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Supplemental Balance Sheet Disclosures

3 Months Ended

Dec. 31, 2011

Supplemental Balance Sheet Disclosures

2. Supplemental Balance Sheet Disclosures

Inventories

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

	December 31,		September 30,
	2011		2011
Raw materials	$	3,026,629	$	2,520,437
Work-in-process	467,896		223,437
Finished goods	648,996		764,721
	$	4,143,521	$	3,508,595

Prepaid expenses and other current assets

Prepaid expenses and other current assets consist of the following:

	December 31,		September 30,
	2011		2011

Unbilled Receivables	$	434,349	$	384,640
Prepaid insurance	98,011		254,171
Income tax asset	131,632		—
Other	316,844		236,825
	$	980,836	$	875,636

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

Property and equipment

Property and equipment, net consists of the following balances:

	December 31,			September 30,
	2011			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	(9,690,821		)	(9,567,335		)
	$	7,463,211		$	7,476,362

Depreciation and amortization related to property and equipment was approximately $125,000 and $135,000 for the three months ended December 31, 2011 and 2010, respectively. The Corporate airplane is primarily utilized in support of product development and is fully depreciated.

Other assets

Other assets consist of the following:

	December 31,		September 30,
	2011		2011
Intangible assets, net of accumulated amortization of $433,837 and $391,829 at December 31, 2011 and September 30, 2011, respectively	$	166,400	$	208,408

Intangible assets consist of licensing and certification rights which are amortized over a defined number of units. No impairment charges were recorded for the three months ended December 31, 2011 and 2010.

Total amortization expense was approximately $42,000 and $24,000 for the three months ended December 31, 2011 and 2010, 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:

	December 31,		September 30,
	2011		2011

Warranty	$	935,898	$	955,549
Salary, benefits and payroll taxes	239,150		476,152
Professional fees	508,941		352,559
Income taxes payable	—		152,658
Materials on order	74,152		89,392
Other	480,480		525,079

	$	2,238,621	$	2,551,389

Warranty cost and accrual information for the three months ended December 31, 2011 is highlighted below:

Warranty Accrual at September 30, 2011	$	955,549
Accrued expense for the three months ended December 31, 2011	30,220
Warranty cost for the three months ended December 31, 2011	(49,871		)
Warranty Accrual at December 31, 2011	$	935,898