10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2014

or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to ____ _ .

Commission File No. 0-147

HICKOK INCORPORATED
_____________________________________________________________
(Exact name of registrant as specified in its charter)

Ohio	34-0288470
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
10514 Dupont Avenue, Cleveland, Ohio	44108
(Address of principal executive offices)	(Zip Code)
(Registrant's telephone number, including area code)	(216) 541-8060

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes X No___

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer,""accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer   [ ]	Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes   No_X_

As of February 9, 2015:  1,163,349 Hickok Incorporated Class A Common Shares and 474,866 Class B Common Shares were outstanding.

PART I. - FINANCIAL INFORMATION

Item 1. Financial Statements.

HICKOK INCORPORATED
CONSOLIDATED INCOME STATEMENTS
(Unaudited)

Three months ended
December 31,

	2014	2013
Net Sales
Product Sales	$1,100,314	$980,395
Service Sales	61,904	69,847
Total Net Sales	1,162,218	1,050,242
Costs and Expenses
Cost of Product Sold	759,510	655,300
Cost of Service Sold	40,603	34,104
Product Development	235,938	231,056
Marketing and Administrative      Expenses	399,399	453,997
Interest Charges	128	-
Other Income	(2,704)	(3,928)
Total Costs and Expenses	1,432,874	1,370,529
Income (Loss) before Provision for Income Taxes	(270,656)	(320,287)
Provision for (Recovery of) Income Taxes	-	-
Net Income (Loss)	$(270,656)	$(320,287)
Earnings per Common Share:
Net Income (Loss)	$(.17)	$(.20)
Earnings per Common Share Assuming Dilution:
Net Income (Loss)	$(.17)	$(.20)
Dividends per Common Share	$-0-	$-0-

See Notes to Consolidated Financial Statements

HICKOK INCORPORATED CONSOLIDATED BALANCE SHEET

	December 31, 2014 (Unaudited)	September 30, 2014 (Note)	December 31, 2013 (Unaudited)
Assets
Current Assets
Cash and Cash Equivalents	$683,826	$390,327	$571,424
Trade Accounts Receivable-Net	486,258	1,172,268	510,450
Notes Receivable-Current	-	-	-
Inventories	1,684,526	1,714,197	1,647,927
Prepaid Expenses	113,667	37,989	122,907
Total Current Assets	2,968,277	3,314,781	2,852,708
Property, Plant and Equipment
Land	233,479	233,479	233,479
Buildings	1,429,718	1,429,718	1,429,718
Machinery and Equipment	2,525,972	2,516,380	2,428,890
	4,189,169	4,179,577	4,092,087
Less: Allowance for Depreciation	3,816,931	3,800,551	3,768,832
Total Property - Net	372,238	379,026	323,255
Other Assets
Notes Receivable-Long-term	4,100	4,100	4,100
Deposits	1,750	1,750	1,750
Total Other Assets	5,850	5,850	5,850
Total Assets	$3,346,365	$3,699,657	$3,181,813

Note: Amounts derived from audited financial statements previously filed with the
Securities and Exchange Commission.

See Notes to Consolidated Financial Statements 

	December 31, 2014 (Unaudited)	September 30, 2014 (Note)	December 31, 2013 (Unaudited)
Liabilities and Stockholders' Equity
Current Liabilities
Short-Term Financing	$-	$-	$-
Convertible Notes Payable-related party	200,000	-	-
Trade Accounts Payable	165,798	145,557	246,605
Accrued Payroll & Related Expenses	105,926	132,719	123,643
Accrued Expenses	94,882	178,815	323,199
Accrued Taxes Other Than Income	55,648	48,342	59,634
Accrued Income Taxes	-	-	-
Total Current Liabilities	622,254	505,433	753,081
Long-Term Liabilities
Convertible Notes Payable-related party	-	200,000	-
Accrued Expenses	235,200	235,200	-
Total Long-Term Liabilities	235,200	435,200	-
Stockholders' Equity
Class A, no par value;    authorized 10,000,000 shares;    1,163,349 shares outstanding    (1,163,349 shares outstanding    at September 30, 2014 and    December 31, 2013)excluding    15,795 shares in treasury	1,261,188	1,261,188	1,261,188
Class B, no par value;    authorized 2,500,000 shares;    474,866 shares outstanding    (474,866 at September 30, 2014    and December 31, 2013)excluding    667 shares in treasury	474,866	474,866	474,866
Preferred, no par value;    authorized 1,000,000 shares;    no shares outstanding	-	-	-
Contributed Capital	1,488,560	1,488,017	1,486,388
Retained Earnings (Deficit)	(735,703)	(465,047)	(793,710)
Total Stockholders' Equity	2,488,911	2,759,024	2,428,732
Total Liabilities and Stockholders' Equity	$3,346,365	$3,699,657	$3,181,813

HICKOK INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED DECEMBER 31,
(Unaudited)

	2014	2013
Cash Flows from Operating Activities:
Cash received from customers	$1,848,228	$1,178,108
Cash paid to suppliers and employees	(1,545,549)	(1,505,791)
Interest paid	-	-
Interest received	412	383
Net Cash Provided By (Used In) Operating          Activities	303,091	(327,300)
Cash Flows from Investing Activities:
Capital expenditures	(9,592)	(40,128)
Net Cash Provided By (Used In) Investing           Activities	(9,592)	(40,128)
Net increase (decrease) in cash and cash equivalents	293,499	(367,428)
Cash and cash equivalents at beginning of year	390,327	938,852
Cash and cash equivalents at end of first quarter	$683,826	$571,424
See Notes to Consolidated Financial Statements
	2014	2013
Reconciliation of Net Income (Loss) to Net Cash  Provided By (Used In) Operating Activities:
Net Income (Loss)	$(270,656)	$(320,287)
Adjustments to reconcile net income (loss) to       net cash provided by operating activities:
Depreciation	16,380	16,380
Share-based compensation expense	543	1,208
Deferred income taxes	-	-
Changes in assets and liabilities:
Decrease (Increase) in accounts                receivable	686,010	127,866
Decrease (Increase) in inventories	29,671	(58,111)
Decrease (Increase) in prepaid expenses	(75,678)	(90,565)
Increase (Decrease) in accounts payable	20,241	72,369
Increase (Decrease) in accrued payroll                and related expenses	(26,793)	(18,876)
Increase (Decrease) in accrued expenses                and accrued taxes other than income                and long-term liabilities	(76,627)	(57,284)
Total Adjustments	573,747	(7,013)
Net Cash Provided By (Used In)                   Operating Activities	$303,091	$(327,300)

HICKOK INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
DECEMBER 31, 2014

1. Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended December 31, 2014 are not necessarily indicative of the results that may be expected for the year ended September 30, 2015. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended September 30, 2014.

2. Inventories

Inventories are valued at the lower of cost or market and consist of the following:

	December 31, 2014	September 30, 2014	December 31, 2013
Components	$1,049,254	$1,066,672	$864,844
Work-in-Process	501,125	521,424	612,598
Finished Product	134,147	126,101	170,485
	$1,684,526	$1,714,197	$1,647,927

The above amounts are net of reserve for obsolete inventory in the amount of $365,564, $363,500 and $810,376 for the periods ended December 31, 2014, September 30, 2014 and December 31, 2013 respectively.

3. Notes Receivable

The Company has a note receivable with a current employee at an interest rate of three percent per annum. The Company does not anticipate repayment within the next twelve months.

4. Convertible Notes Payable

On December 30, 2011, Hickok Incorporated entered into a Convertible Loan Agreement with Roundball, LLC. Under the Convertible Loan Agreement, the Company issued a convertible note to Roundball in the amount of $466,879. In addition, Roundball, LLC had the right to cause the Company to borrow up to an additional $466,880 from Roundball, LLC. The note was unsecured, bore interest at a rate of 0.20% per annum and was set to mature on December 30, 2012.

The note was convertible by the Investor at any time into Class A Common Shares of the Company, at a conversion price of $1.85 per share, although up to no more than 504,735 Conversion Shares. The Company had the option to convert the note at the expiration date, if the investor had not during the course of the agreement. On December 30, 2011, Roundball converted $233,438 into Class A Common Shares of the Company. In addition, on August 20, 2012 Roundball converted the remaining $233,441 under the Convertible Loan Agreement into Class A Common Shares of the Company.

On December 30, 2012 management entered into an amended Convertible Loan Agreement with Roundball which may provide approximately $467,000 of liquidity to meet on going working capital requirements. The amended Convertible Loan Agreement was by and between the Company and a major shareholder who is also a Director modifying the terms and extending the due date of the loan agreement from December 30, 2012 to December 31, 2013 and modified the terms to allow $250,000 of borrowing on the agreement at the Company's discretion at an interest rate of 0.24%.

In partial consideration for Amendment No. 1, the Company and Roundball entered into a Warrant Agreement, dated  December 30, 2012, whereby the Company issued a warrant to Roundball to purchase, at its option, up to 100,000 shares of Class A Common Stock of the Company at an exercise price of $2.50 per share, subject to certain anti-dilution and other adjustments. If not exercised, this warrant will expire on December 30, 2015. Roundball is an affiliate of Steven Rosen, a Director of the Company.

The Company used the Black-Scholes option pricing model to determine the fair value estimate for recognizing the cost of services received in exchange for an award of equity instruments. The Black-Scholes option pricing model requires the use of subjective assumptions which can materially affect the fair value estimates. The warrants are immediately exercisable and expire in December 2015. The fair value of the warrants issued was amortized over the one year amended convertible loan agreement period.

On December 30, 2013 management entered into Amendment No. 2 of the Convertible Loan Agreement with Roundball which continued to provide approximately $467,000 of liquidity to meet on going working capital requirements. The amended Convertible Loan Agreement was by and between the Company and a major shareholder who is also a Director modifying the terms and extending the due date of the loan agreement from December 30, 2013 to December 30, 2014 and continues to allow $250,000 of borrowing on the agreement at the Company's discretion at an interest rate of 0.25%.

During fiscal year ended September 30, 2014, the Company borrowed $200,000 against this agreement. As of December 31, 2014, the outstanding balance on the Roundball convertible note was $200,000.

On December 31, 2014, management entered into Amendment No. 3 of the Convertible Loan Agreement with Roundball which continues to provide approximately $467,000 of liquidity to meet on going working capital requirements. The amended Convertible Loan Agreement is by and between the Company and a major shareholder who is also a Director modifying the terms and extending the due date of the loan agreement from December 30, 2014 to December 30, 2015 and continues to allow $250,000 of borrowing on the agreement at the Company's discretion at an interest rate of 0.34%.

5. Short-term Financing

The Company had a credit agreement of $250,000 with Robert L. Bauman, one of its major shareholders who is also an employee of the Company. The agreement was to expire in April 2013 but was modified on December 31, 2012 to extend the maturity date to December 2013. Effective October 30, 2012 for the remainder of the agreement, the lender may terminate the agreement with 45 days written notice, but it is at the discretion of the Company to deny the termination notice until December 2013 if it would have had a negative effect on the solvency of the Company.

The agreement provided for a revolving credit facility of $250,000 with interest at 0.24% per annum and was unsecured and included a three year warrant for 100,000 shares of Class A common stock at a price of $2.50 per share. In addition, the agreement generally allowed for borrowing based on an amount equal to eighty percent of eligible accounts receivables or $250,000. The revolving line of credit was not extended.

In partial consideration for the original extension of the revolving credit facility the Company and Bauman entered into a Warrant Agreement, dated December 30, 2012 whereby the Company issued a warrant to Bauman to purchase, at his option, up to 100,000 shares of Class A Common Stock of the Company at an exercise price of $2.50 per share, subject to certain anti-dilution and other adjustments. If not exercised, this warrant will expire on December 30, 2015.

The Company used the Black-Scholes option pricing model to determine the fair value estimate for recognizing the cost of services received in exchange for an award of equity instruments. The Black-Scholes option pricing model requires the use of subjective assumptions which can materially affect the fair value estimates. The warrants are immediately exercisable and expire in December 2015. The fair value of the warrants issued was amortized over the one year credit agreement period.

6. Capital Stock, Treasury Stock, Contributed Capital and Stock Options

Unissued shares of Class A common stock (949,233 shares) are reserved for the share-for-share conversion rights of the Class B common stock, stock options under the Directors Plans, conversion rights of the Convertible Promissory Note and available warrants.

On February 27, 2013, the Company's 2013 Omnibus Equity Plan was approved and adopted by an affirmative vote of a majority of the Company's Class A and Class B Shareholders.

The 2013 Omnibus Plan will provide the Company with the flexibility to grant a variety of share-based awards for covered employees, consultants and Directors. The 2013 Omnibus Plan provides for the grant of the following types of incentive awards: stock options, stock appreciation rights, restricted shares, restricted share units, performance shares and Class A Common Shares. Those who will be eligible for awards under the 2013 Omnibus Plan include employees who provide services to the Company and its affiliates, executive officers, non-employee Directors and consultants designated by the Compensation Committee. The Plan has 150,000 Class A Common Shares reserved for issuance. The Class A Common Shares may be either authorized, but unissued, common shares or treasury shares. No share-based awards have been granted under the 2013 Omnibus Equity Plan as of December 31, 2014.

The Company's expired Outside Directors Stock Option Plans (collectively the "Directors Plans"), provided for the automatic grant of options to purchase up to 22,000 shares of Class A Common Stock to members of the Board of Directors who are not employees of the Company, at the fair market value on the date of grant. Options for 22,000 Class A shares were outstanding at December 31, 2014 (22,000 shares at September 30, 2014 and 31,000 shares at December 31, 2013) at prices ranging from $2.925 to $11.00 per share. All outstanding options under the Directors Plans become fully exercisable on March 8, 2015.

The following is a summary of the range of exercise prices for stock options outstanding and exercisable under the Directors Plans at December 31, 2014:

   

Directors Plans	Outstanding Stock Options	Weighted Average  Share Price	Weighted Average Remaining Life	Number of Stock Options  Exercisable	Weighted Average Share Price
Range of exercise prices:
$2.925 - $5.25	13,000	$3.28	5.6	11,000	$3.35
$6.00 - $7.25	5,000	$6.18	3.3	5,000	$6.18
$10.50 - $11.00	4,000	$10.75	2.8	4,000	$10.75
	22,000	$5.30		20,000	$5.54

The Company accounts for Share-Based Payments under the modified prospective method for its stock options for both employees and non-employee Directors. Compensation cost for fixed based awards are measured at the grant date, and the Company uses the Black-Scholes option pricing model to determine the fair value estimates for recognizing the cost of employee and director services received in exchange for an award of equity instruments. The Black-Scholes option pricing model requires the use of subjective assumptions which can materially affect the fair value estimates. Employee stock options were immediately exercisable while Director's stock options are exercisable over a three year period. The fair value of stock option grants to Directors is amortized over the three year vesting period. During the quarter ended December 31, 2014 $543 was expensed as share-based compensation. During the quarter ended December 31, 2013 $1,208 was expensed as share-based compensation. The following weighted-average assumptions were used in the option pricing model for the three month periods ended December 31, 2014 and 2013 respectively: a risk free interest rate of 5.0% and 5.0%; an expected life of 10 and 10 years; an expected dividend yield of 0.0% and 0.0%; and a volatility factor of ..87 and .87.

7. Recently Issued Accounting Pronouncements

The Company did not incur any material impact to its financial condition or results of operations due to the adoption of any new accounting standards during the periods reported.

In May 2014, the FASB issued its final standard on the recognition of revenue from contracts with customers.  The standard, issued as Accounting Standards Update (ASU) 2014-09, outlines a single comprehensive model for entities to use in the accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry specific guidance. The core principle of this model is that “an entity recognizes revenue to depict the transfer of promised goods or services to a customer in an amount that reflects the consideration to which the entity expects to e entitled in exchange for those goods and services.” The update is effective for financial statement periods beginning after December 15, 2016, with early adoption prohibited. The Company has not determined the impact of this pronouncement on its financial statements and related disclosure.

8. Earnings per Common Share

Earnings per common share information is computed on the weighted average number of shares outstanding during each period based on the provisions of FASB Codification ASC Topic 260, "Earnings per Share."  The required reconciliations are as follows:

	Three Months ended December 31,
	2014	2013
Basic Income (Loss) per Share
Income (Loss) available to common stockholders	$(270,656)	$(320,287)
Shares denominator	1,638,215	1,638,215
Per share amount	$(.17)	$(.20)
Effect of Dilutive Securities
Average shares outstanding	1,638,215	1,638,215
Stock options	-*	-*
	1,638,215	1,638,215
Diluted Income (Loss) per Share
Income (Loss) available to common stockholders	$(270,656)	$(320,287)
Per share amount	$(.17)	$(.20)
* Net effect of stock options, warrants, and Convertible Note were antidilutive for the period.

Options and warrants to purchase 22,000 and 200,000 shares of common stock respectively during the first quarter of fiscal 2015 at prices ranging from $2.50 to $11.00 per share were outstanding but were not included in the computation of diluted earnings per share because the option's and warrant's effect was antidilutive or the exercise price was greater than the average market price of the common share.

Options and warrants to purchase 31,000 and 200,000 shares of common stock respectively during the first quarter of fiscal 2014 at prices ranging from $2.50 to $11.00 per share were outstanding but were not included in the computation of diluted earnings per share because the option's and warrant's effect was antidilutive or the exercise price was greater than the average market price of the common share.

In addition, conversion rights to purchase 252,367 shares of common stock at a price of $1.85 per share were not included in the computation of diluted earnings per share during the first quarter of fiscal 2015 and 2014 because the conversion rights of the Convertible Promissory Notes effect was antidilutive or the exercise price was greater than the average market price of the common share.

9. Segment and Related Information

The Company's four business units have a common management team and infrastructure that offer different products and services. The business units have been aggregated into two reportable segments: 1.)indicators and gauges and 2.)automotive related diagnostic tools and equipment.

Indicators and Gauges
This segment consists of products manufactured and sold primarily to companies in the aircraft and locomotive industry. Within the aircraft market, the primary customers are those companies that manufacture or service business and pleasure aircraft. Within the locomotive market, indicators and gauges are sold to both original equipment manufacturers and to operators of railroad equipment.

Automotive Diagnostic Tools and Equipment
This segment consists primarily of products designed and manufactured to support the testing or servicing of automotive systems using electronic means to measure vehicle parameters. These products are sold to OEM's and to the aftermarket using several brand names and a variety of distribution methods. Included in this segment are products used for state required testing of vehicle emissions.

Information by industry segment is set forth below:

Three Months Ended
December 31,

	2014	2013
Net Sales
Indicators and Gauges	$245,669	$404,405
Automotive Diagnostic Tools and Equipment	916,549	645,837
	$1,162,218	$1,050,242
Income (Loss) before Provision for Income Taxes
Indicators and Gauges	$2,493	$65,634
Automotive Diagnostic Tools and Equipment	(31,388)	(87,070)
General Corporate Expenses	(241,761)	(298,851)
	$(270,656)	$(320,287)
Asset Information
Indicators and Gauges	$704,441	$922,325
Automotive Diagnostic Tools and Equipment	1,462,089	1,235,229
Corporate	1,179,835	1,024,259
	$3,346,365	$3,181,813
Geographical Information
Included in the consolidated financial statements are the following amounts related to geographical locations:
Revenue:
United States	$1,127,459	$1,004,148
Australia	8,125	24,138
Canada	19,658	11,492
Mexico	6,976	10,464
Other foreign countries	-	-
	$1,162,218	$1,050,242

All export sales to Australia, Canada, Mexico and other foreign countries are made in United States of America Dollars.

10. Commitments and Contingencies

Legal Matters

The Company is the plaintiff in a suit pursuing patent infringement against a competitor in the emissions market. Management believes that it is not currently possible to estimate the impact, if any, that the ultimate resolution of this matter will have on the Company's results of operations, financial position or cash flows.

11. Subsequent Events

The Company has analyzed its operations subsequent to December 31, 2014 through the date the financial statements were submitted to the Securities and Exchange Commission and has determined that no subsequent events have occurred that would require recognition in the consolidated financial statements or disclosure in the notes to the consolidated financial statements.

12. Business Condition and Management Plan

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has suffered recurring losses from operations during the past several years due primarily to decreasing sales of existing product lines and a general economic downturn in all markets the Company serves. The resulting lower sales levels have impacted the Company's accounts receivable and cash balances, if this situation continues it may prevent the Company from generating sufficient cash flow to sustain its operations.

The ability of the Company to continue as a going concern is dependent on improving the Company's profitability and cash flow and securing additional financing if needed. Management continues to review and revise its strategic plan and believes in the viability of its strategy to increase revenues and profitability through increased sales of existing products and the introduction of new products to the market place. Management believes that the actions presently being taken by the Company will provide the stimulus for it to continue as a going concern, however, because of the inherent uncertainties there can be no assurances to that effect. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Additionally, the Company has net operating loss carryforwards, currently valued at $0, that offset taxable income.

In addition, on December 31, 2014, management entered into an amended unsecured convertible loan agreement which may provide approximately $467,000 of liquidity to meet on going working capital requirements. The unsecured convertible loan agreement is with a major shareholder who is also a Director modifying the terms and extending the due date of the loan agreement and continues to allow $250,000 of borrowing on the agreement at the Company's discretion. This facility is available through December 2015. The Company borrowed $200,000 on the loan agreement during the fiscal year ended September 30, 2014 and it is outstanding at December 31, 2014.

In December 2014, the Company issued a non-binding proposal letter to acquire the membership interests of Federal Hose LLC, a wholly owned subsidiary of First Francis Company, Inc. First Francis is owned by certain directors of the Company and the terms of the potential transaction are still being negotiated.

Management’s strategic plan to increase revenues and profitability through increased sales of existing products, the introduction of new products to the market place and the cash generated from the completion of the large order from a Tier 1 Supplier during the prior fiscal year should provide the Company with the needed working capital for the next twelve months.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Results of Operations, First Quarter (October 1, 2014 through December 31, 2014)
Fiscal 2015 Compared to First Quarter Fiscal 2014
-----------------------------------------------------------------------------------------

Reportable Segment Information

The Company has determined that it has two reportable segments: 1)indicators and gauges and 2)automotive related diagnostic tools and equipment. The indicators and gauges segment consists of products manufactured and sold primarily to companies in the aircraft and locomotive industry. Within the aircraft market, the primary customers are those companies that manufacture or service business, military and pleasure aircraft. Within the locomotive market, indicators and gauges are sold to original equipment manufacturers, servicers of locomotives and operators of railroad equipment. Revenue in this segment was $245,669 and $404,405 for the first quarter of fiscal 2015 and fiscal 2014, respectively. The automotive diagnostic tools and equipment segment consists primarily of products designed and manufactured to support the testing or servicing of automotive systems using electronic means to measure vehicle parameters. These products are sold to OEM's and to the aftermarket using several brand names and a variety of distribution methods. Included in this segment are products used for state required testing of vehicle emissions. Revenue in this segment was $916,549 and $645,837 for the first quarter of fiscal 2015 and fiscal 2014, respectively.

Results of Operations

Product sales for the quarter ended December 31, 2014 were $1,100,314 versus $980,395 for the quarter ended December 31, 2013. The increase in product sales during the current quarter of approximately $120,000 was volume related due primarily to increased sales of automotive diagnostic testing products to OEM's, non-emission aftermarket products and emissions testing products of approximately $228,000, $29,000 and $10,000 respectively, offset by a decrease in sales of indicator products of approximately $147,000. Although the current economic uncertainties make forecasting difficult, product sales are expected to increase significantly during the remainder of fiscal 2015.

Service sales for the quarter ended December 31, 2014 were $61,904 versus $69,847 for the quarter ended December 31, 2013. The decrease was volume related and due primarily to a lower sales volume for chargeable repairs. The current level of service sales related to product repair sales is expected to continue at current levels for the balance of the fiscal year.

Cost of product sold in the first quarter of fiscal 2015 was $759,510 (69.0% of product sales) as compared to $655,300 (66.8% of product sales) in the first quarter of fiscal 2014. The dollar and percentage increase in the cost of product sold was due primarily to reduced plant utilization, a change in product mix and a volume increase in product sales during the current quarter. The current cost of product sold percentage is expected to decrease significantly for the remainder of the year due to both increased plant utilization and improved product mix.

Cost of service sold in the first quarter of fiscal 2015 was $40,603 (65.6% of service sales) as compared to $34,104 (48.8% of service sales) in the first quarter of fiscal 2014. The percentage increase was due primarily to a lower sales volume and product specifics of chargeable repairs. The current cost of services sold percentage is expected to decrease slightly for the balance of the fiscal year.

Product development expenses were $235,938 in the first quarter of fiscal 2015 (21.4% of product sales) as compared to $231,056 (23.6% of product sales) in the first quarter of fiscal 2014. The percentage decrease was due primarily to higher product sales during the current quarter. The current level of product development expenses is expected to continue for the balance of the fiscal year. The Company believes the existing resources will be sufficient to continue to develop identified new products for both OEM and Aftermarket customers.

Marketing and administrative expenses were $399,399 (34.3% of total net sales) in the first quarter of fiscal 2015 versus $453,997 (43.2% of total net sales) for the same period a year ago. The percentage decrease was due primarily to the higher level of total sales for the current quarter. Marketing expenses were approximately $155,000 in the first quarter of fiscal 2015 versus $151,000 for the same period a year ago. Within marketing expenses, promotion expense, travel expense, credit and collection expense, wages and advertising increased by approximately $5,000, $3,000, $3,000, $2,000 and $2,000 respectively. Royalty expense, outside consulting and commissions decreased by approximately $8,000, $2,000 and $1,000 respectively. Administrative expenses were approximately $244,000 in the first quarter of fiscal 2015 versus $303,000 for the same period a year ago. Within administrative expenses professional fees, travel expenses and rent machinery and equipment decreased approximately $60,000, $2,000 and $2,000 respectively. The decreases were offset primarily by an increase in data processing expenses of approximately $6,000. The current level of marketing and administrative expenses are expected to continue for the balance of the fiscal year unless discussions regarding a possible acquisition require additional professional fees. See Discussions Regarding Potential Acquisition section below.

Interest expense was $128 in the first quarter of fiscal 2015 which compares with $0 in the first quarter of fiscal 2014. The increase in interest charges in the current quarter compared to a year ago was due to recording interest expense on the outstanding balance of the convertible notes payable. The current level of interest expense is anticipated to continue for the remainder of the fiscal year.

Other income was $2,704 in the first quarter of fiscal 2015 which compares with $3,928 in the first quarter of fiscal 2014. Other income consists primarily of interest income on cash and cash equivalents invested and the proceeds from the sale of scrap metal shavings. The decrease was due primarily to a decrease in the sale of scrap mental shavings.

Income taxes in the first quarter of fiscal 2015 was $0 which compares with income taxes of $0 in the first quarter of fiscal 2014. In the first quarter of fiscal 2015 and 2014 recovery of income taxes was calculated at an effective tax rate of 37% offset by a increase in the valuation allowance netting to $0.

The net loss in the first quarter of fiscal 2015 was $270,656 which compares with a net loss of $320,287 in the first quarter of fiscal 2014. The higher net loss in fiscal 2014 was due primarily to a lower sales volume.
 
Unshipped customer orders as of December 31, 2014 were $469,000 versus $713,000 at December 31, 2013. The $244,000 decrease was due primarily to decreased orders for indicators, automotive diagnostic products to OEM's and aftermarket products which include emissions products of approximately $113,000, $51,000 and $22,000 respectively. In addition, orders for parts and service also decreased by approximately $58,000. The Company anticipates that most of the current backlog will be shipped in fiscal 2015.

Liquidity and Capital Resources

Total current assets were $2,968,277, $3,314,718 and $2,852,708 at December 31, 2014, September 30, 2014 and December 31, 2013, respectively. The increase of approximately $116,000 from December to December is due primarily to the increase in cash and cash equivalents and inventories of approximately $112,000 and $37,000 respectively, offset by a decrease in accounts receivable and prepaid expenses of approximately $24,000 and $9,000 respectively. The increase in cash and cash equivalents combined with the decrease in accounts receivable was due to the completion of the large order obtained in January 2014 for an OEM supplier. The decrease from September 30, 2014 to December 31, 2014 of approximately $347,000 is due primarily to the decrease in accounts receivable and inventory of approximately $686,000 and $30,000 respectively, offset by an increase in cash and cash equivalents and prepaid expenses of approximately $293,000 and $76,000 respectively. The decrease in cash and accounts receivable was due primarily to the collection of accounts receivable from the large order completed during the fourth quarter of fiscal 2014.

Working capital as of December 31, 2014 amounted to $2,346,023 as compared with $2,099,627 a year earlier. Current assets were 4.8 times current liabilities and total cash and cash equivalents and receivables were 1.9 times current liabilities. These ratios compare to 3.8 and 1.4, respectively, at December 31, 2013.

Internally generated funds during the three months ended December 31, 2014 were a positive $303,091 and were adequate to fund the Company's primary non-operating cash requirements consisting of capital expenditures of $9,592. The primary reason for the positive cash flow from operations was the decrease of accounts receivable, accrued expenses and inventory of $686,010, $76,627 and $29,671 respectively, offset by an increase in prepaid expenses of $75,678 and the net loss during the current quarter of $270,656. The Company does anticipate additional capital expenditures during fiscal 2015 of approximately $100,000 primarily to complete the upgrade and replacement of the Company's IT infrastructure. The Company believes that cash and cash equivalents together with funds anticipated to be generated by operations in addition to available short-term or long-term financing will provide adequate funding of the Company's working capital needs.

Shareholders' equity during the three months ended December 31, 2014 decreased by $270,113 which was the net loss during the period of $270,656 and share-based compensation expense of $543.

Whenever there may be a requirement to increase inventory in fiscal 2015, there will be a negative but temporary impact on liquidity. Management implemented expense reductions in response to the economic downturn and uncertainty in the markets the Company serves. These expense reductions began in fiscal 2009 and have continued through fiscal 2014, and are anticipated to continue for fiscal 2015. The Company has reduced headcount, product development, and marketing, administrative and sales related expenses at points during this expense reduction program in order to appropriately manage its working capital.

In December 2014, management entered into Amendment No. 3 of the Convertible Loan Agreement which may provide approximately $467,000 of liquidity to meet on going working capital requirements. The amended Convertible Loan Agreement is between the Company and a major shareholder who is also a Director, as discussed in Note 4 to the Company's financial statements. This amended agreement modified the terms of the previously amended agreement by modifying the terms and extending the due date of the loan agreement from December 30, 2014 to December 30, 2015 and continues to allow $250,000 of borrowing on the agreement at the Company's discretion. During fiscal 2014, the Company borrowed $200,000 against this facility and at December 31, 2014 this balance is outstanding.

Discussions Regarding Potential Acquisition

The Company is engaged in discussions with First Francis Company, Inc., an entity affiliated with Edward F. Crawford and Matthew V. Crawford, directors of the Company, concerning a potential acquisition of Federal Hose LLC, a wholly owned subsidiary of First Francis. The Company has submitted a non-binding proposal letter to First Francis under the terms of which it would acquire all of the membership interests of Federal Hose in exchange for an aggregate of (i) 911,250 of the Company’s Class A Common Shares; (ii) 303,750 of the Company’s Class B Common Shares; (iii) $4,268,662 in a note to be issued by the Company, which will rank pari passu with its existing indebtedness, bear interest at an annual rate of 4% payable quarterly, subject to redemption over a mandatory 10-year amortization schedule and required to be fully redeemed within six years of their issuance date. The Company will not incur any additional debt greater than $250,000 without the Note Holder’s approval.

Information concerning this prospective transaction constitutes forward-looking statements. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. With respect to statements relating to this proposed transaction, such uncertainties include, among other things, the fact that no agreement has been reached between the parties with respect to the terms of the proposed transaction, and the fact that any such transaction would be subject to a number of conditions precedent, including the negotiation of a satisfactory purchase agreement, authorization by the Board of Directors of the Company, receipt of third party consents, and the satisfaction of other customary conditions precedent. In addition, shareholder approval of the transaction may be required including, in the event that Class B Common Shares are proposed to be issued, separate approval of the holders of a majority of the Company’s Class A Shares. We cannot assure you that any agreement will be reached with respect to the transaction or as to the timing or terms thereof.

Off-Balance Sheet Arrangements

Hickok has no off-balance sheet arrangements (as defined in Regulation S-K Item 303 paragraph (a)(4)(ii)) that have or are reasonably likely to have a material current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies

Our critical accounting policies are as presented in Notes to Consolidated Financial Statements and Management's Discussion and Analysis of Financial Condition and Results of Operation in our Form 10-K for the year ended September 30, 2014.

Forward-Looking Statements

The foregoing discussion includes forward-looking statements relating to the business of the Company. These forward-looking statements, or other statements made by the Company, are made based on management's expectations and beliefs concerning future events impacting the Company and are subject to uncertainties and factors (including, but not limited to, those specified below) which are difficult to predict and, in many instances, are beyond the control of the Company. As a result, actual results of the Company could differ materially from those expressed in or implied by any such forward-looking statements. These uncertainties and factors include (a) the Company's dependence upon a limited number of customers and the automotive industry, (b) the highly competitive industry in which the company operates, which includes several competitors with greater financial resources and larger sales organizations, (c) the acceptance in the marketplace of new products and/or services developed or under development by the Company including automotive diagnostic products and indicating instrument products, (d) the ability of the Company to further establish distribution and a customer base in the automotive aftermarket, (e) the Company's ability to capitalize on market opportunities including state automotive emissions programs and OEM tool programs and (f) the Company's ability to obtain cost effective financing.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Market Risk

The Company is exposed to certain market risks from transactions that are entered into during the normal course of business. The Company has not entered into derivative financial instruments for trading purposes. The Company's primary market risks are exposure related to interest rate risk and equity market fluctuations. The Company's funds available from the convertible note were the only debt subject to interest rate risk during the current quarter. The Company currently has available under the convertible note agreement a credit facility subject to a nominal fixed rate of interest. As a result, the Company believes that the market risk related to interest rate movements is minimal. The Company had $200,000 of outstanding borrowings under this credit facility at December 31, 2014.

Item 4. Controls and Procedures.

As of December 31, 2014, an evaluation was performed, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer along with the Company's Vice President, Finance and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based upon that evaluation, the Company's management, including the Chief Executive Officer along with the Company's Vice President, Finance and Chief Financial Officer, concluded that the Company's disclosure controls and procedures were effective as of December 31, 2014 in ensuring that information required to be disclosed by the Company in the reports it files and submits under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms, and (2) is accumulated and communicated to the Company's management, including its principal executive and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. There were no changes in the Company's internal controls over financial reporting during the first fiscal quarter ended December 31, 2014 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

The Company is the plaintiff in a suit pursuing patent infringement against a competitor in the emissions market. There has been no material developments in this legal proceeding since the filing of Form 10-K for fiscal 2014. Management believes that it is not currently possible to estimate the impact, if any, that the ultimate resolution of the patent infringement matter will have on the Company's results of operations, financial position or cash flows.

Item 6. Exhibits.

Exhibit No.	Description
11	Statement Regarding Computation of Earnings Per Share and Common Share Equivalents
31.1	Rule 13a-14(a)/15d-14(a) Certification by the Chief Executive Officer
31.2	Rule 13a-14(a)/15d-14(a) Certification by the Chief Financial Officer
32.1	Certification by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS**	XBRL Instance
101.SCH**	XBRL Taxonomy Extension Schema
101.CAL**	XBRL Taxonomy Extension Calculation
101.DEF**	XBRL Extension Definition
101.LAB**	XBRL Taxonomy Extension Labels
101.PRE**	XBRL Taxonomy Extension Presentation

** XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		HICKOK INCORPORATED (Registrant)
Date: February 16, 2015	/s/ R. L. Bauman
	R. L. Bauman, Chief Executive Officer, President, and Treasurer
Date: February 16, 2015	/s/ G. M. Zoloty
	G. M. Zoloty, Chief Financial Officer

EX-11

FORM 10-Q

EXHIBIT 11

HICKOK INCORPORATED
CONSOLIDATED STATEMENT OF COMPUTATION OF EARNINGS
PER COMMON SHARE AND COMMON SHARE EQUIVALENTS

	Three Months Ended
	December 31,
	2014	2013
NET INCOME Net income (loss) applicable to common shares for basic earnings per share	$(270,656)	$(320,287)
Net income (loss) applicable to common shares for diluted earnings per share	$(270,656)	$(320,287)
SHARES OUTSTANDING Weighted average shares for basic earnings per share	1,638,215	1,638,215
Net effect of dilutive stock options - based on the treasury stock method using year-end market price, if higher than average market price	-*	-*
Total shares for diluted earnings per share	1,638,215	1,638,215
Basic Earnings Per Common Share	$(.17)	$(.20)
Diluted Earnings Per Common Share	$(.17)	$(.20)

*  Net effect of stock options, warrants and Convertible Note were antidilutive for the period.
   
   

EX-31

Form 10-Q

Exhibit 31.1

RULE 13a-14(a)/15d-14(a) CERTIFICATION

I, Robert L. Bauman, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Hickok Incorporated (the "registrant");
    

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
    

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
    

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

   a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
   
   b) Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
   
   c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
   
   d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
   
   

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

By:

/s/ R. L. Bauman

R. L. Bauman

Chief Executive Officer

February 16, 2015

EX-31

Form 10-Q

Exhibit 31.2

RULE 13a-14(a)/15d-14(a) CERTIFICATION

I, Gregory M. Zoloty, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Hickok Incorporated (the "registrant");
    

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
    

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
    

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

   a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
   
   b) Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
   
   c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
   
   d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
   
   

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

By:

/s/ G. M. Zoloty

G. M. Zoloty

Vice President, Finance
and Chief Financial Officer

February 16, 2015

EX-32

Form 10-Q

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Hickok Incorporated (the "Company") on Form 10-Q for the period ending December 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Robert L. Bauman, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

1. the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ R. L. Bauman

R. L. Bauman

Chief Executive Officer

February 16, 2015

EX-32

Form 10-Q

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Hickok Incorporated (the "Company") on Form 10-Q for the period ending December 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Gregory M. Zoloty, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

1. the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ G. M. Zoloty

G. M. Zoloty

Chief Financial Officer

February 16, 2015

XML

Note 5 - Short-term Financing (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2013
Robert L Bauman [Member]
Warrant Period	3 years
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 2.50
Robert L Bauman [Member] | Common Class A [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	100,000
Revolving Credit Facility [Member] | Robert L Bauman [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 250,000
Line of Credit Facility, Interest Rate During Period	0.24%

XML

Note 4 - Convertible Notes Payable

3 Months Ended

Dec. 31, 2014

Notes to Financial Statements

Debt Disclosure [Text Block]

4.

Convertible Notes Payable

On December 30, 2011, Hickok Incorporated entered into a Convertible Loan Agreement with Roundball, LLC. Under the Convertible Loan Agreement, the Company issued a convertible note to Roundball in the amount of $466,879. In addition, Roundball, LLC had the right to cause the Company to borrow up to an additional $466,880 from Roundball, LLC. The note was unsecured, bore interest at a rate of 0.20% per annum and was set to mature on December 30, 2012. The note was convertible by the Investor at any time into Class A Common Shares of the Company, at a conversion price of $1.85 per share, although up to no more than 504,735 Conversion Shares. The Company had the option to convert the note at the expiration date, if the investor had not during the course of the agreement. On December 30, 2011, Roundball converted $233,438 into Class A Common Shares of the Company. In addition, on August 20, 2012 Roundball converted the remaining $233,441 under the Convertible Loan Agreement into Class A Common Shares of the Company.

 
On December 30, 2012 management entered into an amended Convertible Loan Agreement with Roundball which may provide approximately $467,000 of liquidity to meet on going working capital requirements. The amended Convertible Loan Agreement was by and between the Company and a major shareholder who is also a Director modifying the terms and extending the due date of the loan agreement from December 30, 2012 to December 31, 2013 and modified the terms to allow $250,000 of borrowing on the agreement at the Company's discretion at an interest rate of 0.24%.
 
In partial consideration for Amendment No. 1, the Company and Roundball entered into a Warrant Agreement, dated  December 30, 2012, whereby the Company issued a warrant to Roundball to purchase, at its option, up to 100,000 shares of Class A Common Stock of the Company at an exercise price of $2.50 per share, subject to certain anti-dilution and other adjustments. If not exercised, this warrant will expire on December 30, 2015. Roundball is an affiliate of Steven Rosen, a Director of the Company.

The Company used the Black-Scholes option pricing model to determine the fair value estimate for recognizing the cost of services received in exchange for an award of equity instruments. The Black-Scholes option pricing model requires the use of subjective assumptions which can materially affect the fair value estimates. The warrants are immediately exercisable and expire in December 2015. The fair value of the warrants issued was amortized over the one year amended convertible loan agreement period.

On December 30, 2013 management entered into Amendment No. 2 of the Convertible Loan Agreement with Roundball which continued to provide approximately $467,000 of liquidity to meet on going working capital requirements. The amended Convertible Loan Agreement was by and between the Company and a major shareholder who is also a Director modifying the terms and extending the due date of the loan agreement from December 30, 2013 to December 30, 2014 and continues to allow $250,000 of borrowing on the agreement at the Company's discretion at an interest rate of 0.25%.

During fiscal year ended September 30, 2014, the Company borrowed $200,000 against this agreement. As of December 31, 2014, the outstanding balance on the Roundball convertible note was $200,000.

On December 31, 2014, management entered into Amendment No. 3 of the Convertible Loan Agreement with Roundball which continues to provide approximately $467,000 of liquidity to meet on going working capital requirements. The amended Convertible Loan Agreement is by and between the Company and a major shareholder who is also a Director modifying the terms and extending the due date of the loan agreement from December 30, 2014 to December 30, 2015 and continues to allow $250,000 of borrowing on the agreement at the Company's discretion at an interest rate of 0.34%.

XML

Note 8 - Summary of Earnings Per Share Calculation (Details) (USD $)	3 Months Ended
	Dec. 31, 2014		Dec. 31, 2013
Earnings per Common Share:
Income (Loss) available to common stockholders	$ (270,656)		$ (320,287)
Shares denominator (in shares)	1,638,215		1,638,215
Per share amount (in dollars per share)	$ (0.17)		$ (0.20)
Effect of Dilutive Securities
Average shares outstanding (in shares)	1,638,215		1,638,215
Stock options (in shares)		[1]		[1]
Average shares outstanding, diluted (in shares)	1,638,215		1,638,215
Earnings per Common Share Assuming Dilution:
Income (Loss) available to common stockholders	$ (270,656)		$ (320,287)
Per share amount (in dollars per share)	$ (0.17)		$ (0.20)

[1] Net effect of stock options, warrants, and Convertible Note were antidilutive for the period.

XML

Note 8 - Earnings Per Common Share (Details Textual) (USD $)	3 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Equity Option [Member]
Earnings Per Share [Abstract]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	22,000	31,000
Warrant [Member]
Earnings Per Share [Abstract]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	200,000	200,000
Conversion Rights [Member]
Earnings Per Share [Abstract]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	252,367	252,367
Share Price	1.85	1.85
Options and Warrants [Member] | Maximum [Member]
Earnings Per Share [Abstract]
Share Price	11	11
Options and Warrants [Member] | Minimum [Member]
Earnings Per Share [Abstract]
Share Price	2.50	2.50

XML

Note 9 - Segment and Related Information (Details Textual)	3 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Segment Reporting [Abstract]
Number of Operating Segments	4
Number of Reportable Segments		2

XML

Note 9 - Information by Industry Segment (Details) (USD $)	3 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Revenue	$ 1,162,218	$ 1,050,242
Income (loss) before provistion for income taxes	(270,656)	(320,287)
Asset information	3,346,365	3,181,813
Australia [Member]
Revenue	8,125	24,138
Canada [Member]
Revenue	19,658	11,492
Mexico [Member]
Revenue	6,976	10,464
United States [Member]
Revenue	1,127,459	1,004,148
Corporate Segment [Member]
Asset information	1,179,835	1,024,259
Automotive Diagnostic Tools and Equipment [Member]
Revenue	916,549	645,837
Income (loss) before provistion for income taxes	(31,388)	(87,070)
Asset information	1,462,089	1,235,229
Indicators and Gauges [Member]
Revenue	245,669	404,405
Income (loss) before provistion for income taxes	2,493	65,634
Asset information	704,441	922,325
Corporate, Non-Segment [Member]
Income (loss) before provistion for income taxes	$ (241,761)	$ (298,851)

XML

Note 3 - Notes Receivable

3 Months Ended

Dec. 31, 2014

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

3.

Notes Receivable

The Company has a note receivable with a current employee at an interest rate of three percent per annum. The Company does not anticipate repayment within the next twelve months.

XML

Note 12 - Business Condition and Management Plan (Details Textual) (USD $)	Dec. 31, 2014
Operating Loss Carryforward, Net of Allowance	$ 0
Convertible Notes Payable, Current	200,000
Amendment No. 3 [Member] | Roundball LLC [Member] | Director [Member]
Working Capital Funding	467,000
Line of Credit Facility, Current Borrowing Capacity	250,000
Convertible Notes Payable, Current	$ 200,000

XML

Consolidated Income Statements (Unaudited) (USD $)	3 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Net Sales
Product Sales	$ 1,100,314	$ 980,395
Service Sales	61,904	69,847
Total Net Sales	1,162,218	1,050,242
Costs and Expenses
Cost of Product Sold	759,510	655,300
Cost of Service Sold	40,603	34,104
Product Development	235,938	231,056
Marketing and Administrative Expenses	399,399	453,997
Interest Charges	128
Other Income	(2,704)	(3,928)
Total Costs and Expenses	1,432,874	1,370,529
Income (Loss) before Provision for Income Taxes	(270,656)	(320,287)
Net Income (Loss)	$ (270,656)	$ (320,287)
Earnings per Common Share:
Net Income (Loss) (in dollars per share)	$ (0.17)	$ (0.20)
Earnings per Common Share Assuming Dilution:
Net Income (Loss) (in dollars per share)	$ (0.17)	$ (0.20)
Dividends per Common Share (in dollars per share)	$ 0	$ 0

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Note 1 - Basis of Presentation

3 Months Ended

Dec. 31, 2014

Notes to Financial Statements

Basis of Accounting [Text Block]

1.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended December 31, 2014 are not necessarily indicative of the results that may be expected for the year ended September 30, 2015. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended September 30, 2014.

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Note 2 - Inventories (Details Textual) (USD $)	Dec. 31, 2014	Sep. 30, 2014	Dec. 31, 2013
Inventory Disclosure [Abstract]
Inventory Valuation Reserves	$ 365,564	$ 363,500	$ 810,376

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Note 4 - Convertible Notes Payable (Details Textual) (USD $)	1 Months Ended		12 Months Ended
	Aug. 20, 2012	Dec. 30, 2011	Sep. 30, 2014	Dec. 31, 2014	Dec. 30, 2012	Dec. 31, 2013	Dec. 30, 2013
Debt Disclosure [Abstract]
Convertible Notes Payable, Current				$ 200,000
Roundball LLC [Member] | Convertible Notes Payable [Member]
Debt Disclosure [Abstract]
Convertible Notes Payable, Current		466,879
Debt Instrument, Interest Rate, Stated Percentage					0.20%
Roundball LLC [Member] | Convertible Notes Payable [Member] | Director [Member]
Debt Disclosure [Abstract]
Working Capital Funding					467,000
Debt Instrument, Interest Rate, Stated Percentage						0.24%
Line of Credit Facility, Maximum Borrowing Capacity						250,000
Roundball LLC [Member] | Convertible Notes Payable [Member] | Common Class A [Member]
Debt Disclosure [Abstract]
Debt Instrument, Convertible, Conversion Price		$ 1.85
Convertible Preferred Stock, Shares Issued upon Conversion		504,735
Conversion of Stock, Amount Converted	233,441	233,438
Additional Borrowing [Member] | Roundball LLC [Member] | Convertible Notes Payable [Member]
Debt Disclosure [Abstract]
Proceeds from Issuance of Debt		466,880
Amendment No. 1 [Member] | Roundball LLC [Member] | Common Class A [Member]
Debt Disclosure [Abstract]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights					100,000
Class of Warrant or Right, Exercise Price of Warrants or Rights					2.50
Amendment No 2 [Member] | Roundball LLC [Member]
Debt Disclosure [Abstract]
Convertible Notes Payable, Current			200,000
Proceeds from Convertible Debt			200,000
Amendment No 2 [Member] | Roundball LLC [Member] | Director [Member]
Debt Disclosure [Abstract]
Working Capital Funding						467,000
Debt Instrument, Interest Rate, Stated Percentage							0.25%
Line of Credit Facility, Maximum Borrowing Capacity							250,000
Amendment No. 3 [Member] | Roundball LLC [Member] | Director [Member]
Debt Disclosure [Abstract]
Working Capital Funding				467,000
Convertible Notes Payable, Current				200,000
Debt Instrument, Interest Rate, Stated Percentage				0.34%
Line of Credit Facility, Maximum Borrowing Capacity				$ 250,000

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Note 2 - Inventories

3 Months Ended

Dec. 31, 2014

Notes to Financial Statements

Inventory Disclosure [Text Block]

2.

Inventories

Inventories are valued at the lower of cost or market and consist of the following:

	December 31, 2014		September 30, 2014		December 31, 2013
Components	$	1,049,254	$	1,066,672	$	864,844
Work-in-Process		501,125		521,424		612,598
Finished Product		134,147		126,101		170,485
	$	1,684,526	$	1,714,197	$	1,647,927

The above amounts are net of reserve for obsolete inventory in the amount of $365,564, $363,500 and $810,376 for the periods ended December 31, 2014, September 30, 2014 and December 31, 2013 respectively.

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Consolidated Balance Sheet (Unaudited) (USD $)	Dec. 31, 2014	Sep. 30, 2014	Dec. 31, 2013
Current Assets
Cash and Cash Equivalents	$ 683,826	$ 390,327	$ 571,424
Trade Accounts Receivable-Net	486,258	1,172,268	510,450
Inventories	1,684,526	1,714,197	1,647,927
Prepaid Expenses	113,667	37,989	122,907
Total Current Assets	2,968,277	3,314,781	2,852,708
Property, Plant and Equipment
Land	233,479	233,479	233,479
Buildings	1,429,718	1,429,718	1,429,718
Machinery and Equipment	2,525,972	2,516,380	2,428,890
	4,189,169	4,179,577	4,092,087
Less: Allowance for Depreciation	3,816,931	3,800,551	3,768,832
Total Property - Net	372,238	379,026	323,255
Other Assets
Notes Receivable-Long-term	4,100	4,100	4,100
Deposits	1,750	1,750	1,750
Total Other Assets	5,850	5,850	5,850
Total Assets	3,346,365	3,699,657	3,181,813
Current Liabilities
Convertible Notes Payable-related party	200,000
Trade Accounts Payable	165,798	145,557	246,605
Accrued Payroll & Related Expenses	105,926	132,719	123,643
Accrued Expenses	94,882	178,815	323,199
Accrued Taxes Other Than Income	55,648	48,342	59,634
Total Current Liabilities	622,254	505,433	753,081
Long-Term Liabilities
Convertible Notes Payable-related party		200,000
Accrued Expenses	235,200	235,200
Total Long-Term Liabilities	235,200	435,200
Stockholders' Equity
Preferred, no par value; authorized 1,000,000 shares; no shares outstanding	0	0	0
Contributed Capital	1,488,560	1,488,017	1,486,388
Retained Earnings (Deficit)	(735,703)	(465,047)	(793,710)
Total Stockholders' Equity	2,488,911	2,759,024	2,428,732
Total Liabilities and Stockholders' Equity	3,346,365	3,699,657	3,181,813
Common Class A [Member]
Stockholders' Equity
Class of common stock - value	1,261,188	1,261,188	1,261,188
Common Class B [Member]
Stockholders' Equity
Class of common stock - value	$ 474,866	$ 474,866	$ 474,866

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Note 12 - Business Condition and Management Plan

3 Months Ended

Dec. 31, 2014

Notes to Financial Statements

Going Concern Disclosure [Text Block]

12.

Business Condition and Management Plan

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has suffered recurring losses from operations during the past several years due primarily to decreasing sales of existing product lines and a general economic downturn in all markets the Company serves. The resulting lower sales levels have impacted the Company's accounts receivable and cash balances, if this situation continues it may prevent the Company from generating sufficient cash flow to sustain its operations.

The ability of the Company to continue as a going concern is dependent on improving the Company's profitability and cash flow and securing additional financing if needed. Management continues to review and revise its strategic plan and believes in the viability of its strategy to increase revenues and profitability through increased sales of existing products and the introduction of new products to the market place. Management believes that the actions presently being taken by the Company will provide the stimulus for it to continue as a going concern, however, because of the inherent uncertainties there can be no assurances to that effect. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Additionally, the Company has net operating loss carryforwards, currently valued at $0, that offset taxable income.

In addition, on December 31, 2014, management entered into an amended unsecured convertible loan agreement which may provide approximately $467,000 of liquidity to meet on going working capital requirements. The unsecured convertible loan agreement is with a major shareholder who is also a Director modifying the terms and extending the due date of the loan agreement and continues to allow $250,000 of borrowing on the agreement at the Company's discretion. This facility is available through December 2015. The Company borrowed $200,000 on the loan agreement during the fiscal year ended September 30, 2014 and it is outstanding at December 31, 2014.

In December 2014, the Company issued a non-binding proposal letter to acquire the membership interests of Federal Hose LLC, a wholly owned subsidiary of First Francis Company, Inc. First Francis is owned by certain directors of the Company and the terms of the potential transaction are still being negotiated.

Management’s strategic plan to increase revenues and profitability through increased sales of existing products, the introduction of new products to the market place and the cash generated from the completion of the large order from a Tier 1 Supplier during the prior fiscal year should provide the Company with the needed working capital for the next twelve months.

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Document And Entity Information	3 Months Ended
	Dec. 31, 2014	Feb. 09, 2015
Entity Registrant Name	HICKOK INC
Entity Central Index Key	0000047307
Current Fiscal Year End Date	--09-30
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Type	10-Q
Document Period End Date	Dec. 31, 2014
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Amendment Flag	false
Common Class A [Member]
Entity Common Stock, Shares Outstanding (in shares)		1,163,349
Common Class B [Member]
Entity Common Stock, Shares Outstanding (in shares)		474,866

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Note 2 - Inventories (Tables)

3 Months Ended

Dec. 31, 2014

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	December 31, 2014		September 30, 2014		December 31, 2013
Components	$	1,049,254	$	1,066,672	$	864,844
Work-in-Process		501,125		521,424		612,598
Finished Product		134,147		126,101		170,485
	$	1,684,526	$	1,714,197	$	1,647,927

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Consolidated Balance Sheet (Unaudited) (Parentheticals) (USD $)	Dec. 31, 2014	Sep. 30, 2014	Dec. 31, 2013
Preferred stock - par value (in dollars per share)	$ 0	$ 0	$ 0
Preferred stock - shares authorized (in shares)	1,000,000	1,000,000	1,000,000
Preferred stock - shares outstanding (in shares)	0	0	0
Common Class A [Member]
Class of common stock - par value (in dollars per share)	$ 0	$ 0	$ 0
Class of common stock - shares authorized (in shares)	10,000,000	10,000,000	10,000,000
Class of common stock - shares outstanding (in shares)	1,163,349	1,163,349	1,163,349
Class of common stock - excluding shares in treasury (in shares)	15,795	15,795	15,795
Common Class B [Member]
Class of common stock - par value (in dollars per share)	$ 0	$ 0	$ 0
Class of common stock - shares authorized (in shares)	2,500,000	2,500,000	2,500,000
Class of common stock - shares outstanding (in shares)	474,866	474,866	474,866
Class of common stock - excluding shares in treasury (in shares)	667	667	667

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Note 7 - Recently Issued Accounting Pronouncements

3 Months Ended

Dec. 31, 2014

Notes to Financial Statements

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

7.

Recently Issued Accounting Pronouncements

The Company did not incur any material impact to its financial condition or results of operations due to the adoption of any new accounting standards during the periods reported. 

 
In May 2014, the FASB issued its final standard on the recognition of revenue from contracts with customers.  The standard, issued as Accounting Standards Update (ASU) 2014-09, outlines a single comprehensive model for entities to use in the accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry specific guidance. The core principle of this model is that “an entity recognizes revenue to depict the transfer of promised goods or services to a customer in an amount that reflects the consideration to which the entity expects to e entitled in exchange for those goods and services.” The update is effective for financial statement periods beginning after December 15, 2016, with early adoption prohibited. The Company has not determined the impact of this pronouncement on its financial statements and related disclosure.

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Note 6 - Capital Stock, Treasury Stock, Contributed Capital and Stock Options

3 Months Ended

Dec. 31, 2014

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

6.

Capital Stock, Treasury Stock, Contributed Capital and Stock Options

Unissued shares of Class A common stock (949,233 shares) are reserved for the share-for-share conversion rights of the Class B common stock, stock options under the Directors Plans, conversion rights of the Convertible Promissory Note and available warrants.

On February 27, 2013, the Company's 2013 Omnibus Equity Plan was approved and adopted by an affirmative vote of a majority of the Company's Class A and Class B Shareholders.

The 2013 Omnibus Plan will provide the Company with the flexibility to grant a variety of share-based awards for covered employees, consultants and Directors. The 2013 Omnibus Plan provides for the grant of the following types of incentive awards: stock options, stock appreciation rights, restricted shares, restricted share units, performance shares and Class A Common Shares. Those who will be eligible for awards under the 2013 Omnibus Plan include employees who provide services to the Company and its affiliates, executive officers, non-employee Directors and consultants designated by the Compensation Committee. The Plan has 150,000 Class A Common Shares reserved for issuance. The Class A Common Shares may be either authorized, but unissued, common shares or treasury shares. No share-based awards have been granted under the 2013 Omnibus Equity Plan as of December 31, 2014.

The Company's expired Outside Directors Stock Option Plans (collectively the "Directors Plans"), provided for the automatic grant of options to purchase up to 22,000 shares of Class A Common Stock to members of the Board of Directors who are not employees of the Company, at the fair market value on the date of grant. Options for 22,000 Class A shares were outstanding at December 31, 2014 (22,000 shares at September 30, 2014 and 31,000 shares at December 31, 2013) at prices ranging from $2.925 to $11.00 per share. All outstanding options under the Directors Plans become fully exercisable on March 8, 2015.

The following is a summary of the range of exercise prices for stock options outstanding and exercisable under the Directors Plans at December 31, 2014:

Directors Plans			Outstanding Stock Options		Weighted Average Share Price		Weighted Average Remaining Life		Number of Stock Options Exercisable		Weighted Average Share Price
Range of exercise prices:
$ 2.925	-	$5.25		13,000	$	3.28		5.6		11,000	$	3.35
$ 6.00	-	$7.25		5,000	$	6.18		3.3		5,000	$	6.18
$ 10.50	-	$11.00		4,000	$	10.75		2.8		4,000	$	10.75
				22,000	$	5.30				20,000	$	5.54

The Company accounts for Share-Based Payments under the modified prospective method for its stock options for both employees and non-employee Directors. Compensation cost for fixed based awards are measured at the grant date, and the Company uses the Black-Scholes option pricing model to determine the fair value estimates for recognizing the cost of employee and director services received in exchange for an award of equity instruments. The Black-Scholes option pricing model requires the use of subjective assumptions which can materially affect the fair value estimates. Employee stock options were immediately exercisable while Director's stock options are exercisable over a three year period. The fair value of stock option grants to Directors is amortized over the three year vesting period. During the quarter ended December 31, 2014 $543 was expensed as share-based compensation. During the quarter ended December 31, 2013 $1,208 was expensed as share-based compensation. The following weighted-average assumptions were used in the option pricing model for the three month periods ended December 31, 2014 and 2013 respectively: a risk free interest rate of 5.0% and 5.0%; an expected life of 10 and 10 years; an expected dividend yield of 0.0% and 0.0%; and a volatility factor of .87 and .87.

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Note 2 - Inventory (Details) (USD $)	Dec. 31, 2014	Sep. 30, 2014	Dec. 31, 2013
Components	$ 1,049,254	$ 1,066,672	$ 864,844
Work-in-Process	501,125	521,424	612,598
Finished Product	134,147	126,101	170,485
	$ 1,684,526	$ 1,714,197	$ 1,647,927

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Note 6 - Capital Stock, Treasury Stock, Contributed Capital and Stock Options (Tables) (Directors Plans [Member])

3 Months Ended

Dec. 31, 2014

Directors Plans [Member]

Notes Tables

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block]

Directors Plans			Outstanding Stock Options		Weighted Average Share Price		Weighted Average Remaining Life		Number of Stock Options Exercisable		Weighted Average Share Price
Range of exercise prices:
$ 2.925	-	$5.25		13,000	$	3.28		5.6		11,000	$	3.35
$ 6.00	-	$7.25		5,000	$	6.18		3.3		5,000	$	6.18
$ 10.50	-	$11.00		4,000	$	10.75		2.8		4,000	$	10.75
				22,000	$	5.30				20,000	$	5.54

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Note 10 - Commitments and Contingencies

3 Months Ended

Dec. 31, 2014

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

10.

Commitments and Contingencies

Legal Matters

The Company is the plaintiff in a suit pursuing patent infringement against a competitor in the emissions market. Management believes that it is not currently possible to estimate the impact, if any, that the ultimate resolution of this matter will have on the Company's results of operations, financial position or cash flows.

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Note 8 - Earnings Per Common Share

3 Months Ended

Dec. 31, 2014

Notes to Financial Statements

Earnings Per Share [Text Block]

8.

Earnings per Common Share

Earnings per common share information is computed on the weighted average number of shares outstanding during each period based on the provisions of FASB Codification ASC Topic 260, "Earnings per Share."  The required reconciliations are as follows:

	Three Months ended December 31,
	2014			2013
Basic Income (Loss) per Share
Income (Loss) available to common stockholders	$	(270,656	)	$	(320,287	)
Shares denominator		1,638,215			1,638,215
Per share amount	$	(.17	)	$	(.20	)
Effect of Dilutive Securities
Average shares outstanding		1,638,215			1,638,215
Stock options		-*			-*
		1,638,215			1,638,215
Diluted Income (Loss) per Share
Income (Loss) available to common stockholders	$	(270,656	)	$	(320,287	)
Per share amount	$	(.17	)	$	(.20	)

* Net effect of stock options, warrants, and Convertible Note were antidilutive for the period.

Options and warrants to purchase 22,000 and 200,000 shares of common stock respectively during the first quarter of fiscal 2015 at prices ranging from $2.50 to $11.00 per share were outstanding but were not included in the computation of diluted earnings per share because the option's and warrant's effect was antidilutive or the exercise price was greater than the average market price of the common share.

Options and warrants to purchase 31,000 and 200,000 shares of common stock respectively during the first quarter of fiscal 2014 at prices ranging from $2.50 to $11.00 per share were outstanding but were not included in the computation of diluted earnings per share because the option's and warrant's effect was antidilutive or the exercise price was greater than the average market price of the common share.

In addition, conversion rights to purchase 252,367 shares of common stock at a price of $1.85 per share were not included in the computation of diluted earnings per share during the first quarter of fiscal 2015 and 2014 because the conversion rights of the Convertible Promissory Notes effect was antidilutive or the exercise price was greater than the average market price of the common share.

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Note 9 - Segment and Related Information

3 Months Ended

Dec. 31, 2014

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

9.

Segment and Related Information

The Company's four business units have a common management team and infrastructure that offer different products and services. The business units have been aggregated into two reportable segments: 1.)indicators and gauges and 2.)automotive related diagnostic tools and equipment.

Indicators and Gauges

This segment consists of products manufactured and sold primarily to companies in the aircraft and locomotive industry. Within the aircraft market, the primary customers are those companies that manufacture or service business and pleasure aircraft. Within the locomotive market, indicators and gauges are sold to both original equipment manufacturers and to operators of railroad equipment.

Automotive Diagnostic Tools and Equipment

This segment consists primarily of products designed and manufactured to support the testing or servicing of automotive systems using electronic means to measure vehicle parameters. These products are sold to OEM's and to the aftermarket using several brand names and a variety of distribution methods. Included in this segment are products used for state required testing of vehicle emissions.

 

 
Information by industry segment is set forth below:

	Three Months Ended December 31,
	2014			2013
Net Sales
Indicators and Gauges	$	245,669		$	404,405
Automotive Diagnostic Tools and Equipment		916,549			645,837
	$	1,162,218		$	1,050,242
Income (Loss) before Provision for Income Taxes
Indicators and Gauges	$	2,493		$	65,634
Automotive Diagnostic Tools and Equipment		(31,388	)		(87,070	)
General Corporate Expenses		(241,761	)		(298,851	)
	$	(270,656	)	$	(320,287	)
Asset Information
Indicators and Gauges	$	704,441		$	922,325
Automotive Diagnostic Tools and Equipment		1,462,089			1,235,229
Corporate		1,179,835			1,024,259
	$	3,346,365		$	3,181,813
Geographical Information
Included in the consolidated financial statements are the following amounts related to geographical locations:
Revenue:
United States	$	1,127,459		$	1,004,148
Australia		8,125			24,138
Canada		19,658			11,492
Mexico		6,976			10,464
Other foreign countries		-			-
	$	1,162,218		$	1,050,242

All export sales to Australia, Canada, Mexico and other foreign countries are made in United States of America Dollars.

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Note 11 - Subsequent Events

3 Months Ended

Dec. 31, 2014

Notes to Financial Statements

Subsequent Events [Text Block]

11.

Subsequent Events

The Company has analyzed its operations subsequent to December 31, 2014 through the date the financial statements were submitted to the Securities and Exchange Commission and has determined that no subsequent events have occurred that would require recognition in the consolidated financial statements or disclosure in the notes to the consolidated financial statements.

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Note 9 - Segment and Related Information (Tables)

3 Months Ended

Dec. 31, 2014

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Three Months Ended December 31,
	2014			2013
Net Sales
Indicators and Gauges	$	245,669		$	404,405
Automotive Diagnostic Tools and Equipment		916,549			645,837
	$	1,162,218		$	1,050,242
Income (Loss) before Provision for Income Taxes
Indicators and Gauges	$	2,493		$	65,634
Automotive Diagnostic Tools and Equipment		(31,388	)		(87,070	)
General Corporate Expenses		(241,761	)		(298,851	)
	$	(270,656	)	$	(320,287	)
Asset Information
Indicators and Gauges	$	704,441		$	922,325
Automotive Diagnostic Tools and Equipment		1,462,089			1,235,229
Corporate		1,179,835			1,024,259
	$	3,346,365		$	3,181,813
Geographical Information
Included in the consolidated financial statements are the following amounts related to geographical locations:
Revenue:
United States	$	1,127,459		$	1,004,148
Australia		8,125			24,138
Canada		19,658			11,492
Mexico		6,976			10,464
Other foreign countries		-			-
	$	1,162,218		$	1,050,242

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Note 6 - Capital Stock, Treasury Stock, Contributed Capital and Stock Options (Details Textual) (USD $)	3 Months Ended		22 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Sep. 30, 2014	Feb. 27, 2013
Common Class A [Member]
Stockholders' Equity Note [Abstract]
Common Stock, Capital Shares Reserved for Future Issuance	949,233		949,233
Directors Plans [Member]
Stockholders' Equity Note [Abstract]
Allocated Share-based Compensation Expense	$ 543	$ 1,208
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	5.00%	5.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	10 years	10 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate	0.00%	0.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate	0.87%	0.87%
Directors Plans [Member] | Common Class A [Member]
Stockholders' Equity Note [Abstract]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	22,000
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	22,000	31,000	22,000	22,000
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit	$ 11
Employee Plans [Member]
Stockholders' Equity Note [Abstract]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit	$ 2.925
Omnibus 2013 Equity Plan [Member] | Common Class A [Member]
Stockholders' Equity Note [Abstract]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period			0
Common Stock, Capital Shares Reserved for Future Issuance					150,000

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Consolidated Statements of Cash Flows (Unaudited) (USD $)	3 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Cash Flows from Operating Activities:
Cash received from customers	$ 1,848,228	$ 1,178,108
Cash paid to suppliers and employees	(1,545,549)	(1,505,791)
Interest received	412	383
Net Cash Provided By (Used In) Operating Activities	303,091	(327,300)
Cash Flows from Investing Activities:
Capital expenditures	(9,592)	(40,128)
Net Cash Provided By (Used In) Investing Activities	(9,592)	(40,128)
Net increase (decrease) in cash and cash equivalents	293,499	(367,428)
Cash and cash equivalents at beginning of year	390,327	938,852
Cash and cash equivalents at end of first quarter	683,826	571,424
Reconciliation of Net Income (Loss) to Net Cash Provided By (Used In) Operating Activities:
Net Income (Loss)	(270,656)	(320,287)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation	16,380	16,380
Share-based compensation expense	543	1,208
Deferred income taxes	0	0
Changes in assets and liabilities:
Decrease (Increase) in accounts receivable	686,010	127,866
Decrease (Increase) in inventories	29,671	(58,111)
Decrease (Increase) in prepaid expenses	(75,678)	(90,565)
Increase (Decrease) in accounts payable	20,241	72,369
Increase (Decrease) in accrued payroll and related expenses	(26,793)	(18,876)
Increase (Decrease) in accrued expenses and accrued taxes other than income and long-term liabilities	(76,627)	(57,284)
Total Adjustments	573,747	(7,013)
Net Cash Provided By (Used In) Operating Activities	$ 303,091	$ (327,300)

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Note 5 - Short-term Financing

3 Months Ended

Dec. 31, 2014

Notes to Financial Statements

Short-term Debt [Text Block]

5.

Short-term Financing

The Company had a credit agreement of $250,000 with Robert L. Bauman, one of its major shareholders who is also an employee of the Company. The agreement was to expire in April 2013 but was modified on December 31, 2012 to extend the maturity date to December 2013. Effective October 30, 2012 for the remainder of the agreement, the lender may terminate the agreement with 45 days written notice, but it is at the discretion of the Company to deny the termination notice until December 2013 if it would have had a negative effect on the solvency of the Company.

 

The agreement provided for a revolving credit facility of $250,000 with interest at 0.24% per annum and was unsecured and included a three year warrant for 100,000 shares of Class A common stock at a price of $2.50 per share. In addition, the agreement generally allowed for borrowing based on an amount equal to eighty percent of eligible accounts receivables or $250,000. The revolving line of credit was not extended.

In partial consideration for the original extension of the revolving credit facility the Company and Bauman entered into a Warrant Agreement, dated December 30, 2012 whereby the Company issued a warrant to Bauman to purchase, at his option, up to 100,000 shares of Class A Common Stock of the Company at an exercise price of $2.50 per share, subject to certain anti-dilution and other adjustments. If not exercised, this warrant will expire on December 30, 2015.

The Company used the Black-Scholes option pricing model to determine the fair value estimate for recognizing the cost of services received in exchange for an award of equity instruments. The Black-Scholes option pricing model requires the use of subjective assumptions which can materially affect the fair value estimates. The warrants are immediately exercisable and expire in December 2015. The fair value of the warrants issued was amortized over the one year credit agreement period.

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Note 6 - Summary of Expired Director Plans (Details) (USD $)	3 Months Ended
	Dec. 31, 2014
Outstanding Stock Options (in shares)	22,000
Weighted AverageShare Price (in dollars per share)	$ 5.30
Number of Stock Options Exercisable (in shares)	20,000
Weighted Average Share Price (in dollars per share)	$ 5.54
Exercise Price Range 1 [Member]
Range of Exercise Price, Lower Limit (in dollars per share)	$ 2.925
Range of Exercise Price, Upper Limit (in dollars per share)	$ 5.25
Outstanding Stock Options (in shares)	13,000
Weighted AverageShare Price (in dollars per share)	$ 3.28
Weighted Average Remaining Life	5 years 219 days
Number of Stock Options Exercisable (in shares)	11,000
Weighted Average Share Price (in dollars per share)	$ 3.35
Exercise Price Range 2 [Member]
Range of Exercise Price, Lower Limit (in dollars per share)	$ 6
Range of Exercise Price, Upper Limit (in dollars per share)	$ 7.25
Outstanding Stock Options (in shares)	5,000
Weighted AverageShare Price (in dollars per share)	$ 6.18
Weighted Average Remaining Life	3 years 109 days
Number of Stock Options Exercisable (in shares)	5,000
Weighted Average Share Price (in dollars per share)	$ 6.18
Exercise Price Range 3 [Member]
Range of Exercise Price, Lower Limit (in dollars per share)	$ 10.50
Range of Exercise Price, Upper Limit (in dollars per share)	$ 11
Outstanding Stock Options (in shares)	4,000
Weighted AverageShare Price (in dollars per share)	$ 10.75
Weighted Average Remaining Life	2 years 292 days
Number of Stock Options Exercisable (in shares)	4,000
Weighted Average Share Price (in dollars per share)	$ 10.75

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Note 8 - Earnings Per Common Share (Tables)

3 Months Ended

Dec. 31, 2014

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months ended December 31,
	2014			2013
Basic Income (Loss) per Share
Income (Loss) available to common stockholders	$	(270,656	)	$	(320,287	)
Shares denominator		1,638,215			1,638,215
Per share amount	$	(.17	)	$	(.20	)
Effect of Dilutive Securities
Average shares outstanding		1,638,215			1,638,215
Stock options		-*			-*
		1,638,215			1,638,215
Diluted Income (Loss) per Share
Income (Loss) available to common stockholders	$	(270,656	)	$	(320,287	)
Per share amount	$	(.17	)	$	(.20	)