Commitments and Contingencies:	12 Months Ended
Sep. 30, 2013
Commitments and Contingencies:
Commitments and Contingencies:	14. Commitments and Contingencies: Capital Lease The Company leases certain equipment under capital leases with terms of five years and an implicit interest rate of 7.2%. The capitalized cost of $57,450 and related annual amortization of $0, $5,000 and $5,000 have been included in property and equipment at September 30, 2013, 2012 and 2011, respectively. The balance due on these leases was $0, $0 and $13,000 as of September 30, 2013, 2012 and 2011, respectively. Operating Leases Rent expense under operating leases totaled $39,000, $30,000 and $31,000 for the years ended September 30, 2013, 2012 and 2011, respectively. Purchase Obligations A “purchase obligation” is defined as an agreement to purchase goods or services that is enforceable and legally binding on the Company and that specifies all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable price provisions, and the approximate timing of the transaction. These amounts are comprised primarily of open purchase order commitments entered in the ordinary course of business with vendors and subcontractors pertaining to fulfillment of the Company’s current order backlog. The purchase obligations on open purchase orders were $3.8 million, $1.9 million and $1.4 million as of September 30, 2013, 2012 and 2011, respectively. Product Liability The Company has product liability insurance of $50,000,000. The Company has not experienced any material product liability claims in the past. Legal Proceedings In the ordinary course of business, the Company is at times subject to various legal proceedings and claims. IS&S does not believe any such matters that are currently pending will have a material effect on its results of operations or financial position. On November 29, 2011, AMR Corporation, the parent company of AAI and certain of its other U.S. based subsidiaries filed voluntary petitions for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Southern District of New York (the “Bankruptcy”). For the years ended September 30, 2013 and 2012, AAI accounted for approximately 14% and 5%, respectively, of net sales. AAI continued to purchase and pay for products from the Company in the ordinary course of business after November 29, 2011. As of November 29, 2011, the Company had pre-Bankruptcy outstanding accounts receivable of $760,000 from AAI. The Bankruptcy Court recently approved the settlement of the U.S. Department of Justice’s antitrust lawsuit challenging the AMR - U.S. Airways merger, and the merger was consummated on December 9, 2013. Shortly thereafter, the Company collected in full, the outstanding amount of $760,000. On September 26, 2011, Farhad Daghigh, a former employee of the Company, filed a lawsuit against the Company in the Court of Common Pleas of Chester County (“the Court”) alleging breach of contract and violation of the Pennsylvania Wage Payment and Collection Law and claiming unpaid sales commissions, prejudgment interest, and liquidated damages totaling approximately $583,000 for the fiscal years ended 2007, 2008, 2009 and 2010, plus attorneys’ fees and costs. In June 2013, following a trial without a jury, the Court found in favor of the plaintiff awarding him damages for breach of contract, violation of the Pennsylvania Wage Payment and Collection Law, prejudgment interest, and plaintiff’s reasonable attorneys’ fees. The Company has appealed the decision. Pending the outcome of the appeal, the Company has recorded an estimated total liability of $657,000 (which includes the plaintiff’s estimated attorney’s fees), which is recorded as a component of selling, general and administrative expenses for the fiscal year ended September 30, 2013. On January 17, 2007 the Company filed suit in the Court of Common Pleas for Delaware County, Pennsylvania against Strathman Associates, a former software consultant for IS&S, alleging that Strathman had improperly used IS&S trade secret and proprietary information in assisting J2 and Kollsman in developing the J2/Kollsman Air Data Computer. The case has not been resolved as of the date hereof.

14. Commitments and Contingencies:

Capital Lease

The Company leases certain equipment under capital leases with terms of five years and an implicit interest rate of 7.2%. The capitalized cost of $57,450 and related annual amortization of $0, $5,000 and $5,000 have been included in property and equipment at September 30, 2013, 2012 and 2011, respectively. The balance due on these leases was $0, $0 and $13,000 as of September 30, 2013, 2012 and 2011, respectively.

Operating Leases

Rent expense under operating leases totaled $39,000, $30,000 and $31,000 for the years ended September 30, 2013, 2012 and 2011, respectively.

Purchase Obligations

A “purchase obligation” is defined as an agreement to purchase goods or services that is enforceable and legally binding on the Company and that specifies all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable price provisions, and the approximate timing of the transaction. These amounts are comprised primarily of open purchase order commitments entered in the ordinary course of business with vendors and subcontractors pertaining to fulfillment of the Company’s current order backlog. The purchase obligations on open purchase orders were $3.8 million, $1.9 million and $1.4 million as of September 30, 2013, 2012 and 2011, respectively.

Product Liability

The Company has product liability insurance of $50,000,000. The Company has not experienced any material product liability claims in the past.

Legal Proceedings

In the ordinary course of business, the Company is at times subject to various legal proceedings and claims. IS&S does not believe any such matters that are currently pending will have a material effect on its results of operations or financial position.

On November 29, 2011, AMR Corporation, the parent company of AAI and certain of its other U.S. based subsidiaries filed voluntary petitions for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Southern District of New York (the “Bankruptcy”). For the years ended September 30, 2013 and 2012, AAI accounted for approximately 14% and 5%, respectively, of net sales. AAI continued to purchase and pay for products from the Company in the ordinary course of business after November 29, 2011. As of November 29, 2011, the Company had pre-Bankruptcy outstanding accounts receivable of $760,000 from AAI. The Bankruptcy Court recently approved the settlement of the U.S. Department of Justice’s antitrust lawsuit challenging the AMR - U.S. Airways merger, and the merger was consummated on December 9, 2013. Shortly thereafter, the Company collected in full, the outstanding amount of $760,000.

On September 26, 2011, Farhad Daghigh, a former employee of the Company, filed a lawsuit against the Company in the Court of Common Pleas of Chester County (“the Court”) alleging breach of contract and violation of the Pennsylvania Wage Payment and Collection Law and claiming unpaid sales commissions, prejudgment interest, and liquidated damages totaling approximately $583,000 for the fiscal years ended 2007, 2008, 2009 and 2010, plus attorneys’ fees and costs. In June 2013, following a trial without a jury, the Court found in favor of the plaintiff awarding him damages for breach of contract, violation of the Pennsylvania Wage Payment and Collection Law, prejudgment interest, and plaintiff’s reasonable attorneys’ fees. The Company has appealed the decision. Pending the outcome of the appeal, the Company has recorded an estimated total liability of $657,000 (which includes the plaintiff’s estimated attorney’s fees), which is recorded as a component of selling, general and administrative expenses for the fiscal year ended September 30, 2013.

On January 17, 2007 the Company filed suit in the Court of Common Pleas for Delaware County, Pennsylvania against Strathman Associates, a former software consultant for IS&S, alleging that Strathman had improperly used IS&S trade secret and proprietary information in assisting J2 and Kollsman in developing the J2/Kollsman Air Data Computer. The case has not been resolved as of the date hereof.