Supplemental Balance Sheet Disclosures

6 Months Ended

Mar. 31, 2012

Supplemental Balance Sheet Disclosures

Supplemental Balance Sheet Disclosures

2. Supplemental Balance Sheet Disclosures

Inventories

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

	March 31,		September 30,
	2012		2011
Raw materials	$	3,344,424	$	2,520,437
Work-in-process	586,854		223,437
Finished goods	547,594		764,721
	$	4,478,872	$	3,508,595

Prepaid expenses and other current assets

Prepaid expenses and other current assets consist of the following:

	March 31,		September 30,
	2012		2011
Unbilled Receivables	$	815,618	$	384,640
Prepaid insurance	56,612		254,171
Income tax asset	54,452		—
Other	326,544		236,825
	$	1,253,226	$	875,636

Unbilled receivables represent principally sales recorded under the percentage-of-completion method of accounting that have not been billed to customers in accordance with applicable contract terms.

Property and equipment

Property and equipment, net consists of the following balances:

	March 31,			September 30,
	2012			2011
Computer equipment	$	2,055,128		$	2,055,128
Corporate airplane	3,082,186			3,082,186
Furniture and office equipment	1,074,279			1,074,279
Manufacturing facility	5,605,616			5,605,616
Equipment	4,315,578			4,205,243
Land	1,021,245			1,021,245
	17,154,032			17,043,697
Less: Accumulated depreciation and amortization	(9,817,102		)	(9,567,335		)
	$	7,336,930		$	7,476,362

Depreciation and amortization related to property and equipment was approximately $126,000 and $137,000 for the three months ended March 31, 2012 and 2011, respectively. The Corporate airplane is utilized primarily in support of product development and is fully depreciated.

Depreciation and amortization related to property and equipment was approximately $251,000 and $272,000 for the six months ended March 31, 2012 and 2011, respectively.

Other assets

Other assets consist of the following:

	March 31,		September 30,
	2012		2011
Intangible assets, net of accumulated amortization of $439,237 and $391,829 at March 31, 2012 and September 30, 2011	$	161,000	$	208,408
	$	161,000	$	208,408

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

Total amortization expense was approximately $5,000 and $38,000 for the three months ended March 31, 2012 and 2011, respectively. Total amortization expense for the six months ended March 31, 2012 and 2011 was $47,000 and $62,000, respectively. Because the intangible assets are being amortized over a defined number of units, the future amortization expense over the next five years cannot be determined at this time.

Accrued expenses

Accrued expenses consist of the following:

	March 31,		September 30,
	2012		2011
Warranty	$	899,475	$	955,549
Salary, benefits and payroll taxes	442,554		476,152
Professional fees	238,496		352,559
Income taxes payable	—		152,658
Materials on order	54,942		89,392
Other	285,748		525,079
	$	1,921,215	$	2,551,389

	Three Months Ending			Six Months Ending
	March 31, 2012
Warranty accrual, beginning of period	$	935,898		$	955,549
Accrued expense for the three and six months ended March 31, 2012	24,216			54,436
Warranty cost for the three and six months ended March 31, 2012	(60,639		)	(110,510		)
Warranty accrual, end of period	$	899,475		$	899,475