CAPITAL STOCK	12 Months Ended
Sep. 30, 2016
CAPITAL STOCK [Abstract]
CAPITAL STOCK	(3) CAPITAL STOCK Sevcon Inc. has two classes of authorized capital stock, preferred and common. There are authorized 1,000,000 shares of preferred stock, $.10 par value and 20,000,000 shares of common stock, $.10 par value. On September 12, 2014 the Company issued 465,500 shares of Series A Convertible Preferred Stock (“Series A Preferred”) at $21.50 per share. The issue raised $9.3 million after costs. The preferred stock, which has a stated value of $24 per share, pays a 4% cumulative annual dividend paid semi-annually on October 15 and April 15, each year. The main terms of the Series A Preferred are as follows: Ranking - With respect to the payment of dividends and distribution of amounts of net assets upon a dissolution, liquidation or winding up, the Series A Preferred will rank senior to common stock and any other class or series of stock over which the Series A Preferred has preference or priority in the payment of dividends or in the distribution of assets on liquidation. Dividends - The holders of the Series A Preferred are entitled to receive, when, as and if declared by the Board of Directors, out of funds legally available for such purpose, dividends at the rate equal to 4% of the stated value per share of $24.00, and no more. Such dividends are cumulative and accrue without interest on a daily basis from the date of issuance of the Series A Preferred, and are payable semiannually in cash or in shares of common stock at the Company’s sole discretion. Liquidation Preference - In the event of a liquidation, dissolution or winding up (a “liquidation”), after the satisfaction in full of the debts of the corporation and the payment of any priority liquidation preference owed to the holders of shares of stock which rank senior to the Series A Preferred, the holders of Series A Preferred shall be entitled to receive out of the assets of the corporation an amount equal to the dividends accrued and unpaid thereon, without interest, plus a sum in cash or property at its fair market value as determined by the Board of Directors equal to the greater of (a) the stated value per share of Series A Preferred and (b) such amount per share as would have been payable had all shares of Series A Preferred been converted into common stock immediately before the liquidation, before any payment may be made or assets distributed to the holders of Junior Stock. For this purpose, “liquidation” does not include any consolidation of the Company with, or merger of the Company into, any other entity, any merger of another entity into the Company, any sale or transfer of assets of the Company or any exchange of securities of the Company. Conversion - Optional Conversion by Holder - Each share of Series A Preferred is convertible at the election of the holder at any time, into shares of common stock by dividing the stated value ($24.00) per share by a conversion price, which is initially $8.00, resulting in a conversion ratio of 3:1. Conversion - Optional Conversion by Sevcon - If at any time after the fifth anniversary of the initial issue date of the Series A Preferred, the closing sale price of common stock exceeds $15.50 for 20 out of 30 consecutive trading days the Company may, at its discretion, elect that all (but not less than all) outstanding shares of Series A Preferred be automatically converted into shares of common stock. Conversion Price Adjustment - The conversion price and, therefore, the conversion rate, will be adjusted to reflect any dividend or distribution in shares of common stock made on any class or series of its capital stock other than on shares of Series A Preferred or any subdivision, combination or reclassification of the outstanding shares of common stock (including through a merger of the Company with another entity) so that each holder of shares of Series A Preferred thereafter surrendered for conversion shall be entitled to receive the number of shares or other of common stock that such Holder would have owned or have been entitled to receive immediately after such action had such shares of Series A Preferred been converted immediately before such action. Voting - The holders of Series A Preferred do not have any voting rights except in the event the terms of the Series A Preferred were to be altered or the Company were to issue any shares of any other class or series of capital stock ranking senior to the Series A Preferred as to dividends or upon liquidation. Redemption – The Series A Preferred are not-redeemable for cash or other assets. Accounting Classification – The Company evaluated the Series A Preferred and determined that it should be considered an “equity host” and not a “debt host.” This evaluation was necessary to determine if any embedded features required bifurcation and, therefore, would be required to be accounted for separately as a derivative liability. Our analysis followed the “whole instrument approach,” which compares an individual feature against the entire preferred stock instrument that includes that feature. Our analysis was based on a consideration of the economic characteristics and risks of the preferred stock and, more specifically, evaluated all of the stated and implied substantive terms and features of the stock, including (1) whether the preferred stock included redemption features; (2) how and when any redemption features could be exercised; (3) whether the holders of preferred stock were entitled to dividends; (4) the voting rights of the preferred stock; and (5) the existence and nature of any conversion rights. As a result of our determination that the Series A Preferred was an “equity host,” we determined that the embedded conversion options did not require bifurcation as derivative liabilities.

(3) CAPITAL STOCK

Sevcon Inc. has two classes of authorized capital stock, preferred and common. There are authorized 1,000,000 shares of preferred stock, $.10 par value and 20,000,000 shares of common stock, $.10 par value.

On September 12, 2014 the Company issued 465,500 shares of Series A Convertible Preferred Stock (“Series A Preferred”) at $21.50 per share. The issue raised $9.3 million after costs. The preferred stock, which has a stated value of $24 per share, pays a 4% cumulative annual dividend paid semi-annually on October 15 and April 15, each year. The main terms of the Series A Preferred are as follows:

Ranking - With respect to the payment of dividends and distribution of amounts of net assets upon a dissolution, liquidation or winding up, the Series A Preferred will rank senior to common stock and any other class or series of stock over which the Series A Preferred has preference or priority in the payment of dividends or in the distribution of assets on liquidation.

Dividends - The holders of the Series A Preferred are entitled to receive, when, as and if declared by the Board of Directors, out of funds legally available for such purpose, dividends at the rate equal to 4% of the stated value per share of $24.00, and no more. Such dividends are cumulative and accrue without interest on a daily basis from the date of issuance of the Series A Preferred, and are payable semiannually in cash or in shares of common stock at the Company’s sole discretion.

Liquidation Preference - In the event of a liquidation, dissolution or winding up (a “liquidation”), after the satisfaction in full of the debts of the corporation and the payment of any priority liquidation preference owed to the holders of shares of stock which rank senior to the Series A Preferred, the holders of Series A Preferred shall be entitled to receive out of the assets of the corporation an amount equal to the dividends accrued and unpaid thereon, without interest, plus a sum in cash or property at its fair market value as determined by the Board of Directors equal to the greater of (a) the stated value per share of Series A Preferred and (b) such amount per share as would have been payable had all shares of Series A Preferred been converted into common stock immediately before the liquidation, before any payment may be made or assets distributed to the holders of Junior Stock. For this purpose, “liquidation” does not include any consolidation of the Company with, or merger of the Company into, any other entity, any merger of another entity into the Company, any sale or transfer of assets of the Company or any exchange of securities of the Company.

Conversion - Optional Conversion by Holder - Each share of Series A Preferred is convertible at the election of the holder at any time, into shares of common stock by dividing the stated value ($24.00) per share by a conversion price, which is initially $8.00, resulting in a conversion ratio of 3:1.

Conversion - Optional Conversion by Sevcon - If at any time after the fifth anniversary of the initial issue date of the Series A Preferred, the closing sale price of common stock exceeds $15.50 for 20 out of 30 consecutive trading days the Company may, at its discretion, elect that all (but not less than all) outstanding shares of Series A Preferred be automatically converted into shares of common stock.

Conversion Price Adjustment - The conversion price and, therefore, the conversion rate, will be adjusted to reflect any dividend or distribution in shares of common stock made on any class or series of its capital stock other than on shares of Series A Preferred or any subdivision, combination or reclassification of the outstanding shares of common stock (including through a merger of the Company with another entity) so that each holder of shares of Series A Preferred thereafter surrendered for conversion shall be entitled to receive the number of shares or other of common stock that such Holder would have owned or have been entitled to receive immediately after such action had such shares of Series A Preferred been converted immediately before such action.

Voting - The holders of Series A Preferred do not have any voting rights except in the event the terms of the Series A Preferred were to be altered or the Company were to issue any shares of any other class or series of capital stock ranking senior to the Series A Preferred as to dividends or upon liquidation.

Redemption – The Series A Preferred are not-redeemable for cash or other assets.

Accounting Classification – The Company evaluated the Series A Preferred and determined that it should be considered an “equity host” and not a “debt host.” This evaluation was necessary to determine if any embedded features required bifurcation and, therefore, would be required to be accounted for separately as a derivative liability. Our analysis followed the “whole instrument approach,” which compares an individual feature against the entire preferred stock instrument that includes that feature. Our analysis was based on a consideration of the economic characteristics and risks of the preferred stock and, more specifically, evaluated all of the stated and implied substantive terms and features of the stock, including (1) whether the preferred stock included redemption features; (2) how and when any redemption features could be exercised; (3) whether the holders of preferred stock were entitled to dividends; (4) the voting rights of the preferred stock; and (5) the existence and nature of any conversion rights. As a result of our determination that the Series A Preferred was an “equity host,” we determined that the embedded conversion options did not require bifurcation as derivative liabilities.