, September 30, 2020 2019 Raw materials $ 3,378,246 $ 3,408,742 Work-in-process 656,382 775,770 Finished goods 256,707 286,182 $ 4,291,335 $ 4,470,694 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 year 2018, the Company purchased a Hawker Beechcraft B200GT aircraft for approximately $2.4 million. This aircraft serves 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 2020, 2019 or 2018. 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, autothrottles 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. Revenue from Contracts with Customers The Company adopted ASC 606 on October 1, 2018 using the modified retrospective method for all contracts not completed as of the date of adoption. The reported results for fiscal years ended September 30, 2020 and 2019 reflect the application of ASC 606 guidance while the reported results for the fiscal year ended September 30, 2018was prepared under the guidance of ASC 605, “Revenue Recognition“ (“ASC 605”), which is also referred to herein as "legacy GAAP" or the "previous guidance." The adoption of ASC 606 represents a change in accounting principles. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods or services. To achieve this core principle, the Company applies the following five steps: 1) Identify the contract with a customer The Company's contract with its customers typically is the form of a purchase order issued to the Company by its customers and, to a lesser degree, in the form of a purchase order issued in connection with a formal contract executed with a customer. For the purpose of accounting for revenue under ASC 606, a contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party's rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance and, (iii) the Company determines that collection of substantially all consideration for goods or services that are transferred is probable based on the customer's intent and ability to pay the promised consideration. The Company applies judgment in determining the customer's ability and intention to pay, which is based on a variety of factors including the customer's historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer. 2) Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the good or service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the goods or services is separately identifiable from other promises in the contract. Most of our revenue is derived from purchases under which we provide a specific product or service and, as a result, there is only one performance obligation. In the event that a contract includes multiple promised goods or services, such as an EDC contract which includes both engineering services and a resulting product shipment, the Company must apply judgment to determine whether promised goods or services are capable of being distinct in the context of the contract. In these cases, the Company considers whether the customer could, on its own, or together with other resources that are readily available from third parties, produce the physical product using only the output resulting from the Company's completion of engineering services. If the customer cannot produce the physical product, then the promised goods or services are accounted for as a combined performance obligation. 3) Determine the transaction price The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods or services to the customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company's judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. None of the Company's contracts for all periods presented included variable consideration. 4) Allocate the transaction price to performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. The Company determines standalone selling price based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price by taking into account available information such as market conditions as well as the cost of the goods or services and the Company's normal margins for similar performance obligations. 5) Recognize revenue when or as the Company satisfies a performance obligation The Company satisfies performance obligations either over time or at a point in time as discussed in further detail below. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised good or service to a customer. Revenue from products transferred to customers at a point in time accounted for 97 percent of our revenue for the fiscal year ended September 30, 2020 and is typically recognized at the time of shipment of products to the customer. The remaining revenue results from EDC contracts and is recognized over time using an input measure (e.g., costs incurred to date relative to total estimated costs at completion) to measure progress. Contract costs include material, components and third-party avionics purchased from suppliers, direct labor, and overhead costs. At September 30, 2020, we had approximately $3,640,637 of remaining performance obligations, which we also refer to as total backlog. We expect to recognize approximately 100% of our remaining performance obligations as revenue over the next 12 months with the remaining balance recognized thereafter. Contract Estimates Accounting for performance obligations in long-term contracts that are satisfied over time involves the use of various techniques to estimate progress towards satisfaction of the performance obligation. The Company typically measures progress based on costs incurred compared to estimated total contract costs. Contract cost estimates are based on various assumptions to project the outcome of future events that often span more than a single year. These assumptions include the amount of labor and labor costs, the quantity and cost of raw materials used in the completion of the performance obligation, and the complexity of the work to be performed. As a significant change in one or more of these estimates could affect the profitability of our contracts, we review and update our contract-related estimates regularly. We recognize adjustments in estimated profit on contracts under the cumulative catch-up method. Under this method, the impact of the adjustment on profit recorded to date is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance is recognized using the adjusted estimate. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, we recognize the total loss in the quarter it is identified. The impact of adjustments in contract estimates on our operating earnings can be reflected in either operating costs and expenses or revenue. The aggregate impact of adjustments in contract estimates did not change our revenue and operating earnings (and diluted earnings per share) for the fiscal years ended September 30, 2020 and 2019. Therefore, no adjustment on any contract was material to our consolidated financial statements for the fiscal years ended September 30, 2020 and 2019. Financial Statement Impact of Adopting ASC 606 The Company adopted ASC 606 using the modified retrospective method. The adoption resulted in no adjustment to the Company’s retained earnings as of the adoption date, and there were no significant changes in the Company’s consolidated statements of operations for the fiscal years ended September 30, 2020 and 2019 as a result of the adoption of ASC 606 on October 1, 2018 compared to if the Company had continued to recognize revenues under previous guidance. Additionally, there was no change to the Company’s assets or liabilities as of September 30, 2020 and 2019 as a result of the adoption of ASC 606 on October 1, 2018 compared to if the Company had continued to recognize revenues under previous guidance. The adoption of ASC 606 had no impact on the Company’s cash flows from operations. Contract Balances Contract assets consist of the right to consideration in exchange for product offerings that we have transferred to a customer under the contract. Contract liabilities primarily relate to consideration received in advance of performance under the contract. The following table reflects the Company's contract assets and contract liabilities: Contract Contract Assets Liabilities September 30, 2019 $ 80,182 $ 29,231 Amount transferred to receivables from contract assets (80,182) — Contract asset additions — — Performance obligations satisfied during the period that were included in the contract liability balance at the beginning of the period — (28,781) Increases due to invoicing prior to satisfaction of performance obligations — 312,915 September 30, 2020 $ — $ 313,365 Customer Service Revenue The Company enters into sales arrangements 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 2020, 2019 and 2018 are as follows: For the Fiscal Year Ended September 30, 2020 2019 2018 Customer Service Sales $ 4,265,086 $ 3,553,919 $ 4,047,265 Customer Service Cost of Sales 1,457,995 1,374,227 1,724,167 Gross Profit $ 2,807,091 $ 2,179,692 $ 2,323,098 Lease Recognition On October 1, 2019, we adopted ASU 2016-02 using the required modified retrospective approach. This pronouncement requires lessees to record "right-of-use" assets and corresponding lease liabilities on the balance sheet for most leases. We adopted this pronouncement utilizing the transition practical expedient which eliminated the requirement that entities apply the new lease standard to the comparative periods presented in the year of adoption. See Note 18, " Lease Recognition ," to the consolidated financial statements for a discussion of the impact resulting from the adoption of this guidance. 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 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 U.S. 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 the Tax Act, which made broad and complex changes to the U.S. tax code, 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 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. In March 2020, in response to the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") was signed into law to provide emergency assistance to affected individuals, families, and businesses. The CARES Act provides numerous tax provisions and other stimulus measures, including temporary changes regarding the prior and future utilization of NOLs. The CARES Act amends the NOL provisions of the Tax Act, allowing for the carryback of losses arising in tax years beginning before December 31, 2017, to each of the two taxable years preceding the taxable year of loss. Approximately $1,500,000 of pre-tax NOL was carried back two years to fully offset taxable income. This carryback frees up previously utilized R&D credits, resulting in an estimated increase in R&D credit carryforward of $196,000. The carryback created approximately $16,000 of AMT tax, which was refunded. The cash impact of this carryback was $309,412. Engineering Development Total engineering development expense comprises 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 ”, 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 years 2020, 2019 and 2018 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, 2020 and 2019, according to the valuation techniques the Company used to determine their fair values. Fair Value Measurement on September 30, 2020 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 $ 11,607,293 $ — $ — Fair Value Measurement on September 30, 2019 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 $ 21,450,242 $ — $ — Share-Based Compensation The Company accounts for share-based compensation under ASC Topic 718, which requires 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. Accordingly, adoption of ASC Topic 718's fair value method results in recording compensation costs under the Company's stock based compensation plans. The Company determined the fair value of its stock option awards at the date of grant using the Black-Scholes option pricing model. Option pricing models and generally accepted valuation techniques require management to make assumptions and to apply judgment to determine the fair value of its awards. These assumptions and judgments include estimating future volatility of the Company's stock price, expected dividend yield, future employee turnover rates, and future employee stock option exercise behaviors. Changes in these assumptions can materially affect fair value estimates. The Company does not believe that a reasonable likelihood exists that there will be a material change in future estimates or assumptions used to determine share-based compensation expense. However, if actual results are not consistent with the Company's estimates or assumptions, the Company would adjust its estimates. Such adjustments could have a material impact on the Company's financial position. Warranty Reserves The Company offers warranties on some products of various lengths, however the standard warranty period 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 and demographic factors. 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, 2020 and 2019. However, the actual value of such claims could be significantly affected if future occurrences and claims differ from these assumptions. At September 30, 2020 and 2019, the estimated liability for medical claims incurred but not reported was $48,200 and $55,700, respectively. The Company has recorded the excess of funded premiums over estimated claims incurred but not reported of $225,200 as a current asset in the accompanying consolidated balance sheet. During the year ended September 30, 2020, 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 stockholders’ 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 May 2014, the FASB issued ASU 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 req |
Net Income Per Share
Net Income Per Share | 12 Months Ended |
Sep. 30, 2020 | |
Net Income Per Share | |
Net Income Per Share | 4. Net Income Per Share For the Fiscal Year Ended September 30, 2020 2019 2018 Numerator: Net income (loss) $ 3,269,783 $ 1,850,296 $ (3,653,905) Denominator: Basic weighted average shares 16,939,302 16,867,550 16,805,991 Dilutive effect of share-based awards 174,889 74,897 — Diluted weighted average shares 17,114,191 16,942,447 16,805,991 Net income (loss) per common share: Basic $ 0.19 $ 0.11 $ (0.22) Diluted $ 0.19 $ 0.11 $ (0.22) 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, 2020, 2019 and 2018, there were 104,500, 550,834 and 550,834 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 years 2020 and 2019, 100,000 and 0 shares, respectively were excluded from the calculation of earnings per share as their effect would be anti-dilutive. 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. |
Contract Asset
Contract Asset | 12 Months Ended |
Sep. 30, 2020 | |
Contract Asset | |
Contract Asset | 5. Contract Asset Contract asset principally represent sales recorded under the over time method of accounting that have not been billed to customers in accordance with applicable contract terms. Contract asset was $0 and $80,182 at September 30, 2020 and 2019, respectively. The over time 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 over time 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 decreased operating income by $0, $16,000 and $0 during the fiscal years ended September 30, 2020, 2019 and 2018, respectively. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Sep. 30, 2020 | |
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, 2020 2019 Prepaid insurance $ 336,331 $ 302,376 Other 338,778 339,673 $ 675,109 $ 642,049 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Sep. 30, 2020 | |
Property and Equipment | |
Property and Equipment | 7. Property and Equipment Property and equipment, net consists of the following balances: September 30, September 30, 2020 2019 Computer equipment $ 2,302,978 $ 2,285,152 Corporate airplanes 5,601,039 5,601,039 Furniture and office equipment 1,031,099 1,033,779 Manufacturing facility 5,733,313 5,733,313 Equipment 5,723,355 5,635,134 Land 1,021,245 1,021,245 21,413,029 21,309,662 Less accumulated depreciation and amortization (13,237,157) (12,864,970) $ 8,175,872 $ 8,444,692 Depreciation related to property and equipment was approximately $387,617, $423,326 and $430,886 in fiscal years 2020, 2019 and 2018, 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, 2020 | |
Other Assets | |
Other Assets | 8. Other Assets Other assets consist of the following: September 30, September 30, 2020 2019 Intangible assets, net of accumulated amortization of $583,655 at September 30, 2020 and $551,037 at September 30, 2019 $ 112,851 $ 49,200 Operating lease right-of-use assets 45,126 — Other non-current assets 91,566 104,841 $ 249,543 $ 154,041 Intangible assets consist of licensing and certification rights which are amortized over a defined number of units. No impairment charges were recorded in fiscal 2020, 2019 or 2018. Total intangible amortization expense was $32,618, $19,400 and $0 in fiscal years 2020, 2019 and 2018, respectively. The timing of future amortization expense is not determinable because the intangible assets are being amortized over a defined number of units. On October 1, 2019, we adopted ASU 2016-02 using the required modified retrospective approach. This pronouncement requires lessees to record "right-of-use" assets and corresponding lease liabilities on the balance sheet for most leases. We adopted this pronouncement utilizing the transition practical expedient which eliminated the requirement that entities apply the new lease standard to the comparative periods presented in the year of adoption. See Note 18, " Lease Recognition ," to the consolidated financial statements for a discussion of the impact resulting from the adoption of this guidance. Other non-current assets as of September 30, 2020 and September 30, 2019 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 include $16,266 and $29,541 of prepaid software licenses, that will be earned upon the shipment of a certain product to a customer, as of September 30, 2020 and September 30, 2019, respectively. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Sep. 30, 2020 | |
Accrued Expenses | |
Accrued Expenses | 9. Accrued Expenses Accrued expenses consist of the following: September 30, September 30, 2020 2019 Warranty $ 547,743 $ 606,680 Salary, benefits and payroll taxes 483,797 212,322 Professional fees 151,956 153,298 Operating lease 45,126 — Other 133,338 138,618 $ 1,361,960 $ 1,110,918 On October 1, 2019, we adopted ASU 2016-02 using the required modified retrospective approach. This pronouncement requires lessees to record "right-of-use" assets and corresponding lease liabilities on the balance sheet for most leases. We adopted this pronouncement utilizing the transition practical expedient which eliminated the requirement that entities apply the new lease standard to the comparative periods presented in the year of adoption. See Note 18, " Lease Recognition ," to the consolidated financial statements for a discussion of the impact resulting from the adoption of this guidance. |
Warranty
Warranty | 12 Months Ended |
Sep. 30, 2020 | |
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, 2020 and 2019: 2020 2019 Warranty accrual as of October 1, $ 606,680 $ 854,952 Expense (release) accrual for fiscal year 67,464 (168,589) Warranty cost incurred for fiscal year (126,401) (79,683) Warranty accrual as of September 30, $ 547,743 $ 606,680 |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2020 | |
Income Taxes | |
Income Taxes | 11. Income Taxes In March 2020, the CARES Act was signed into law providing numerous tax provisions and other stimulus measures, including temporary changes regarding the prior and future utilization of NOLs. The CARES Act amends the NOL provisions of the Tax Act, allowing for the carryback of losses arising in tax years beginning before December 31, 2017, to each of the two taxable years preceding the taxable year of loss. Approximately $1,500,000 of pre-tax NOL was carried back two years to fully offset taxable income. This carryback frees up previously utilized R&D credits, resulting in an estimated increase in R&D credit carryforward of $196,000. The carryback created approximately $16,000 of AMT tax, which was refunded. The cash impact of this carryback was $309,412. The components of income taxes are as follows: For the Fiscal Year Ended September 30, 2020 2019 2018 Current provision (benefit): Federal $ (309,401) $ — $ (3,440) State 481 1,749 5,239 Total current provision (308,920) 1,749 1,799 Deferred provision Federal — — 61,799 State 38 56 53 Total deferred provision 38 56 61,852 Total current and deferred provision $ (308,882) $ 1,805 $ 63,651 Following is a reconciliation of the statutory federal rate to the Company’s effective income tax rate: For the Fiscal Year Ended September 30, 2020 2019 2018 U.S. Federal statutory tax rate 21.00 % 21.0 % 24.3 % Rate change due to tax reform 0.0 % 0.0 % (9.0) % State income taxes, net of federal benefit (2.2) % (0.9) % 1.9 % Permanent items (6.3) % 0.8 % (0.1) % Research and development tax credits (10.6) % (0.8) % 1.3 % Valuation allowance (15.2) % (20.2) % (20.3) % Change in unrecognized tax benefits 2.2 % 0.2 % 0.9 % 123R cancellations and forfeitures 0.0 % 0.0 % (0.8) % Tax Law Changes: CARES Act 0.3 % 0.0 % 0.0 % Other 0.4 % 0.0 % 0.0 % Effective income tax rate (10.4) % 0.1 % (1.8) % On December 22, 2017, the U.S. government enacted the Tax Act, which made broad and complex changes to the U.S. tax code, including, but not limited to the reduction of the U.S. federal corporate tax rate from 34 percent to 21 percent. 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, 2020 2019 2018 Non Current Non Current Non Current Deferred tax assets: Reserves and accruals $ 698,233 $ 690,148 $ 730,015 Research and development credit 1,589,247 1,331,170 1,318,977 NOL carryforwards -fed/state 2,192,018 2,590,791 2,982,246 Depreciation (807,522) (826,724) (863,796) Stock options 5,296 348,624 345,608 3,677,272 4,134,009 4,513,050 Less: Valuation allowance (3,471,164) (3,922,620) (4,296,553) Total deferred tax assets 206,108 211,389 216,497 Deferred tax liabilities: Depreciation (335,797) (341,040) (346,091) Total deferred tax liabilities (335,797) (341,040) (346,091) Net deferred tax (liability) asset $ (129,689) $ (129,651) $ (129,594) At September 30, 2020 and 2019, the Company had state NOL carryforwards of approximately $24,392,000 and $24,009,000, 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 $1,589,000 and $1,331,000 in fiscal 2020 and 2019, respectively, which begin to expire in varying amounts after fiscal year ending September 30, 2029. 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 allowance 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, 2020 and September 30, 2019 was approximately $451,000 and $375,000, 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, 2020 2019 2018 Balance at beginning of year $ 546,000 $ 540,000 $ 570,000 Unrecognized tax benefits related to prior years 39,000 — 52,000 Unrecognized tax benefits related to current year 37,000 6,000 11,000 Decrease in unrecognized tax benefits due to the lapse of applicable statute of limitations (7,000) — (93,000) Balance at end of year $ 615,000 $ 546,000 $ 540,000 The total liabilities associated with the unrecognized tax benefits that, if recognized, would impact the Company’s effective tax rate were $ 615,000, $546,000 and $540,000 at September 30, 2020, 2019 and 2018, respectively. It is not anticipated that the balance of unrecognized tax benefits at September 30, 2020 will change significantly over the next twelve months. The balance of unrecognized tax benefits as reflected in the table above at September 30, 2020 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, 2020, 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 years ended September 30, 2020, 2019 and 2018, the Company recognized expense of $0, $0 and $0, 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, 2016 and thereafter are open years subject to examination by the Internal Revenue Service. The Company files income tax returns in various state jurisdictions, as appropriate, with varying statutes of limitation. There are no state income tax examinations in process at this time. |
Savings Plan
Savings Plan | 12 Months Ended |
Sep. 30, 2020 | |
Savings Plan | |
Savings Plan | 12. Savings Plan The Company sponsors a voluntary defined contribution savings plan covering all employees. The Company made contributions of $112,000, $96,000 and $110,000 for the fiscal years ended September 30, 2020, 2019 and 2018, respectively. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Sep. 30, 2020 | |
Share-Based Compensation | |
Share-Based Compensation | 13. Share-Based Compensation The Company accounts for share-based compensation under the provisions of ASC Topic 718 by using the fair value method for expensing stock options and stock awards. Total share-based compensation expense was approximately $177,000, $173,000 and $200,000 for the fiscal years ended September 30, 2020, 2019 and 2018, 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 approximately $17,000, $0 and $0 for the fiscal years ended September 30, 2020, 2019 and 2018, respectively. Compensation expense related to share-based awards is recorded as a component of selling, general and administrative expenses. The Company has two share-based compensation plans: (1) the 2009 Stock-Based Incentive Compensation Plan (the “2009 Plan”), which terminated with respect to the grant of any new awards on January 20, 2019, and (2) the 2019 Stock-Based Incentive Compensation Plan (the "2019 Plan"). The 2009 Plan and the 2019 Plan were approved by the shareholders on March 12, 2009 and April 2, 2019, respectively. 2009 Stock-Based Incentive Compensation Plan The 2009 Plan authorized the grant of stock appreciation rights, restricted stock, options, RSUs and other equity-based 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 was 1,200,000, all of which could be issued pursuant to awards of incentive stock options. In addition, the 2009 Plan provided 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. The 2009 Plan terminated on January 20, 2019 with respect to the grant of any new awards. If there is any change in the Company’s corporate capitalization, the Compensation Committee must proportionately and equitably adjust 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, 2020, 2019 and 2018, and changes during the periods then ended: Weighted Average Aggregate Exercise Intrinsic Options Price Value 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 Granted — — — Exercised — — — Cancelled — — — Outstanding at September 30, 2019 550,834 $ 3.32 $ 761,767 Granted — — — Exercised (546,334) 3.31 1,926,782 Cancelled — Outstanding at September 30, 2020 4,500 $ 3.78 $ 13,770 Vested and expected to vest 4,500 $ 3.78 $ 13,770 Options exercisable at September 30, 2020 4,500 $ 3.78 $ 13,770 The following table summarizes information about stock options under the 2009 Plan at September 30, 2020: Options Outstanding Options Exercisable Outstanding Weighted- As of Average Weighted- Weighted- Range of Exercise September 30, Remaining Average As of September Average Prices 2020 Contractual Life Exercise Price 30, 2020 Exercise Price $ 0.00 - $ 5.00 4,500 $ 3.78 4,500 $ 3.78 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 under the 2009 Plan in fiscal years 2020, 2019 and 2018. Total compensation expense associated with stock option awards to employees under the 2009 Plan was $0 for each of the fiscal years ended September 30, 2020, 2019 and 2018, respectively. Total share-based compensation expense associated with the annual grant of stock awards to non-employee directors under the 2009 Plan was approximately $0, $173,000 and $200,000 for the fiscal years ended September 30, 2020, 2019 and 2018, respectively. At September 30, 2020, no unrecognized compensation expense, net of forfeitures, related to non-vested stock options under the 2009 Plan, will be recognized. 2019 Stock-Based Incentive Compensation Plan The 2019 Plan authorizes the grant of stock appreciation rights, restricted stock, options and other equity-based awards. Options granted under the 2019 Plan may be either “incentive stock options” as defined in section 422 of the Code or nonqualified stock options, as determined by 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 similar corporate transaction or event, the maximum number of shares of common stock available for awards under the 2019 Plan is 750,000, plus 139,691 shares of common stock that were authorized but unissued under the 2009 Plan as of the effective date of the 2019 Plan (i.e., April 2, 2019), all of which may be issued pursuant to awards of incentive stock options. In addition, the 2019 Plan provides that no more than 300,000 shares may be awarded in any calendar year to any employee. On August 27, 2020, 100,000 stock options have been granted to Relland M. Winand, the Company’s Chief Financial Officer, under the 2019 Plan. As of September 30, 2020, there were 716,635 shares of common stock available for awards under the 2019 Plan. If any award is forfeited, terminates or otherwise is settled for any reason without an actual distribution of shares to the participant, 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 2019 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 kind of shares of common stock covered by awards then outstanding under the 2019 Plan, the aggregate number and kind of shares of common stock available under the 2019 Plan, any applicable individual limits on the number of shares of common stock available for awards under the 2019 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. 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. Following is a summary of option activity under the 2019 Plan for the fiscal year ended September 30, 2020, and changes during the periods then ended: Weighted Average Aggregate Exercise Intrinsic Options Price Value Outstanding at September 30, 2019 — $ — $ — Granted 100,000 7.10 — Exercised — — — Cancelled — — — Outstanding at September 30, 2020 100,000 $ 7.10 $ — Vested and expected to vest 100,000 $ 7.10 $ — Options exercisable at September 30, 2020 — $ — $ — The following table summarizes information about stock options under the 2019 Plan at September 30, 2020: Options Outstanding Options Exercisable Outstanding Weighted- As of Average Weighted- Weighted- Range of Exercise September 30, Remaining Average As of September Average Prices 2020 Contractual Life Exercise Price 30, 2020 Exercise Price $ 0.00 - $ 5.00 100,000 9.9 $ 7.1 — $ — 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. Below are the fair value assumptions used to record compensation expense, related to the 2019 Plan, for the following periods identified: Fiscal Year Ended September 30, 2020 2019 (1) 2018 (1) Expected dividend rate — — — Expected volatility 58.4 % — % — % Weighted average risk-free interest rate 0.3 % — % — % Expected lives (years) 5.5 — — (1) The Company did not grant any options in fiscal 2019 and 2018 The Company granted 100,000 options in fiscal year 2020. Total compensation expense associated with stock option awards to employees under the 2019 Plan was $17,337 for fiscal year ended September 30, 2020 and $0 for each of the fiscal years ended September 30, 2019 and 2018, respectively. Total share-based compensation expense associated with the annual grant of stock awards to non-employee directors under the 2019 Plan was approximately $160,000, $0 and $0 for the fiscal years ended September 30, 2020, 2019 and 2018, respectively. At September 30, 2020, unrecognized compensation expense of approximately $345,363, net of forfeitures, related to non-vested stock options under the 2019 Plan, will be recognized. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | 14. Commitments and Contingencies Operating Leases Rent expense under operating leases totaled approximately $141,000, $140,000 and $113,000 for the years ended September 30, 2020, 2019 and 2018, respectively. Future minimum lease payments under non-cancelable operating leases are $48,000 for the year ended September 30, 2020. 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 primarily comprise 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 $853,123, $1,082,928 and $730,275 as of September 30, 2020, 2019 and 2018, 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, the Company is at times subject to various legal proceedings and claims. The Company does not believe any 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, 2020 | |
Related Party Transactions | |
Related Party Transactions | 15. Related Party Transactions The Company incurred legal fees of $15,000, $8,000 and $0 for the fiscal years ended September 30, 2020, 2019 and 2018, respectively with a lawyer who is a shareholder of the Company. |
Quarterly Financial Data (unaud
Quarterly Financial Data (unaudited) | 12 Months Ended |
Sep. 30, 2020 | |
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, 2020 and September 30, 2019 are presented below: Fiscal Year Ended September 30, 2020 First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 4,511,428 $ 4,835,065 $ 5,953,689 $ 6,295,017 Cost of sales 1,909,781 2,539,894 2,559,016 2,784,533 Gross profit 2,601,647 2,295,171 3,394,673 3,510,484 Operating income 231,758 51,763 1,244,446 1,217,487 Net income 327,908 438,105 1,259,858 1,243,912 Net income per common share Basic $ 0.02 $ 0.03 $ 0.07 $ 0.07 Diluted $ 0.02 $ 0.03 $ 0.07 $ 0.07 Fiscal Year Ended September 30, 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 3,977,650 $ 4,203,127 $ 4,589,824 $ 4,801,988 Cost of sales 1,811,847 1,856,921 2,064,617 1,942,734 Gross profit 2,165,803 2,346,206 2,525,207 2,859,254 Operating (loss) income 96,015 173,067 386,629 873,033 Net income 139,421 202,499 511,259 997,117 Net (loss) income per common share Basic $ 0.01 $ 0.01 $ 0.03 $ 0.06 Diluted $ 0.01 $ 0.01 $ 0.03 $ 0.06 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. |
Business Segments
Business Segments | 12 Months Ended |
Sep. 30, 2020 | |
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, 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. Geographic Data Most of the Company’s sales, operating results and identifiable assets are generated in the United States. In fiscal years 2020, 2019 and 2018, net sales outside the United States amounted to $9.4 million, $7.5 million and $4.7 million, respectively. Product Data The Company’s current product line includes FPDS, flight management systems, and air data systems and components. During fiscal years 2020, 2019 and 2018, the Company derived 80%, 90% and 75%, respectively, of its total product revenue from sales of FPDS. During fiscal years 2020, 2019 and 2018, the Company derived 20%, 10% and 25%, respectively, of total product revenues from the sale of air data systems related products. During fiscal 2020, 2019 and 2018, the Company derived 4%, 8% and 3%, respectively, of total revenues from the sale of EDC services. |
Lease Recognition
Lease Recognition | 12 Months Ended |
Sep. 30, 2020 | |
Lease Recognition | |
Leases Recognition | 18. Lease Recognition On October 1, 2019, we adopted ASU 2016-02. This pronouncement requires lessees to record "right-of-use" assets and corresponding lease liabilities on the balance sheet for most leases. We adopted this pronouncement utilizing the transition practical expedient which eliminated the requirement that entities apply the new lease standard to the comparative periods presented in the year of adoption. As part of our adoption, we elected to utilize the package of practical expedients permitted under the new standard, which allowed us to not reassess: (a) whether an existing contract is or contains a lease, (b) the classification for existing leases and (c) initial direct costs. Further, as permitted by the standard, we made an accounting policy election not to record right-of-use assets or lease liabilities for leases with an initial term of 12 months or less. Instead, consistent with previous accounting guidance, we will recognize payments for such leases in the statement of operations on a straight-line basis over the lease term. We lease real estate and equipment under various operating leases. A lease exists when a contract or part of a contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. In determining whether a lease exists, we consider whether a contract provides us with both: (a) the right to obtain substantially all of the economic benefits from the use of the identified asset and (b) the right to direct the use of the identified asset. Some of our leases include base rental periods coupled with options to renew or terminate the lease, generally at our discretion. In evaluating the lease term, we consider whether we are reasonably certain to exercise such options. To the extent a significant economic incentive exists to exercise an option, that option is included within the lease term. However, based on the nature of our lease arrangements, options generally do not provide us with a significant economic incentive and are therefore excluded from the lease term for the majority of our arrangements. Our leases typically include a combination of fixed and variable payments. Fixed payments are generally included when measuring the right-of-use asset and lease liability. Variable payments, which primarily represent payments based on usage of the underlying asset, are generally excluded from such measurement and expensed as incurred. In addition, certain of our lease arrangements may contain a lease coupled with an arrangement to provide other services, such as maintenance, or may require us to make other payments on behalf of the lessor related to the leased asset, such as payments for taxes or insurance. As permitted by ASU 2016-02, we have elected to account for these non-lease components together with the associated lease component if included in the lease payments. This election has been made for each of our asset classes. The measurement of "right-of-use" assets and lease liabilities requires us to estimate appropriate discount rates. To the extent the rate implicit in the lease is readily determinable, such rate is utilized. However, based on information available at lease commencement for our leases, the rate implicit in the lease is not known. In these instances, we utilize an incremental borrowing rate, which represents the rate of interest that we would pay to borrow on a collateralized basis over a similar term. The impact of the adoption of ASU 2016-02 on the balance sheet as of October 1, 2019 was: As Reported Balance September 30, 2019 Increase October 1, 2019 Operating lease right-of-use assets $ — $ 130,018 $ 130,018 Total assets 38,557,025 130,018 38,687,043 Operating lease liabilities — 84,892 84,892 Total current liabilities 2,219,222 84,892 2,304,114 Operating lease liabilities non-current — 45,126 45,126 Total liabilities 2,348,873 45,126 2,393,999 Total liabilities and equity 38,557,025 130,018 38,687,043 Future minimum lease payments under operating leases are as follows at September 30, 2019: Twelve Months Ending Operating September 30, Leases 2020 $ 2010 Total minimum lease payments $ 134,810 Amount representing interest (4,792) Present value of minimum lease payments 130,018 Current portion (84,892) Long-term portion of lease obligations $ 45,126 Rent expense and cash paid for various operating leases in aggregate are $141,000 for the periods ended September 30, 2020. The weighted average remaining lease term is 0.6 years and the weighted average discount rate is 5.0% as of September 30, 2020. Future minimum lease payments under operating leases are as follows at September 30, 2020: Twelve Months Ending Operating September 30, Leases 2021 $ 47,988 Total minimum lease payments $ 47,988 Amount representing interest (2,862) Present value of minimum lease payments 45,126 Current portion (45,126) Long-term portion of lease obligations $ — |
Subsequent Events
Subsequent Events | 12 Months Ended |
Sep. 30, 2020 | |
Subsequent Events | |
Subsequent Events | 19. Subsequent Events On December 10, 2020, the Company’s Board of Directors declared a special cash dividend in the amount of $0.50 per share, payable on or about December 30, 2020 to shareholders of record as of the close of business on December 21, 2020. The total dividend payment is estimated to be approximately $8.6 million. Factoring in the payment of this dividend, the estimated tax characteristic of both this dividend per share and the Company’s earlier $0.65 per share special cash dividend which was payable on October 1, 2020 is 20% ordinary income and 80% return of capital. The declaration and payment of any dividend in the future will be at the discretion of the Company’s Board of Directors. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2020 | |
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. |
Impact of the COVID-19 Pandemic | Impact of the COVID-19 Pandemic The ongoing global outbreak of coronavirus, which was declared a pandemic by the World Health Organization on March 11, 2020 and a national emergency by the President of the United States on March 13, 2020, has caused and is continuing to cause business slowdowns and shutdowns and turmoil in the financial markets both in the United States and abroad. IS&S is monitoring the impact of the COVID-19 pandemic on its business, including how it has impacted and will impact the Company's employees, customers, suppliers and distribution channels. The Company has not yet seen a material impact from the COVID-19 pandemic on its business, financial position, liquidity, or ability to service customers or maintain critical operations. However, the COVID-19 pandemic, as well as the quarantines and other governmental and non-governmental restrictions which have been imposed throughout the world in an effort to contain or mitigate the spread of the coronavirus, has created significant volatility, uncertainty and disruption which may adversely affect IS&S’ business and has caused and is continuing to cause significant market turbulence and disruption that may continue for some time even after business restrictions are lifted and the threat of the coronavirus diminishes. As a result, the Company may face liquidity shortages, weaker product demand from its customers, disruptions in its supply chain, and/or staffing shortages in its workforce for the foreseeable future due to the direct and indirect effects of the COVID-19 pandemic. |
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, 2020 and 2019 consist of cash on deposit and cash invested in money market funds with financial institutions. |
Restricted Cash | Restricted Cash On September 4, 2020, the Company's Board of Directors declared a special cash dividend in the amount of $0.65 per share, payable on October 1, 2020 to shareholders of record as of the close of business on September 15, 2020. The total dividend payment was approximately $11.2 million and is included in restricted cash on the accompanying consolidated balance sheets. The Company did not pay dividends in fiscal 2019 or fiscal 2018. The declaration and payment of any dividend in the future will be at the discretion of the Company's Board of Directors. As of September 30, 2020, the Company had $12.6 million in cash and cash and equivalents and $11.2 million in restricted cash. Total cash and cash and equivalents and restricted cash as of September 30, 2020 was $23.8 million. As of September 30, 2019, the Company had $22.4 million in cash and cash and equivalents and $0 in restricted cash. Total cash and cash equivalents and restricted cash as of September 30, 2019 was $22.4 million. |
Inventory Valuation | Inventory Valuation Inventories are stated at the lower of cost (first-in, first-out) or net realizable value, net of write-downs for excess and obsolete inventory, and consist of the following: September 30, September 30, 2020 2019 Raw materials $ 3,378,246 $ 3,408,742 Work-in-process 656,382 775,770 Finished goods 256,707 286,182 $ 4,291,335 $ 4,470,694 |
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 year 2018, the Company purchased a Hawker Beechcraft B200GT aircraft for approximately $2.4 million. This aircraft serves 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 2020, 2019 or 2018. |
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, autothrottles 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. Revenue from Contracts with Customers The Company adopted ASC 606 on October 1, 2018 using the modified retrospective method for all contracts not completed as of the date of adoption. The reported results for fiscal years ended September 30, 2020 and 2019 reflect the application of ASC 606 guidance while the reported results for the fiscal year ended September 30, 2018was prepared under the guidance of ASC 605, “Revenue Recognition“ (“ASC 605”), which is also referred to herein as "legacy GAAP" or the "previous guidance." The adoption of ASC 606 represents a change in accounting principles. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods or services. To achieve this core principle, the Company applies the following five steps: 1) Identify the contract with a customer The Company's contract with its customers typically is the form of a purchase order issued to the Company by its customers and, to a lesser degree, in the form of a purchase order issued in connection with a formal contract executed with a customer. For the purpose of accounting for revenue under ASC 606, a contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party's rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance and, (iii) the Company determines that collection of substantially all consideration for goods or services that are transferred is probable based on the customer's intent and ability to pay the promised consideration. The Company applies judgment in determining the customer's ability and intention to pay, which is based on a variety of factors including the customer's historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer. 2) Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the good or service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the goods or services is separately identifiable from other promises in the contract. Most of our revenue is derived from purchases under which we provide a specific product or service and, as a result, there is only one performance obligation. In the event that a contract includes multiple promised goods or services, such as an EDC contract which includes both engineering services and a resulting product shipment, the Company must apply judgment to determine whether promised goods or services are capable of being distinct in the context of the contract. In these cases, the Company considers whether the customer could, on its own, or together with other resources that are readily available from third parties, produce the physical product using only the output resulting from the Company's completion of engineering services. If the customer cannot produce the physical product, then the promised goods or services are accounted for as a combined performance obligation. 3) Determine the transaction price The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods or services to the customer. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in the Company's judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. None of the Company's contracts for all periods presented included variable consideration. 4) Allocate the transaction price to performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. The Company determines standalone selling price based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price by taking into account available information such as market conditions as well as the cost of the goods or services and the Company's normal margins for similar performance obligations. 5) Recognize revenue when or as the Company satisfies a performance obligation The Company satisfies performance obligations either over time or at a point in time as discussed in further detail below. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised good or service to a customer. Revenue from products transferred to customers at a point in time accounted for 97 percent of our revenue for the fiscal year ended September 30, 2020 and is typically recognized at the time of shipment of products to the customer. The remaining revenue results from EDC contracts and is recognized over time using an input measure (e.g., costs incurred to date relative to total estimated costs at completion) to measure progress. Contract costs include material, components and third-party avionics purchased from suppliers, direct labor, and overhead costs. At September 30, 2020, we had approximately $3,640,637 of remaining performance obligations, which we also refer to as total backlog. We expect to recognize approximately 100% of our remaining performance obligations as revenue over the next 12 months with the remaining balance recognized thereafter. Contract Estimates Accounting for performance obligations in long-term contracts that are satisfied over time involves the use of various techniques to estimate progress towards satisfaction of the performance obligation. The Company typically measures progress based on costs incurred compared to estimated total contract costs. Contract cost estimates are based on various assumptions to project the outcome of future events that often span more than a single year. These assumptions include the amount of labor and labor costs, the quantity and cost of raw materials used in the completion of the performance obligation, and the complexity of the work to be performed. As a significant change in one or more of these estimates could affect the profitability of our contracts, we review and update our contract-related estimates regularly. We recognize adjustments in estimated profit on contracts under the cumulative catch-up method. Under this method, the impact of the adjustment on profit recorded to date is recognized in the period the adjustment is identified. Revenue and profit in future periods of contract performance is recognized using the adjusted estimate. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, we recognize the total loss in the quarter it is identified. The impact of adjustments in contract estimates on our operating earnings can be reflected in either operating costs and expenses or revenue. The aggregate impact of adjustments in contract estimates did not change our revenue and operating earnings (and diluted earnings per share) for the fiscal years ended September 30, 2020 and 2019. Therefore, no adjustment on any contract was material to our consolidated financial statements for the fiscal years ended September 30, 2020 and 2019. Financial Statement Impact of Adopting ASC 606 The Company adopted ASC 606 using the modified retrospective method. The adoption resulted in no adjustment to the Company’s retained earnings as of the adoption date, and there were no significant changes in the Company’s consolidated statements of operations for the fiscal years ended September 30, 2020 and 2019 as a result of the adoption of ASC 606 on October 1, 2018 compared to if the Company had continued to recognize revenues under previous guidance. Additionally, there was no change to the Company’s assets or liabilities as of September 30, 2020 and 2019 as a result of the adoption of ASC 606 on October 1, 2018 compared to if the Company had continued to recognize revenues under previous guidance. The adoption of ASC 606 had no impact on the Company’s cash flows from operations. Contract Balances Contract assets consist of the right to consideration in exchange for product offerings that we have transferred to a customer under the contract. Contract liabilities primarily relate to consideration received in advance of performance under the contract. The following table reflects the Company's contract assets and contract liabilities: Contract Contract Assets Liabilities September 30, 2019 $ 80,182 $ 29,231 Amount transferred to receivables from contract assets (80,182) — Contract asset additions — — Performance obligations satisfied during the period that were included in the contract liability balance at the beginning of the period — (28,781) Increases due to invoicing prior to satisfaction of performance obligations — 312,915 September 30, 2020 $ — $ 313,365 Customer Service Revenue The Company enters into sales arrangements 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 2020, 2019 and 2018 are as follows: For the Fiscal Year Ended September 30, 2020 2019 2018 Customer Service Sales $ 4,265,086 $ 3,553,919 $ 4,047,265 Customer Service Cost of Sales 1,457,995 1,374,227 1,724,167 Gross Profit $ 2,807,091 $ 2,179,692 $ 2,323,098 |
Lease Recognition | Lease Recognition On October 1, 2019, we adopted ASU 2016-02 using the required modified retrospective approach. This pronouncement requires lessees to record "right-of-use" assets and corresponding lease liabilities on the balance sheet for most leases. We adopted this pronouncement utilizing the transition practical expedient which eliminated the requirement that entities apply the new lease standard to the comparative periods presented in the year of adoption. See Note 18, " Lease Recognition ," to the consolidated financial statements for a discussion of the impact resulting from the adoption of this guidance. |
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 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 U.S. 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 the Tax Act, which made broad and complex changes to the U.S. tax code, 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 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. In March 2020, in response to the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") was signed into law to provide emergency assistance to affected individuals, families, and businesses. The CARES Act provides numerous tax provisions and other stimulus measures, including temporary changes regarding the prior and future utilization of NOLs. The CARES Act amends the NOL provisions of the Tax Act, allowing for the carryback of losses arising in tax years beginning before December 31, 2017, to each of the two taxable years preceding the taxable year of loss. Approximately $1,500,000 of pre-tax NOL was carried back two years to fully offset taxable income. This carryback frees up previously utilized R&D credits, resulting in an estimated increase in R&D credit carryforward of $196,000. The carryback created approximately $16,000 of AMT tax, which was refunded. The cash impact of this carryback was $309,412. |
Engineering Development | Engineering Development Total engineering development expense comprises 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 ”, 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 years 2020, 2019 and 2018 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, 2020 and 2019, according to the valuation techniques the Company used to determine their fair values. Fair Value Measurement on September 30, 2020 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 $ 11,607,293 $ — $ — Fair Value Measurement on September 30, 2019 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 $ 21,450,242 $ — $ — |
Share-Based Compensation | Share-Based Compensation The Company accounts for share-based compensation under ASC Topic 718, which requires 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. Accordingly, adoption of ASC Topic 718's fair value method results in recording compensation costs under the Company's stock based compensation plans. The Company determined the fair value of its stock option awards at the date of grant using the Black-Scholes option pricing model. Option pricing models and generally accepted valuation techniques require management to make assumptions and to apply judgment to determine the fair value of its awards. These assumptions and judgments include estimating future volatility of the Company's stock price, expected dividend yield, future employee turnover rates, and future employee stock option exercise behaviors. Changes in these assumptions can materially affect fair value estimates. The Company does not believe that a reasonable likelihood exists that there will be a material change in future estimates or assumptions used to determine share-based compensation expense. However, if actual results are not consistent with the Company's estimates or assumptions, the Company would adjust its estimates. Such adjustments could have a material impact on the Company's financial position. |
Warranty Reserves | Warranty Reserves The Company offers warranties on some products of various lengths, however the standard warranty period 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 and demographic factors. 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, 2020 and 2019. However, the actual value of such claims could be significantly affected if future occurrences and claims differ from these assumptions. At September 30, 2020 and 2019, the estimated liability for medical claims incurred but not reported was $48,200 and $55,700, respectively. The Company has recorded the excess of funded premiums over estimated claims incurred but not reported of $225,200 as a current asset in the accompanying consolidated balance sheet. During the year ended September 30, 2020, 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 stockholders’ 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 May 2014, the FASB issued ASU 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 adopted this guidance on October 1, 2018 using the modified retrospective method. See Note 3, “ Financial Statement Impact of Adopting ASC 606,” to the consolidated financial statements for a discussion of the impact resulting from the adoption of this guidance. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”) as modified, which replaces existing leasing rules with a comprehensive lease measurement and recognition standard and expanded disclosure requirements. ASU 2016-02 will require lessees to recognize most leases on their balance sheets as liabilities, with corresponding “right-of-use” assets and is effective for annual reporting periods beginning after December 15, 2018, subject to early adoption. For income statement recognition purposes, leases will be classified as either a finance or an operating lease without relying upon the bright-line tests under current GAAP. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that we may elect to apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. An entity that elects to apply the practical expedients will, in effect, continue to account for leases that commence before the effective date in accordance with previous GAAP unless the lease is modified, except that lessees are required to recognize a right-of-use asset and a lease liability for all operating leases at each reporting date based on the present value of the remaining minimum rental payments that were tracked and disclosed under previous GAAP. We adopted ASU 2016-02 effective October 1, 2019 using the required modified retrospective approach. See Note 18, “ Lease Recognition ,” to the consolidated financial statements for a discussion of the impact resulting from the adoption of this guidance. In June 2016, FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instrument (“ASU 2016-13”). ASU 2016-13 replaces the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for SEC small business filers for fiscal years beginning after December 15, 2022. Management is currently assessing the impact ASU 2016-13 will have on the Company. In June 2018, the FASB issued ASU 2018-07, “ Stock-based Compensation: Improvements to Nonemployee Share-based Payment Accounting ,” (“ASU 2018-07”) which amends the existing accounting standards for share-based payments to nonemployees. This ASU aligns much of the guidance on measuring and classifying nonemployee awards with that of awards to employees. Under the new guidance, the measurement of nonemployee equity awards is fixed on the grant date. This ASU becomes effective in the first quarter of fiscal year 2019 and early adoption is permitted but no earlier than an entity’s adoption date of Topic 606. Entities will apply the ASU by recognizing a cumulative-effect adjustment to retained earnings as of the beginning of the annual period of adoption. We adopted ASU 2018-07 effective October 1, 2018 and the implementation had no material impact on the consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, “ Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement ,” (“ASU 2018-13”) 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, 2020 | |
Summary of Significant Accounting Policies | |
Schedule of inventories | September 30, September 30, 2020 2019 Raw materials $ 3,378,246 $ 3,408,742 Work-in-process 656,382 775,770 Finished goods 256,707 286,182 $ 4,291,335 $ 4,470,694 |
Summary of contract assets and contract liabilities balances | Contract Contract Assets Liabilities September 30, 2019 $ 80,182 $ 29,231 Amount transferred to receivables from contract assets (80,182) — Contract asset additions — — Performance obligations satisfied during the period that were included in the contract liability balance at the beginning of the period — (28,781) Increases due to invoicing prior to satisfaction of performance obligations — 312,915 September 30, 2020 $ — $ 313,365 |
Schedule of customer service revenue and cost of sales | For the Fiscal Year Ended September 30, 2020 2019 2018 Customer Service Sales $ 4,265,086 $ 3,553,919 $ 4,047,265 Customer Service Cost of Sales 1,457,995 1,374,227 1,724,167 Gross Profit $ 2,807,091 $ 2,179,692 $ 2,323,098 |
Schedule of financial assets and liabilities accounted for at fair value on a recurring basis | Fair Value Measurement on September 30, 2020 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 $ 11,607,293 $ — $ — Fair Value Measurement on September 30, 2019 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 $ 21,450,242 $ — $ — |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Net Income Per Share | |
Schedule of earnings per share | For the Fiscal Year Ended September 30, 2020 2019 2018 Numerator: Net income (loss) $ 3,269,783 $ 1,850,296 $ (3,653,905) Denominator: Basic weighted average shares 16,939,302 16,867,550 16,805,991 Dilutive effect of share-based awards 174,889 74,897 — Diluted weighted average shares 17,114,191 16,942,447 16,805,991 Net income (loss) per common share: Basic $ 0.19 $ 0.11 $ (0.22) Diluted $ 0.19 $ 0.11 $ (0.22) |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Prepaid Expenses and Other Current Assets | |
Schedule of prepaid expenses and other current assets | September 30, September 30, 2020 2019 Prepaid insurance $ 336,331 $ 302,376 Other 338,778 339,673 $ 675,109 $ 642,049 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Property and Equipment | |
Schedule of property and equipment, net | September 30, September 30, 2020 2019 Computer equipment $ 2,302,978 $ 2,285,152 Corporate airplanes 5,601,039 5,601,039 Furniture and office equipment 1,031,099 1,033,779 Manufacturing facility 5,733,313 5,733,313 Equipment 5,723,355 5,635,134 Land 1,021,245 1,021,245 21,413,029 21,309,662 Less accumulated depreciation and amortization (13,237,157) (12,864,970) $ 8,175,872 $ 8,444,692 |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Other Assets | |
Schedule of other assets | September 30, September 30, 2020 2019 Intangible assets, net of accumulated amortization of $583,655 at September 30, 2020 and $551,037 at September 30, 2019 $ 112,851 $ 49,200 Operating lease right-of-use assets 45,126 — Other non-current assets 91,566 104,841 $ 249,543 $ 154,041 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Accrued Expenses | |
Schedule of accrued expenses | September 30, September 30, 2020 2019 Warranty $ 547,743 $ 606,680 Salary, benefits and payroll taxes 483,797 212,322 Professional fees 151,956 153,298 Operating lease 45,126 — Other 133,338 138,618 $ 1,361,960 $ 1,110,918 |
Warranty (Tables)
Warranty (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Warranty | |
Schedule of warranty cost and accrual information | 2020 2019 Warranty accrual as of October 1, $ 606,680 $ 854,952 Expense (release) accrual for fiscal year 67,464 (168,589) Warranty cost incurred for fiscal year (126,401) (79,683) Warranty accrual as of September 30, $ 547,743 $ 606,680 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Income Taxes | |
Schedule of components of income taxes | For the Fiscal Year Ended September 30, 2020 2019 2018 Current provision (benefit): Federal $ (309,401) $ — $ (3,440) State 481 1,749 5,239 Total current provision (308,920) 1,749 1,799 Deferred provision Federal — — 61,799 State 38 56 53 Total deferred provision 38 56 61,852 Total current and deferred provision $ (308,882) $ 1,805 $ 63,651 |
Schedule of reconciliation of the statutory federal rate to the Company's effective income tax rate | For the Fiscal Year Ended September 30, 2020 2019 2018 U.S. Federal statutory tax rate 21.00 % 21.0 % 24.3 % Rate change due to tax reform 0.0 % 0.0 % (9.0) % State income taxes, net of federal benefit (2.2) % (0.9) % 1.9 % Permanent items (6.3) % 0.8 % (0.1) % Research and development tax credits (10.6) % (0.8) % 1.3 % Valuation allowance (15.2) % (20.2) % (20.3) % Change in unrecognized tax benefits 2.2 % 0.2 % 0.9 % 123R cancellations and forfeitures 0.0 % 0.0 % (0.8) % Tax Law Changes: CARES Act 0.3 % 0.0 % 0.0 % Other 0.4 % 0.0 % 0.0 % Effective income tax rate (10.4) % 0.1 % (1.8) % |
Schedule of deferred tax assets and liabilities | As of September 30, 2020 2019 2018 Non Current Non Current Non Current Deferred tax assets: Reserves and accruals $ 698,233 $ 690,148 $ 730,015 Research and development credit 1,589,247 1,331,170 1,318,977 NOL carryforwards -fed/state 2,192,018 2,590,791 2,982,246 Depreciation (807,522) (826,724) (863,796) Stock options 5,296 348,624 345,608 3,677,272 4,134,009 4,513,050 Less: Valuation allowance (3,471,164) (3,922,620) (4,296,553) Total deferred tax assets 206,108 211,389 216,497 Deferred tax liabilities: Depreciation (335,797) (341,040) (346,091) Total deferred tax liabilities (335,797) (341,040) (346,091) Net deferred tax (liability) asset $ (129,689) $ (129,651) $ (129,594) |
Schedule of reconciliation of beginning and ending balances of total amounts of gross unrecognized tax benefits | For the Fiscal Year Ended September 30, 2020 2019 2018 Balance at beginning of year $ 546,000 $ 540,000 $ 570,000 Unrecognized tax benefits related to prior years 39,000 — 52,000 Unrecognized tax benefits related to current year 37,000 6,000 11,000 Decrease in unrecognized tax benefits due to the lapse of applicable statute of limitations (7,000) — (93,000) Balance at end of year $ 615,000 $ 546,000 $ 540,000 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
2009 Plan | |
Share-Based compensation | |
Summary of option activity | Weighted Average Aggregate Exercise Intrinsic Options Price Value 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 Granted — — — Exercised — — — Cancelled — — — Outstanding at September 30, 2019 550,834 $ 3.32 $ 761,767 Granted — — — Exercised (546,334) 3.31 1,926,782 Cancelled — Outstanding at September 30, 2020 4,500 $ 3.78 $ 13,770 Vested and expected to vest 4,500 $ 3.78 $ 13,770 Options exercisable at September 30, 2020 4,500 $ 3.78 $ 13,770 |
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 2020 Contractual Life Exercise Price 30, 2020 Exercise Price $ 0.00 - $ 5.00 4,500 $ 3.78 4,500 $ 3.78 |
2019 Plan | |
Share-Based compensation | |
Summary of option activity | Weighted Average Aggregate Exercise Intrinsic Options Price Value Outstanding at September 30, 2019 — $ — $ — Granted 100,000 7.10 — Exercised — — — Cancelled — — — Outstanding at September 30, 2020 100,000 $ 7.10 $ — Vested and expected to vest 100,000 $ 7.10 $ — Options exercisable at September 30, 2020 — $ — $ — |
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 2020 Contractual Life Exercise Price 30, 2020 Exercise Price $ 0.00 - $ 5.00 100,000 9.9 $ 7.1 — $ — |
Schedule of fair value assumptions used to record compensation expense | Fiscal Year Ended September 30, 2020 2019 (1) 2018 (1) Expected dividend rate — — — Expected volatility 58.4 % — % — % Weighted average risk-free interest rate 0.3 % — % — % Expected lives (years) 5.5 — — (1) The Company did not grant any options in fiscal 2019 and 2018 |
Quarterly Financial Data (una_2
Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Quarterly Financial Data (unaudited) | |
Summary of quarterly results of operations of the Company | Fiscal Year Ended September 30, 2020 First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 4,511,428 $ 4,835,065 $ 5,953,689 $ 6,295,017 Cost of sales 1,909,781 2,539,894 2,559,016 2,784,533 Gross profit 2,601,647 2,295,171 3,394,673 3,510,484 Operating income 231,758 51,763 1,244,446 1,217,487 Net income 327,908 438,105 1,259,858 1,243,912 Net income per common share Basic $ 0.02 $ 0.03 $ 0.07 $ 0.07 Diluted $ 0.02 $ 0.03 $ 0.07 $ 0.07 Fiscal Year Ended September 30, 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Net sales $ 3,977,650 $ 4,203,127 $ 4,589,824 $ 4,801,988 Cost of sales 1,811,847 1,856,921 2,064,617 1,942,734 Gross profit 2,165,803 2,346,206 2,525,207 2,859,254 Operating (loss) income 96,015 173,067 386,629 873,033 Net income 139,421 202,499 511,259 997,117 Net (loss) income per common share Basic $ 0.01 $ 0.01 $ 0.03 $ 0.06 Diluted $ 0.01 $ 0.01 $ 0.03 $ 0.06 |
Lease Recognition (Tables)
Lease Recognition (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Lease Recognition | |
Schedule of impact of the adoption of ASU 2016-02 on the balance sheet | The impact of the adoption of ASU 2016-02 on the balance sheet as of October 1, 2019 was: As Reported Balance September 30, 2019 Increase October 1, 2019 Operating lease right-of-use assets $ — $ 130,018 $ 130,018 Total assets 38,557,025 130,018 38,687,043 Operating lease liabilities — 84,892 84,892 Total current liabilities 2,219,222 84,892 2,304,114 Operating lease liabilities non-current — 45,126 45,126 Total liabilities 2,348,873 45,126 2,393,999 Total liabilities and equity 38,557,025 130,018 38,687,043 |
Schedule of future minimum lease payments under operating leases | Future minimum lease payments under operating leases are as follows at September 30, 2019: Twelve Months Ending Operating September 30, Leases 2020 $ 2010 Total minimum lease payments $ 134,810 Amount representing interest (4,792) Present value of minimum lease payments 130,018 Current portion (84,892) Long-term portion of lease obligations $ 45,126 Future minimum lease payments under operating leases are as follows at September 30, 2020: Twelve Months Ending Operating September 30, Leases 2021 $ 47,988 Total minimum lease payments $ 47,988 Amount representing interest (2,862) Present value of minimum lease payments 45,126 Current portion (45,126) Long-term portion of lease obligations $ — |
Background (Details)
Background (Details) | 12 Months Ended |
Sep. 30, 2020segment | |
Background | |
Number of business segments | 1 |
Concentrations (Details)
Concentrations (Details) $ in Millions | 12 Months Ended | |||
Sep. 30, 2020USD ($)customeritem | Sep. 30, 2019USD ($)customeritem | Sep. 30, 2018USD ($)customer | Sep. 30, 2017customer | |
FPDS | ||||
Concentrations | ||||
Concentration of risk (as a percent) | 80.00% | 90.00% | 75.00% | |
Air data systems and components | ||||
Concentrations | ||||
Concentration of risk (as a percent) | 20.00% | 10.00% | 25.00% | |
Concentration of Credit Risk | ||||
Concentration of Credit Risk | ||||
Number of banks for maintenance of cash balances | 2 | |||
Net sales | Major Customers and Products | ||||
Concentrations | ||||
Concentration of risk (as a percent) | 63.00% | 53.00% | 48.00% | |
Number of major customers | customer | 5 | 5 | 5 | 5 |
Accounts receivable and contract assets | $ | $ 3.4 | $ 1.3 | $ 1.4 | |
Net sales | Major Customers and Products | Pilatus | ||||
Concentrations | ||||
Concentration of risk (as a percent) | 33.00% | 25.00% | 20.00% | |
Net sales | Major Customers and Products | Government contractors and Agencies | ||||
Concentrations | ||||
Concentration of risk (as a percent) | 32.00% | 20.00% | 32.00% | |
Net sales | Major Products | FPDS | ||||
Concentrations | ||||
Concentration of risk (as a percent) | 80.00% | 90.00% | 75.00% | |
Net sales | Major Products | Air data systems and components | ||||
Concentrations | ||||
Concentration of risk (as a percent) | 20.00% | 10.00% | 25.00% | |
Inventory | Major Suppliers | ||||
Concentrations | ||||
Concentration of risk (as a percent) | 32.80% | 23.40% | ||
Number of major suppliers | 2 | 2 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | Sep. 04, 2020 | Jan. 01, 2018 | Dec. 22, 2017 | Mar. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Restricted Cash | |||||||||||||||||
Cash dividends declared per share | $ 0.65 | ||||||||||||||||
Total cash dividend payment | $ 11,200,000 | ||||||||||||||||
Cash and cash equivalents | $ 12,603,967 | $ 22,416,830 | 12,603,967 | $ 22,416,830 | |||||||||||||
Restricted cash | 11,180,900 | 0 | 11,180,900 | 0 | |||||||||||||
Total cash and cash equivalents and restricted cash | 23,784,867 | 22,416,830 | 23,784,867 | 22,416,830 | $ 20,390,713 | $ 24,680,301 | |||||||||||
Inventory Valuation | |||||||||||||||||
Raw materials | 3,378,246 | 3,408,742 | 3,378,246 | 3,408,742 | |||||||||||||
Work-in-process | 656,382 | 775,770 | 656,382 | 775,770 | |||||||||||||
Finished goods | 256,707 | 286,182 | 256,707 | 286,182 | |||||||||||||
Inventories | 4,291,335 | 4,470,694 | 4,291,335 | 4,470,694 | |||||||||||||
Property and Equipment | |||||||||||||||||
Payment to acquire property and equipment | 118,797 | 81,281 | 2,548,612 | ||||||||||||||
Long-Lived Assets | |||||||||||||||||
Impairment charges | 0 | 0 | 0 | ||||||||||||||
Contract Balances | |||||||||||||||||
Balance at beginning of the period (contract assets) | $ 80,182 | 80,182 | |||||||||||||||
Balance at beginning of the period (contract liabilities) | 29,231 | 29,231 | |||||||||||||||
Amount transferred to receivables from contract assets | (80,182) | ||||||||||||||||
Contract asset additions | (80,182) | 80,182 | (554,190) | ||||||||||||||
Performance obligations satisfied during the period that were included in the contract liability balance at the beginning of the period | (28,781) | ||||||||||||||||
Increases due to invoicing prior to satisfaction of performance obligations | 312,915 | ||||||||||||||||
Balance at end of the period (contract assets) | 0 | 80,182 | 0 | 80,182 | |||||||||||||
Balance at end of the period (contract liabilities) | 313,365 | 29,231 | 313,365 | 29,231 | |||||||||||||
Customer Service Revenue | |||||||||||||||||
Customer Service Cost of Sales | 2,784,533 | $ 2,559,016 | $ 2,539,894 | 1,909,781 | 1,942,734 | $ 2,064,617 | $ 1,856,921 | $ 1,811,847 | 9,793,224 | 7,676,119 | 7,311,923 | ||||||
Gross Profit | $ 3,510,484 | $ 3,394,673 | 2,295,171 | $ 2,601,647 | $ 2,859,254 | $ 2,525,207 | $ 2,346,206 | $ 2,165,803 | $ 11,801,975 | $ 9,896,470 | $ 6,538,449 | ||||||
Income taxes | |||||||||||||||||
U.S. Federal statutory tax rate (as a percent) | 21.00% | 34.00% | 21.00% | 21.00% | 24.30% | ||||||||||||
Percentage of limitation on net operating losses | 80.00% | ||||||||||||||||
Deferred income tax expense due to Tax Cuts and Jobs Act | $ 321,038 | ||||||||||||||||
Customer Service | |||||||||||||||||
Customer Service Revenue | |||||||||||||||||
Customer Service Sales | $ 4,265,086 | $ 3,553,919 | $ 4,047,265 | ||||||||||||||
Customer Service Cost of Sales | 1,457,995 | 1,374,227 | 1,724,167 | ||||||||||||||
Gross Profit | $ 2,807,091 | $ 2,179,692 | 2,323,098 | ||||||||||||||
COVID 19 | |||||||||||||||||
Income taxes | |||||||||||||||||
Amount of pre-tax NOL carried back two years to fully offset taxable income | $ 1,500,000 | 1,500,000 | |||||||||||||||
AMT tax | 16,000 | 16,000 | |||||||||||||||
Cash impact of carryback | 309,412 | ||||||||||||||||
COVID 19 | R&D | |||||||||||||||||
Income taxes | |||||||||||||||||
Increase in R&D credit carryforward | $ 196,000 | $ 196,000 | |||||||||||||||
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 airplanes | |||||||||||||||||
Property and Equipment | |||||||||||||||||
Estimated useful lives | 10 years | ||||||||||||||||
Hawker Beechcraft B200GT Aircraft | |||||||||||||||||
Property and Equipment | |||||||||||||||||
Payment to acquire property and equipment | $ 2,400,000 | ||||||||||||||||
Manufacturing facility | |||||||||||||||||
Property and Equipment | |||||||||||||||||
Estimated useful lives | 39 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Revenue Recognition (Details) | 12 Months Ended |
Sep. 30, 2020USD ($) | |
Revenue, remaining performance obligations | |
Percentage of revenue from products to customer | 97.00% |
Remaining performance obligations | $ 3,640,637 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, remaining performance obligations | |
Percentage of remaining performance obligation expected to be recognized in period | 100.00% |
Revenue, Remaining Performance Obligation,Expected Timing of Satisfaction, Period | 12 months |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Fair Value (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Warranty | ||
Standard Product Warranty Accrual, Length of Warranty Period | 24 months | |
Self-Insurance Reserves | ||
Estimated liability for medical claims incurred but not reported | $ 48,200 | $ 55,700 |
Excess of funded premiums over estimated claims incurred but not reported | 225,200 | |
Fair value on a recurring basis | Quoted Price in Active Markets for Identical Assets (Level 1) | Money market funds | ||
Assets | ||
Cash and cash equivalents | $ 11,607,293 | $ 21,450,242 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - New Accounting Pronouncements (Details) - USD ($) | Sep. 30, 2020 | Oct. 01, 2019 | Sep. 30, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use asset | $ 45,126 | $ 130,018 | |
Operating lease liabilities | $ 45,126 | $ 130,018 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator: | |||||||||||
Net income (loss) | $ 1,243,912 | $ 1,259,858 | $ 438,105 | $ 327,908 | $ 997,117 | $ 511,259 | $ 202,499 | $ 139,421 | $ 3,269,783 | $ 1,850,296 | $ (3,653,905) |
Denominator: | |||||||||||
Basic weighted average shares | 16,939,302 | 16,867,550 | 16,805,991 | ||||||||
Dilutive effect of share-based awards | 174,889 | 74,897 | |||||||||
Diluted weighted average shares | 17,114,191 | 16,942,447 | 16,805,991 | ||||||||
Net income (loss) per common share: | |||||||||||
Basic (in dollars per share) | $ 0.07 | $ 0.07 | $ 0.03 | $ 0.02 | $ 0.06 | $ 0.03 | $ 0.01 | $ 0.01 | $ 0.19 | $ 0.11 | $ (0.22) |
Diluted (in dollars per share) | $ 0.07 | $ 0.07 | $ 0.03 | $ 0.02 | $ 0.06 | $ 0.03 | $ 0.01 | $ 0.01 | $ 0.19 | $ 0.11 | $ (0.22) |
Options to purchase common stock outstanding (in shares) | 104,500 | 550,834 | 104,500 | 550,834 | 550,834 | ||||||
Anti-dilutive options to purchase common stock excluded from the computation of diluted earnings per share (in shares) | 100,000 | 0 | |||||||||
RSU | |||||||||||
Net income (loss) per common share: | |||||||||||
Restricted stock units outstanding ( in shares) | 0 | 0 | 0 | 0 | 0 |
Contract Asset (Details)
Contract Asset (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Contract Asset | |||||||||||
Contract asset | $ 0 | $ 80,182 | $ 0 | $ 80,182 | |||||||
Cumulative change in operating income resulting from changes in estimates | $ 1,217,487 | $ 1,244,446 | $ 51,763 | $ 231,758 | $ 873,033 | $ 386,629 | $ 173,067 | $ 96,015 | 2,745,454 | 1,528,744 | $ (3,711,539) |
Long-term contracts accounted for under percentage-of-completion | |||||||||||
Contract Asset | |||||||||||
Cumulative change in operating income resulting from changes in estimates | $ 0 | $ 16,000 | $ 0 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Prepaid Expenses and Other Current Assets | ||
Prepaid insurance | $ 336,331 | $ 302,376 |
Other | 338,778 | 339,673 |
Total prepaid expenses and other current assets | $ 675,109 | $ 642,049 |
Property and Equipment (Details
Property and Equipment (Details) | 12 Months Ended | ||
Sep. 30, 2020USD ($)aircraft | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | |
Property and equipment | |||
Property and equipment, gross | $ 21,413,029 | $ 21,309,662 | |
Less: accumulated depreciation and amortization | (13,237,157) | (12,864,970) | |
Property and equipment, net | 8,175,872 | 8,444,692 | |
Depreciation | $ 387,617 | 423,326 | $ 430,886 |
Number of corporate airplanes, depreciated | aircraft | 1 | ||
Number of corporate airplanes | aircraft | 2 | ||
Computer equipment | |||
Property and equipment | |||
Property and equipment, gross | $ 2,302,978 | 2,285,152 | |
Corporate airplanes | |||
Property and equipment | |||
Property and equipment, gross | 5,601,039 | 5,601,039 | |
Furniture and office equipment | |||
Property and equipment | |||
Property and equipment, gross | 1,031,099 | 1,033,779 | |
Manufacturing facility | |||
Property and equipment | |||
Property and equipment, gross | 5,733,313 | 5,733,313 | |
Equipment | |||
Property and equipment | |||
Property and equipment, gross | 5,723,355 | 5,635,134 | |
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, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | Oct. 01, 2019 | |
Other Assets | ||||
Intangible assets, net of accumulated amortization of $583,655 at September 30, 2020 and $551,037 at September 30, 2019 | $ 112,851 | $ 49,200 | ||
Operating lease right-of-use assets | 45,126 | $ 130,018 | ||
Other non-current assets | 91,566 | 104,841 | ||
Total other assets | 249,543 | 154,041 | ||
Accumulated amortization of intangible assets | 583,655 | 551,037 | ||
Impairment charges | 0 | 0 | $ 0 | |
Intangible asset amortization expense | 32,618 | 19,400 | $ 0 | |
Prepaid software licenses | $ 16,266 | $ 29,541 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 |
Accrued Expenses | |||
Warranty | $ 547,743 | $ 606,680 | $ 854,952 |
Salary, benefits and payroll taxes | 483,797 | 212,322 | |
Professional fees | 151,956 | 153,298 | |
Operating lease | 45,126 | 84,892 | |
Other | 133,338 | 138,618 | |
Total accrued expenses | $ 1,361,960 | $ 1,110,918 |
Warranty (Details)
Warranty (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Warranty cost and accrual information | ||
Warranty accrual, beginning of period | $ 606,680 | $ 854,952 |
Expense (release) accrual for fiscal year | 67,464 | (168,589) |
Warranty cost incurred for fiscal year | (126,401) | (79,683) |
Warranty accrual, end of period | $ 547,743 | $ 606,680 |
Income Taxes - Impact of COVID-
Income Taxes - Impact of COVID-19 (Details) - COVID 19 | 1 Months Ended |
Mar. 31, 2020USD ($) | |
Unusual or Infrequent Item, or Both [Line Items] | |
Net operating loss | $ 1,500,000 |
Alternate minimum tax | 16,000 |
Cash impact of the NOL carrryback | 309,412 |
R&D | |
Unusual or Infrequent Item, or Both [Line Items] | |
Tax Credit carryforwards | $ 196,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | Jan. 01, 2018 | Dec. 22, 2017 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 |
Current provision (benefit): | |||||
Federal | $ (309,401) | $ (3,440) | |||
State | 481 | $ 1,749 | 5,239 | ||
Total current provision | (308,920) | 1,749 | 1,799 | ||
Deferred provision | |||||
Federal | 61,799 | ||||
State | 38 | 56 | 53 | ||
Total deferred provision | 38 | 56 | 61,852 | ||
Total current and deferred provision | $ (308,882) | $ 1,805 | $ 63,651 | ||
Reconciliation of the statutory federal rate to the Company's effective income tax rate | |||||
U.S. Federal statutory tax rate (as a percent) | 21.00% | 34.00% | 21.00% | 21.00% | 24.30% |
Rate change due to tax reform (as a percent) | 0.00% | 0.00% | (9.00%) | ||
State income taxes, net of federal benefit (as a percent) | (2.20%) | (0.90%) | 1.90% | ||
Permanent items (as a percent) | (6.30%) | 0.80% | (0.10%) | ||
Research and development tax credits (as a percent) | (10.60%) | (0.80%) | 1.30% | ||
Valuation allowance (as a percent) | (15.20%) | (20.20%) | (20.30%) | ||
Change in unrecognized tax benefits (as a percent) | 2.20% | 0.20% | 0.90% | ||
123R cancellations and forfeitures | 0.00% | 0.00% | (0.80%) | ||
Tax Law Changes: CARES Act | 0.30% | 0.00% | 0.00% | ||
Other | 0.40% | 0.00% | 0.00% | ||
Effective income tax rate (as a percent) | (10.40%) | 0.10% | (1.80%) |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax assets and liabilities component (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 |
Deferred tax assets: | |||
Reserves and accruals | $ 698,233 | $ 690,148 | $ 730,015 |
Research and development credit | 1,589,247 | 1,331,170 | 1,318,977 |
NOL carryforwards - fed/state | 2,192,018 | 2,590,791 | 2,982,246 |
Depreciation | (807,522) | (826,724) | (863,796) |
Stock options | 5,296 | 348,624 | 345,608 |
Gross deferred tax assets | 3,677,272 | 4,134,009 | 4,513,050 |
Less : Valuation allowance | (3,471,164) | (3,922,620) | (4,296,553) |
Total deferred tax assets | 206,108 | 211,389 | 216,497 |
Deferred tax liabilities: | |||
Depreciation | (335,797) | (341,040) | (346,091) |
Total deferred tax liabilities | (335,797) | (341,040) | (346,091) |
Net deferred tax (liability) asset | $ (129,689) | $ (129,651) | $ (129,594) |
Income Taxes - Net operating lo
Income Taxes - Net operating loss (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
State | ||
Operating loss carryforward | ||
Net operating loss | $ 24,392,000 | $ 24,009,000 |
Income Taxes - Tax carryforward
Income Taxes - Tax carryforward and reconciliation of unrecognized tax benefit (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Tax credit carryforward | |||
Change in valuation allowance | $ 451,000 | $ 375,000 | |
Valuation allowance | 3,471,164 | 3,922,620 | $ 4,296,553 |
Reconciliation of beginning and ending balances of total amounts of gross unrecognized tax benefits | |||
Balance at beginning of year | 546,000 | 540,000 | 570,000 |
Unrecognized tax benefits related to prior years | 39,000 | 52,000 | |
Unrecognized tax benefits related to current year | 37,000 | 6,000 | 11,000 |
Decrease in unrecognized tax benefits due to the lapse of applicable statute of limitations | (7,000) | (93,000) | |
Balance at end of year | 615,000 | 546,000 | 540,000 |
Unrecognized tax benefits , if recognized, would impact effective tax rate | 615,000 | 546,000 | 540,000 |
Unrecognized tax benefits against accrued interest | 0 | ||
Accrual recorded for penalties | 0 | ||
Expense for interest (net of federal impact) recognized | 0 | 0 | $ 0 |
Adjustments resulting from IRS examination | 0 | ||
R&D | Federal | |||
Tax credit carryforward | |||
Tax Credit carryforwards | $ 1,589,000 | $ 1,331,000 |
Savings Plan (Details)
Savings Plan (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Savings Plan | |||
Contributions made to defined contribution savings plan | $ 112,000 | $ 96,000 | $ 110,000 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) | 12 Months Ended | ||
Sep. 30, 2020USD ($)item | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | |
Share-Based compensation | |||
Share-based compensation expense | $ 177,000 | $ 173,000 | $ 200,000 |
Income tax effect recognized as a credit to additional paid-in capital related to share-based compensation | $ 17,000 | $ 0 | $ 0 |
Number of share-based compensation plans maintained by the company | item | 2 |
Share-Based Compensation - 2009
Share-Based Compensation - 2009 Stock-Based Incentive Compensation Plan (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Options | |||
Outstanding at the beginning of the period (in shares) | 550,834 | 550,834 | |
Outstanding at the end of the period (in shares) | 104,500 | 550,834 | 550,834 |
2009 Plan | |||
Share-Based compensation | |||
Number of shares of common stock reserved for awards | 1,200,000 | ||
2009 Plan | Options | |||
Options | |||
Outstanding at the beginning of the period (in shares) | 550,834 | 550,834 | 556,834 |
Exercised (in shares) | (546,334) | ||
Cancelled (in shares) | 0 | (6,000) | |
Outstanding at the end of the period (in shares) | 4,500 | 550,834 | 550,834 |
Vested and expected to vest (in shares) | 4,500 | ||
Options exercisable at the end of the period (in shares) | 4,500 | ||
Weighted Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 3.32 | $ 3.32 | $ 3.32 |
Exercised (in dollars per share) | 3.31 | ||
Cancelled (in dollars per share) | 0 | 3.78 | |
Outstanding at the end of the period (in dollars per share) | 3.78 | $ 3.32 | $ 3.32 |
Vested and expected to vest (in dollars per share) | 3.78 | ||
Options exercisable at the end of the period (in dollars per share) | $ 3.78 | ||
Aggregate Intrinsic Value | |||
Outstanding at the beginning of the period (in dollars) | $ 761,767 | $ 15,000 | $ 177,043 |
Exercised (in dollars) | 1,926,782 | 0 | 0 |
Outstanding at the end of the period (in dollars) | 13,770 | $ 761,767 | $ 15,000 |
Vested and expected to vest (in dollars) | 13,770 | ||
Options exercisable at the end of the period (in dollars) | $ 13,770 | ||
2009 Plan | Performance-based Award | Employee | |||
Share-Based compensation | |||
Maximum award (in shares) | 300,000 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of information about stock options 2009 plan (Details) - 2009 Plan - Range of Exercise Price - $0.00 - $5.00 - Options | 12 Months Ended |
Sep. 30, 2020$ / 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 | 4,500 |
Options Outstanding - Weighted-Average Remaining Contractual Life | 10 months 24 days |
Options Outstanding - Weighted-Average Exercise Price (in dollars per share) | $ 3.78 |
Options exercisable at the end of the period (in shares) | shares | 4,500 |
Options Exercisable - Weighted-Average Exercise Price (in dollars per share) | $ 3.78 |
Share-Based Compensation - Fair
Share-Based Compensation - Fair Value assumptions for stock option plan (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-Based compensation | |||
Share-based compensation expense | $ 177,000 | $ 173,000 | $ 200,000 |
2009 Plan | Employee | |||
Share-Based compensation | |||
Share-based compensation expense | 0 | 0 | 0 |
2009 Plan | Non-employee director | |||
Share-Based compensation | |||
Share-based compensation expense | 0 | 173,000 | 200,000 |
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 | ||
2019 Plan | Non-employee director | |||
Share-Based compensation | |||
Share-based compensation expense | $ 160,000 | 0 | 0 |
2019 Plan | Options | |||
Share-Based compensation | |||
Share-based compensation expense | 17,337 | $ 0 | $ 0 |
Unrecognized compensation cost, related to non-vested stock options | $ 345,363 | ||
2019 Plan | Options | Minimum | |||
Share-Based compensation | |||
Vesting period | 3 years | ||
2019 Plan | Options | Maximum | |||
Share-Based compensation | |||
Expiration term | 10 years | ||
Vesting period | 5 years |
Share-Based Compensation - 2019
Share-Based Compensation - 2019 Stock-Based Incentive Compensation Plan (Details) - USD ($) | Aug. 27, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 |
Share-based compensation. | ||||
Common stock, shares authorized | 75,000,000 | 75,000,000 | ||
Share-based compensation expense | $ 177,000 | $ 173,000 | $ 200,000 | |
Options | ||||
Outstanding at the beginning of the period (in shares) | 550,834 | 550,834 | ||
Outstanding at the end of the period (in shares) | 104,500 | 550,834 | 550,834 | |
2019 Plan | ||||
Share-based compensation. | ||||
Common stock, shares authorized | 139,691 | |||
Number of shares of common stock reserved for awards | 750,000 | |||
Number of shares of common stock available for awards under the plan | 716,635 | |||
2019 Plan | Employee | ||||
Share-based compensation. | ||||
Number of shares of common stock reserved for awards | 300,000 | |||
2019 Plan | Options | ||||
Share-based compensation. | ||||
Share-based compensation expense | $ 17,337 | $ 0 | $ 0 | |
Options | ||||
Granted (in shares) | 100,000 | |||
Outstanding at the end of the period (in shares) | 100,000 | |||
Vested and expected to vest (in shares) | 100,000 | |||
Weighted Average Exercise Price | ||||
Granted (in dollars per share) | $ 7.10 | |||
Outstanding at the end of the period (in dollars per share) | 7.10 | |||
Vested and expected to vest (in dollars per share) | $ 7.10 | |||
2019 Plan | Options | Chief Financial Officer | ||||
Options | ||||
Granted (in shares) | 100,000 |
Share-Based Compensation - Su_2
Share-Based Compensation - Summary of information about stock options 2019 plan (Details) - 2019 Plan - Range of Exercise Price - $0.00 - $5.00 - Options | 12 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Information about stock options, by exercise price range | |
Options outstanding at the end of the period (in shares) | shares | 100,000 |
Options Outstanding - Weighted-Average Remaining Contractual Life | 9 years 10 months 24 days |
Options Outstanding - Weighted-Average Exercise Price (in dollars per share) | $ / shares | $ 7.1 |
Share-Based Compensation - Fa_2
Share-Based Compensation - Fair value assumptions related to the 2019 Plan (Details) - 2019 Plan - Options | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based compensation. | |||
Expected volatility | 58.40% | ||
Weighted average risk-free interest rate | 0.30% | ||
Expected lives (years) | 5 years 6 months | 0 years | 0 years |
Commitments and Contingencies -
Commitments and Contingencies - Operating leases and purchase obligations (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Operating leases | |||
Rent expense under operating leases | $ 141,000 | $ 140,000 | $ 113,000 |
Operating leases future minimum payments due | 47,988 | 134,810 | |
Purchase Obligations | |||
Purchase obligations on open purchase orders | 853,123 | $ 1,082,928 | $ 730,275 |
Product Liability | |||
Product liability insurance | $ 50,000,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Shareholder | |||
Related Party Transactions | |||
Legal fees | $ 15,000 | $ 8,000 | $ 0 |
Quarterly Financial Data (una_3
Quarterly Financial Data (unaudited) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Quarterly Financial Data (unaudited) | |||||||||||
Net sales | $ 6,295,017 | $ 5,953,689 | $ 4,835,065 | $ 4,511,428 | $ 4,801,988 | $ 4,589,824 | $ 4,203,127 | $ 3,977,650 | $ 21,595,199 | $ 17,572,589 | $ 13,850,372 |
Cost of sales | 2,784,533 | 2,559,016 | 2,539,894 | 1,909,781 | 1,942,734 | 2,064,617 | 1,856,921 | 1,811,847 | 9,793,224 | 7,676,119 | 7,311,923 |
Gross profit | 3,510,484 | 3,394,673 | 2,295,171 | 2,601,647 | 2,859,254 | 2,525,207 | 2,346,206 | 2,165,803 | 11,801,975 | 9,896,470 | 6,538,449 |
Operating (loss) income | 1,217,487 | 1,244,446 | 51,763 | 231,758 | 873,033 | 386,629 | 173,067 | 96,015 | 2,745,454 | 1,528,744 | (3,711,539) |
Net income | $ 1,243,912 | $ 1,259,858 | $ 438,105 | $ 327,908 | $ 997,117 | $ 511,259 | $ 202,499 | $ 139,421 | $ 3,269,783 | $ 1,850,296 | $ (3,653,905) |
Net (loss) income per common share | |||||||||||
Basic (in dollars per share) | $ 0.07 | $ 0.07 | $ 0.03 | $ 0.02 | $ 0.06 | $ 0.03 | $ 0.01 | $ 0.01 | $ 0.19 | $ 0.11 | $ (0.22) |
Diluted (in dollars per share) | $ 0.07 | $ 0.07 | $ 0.03 | $ 0.02 | $ 0.06 | $ 0.03 | $ 0.01 | $ 0.01 | $ 0.19 | $ 0.11 | $ (0.22) |
Business Segments (Details)
Business Segments (Details) $ in Millions | 12 Months Ended | ||
Sep. 30, 2020USD ($)segment | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | |
Business segments | |||
Number of business segments | segment | 1 | ||
FPDS | |||
Geographic Data | |||
Sales percentage | 80.00% | 90.00% | 75.00% |
Air data systems and components | |||
Geographic Data | |||
Sales percentage | 20.00% | 10.00% | 25.00% |
Engineering development contracts | |||
Geographic Data | |||
Sales percentage | 4.00% | 8.00% | 3.00% |
Outside the United States | |||
Geographic Data | |||
Net sales from outside the United States | $ | $ 9.4 | $ 7.5 | $ 4.7 |
Lease Recognition (Details)
Lease Recognition (Details) - USD ($) | Sep. 30, 2020 | Oct. 01, 2019 | Sep. 30, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | $ 45,126 | $ 130,018 | |
Total assets | 41,545,837 | 38,687,043 | $ 38,557,025 |
Operating lease liabilities | 45,126 | 84,892 | |
Total current liabilities | 13,647,117 | 2,304,114 | 2,219,222 |
Operating lease liabilities non-current | 45,126 | ||
Total liabilities | 13,776,806 | 2,393,999 | 2,348,873 |
Total liabilities and equity | $ 41,545,837 | 38,687,043 | 38,557,025 |
Accrued Liabilities | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease liabilities | 84,892 | ||
Operating lease liabilities non-current | $ 45,126 | ||
Increase | ASU 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets | 130,018 | ||
Total assets | 130,018 | ||
Total current liabilities | 84,892 | ||
Total liabilities | 45,126 | ||
Total liabilities and equity | 130,018 | ||
Increase | ASU 2016-02 | Accrued Liabilities | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease liabilities | 84,892 | ||
Operating lease liabilities non-current | $ 45,126 |
Lease Recognition - Operating l
Lease Recognition - Operating leases (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Lease Recognition | ||
Operating leases expenses | $ 141,000 | |
Weighted average remaining lease term | 7 months 6 days | |
Weighted average discount rate | 5.00% | |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Accrued Liabilities, Current | Accrued Liabilities, Current |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued Liabilities, Current | |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Accrued Liabilities, Current | |
Other Assets, Noncurrent | $ 249,543 | $ 154,041 |
Lease Recognition - Future mini
Lease Recognition - Future minimum lease payments (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Future minimum lease payments under operating leases | ||
2020 | $ 86,822 | |
2021 | $ 47,988 | 47,988 |
Total minimum lease payments | 47,988 | 134,810 |
Amount representing interest | (2,862) | (4,792) |
Present value of minimum lease payments | 45,126 | 130,018 |
Current portion | $ (45,126) | (84,892) |
Long-term portion of lease obligations | $ 45,126 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | Dec. 10, 2020 | Oct. 01, 2020 | Sep. 04, 2020 | Sep. 30, 2020 |
Subsequent Event | ||||
Cash dividends declared per share | $ 0.65 | |||
Aggregate amount of dividend payment | $ 11.2 | |||
Subsequent Event | ||||
Subsequent Event | ||||
Cash dividends declared per share | $ 0.50 | $ 0.65 | ||
Aggregate amount of dividend payment | $ 8.6 | |||
Percentage of dividend on ordinary income | 20.00% | |||
Percentage of dividend on return on capital | 80.00% |