Significant Accounting Policies (Policies)

3 Months Ended

Dec. 31, 2020

Effect of Covid-19 Pandemic [Policy Text Block]

Impacts of COVID-

March 11, 2020,

the World Health Organization declared the outbreak of a novel coronavirus (COVID-

) as a pandemic, which has resulted in authorities implementing numerous measures to contain the virus, including travel bans and restrictions, quarantines, shelter-in-place orders, and business limitations and shutdowns.  While we are unable to accurately predict the full impact that COVID-

will have on our results from operations, financial condition, liquidity and cash flows due to numerous uncertainties, including the duration, severity and impact of the pandemic and containment measures, our compliance with these measures has impacted our day-to-day operations and could disrupt our business and operations, as well as those of our key business partners, vendors and other counterparties for an indefinite period of time.  To support the health and well-being of our employees, business partners and communities, a vast majority of our employees have been working remotely since mid-

March 2020

and continue to do so for the foreseeable future.

COVID-

has had negative impacts on our operations and the future impacts of the pandemic and any corresponding economic results are largely unknown and rapidly evolving.  Beginning in

March 2020

and continuing through today, the in-person events portion of our business was and continues to be significantly impacted by cancellations and/or postponements due to social distancing protocols enacted to stem the spread of the virus.  In response to the cancellations, the Company introduced a new virtual events platform as an alternate solution for our customers. In addition, the closure of educational institutions globally and the negative financial impact on their funding, could impact sales in the upcoming quarters.  While the virus has increased awareness of the need for distance learning tools and the adoption of video as a necessary communication medium, it is impossible for us to predict with confidence the long-term financial impact on our business including results of operations and liquidity.

Costs Associated with Exit or Disposal Activity or Restructuring [Policy Text Block]

Restructuring and exit activities

The determination of when the Company accrues for involuntary termination benefits under restructuring plans depends on whether the termination benefits are provided under an on-going benefit arrangement or under a

one

-time benefit arrangement. The Company accounts for on-going benefit arrangements, such as those documented by employment agreements, in accordance with Accounting Standards Codification

712

("ASC

712"

)

Nonretirement Postemployment Benefits

. Under ASC

712,

liabilities for postemployment benefits are recorded at the time the obligations are probable of being incurred and can be reasonably estimated. The Company accounts for

one

-time employment benefit arrangements in accordance with ASC

420

Exit or Disposal Cost Obligations

. When applicable, the Company records such costs into operating expense.

During the quarter ended

December 31, 2020,

the Company expensed involuntary termination benefits of

$101

thousand under ASC

420

compared to

zero

in the same quarter last year.

Lessor, Leases [Policy Text Block]

Investment in Sales-Type Lease

The Company has entered into sales-type lease arrangements with certain customers, consisting of recorders leased with terms ranging from

years.

Investment in sales-type leases consists of the following (in thousands) as of

December 31, 2020

Investment in sales-type lease, gross:
2021	$	218
2022		78
Gross investment in sales-type lease		296
Less: Unearned income		(1	)
Total investment in sales-type lease	$	295

Current portion of total investment in sales-type lease	$	217
Long-term portion of total investment in sales-type lease		78

Inventory, Policy [Policy Text Block]

Inventory

Inventory consists of raw materials and supplies used in the assembly of Mediasite recorders and finished units. Inventory of completed units and spare parts are carried at the lower of cost or net realizable value, with cost determined on a

first

-in,

first

-out basis. An obsolescence reserve has been established to account for slow moving inventory.

Inventory consists of the following (in thousands):

	December 31,			September 30,
	2020			2020
Raw materials and supplies	$	282		$	267
Finished goods		1,054			1,022
Less: Obsolescence reserve		(122	)		(122	)

Asset Retirement Obligation [Policy Text Block]

Asset Retirement Obligation

An asset retirement obligation (“ARO”) associated with the retirement of a tangible long-lived asset is recognized as a liability in the period in which it is incurred or becomes determinable, with an associated increase in the carrying amount of the related long-term asset. The cost of the tangible asset, including the initially recognized asset retirement cost, is depreciated over the useful life of the asset. As of

December 31, 2020

and

September 30, 2020

, the Company has recorded a liability of

$138

thousand and

$134

thousand, respectively, for retirement obligations associated with returning the MSKK leased property to the respective lessors upon the termination of the lease arrangement. Asset retirement obligations are included in other-long term liabilities on the condensed consolidated balance sheets.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value of Financial Instruments

In determining the fair value of financial assets and liabilities, the Company currently utilizes market data or other assumptions that it believes market participants would use in pricing the asset or liability in the principal or most advantageous market, and adjusts for non-performance and/or other risk associated with the Company as well as counterparties, as appropriate. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in

one

of the following levels:

Level

Inputs: Unadjusted quoted prices which are available in active markets for identical assets or liabilities accessible to the Company at the measurement date.

Level

Inputs: Inputs other than quoted prices included in Level

inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

Level

Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are

not

available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

The hierarchy gives the highest priority to Level

as this level provides the most reliable measure of fair value, while giving the lowest priority to Level

Financial Liabilities Measured at Fair Value on Recurring Basis

The fair value of the bifurcated conversion feature represented by the warrant derivative liability associated with the PFG debt is measured at fair value on a recurring basis based on a Black Scholes option pricing model with assumptions for stock price, exercise price, volatility, expected term, risk free interest rate and dividend yield similar to those described for share-based compensation which were generally observable (Level

Financial liabilities measured at fair value on a recurring basis are summarized below (in thousands):

December 31, 2020		Level 1				Level 2				Level 3				Total Fair Value
Derivative liability		$	—			$	71			$	—			$	71

September 30, 2020		Level 1				Level 2				Level 3				Total Fair Value
Derivative liability		$	—			$	66			$	—			$	66

The gain or loss related to the fair value remeasurement on the derivative liability is included in the other expense line on the condensed consolidated statements of operations.

Financial Liabilities Measured at Fair Value on a Non-Recurring Basis

The initial fair values of PFG debt and warrant debt (see Note

) were based on the present value of expected future cash flows and assumptions about current interest rates and the creditworthiness of the Company (Level

The Mr. Mark D. Burish ("Mr. Burish") warrant was measured at fair value using a Black Scholes model and the remaining fair value was allocated to the related Mr. Burish note purchase agreement (see Note

) which management believes materially approximated the fair value based on calculating the present value of expected future cash flows (Level

). The non-recurring fair value measurements were performed as of the date of issuance of the note purchase agreement and warrant. The discount was being amortized over the life of the related debt until

May 2020,

at which time the debt was extinguished and exchanged for the Company's common stock.

Financial Instruments

Not

Measured at Fair Value

The Company's other financial instruments consist primarily of cash and cash equivalents, accounts receivable, investment in sales-type lease, accounts payable, debt instruments and capital lease obligations. The book values of cash and cash equivalents, accounts receivable, investment in sales-type lease, and accounts payable are considered to be representative of their respective fair values due their short term nature. The carrying value of debt including the current portion, approximates fair market value as the variable and fixed rate approximates the current market rate of interest available to the Company.

Legal Costs, Policy [Policy Text Block]

Legal Contingencies

When legal proceedings are brought or claims are made against the Company and the outcome is uncertain, we are required to determine whether it is probable that an asset has been impaired or a liability has been incurred. If such impairment or liability is probable and the amount of loss can be reasonably estimated, the loss must be charged to earnings.

legal contingencies were recorded or were required to be disclosed for the

three

months ended

December 31, 2020

2019

Share-based Payment Arrangement [Policy Text Block]

Stock Based Compensation

The Company uses a lattice valuation model to account for all employee stock options granted. The lattice valuation model is a more flexible analysis to value options because of its ability to incorporate inputs that change over time, such as actual exercise behavior of option holders. The Company uses historical data to estimate the option exercise and employee departure behavior in the lattice valuation model. Expected volatility is based on historical volatility of the Company's stock. The Company considers all employees to have similar exercise behavior and therefore has

not

identified separate homogeneous groups for valuation. The expected term of options granted is derived from the output of the option pricing model and represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods the options are expected to be outstanding is based on the U.S. Treasury yields in effect at the time of grant. Forfeitures are based on actual behavior patterns. The expected exercise factor and forfeiture rates are calculated using historical exercise and forfeiture activity for the previous

three

years.

The fair value of each option grant is estimated using the assumptions in the following table:

	Three Months Ended
	December 31,
	2020		2019
Expected life	4.7 years		4.5 years
Risk-free interest rate	0.33	%	1.63	%
Expected volatility	82.61	%	72.40	%
Expected forfeiture rate	14.18	%	15.05	%
Expected exercise factor	1.2		1.2
Expected dividend yield	0	%	0	%

A summary of option activity at

December 31, 2020

and changes during the

three

months then ended is presented below:

				Weighted-		Weighted-Average
				Average		Remaining Contractual
	Options			Exercise Price		Period in Years
Outstanding at October 1, 2020		1,707,515		$	5.09		4.6
Granted		489,250			3.29		9.9
Exercised		(59,670	)		2.39		0.1
Forfeited		(168,409	)		7.34		0.0
Outstanding at December 31, 2020		1,968,686			4.53		6.5
Exercisable at December 31, 2020		1,256,704					4.6

A summary of the status of the Company's non-vested options and changes during the

three

month period ended

December 31, 2020

is presented below:

				Weighted-Average
				Grant Date Fair
Non-vested Options	Options			Value
Non-vested at October 1, 2020		339,897		$	0.60
Granted		489,250			1.55
Vested		(141,336	)		0.78
Forfeited		(8,745	)		0.58
Non-vested at December 31, 2020		679,066		$	1.33

The weighted average grant date fair value of options granted during the

three

months ended

December 31, 2020

was

$1.55.

As of

December 31, 2020

, there was

$510

thousand of total unrecognized compensation cost related to non-vested stock-based compensation, with total forfeiture adjusted unrecognized compensation cost of

$394

thousand. The cost is expected to be recognized over a weighted-average remaining life of

1.9

years.

Stock-based compensation recorded in the

three

months ended

December 31, 2020

was

$119

thousand. Stock-based compensation recorded in the

three

months ended

December 31, 2019

was

$52

thousand. There was

$142

thousand in cash received from exercises under all stock option plans and warrants during the

three

months ended

December 31, 2020

and

zero

during the same period in

2019

. There were

tax benefits realized for tax deductions from option exercises in either of the

three

month period ended

December 31, 2020

2019

. The Company currently expects to satisfy share-based awards with registered shares available to be issued.

The Company also has an Employee Stock Purchase Plan ("Purchase Plan") under which an aggregate of

300,000

common shares

may

be issued. The board passed a resolution in

December 2020

to increase the share count by an additional

100,000

shares. A total of

106,710

shares are available to be issued under the plan as

December 31, 2020.

The Company recorded stock compensation expense under this plan of less than

thousand for each of the

three

month period ended

December 31, 2020

and

2019

Preferred Stock and Dividends [Policy Text Block]

Preferred Stock and Dividends

A total of

zero

shares of Preferred Stock, Series A were issued and outstanding as of

December 31, 2020

and

2019.

Earnings Per Share, Policy [Policy Text Block]

Per Share Computation

Basic earnings (loss) per share has been computed using the weighted-average number of shares of common stock outstanding during the period, less shares that

may

be repurchased, and excludes any dilutive effects of options and warrants. In periods where the Company reports net income, diluted net income per share is computed using common equivalent shares related to outstanding options and warrants to purchase common stock. The numerator for the calculation of basic and diluted earnings per share is net income (loss) attributable to common stockholders. The following table sets forth the computation of basic and diluted weighted average shares used in the earnings per share calculations:

	Three Months Ended
	December 31,
	2020		2019
Denominator for basic net income (loss) per share - weighted average common shares		7,963,775		6,736,643
Effect of dilutive options and warrants (treasury method)		372,253		—
Denominator for diluted net income (loss) per share - adjusted weighted average common shares		8,336,028		6,736,643
Options, warrants and convertible shares outstanding during each period, but not included in the computation of diluted net loss per share because they are antidilutive		1,132,365		2,124,738

Liquidity [Policy Text Block]

Liquidity

December 31, 2020

, approximately

$3.1

million of cash and cash equivalents was held by the Company's foreign subsidiaries.

The Company believes its cash position plus available resources is adequate to accomplish its business plan through at least the next

twelve

months. We will likely evaluate lease opportunities to finance equipment purchases in the future and support working capital needs. We

may

also seek additional equity financing but there are

assurances that these will be on terms acceptable to the Company.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

December 2019,

the FASB issued ASU

2019

12,

"Income Taxes (Topic

740

): Simplifying the Accounting for Income Taxes", ("ASU

2019

12"

). The amendments in this ASU affect entities within the scope of Topic

740.

For public business entities, the amendments in this ASU are effective for fiscal years beginning after

December 15, 2020,

and interim periods within fiscal years beginning after

December 15, 2020.

Early adoption of the amendments is permitted, including adoption in any interim period for public entities for periods for which financial statements have

not

yet been issued. An entity that elects to early adopt the amendments in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period. An entity that elects early adoption must adopt all the amendments in the same period. The Company is currently evaluating the guidance and its impact to the financial statements.

Accounting standards that have been issued but are

not

yet effective by the FASB or other standards-setting bodies that do

not

require adoption until a future date, which are

not

discussed above, are

not

expected to have a material impact on the Company's financial statements upon adoption.