Supplemental Balance Sheet Disclosures

3 Months Ended

Dec. 31, 2012

Supplemental Balance Sheet Disclosures

Supplemental Balance Sheet Disclosures

2. Supplemental Balance Sheet Disclosures

Inventories

Inventories are stated at the lower of cost (first-in, first-out) or market, net of reserve for excess and obsolete inventory, and consist of the following:

	December 31,		September 30,
	2012		2012
Raw materials	$	2,610,038	$	2,752,833
Work-in-process	580,994		555,495
Finished goods	276,662		493,219
	$	3,467,694	$	3,801,547

Prepaid expenses and other current assets

Prepaid expenses and other current assets consist of the following:

	December 31,		September 30,
	2012		2012
Revenue recognized not yet invoiced	$	3,007,771	$	1,595,436
Prepaid insurance	233,075		176,340
Other	428,882		259,868
	$	3,669,728	$	2,031,644

Revenue recognized not yet invoiced principally represents sales recorded under the percentage-of-completion method of accounting that have not been billed to customers in accordance with applicable contract terms.

Property and equipment

Property and equipment, net consists of the following balances:

	December 31,			September 30,
	2012			2012
Computer equipment	$	2,119,481		$	2,090,556
Corporate airplane	3,082,186			3,082,186
Furniture and office equipment	1,076,849			1,076,849
Manufacturing facility	5,616,422			5,605,616
Equipment	4,382,214			4,378,714
Land	1,021,245			1,021,245
	17,298,397			17,255,166
Less: Accumulated depreciation and amortization	(10,146,747		)	(10,040,788		)
	$	7,151,650		$	7,214,378

Depreciation and amortization related to property and equipment was approximately $106,000 and $125,000 for the three months ended December 31, 2012 and 2011, respectively.  The Corporate airplane is primarily utilized in support of product development and has been depreciated to its estimated salvage value.

Other assets

Other assets consist of the following:

	December 31,		September 30,
	2012		2012
Intangible assets, net of accumulated amortization of $454,837 and $441,637 at December 31, 2012 and September 30, 2012, respectively	$	145,400	$	158,600

Intangible assets consist of licensing and certification rights which are amortized over a defined number of units.  No impairment charges were recorded for the three months ended December 31, 2012 and 2011.

Total amortization expense was approximately $13,000 and $42,000 for the three months ended December 31, 2012 and 2011, respectively. Since the intangible assets are being amortized over a defined number of units, the timing of future amortization expense is not determinable.

Accrued expenses

Accrued expenses consist of the following:

	December 31,		September 30,
	2012		2012
Warranty	$	799,748	$	850,499
Salary, benefits and payroll taxes	272,204		531,862
Professional fees	380,998		330,858
Income taxes payable	76,160		132,980
Materials on order	60,871		43,374
Other	1,019,047		834,239
	$	2,609,028	$	2,723,812

Warranty cost and accrual information for the three months ended December 31, 2012 is highlighted below:

Warranty Accrual at September 30, 2012	$	850,499
Accrued expense for the three months ended December 31, 2012	(12,931		)
Warranty cost for the three months ended December 31, 2012	(37,820		)
Warranty Accrual at December 31, 2012	$	799,748