Discontinued Operations

9 Months Ended

Jun. 30, 2013

Discontinued Operations

Discontinued Operations

Sale of Thermal Imaging Business.

As a result of the Thermal Imaging Asset Sale, the Company’s Thermal Imaging Business is classified as a discontinued operation in the consolidated financial statements of the Company. The following summarized financial information relates to the Thermal Imaging Business:

	Three Months Ended				Nine Months Ended
	(Unaudited)				(Unaudited)
	June 30,		July 1,		June 30,		July 1,
	2013		2012		2013		2012
Total revenues	$	-	$	-	$	-	$	1,982,000
Cost and expenses
Cost of revenues		-		-		-		1,809,000
General and administrative expense		-		-		-		87,000
Research and development expense		-		-		-		574,000
Total costs and expenses		-		-		-		2,470,000
Loss from operations		-		-		-		(488,000)
Gain on disposal (net of $0 tax)		-		-		-		7,748,000
Net (loss) from discontinued operations (net of $0 tax)	$	-	$	-	$	-	$	7,260,000

    Cessation of Government Business

On March 19, 2013, the Company announced that it had discontinued its government-focused business, including the Secure Memory Systems, Cognitive and Microsystems business units (the “Government Business”), and instead focus on the Company’s cyber-security business.  As a result of the Company’s decision, the Company’s Government Business is classified as a discontinued operation in the consolidated financial statements of the Company. The following summarized financial information relates to the Government Business:

	Three Months Ended						Nine Months Ended
	(Unaudited)						(Unaudited)
	June 30,			July 1,			June 30,			July 1,
	2013			2012			2013			2012
Total revenues	$	605,000		$	933,000		$	2,119,000		$	3,432,000
Cost of revenues		500,000			1,569,000			3,106,000			2,495,000
General and administrative expense		231,000			194,000			1,113,000			3,032,000
Research and development expense		(62,000	)		487,000			702,000			1,293,000
Total costs and expenses		669,000			2,250,000			4,921,000			6,820,000
(Loss) on disposal of assets		(270,000	)		-			(270,000	)		-
Net (loss) from discontinued operations (net of $0 tax)	$	(334,000	)	$	(1,317,000	)	$	(3,072,000	)	$	(3,388,000	)

Included in the consolidated balance sheets are the following major classes of assets and liabilities associated with the Government Business as of June 30, 2013 and September 30, 2012:

	June 30, 2013		September 30, 2012
	(Unaudited)		(Unaudited)
Accounts receivable, net	$	153,000	$	445,000
Unbilled revenues on uncompleted contracts		562,000		549,000
Prepaid expenses and other current assets		11,000		54,000
Current assets of discontinued operations	$	726,000	$	1,048,000
Property and equipment, net	$	64,000	$	824,000
Other assets		36,000		117,000
Non-current assets of discontinued operations	$	100,000	$	941,000
Accounts payable	$	256,000	$	211,000
Accrued expenses		508,000		311,000
Advance billings on uncompleted contracts		141,000		297,000
Current liabilities from discontinued operations	$	905,000	$	819,000