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 June 30, 2016

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 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 small 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   [ ]	Small 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 August 8, 2016:  2,074,599 Hickok Incorporated Class A Common Shares and 778,616 Class B Common Shares were outstanding.

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements.

HICKOK INCORPORATED
CONSOLIDATED INCOME STATEMENTS
(Unaudited)

Three months ended
  June 30,  Nine months ended
    June 30, 

	2016	2015	2016	2015
Net Sales
Product Sales	$1,479,543	$1,746,940	$3,770,950	$3,886,037
Service Sales	50,701	57,674	182,790	171,977
Total Net Sales	1,530,244	1,804,614	3,953,740	4,058,014
Costs and Expenses
Cost of Product Sold	746,161	961,912	2,081,508	2,395,268
Cost of Service Sold	23,269	34,908	122,987	110,856
Product Development	258,406	245,794	777,889	742,239
Marketing and    Administrative Expenses	507,326	453,903	1,488,461	1,253,872
Interest Charges	4,843	171	8,179	470
Other (Income) Expense	(1,666)	(1,705)	(5,556)	(7,003)
Total Costs and Expenses	1,538,339	1,694,983	4,473,468	4,495,702
Income (Loss) before Provision for Income Taxes	(8,095)	109,631	(519,728)	(437,688)
Income (Recovery of) Taxes	-	-	-	-
Net Income (Loss)	$(8,095)	$109,631	$(519,728)	$(437,688)
Earnings per Common Share:
Net Income (Loss)	$(.01)	$.07	$(.32)	$(.27)
Earnings per Common Share
Assuming Dilution:
Net Income (Loss)	$(.01)	$.07	$(.32)	$(.27)
Dividends per Common Share	$ - 0 -	$ - 0 -	$ - 0 -	$ - 0 -

See Notes to Consolidated Financial Statements

HICKOK INCORPORATED
CONSOLIDATED BALANCE SHEET

   
 

	June 30,   2016  (Unaudited)	September 30,    2015   (Note)	June 30,    2015   (Unaudited)
Assets
Current Assets
Cash and Cash Equivalents	$256,051	$346,405	$364,649
Trade Accounts Receivable - Net	793,935	1,101,554	752,677
Notes Receivable - Current	-	-	-
Inventories	1,948,674	1,926,513	1,681,100
Prepaid Expenses	53,163	112,019	70,549
Total Current Assets	3,051,823	3,486,491	2,868,975
Property, Plant and Equipment
Land	233,479	233,479	233,479
Buildings	1,440,138	1,440,138	1,429,718
Machinery and Equipment	2,608,104	2,348,554	2,567,635
	4,281,721	4,022,171	4,230,832
Less: Allowance for Depreciation	3,741,437	3,646,937	3,849,691
Total Property - Net	540,284	375,234	381,141
Other Assets
Notes Receivable - Long-term	4,100	4,100	4,100
Deposits	750	750	1,750
Total Other Assets	4,850	4,850	5,850
Total Assets	$3,596,957	$3,866,575	$3,255,966

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

See Notes to Consolidated Financial Statements

 
 
 
 
 
 

			June 30,   2016  (Unaudited)	September 30, ____2015___ (Note)	June 30,    2015    (Unaudited)
Liabilities and Stockholders' Equity
Current Liabilities
Short-term Financing-related party			$250,000	$-	$-
Convertible Notes Payable-related party			200,000	-	200,000
Lease Payable			54,627	-	-
Trade Accounts Payable			190,718	297,761	173,103
Accrued Payroll & Related Expenses			132,707	167,770	149,335
Accrued Expenses			472,268	183,390	374,204
Accrued Taxes Other Than Income			27,211	40,764	37,445
Accrued Income Taxes			-	-	-
Total Current Liabilities			1,327,531	689,685	934,087
Long-Term Liabilities
Convertible Notes Payable-related party			-	200,000	-
Lease Payable			151,964	-	-
Accrued expenses			-	339,700	-
Total Long-Term Liabilities			151,964	539,700	-
Stockholders' Equity
Class A, no par value; authorized			1,261,188	1,261,188	1,261,188
	10,000,000 shares; 1,163,349 shares outstanding (1,163,349 shares outstanding at September 30, 2015 and June 30, 2015) excluding 15,795 shares in treasury
Class B, no par value; authorized			474,866	474,866	474,866
		2,500,000 shares; 474,866 shares outstanding (474,866 shares outstanding at September 30, 2015 and June 30, 2015) excluding 667 shares in treasury
Preferred, no par value; authorized
	1,000,000 shares; no shares outstanding		-	-	-
Contributed Capital			1,488,560	1,488,560	1,488,560
Retained Earnings (Deficit)			(1,107,152)	(587,424)	(902,735)
Total Stockholders' Equity			2,117,462	2,637,190	2,321,879
Total Liabilities and  Stockholders' Equity			$3,596,957	$3,866,575	$3,255,966

HICKOK INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JUNE 30,
(Unaudited)

 

	2016	2015
Cash Flows from Operating Activities:
Cash received from customers	$4,261,359	$4,477,605
Cash paid to suppliers and employees	(4,542,057)	(4,452,731)
Interest paid	(7,329)	-
Interest received	632	703
Income taxes (paid) refunded	-	-
Net Cash Provided By (Used In) Operating Activities	(287,395)	25,577
Cash Flows from Investing Activities:
Capital expenditures	(26,435)	(51,255)
Net Cash Provided By (Used In) Investing Activities	(26,435)	(51,255)
Cash Flows from Financing Activities:
Short-term borrowing-related party	250,000	-
Payments on lease payable borrowing	(26,524)	-
Net Cash Provided By (Used In) Financing Activities	223,476	-
Net increase (decrease) in cash and cash equivalents	(90,354)	(25,678)
Cash and cash equivalents at beginning of year	346,405	390,327
Cash and cash equivalents at end of third quarter	$256,051	$364,649
See Notes to Consolidated Financial Statements
	2016	2015
Reconciliation of Net Income (Loss) to Net Cash Provided By (Used In) Operating Activities:
Net Income (Loss)	$(519,728)	$(437,688)
Adjustments to reconcile Net Income (Loss)  to net cash provided by operating activities:
Depreciation	94,500	49,140
Non-cash share-based compensation expense	-	543
Changes in assets and liabilities:
Decrease (Increase) in trade accounts receivable	307,619	419,591
Decrease (Increase) in inventories	(22,161)	33,097
Decrease (Increase) in prepaid expenses	58,856	(32,560)
Increase (Decrease) in accounts payable	(107,043)	27,546
Increase (Decrease) in accrued payroll and          related expenses	(35,063)	16,616
Increase (Decrease) in accrued expenses and         accrued taxes other than income	(64,375)	(50,708)
Total Adjustments	232,333	463,265
Net Cash Provided By (Used In) Operating Activities	$(287,395)	$25,577
Supplemental Schedule of Non-Cash Activity:
Assets acquired by capital lease	$233,115	$-

HICKOK INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
JUNE 30, 2016

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 and nine month periods ended June 30, 2016 are not necessarily indicative of the results that may be expected for the year ended September 30, 2016. 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, 2015.

2. Inventories

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

	June 30,    2016	Sept. 30,    2015	June 30,    2015
Components	$1,269,567	$1,254,294	$1,059,014
Work-in-Process	525,835	499,752	475,436
Finished Product	153,272	172,467	146,650
	$1,948,674	$1,926,513	$1,681,100

The above amounts are net of reserve for obsolete inventory in the amount of $199,987, $251,500 and $371,564 for the periods ended June 30, 2016, September 30, 2015 and June 30, 2015 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, management entered into a Convertible Loan Agreement with Roundball LLC. Over the past several years there have been several amendments to the original agreement.

On December 30, 2015, management entered into Amendment No. 4 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 an affiliate of two Directors extending the due date of the loan agreement from December 30, 2015 to December 30, 2016 and continues to allow $250,000 of borrowing on the agreement at the Company's discretion at an interest rate of 0.34% of which $200,000 is outstanding at June 30, 2016.

During fiscal year ended September 30, 2014, the Company borrowed $200,000 against this agreement. As of June 30, 2016, the outstanding balance on the Roundball convertible note was $200,000.

As part of the Convertible Loan Agreement between the Company and Roundball LLC. the parties 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 or amended, this warrant would have expired on December 30, 2015.

On December 30, 2015, management entered into Amendment No. 1 of the Warrant Agreement with Roundball. The amended Warrant Agreement is by and between the Company and a major shareholder who is also an affiliate of two Directors extending the due date of the agreement from December 30, 2015 to December 30, 2016.

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 2016. The fair value of the warrants issued was amortized over the one-year amended convertible loan agreement period. The following weighted-average assumptions were used in the option pricing model: a risk free interest rate of 0.42%; an expected life of 1 year; an expected dividend yield of 0.0%; and a volatility factor of .84.

The Company recorded interest expense on the Roundball note of $173 and $518 for the three months and nine month periods ended June 30, 2016 respectively.

5. Short-term Financing

On June 3, 2016, management entered into an unsecured revolving credit agreement with First Francis Company Inc. First Francis Company Inc, became a major shareholder of the Company on July 1, 2016 when the Company entered into an Agreement and Plan of Merger with First Francis Company Inc. owner of Federal Hose, Federal Hose, and Mr. Edward Crawford and Mr. Matthew Crawford, each of whom are the shareholders of First Francis Company Inc. Edward Crawford and Matthew Crawford serve on the Board of directors of Hickok Incorporated. Matthew Crawford is the son of Edward Crawford.

The agreement provides for a revolving credit facility of $250,000 with interest at 4.0% per annum and is unsecured. Each loan made under the credit arrangement will be due and payable in full on the expiration date of the revolver note. In addition, the agreement generally allows for borrowing based on an amount equal to eighty percent of eligible accounts receivables or $250,000. The revolving line of credit expires on May 31, 2017.

The Company has borrowed $250,000 against this credit facility during the quarter ended June 30, 2016 and has recorded interest expense of $333 during the current period and as of June 30, 2016 no interest was paid. As of June 30, 2016 the outstanding balance on this credit facility was $250,000.

6. Capital Leases

	Current Portion 2016	Total   June 30, 2016	Total   June 30, 2015
Capital lease obligation on MIS computer equipment and software, payable in monthly installments of $2,059 including interest at approximately 1.04% per annum through December, 2017.	$24,710	$35,006	$-
Capital lease obligation on IT computer equipment and software, payable in monthly installments of $3,888 including interest at approximately 9.83% per annum, through February, 2021.	29,917	171,585	-
	$54,627	206,591	-
Less current portion		54,627	-
		$151,964	$-

The cost of fixed assets related to the capital leases is $233,115 which approximates book value at June 30, 2016.

7. Capital Stock, Treasury Stock, Contributed Capital and Stock Options Unissued shares of Class A common stock (832,233 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. 

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 and 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 June 30, 2016.

The Company's expired Outside Directors Stock Option Plans (collectively the "Directors Plans"), have provided for the automatic grant of options to purchase up to 5,000 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 5,000 Class A shares were outstanding at June 30, 2016 (6,000 shares at September 30, 2015 and 20,000 shares at June 30, 2015) at prices ranging from $2.925 to $6.00 per share. Options for 1,000 shares expired during the three month period ended March 31, 2016 at $2.925 per share. In addition, options for 2,000 shares expired during the three month period ended March 31, 2015 at $6.45 per share. All outstanding options under the expired Directors Plans became 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 expired Directors Plans at June 30, 2016:

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	4,000	$2.925	5.5	4,000	$2.925
$6.00	1,000	$6.00	3.8	1,000	$6.00
	5,000	$3.54		5,000	$3.54

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 are 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 three and the nine month periods ended June 30, 2016 and 2015 respectively $0 and $0; $0 and $543 was expensed as share-based compensation. The following weighted-average assumptions were used in the option pricing model for the three and nine month periods ended June 30, 2016 and 2015 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.

8. 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 March 2016, the Financial Accounting Standards Board (FASB) issued a new standard that changes the accounting for certain aspects of share-based payments to employees. The new guidance requires excess tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled.  In addition, cash flows related to excess tax benefits will no longer be separately classified as a financing activity apart from the other income tax cash flows. The standard also allows us to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting, clarifies that all cash payments made on an employee’s behalf for withheld shares should be presented as a financing activity on our cash flow statements, and provides an accounting policy election to account for forfeitures as they occur. The new standard is effective for us beginning October 1, 2017, with early adoption permitted. This new standard is not expected to have a significant impact on the Company’s financial statements.

In February 2016, the FASB issued a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of lease assets and lease liabilities on the balance sheet. Most prominent among the amendments  is the recognition of assets and liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP.  Under the new standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The new standard will be effective for us beginning October 1, 2019, with early adoption permitted. We are evaluating the impact this standard will have to our financial statements.

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 be entitled in exchange for those goods and services.” The update is effective for financial statement periods beginning after December 15, 2017, with early adoption prohibited. The Company has not determined the impact of this pronouncement on its financial statements and related disclosure.

In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern ("ASU 2014-15") requires that an entity's management evaluate whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued. ASU 2014-15 is effective for annual periods beginning after December 15, 2016 and for interim periods thereafter. The Company is evaluating the potential impacts of this new standard on its quarterly reporting process.

9. 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
      June 30,  Nine Months Ended 
  June 30, 

	2016	2015	2016	2015
Basic Income (Loss) per Share
Income (Loss) available   to common stockholders	$(8,095)	$109,631	$(519,728)	$(437,688)
Shares denominator	1,638,215	1,638,215	1,638,215	1,638,215
Per share amount	$(.01)	$.07	$(.32)	$(.27)
Effect of Dilutive Securities
Average shares outstanding	1,638,215	1,638,215	1,638,215	1,638,215
Stock options	-*	-*	-*	-*
	1,638,215	1,638,215	1,638,215	1,638,215
Diluted Income (Loss) per Share
Income (Loss) available   to common stockholders	$(8,095)	$109,631	$(519,728)	$(437,688)
Per share amount	$(.01)	$.07	$(.32)	$(.27)
* Net effect of stock options and warrants were antidilutive for the period.

 

Options and warrants to purchase 5,000 and 100,000 shares of common stock respectively during the third quarter and the first nine months of fiscal 2016 at prices ranging from $2.50 to $6.00 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 during the third quarter and first nine months of fiscal 2016 at a price of $1.85 per share were not included in the computation of diluted earnings per share 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.

Options and warrants to purchase 20,000 and 200,000 shares of common stock respectively during the third quarter and the first nine months 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.

In addition, conversion rights to purchase 252,367 shares of common stock during the third quarter and first nine months of fiscal 2015 at a price of $1.85 per share were not included in the computation of diluted earnings per share 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.

10. Segment and Related Information

The Company's three 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, military 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
         June 30,   Nine Months Ended
      June 30, 

	2016	2015	2016	2015
Net Revenue
Indicators and Gauges	$368,065	$332,771	$882,125	$933,707
Automotive Diagnostic  Tools and Equipment	1,162,179	1,471,843	3,071,615	3,124,307
	$1,530,244	$1,804,614	$3,953,740	$4,058,014
Income (Loss) before provision for Income Taxes
Indicators and Gauges	$102,085	$54,783	$165,321	$119,379
Automotive Diagnostic  Tools and Equipment	224,083	294,830	261,211	172,283
General Corporate Expenses	(334,263)	(239,982)	(946,260)	(729,350)
	$(8,095)	$109,631	$(519,728)	$(437,688)
Asset Information
Indicators and Gauges			$822,392	$721,504
Automotive Diagnostic Tools and Equipment			1,917,982	1,705,065
Corporate			856,583	829,397
			$3,596,957	$3,255,966
Geographical Information
Included in the consolidated financial statements are the following amounts related to geographical locations:
Revenue:
United States	$1,506,778	$1,739,642	$3,851,487	$3,935,224
Australia	21,471	1,602	60,412	13,402
Canada	1,995	21,487	16,693	57,041
Mexico	-	7,283	4,360	17,747
China	-	29,657	-	29,657
England	-	4,943	20,260	4,943
Other foreign countries	-	-	528	-
	$1,530,244	$1,804,614	$3,953,740	$4,058,014

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

11. 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.

12. Subsequent Events

The Company has analyzed its operations subsequent to June 30, 2016 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, except as follows:

On July 1, 2016, Hickok Incorporated completed its acquisition of Federal Hose Manufacturing LLC (Federal Hose). Pursuant to the terms of the Merger Agreement, the consummation of the transaction depended upon the satisfaction or waiver of a number of certain customary closing conditions and the approval of the Company's shareholders. All of these conditions were satisfied and the merger was completed on July 1, 2016.

In accordance with the Merger Agreement, the Company issued 911,250 validly issued, fully paid and non-assessable Class A Common Shares, without par value, and 303,750 validly issued, fully paid and non-assessable Class B Common Shares, without par value, to First Francis Company Inc. as consideration at the closing of the merger. The Company also issued to First Francis Company Inc. a promissory note in the principal amount of $2,768,662 and a promissory note in the principal amount of $2,000,000, each of which is secured by all of the assets of Hickok and certain of its subsidiaries, bears interest at a rate of 4.0% per annum, is amortized over a ten year period, and will be fully due six years after the issue date. These promissory notes contain customary provisions regarding acceleration of the Company's obligations as a result of an event of default.

13.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 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 believes the acquisition of Federal Hose on July 1, 2016 will add to the Company's profitability and cash flow. In addition, 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.

In addition, on December 30, 2015, 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 an affiliate of two Directors 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 2016. The Company had previously borrowed $200,000 and it is outstanding at June 30, 2016.

On December 30, 2015, management entered into Amendment No. 1 of the Warrant Agreement with Roundball. The amended Warrant Agreement is by and between the Company and a major shareholder who is also an affiliate of two Directors extending the due date of the agreement from December 30, 2015 to December 30, 2016.

On June 3, 2016, management entered into an unsecured revolving credit agreement with First Francis Company Inc. First Francis Company Inc, became a major shareholder of the Company on July 1, 2016 when the Company entered into an Agreement and Plan of Merger with First Francis Company Inc. owner of Federal Hose, Federal Hose, and Mr. Edward Crawford and Mr. Matthew Crawford, each of whom are the shareholders of First Francis Company Inc. Edward Crawford and Matthew Crawford serve on the Board of directors of Hickok Incorporated. Matthew Crawford is the son of Edward Crawford.

The agreement provides for a revolving credit facility of $250,000. This facility is available through May 31, 2017. The Company has borrowed $250,000 against this credit facility during the quarter ended June 30, 2016. As of June 30, 2016 the outstanding balance on this credit facility was $250,000.

On July 1, 2016 the Company completed the acquisition of Federal Hose and issued to First Francis Company Inc. a promissory note in the principal amount of $2,768,662 and a promissory note in the principal amount of $2,000,000, each of which is secured by all of the assets of Hickok and certain of its subsidiaries, bears interest at a rate of 4.0% per annum, is amortized over a ten year period, and will be fully due six years after the issue date. These promissory notes contain customary provisions regarding acceleration of the Company's obligations as a result of an event of default.

Management’s strategic plan to increase revenues and profitability through increased sales of existing products, the introduction of new products to the market place, the completion of the acquisition of Federal Hose Manufacturing LLC (see Footnote No. 12 Subsequent Events) and other additional short-term or long-term financing is expected to 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, Third Quarter (April 1, 2016 through June 30, 2016)
Fiscal 2016 Compared to Third Quarter Fiscal 2015
-------------------------------------------------------------------------------------

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. In the fourth quarter of fiscal 2016 the Company will have a third reportable segment, flexible hose due to the acquisition of Federal Hose on July 1, 2016. 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 $368,065 and $332,771 for the third quarter of fiscal 2016 and fiscal 2015, respectively, and $882,125 and $933,707 for the first nine months of fiscal 2016 and fiscal 2015, 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 $1,162,179 and $1,471,843 for the third quarter of fiscal 2016 and fiscal 2015, respectively, and $3,071,615 and $3,124,307 for the first nine months of fiscal 2016 and fiscal 2015, respectively.Decreased sales volume in the third quarter was due to timing and for the fiscal year 2016 was primarily due to the absence of multiple large orders from Tier 1 OEM suppliers.

Results of Operations

Product sales for the quarter ended June 30, 2016 were $1,479,543 versus $1,746,940 for the quarter ended June 30, 2015. The 15% decrease in product sales during the current quarter of approximately $267,000 was volume related due primarily to decreased sales of automotive diagnostic testing products to OEM's of approximately $274,000. In addition, sales of aftermarket products decreased during the current quarter by approximately $102,000. Sales of emission products and indicator products increased during the current quarter by approximately $80,000 and $29,000 respectively. Product sales for the quarter ended June 30, 2016 benefited from a single moderate size order from a Tier 1 Supplier while product sales for the prior year third quarter benefited from two moderate size orders from a Tier 1 Supplier. Product sales are expected to increase substantially during the fourth quarter due to the July 1, 2016 acquisition of Federal Hose.  

Service sales for the quarter ended June 30, 2016 were $50,701 versus $57,674 for the quarter ended June 30, 2015. The current level of service sales related to product repair sales is expected to continue in the fourth quarter of the fiscal year.

Cost of product sold in the third quarter of fiscal 2016 was $746,161 (50.4% of product sales) as compared to $961,912 (55.1% of product sales) in the third quarter of 2015. The percentage decrease in the cost of product sold was due primarily to a change in product mix. The current cost of product sold percentage is expected to increase substantially during the fourth quarter of the fiscal year due to the acquisition of Federal Hose. The increase will be due primarily to a lower gross margin on flexible hose product.

Cost of service sold for the quarter ended June 30, 2016 was $23,269 (45.9% of service sales) as compared to $34,908 (60.5% of service sales) in the quarter ended June 30, 2015. The percentage decrease was due primarily to the product specifics of chargeable repairs in the current quarter. The current cost of services sold percentage is anticipated to continue in the fourth quarter of the fiscal year.

Product development expenses were $258,406 in the third quarter of fiscal 2016 (17.5% of product sales) as compared to $245,794 (14.1% of product sales) in the third quarter of fiscal 2015. The percentage increase was due primarily to lower product sales during the current quarter. The dollar increase was due primarily to an increase in labor costs, professional fees, depreciation and telephone expense of approximately $7,000, $4,000, $2,000 and $1,000 offset in part by a decrease in research and experimental material of approximately $1,000. The current level of product development expenses is expected to continue in the fourth quarter of the fiscal year. Management 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 $507,326 (33.2% of total sales) in the third quarter of fiscal 2016 versus $453,903 (25.2% of total sales) for the same period a year ago. Marketing expenses were approximately $176,000 in the third quarter of fiscal 2016 versus $212,000 for the same period a year ago. Within marketing expenses, royalty expense, commission expense, advertising expense and promotion expense decreased by approximately $24,000, $9,000, $7,000 and $3,000 respectively. These decreases were offset in part by an increase in labor costs, travel expense and telephone expense of approximately $5,000, $1,000 and $1,000 respectively. Administrative expenses were approximately $331,000 in the third quarter of fiscal 2016 versus $242,000 for the same period a year ago. Within administrative expenses, professional fees, depreciation expense, data processing expense and labor costs increased by approximately $75,000, $7,000, $6,000 and $3,000 respectively. These increases were offset in part by a decrease in repairs and maintenance computer equipment and travel expense of approximately $1,000, and $1,000 respectively. The professional fees in the third quarter were largely related to the Federal Hose acquisition and are expected to decrease in the fourth quarter. The current level of marketing and other administrative expenses is expected to increase substantially during the fourth quarter due to the Federal Hose acquisition.

Interest expense was $4,843 in the third quarter of fiscal 2016 which compares with $171 in the third quarter of fiscal 2015. Interest expense for the current quarter was due primarily to the borrowing on a capital lease for IT equipment, the unsecured revolving credit agreement and the convertible note payable of approximately $4,300, $300 and 200 respectively. Interest expense for the prior year third quarter was due to the borrowing available on the convertible note payable. The current level of interest expense is expected to increase during the fourth quarter of the fiscal year due to interest on the loans associated with the Federal Hose acquisition.

Other income was $1,666 in the third quarter of fiscal 2016 which compares with $1,705 in the third quarter of fiscal 2015. Other income consists primarily of the proceeds from the sale of scrap metal shavings, purchase discounts and interest income on cash and cash equivalents invested. The decrease was due primarily to a lower level of interest income on cash and cash equivalents invested during the current quarter. The current level of other income is expected to continue during the fourth quarter

Income taxes in the third quarter of fiscal 2015 and 2014 was $0. In the third quarter of fiscal 2016 recovery of income taxes and in 2015 income taxes were calculated at an effective tax rate of 37%. In the third quarter of fiscal 2016 recovery of income taxes was offset by a increase in the valuation allowance netting to $0. In the third quarter of fiscal 2015 income taxes were offset by deferred taxes, specifically net operating loss carryforwards. 

The net loss in the third quarter of fiscal 2016 was $8,095 which compares with net income of $109,631 in fiscal 2015. The decrease in net income for the current quarter was the result of a lower sales volume.

Unshipped customer orders as of June 30, 2016 was $1,002,000 versus $1,391,000 a year earlier. Included in the June 30, 2016 backlog is $345,000 of flexible hose orders. The core business backlog decreased by approximately $734,000 due primarily to decreased orders for diagnostic products to automotive OEM's of approximately $844,000 and aftermarket products of approximately $18,000, offset in part by an increase in orders for indicator products of approximately $128,000. The Company anticipates that approximately 78% of the current backlog will be shipped in the last quarter of fiscal 2016.

Results of Operations, Nine Months Ended June 30, 2016
Compared to Nine Months Ended June 30, 2015

Product sales for the nine months ended June 30, 2016 were $3,770,950 versus $3,886,037 for the same period in fiscal 2015. The decrease in product sales during the first nine months of the current fiscal year of approximately $115,000 was volume related due to lower sales of automotive diagnostic testing products, primarily, automotive diagnostic testing products to the aftermarket of approximately $165,000 and indicator products of approximately $83,000. These decreases were offset by an increase in automotive diagnostic products to OEM's and emission product sales of approximately $40,000 and $93,000 respectively. Fiscal 2016 benefited from a single larger order for a Tier 1 OEM supplier. Fiscal 2015 product sales to OEM's increased due to two moderate size orders for a Tier 1 OEM supplier shipping during the first nine months of fiscal 2015. The decrease in indicator sales during the first nine months of the current year was primarily the result of decreased customer orders of government funded programs for the military and locomotive products. Product sales are expected to increase substantially during the fourth quarter due to the July 1, 2016 acquisition of Federal Hose.  

Service sales for the nine months ended June 30, 2016 were $182,790 compared with $171,977 for the same period in fiscal 2015. The increase was volume related and due primarily to a higher sales volume for chargeable repairs. The current level of service sales related to product repair sales is expected to continue in the last three months of the fiscal year.

Cost of product sold was $2,081,508 (55.2% of product sales) compared with $2,395,268 (61.6% of product sales) for the nine months ended June 30, 2015. The dollar decrease was due to a lower sales volume and the margin improvement in the cost of product sold was due to product mix in the current fiscal year.  The current cost of product sold percentage is expected to increase substantially during the fourth quarter of the fiscal year due to the acquisition of Federal Hose. The increase will be due primarily to a lower gross margin on flexible hose product.

Cost of service sold was $122,987 (67.3% of service sales) compared with $110,856 (64.5% of service sales) for the nine months ended June 30, 2015. The dollar and percentage increase was due primarily to the product specifics of chargeable repairs and a higher sales volume in chargeable repairs in the current quarter. The cost of services sold percentage is expected to continue in the fourth quarter of the fiscal year.

Product development expenses were $777,889 (20.6% of product sales) compared to $742,239 (19.1% of product sales) for the nine months ended June 30, 2015. The percentage increase was due primarily to lower product sales during the current nine months of fiscal 2016. The dollar increase was due primarily to an increase in labor costs, telephone expense, depreciation expense and professional fees of approximately $22,000, $8,000, $7,000 and $4,000 respectively. These increases were offset in part by a decrease in travel expense and technical books and dues of approximately $3,000 and $2,000 respectively. The current level of product development expenditures is expected to continue for the fourth quarter of the fiscal year. Management believes the existing and planned resources will be sufficient to continue to develop identified new products for both OEM and Aftermarket customers.

Marketing and administrative expenses were $1,488,461 for the nine months ended June 30, 2016 (37.6% of total sales) versus $1,253,872 (30.9% of total sales) for the nine months ended June 30, 2015. Marketing expenses were approximately $545,000 during the first nine months of the current fiscal year versus $518,000 for the same period a year ago. Within marketing expenses, increases were primarily in labor costs, advertising expense, credit and collection expense, telephone expense and travel expense of approximately $13,000, $11,000, $7,000, $4,000 and $3,000 respectively. These increases were offset in part by decreases in commission expense, royalty expense and promotion expense of approximately $6,000, $4,000 and $1,000 respectively. Administrative expenses were approximately $943,000 during the first nine months of the current fiscal year versus $736,000 for the same period a year ago. The dollar increase during the first nine months of the current fiscal year was due primarily to increases in professional fees, depreciation expense, data processing expenses, labor costs and telephone expense of approximately $175,000, $20,000, $7,000, $4,000 and $3,000 respectively. These increases were offset in part by decreases in repairs and maintenance machinery and equipment, and travel expense of approximately $1,000 and $1,000 respectively. The professional fees increase in fiscal 2016 were largely related to the Federal Hose acquisition and are expected to decrease in the fourth quarter. The current level of marketing and other administrative expenses is expected to increase substantially during the fourth quarter due to the Federal Hose acquisition.

Interest expense was $8,179 for the nine months ended June 30, 2016, and $470 for the same period in 2015. Interest expense for the current year was due primarily to the borrowing on a capital lease for IT equipment, the unsecured revolving credit agreement and the convertible note payable of approximately $7,300, $300 and 500 respectively. Interest expense for the prior year third quarter was due to the borrowing available on the convertible note payable. The current level of interest expense is expected to increase during the fourth quarter of the fiscal year due to interest on the loans associated with the Federal Hose acquisition.

Other income of $5,556 compares with other income of $7,003 in the same period last year. Other income consists primarily of the proceeds from the sale of scrap metal shavings, purchase discounts and interest income on cash and cash equivalents invested. The decrease was due primarily to a decrease in the sale of scrap metal shavings of approximately $1,300 during the current year nine month period. The current level of other income is expected to continue for the fourth quarter of fiscal 2016.

Income taxes during the first nine months of fiscal 2016 was $0 which compares with income taxes of $0 in the first nine months of fiscal 2015. In the first nine months of fiscal 2016 and 2015 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 for the nine months ended June 30, 2016 was $519,728 which compares with a net loss of $437,688 for the nine months ended June 30, 2015. The increased net loss for the first nine months of fiscal 2016 was primarily the result of a lower sales volume and higher operating costs, specifically professional fees related to the acquisition of Federal Hose.

Liquidity and Capital Resources

Total current assets were $3,051,823, $3,486,491 and $2,868,975 at June 30, 2016, September 30, 2015 and June 30, 2015, respectively. The increase of approximately $183,000 from June to June is due primarily to the increase in inventory and accounts receivable of approximately $268,000 and $41,000 respectively, offset in part by a decrease in cash and cash equivalents and prepaid expenses of approximately $109,000 and $17,000 respectively. The increase in accounts receivable combined with the increase in inventory was due primarily to the purchase of inventory and invoicing for the large OEM orders during the period. The increase in cash and cash equivalents was due to the collection of the accounts receivable from the large OEM orders. The decrease in current assets from September to June of approximately $435,000 was due primarily to the decrease in accounts receivable, cash and cash equivalents, and prepaid expenses of approximately $308,000, $90,000 and $59,000 respectively, offset by an increase in inventory of approximately $22,000. The increase in inventory was due primarily to the purchase of inventory for the moderate size OEM orders during the period. The decrease in accounts receivable was due to the decrease in the sales volume and the collection of the accounts receivable from the moderate size OEM orders during the period. Prepaid expenses decreased during the period due to timing.

Working capital as of June 30, 2016 amounted to $1,724,292 as compared with $1,934,888 a year earlier. Current assets were 2.3 times current liabilities compared to 3.1 a year ago. The quick ratio was .79 compared to 1.2 a year ago. 

Internally generated funds during the nine months ended June 30, 2016 were a negative $287,395 and were not adequate to fund the Company's primary non-operating cash requirements consisting of capital expenditures of $26,435. The primary reason for the negative cash flow from operations was the net loss during the period of $519,728 a decrease in accounts payable and inventory due to the completion of the moderate size orders received during the period, offset by a decrease in accounts receivable and prepaid expenses of $307,619 and $58,856 respectively. The Company does anticipate additional capital expenditures during fiscal 2016 of approximately $40,000 primarily to continue 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 the recent acquisition of Federal Hose and available short-term or long-term financing will provide adequate funding of the Company's working capital needs.

Shareholders' equity during the nine months ended June 30, 2016 decreased by $519,728 which was the net loss during the period.

Whenever there may be a requirement to increase inventory in fiscal 2016, there will be a negative but temporary impact on liquidity. Management continues to tightly control expenses and will take actions as deemed necessary to manage its working capital.

In December 2015, management entered into Amendment No. 4 of the Convertible Loan Agreement which may provide up to approximately $467,000 of liquidity to meet on going working capital requirements. The Convertible Loan Agreement, as amended, is between the Company and a major shareholder who is also affiliated with two Directors, as discussed in Note 4 to the Company's financial statements. This amended agreement modified the terms of the previously amended agreement by extending the due date of the loan agreement from December 30, 2015 to December 30, 2016 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 June 30, 2016 this balance is outstanding.

On June 3, 2016, management entered into an unsecured revolving credit agreement with First Francis Company Inc. First Francis Company Inc, became a major shareholder of the Company on July 1, 2016 when the Company entered into an Agreement and Plan of Merger with First Francis Company Inc. owner of Federal Hose. The agreement provides for a revolving credit facility of $250,000. This facility is available through May 31, 2017. The Company has borrowed $250,000 against this credit facility during the quarter ended June 30, 2016. As of June 30, 2016 the outstanding balance on this credit facility was $250,000.

Management’s strategic plan to increase revenues and profitability through increased sales of existing products, the introduction of new products to the market place, the Company's continued efforts on several large potential orders with OEMs, and other additional short-term or long-term financing is expected to provide the Company with the needed working capital for the next twelve months. In addition, the Company completed the acquisition of Federal Hose on July 1, 2016 which is anticipated to provide increased sales and earnings.

Discussions Regarding Acquisition

On July 1, 2016, Hickok Incorporated completed its acquisition of Federal Hose Manufacturing LLC (Federal Hose). Pursuant to the terms of the Merger Agreement, the consummation of the transaction depended upon the satisfaction or waiver of a number of certain customary closing conditions and the approval of the Company's shareholders. All of these conditions were satisfied and the merger was completed on July 1, 2016.

In accordance with the Merger Agreement, the Company issued 911,250 validly issued, fully paid and non-assessable Class A Common Shares, without par value, and 303,750 validly issued, fully paid and non-assessable Class B Common Shares, without par value, to First Francis Company Inc. as consideration at the closing of the merger. The Company also issued to First Francis Company Inc. a promissory note in the principal amount of $2,768,662 and a promissory note in the principal amount of $2,000,000, each of which is secured by all of the assets of Hickok and certain of its subsidiaries, bears interest at a rate of 4.0% per annum, is amortized over a ten year period, and will be fully due six years after the issue date. These promissory notes contain customary provisions regarding acceleration of the Company's obligations as a result of an event of default.

The Company believes that the Federal Hose transaction provides it with a unique opportunity to build shareholder value through the addition of an established, profitable business that is immediately accretive to Hickok’s earnings.

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 Operations in our Form 10-K for the year ended September 30, 2015.

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 ability to effectively integrate Federal Hose and manage the larger operations of the combined business, (b) the Company's dependence upon a limited number of customers, (c) the highly competitive industry in which the company operates, which includes several competitors with greater financial resources and larger sales organizations, (d) 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, (e) the ability of the Company to further establish distribution and a customer base in the automotive aftermarket, (f) the Company's ability to capitalize on market opportunities including state automotive emissions programs and OEM tool programs, (g) the Company's ability to obtain cost effective financing and (h) the Company's ability to satisfy its interest payments.

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 risk is exposure related to interest rate risk. The Company's debt subject to interest rate risk during the current quarter was the funds available from the convertible note agreement and the revolving credit agreement. The Company had an outstanding balance on the convertible note at June 30, 2016, of $200,000 which is subject to a fixed rate of interest of 0.34%. In addition, the Company had an outstanding balance on the revolving credit agreement at June 30, 2016, of $250,000 which is subject to a fixed rate of interest of 4.0%. As a result, the Company believes that the market risk relating to interest rate movements is minimal. 

Item 4. Controls and Procedures.

As of June 30, 2016, 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 June 30, 2016 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 third fiscal quarter ended June 30, 2016 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 have been several legal developments in this legal proceeding since the filing of Form 10-K for fiscal 2015 however it is still difficult to access the status of the proceedings or probable outcomes. 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 Taxonomy 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: August 12, 2016	/s/ R. L. Bauman
	R. L. Bauman, Chief Executive Officer, President, and Treasurer
Date: August 12, 2016	/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	Nine Months Ended
June 30,	June 30,
2016           2015	2016           2015

NET INCOME Net Income (Loss) applicable to common shares for basic earnings per share	$(8,095)	$109,631	$(519,728)	$(437,688)
Net Income (Loss) applicable to common shares for diluted earnings per share	$(8,095)	$109,631	$(519,728)	$(437,688)
SHARES OUTSTANDING Weighted average shares for basic earnings per share	1,638,215	1,638,215	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	1,638,215	1,638,215
Basic Earnings Per Common Share	$(.01)	$.07	$(.32)	$(.27)
Diluted Earnings Per Common Share	$(.01)	$.07	$(.27)	$(.27)

 *  Net effect of stock options was 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

August 12, 2016

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

August 12, 2016

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 June 30, 2016 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

August 12, 2016

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 June 30, 2016 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

August 12, 2016

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Document And Entity Information - shares	9 Months Ended
	Jun. 30, 2016	Aug. 08, 2016
Common Class B [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding (in shares)		778,616
Common Class A [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding (in shares)		2,074,599
Entity Registrant Name	HICKOK INC
Entity Central Index Key	0000047307
Trading Symbol	hicka
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	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Amendment Flag	false

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Consolidated Income Statements (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Net Sales
Product Sales	$ 1,479,543	$ 1,746,940	$ 3,770,950	$ 3,886,037
Service Sales	50,701	57,674	182,790	171,977
Total Net Sales	1,530,244	1,804,614	3,953,740	4,058,014
Costs and Expenses
Cost of Product Sold	746,161	961,912	2,081,508	2,395,268
Cost of Service Sold	23,269	34,908	122,987	110,856
Product Development	258,406	245,794	777,889	742,239
Marketing and Administrative Expenses	507,326	453,903	1,488,461	1,253,872
Interest Charges	4,843	171	8,179	470
Other (Income) Expense	(1,666)	(1,705)	(5,556)	(7,003)
Total Costs and Expenses	1,538,339	1,694,983	4,473,468	4,495,702
Income (Loss) before Provision for Income Taxes	(8,095)	109,631	(519,728)	(437,688)
Income (Recovery of) Taxes
Net Income (Loss)	$ (8,095)	$ 109,631	$ (519,728)	$ (437,688)
Earnings per Common Share:
Net Income (Loss) (in dollars per share)	$ (0.01)	$ 0.07	$ (0.32)	$ (0.27)
Earnings per Common Share Assuming Dilution:
Net Income (Loss) (in dollars per share)	(0.01)	0.07	(0.32)	(0.27)
Dividends per Common Share (in dollars per share)	$ 0	$ 0	$ 0	$ 0

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Consolidated Balance Sheet (Unaudited) - USD ($)	Jun. 30, 2016	Sep. 30, 2015	Jun. 30, 2015
Common Class A [Member]
Stockholders' Equity
Common stock, value	$ 1,261,188	$ 1,261,188	$ 1,261,188
Common Class B [Member]
Stockholders' Equity
Common stock, value	474,866	474,866	474,866
Cash and Cash Equivalents	256,051	346,405	364,649
Trade Accounts Receivable - Net	793,935	1,101,554	752,677
Notes Receivable - Current
Inventories	1,948,674	1,926,513	1,681,100
Prepaid Expenses	53,163	112,019	70,549
Total Current Assets	3,051,823	3,486,491	2,868,975
Land	233,479	233,479	233,479
Buildings	1,440,138	1,440,138	1,429,718
Machinery and Equipment	2,608,104	2,348,554	2,567,635
	4,281,721	4,022,171	4,230,832
Less: Allowance for Depreciation	3,741,437	3,646,937	3,849,691
Total Property - Net	540,284	375,234	381,141
Notes Receivable - Long-term	4,100	4,100	4,100
Deposits	750	750	1,750
Total Other Assets	4,850	4,850	5,850
Total Assets	3,596,957	3,866,575	3,255,966
Short-term Financing-related party	250,000
Convertible Notes Payable-related party	200,000		200,000
Lease Payable	54,627
Trade Accounts Payable	190,718	297,761	173,103
Accrued Payroll & Related Expenses	132,707	167,770	149,335
Accrued Expenses	472,268	183,390	374,204
Accrued Taxes Other Than Income	27,211	40,764	37,445
Accrued Income Taxes
Total Current Liabilities	1,327,531	689,685	934,087
Convertible Notes Payable-related party		200,000
Lease Payable	151,964
Accrued expenses		339,700
Total Long-Term Liabilities	151,964	539,700
Preferred, no par value; authorized 1,000,000 shares; no shares outstanding
Contributed Capital	1,488,560	1,488,560	1,488,560
Retained Earnings (Deficit)	(1,107,152)	(587,424)	(902,735)
Total Stockholders' Equity	2,117,462	2,637,190	2,321,879
Total Liabilities and Stockholders' Equity	$ 3,596,957	$ 3,866,575	$ 3,255,966

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Consolidated Balance Sheet (Unaudited) (Parentheticals) - $ / shares	Jun. 30, 2016	Sep. 30, 2015	Jun. 30, 2015
Common Class A [Member]
Common stock, par value (in dollars per share)	$ 0	$ 0	$ 0
Common stock, shares authorized (in shares)	10,000,000	10,000,000	10,000,000
Common stock, shares outstanding (in shares)	1,163,349	1,163,349	1,163,349
Treasury stock, shares (in shares)	15,795	15,795	15,795
Common Class B [Member]
Common stock, par value (in dollars per share)	$ 0	$ 0	$ 0
Common stock, shares authorized (in shares)	2,500,000	2,500,000	2,500,000
Common stock, shares outstanding (in shares)	474,866	474,866	474,866
Treasury stock, shares (in shares)	667	667	667
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

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Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash Flows from Operating Activities:
Cash received from customers	$ 4,261,359	$ 4,477,605
Cash paid to suppliers and employees	(4,542,057)	(4,452,731)
Interest paid	(7,329)
Interest received	632	703
Income taxes (paid) refunded
Net Cash Provided By (Used In) Operating Activities	(287,395)	25,577
Cash Flows from Investing Activities:
Capital expenditures	(26,435)	(51,255)
Net Cash Provided By (Used In) Investing Activities	(26,435)	(51,255)
Cash Flows from Financing Activities:
Short-term borrowing-related party	250,000
Payments on lease payable borrowing	(26,524)
Net Cash Provided By (Used In) Financing Activities	223,476
Net increase (decrease) in cash and cash equivalents	(90,354)	(25,678)
Cash and cash equivalents at beginning of year	346,405	390,327
Cash and cash equivalents at end of third quarter	256,051	364,649
Reconciliation of Net Income (Loss) to Net Cash Provided By (Used In) Operating Activities:
Net Income (Loss)	(519,728)	(437,688)
Adjustments to reconcile Net Income (Loss) to net cash provided by operating activities:
Depreciation	94,500	49,140
Non-cash share-based compensation expense		543
Changes in assets and liabilities:
Decrease (Increase) in trade accounts receivable	307,619	419,591
Decrease (Increase) in inventories	(22,161)	33,097
Decrease (Increase) in prepaid expenses	58,856	(32,560)
Increase (Decrease) in accounts payable	(107,043)	27,546
Increase (Decrease) in accrued payroll and related expenses	(35,063)	16,616
Increase (Decrease) in accrued expenses and accrued taxes other than income	(64,375)	(50,708)
Total Adjustments	232,333	463,265
Net Cash Provided By (Used In) Operating Activities	(287,395)	25,577
Supplemental Schedule of Non-Cash Activity:
Assets acquired by capital lease	$ 233,115

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Note 1 - Basis of Presentation

9 Months Ended

Jun. 30, 2016

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 and nine month periods ended June 30, 2016 are not necessarily indicative of the results that may be expected for the year ended September 30, 2016. 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, 2015.

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Note 2 - Inventories

9 Months Ended

Jun. 30, 2016

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:
 
   

	June 30, 2016		Sept. 30, 2015		June 30, 2015
Components	$	1,269,567	$	1,254,294	$	1,059,014
Work-in-Process		525,835		499,752		475,436
Finished Product		153,272		172,467		146,650
	$	1,948,674	$	1,926,513	$	1,681,100

The above amounts are net of reserve for obsolete inventory in the amount of $199,987

, $251,500 and $371,564 for the periods ended June 30, 2016, September 30, 2015 and June 30, 2015 respectively.

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Note 3 - Notes Receivable

9 Months Ended

Jun. 30, 2016

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.

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Note 4 - Convertible Notes Payable

9 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Debt Disclosure [Text Block]

4.  

Convertible Notes Payabl

e

On December 30, 2011, management entered into a Convertible Loan Agreement with Roundball LLC. Over the past several years there have been several amendments to the original agreement.

On December 30, 2015, management entered into Amendment No. 4 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 an affiliate of two Directors extending the due date of the loan agreement from December 30, 2015 to December 30, 2016 and continues to allow $250,000 of borrowing on the agreement at the Company's discretion at an interest rate of 0.34% of which $200,000 is outstanding at June 30, 2016.

During fiscal year ended September 30, 2014, the Company borrowed $200,000 against this agreement. As of June 30, 2016, the outstanding balance on the Roundball convertible note was $200,000.

As part of the Convertible Loan Agreement between the Company and Roundball LLC. the parties 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 or amended, this warrant would have expired on December 30, 2015.

On December 30, 2015, management entered into Amendment No. 1 of the Warrant Agreement with Roundball. The amended Warrant Agreement is by and between the Company and a major shareholder who is also an affiliate of two Directors extending the due date of the agreement from December 30, 2015 to December 30, 2016.

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 2016. The fair value of the warrants issued was amortized over the one-year amended convertible loan agreement period. The following weighted-average assumptions were used in the option pricing model: a risk free interest rate of 0.42%; an expected life of 1 year; an expected dividend yield of 0.0%; and a volatility factor of .84.

The Company recorded interest expense on the Roundball note of $173 and $518

for the three months and nine month periods ended June 30, 2016 respectively.

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Note 5 - Short-term Financing

9 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Short-term Debt [Text Block]

5.

Short-term Financing

On June 3, 2016, management entered into an unsecured revolving credit agreement with First Francis Company Inc. First Francis Company Inc, became a major shareholder of the Company on July 1, 2016 when the Company entered into an Agreement and Plan of Merger with First Francis Company Inc. owner of Federal Hose, Federal Hose, and Mr. Edward Crawford and Mr. Matthew Crawford, each of whom are the shareholders of First Francis Company Inc. Edward Crawford and Matthew Crawford serve on the Board of directors of Hickok Incorporated. Matthew Crawford is the son of Edward Crawford.

The agreement provides for a revolving credit facility of $250,000 with interest at 4.0% per annum and is unsecured. Each loan made under the credit arrangement will be due and payable in full on the expiration date of the revolver note. In addition, the agreement generally allows for borrowing based on an amount equal to eighty percent of eligible accounts receivables or $250,000. The revolving line of credit expires on May 31, 2017.

The Company has borrowed $250,000 against this credit facility during the quarter ended June 30, 2016 and has recorded interest expense of $333 during the current period and as of June 30, 2016 no interest was paid. As of June 30, 2016 the outstanding balance on this credit facility was $250,000.

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Note 6 - Capital Leases

9 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Capital Leases in Financial Statements of Lessee Disclosure [Text Block]

6.

Capital Leases

	Current Portion 2016		Total June 30, 2016		Total June 30, 2015
Capital lease obligation on MIS computer equipment and software, payable in monthly installments of $2,059 including interest at approximately 1.04% per annum through December, 2017.	$	24,710	$	35,006	$	-
Capital lease obligation on IT computer equipment and software, payable in monthly installments of $3,888 including interest at approximately 9.83% per annum, through February, 2021.		29,917		171,585		-
	$	54,627		206,591		-
Less current portion				54,627		-
			$	151,964	$	-

The cost of fixed assets related to the capital leases is $233,115 which approximates book value at June 30, 2016.

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Note 7 - Capital Stock, Treasury Stock, Contributed Capital and Stock Options

9 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

7.

Capital Stock, Treasury Stock, Contributed Capital and Stock Options

Unissued shares of Class A common stock (832,233 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. 

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 and 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 June 30, 2016.

The Company's expired Outside Directors Stock Option Plans (collectively the "Directors Plans"), have provided for the automatic grant of options to purchase up to 5,000 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 5,000 Class A shares were outstanding at June 30, 2016 (6,000 shares at September 30, 2015 and 20,000 shares at June 30, 2015) at prices ranging from $2.925 to $6.00 per share. Options for 1,000 shares expired during the three month period ended March 31, 2016 at $2.925 per share. In addition, options for 2,000 shares expired during the three month period ended March 31, 2015 at $6.45 per share. All outstanding options under the expired Directors Plans became 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 expired Directors Plans at June 30, 2016:

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		4,000	$	2.925		5.5		4,000	$	2.925
	$6.00			1,000	$	6.00		3.8		1,000	$	6.00
				5,000	$	3.54				5,000	$	3.54

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 are 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 three and the nine month periods ended June 30, 2016 and 2015 respectively $0 and $0; $0 and $543 was expensed as share-based compensation. The following weighted-average assumptions were used in the option pricing model for the three and nine month periods ended June 30, 2016 and 2015 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 8 - Recently Issued Accounting Pronouncements

9 Months Ended

Jun. 30, 2016

Notes to Financial Statements

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

8.

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 March 2016, the Financial Accounting Standards Board (FASB) issued a new standard that changes the accounting for certain aspects of share-based payments to employees. The new guidance requires excess tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled.  In addition, cash flows related to excess tax benefits will no longer be separately classified as a financing activity apart from the other income tax cash flows. The standard also allows us to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting, clarifies that all cash payments made on an employee’s behalf for withheld shares should be presented as a financing activity on our cash flow statements, and provides an accounting policy election to account for forfeitures as they occur. The new standard is effective for us beginning October 1, 2017, with early adoption permitted. This new standard is not expected to have a significant impact on the Company’s financial statements.

In February 2016, the FASB issued a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of lease assets and lease liabilities on the balance sheet. Most prominent among the amendments  is the recognition of assets and liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP.  Under the new standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The new standard will be effective for us beginning October 1, 2019, with early adoption permitted. We are evaluating the impact this standard will have to our financial statements.

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 be entitled in exchange for those goods and services.” The update is effective for financial statement periods beginning after December 15, 2017, with early adoption prohibited. The Company has not determined the impact of this pronouncement on its financial statements and related disclosure.

In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern ("ASU 2014-15") requires that an entity's management evaluate whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued. ASU 2014-15 is effective for annual periods beginning after December 15, 2016 and for interim periods thereafter. The Company is evaluating the potential impacts of this new standard on its quarterly reporting process.

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Note 9 - Earnings Per Common Share

9 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Earnings Per Share [Text Block]

9.

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 June 30,					Nine Months Ended June 30,
	2016			2015		2016			2015
Basic Income (Loss) per Share
Income (Loss) available to common stockholders	$	(8,095	)	$	109,631	$	(519,728	)	$	(437,688	)
Shares denominator		1,638,215			1,638,215		1,638,215			1,638,215
Per share amount	$	(.01	)	$	.07	$	(.32	)	$	(.27	)
Effect of Dilutive Securities
Average shares outstanding		1,638,215			1,638,215		1,638,215			1,638,215
Stock options		-*			-*		-*			-*
		1,638,215			1,638,215		1,638,215			1,638,215
Diluted Income (Loss) per Share
Income (Loss) available to common stockholders	$	(8,095	)	$	109,631	$	(519,728	)	$	(437,688	)
Per share amount	$	(.01	)	$	.07	$	(.32	)	$	(.27	)

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

Options

and warrants to purchase 5,000 and 100,000 shares of common stock respectively during the third quarter and the first nine months of fiscal 2016 at prices ranging from $2.50 to $6.00 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 during the third quarter and first nine months of fiscal 2016 at a price of $1.85 per share were not included in the computation of diluted earnings per share 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.

Options

and warrants to purchase 20,000 and 200,000 shares of common stock respectively during the third quarter and the first nine months 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.

In addition

, conversion rights to purchase 252,367 shares of common stock during the third quarter and first nine months of fiscal 2015 at a price of $1.85 per share were not included in the computation of diluted earnings per share 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 10 - Segment and Related Information

9 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

10.  

Segment and Related Information

The Company's three 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, military 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 June 30,						Nine Months Ended June 30,
	2016			2015			2016			2015
Net Revenue
Indicators and Gauges	$	368,065		$	332,771		$	882,125		$	933,707
Automotive Diagnostic Tools and Equipment		1,162,179			1,471,843			3,071,615			3,124,307
	$	1,530,244		$	1,804,614		$	3,953,740		$	4,058,014
Income (Loss) before provision for Income Taxes
Indicators and Gauges	$	102,085		$	54,783		$	165,321		$	119,379
Automotive Diagnostic Tools and Equipment		224,083			294,830			261,211			172,283
General Corporate Expenses		(334,263	)		(239,982	)		(946,260	)		(729,350	)
	$	(8,095	)	$	109,631		$	(519,728	)	$	(437,688	)
Asset Information
Indicators and Gauges							$	822,392		$	721,504
Automotive Diagnostic Tools and Equipment								1,917,982			1,705,065
Corporate								856,583			829,397
							$	3,596,957		$	3,255,966
Geographical Information
Included in the consolidated financial statements are the following amounts related to geographical locations:
Revenue:
United States	$	1,506,778		$	1,739,642		$	3,851,487		$	3,935,224
Australia		21,471			1,602			60,412			13,402
Canada		1,995			21,487			16,693			57,041
Mexico		-			7,283			4,360			17,747
China		-			29,657			-			29,657
England		-			4,943			20,260			4,943
Other foreign countries		-			-			528			-
	$	1,530,244		$	1,804,614		$	3,953,740		$	4,058,014

All export sales to Australia, Canada, Mexico, China, England

and other foreign countries are made in United States of America Dollars.

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Note 11 - Commitments and Contingencies

9 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

11. 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 12 - Subsequent Events

9 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Subsequent Events [Text Block]

12.  

Subsequent Events

The Company has analyzed its operations subsequent to June 30, 2016 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, except as follows:

On July 1, 2016, Hickok Incorporated completed its acquisition of Federal Hose Manufacturing LLC (Federal Hose). Pursuant to the terms of the Merger Agreement, the consummation of the transaction depended upon the satisfaction or waiver of a number of certain customary closing conditions and the approval of the Company's shareholders. All of these conditions were satisfied and the merger was completed on July 1, 2016.

In accordance with the Merger Agreement, the Company issued 911,250 validly issued, fully paid and non-assessable Class A Common Shares, without par value, and 303,750 validly issued, fully paid and non-assessable Class B Common Shares, without par value, to First Francis Company Inc. as consideration at the closing of the merger. The Company also issued to First Francis Company Inc. a promissory note in the principal amount of $2,768,662 and a promissory note in the principal amount of $2,000,000, each of which is secured by all of the assets of Hickok and certain of its subsidiaries, bears interest at a rate of 4.0% per annum, is amortized over a ten year period, and will be fully due six years after the issue date. These promissory notes contain customary provisions regarding acceleration of the Company's obligations as a result of an event of default.

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Note 13 - Business Condition and Management Plan

9 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Going Concern Disclosure [Text Block]

13. 

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 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 believes the acquisition of Federal Hose on July 1, 2016 will add to the Company's profitability and cash flow. In addition, 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.

In addition, on December 30, 2015, 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 an affiliate of two Directors 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 2016. The Company had previously borrowed $200,000 and it is outstanding at June 30, 2016.

On December 30, 2015, management entered into Amendment No. 1 of the Warrant Agreement with Roundball. The amended Warrant Agreement is by and between the Company and a major shareholder who is also an affiliate of two Directors extending the due date of the agreement from December 30, 2015 to December 30, 2016.

On June 3, 2016, management entered into an unsecured revolving credit agreement with First Francis Company Inc. First Francis Company Inc, became a major shareholder of the Company on July 1, 2016 when the Company entered into an Agreement and Plan of Merger with First Francis Company Inc. owner of Federal Hose, Federal Hose, and Mr. Edward Crawford and Mr. Matthew Crawford, each of whom are the shareholders of First Francis Company Inc. Edward Crawford and Matthew Crawford serve on the Board of directors of Hickok Incorporated. Matthew Crawford is the son of Edward Crawford.

The agreement provides for a revolving credit facility of $250,000. This facility is available through May 31, 2017. The Company has borrowed $250,000 against this credit facility during the quarter ended June 30, 2016. As of June 30, 2016 the outstanding balance on this credit facility was $250,000.

On July 1, 2016 the Company completed the acquisition of Federal Hose and issued to First Francis Company Inc. a promissory note in the principal amount of $2,768,662 and a promissory note in the principal amount of $2,000,000, each of which is secured by all of the assets of Hickok and certain of its subsidiaries, bears interest at a rate of 4.0% per annum, is amortized over a ten year period, and will be fully due six years after the issue date. These promissory notes contain customary provisions regarding acceleration of the Company's obligations as a result of an event of default.

Management’s strategic plan to increase revenues and profitability through increased sales of existing products, the introduction of new products to the market place, the completion of the acquisition of Federal Hose Manufacturing LLC (see Footnote No. 12 Subsequent Events) and other additional short-term or long-term financing is expected to provide the Company with the needed working capital for the next twelve months.

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Note 2 - Inventories (Tables)

9 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	June 30, 2016		Sept. 30, 2015		June 30, 2015
Components	$	1,269,567	$	1,254,294	$	1,059,014
Work-in-Process		525,835		499,752		475,436
Finished Product		153,272		172,467		146,650
	$	1,948,674	$	1,926,513	$	1,681,100

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Note 6 - Capital Leases (Tables)

9 Months Ended

Jun. 30, 2016

Notes Tables

Schedule of Capital Leased Assets [Table Text Block]

	Current Portion 2016		Total June 30, 2016		Total June 30, 2015
Capital lease obligation on MIS computer equipment and software, payable in monthly installments of $2,059 including interest at approximately 1.04% per annum through December, 2017.	$	24,710	$	35,006	$	-
Capital lease obligation on IT computer equipment and software, payable in monthly installments of $3,888 including interest at approximately 9.83% per annum, through February, 2021.		29,917		171,585		-
	$	54,627		206,591		-
Less current portion				54,627		-
			$	151,964	$	-

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Note 7 - Capital Stock, Treasury Stock, Contributed Capital and Stock Options (Tables)

9 Months Ended

Jun. 30, 2016

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		4,000	$	2.925		5.5		4,000	$	2.925
	$6.00			1,000	$	6.00		3.8		1,000	$	6.00
				5,000	$	3.54				5,000	$	3.54

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Note 9 - Earnings Per Common Share (Tables)

9 Months Ended

Jun. 30, 2016

Notes Tables

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

	Three Months Ended June 30,					Nine Months Ended June 30,
	2016			2015		2016			2015
Basic Income (Loss) per Share
Income (Loss) available to common stockholders	$	(8,095	)	$	109,631	$	(519,728	)	$	(437,688	)
Shares denominator		1,638,215			1,638,215		1,638,215			1,638,215
Per share amount	$	(.01	)	$	.07	$	(.32	)	$	(.27	)
Effect of Dilutive Securities
Average shares outstanding		1,638,215			1,638,215		1,638,215			1,638,215
Stock options		-*			-*		-*			-*
		1,638,215			1,638,215		1,638,215			1,638,215
Diluted Income (Loss) per Share
Income (Loss) available to common stockholders	$	(8,095	)	$	109,631	$	(519,728	)	$	(437,688	)
Per share amount	$	(.01	)	$	.07	$	(.32	)	$	(.27	)

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Note 10 - Segment and Related Information (Tables)

9 Months Ended

Jun. 30, 2016

Notes Tables

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

	Three Months Ended June 30,						Nine Months Ended June 30,
	2016			2015			2016			2015
Net Revenue
Indicators and Gauges	$	368,065		$	332,771		$	882,125		$	933,707
Automotive Diagnostic Tools and Equipment		1,162,179			1,471,843			3,071,615			3,124,307
	$	1,530,244		$	1,804,614		$	3,953,740		$	4,058,014
Income (Loss) before provision for Income Taxes
Indicators and Gauges	$	102,085		$	54,783		$	165,321		$	119,379
Automotive Diagnostic Tools and Equipment		224,083			294,830			261,211			172,283
General Corporate Expenses		(334,263	)		(239,982	)		(946,260	)		(729,350	)
	$	(8,095	)	$	109,631		$	(519,728	)	$	(437,688	)
Asset Information
Indicators and Gauges							$	822,392		$	721,504
Automotive Diagnostic Tools and Equipment								1,917,982			1,705,065
Corporate								856,583			829,397
							$	3,596,957		$	3,255,966
Geographical Information
Included in the consolidated financial statements are the following amounts related to geographical locations:
Revenue:
United States	$	1,506,778		$	1,739,642		$	3,851,487		$	3,935,224
Australia		21,471			1,602			60,412			13,402
Canada		1,995			21,487			16,693			57,041
Mexico		-			7,283			4,360			17,747
China		-			29,657			-			29,657
England		-			4,943			20,260			4,943
Other foreign countries		-			-			528			-
	$	1,530,244		$	1,804,614		$	3,953,740		$	4,058,014

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Note 2 - Inventories (Details Textual) - USD ($)	Jun. 30, 2016	Sep. 30, 2015	Jun. 30, 2015
Inventory Valuation Reserves	$ 199,987	$ 251,500	$ 371,564

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Note 2 - Inventory (Details) - USD ($)	Jun. 30, 2016	Sep. 30, 2015	Jun. 30, 2015
Components	$ 1,269,567	$ 1,254,294	$ 1,059,014
Work-in-Process	525,835	499,752	475,436
Finished Product	153,272	172,467	146,650
	$ 1,948,674	$ 1,926,513	$ 1,681,100

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Note 3 - Notes Receivable (Details Textual)	9 Months Ended
	Jun. 30, 2016
Unsecured Note Receivable Interest Rate	3.00%

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Note 4 - Convertible Notes Payable (Details Textual) - USD ($)	3 Months Ended	9 Months Ended	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2016	Dec. 30, 2016	Sep. 30, 2014	Dec. 31, 2015	Dec. 30, 2015	Dec. 30, 2012
Director [Member] | Roundball LLC [Member] | Convertible Notes Payable [Member]
Working Capital Funding						$ 467,000
Line of Credit Facility, Maximum Borrowing Capacity						$ 250,000
Roundball LLC [Member] | Amendment No. 1 [Member] | Warrant to Purchase Class A Common Stock [Member]
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
Roundball LLC [Member]
Interest Expense, Debt	$ 173	$ 518
Debt Instrument, Interest Rate, Stated Percentage					0.34%
Line of Credit Facility, Fair Value of Amount Outstanding	$ 200,000	$ 200,000
Proceeds from Convertible Debt				$ 200,000
Warrant Term			1 year
Fair Value Assumptions, Risk Free Interest Rate			0.42%
Fair Value Assumptions, Expected Term			1 year
Fair Value Assumptions, Expected Dividend Rate			0.00%
Fair Value Assumptions, Weighted Average Volatility Rate			0.84%

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Note 5 - Short-term Financing (Details Textual) - USD ($)	1 Months Ended	3 Months Ended		9 Months Ended
	Jun. 30, 2016	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Sep. 30, 2015
Revolving Credit Facility [Member] | First Francis [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 250,000	$ 250,000		$ 250,000
Line of Credit Facility, Interest Rate During Period	4.00%
Interest Paid		0
Proceeds from Lines of Credit	$ 250,000	250,000
Interest Expense		333
Short-term Debt	250,000	250,000		250,000
Interest Paid				7,329
Interest Expense		4,843	$ 171	8,179	470
Short-term Debt	$ 250,000	$ 250,000		$ 250,000

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Note 6 - Capital Leases (Details Textual) - USD ($)	Jun. 30, 2016	Sep. 30, 2015	Jun. 30, 2015
Assets Held under Capital Leases [Member]
Property, Plant and Equipment, Gross	$ 233,115
Property, Plant and Equipment, Gross	$ 4,281,721	$ 4,022,171	$ 4,230,832

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Note 6 - Capital Leased Assets (Details) - USD ($)	Jun. 30, 2016	Sep. 30, 2015	Jun. 30, 2015
Assets Held Under Capital Leases, MIS Computer Equipment [Member]
Capital lease obligation, current portion	$ 24,710
Capital lease obligation	35,006
Assets Held Under Capital Leases, IT Computer Equipment [Member]
Capital lease obligation, current portion	29,917
Capital lease obligation	171,585
Capital lease obligation, current portion	54,627
Capital lease obligation	206,591
	$ 151,964

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Note 6 - Capital Leased Assets (Details) (Parentheticals)	9 Months Ended
	Jun. 30, 2016 USD ($)
Assets Held Under Capital Leases, MIS Computer Equipment [Member] | Debt Instrument, Maturing at December, 2017 [Member]
Interest rate	1.04%
Assets Held Under Capital Leases, MIS Computer Equipment [Member]
Monthly Installment	$ 2,059
Assets Held Under Capital Leases, IT Computer Equipment [Member] | Debt Instrument, Maturing at February, 2021 [Member]
Interest rate	9.83%
Assets Held Under Capital Leases, IT Computer Equipment [Member]
Monthly Installment	$ 3,888

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Note 7 - Capital Stock, Treasury Stock, Contributed Capital and Stock Options (Details Textual) - USD ($)	3 Months Ended				9 Months Ended
	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2015	Mar. 31, 2015	Jun. 30, 2016	Jun. 30, 2015	Sep. 30, 2015	Feb. 27, 2013
Common Class A [Member] | Omnibus 2013 Equity Plan [Member]
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
Common Class A [Member] | Directors Plans [Member] | Minimum [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit					$ 2.925
Common Class A [Member] | Directors Plans [Member] | Maximum [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit					$ 6
Common Class A [Member] | Directors Plans [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	5,000		20,000		5,000	20,000	6,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period		1,000		2,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Expirations in Period, Weighted Average Exercise Price		$ 2.925		$ 6.45
Common Class A [Member]
Common Stock, Capital Shares Reserved for Future Issuance	832,233				832,233
Directors Plans [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	5.00%		5.00%		5.00%	5.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	10 years		10 years		10 years	10 years
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate	0.00%		0.00%		0.00%	0.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate	0.87%		0.87%		0.87%	0.87%
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period					3 years
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period					3 years
Allocated Share-based Compensation Expense	$ 0		$ 0		$ 0	$ 543

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Note 7 - Summary of Expired Director Plans (Details)	9 Months Ended
	Jun. 30, 2016 $ / shares shares
Exercise Price Range 1 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit	$ 2.925
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit	$ 5.25
Outstanding stock options (in shares) | shares	4,000
Outstanding, weighted average share price (in dollars per share)	$ 2.925
Weighted average remaining life	5 years 182 days
Number of stock options exercisable (in shares) | shares	4,000
Exercisable, weighted average share price (in dollars per share)	$ 2.925
Exercise Price Range 2 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit	$ 6
Outstanding stock options (in shares) | shares	1,000
Outstanding, weighted average share price (in dollars per share)	$ 6
Weighted average remaining life	3 years 292 days
Number of stock options exercisable (in shares) | shares	1,000
Exercisable, weighted average share price (in dollars per share)	$ 6
Outstanding stock options (in shares) | shares	5,000
Outstanding, weighted average share price (in dollars per share)	$ 3.54
Number of stock options exercisable (in shares) | shares	5,000
Exercisable, weighted average share price (in dollars per share)	$ 3.54

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Note 9 - Earnings Per Common Share (Details Textual) - $ / shares	3 Months Ended		9 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Conversion Rights [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	252,367	252,367	252,367	252,367
Share Price	$ 1.85	$ 1.85	$ 1.85	$ 1.85
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	100,000	200,000	100,000	200,000
Employee Stock Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	5,000	20,000	5,000	20,000
Options and Warrants [Member] | Minimum [Member]
Share Price	$ 2.50	$ 2.50	$ 2.50	$ 2.50
Options and Warrants [Member] | Maximum [Member]
Share Price	$ 6	$ 11	$ 6	$ 11

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Note 9 - Summary of Earnings Per Share Calculation (Details) - USD ($)		3 Months Ended		9 Months Ended
		Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Earnings per Common Share:
Income (Loss) available to common stockholders		$ (8,095)	$ 109,631	$ (519,728)	$ (437,688)
Shares denominator (in shares)		1,638,215	1,638,215	1,638,215	1,638,215
Per share amount (in dollars per share)		$ (0.01)	$ 0.07	$ (0.32)	$ (0.27)
Effect of Dilutive Securities
Average shares outstanding (in shares)		1,638,215	1,638,215	1,638,215	1,638,215
Stock options (in shares)	[1]
(in shares)		1,638,215	1,638,215	1,638,215	1,638,215
Earnings per Common Share Assuming Dilution:
Income (Loss) available to common stockholders		$ (8,095)	$ 109,631	$ (519,728)	$ (437,688)
Net Income (Loss) (in dollars per share)		$ (0.01)	$ 0.07	$ (0.32)	$ (0.27)

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

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Note 10 - Segment and Related Information (Details Textual)	9 Months Ended
	Jun. 30, 2016
Number of Operating Segments	3
Number of Reportable Segments	2

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Note 10 - Information by Industry Segment (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Sep. 30, 2015
Indicators and Gauges [Member]
Revenue	$ 368,065	$ 332,771	$ 882,125	$ 933,707
Income (Loss) before provision for Income Taxes
Income (Loss) before provision for Income Taxes	102,085	54,783	165,321	119,379
Asset Information
Assets	822,392	721,504	822,392	721,504
Revenue:
Revenue	368,065	332,771	882,125	933,707
Automotive Diagnostic Tools and Equipment [Member]
Revenue	1,162,179	1,471,843	3,071,615	3,124,307
Income (Loss) before provision for Income Taxes
Income (Loss) before provision for Income Taxes	224,083	294,830	261,211	172,283
Asset Information
Assets	1,917,982	1,705,065	1,917,982	1,705,065
Revenue:
Revenue	1,162,179	1,471,843	3,071,615	3,124,307
Corporate Segment [Member]
Income (Loss) before provision for Income Taxes
Income (Loss) before provision for Income Taxes	(334,263)	(239,982)	(946,260)	(729,350)
Asset Information
Assets	856,583	829,397	856,583	829,397
UNITED STATES
Revenue	1,506,778	1,739,642	3,851,487	3,935,224
Revenue:
Revenue	1,506,778	1,739,642	3,851,487	3,935,224
AUSTRALIA
Revenue	21,471	1,602	60,412	13,402
Revenue:
Revenue	21,471	1,602	60,412	13,402
CANADA
Revenue	1,995	21,487	16,693	57,041
Revenue:
Revenue	1,995	21,487	16,693	57,041
MEXICO
Revenue		7,283	4,360	17,747
Revenue:
Revenue		7,283	4,360	17,747
CHINA
Revenue		29,657		29,657
Revenue:
Revenue		29,657		29,657
England [Member]
Revenue		4,943	20,260	4,943
Revenue:
Revenue		4,943	20,260	4,943
Other Foreign Countries [Member]
Revenue			528
Revenue:
Revenue			528
Revenue	1,530,244	1,804,614	3,953,740	4,058,014
Income (Loss) before provision for Income Taxes	(8,095)	109,631	(519,728)	(437,688)
Assets	3,596,957	3,255,966	3,596,957	3,255,966	$ 3,866,575
Revenue	$ 1,530,244	$ 1,804,614	$ 3,953,740	$ 4,058,014

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Note 12 - Subsequent Events (Details Textual) - USD ($)	Jul. 01, 2016	Dec. 31, 2015
Common Class A [Member] | Federal Hose [Member] | First Francis [Member] | Subsequent Event [Member]
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares	911,250
Common Class B [Member] | Federal Hose [Member] | First Francis [Member] | Subsequent Event [Member]
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares	303,750
Federal Hose [Member] | First Francis [Member] | Subsequent Event [Member] | Promissory Note 1 [Member]
Debt Instrument, Face Amount	$ 2,768,662
Federal Hose [Member] | First Francis [Member] | Subsequent Event [Member] | Promissory Note 2 [Member]
Debt Instrument, Face Amount	$ 2,000,000
Federal Hose [Member] | First Francis [Member] | Subsequent Event [Member] | Promissory Note 1 and 2 [Member]
Debt Instrument, Interest Rate, Stated Percentage	4.00%
Debt Instrument, Amortized Term	10 years
Debt Instrument, Term	6 years
Debt Instrument, Interest Rate, Stated Percentage		0.34%

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Note 13 - Business Condition and Management Plan (Details Textual) - USD ($)		1 Months Ended	3 Months Ended
	Jul. 01, 2016	Jun. 30, 2016	Jun. 30, 2016	Dec. 31, 2015	Dec. 30, 2015	Sep. 30, 2015	Jun. 30, 2015
Roundball LLC [Member] | Director [Member] | Amendment No.4 [Member]
Working Capital Funding					$ 467,000
Line of Credit Facility, Current Borrowing Capacity					$ 250,000
Convertible Notes Payable, Current		$ 200,000	$ 200,000
Promissory Note 1 [Member] | Federal Hose [Member] | First Francis [Member] | Subsequent Event [Member]
Debt Instrument, Face Amount	$ 2,768,662
Promissory Note 2 [Member] | Federal Hose [Member] | First Francis [Member] | Subsequent Event [Member]
Debt Instrument, Face Amount	$ 2,000,000
Promissory Note 1 and 2 [Member] | Federal Hose [Member] | First Francis [Member] | Subsequent Event [Member]
Debt Instrument, Interest Rate, Stated Percentage	4.00%
Debt Instrument, Amortized Term	10 years
Debt Instrument, Term	6 years
Revolving Credit Facility [Member] | First Francis [Member]
Line of Credit Facility, Maximum Borrowing Capacity		250,000	250,000
Proceeds from Lines of Credit		250,000	250,000
Short-term Debt		250,000	250,000
Convertible Notes Payable, Current		200,000	200,000				$ 200,000
Short-term Debt		$ 250,000	$ 250,000
Debt Instrument, Interest Rate, Stated Percentage				0.34%