Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | ||
Sep. 30, 2013 | Dec. 12, 2013 | Mar. 31, 2013 | |
Document Information [Line Items] | ' | ' | ' |
Document Type | '10-K | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 30-Sep-13 | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Trading Symbol | 'HAUP | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 10,122,344 | ' |
Entity Registrant Name | 'HAUPPAUGE DIGITAL INC | ' | ' |
Entity Central Index Key | '0000930803 | ' | ' |
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 | 'Smaller Reporting Company | ' | ' |
Entity Public Float | ' | ' | $9,248,399 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Sep. 30, 2012 |
ASSETS: | ' | ' |
Cash and cash equivalents | $1,482,566 | $5,095,853 |
Accounts receivable, net of various allowances | 2,180,276 | 2,618,081 |
Other non trade receivables | 278,497 | 1,995,654 |
Inventories | 10,479,048 | 9,497,856 |
Deferred income tax asset-current | 453,659 | 977,488 |
Prepaid expenses and other current assets | 1,155,054 | 1,088,085 |
Total current assets | 16,029,100 | 21,273,017 |
Intangible assets, net | 0 | 2,431,594 |
Property and equipment, net | 144,596 | 235,978 |
Security deposits and other non-current assets | 115,589 | 109,218 |
Deferred income tax asset-non current | 692,225 | 622,272 |
Total assets | 16,981,510 | 24,672,079 |
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT): | ' | ' |
Accounts payable | 3,758,876 | 5,865,085 |
Accrued expenses - fees | 12,497,060 | 12,943,022 |
Accrued expenses | 2,590,291 | 3,668,491 |
Income taxes payable | 188,187 | 230,123 |
Total current liabilities | 19,034,414 | 22,706,721 |
Commitments and contingencies | ' | ' |
Stockholders' Equity (Deficit) | ' | ' |
Common stock $.01 par value; 25,000,000 shares authorized, 10,882,823 shares issued | 108,828 | 108,828 |
Additional paid-in capital | 18,428,511 | 18,316,085 |
Retained deficit | -13,492,346 | -9,443,408 |
Accumulated other comprehensive loss | -4,692,349 | -4,610,599 |
Treasury stock at cost, 760,479 shares | -2,405,548 | -2,405,548 |
Total stockholders' (deficit) equity | -2,052,904 | 1,965,358 |
Total liabilities and stockholders’ equity (deficit) | $16,981,510 | $24,672,079 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $) | Sep. 30, 2013 | Sep. 30, 2012 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 10,882,823 | 10,882,823 |
Treasury stock, shares | 760,479 | 760,479 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Net sales | $34,017,233 | $44,640,360 |
Cost of sales | 21,664,056 | 31,144,077 |
Gross profit | 12,353,177 | 13,496,283 |
Selling, general and administrative expenses | 11,078,514 | 12,187,542 |
Impairment of intangible assets | 1,676,758 | 0 |
Research and development expenses | 3,098,226 | 3,399,213 |
Loss from operations | -3,500,321 | -2,090,472 |
Other Income: | ' | ' |
Interest income | 2,901 | 4,500 |
Foreign currency | 43,028 | 9,904 |
Total other income | 45,929 | 14,404 |
Loss before income tax provision | -3,454,392 | -2,076,068 |
Current income tax expense | 140,670 | 150,204 |
Deferred income tax expense | 453,876 | 317,178 |
Net loss | ($4,048,938) | ($2,543,450) |
Net loss per share: | ' | ' |
Basic and Diluted (in dollars per share) | ($0.40) | ($0.25) |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Comprehensive loss: | ' | ' |
Net loss | ($4,048,938) | ($2,543,450) |
Foreign currency translation loss | -81,750 | -68,892 |
Comprehensive loss | ($4,130,688) | ($2,612,342) |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (USD $) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Treasury Stock [Member] |
Balance at Sep. 30, 2011 | $4,449,210 | $108,828 | $18,187,595 | ($6,899,958) | ($4,541,707) | ($2,405,548) |
Balance (in shares) at Sep. 30, 2011 | ' | 10,882,823 | ' | ' | ' | ' |
Net loss | -2,543,450 | 0 | 0 | -2,543,450 | 0 | 0 |
Stock compensation expense | 128,490 | 0 | 128,490 | 0 | 0 | 0 |
Foreign currency translation loss | -68,892 | 0 | 0 | 0 | -68,892 | 0 |
Balance at Sep. 30, 2012 | 1,965,358 | 108,828 | 18,316,085 | -9,443,408 | -4,610,599 | -2,405,548 |
Balance (in shares) at Sep. 30, 2012 | ' | 10,882,823 | ' | ' | ' | ' |
Net loss | -4,048,938 | 0 | 0 | -4,048,938 | 0 | 0 |
Stock compensation expense | 112,426 | 0 | 112,426 | 0 | ' | ' |
Foreign currency translation loss | -81,750 | 0 | 0 | 0 | -81,750 | 0 |
Balance at Sep. 30, 2013 | ($2,052,904) | $108,828 | $18,428,511 | ($13,492,346) | ($4,692,349) | ($2,405,548) |
Balance (in shares) at Sep. 30, 2013 | ' | 10,882,823 | ' | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Cash Flows From Operating Activities: | ' | ' |
Net loss | ($4,048,938) | ($2,543,450) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ' | ' |
Depreciation and amortization | 121,864 | 178,190 |
Amortization and impairment of intangible assets | 2,431,594 | 754,836 |
Stock compensation expense | 112,426 | 128,490 |
Deferred income tax expense | 453,876 | 317,178 |
Sales return reserve, net | -512,862 | -120,834 |
Provision for bad debt | 0 | 40,000 |
Provision for slow moving inventory | 200,000 | 465,000 |
Other | -24,632 | 21,581 |
Changes in current assets and liabilities: | ' | ' |
Accounts receivable and other non trade receivables | 3,821,592 | 1,796,195 |
Inventories | -2,322,723 | -161,911 |
Prepaid expenses and other current assets | -63,928 | -107,792 |
Accounts payable | -2,120,049 | -793,813 |
Accrued expenses and income taxes payable | -1,588,463 | 1,147,754 |
Total adjustments | 508,695 | 3,664,874 |
Net cash provided by (used in) operating activities | -3,540,243 | 1,121,424 |
Cash Flows From Investing Activities: | ' | ' |
Purchases of property and equipment | -30,482 | -45,465 |
Net cash used in investing activities | -30,482 | -45,465 |
Effect of exchange rates on cash | -42,562 | -60,643 |
Net increase (decrease) in cash and cash equivalents | -3,613,287 | 1,015,316 |
Cash and cash equivalents, beginning of year | 5,095,853 | 4,080,537 |
Cash and cash equivalents, end of year | 1,482,566 | 5,095,853 |
Supplemental disclosures: | ' | ' |
Income taxes paid | $181,590 | $161,455 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Accounting Policies [Abstract] | ' | |||||||||
Significant Accounting Policies [Text Block] | ' | |||||||||
1. Summary of Significant Accounting Policies | ||||||||||
Principles of Consolidation | ||||||||||
The consolidated financial statements include the accounts of Hauppauge Digital Inc. and its wholly-owned subsidiaries, Hauppauge Computer Works Inc., Hauppauge Digital Inc. Taiwan, PCTV Systems Sarl, its branch PCTV Systems GmbH, Hauppauge Digital Europe Sarl, its branch Hauppauge Digital Europe Sarl Ireland and Hauppauge Digital Europe Sarl’s wholly-owned subsidiaries, Hauppauge Digital Asia Pte Ltd, Hauppauge Computer Works GmbH and Hauppauge Computer Works, Ltd, ( collectively, the “Company”). All inter-company accounts and transactions have been eliminated. | ||||||||||
Certain reclassifications have been made to prior consolidated financial statements to conform to the current classifications. | ||||||||||
Nature of Business | ||||||||||
The Company is a public company that manufactures and markets innovative solutions that enable television and video content to be digitally viewed or recorded on personal computers and mobile devices. The Company was incorporated in August 1994 and the Company is headquartered in Hauppauge, New York with: | ||||||||||
· Administrative offices in New York, Ireland and Singapore; | ||||||||||
· Sales offices in Germany, London, Paris, The Netherlands, Sweden, Italy, Spain, Singapore, Taiwan and California; and | ||||||||||
· Research and development centers in Hauppauge, New York, Braunschweig, Germany and Taipei,Taiwan. | ||||||||||
The Company’s products fall under three product categories: | ||||||||||
· High Definition Video Recorders | ||||||||||
· TV Receivers and Tuners | ||||||||||
· Other Video Products and Software | ||||||||||
Basis of Presentation | ||||||||||
The Company’s cash requirements for the next twelve months will include, among other things, the cash to fund the Company’s operating and working capital needs. The Company relies exclusively upon cash generated from operations to fund these needs. The Company does not have a working capital line of credit or other borrowing facility in place to draw upon in the event that cash from its operations is insufficient to fund its capital requirements to sustain its operations. The Company’s cash and cash equivalents as of September 30, 2013 and its internally generated cash will not provide sufficient liquidity to meet its capital needs for the next twelve months, and additional sources of cash may be required to meet its capital needs. There can be no assurance that the Company will be able to obtain additional sources of cash if needed. The financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of the uncertainty described here. | ||||||||||
In recognition of the operating losses, loss of sales and reduction of cash, the Company has been implementing expense reduction initiatives to lower the Company’s expense structure to bring it in line with sales. The Company has also retained on a consulting basis an advisory firm to assist it in considering and pursuing strategic alternatives, including possible additional financing to fund its capital needs and the restructuring of its business. | ||||||||||
If any strategic or restructuring plan that the Company develops and implements is not successful, or if the Company is not able to raise additional capital, there is a substantial risk that that the Company might not be able to sustain its operations at current levels, which would have a material adverse effect on its business, operating results and financial condition. | ||||||||||
Product Segment and Geographic Information | ||||||||||
The Company operates primarily in one business segment, which is the development, marketing and manufacturing of TV receiver and video recording products for the personal computer market. Most of the Company’s products are similar in function and share commonality of component parts and manufacturing processes. The Company’s products are either sold, or can be sold, by the same retailers and distributors in the Company’s marketing channel. The Company also sells its TV tuner products directly to PC manufacturers. The Company evaluates its product lines under the functional categories of video recorder products, such as the USB-Live2, HD-PVR and Colossus, TV tuner products such as the Broadway, digital TV tuners and hybrid digital/analog TV tuners, and other video products and software. | ||||||||||
Sales by functional category are as follows: | ||||||||||
Fiscal years ended September 30, | ||||||||||
2013 | 2012 | |||||||||
Product line sales | ||||||||||
Video recorder products | $ | 17,849,266 | $ | 23,828,900 | ||||||
TV tuner products | 14,689,281 | 18,546,331 | ||||||||
Other video products and software | 1,478,686 | 2,265,129 | ||||||||
Total sales | $ | 34,017,233 | $ | 44,640,360 | ||||||
The Company sells its product through a domestic and international network of distributors and retailers. | ||||||||||
Net sales to customers by geographic location consist of: | ||||||||||
Fiscal years ended September 30, | ||||||||||
Sales to: | 2013 | 2012 | ||||||||
The Americas | 63 | % | 56 | % | ||||||
Northern Europe | 10 | % | 12 | % | ||||||
Southern Europe | 7 | % | 11 | % | ||||||
Central and Eastern Europe | 15 | % | 17 | % | ||||||
Asia | 5 | % | 4 | % | ||||||
Total | 100 | % | 100 | % | ||||||
Net long lived assets located in the United States, Europe and Asia were approximately 66%, 19% and 15% of total net long lived assets, respectively, at September 30, 2013, and 60%, 35% and 5%, respectively, at September 30, 2012. | ||||||||||
Use of Estimates | ||||||||||
In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company reviews all significant estimates affecting the financial statements on a recurring basis and records the effect of any adjustments when necessary. | ||||||||||
Cash Equivalents | ||||||||||
For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity date of three months or less to be cash equivalents. | ||||||||||
Concentrations of Credit Risk | ||||||||||
Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable. At times, such cash in banks are in excess of the FDIC insurance limit. Concentration of credit risk with respect to accounts receivable exists because the Company operates in one industry (also see Note 10- Significant Customer Information ). Although the Company operates in one business segment, it does not believe that it has a material concentration of credit risk either from an individual counter party or a group of counter parties, due to the large and diverse user group for its products. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. The Company maintains allowances to cover potential or anticipated losses for uncollectible amounts. | ||||||||||
Shipping and Handling Costs | ||||||||||
The Company records all shipping and handling charges in Cost of Sales. | ||||||||||
Revenue Recognition | ||||||||||
The Company sells through a sales channel which is comprised of retailers, PC manufacturers and distributors. The majority of the Company’s customers are granted lines of credit. The product is shipped on account with the majority of customers typically given 30 to 60 day payment terms. Those customers deemed as significant credit risks either pay in advance or issue the Company a letter of credit. The Company requires the customer to submit a purchase order to the Company. The product price and payment terms are fixed per the terms of the purchase order. Upon shipment of the order to the customer, the title to the goods is passed to the customer. The customer is legally obligated to pay for the order within the payment terms stated on the customer’s purchase order. The obligation to insure the products and the cost of pilferage, while in the customer’s possession, is the responsibility of the customer. The Company sells analog, hybrid video recorders or digital computer products that are stocked on the shelves of retailers and are subject to the normal consumer traffic that retail stores attract. Aside from normal store promotions such as advertisements in the store’s circular, the Company has no further obligation to assist in the resale of the products. | ||||||||||
The Company offers some of its customers a right of return. The Company, typically at the end of every quarter and based on historical data, evaluates its sales return reserve level based on the previous six months sales. Due to seasonal nature of the business coupled with the changing economic environment, management exercises judgment with regard to the historical data when calculating the reserve. | ||||||||||
The Company offers mail-in rebates on certain products at certain times as determined by the Company. The rebates are recorded as a reduction to sales. The Company also participates in limited cooperative advertising programs with retailers and distributors and classifies these expenses as a component of sales and marketing expenses. | ||||||||||
Warranty Policy | ||||||||||
The Company warrants that its products are free from defects in material and workmanship for a period of two years from the date of initial retail purchase. The warranty does not cover any losses or damage that occur as a result of improper installation, misuse or neglect and repair or modification by anyone other than the Company or its authorized repair agents. The Company accrues anticipated warranty costs based upon historical percentages of items returned for repair within one year of the initial sale. The Company’s repair rate of product under warranty has been minimal and the warranty reserve has not been material. | ||||||||||
Inventories | ||||||||||
Inventories are valued at the lower of cost (principally average cost) or market. Cost adjustments have been provided to reduce obsolete and/or excess inventory to its net realizable value. | ||||||||||
Property and Equipment | ||||||||||
Depreciation of office equipment and machinery and amortization of leasehold improvements is provided for using both accelerated and straight line methods over the estimated useful lives of the related assets as follows: | ||||||||||
Office Equipment and Machinery: 5 to 7 years | ||||||||||
Leasehold improvements: asset life or lease term, whichever is shorter | ||||||||||
Income taxes | ||||||||||
The Company follows the asset and liability method of accounting for income taxes. Deferred income taxes are recorded to reflect the temporary differences in the tax bases of the assets or liabilities and their reported amounts in the financial statements and for tax credit carry forwards. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the Company’s financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount currently estimated to be realized. Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50% likely to be realized upon ultimate settlement. Unrecognized tax benefits are tax benefits claimed in tax returns that do not meet these recognition and measurement standards. As of September 30, 2013 and 2012, the Company did not have any uncertain tax positions, and due to unused tax loss carry forwards, has three years worth of open domestic tax years. Due to unused foreign tax loss carry forwards, the Company has three years worth of open foreign tax years. The Company does not expect any open tax years or uncertain tax positions to have a significant impact on its results of operations or financial position during the next 12 months. The Company would classify interest and penalties related to any unrecognized tax benefits in its income tax provision. | ||||||||||
Long-Lived Assets | ||||||||||
Long-lived assets, such as property and equipment and intangible assets, are evaluated for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows from the use of these assets. When any such impairment exists, the related assets will be written down to fair value. Impairment indicators include, among other conditions: cash flow deficits, a historic or anticipated decline in net sales or operating profit, adverse legal or regulatory developments, accumulation of costs significantly in excess of amounts originally expected to acquire the asset, and a material decrease in the fair market value of some or all of the assets. Assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows generated by other asset groups. Amortization of intangible assets was provided using the straight-line method over the estimated useful lives of the assets. | ||||||||||
Research and Development | ||||||||||
Expenditures for research and development are charged to expense as incurred. | ||||||||||
Foreign Currency Translations and Transactions | ||||||||||
The Company’s Asian subsidiary’s functional currency is the reporting currency of the Company. | ||||||||||
The financial position and results of operations of the Company’s European subsidiaries are determined using Euros as the functional currency. Assets and liabilities of these subsidiaries are translated at the exchange rate in effect at each period end. Income statement accounts are translated at the average rate during the year. Translation adjustments arising from the translation to U.S. Dollars at differing exchange rates are included in the accumulated other comprehensive income (loss) account in stockholders’ equity (deficit). Gains and losses resulting from transactions that are denominated in currencies other than the functional currency are included in earnings as a component of other income. | ||||||||||
Fair Value of Financial Instruments | ||||||||||
The carrying amounts of certain financial instruments, including cash, receivables and accounts payable, approximate fair value as of September 30, 2013 and 2012 because of the relatively short term maturity of these instruments. | ||||||||||
Net income (loss) per share | ||||||||||
Basic net income (loss) per share includes no dilution and is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding for the period. Diluted net income (loss) per share reflects, in periods in which they have a dilutive effect, the dilution which would occur upon the exercise of stock options. A reconciliation of the shares used in calculating basic and diluted earnings (loss) per share follows: | ||||||||||
Years ended September 30, | ||||||||||
2013 | 2012 | |||||||||
Weighted average common stock outstanding-basic | 10,122,344 | 10,122,344 | ||||||||
Common Stock equivalents-stock options | - | - | ||||||||
Weighted average shares outstanding-diluted | 10,122,344 | 10,122,344 | ||||||||
Options to purchase 1,280,125 and 1,524,567 shares of common stock at prices ranging $0.74 to $7.45 and $0.77 to $7.45, respectively, were outstanding as of September 30, 2013 and 2012, respectively, but were not included in the computation of diluted net loss per share of common stock because they were anti-dilutive. | ||||||||||
Stock Based Compensation | ||||||||||
The Company determines the fair value of stock options using the Black-Scholes valuation model and such fair value is recognized as an expense over the service period, net of estimated forfeitures. As of September 30, 2013, options had been issued from four incentive option plans and one non qualified option plan. These options typically vest over a period of four to five years. Options granted have a contract term of 10 years. The fair value for these options was estimated at the date of grant using a Black-Scholes option pricing model with the weighted average assumptions in the table below based on the interest rate of a 7 year government bond and an expected volatility based on historical data of the Company’s stock. | ||||||||||
Stock option grant assumptions: | 2013 | 2012 | ||||||||
Weighted average fair value of grants | $ | 0.53 | $ | 0.63 | ||||||
Risk free interest rate | 1.72 | % | 1.81 | % | ||||||
Dividend yield | - | - | ||||||||
Expected volatility | 77 | % | 65 | % | ||||||
Expected life in years | 7 | 7 | ||||||||
As of September 30, 2013, there was $250,136 of total unrecognized compensation expense net of estimated forfeitures, related to non-vested share based compensation arrangements which is expected to be recognized over a weighted average period of 4 years. The total stock based compensation recorded during the years ended September 30, 2013 and 2012 was $112,426 and $128,489. For September 30, 2013 and 2012, stock compensation expense of $71,550 and $81,773 have been recorded to selling, general and administrative expense and $40,876 and $46,717 have been recorded to research and development expense. | ||||||||||
Accrued expenses - fees | ||||||||||
The Company uses various software and technologies in certain of its products. In certain cases, the Company purchases or licenses these software and technologies from third parties. The related purchase or license agreements provide for payment of royalty and other fees associated with the Company's sale of the related products. Such fees are estimated and get accrued and reflected as a component of cost of sales when those sales occur. In certain circumstances, such fees are not specifically covered by contractual arrangements but are nonetheless potentially due to the third party sellers or owners of the software and technologies. The Company uses all available applicable information in determining these estimates and thus the accrued amounts are subject to change as new information is made available to the Company. Occasionally, third parties audit the Company's historical determination of fees and adjustments are made. Accrued fees are subject to elimination after three to seven years if not billed by or requested from the third parties. | ||||||||||
Recent Accounting Pronouncements | ||||||||||
In February 2013, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance which amends Accounting Standards Codification (“ASC”) 220, “Comprehensive Income.” The amended guidance requires entities to provide information about the amounts reclassified out of accumulated other comprehensive income by component. Additionally, entities are required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required under U.S. generally accepted accounting principles (“GAAP”) to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures in the financial statements. The amended guidance does not change the current requirements for reporting net income or other comprehensive income. The amendments will become effective for the Company beginning with the first quarter of fiscal year 2014. As this is disclosure-only guidance, it will not have an impact on the Company’s consolidated financial results. | ||||||||||
In July 2013, the FASB issued new accounting guidance which requires the netting of unrecognized tax benefits against a | ||||||||||
deferred tax asset for a loss or other carry forward that would apply in settlement of the uncertain tax positions. Under the new standard, unrecognized tax benefits will be netted against all available same-jurisdiction loss or other tax carry forwards that would be utilized, rather than only against carry forwards that are created by the unrecognized tax benefits. The new guidance is effective prospectively to all existing unrecognized tax benefits, but entities can choose to apply it retrospectively. The guidance will be effective for the Company in its first quarter of fiscal year 2015, with early adoption permitted. The Company is currently assessing the impact this guidance will have on its consolidated statements of financial position and cash flows. | ||||||||||
Accounts_receivable
Accounts receivable | 12 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Accounts Receivable, Net [Abstract] | ' | |||||||
Financing Receivables [Text Block] | ' | |||||||
2. Accounts receivable | ||||||||
On a daily basis, the Company credit approves all orders scheduled for shipment. Customers who are over their credit limit or who have invoices that are past their due date are typically placed on credit hold until the credit problem is resolved. Credit reviews are performed on new customers. Existing customers who request an increased credit line are subject to a new credit review before increases in their credit line are approved. | ||||||||
The Company’s reserve for bad debt is computed using a specific identification method. On a quarterly basis the Company reviews the age and quality of its accounts receivable. The Company reserves amounts due us from companies that have gone bankrupt or companies that it evaluates are near bankrupt. | ||||||||
Receivables consist of: | ||||||||
· | Trade receivables from sales to customers | |||||||
· | Receivables pertaining to component parts purchased from the Company by its contract manufacturers which are excluded from sales | |||||||
· | General services tax (GST) and value added tax (VAT) reclaimable on goods purchased by the Company’s Asian and European locations | |||||||
· | Allowances, consisting of sales returns and allowances and bad debts | |||||||
· | Other minor non trade receivables | |||||||
The following is a listing by category of the Company’s accounts receivable as of September 30, 2013 and 2012. | ||||||||
As of September 30, | ||||||||
Receivable detail: | 2013 | 2012 | ||||||
Trade receivables | $ | 3,977,347 | $ | 6,319,544 | ||||
Allowance for doubtful accounts | -102,123 | -352,123 | ||||||
Sales returns and allowances | -1,694,948 | -3,349,340 | ||||||
Net trade receivables | $ | 2,180,276 | $ | 2,618,081 | ||||
Receivable from contract manufacturers | $ | 74,797 | $ | 1,649,444 | ||||
GST and VAT taxes receivables | 147,816 | 287,446 | ||||||
Other | 55,884 | 58,764 | ||||||
Total other non trade receivables | $ | 278,497 | $ | 1,995,654 | ||||
Inventories
Inventories | 12 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Inventory Disclosure [Text Block] | ' | |||||||
3. Inventories | ||||||||
Inventories consist of the following: | ||||||||
September 30, | ||||||||
2013 | 2012 | |||||||
Component Parts | $ | 3,795,919 | $ | 3,412,673 | ||||
Finished goods | 5,302,761 | 3,563,284 | ||||||
Subtotal | 9,098,680 | 6,975,957 | ||||||
Reserve for anticipated sales returns at cost | 1,380,368 | 2,521,899 | ||||||
Total | $ | 10,479,048 | $ | 9,497,856 | ||||
Property_and_Equipment
Property and Equipment | 12 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||
Property, Plant and Equipment Disclosure [Text Block] | ' | |||||||
4. Property and Equipment | ||||||||
The following is a summary of property and equipment: | ||||||||
September 30, | ||||||||
2013 | 2012 | |||||||
Office Equipment and Machinery | $ | 1,712,997 | $ | 1,663,528 | ||||
Less: Accumulated depreciation and amortization | -1,568,401 | -1,427,550 | ||||||
$ | 144,596 | $ | 235,978 | |||||
Depreciation and amortization expense totaled $ 121,864 and $ 178,190 for the years ended September 30, 2013 and 2012, respectively. | ||||||||
Intangible_Assets
Intangible Assets | 12 Months Ended |
Sep. 30, 2013 | |
Finite-Lived Intangible Assets, Net [Abstract] | ' |
Intangible Assets Disclosure [Text Block] | ' |
5. Intangible Assets | |
In December 2008, the Company purchased the PCTV Systems TV tuner business from Avid Technology Inc. Included as part of the purchase were intangible assets relating to customer relationships, value of technology and a covenant not to compete. Pursuant to a valuation analysis done by a third party valuation company, a value of $5,262,229 was assigned to the three intangible asset components. As of September 30, 2012, the intangible assets had gross carrying values of $1,644,353, $1,849,897 and $1,767,979, respectively, with aggregate accumulated amortization of $2,830,635. | |
In the five years since the purchase, the level of revenue generated from the acquired product line and the number of customers and revenue per customer has fallen to a point where management has evaluated that there has been an impairment in the value of the intangible asset. Due to continued decreases in sales during the second half of the fiscal year and management’s estimate for the future, the Company recorded a $1,676,758 impairment charge in the fourth quarter to fully write off these assets. | |
Accrued_Expenses_Fees
Accrued Expenses - Fees | 12 Months Ended |
Sep. 30, 2013 | |
Accounts Payable and Accrued Liabilities [Abstract] | ' |
Accrued Expenses Fees [Text Block] | ' |
6. Accrued Expenses – Fees | |
The Company uses various software and technologies in certain of its products. In certain cases, the Company purchases or licenses these software and technologies from third parties. The related purchase or license agreements provide for payment of royalty and other fees associated with the Company's sale of the related products. Such fees are estimated and get accrued and reflected as a component of cost of sales when those sales occur. In certain circumstances, such fees are not specifically covered by contractual arrangements but are nonetheless potentially due to the third party sellers or owners of the software and technologies. The Company uses all available applicable information in determining these estimates and thus the accrued amounts are subject to change as new information is made available to the Company. Occasionally, third parties audit the Company's historical determination of fees and adjustments are made. Accrued fees are subject to elimination after three to seven years if not billed by or requested from the third parties. Based on new information obtained during fiscal 2013 and 2012, including the completion of a significant third party audit in fiscal 2013, the Company reduced its accrued expenses - fees balance by $1,892,888 and $310,000, respectively. These estimate changes resulted in an improved gross margin during fiscal 2013 and 2012. As of September 30, 2013 and 2012, the amount of accrued expense-fees amounted to $12,497,060 and $12,943,022, respectively. | |
During fiscal 2013, $1,628,254 in fees were charged to cost of sales exclusive of the estimate changes described above and $210,430 in fees were paid to various third parties. During fiscal 2012, $1,484,875 in fees were charged to cost of sales exclusive of the estimate changes described above and $1,574,839 in fees were paid to various third parties. | |
Accrued_Expenses
Accrued Expenses | 12 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Accrued Expenses [Abstract] | ' | |||||||
Accrued Expenses [Text Block] | ' | |||||||
7. Accrued Expenses | ||||||||
Accrued expenses are for costs incurred for goods and services which are based on estimates, charged as incurred to operations as period costs, and for which no invoice has been rendered. Accrued expenses consist of the following: | ||||||||
2013 | 2012 | |||||||
Sales rebate program | $ | 1,232,493 | $ | 1,773,589 | ||||
Freight and duty | 858,933 | 979,712 | ||||||
Compensation | 222,595 | 207,683 | ||||||
Warranty repair | 79,667 | 110,878 | ||||||
Advertising and marketing | 196,603 | 200,367 | ||||||
Severance | - | 396,262 | ||||||
$ | 2,590,291 | $ | 3,668,491 | |||||
Income_Taxes
Income Taxes | 12 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Income Tax Disclosure [Abstract] | ' | |||||||
Income Tax Disclosure [Text Block] | ' | |||||||
.8. Income Taxes | ||||||||
The Company’s income tax provision consists of the following: | ||||||||
Years ended September 30, | ||||||||
2013 | 2012 | |||||||
Current tax expense: | ||||||||
State income taxes | $ | 40,000 | $ | 40,000 | ||||
Foreign income taxes | 100,670 | 110,204 | ||||||
Total current tax expense | 140,670 | 150,204 | ||||||
Deferred tax expense | ||||||||
Federal | 406,084 | 283,779 | ||||||
State | 47,792 | 33,399 | ||||||
Total deferred tax expense | 453,876 | 317,178 | ||||||
Total tax provision | $ | 594,546 | $ | 467,382 | ||||
Components of deferred taxes are as follows: | ||||||||
Years ended September 30, | ||||||||
2013 | 2012 | |||||||
Net operating losses domestic | $ | 435,231 | $ | 367,959 | ||||
Net operating losses foreign | 475,693 | 475,693 | ||||||
Sales returns and allowances | 119,540 | 314,428 | ||||||
Inventory obsolescence reserve | 132,135 | 355,627 | ||||||
Allowance for bad debts | 38,807 | 133,807 | ||||||
Vacation accrual | 24,588 | 24,588 | ||||||
Warranty reserve | 9,158 | 9,158 | ||||||
263 A inventory capitalization | 129,430 | 139,880 | ||||||
Depreciation | 51,898 | 39,928 | ||||||
Goodwill | 32,776 | 53,296 | ||||||
AMT credits | 172,321 | 177,704 | ||||||
R&D credits | 149,657 | 311,275 | ||||||
Subtotal | 1,771,234 | 2,403,343 | ||||||
Valuation allowance | -625,350 | -803,583 | ||||||
Net deferred tax assets | $ | 1,145,884 | $ | 1,599,760 | ||||
The Company’s net deferred tax asset is primarily attributable to its Hauppauge Computer Works Inc. domestic operations. In evaluating the future realization of the Company’s deferred tax asset and the corresponding valuation allowance as of September 30, 2013, the Company took into consideration: | ||||||||
⋅ before inventory disposals, write offs of accounts receivable and utilization of net operating loss carry-forwards, its domestic operations had taxable income for the last five fiscal years; | ||||||||
⋅ over the last five fiscal years its domestic operations had $4,909,657 in inventory disposals, account receivable write offs and net operating loss carry-forward utilization, which at a 38% blended tax rate provided a $1,865,670 reduction in taxes payable; | ||||||||
⋅ a three year forecast that included the impact of new products as well as an expense reduction plan that the Company put into effect which supports the deferred tax asset utilization of its domestic net operating losses and timing differences over the next three years; and | ||||||||
⋅ a history of utilization of prior domestic net operating losses. | ||||||||
After evaluating the circumstances listed above, it was the Company’s opinion that its net deferred tax asset of $1,145,884 is realizable as of September 30, 2013. | ||||||||
As of September 30, 2013, the Company had $1,495,345 in unrestricted domestic net operating losses expiring between 2028 and 2032. As of September 30, 2013, the Company had tax credit carry forwards for research and development expenses totaling $149,657 (which expire in 2018) which have a full valuation allowance recorded against them. In addition, there are foreign net operating losses which have a full valuation allowance recorded against them. | ||||||||
No provision has been made for income taxes on substantially all of the undistributed earnings of the Company’s foreign subsidiaries of approximately $1,543,000 at September 30, 2013 as the Company intends to indefinitely reinvest such earnings. | ||||||||
The difference between the actual income tax provision (benefit) and the tax provision computed by applying the Federal statutory income tax rate of 34% to the loss before income tax is attributable to the following: | ||||||||
Years ended September 30, | ||||||||
2013 | 2012 | |||||||
Income tax benefit at federal statutory rate | $ | -1,174,493 | $ | -705,863 | ||||
Reduction in valuation allowance | -178,233 | - | ||||||
Change in estimate of prior year income taxes | 105,372 | 22,820 | ||||||
Permanent differences-life insurance | 1,700 | 1,700 | ||||||
Permanent differences-compensation expense | 38,221 | 43,687 | ||||||
Permanent differences-other | 1,700 | 1,700 | ||||||
State income taxes, net of federal benefit | 57,943 | 26,400 | ||||||
Foreign earnings taxed at rates other than the federal statutory rate | 1,557,916 | 1,073,189 | ||||||
Other | 805 | 3,749 | ||||||
Other adjustments and AMT charges | 21,997 | - | ||||||
Expiring R&D credits | 161,618 | - | ||||||
Tax provision | $ | 594,546 | $ | 467,382 | ||||
The Company’s Luxembourg corporation functions as the entity which services the Company’s European customers. The Company has separate domestic and foreign tax entities, with the Luxembourg entity paying a royalty fee to the Company’s domestic operation for use of the Hauppauge name. | ||||||||
Including royalty fees received from the Company’s Luxembourg subsidiary, the Company’s domestic operation generated pretax income of $831,626 and $756,241 for the years ended September 30, 2013 and 2012, respectively. The Company’s international operations had a pretax loss including royalty fees of $4,286,016 and $2,848,072 for the years ended September 30, 2013 and 2012, respectively. | ||||||||
Stockholders_Equity
Stockholders' Equity | 12 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Stockholders Equity Note [Abstract] | ' | ||||||||||||||||
Stockholders Equity Note Disclosure [Text Block] | ' | ||||||||||||||||
9. Stockholders’ Equity | |||||||||||||||||
a. Treasury Stock | |||||||||||||||||
The Company’s Board of Directors approved a stock repurchase program which allows for the repurchase of 1,200,000 shares under the plan. As of September 30, 2013, the Company held 760,479 treasury shares purchased for $2,405,548 at an average purchase price of approximately $3.16 per share. | |||||||||||||||||
b. Stock Compensation Plans | |||||||||||||||||
On December 14, 1995, the Board of Directors authorized the adoption of the 1996 Non-Qualified Stock Option Plan (the "1996 Non-Qualified Plan") which was approved by the Company’s stockholders on March 5, 1996. The plan expired on March 5, 2006 and no more options can be issued under this plan. This plan does not qualify for treatment as an incentive stock option plan under the Internal Revenue Code. As of September 30, 2013 and 2012, 30,000 and 99,500 options, with an exercise price of $3.38 as of September 30, 2013 and ranging in exercise prices from $1.08 to $4.13 as of September 30, 2012, were outstanding under the 1996 Non-Qualified Plan. | |||||||||||||||||
On December 17, 1997, the Company’s Board of Directors adopted and authorized a new incentive stock option plan pursuant to section 422A of the Internal Revenue Code. This plan was approved by the Company’s stockholders at the Company’s March 12, 1998 Annual Stockholders’ Meeting. This plan terminated on December 16, 2007 and no further options can be issued under this plan. There were no options outstanding as of September 30, 2013 and 40,925 options outstanding with an exercise price of $1.08 as of September 2, 2012. | |||||||||||||||||
The Company’s Board of Directors, on May 9, 2000, adopted the 2000 Performance and Equity Incentive Plan (the “2000 Plan”). This plan was approved by the stockholders at the Company’s July 18, 2000 Annual Stockholders’ Meeting. The purpose of the 2000 Plan is to attract, retain and motivate key employees, directors and non-employee consultants. The plan expired on May 9, 2010 and no more options can be issued under this plan. There were no options outstanding as of September 30, 2013 and 77,517 options were outstanding from this plan with an exercise price of $1.08 as of September 30, 2012. | |||||||||||||||||
The Company’s Board of Directors on May 16, 2003 adopted the 2003 Performance and Equity Incentive Plan | |||||||||||||||||
(the “2003 Plan”). This plan was approved by the stockholders at the Company’s September 22, 2003 Annual Stockholders’ Meeting. The purpose of the 2003 Plan is to provide equity ownership opportunities and performance based incentives to attract and retain the services of key employees, Directors and non-employee consultants of the Company and to motivate such individuals to put forth maximum efforts on behalf of the Company. The plan expired on May 16, 2013 and no more options can be issued under this plan. As of September 30, 2013 and 2012, 1,067,125 and 1,268,625 options were outstanding from this plan ranging in exercise prices from $0.77 to $7.45 as of September 30, 2013 and September 30, 2012. | |||||||||||||||||
The Company’s Board of Directors on May 17, 2012 adopted the 2012 Performance and Equity Incentive Plan (the “2012 Plan”). This plan was approved by the stockholders at the Company’s August 15, 2012 Annual Stockholders’ Meeting. The purpose of the 2012 Plan is to provide equity ownership opportunities and performance based incentives to attract and retain the services of eligible participants who are key employees, directors and non-employee consultants of the Company, so as to motivate such individuals to put forth maximum efforts on behalf of the Company and to promote the success of the Company’s business. | |||||||||||||||||
The 2012 Plan, as adopted reserves up to 1,000,000 shares of common stock. The number of shares is subject to adjustment in the event of any merger, reorganization, consolidation, recapitalization, stock dividend, stock split (including reverse stock splits) or other changes in corporate structure affecting the common stock. All of the common stock which may be awarded under the 2012 Plan may be subject to delivery through Incentive Stock Options. No Award may be granted under the 2012 Plan after May 16, 2022. An Award means an award of a Stock Option, Stock Appreciation Right, Restricted Stock, Performance Award, Other Stock Award or other award or benefit as provided in the 2012 Plan. The 2012 Plan will be administered by one or more different Committees with respect to the different groups of Eligible Participants to the extent desirable to qualify Awards in accordance with the requirements of Applicable Laws. A Committee consists of (i) the Board or (ii) a Committee of two or more outside directors or non-employee directors, as provided in the 2012 Plan. | |||||||||||||||||
The Board may amend, suspend or discontinue the 2012 Plan or any portion thereof at any time, but no amendment, suspension or discontinuation shall be made which would impair the right of any Holder of an Award without such person’s consent. Stockholder approval is required to increase the number of shares reserved for the purposes of the 2012 Plan above the number expressly provided in the 2012 Plan, decrease the price of any Stock Option to less than the Fair Market Value on the date of grant, change the class of employees eligible to participate in the 2012 Plan or extend maximum option periods under the 2012 Plan. Subject to the foregoing, the Board has the authority to amend the 2012 Plan to take into account changes in law and tax and accounting rules. However, only the Committee has the authority to make any such change in the 2012 Plan or any Award intended to comply with the provisions of Section 162 (m) of the Code. The Board may institute loan programs to assist participants who are not Directors or Executive Officers of the Company or a Subsidiary in financing the exercise of options through full recourse interest bearing notes not to exceed the cash consideration payable plus all applicable taxes in connection with the acquisition of shares. | |||||||||||||||||
Stock Options granted under the 2012 Plan may be of two types, those intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended (“Incentive Stock Options”) and those not so intended to qualify (“Non-Qualified Stock Options”). To the extent that a Stock Option does not qualify as an Incentive Stock Option, it shall constitute a Non-Qualified Stock Option. Non-employee Directors and non-employee consultants may only be granted Non-Qualified Stock Options. An Incentive Stock Option may be granted only to Eligible Participants who are employees of the Company or a Subsidiary at the time of the Award. A change in status of the grantee of an Incentive Stock Option to a non-employee consultant will cause the Incentive Stock Option to be treated as a Non-Qualified Stock Option. The Committee may condition the grant and vesting of Stock Options subject to continued employment or service with the Company, as the case may be and/or passage of time. Such Stock Options may be further conditioned upon the attainment of specified Performance Goals (as may be adjusted pursuant to the 2012 Plan) and the level of achievement against such Performance Goals as deemed appropriate by the Committee, or such other factors or criteria as the Committee shall determine in its sole discretion. As of September 30, 2013 and 2012, there were 183,00038,000 options were outstanding under this plan at an exercise prices ranging from $0.74 to $1.24 as of September 30, 2013 and $1.24 as of September 30, 2012. | |||||||||||||||||
Incentive Stock Options granted under the 2012 Plan shall be exercisable at Fair Market Value at the date of grant which is generally the closing price of a share of common stock as of such date, or such higher price as shall be determined by the Committee. Incentive Stock Options shall be exercisable no more than 10 years after the date of grant. Non-Qualified Stock Options shall be exercisable at the Fair Market Value of the common stock on the award date and shall be exercisable no more than 10 years and 1 month from the date of grant. Stock Options are exercisable at such times and under such terms and conditions as shall be determined by the Committee. If Incentive Stock Options are granted to any owner of 10% or more of the combined voting power of the Company, the exercise price shall be at least 110% of the Fair Market Value on the date of grant, and the option must state that it is not exercisable after the expiration of 5 years from the date of grant. To the extent that the aggregate Fair Market Value (determined at the time the option is granted) of common stock with respect to which Incentive Stock Options are exercisable for the first time by the Optionee during any calendar year exceeds $100,000, such options will not be Incentive Stock Options. | |||||||||||||||||
The Committee may grant options with a reload feature. A reload feature shall only apply when the option price is paid by delivery of common stock held by the optionee for at least 12 months. The agreement for options containing the reload feature shall provide that the option holder shall receive, contemporaneously with the payment of the option price in common stock, a Reload Option to purchase, to the extent authorized by the Committee, (a) the number of shares of common stock equal to the number of shares of common stock used to exercise the option, and (b) the number of shares of common stock used to satisfy any tax withholding requirement incident to the underlying Stock Option. The exercise price of the Reload Option shall be equal to the Fair Market Value of the common stock on the date of grant of the Reload Option and each Reload Option shall be fully exercisable six months from the effective date of the grant of such Reload Option. The term of the Reload Option shall be equal to the remaining term of the option which gave rise to the Reload Option. No additional Reload Options shall be granted to Optionees when Stock Options are exercised following the termination of the Optionee’s employment. Notwithstanding the fact that the underlying option may be an Incentive Stock Option, a Reload Option is not intended to qualify as an Incentive Stock Option. To date, no options with reload features have been granted. | |||||||||||||||||
Stock Appreciation Rights (“SARs”) may be granted in conjunction with all or part of any Stock Option granted under the 2012 Plan or independent of a Stock Option grant. SARs shall be subject to such terms and conditions as shall be determined by the Committee. Upon the exercise of a SAR, a holder shall be entitled to receive an amount in cash, common stock, or both, equal in value to the excess of the Fair Market Value over the exercise price per share of common stock. In general, the exercise price shall be the Fair Market Value of the common stock on the award date. Shares of Restricted Stock may also be issued either alone or in addition to other Awards granted under the 2012 Plan. The Committee shall determine the Eligible Participants to whom, and the time or times at which grants of, Restricted Stock will be made, the number of shares to be awarded, the time or times within which such Awards may be subject to forfeiture and any other terms and conditions of the award. To date, no SARs, Restricted Stock or performance awards have been granted. | |||||||||||||||||
Upon a Change in Control as defined in the 2012 Plan, but only to the extent determined by the Committee, Stock Options, SARs, Restricted Stock Awards, Other Stock Awards and Performance Awards (each, an “Award”) will vest, provided that no Award granted to an employee of the Company shall vest or be exercisable unless the employee’s employment is terminated within 24 months from the date of the Change in Control, but such Award will not vest if the employee is terminated for Cause, as defined in the 2012 Plan or if the employee resigns his employment without Good Reason, as defined in the 2012 Plan. Otherwise, the Award shall not vest and be exercisable upon a Change in Control, unless otherwise determined. The employee shall have 30 days from after his employment is terminated due to a Change in Control to exercise all unexercised Awards. However, in the event of the death or disability of the employee, all unexercised Awards must be exercised within twelve (12) months after the death or disability of the employee. | |||||||||||||||||
A summary of the of the Company’s fixed options plans as of September 30, 2013 and 2012 and changes during the years ended those dates is presented below: | |||||||||||||||||
Weighted | |||||||||||||||||
Weighted | Weighted | Average | |||||||||||||||
Average | Average | Contract | Aggregated | ||||||||||||||
Exercise | Non | Exercise | Term | Intrinsic | |||||||||||||
ISO | Price | Qualified | Price | (Years) | Value | ||||||||||||
Balance at September 30, 2011 | 1,283,192 | $ | 3.42 | 99,500 | $ | 3.03 | |||||||||||
Granted | 297,000 | 0.98 | - | - | |||||||||||||
Forfeited | -155,125 | 2.29 | - | - | |||||||||||||
Balance at September 30, 2012 | 1,425,067 | $ | 3.04 | 99,500 | $ | 3.03 | |||||||||||
Granted | 145,000 | 0.74 | - | - | |||||||||||||
Forfeited | -319,942 | 2.39 | -69,500 | 3.14 | |||||||||||||
Balance at September 30, 2013 | 1,250,125 | $ | 2.97 | 30,000 | $ | 3.38 | 4.33 | $ | - | ||||||||
Options exercisable at September 30, 2013 | 996,125 | $ | 3.49 | 30,000 | $ | 3.38 | 5.22 | $ | - | ||||||||
There were no options exercised during the years ended September 30, 2013 and 2012. | |||||||||||||||||
Significant_Customer_Informati
Significant Customer Information | 12 Months Ended |
Sep. 30, 2013 | |
Significant Customer Information [Abstract] | ' |
Significant Customer Information [Text Block] | ' |
10. Significant Customer Information | |
For fiscal 2013, the Company had no customers that accounted for over 10% of its net sales. For fiscal 2012, the Company had one customer, Best Buy, that accounted for approximately 10.3% of its net sales. | |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Sep. 30, 2013 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions Disclosure [Text Block] | ' |
11. Related Party Transactions | |
The Company occupies a facility located in Hauppauge, New Yorkthat is used for executive offices, sales, research and development, and for the testing, storage and shipping of its products. Hauppauge Computer Works Inc. leases the premises from a real estate limited liability company, which is majority owned by certain current and former executive officers or their spouses who also own in excess of 10% of the shares of the Company’s common stock as of September 30, 2013. | |
The previous lease expired on August 31, 2011. On August 25, 2011, the Company entered into a new five year lease, commencing September 1, 2011 and ending August 31, 2016. Under the expired lease the Company was paying annual rent of $337,656. In recognition of the current real estate market conditions, the Company was able to obtain a rent reduction. The new lease calls for base rent of $250,000 in the first and second years of the lease; base rent of $257,500 in the third and fourth years of the lease and base rent of $265,225 for the fifth year of the lease. The rent is payable monthly on the first day of each month. The execution of the lease agreement was approved by our Board of Directors, following the recommendation of our Audit Committee. Under the lease, the Company is obligated to pay real estate taxes, utilities, insurance and operating costs of maintaining and repairing the premises during the term of the lease. | |
Litigation
Litigation | 12 Months Ended |
Sep. 30, 2013 | |
Litigation [Abstract] | ' |
Litigation [Text Block] | ' |
12. Litigation | |
In the normal course of business, the Company is party to various claims and/or litigation. To the best of its knowledge, management believes that there is currently no material litigation which, considered individually or in the aggregate, would have a material adverse effect on the Company’s financial position and results of operations. | |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Sep. 30, 2013 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Commitments and Contingencies Disclosure [Text Block] | ' | ||||
13. Commitments and Contingencies | |||||
The Company occupies space leased from both related parties and non related parties. Rent expense to related parties and non related third parties totaled approximately $657,000 and $683,000 for the years ended September 30, 2013 and 2012, respectively. | |||||
The Company is responsible to pay real estate taxes, utilities, insurance and operating costs of maintaining and repairing the premises. | |||||
Minimum annual lease payments to related parties and unrelated third parties are as follows: | |||||
Years Ended September 30, | |||||
2014 | $ | 542,770 | |||
2015 | 490,416 | ||||
2016 | 406,065 | ||||
2017 | 97,500 | ||||
Total | $ | 1,536,751 | |||
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended |
Sep. 30, 2013 | |
Fair Value Disclosures [Abstract] | ' |
Fair Value Disclosures [Text Block] | ' |
14. Fair Value Measurements | |
A fair value measurement assumes a transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. A hierarchy for observable and unobservable inputs used to measure fair value are described below: | |
⋅ Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. | |
⋅ Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. | |
⋅ Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. | |
In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value. The Company has no financial assets or liabilities carried at fair value on a recurring basis. | |
Additionally, on a nonrecurring basis, the Company uses fair value measures when analyzing asset impairment. Long-lived assets and certain identifiable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If it is determined such indicators are present and the review indicates that the assets will not be fully recoverable, based on undiscounted estimated cash flows over the remaining amortization periods, their carrying values are reduced to estimated fair value. Measurements based on undiscounted cash flows are considered to be Level 3 inputs. | |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Accounting Policies [Abstract] | ' | |||||||||
Consolidation, Policy [Policy Text Block] | ' | |||||||||
Principles of Consolidation | ||||||||||
The consolidated financial statements include the accounts of Hauppauge Digital Inc. and its wholly-owned subsidiaries, Hauppauge Computer Works Inc., Hauppauge Digital Inc. Taiwan, PCTV Systems Sarl, its branch PCTV Systems GmbH, Hauppauge Digital Europe Sarl, its branch Hauppauge Digital Europe Sarl Ireland and Hauppauge Digital Europe Sarl’s wholly-owned subsidiaries, Hauppauge Digital Asia Pte Ltd, Hauppauge Computer Works GmbH and Hauppauge Computer Works, Ltd, ( collectively, the “Company”). All inter-company accounts and transactions have been eliminated. | ||||||||||
Certain reclassifications have been made to prior consolidated financial statements to conform to the current classifications. | ||||||||||
Business Combinations Policy [Policy Text Block] | ' | |||||||||
Nature of Business | ||||||||||
The Company is a public company that manufactures and markets innovative solutions that enable television and video content to be digitally viewed or recorded on personal computers and mobile devices. The Company was incorporated in August 1994 and the Company is headquartered in Hauppauge, New York with: | ||||||||||
· Administrative offices in New York, Ireland and Singapore; | ||||||||||
· Sales offices in Germany, London, Paris, The Netherlands, Sweden, Italy, Spain, Singapore, Taiwan and California; and | ||||||||||
· Research and development centers in Hauppauge, New York, Braunschweig, Germany and Taipei,Taiwan. | ||||||||||
The Company’s products fall under three product categories: | ||||||||||
· High Definition Video Recorders | ||||||||||
· TV Receivers and Tuners | ||||||||||
· Other Video Products and Software | ||||||||||
Basis of Presentation [Policy Text Block] | ' | |||||||||
Basis of Presentation | ||||||||||
The Company’s cash requirements for the next twelve months will include, among other things, the cash to fund the Company’s operating and working capital needs. The Company relies exclusively upon cash generated from operations to fund these needs. The Company does not have a working capital line of credit or other borrowing facility in place to draw upon in the event that cash from its operations is insufficient to fund its capital requirements to sustain its operations. The Company’s cash and cash equivalents as of September 30, 2013 and its internally generated cash will not provide sufficient liquidity to meet its capital needs for the next twelve months, and additional sources of cash may be required to meet its capital needs. There can be no assurance that the Company will be able to obtain additional sources of cash if needed. The financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that might result from the outcome of the uncertainty described here. | ||||||||||
In recognition of the operating losses, loss of sales and reduction of cash, the Company has been implementing expense reduction initiatives to lower the Company’s expense structure to bring it in line with sales. The Company has also retained on a consulting basis an advisory firm to assist it in considering and pursuing strategic alternatives, including possible additional financing to fund its capital needs and the restructuring of its business. | ||||||||||
If any strategic or restructuring plan that the Company develops and implements is not successful, or if the Company is not able to raise additional capital, there is a substantial risk that that the Company might not be able to sustain its operations at current levels, which would have a material adverse effect on its business, operating results and financial condition. | ||||||||||
Segment Reporting, Policy [Policy Text Block] | ' | |||||||||
Product Segment and Geographic Information | ||||||||||
The Company operates primarily in one business segment, which is the development, marketing and manufacturing of TV receiver and video recording products for the personal computer market. Most of the Company’s products are similar in function and share commonality of component parts and manufacturing processes. The Company’s products are either sold, or can be sold, by the same retailers and distributors in the Company’s marketing channel. The Company also sells its TV tuner products directly to PC manufacturers. The Company evaluates its product lines under the functional categories of video recorder products, such as the USB-Live2, HD-PVR and Colossus, TV tuner products such as the Broadway, digital TV tuners and hybrid digital/analog TV tuners, and other video products and software. | ||||||||||
Sales by functional category are as follows: | ||||||||||
Fiscal years ended September 30, | ||||||||||
2013 | 2012 | |||||||||
Product line sales | ||||||||||
Video recorder products | $ | 17,849,266 | $ | 23,828,900 | ||||||
TV tuner products | 14,689,281 | 18,546,331 | ||||||||
Other video products and software | 1,478,686 | 2,265,129 | ||||||||
Total sales | $ | 34,017,233 | $ | 44,640,360 | ||||||
The Company sells its product through a domestic and international network of distributors and retailers. | ||||||||||
Net sales to customers by geographic location consist of: | ||||||||||
Fiscal years ended September 30, | ||||||||||
Sales to: | 2013 | 2012 | ||||||||
The Americas | 63 | % | 56 | % | ||||||
Northern Europe | 10 | % | 12 | % | ||||||
Southern Europe | 7 | % | 11 | % | ||||||
Central and Eastern Europe | 15 | % | 17 | % | ||||||
Asia | 5 | % | 4 | % | ||||||
Total | 100 | % | 100 | % | ||||||
Net long lived assets located in the United States, Europe and Asia were approximately 66%, 19% and 15% of total net long lived assets, respectively, at September 30, 2013, and 60%, 35% and 5%, respectively, at September 30, 2012. | ||||||||||
Use of Estimates, Policy [Policy Text Block] | ' | |||||||||
Use of Estimates | ||||||||||
In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company reviews all significant estimates affecting the financial statements on a recurring basis and records the effect of any adjustments when necessary. | ||||||||||
Cash and Cash Equivalents, Policy [Policy Text Block] | ' | |||||||||
Cash Equivalents | ||||||||||
For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity date of three months or less to be cash equivalents. | ||||||||||
Concentration Risk, Credit Risk, Policy [Policy Text Block] | ' | |||||||||
Concentrations of Credit Risk | ||||||||||
Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable. At times, such cash in banks are in excess of the FDIC insurance limit. Concentration of credit risk with respect to accounts receivable exists because the Company operates in one industry (also see Note 10- Significant Customer Information ). Although the Company operates in one business segment, it does not believe that it has a material concentration of credit risk either from an individual counter party or a group of counter parties, due to the large and diverse user group for its products. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. The Company maintains allowances to cover potential or anticipated losses for uncollectible amounts. | ||||||||||
Shipping and Handling Cost, Policy [Policy Text Block] | ' | |||||||||
Shipping and Handling Costs | ||||||||||
The Company records all shipping and handling charges in Cost of Sales. | ||||||||||
Revenue Recognition, Policy [Policy Text Block] | ' | |||||||||
Revenue Recognition | ||||||||||
The Company sells through a sales channel which is comprised of retailers, PC manufacturers and distributors. The majority of the Company’s customers are granted lines of credit. The product is shipped on account with the majority of customers typically given 30 to 60 day payment terms. Those customers deemed as significant credit risks either pay in advance or issue the Company a letter of credit. The Company requires the customer to submit a purchase order to the Company. The product price and payment terms are fixed per the terms of the purchase order. Upon shipment of the order to the customer, the title to the goods is passed to the customer. The customer is legally obligated to pay for the order within the payment terms stated on the customer’s purchase order. The obligation to insure the products and the cost of pilferage, while in the customer’s possession, is the responsibility of the customer. The Company sells analog, hybrid video recorders or digital computer products that are stocked on the shelves of retailers and are subject to the normal consumer traffic that retail stores attract. Aside from normal store promotions such as advertisements in the store’s circular, the Company has no further obligation to assist in the resale of the products. | ||||||||||
The Company offers some of its customers a right of return. The Company, typically at the end of every quarter and based on historical data, evaluates its sales return reserve level based on the previous six months sales. Due to seasonal nature of the business coupled with the changing economic environment, management exercises judgment with regard to the historical data when calculating the reserve. | ||||||||||
The Company offers mail-in rebates on certain products at certain times as determined by the Company. The rebates are recorded as a reduction to sales. The Company also participates in limited cooperative advertising programs with retailers and distributors and classifies these expenses as a component of sales and marketing expenses. | ||||||||||
Warranty Policy [Policy Text Block] | ' | |||||||||
Warranty Policy | ||||||||||
The Company warrants that its products are free from defects in material and workmanship for a period of two years from the date of initial retail purchase. The warranty does not cover any losses or damage that occur as a result of improper installation, misuse or neglect and repair or modification by anyone other than the Company or its authorized repair agents. The Company accrues anticipated warranty costs based upon historical percentages of items returned for repair within one year of the initial sale. The Company’s repair rate of product under warranty has been minimal and the warranty reserve has not been material. | ||||||||||
Inventory, Policy [Policy Text Block] | ' | |||||||||
Inventories | ||||||||||
Inventories are valued at the lower of cost (principally average cost) or market. Cost adjustments have been provided to reduce obsolete and/or excess inventory to its net realizable value. | ||||||||||
Property, Plant and Equipment, Policy [Policy Text Block] | ' | |||||||||
Property and Equipment | ||||||||||
Depreciation of office equipment and machinery and amortization of leasehold improvements is provided for using both accelerated and straight line methods over the estimated useful lives of the related assets as follows: | ||||||||||
Office Equipment and Machinery: 5 to 7 years | ||||||||||
Leasehold improvements: asset life or lease term, whichever is shorter | ||||||||||
Income Tax, Policy [Policy Text Block] | ' | |||||||||
Income taxes | ||||||||||
The Company follows the asset and liability method of accounting for income taxes. Deferred income taxes are recorded to reflect the temporary differences in the tax bases of the assets or liabilities and their reported amounts in the financial statements and for tax credit carry forwards. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the Company’s financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount currently estimated to be realized. Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50% likely to be realized upon ultimate settlement. Unrecognized tax benefits are tax benefits claimed in tax returns that do not meet these recognition and measurement standards. As of September 30, 2013 and 2012, the Company did not have any uncertain tax positions, and due to unused tax loss carry forwards, has three years worth of open domestic tax years. Due to unused foreign tax loss carry forwards, the Company has three years worth of open foreign tax years. The Company does not expect any open tax years or uncertain tax positions to have a significant impact on its results of operations or financial position during the next 12 months. The Company would classify interest and penalties related to any unrecognized tax benefits in its income tax provision. | ||||||||||
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | ' | |||||||||
Long-Lived Assets | ||||||||||
Long-lived assets, such as property and equipment and intangible assets, are evaluated for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows from the use of these assets. When any such impairment exists, the related assets will be written down to fair value. Impairment indicators include, among other conditions: cash flow deficits, a historic or anticipated decline in net sales or operating profit, adverse legal or regulatory developments, accumulation of costs significantly in excess of amounts originally expected to acquire the asset, and a material decrease in the fair market value of some or all of the assets. Assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows generated by other asset groups. Amortization of intangible assets was provided using the straight-line method over the estimated useful lives of the assets. | ||||||||||
Research and Development Expense, Policy [Policy Text Block] | ' | |||||||||
Research and Development | ||||||||||
Expenditures for research and development are charged to expense as incurred. | ||||||||||
Foreign Currency Transactions and Translations Policy [Policy Text Block] | ' | |||||||||
Foreign Currency Translations and Transactions | ||||||||||
The Company’s Asian subsidiary’s functional currency is the reporting currency of the Company. | ||||||||||
The financial position and results of operations of the Company’s European subsidiaries are determined using Euros as the functional currency. Assets and liabilities of these subsidiaries are translated at the exchange rate in effect at each period end. Income statement accounts are translated at the average rate during the year. Translation adjustments arising from the translation to U.S. Dollars at differing exchange rates are included in the accumulated other comprehensive income (loss) account in stockholders’ equity (deficit). Gains and losses resulting from transactions that are denominated in currencies other than the functional currency are included in earnings as a component of other income. | ||||||||||
Fair Value of Financial Instruments, Policy [Policy Text Block] | ' | |||||||||
Fair Value of Financial Instruments | ||||||||||
The carrying amounts of certain financial instruments, including cash, receivables and accounts payable, approximate fair value as of September 30, 2013 and 2012 because of the relatively short term maturity of these instruments. | ||||||||||
Earnings Per Share, Policy [Policy Text Block] | ' | |||||||||
Net income (loss) per share | ||||||||||
Basic net income (loss) per share includes no dilution and is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding for the period. Diluted net income (loss) per share reflects, in periods in which they have a dilutive effect, the dilution which would occur upon the exercise of stock options. A reconciliation of the shares used in calculating basic and diluted earnings (loss) per share follows: | ||||||||||
Years ended September 30, | ||||||||||
2013 | 2012 | |||||||||
Weighted average common stock outstanding-basic | 10,122,344 | 10,122,344 | ||||||||
Common Stock equivalents-stock options | - | - | ||||||||
Weighted average shares outstanding-diluted | 10,122,344 | 10,122,344 | ||||||||
Options to purchase 1,280,125 and 1,524,567 shares of common stock at prices ranging $0.74 to $7.45 and $0.77 to $7.45, respectively, were outstanding as of September 30, 2013 and 2012, respectively, but were not included in the computation of diluted net loss per share of common stock because they were anti-dilutive. | ||||||||||
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | ' | |||||||||
Stock Based Compensation | ||||||||||
The Company determines the fair value of stock options using the Black-Scholes valuation model and such fair value is recognized as an expense over the service period, net of estimated forfeitures. As of September 30, 2013, options had been issued from four incentive option plans and one non qualified option plan. These options typically vest over a period of four to five years. Options granted have a contract term of 10 years. The fair value for these options was estimated at the date of grant using a Black-Scholes option pricing model with the weighted average assumptions in the table below based on the interest rate of a 7 year government bond and an expected volatility based on historical data of the Company’s stock. | ||||||||||
Stock option grant assumptions: | 2013 | 2012 | ||||||||
Weighted average fair value of grants | $ | 0.53 | $ | 0.63 | ||||||
Risk free interest rate | 1.72 | % | 1.81 | % | ||||||
Dividend yield | - | - | ||||||||
Expected volatility | 77 | % | 65 | % | ||||||
Expected life in years | 7 | 7 | ||||||||
As of September 30, 2013, there was $250,136 of total unrecognized compensation expense net of estimated forfeitures, related to non-vested share based compensation arrangements which is expected to be recognized over a weighted average period of 4 years. The total stock based compensation recorded during the years ended September 30, 2013 and 2012 was $112,426 and $128,489. For September 30, 2013 and 2012, stock compensation expense of $71,550 and $81,773 have been recorded to selling, general and administrative expense and $40,876 and $46,717 have been recorded to research and development expense. | ||||||||||
Accrued Expenses Fees [Policy Text Block] | ' | |||||||||
Accrued expenses - fees | ||||||||||
The Company uses various software and technologies in certain of its products. In certain cases, the Company purchases or licenses these software and technologies from third parties. The related purchase or license agreements provide for payment of royalty and other fees associated with the Company's sale of the related products. Such fees are estimated and get accrued and reflected as a component of cost of sales when those sales occur. In certain circumstances, such fees are not specifically covered by contractual arrangements but are nonetheless potentially due to the third party sellers or owners of the software and technologies. The Company uses all available applicable information in determining these estimates and thus the accrued amounts are subject to change as new information is made available to the Company. Occasionally, third parties audit the Company's historical determination of fees and adjustments are made. Accrued fees are subject to elimination after three to seven years if not billed by or requested from the third parties. | ||||||||||
New Accounting Pronouncements, Policy [Policy Text Block] | ' | |||||||||
Recent Accounting Pronouncements | ||||||||||
In February 2013, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance which amends Accounting Standards Codification (“ASC”) 220, “Comprehensive Income.” The amended guidance requires entities to provide information about the amounts reclassified out of accumulated other comprehensive income by component. Additionally, entities are required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required under U.S. generally accepted accounting principles (“GAAP”) to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures in the financial statements. The amended guidance does not change the current requirements for reporting net income or other comprehensive income. The amendments will become effective for the Company beginning with the first quarter of fiscal year 2014. As this is disclosure-only guidance, it will not have an impact on the Company’s consolidated financial results. | ||||||||||
In July 2013, the FASB issued new accounting guidance which requires the netting of unrecognized tax benefits against a | ||||||||||
deferred tax asset for a loss or other carry forward that would apply in settlement of the uncertain tax positions. Under the new standard, unrecognized tax benefits will be netted against all available same-jurisdiction loss or other tax carry forwards that would be utilized, rather than only against carry forwards that are created by the unrecognized tax benefits. The new guidance is effective prospectively to all existing unrecognized tax benefits, but entities can choose to apply it retrospectively. The guidance will be effective for the Company in its first quarter of fiscal year 2015, with early adoption permitted. The Company is currently assessing the impact this guidance will have on its consolidated statements of financial position and cash flows. | ||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Accounting Policies [Abstract] | ' | |||||||||
Schedule Of Revenue By Functional Category [Table Text Block] | ' | |||||||||
Sales by functional category are as follows: | ||||||||||
Fiscal years ended September 30, | ||||||||||
2013 | 2012 | |||||||||
Product line sales | ||||||||||
Video recorder products | $ | 17,849,266 | $ | 23,828,900 | ||||||
TV tuner products | 14,689,281 | 18,546,331 | ||||||||
Other video products and software | 1,478,686 | 2,265,129 | ||||||||
Total sales | $ | 34,017,233 | $ | 44,640,360 | ||||||
Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block] | ' | |||||||||
Net sales to customers by geographic location consist of: | ||||||||||
Fiscal years ended September 30, | ||||||||||
Sales to: | 2013 | 2012 | ||||||||
The Americas | 63 | % | 56 | % | ||||||
Northern Europe | 10 | % | 12 | % | ||||||
Southern Europe | 7 | % | 11 | % | ||||||
Central and Eastern Europe | 15 | % | 17 | % | ||||||
Asia | 5 | % | 4 | % | ||||||
Total | 100 | % | 100 | % | ||||||
Schedule of Weighted Average Number of Shares [Table Text Block] | ' | |||||||||
A reconciliation of the shares used in calculating basic and diluted earnings (loss) per share follows: | ||||||||||
Years ended September 30, | ||||||||||
2013 | 2012 | |||||||||
Weighted average common stock outstanding-basic | 10,122,344 | 10,122,344 | ||||||||
Common Stock equivalents-stock options | - | - | ||||||||
Weighted average shares outstanding-diluted | 10,122,344 | 10,122,344 | ||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | ' | |||||||||
The fair value for these options was estimated at the date of grant using a Black-Scholes option pricing model with the weighted average assumptions in the table below based on the interest rate of a 7 year government bond and an expected volatility based on historical data of the Company’s stock. | ||||||||||
Stock option grant assumptions: | 2013 | 2012 | ||||||||
Weighted average fair value of grants | $ | 0.53 | $ | 0.63 | ||||||
Risk free interest rate | 1.72 | % | 1.81 | % | ||||||
Dividend yield | - | - | ||||||||
Expected volatility | 77 | % | 65 | % | ||||||
Expected life in years | 7 | 7 | ||||||||
Accounts_receivable_Tables
Accounts receivable (Tables) | 12 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Accounts Receivable, Net [Abstract] | ' | |||||||
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | ' | |||||||
The following is a listing by category of the Company’s accounts receivable as of September 30, 2013 and 2012. | ||||||||
As of September 30, | ||||||||
Receivable detail: | 2013 | 2012 | ||||||
Trade receivables | $ | 3,977,347 | $ | 6,319,544 | ||||
Allowance for doubtful accounts | -102,123 | -352,123 | ||||||
Sales returns and allowances | -1,694,948 | -3,349,340 | ||||||
Net trade receivables | 2,180,276 | $ | 2,618,081 | |||||
Receivable from contract manufacturers | $ | 74,797 | $ | 1,649,444 | ||||
GST and VAT taxes receivables | 147,816 | 287,446 | ||||||
Other | 55,884 | 58,764 | ||||||
Total other non trade receivables | $ | 278,497 | $ | 1,995,654 | ||||
Inventories_Tables
Inventories (Tables) | 12 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Schedule of Inventory, Current [Table Text Block] | ' | |||||||
Inventories consist of the following: | ||||||||
September 30, | ||||||||
2013 | 2012 | |||||||
Component Parts | $ | 3,795,919 | $ | 3,412,673 | ||||
Finished goods | 5,302,761 | 3,563,284 | ||||||
Subtotal | 9,098,680 | 6,975,957 | ||||||
Reserve for anticipated sales returns at cost | 1,380,368 | 2,521,899 | ||||||
Total | $ | 10,479,048 | $ | 9,497,856 | ||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||
Property, Plant and Equipment [Table Text Block] | ' | |||||||
The following is a summary of property and equipment: | ||||||||
September 30, | ||||||||
2013 | 2012 | |||||||
Office Equipment and Machinery | $ | 1,712,997 | $ | 1,663,528 | ||||
Less: Accumulated depreciation and amortization | -1,568,401 | -1,427,550 | ||||||
$ | 144,596 | $ | 235,978 | |||||
Accrued_Expenses_Tables
Accrued Expenses (Tables) | 12 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Accrued Expenses [Abstract] | ' | |||||||
Accrued Expenses [Table Text Block] | ' | |||||||
Accrued expenses consist of the following: | ||||||||
2013 | 2012 | |||||||
Sales rebate program | $ | 1,232,493 | $ | 1,773,589 | ||||
Freight and duty | 858,933 | 979,712 | ||||||
Compensation | 222,595 | 207,683 | ||||||
Warranty repair | 79,667 | 110,878 | ||||||
Advertising and marketing | 196,603 | 200,367 | ||||||
Severance | - | 396,262 | ||||||
$ | 2,590,291 | $ | 3,668,491 | |||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Income Tax Disclosure [Abstract] | ' | |||||||
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | ' | |||||||
The Company’s income tax provision consists of the following: | ||||||||
Years ended September 30, | ||||||||
2013 | 2012 | |||||||
Current tax expense: | ||||||||
State income taxes | $ | 40,000 | $ | 40,000 | ||||
Foreign income taxes | 100,670 | 110,204 | ||||||
Total current tax expense | 140,670 | 150,204 | ||||||
Deferred tax expense | ||||||||
Federal | 406,084 | 283,779 | ||||||
State | 47,792 | 33,399 | ||||||
Total deferred tax expense | 453,876 | 317,178 | ||||||
Total tax provision | $ | 594,546 | $ | 467,382 | ||||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | ' | |||||||
Components of deferred taxes are as follows: | ||||||||
Years ended September 30, | ||||||||
2013 | 2012 | |||||||
Net operating losses domestic | $ | 435,231 | $ | 367,959 | ||||
Net operating losses foreign | 475,693 | 475,693 | ||||||
Sales returns and allowances | 119,540 | 314,428 | ||||||
Inventory obsolescence reserve | 132,135 | 355,627 | ||||||
Allowance for bad debts | 38,807 | 133,807 | ||||||
Vacation accrual | 24,588 | 24,588 | ||||||
Warranty reserve | 9,158 | 9,158 | ||||||
263 A inventory capitalization | 129,430 | 139,880 | ||||||
Depreciation | 51,898 | 39,928 | ||||||
Goodwill | 32,776 | 53,296 | ||||||
AMT credits | 172,321 | 177,704 | ||||||
R&D credits | 149,657 | 311,275 | ||||||
Subtotal | 1,771,234 | 2,403,343 | ||||||
Valuation allowance | -625,350 | -803,583 | ||||||
Net deferred tax assets | $ | 1,145,884 | $ | 1,599,760 | ||||
Schedule Of Reconciliation Of Actual Income Tax Provision And Federal Tax Provision [Table Text Block] | ' | |||||||
The difference between the actual income tax provision (benefit) and the tax provision computed by applying the Federal statutory income tax rate of 34% to the loss before income tax is attributable to the following: | ||||||||
Years ended September 30, | ||||||||
2013 | 2012 | |||||||
Income tax benefit at federal statutory rate | $ | -1,174,493 | $ | -705,863 | ||||
Reduction in valuation allowance | -178,233 | - | ||||||
Change in estimate of prior year income taxes | 105,372 | 22,820 | ||||||
Permanent differences-life insurance | 1,700 | 1,700 | ||||||
Permanent differences-compensation expense | 38,221 | 43,687 | ||||||
Permanent differences-other | 1,700 | 1,700 | ||||||
State income taxes, net of federal benefit | 57,943 | 26,400 | ||||||
Foreign earnings taxed at rates other than the federal statutory rate | 1,557,916 | 1,073,189 | ||||||
Other | 805 | 3,749 | ||||||
Other adjustments and AMT charges | 21,997 | - | ||||||
Expiring R&D credits | 161,618 | - | ||||||
Tax provision | $ | 594,546 | $ | 467,382 | ||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 12 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Stockholders Equity Note [Abstract] | ' | ||||||||||||||||
Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block] | ' | ||||||||||||||||
A summary of the of the Company’s fixed options plans as of September 30, 2013 and 2012 and changes during the years ended those dates is presented below: | |||||||||||||||||
Weighted | |||||||||||||||||
Weighted | Weighted | Average | |||||||||||||||
Average | Average | Contract | Aggregated | ||||||||||||||
Exercise | Non | Exercise | Term | Intrinsic | |||||||||||||
ISO | Price | Qualified | Price | (Years) | Value | ||||||||||||
Balance at September 30, 2011 | 1,283,192 | $ | 3.42 | 99,500 | $ | 3.03 | |||||||||||
Granted | 297,000 | 0.98 | - | - | |||||||||||||
Forfeited | -155,125 | 2.29 | - | - | |||||||||||||
Balance at September 30, 2012 | 1,425,067 | $ | 3.04 | 99,500 | $ | 3.03 | |||||||||||
Granted | 145,000 | 0.74 | - | - | |||||||||||||
Forfeited | -319,942 | 2.39 | -69,500 | 3.14 | |||||||||||||
Balance at September 30, 2013 | 1,250,125 | $ | 2.97 | 30,000 | $ | 3.38 | 4.33 | $ | - | ||||||||
Options exercisable at September 30, 2013 | 996,125 | $ | 3.49 | 30,000 | $ | 3.38 | 5.22 | $ | - | ||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Sep. 30, 2013 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | ' | ||||
Minimum annual lease payments to related parties and unrelated third parties are as follows: | |||||
Years Ended September 30, | |||||
2014 | $ | 542,770 | |||
2015 | 490,416 | ||||
2016 | 406,065 | ||||
2017 | 97,500 | ||||
Total | $ | 1,536,751 | |||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Revenue By Functional Category Disclosure [Line Items] | ' | ' |
Total sales | $34,017,233 | $44,640,360 |
Video Recorder Products [Member] | ' | ' |
Revenue By Functional Category Disclosure [Line Items] | ' | ' |
Total sales | 17,849,266 | 23,828,900 |
Tv Tuner Products [Member] | ' | ' |
Revenue By Functional Category Disclosure [Line Items] | ' | ' |
Total sales | 14,689,281 | 18,546,331 |
Other Video Products And Software [Member] | ' | ' |
Revenue By Functional Category Disclosure [Line Items] | ' | ' |
Total sales | $1,478,686 | $2,265,129 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 1) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Revenue, Major Customer [Line Items] | ' | ' |
Sales Revenue, Goods, Net, Percentage | 100.00% | 100.00% |
Americas [Member] | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' |
Sales Revenue, Goods, Net, Percentage | 63.00% | 56.00% |
Northern Europe [Member] | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' |
Sales Revenue, Goods, Net, Percentage | 10.00% | 12.00% |
Southern Europe [Member] | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' |
Sales Revenue, Goods, Net, Percentage | 7.00% | 11.00% |
Central and Eastern Europe [Member] | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' |
Sales Revenue, Goods, Net, Percentage | 15.00% | 17.00% |
Asia [Member] | ' | ' |
Revenue, Major Customer [Line Items] | ' | ' |
Sales Revenue, Goods, Net, Percentage | 5.00% | 4.00% |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details 2) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Weighted Average Number of Shares Disclosure [Line Items] | ' | ' |
Weighted average common stock outstanding-basic (in shares) | 10,122,344 | 10,122,344 |
Common Stock equivalents-stock options (in shares) | 0 | 0 |
Weighted average shares outstanding-diluted (in shares) | 10,122,344 | 10,122,344 |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies (Details 3) (USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Weighted average fair value of grants (in dollars per share) | $0.53 | $0.63 |
Risk free interest rate | 1.72% | 1.81% |
Dividend yield | 0.00% | 0.00% |
Expected volatility | 77.00% | 65.00% |
Expected life in years | '7 years | '7 years |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies (Details Textual) (USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Business policy disclosure [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance | 1,280,125 | 1,524,567 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit | $0.74 | $0.77 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit | $7.45 | $7.45 |
Stock compensation expense-employees | $112,426 | $128,490 |
Unrecognized Compensation Expense | 250,136 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | 112,426 | 128,489 |
Concentration Risk, Percentage | 100.00% | 100.00% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | '7 years | '7 years |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Remaining Contractual Terms | '4 years | ' |
Expected Income Tax Recovery Percentage Recognition | 50.00% | ' |
Asia [Member] | ' | ' |
Business policy disclosure [Line Items] | ' | ' |
Concentration Risk, Percentage | 5.00% | 4.00% |
Asia [Member] | Long Lived Asset [Member] | ' | ' |
Business policy disclosure [Line Items] | ' | ' |
Concentration Risk, Percentage | 15.00% | 5.00% |
United State [Member] | Long Lived Asset [Member] | ' | ' |
Business policy disclosure [Line Items] | ' | ' |
Concentration Risk, Percentage | 66.00% | 60.00% |
Europes [Member] | Long Lived Asset [Member] | ' | ' |
Business policy disclosure [Line Items] | ' | ' |
Concentration Risk, Percentage | 19.00% | 35.00% |
Research and Development Expense [Member] | ' | ' |
Business policy disclosure [Line Items] | ' | ' |
Stock compensation expense-employees | 40,876 | 46,717 |
Sga Expense [Member] | ' | ' |
Business policy disclosure [Line Items] | ' | ' |
Stock compensation expense-employees | $71,550 | $81,773 |
Options [Member] | ' | ' |
Business policy disclosure [Line Items] | ' | ' |
Share-based Compensation Arrangement By Share-based Payment Award Options Granted Weighted Average Remaining Contractual Term2 | '10 years | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | '7 years | ' |
Maximum [Member] | ' | ' |
Business policy disclosure [Line Items] | ' | ' |
Property, Plant and Equipment, Useful Life | '7 years | ' |
Maximum [Member] | Options [Member] | ' | ' |
Business policy disclosure [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | '5 years | ' |
Minimum [Member] | ' | ' |
Business policy disclosure [Line Items] | ' | ' |
Property, Plant and Equipment, Useful Life | '5 years | ' |
Minimum [Member] | Options [Member] | ' | ' |
Business policy disclosure [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | '4 years | ' |
Accounts_receivable_Details
Accounts receivable (Details) (USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Trade receivables | $3,977,347 | $6,319,544 |
Allowance for doubtful accounts | -102,123 | -352,123 |
Sales reserve | -1,694,948 | -3,349,340 |
Net trade receivables | 2,180,276 | 2,618,081 |
Total other non trade receivables | 278,497 | 1,995,654 |
Receivable From Contract Manufacturers [Member] | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Total other non trade receivables | 74,797 | 1,649,444 |
Gst and Vat Taxes Receivables [Member] | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Total other non trade receivables | 147,816 | 287,446 |
Other [Member] | ' | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' |
Total other non trade receivables | $55,884 | $58,764 |
Inventories_Details
Inventories (Details) (USD $) | Sep. 30, 2013 | Sep. 30, 2012 |
Schedule of Inventory [Line Items] | ' | ' |
Component Parts | $3,795,919 | $3,412,673 |
Finished goods | 5,302,761 | 3,563,284 |
Subtotal | 9,098,680 | 6,975,957 |
Reserve for anticipated sales returns at cost | 1,380,368 | 2,521,899 |
Total | $10,479,048 | $9,497,856 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | Sep. 30, 2013 | Sep. 30, 2012 |
Property, Plant and Equipment [Line Items] | ' | ' |
Office Equipment and Machinery | $1,712,997 | $1,663,528 |
Less: Accumulated depreciation and amortization | -1,568,401 | -1,427,550 |
Property, Plant and Equipment, Net, Total | $144,596 | $235,978 |
Property_and_Equipment_Details1
Property and Equipment (Details Textual) (USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Property, Plant and Equipment [Line Items] | ' | ' |
Depreciation, Depletion and Amortization, Total | $121,864 | $178,190 |
Intangible_Assets_Details_Text
Intangible Assets (Details Textual) (USD $) | Sep. 30, 2013 | Sep. 30, 2012 |
Indefinite-lived Intangible Assets [Line Items] | ' | ' |
Finite-Lived Intangible Assets, Gross | $5,262,229 | ' |
Finite-Lived Intangible Assets, Net, Total | 1,676,758 | ' |
Finite-Lived Intangible Assets, Accumulated Amortization | ' | 2,830,635 |
Customer Relationships [Member] | ' | ' |
Indefinite-lived Intangible Assets [Line Items] | ' | ' |
Finite-Lived Intangible Assets, Gross | ' | 1,644,353 |
Value of technology [Member] | ' | ' |
Indefinite-lived Intangible Assets [Line Items] | ' | ' |
Finite-Lived Intangible Assets, Gross | ' | 1,849,897 |
Covenant not to compete [Member] | ' | ' |
Indefinite-lived Intangible Assets [Line Items] | ' | ' |
Finite-Lived Intangible Assets, Gross | ' | $1,767,979 |
Accrued_Expenses_Fees_Details_
Accrued Expenses - Fees (Details Textual) (USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Accrued Expenses Fees [Line Items] | ' | ' |
Reduction In Accrued Expenses Fees | $1,892,888 | $310,000 |
Accrued expenses - fees | 12,497,060 | 12,943,022 |
Payments To Third Parties Fees | 210,430 | 1,574,839 |
Cost of Revenue, Total | $1,628,254 | $1,484,875 |
Accrued_Expenses_Details
Accrued Expenses (Details) (USD $) | Sep. 30, 2013 | Sep. 30, 2012 |
Accrued Expenses [Line Items] | ' | ' |
Sales rebate program | $1,232,493 | $1,773,589 |
Freight and duty | 858,933 | 979,712 |
Compensation | 222,595 | 207,683 |
Warranty repair | 79,667 | 110,878 |
Advertising and marketing | 196,603 | 200,367 |
Severance | 0 | 396,262 |
Accrued expenses | $2,590,291 | $3,668,491 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Current tax expense: | ' | ' |
State income taxes | $40,000 | $40,000 |
Foreign income taxes | 100,670 | 110,204 |
Total current tax expense | 140,670 | 150,204 |
Deferred tax expense | ' | ' |
Federal | 406,084 | 283,779 |
State | 47,792 | 33,399 |
Total deferred tax expense | 453,876 | 317,178 |
Total tax provision | $594,546 | $467,382 |
Income_Taxes_Details_1
Income Taxes (Details 1) (USD $) | Sep. 30, 2013 | Sep. 30, 2012 |
Income Taxes [Line Items] | ' | ' |
Net operating losses domestic | $435,231 | $367,959 |
Net operating losses foreign | 475,693 | 475,693 |
Sales returns and allowances | 119,540 | 314,428 |
Inventory obsolescence reserve | 132,135 | 355,627 |
Allowance for bad debts | 38,807 | 133,807 |
Vacation accrual | 24,588 | 24,588 |
Warranty reserve | 9,158 | 9,158 |
263 A inventory capitalization | 129,430 | 139,880 |
Depreciation | 51,898 | 39,928 |
Goodwill | 32,776 | 53,296 |
AMT credits | 172,321 | 177,704 |
R&D credits | 149,657 | 311,275 |
Subtotal | 1,771,234 | 2,403,343 |
Valuation allowance | -625,350 | -803,583 |
Net deferred tax assets | $1,145,884 | $1,599,760 |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Income Taxes [Line Items] | ' | ' |
Income tax benefit at federal statutory rate | ($1,174,493) | ($705,863) |
Reduction in valuation allowance | -178,233 | 0 |
Change in estimate of prior year income taxes | 105,372 | 22,820 |
Permanent differences-life insurance | 1,700 | 1,700 |
Permanent differences-compensation expense | 38,221 | 43,687 |
Permanent differences-other | 1,700 | 1,700 |
State income taxes, net of federal benefit | 57,943 | 26,400 |
Foreign earnings taxed at rates other than the federal statutory rate | 1,557,916 | 1,073,189 |
Other | 805 | 3,749 |
Other adjustments and AMT charges | 21,997 | 0 |
Expiring R&D credits | 161,618 | 0 |
Tax provision | $594,546 | $467,382 |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) (USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Income Taxes [Line Items] | ' | ' |
Deferred Tax Assets, Inventory | $4,909,657 | ' |
Effective Income Tax Rate Reconciliation, Percent, Total | 38.00% | ' |
Effective Income Tax Rate Reconciliation, Deduction, Amount, Total | 1,865,670 | ' |
Deferred Tax Assets, Net | 1,145,884 | ' |
Undistributed Earnings of Foreign Subsidiaries | 1,543,000 | ' |
Deferred Tax Assets, Operating Loss Carryforwards, Subject to Expiration | 1,495,345 | ' |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 34.00% | ' |
European Subsidiary [Member] | ' | ' |
Income Taxes [Line Items] | ' | ' |
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest, Total | 831,626 | 756,241 |
International Operations [Member] | ' | ' |
Income Taxes [Line Items] | ' | ' |
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest, Total | 4,286,016 | 2,848,072 |
Research and Development Expense [Member] | ' | ' |
Income Taxes [Line Items] | ' | ' |
Tax Credit Carryforward, Amount | $149,657 | ' |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Balance at September 30, 2013 Weighted Average Remaining Contractual Term (Years) | '4 years 3 months 29 days | ' |
Options exercisable at September 30, 2013 Weighted Average Remaining Contractual Term (Years) | '5 years 2 months 19 days | ' |
Balance at September 30, 2013 Aggregated Intrinsic Value | $0 | ' |
Options exercisable at September 30, 2013 Aggregated Intrinsic Value | $0 | ' |
Balance | 1,524,567 | ' |
Balance | 1,280,125 | ' |
Iso [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Balance | 1,425,067 | 1,283,192 |
Granted | 145,000 | 297,000 |
Forfeited | -319,942 | -155,125 |
Balance | 1,250,125 | 1,425,067 |
Options exercisable at September 30, 2013 | 996,125 | ' |
Balance Weighted Average Exercise Price | $3.04 | $3.42 |
Granted Weighted Average Exercise Price | $0.74 | $0.98 |
Forfeited Weighted Average Exercise Price | $2.39 | $2.29 |
Balance Weighted Average Exercise Price | $2.97 | $3.04 |
Options exercisable at September 30, 2013 Weighted Average Exercise Price | $3.49 | ' |
Non Qualified [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Balance | 99,500 | 99,500 |
Granted | 0 | 0 |
Forfeited | -69,500 | 0 |
Balance | 30,000 | 99,500 |
Options exercisable at September 30, 2013 | 30,000 | ' |
Balance Weighted Average Exercise Price | $3.03 | $3.03 |
Granted Weighted Average Exercise Price | $0 | $0 |
Forfeited Weighted Average Exercise Price | $3.14 | $0 |
Balance Weighted Average Exercise Price | $3.38 | $3.03 |
Options exercisable at September 30, 2013 Weighted Average Exercise Price | $3.38 | ' |
Stockholders_Equity_Details_Te
Stockholders' Equity (Details Textual) (USD $) | 12 Months Ended | 12 Months Ended | ||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 02, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Non-Qualified Plan [Member] | Non-Qualified Plan [Member] | Nineteen Ninety Seven Iso [Member] | Nineteen Ninety Seven Iso [Member] | Two Thousand Iso [Member] | Two Thousand Iso [Member] | Two Thousand And Three Iso [Member] | Two Thousand And Three Iso [Member] | Two Thousand And Twelve Iso [Member] | Two Thousand And Twelve Iso [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Repurchased During Period, Shares | 1,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Treasury Stock, Shares, Acquired | 760,479 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Treasury Stock, Value | $2,405,548 | $2,405,548 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Treasury Stock Repurchase Price | $3.16 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance | 1,280,125 | 1,524,567 | 99,500 | 30,000 | 0 | 40,925 | 0 | 77,517 | 1,067,125 | 1,268,625 | 183,000 | 38,000 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit | $0.74 | $0.77 | $1.08 | ' | ' | ' | ' | ' | $0.77 | $0.77 | $0.74 | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit | $7.45 | $7.45 | $4.13 | ' | ' | ' | ' | ' | $7.45 | $7.45 | $1.24 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | ' | ' | ' | $3.38 | ' | $1.08 | ' | $1.08 | ' | ' | ' | $1.24 |
Common Stock, Capital Shares Reserved for Future Issuance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' |
Employee Stock Ownership Plan (ESOP), Plan Description | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'If Incentive Stock Options are granted to any owner of 10% or more of the combined voting power of the Company, the exercise price shall be at least 110% of the Fair Market Value on the date of grant, and the option must state that it is not exercisable after the expiration of 5 years from the date of grant | ' |
Aggregate Fair Market Value Incentive Stock Option Maximum | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 | ' |
Significant_Customer_Informati1
Significant Customer Information (Details Textual) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Significant Customer Information [Line Items] | ' | ' |
Concentration Risk, Percentage | 100.00% | 100.00% |
Segment Reporting, Disclosure of Major Customers | 'For fiscal 2013 the Company had no customers that accounted for over 10% of its net sales. | 'For fiscal 2012 the Company had one customer, Best Buy, that accounted for approximately 10.3% of its net sales. |
One Customer [Member] | Sales Revenue, Net [Member] | ' | ' |
Significant Customer Information [Line Items] | ' | ' |
Concentration Risk, Percentage | ' | 10.30% |
Related_Party_Transactions_Det
Related Party Transactions (Details Textual) (USD $) | 12 Months Ended |
Sep. 30, 2013 | |
Related Party Transaction [Line Items] | ' |
Payments for Rent | $337,656 |
Base Rent Year One And Two | 250,000 |
Base Rent Year Three And Four | 257,500 |
Base Rent Year Five | $265,225 |
Percentage Of Ownership In Lease Rental Company | 10.00% |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | Sep. 30, 2013 |
Commitment And Contingencies [Line Items] | ' |
2014 | $542,770 |
2015 | 490,416 |
2016 | 406,065 |
2017 | 97,500 |
Total | $1,536,751 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details Textual) (USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Commitment And Contingencies [Line Items] | ' | ' |
Operating Leases, Rent Expense | $657,000 | $683,000 |