XML 30 R20.htm IDEA: XBRL DOCUMENT
v3.25.0.1

Supplemental Balance Sheet Disclosures (Tables) | 3 Months Ended
--- | ---
Dec. 31, 2024
Supplemental Balance Sheet Disclosures |
Schedule of preliminary allocation of the purchase consideration | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Amounts Recognized as of | ​ | ​ | ​ | ​
​ |  | Acquisition Date |  | Measurement |  | Purchase Price
​ | ​ | (as previously reported) | ​ | Period Adjustments | ​ | Allocation
Total consideration | ​ | $ | 14,060,000 | ​ | $ | — | ​ | $ | 14,060,000
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Prepaid inventory (a) | ​ | $ | 3,191,000 | ​ | $ | — | ​ | $ | 3,191,000
Prepaid equipment and other current assets | ​ | ​ | 160,000 | ​ | ​ | — | ​ | ​ | 160,000
Intangible assets (b) | ​ | ​ | 9,570,000 | ​ | ​ | — | ​ | ​ | 9,570,000
Goodwill (c) | ​ | ​ | 1,139,000 | ​ | ​ | — | ​ | ​ | 1,139,000
Net assets acquired | ​ | $ | 14,060,000 | ​ | $ | — | ​ | $ | 14,060,000
​
| (a) | Prepaid inventory consists primarily of raw materials acquired by the Company but not in the Company’s physical possession as of the acquisition date. The fair value of raw materials was estimated to equal the replacement cost.
| (b) | Intangible assets consists of backlog, customer relationships, and license agreements related to the license rights to use certain Honeywell intellectual property and are recorded at estimated fair values. The estimated fair value of these license agreements are based on a variation of the income valuation approach and are determined using the relief from royalty method. The estimated fair value of the backlog and customer relationships are based on a variation of the income valuation approach known as the multi-period excess earnings method. Refer to the Company’s 2024 10K, Note 5, “Intangible assets” for further details.
| (c) | Goodwill represents the excess of the purchase consideration over the preliminary fair value of the net assets acquired. The goodwill recognized is primarily attributable to the expected synergies from the September 2024 Honeywell
|  | Agreement. Goodwill resulting from the September 2024 Honeywell Agreement has been assigned to the Company’s one reporting unit.
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Amounts Recognized as of | ​ | ​ | ​ | ​
​ |  | Acquisition Date |  | Measurement |  | Purchase Price
​ | ​ | (as previously reported) | ​ | Period Adjustments | ​ | Allocation
Cash consideration | ​ | $ | 35,860,000 | ​ | $ | — | ​ | $ | 35,860,000
Total consideration | ​ | $ | 35,860,000 | ​ | $ | — | ​ | $ | 35,860,000
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | —
Prepaid inventory (a) | ​ | $ | 10,036,160 | ​ | $ | (3,012,626) | (d) | $ | 7,023,534
Equipment | ​ | ​ | 2,609,000 | ​ | ​ | 3,675,000 | (d) | ​ | 6,284,000
Construction in progress | ​ | ​ | 1,238,000 | ​ | ​ | — | ​ | ​ | 1,238,000
Intangible assets (b) | ​ | ​ | 20,900,000 | ​ | ​ | (3,660,000) | (d) | ​ | 17,240,000
Goodwill (c) | ​ | ​ | 4,608,041 | ​ | ​ | (533,575) | (d)(e) | ​ | 4,074,466
Assets acquired | ​ | ​ | 39,391,201 | ​ | ​ | (3,531,201) | ​ | ​ | 35,860,000
Accrued expenses | ​ | ​ | (3,531,201) | ​ | ​ | 3,531,201 | (e) | ​ | —
Liabilities assumed | ​ | ​ | (3,531,201) | ​ | ​ | 3,531,201 | ​ | ​ | —
Net assets acquired | ​ | $ | 35,860,000 | ​ | $ | — | ​ | $ | 35,860,000
​ ​
| (a) | Prepaid inventory consists of raw materials and finished goods acquired by the Company but not in the Company’s physical possession as of the acquisition date. The fair value of raw materials was estimated to equal the replacement cost. The fair value of finished goods was determined based on the estimated selling price, net of selling costs and a margin on the selling activities, which resulted in a change in the value of the finished goods.
| (b) | Intangible assets consist of license agreement related to the license rights to use certain Honeywell intellectual property and customer relationships and are recorded at estimated fair values. The estimated fair value of the license agreement is based on a variation of the income valuation approach and is determined using the relief from royalty method. The estimated fair value of the customer relationships is based on a variation of the income valuation approach known as the multi-period excess earnings method. Refer to Intangible assets within Note 2, “Supplemental Balance Sheet Disclosures” for further details.
| (c) | Goodwill represents the excess of the purchase consideration over the estimated fair value of the assets acquired and liabilities assumed. The goodwill recognized is primarily attributable to the expected synergies from the transaction. Goodwill resulting from the transaction has been assigned to the Company’s one operating segment and one reporting unit.
| (d) | In the third quarter of 2024 and within one year from the acquisition date, the Company identified measurement period adjustments related to fair value estimates. The measurement period adjustments were due to the refinement of inputs used to calculate the fair value of the prepaid inventory, equipment, license agreement and customer relationships based on facts and circumstances that existed as of the acquisition date. One of the refinements of inputs used was a change in classification of prepaid inventory to equipment of $3.7 million. The adjustments resulted in an overall increase to goodwill of $3.0 million. As a result of the measurement period adjustments to the estimated fair values of equipment and customer relationships, during the third quarter of 2024, the Company recognized $218,623 additional depreciation expense in cost of sales and $67,500 additional amortization expense in selling, general and administrative respectively, related to the effects that would have been recognized in previous quarters if the measurement period adjustments were recognized as of the acquisition date. For the remaining measurement period adjustments, the change to the preliminary fair value estimates did not have a material impact to the condensed consolidated statement of operations.
| (e) | During the fourth quarter of 2023, the Company identified measurement period adjustments related to the fair value estimates for accrued expenses. While the Asset Purchase and License Agreement indicated an amount of liabilities related to open supplier purchase orders to be assumed by the Company as of the acquisition date, it was determined that there were no actual liabilities outstanding related to these open supplier purchase orders as of the acquisition date; therefore, the $3.5 million assumed liabilities preliminarily recorded were reversed. The adjustments resulted in an overall decrease to goodwill of $3.5 million; the adjustments have no impact to the condensed consolidated statement of operations.
Summary of unaudited pro forma consolidated information | ​
​ | ​ | ​ | ​
​ | ​ | ​ | Three Months Ended December 31,
​ |  | 2023
Net sales | ​ | $ | 12,021,871
Net income | ​ | $ | 401,129
Schedule of inventories | ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | December 31, |  | September 30,
​ | ​ | 2024 | ​ | 2024
Raw materials | ​ | $ | 12,227,940 | ​ | $ | 9,862,591
Work-in-process | ​ |  | 1,590,822 | ​ |  | 1,357,504
Finished goods | ​ |  | 1,688,089 | ​ |  | 1,512,286
​ | ​ | $ | 15,506,851 | ​ | $ | 12,732,381
Schedule of prepaid expenses and other current assets | ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | December 31, |  | September 30,
​ | ​ | 2024 | ​ | 2024
Prepaid insurance | ​ | $ | 292,636 | ​ | $ | 54,197
Honeywell TSA Agreement | ​ | ​ | 70,000 | ​ | ​ | 140,000
Other | ​ |  | 1,203,247 | ​ |  | 967,197
​ | ​ | $ | 1,565,883 | ​ | $ | 1,161,394
Summary of intangible assets other than goodwill | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | As of December 31, 2024
​ |  | Gross Carrying |  | Accumulated |  | Accumulated |  | Net Carrying
​ | ​ | Value |  | Impairment |  | Amortization |  | Value
License agreement (a) | ​ | $ | 9,140,000 | ​ | $ | — | ​ | $ | — | ​ | $ | 9,140,000
Customer relationships (a) | ​ |  | 13,284,327 | ​ |  | — | ​ |  | (1,809,762) | ​ |  | 11,474,565
Backlog (b) | ​ | ​ | 6,310,000 | ​ | ​ | — | ​ | ​ | (394,375) | ​ | ​ | 5,915,625
Licensing and certification rights (c) | ​ |  | 696,506 | ​ |  | (44,400) | ​ |  | (638,285) | ​ |  | 13,821
Total | ​ | $ | 29,430,833 | ​ | $ | (44,400) | ​ | $ | (2,842,422) | ​ | $ | 26,544,011
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | As of September 30, 2024
​ |  | Gross Carrying |  | Accumulated |  | Accumulated |  | Net Carrying
​ |  | Value |  | Impairment |  | Amortization |  | Value
License agreement (a) | ​ | $ | 9,140,000 | ​ | $ | — | ​ | $ | — | ​ | $ | 9,140,000
Customer relationships (a) | ​ |  | 13,008,332 | ​ |  | — | ​ |  | (1,459,861) | ​ |  | 11,548,471
Backlog (b) | ​ | ​ | 6,310,000 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 6,310,000
Licensing and certification rights (c) | ​ |  | 696,506 | ​ |  | (44,400) | ​ |  | (638,285) | ​ |  | 13,821
Total | ​ | $ | 29,154,838 | ​ | $ | (44,400) | ​ | $ | (2,098,146) | ​ | $ | 27,012,292
​
| (a) | As part of the September 2024 Honeywell Agreement, the July 2024 Honeywell Asset Acquisition, and the June 2023 Honeywell Agreement transactions, the Company acquired intangible assets related to the license agreements for the license rights to use certain Honeywell intellectual property, backlog and customer relationships. The license agreements have an indefinite life and are not subject to amortization; the customer relationships have an estimated weighted average life of ten years.
​
| (b) | As part of the September 2024 Honeywell Agreement, the Company acquired intangible assets related to backlog with a useful life of four years.
​
| (c) | The licensing, and certification rights are amortized over a defined number of units.
Summary of expected future amortization expense related to the customer relationships |
​ | ​ | ​ | ​
​ | ​ | ​ | Amortization Expense
2025 (nine months remaining) | ​ | $ | 2,218,895
2026 | ​ | ​ | 2,958,527
2027 | ​ | ​ | 2,958,527
2028 |  | ​ | 2,958,527
2029 |  | ​ | 1,381,027
Thereafter |  | ​ | 4,914,687
Total | ​ | $ | 17,390,190
Schedule of property and equipment, net | ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | December 31, |  | September 30,
​ | ​ | 2024 | ​ | 2024
Computer equipment | ​ | $ | 2,922,175 | ​ | $ | 2,416,795
Furniture and office equipment | ​ |  | 984,205 | ​ |  | 984,205
Buildings and improvements | ​ |  | 6,241,299 | ​ |  | 6,198,690
Equipment other | ​ |  | 15,312,781 | ​ |  | 15,161,225
Land | ​ |  | 1,021,245 | ​ |  | 1,021,245
​ | ​ |  | 26,481,705 | ​ |  | 25,782,160
Less accumulated depreciation and amortization | ​ |  | (13,032,661) | ​ |  | (12,409,862)
​ | ​ | $ | 13,449,044 | ​ | $ | 13,372,298
Schedule of other assets | ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | December 31, |  | September 30,
​ | ​ | 2024 | ​ | 2024
Operating lease right-of-use assets | ​ | $ | — | ​ | $ | 2,100
Other non-current assets | ​ |  | 150,119 | ​ |  | 471,625
​ | ​ | $ | 150,119 | ​ | $ | 473,725
Schedule of accrued expenses | ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | December 31, |  | September 30,
​ | ​ | 2024 | ​ | 2024
Warranty | ​ | $ | 522,724 | ​ | $ | 596,538
Salary, benefits and payroll taxes | ​ |  | 426,558 | ​ |  | 1,685,372
Professional fees | ​ |  | 142,709 | ​ |  | 262,320
Operating lease | ​ | ​ | — | ​ | ​ | 2,100
Income tax payable | ​ | ​ | 1,596,511 | ​ | ​ | 1,194,185
Other | ​ |  | 1,594,964 | ​ |  | 868,779
​ | ​ | $ | 4,283,466 | ​ | $ | 4,609,294
​
Schedule of warranty cost and accrual information | ​
​ | ​ | ​ | ​ | ​
​ |  | Three Months Ending | ​
​ | ​ | December 31, 2024 |
Warranty accrual, beginning of period | ​ | $ | 596,538 | ​
Accrued expense (Adjustment) | ​ |  | (20,000) | ​
Warranty cost | ​ |  | (53,814) | ​
Warranty accrual, end of period | ​ | $ | 522,724 | ​
​

X
- Definition Tabular disclosure of amortizable finite-lived intangible assets, in total and by major class, including the gross carrying amount and accumulated amortization, and indefinite-lived intangible assets not subject to amortization, excluding goodwill, in total and by major class. A major class is composed of intangible assets that can be grouped together because they are similar, either by their nature or by their use in the operations of a company. + References No definition available. + Details
Name: | issc_ScheduleOfFiniteLivedAndIndefiniteLivedIntangibleAssetsByMajorClassTableTextBlock
Namespace Prefix: | issc_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of pro forma results of operations for a material business acquisition or series of individually immaterial business acquisitions that are material in the aggregate. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h)(2) -SubTopic 10 -Topic 805 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479328/805-10-50-2 Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h)(3) -SubTopic 10 -Topic 805 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479328/805-10-50-2 + Details
Name: | us-gaap_BusinessAcquisitionProFormaInformationTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockSupplementAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of amortization expense of assets, excluding financial assets, that lack physical substance, having a limited useful life. + References No definition available. + Details
Name: | us-gaap_FiniteLivedIntangibleAssetsAmortizationExpenseTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, balances by class of assets, depreciation and depletion expense and method used, including composite depreciation, and accumulated deprecation. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Section 50 -Paragraph 1 -SubTopic 10 -Topic 360 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482099/360-10-50-1 + Details
Name: | us-gaap_PropertyPlantAndEquipmentTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the components of accrued liabilities. + References No definition available. + Details
Name: | us-gaap_ScheduleOfAccruedLiabilitiesTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of assets, excluding financial assets and goodwill, lacking physical substance with a finite life, by either major class or business segment. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 350 -SubTopic 30 -Name Accounting Standards Codification -Section 55 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482640/350-30-55-40 Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 350 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482665/350-30-50-2 + Details
Name: | us-gaap_ScheduleOfFiniteLivedIntangibleAssetsTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the carrying amount as of the balance sheet date of merchandise, goods, commodities, or supplies held for future sale or to be used in manufacturing, servicing or production process. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 210 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02(6)(a)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480566/210-10-S99-1 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 210 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02(6)(b)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480566/210-10-S99-1 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 210 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02(6)(c)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480566/210-10-S99-1 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147483489/210-10-50-1 + Details
Name: | us-gaap_ScheduleOfInventoryCurrentTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the carrying amounts of other current assets. + References No definition available. + Details
Name: | us-gaap_ScheduleOfOtherCurrentAssetsTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the changes in the guarantor's aggregate product warranty liability, including the beginning balance of the aggregate product warranty liability, the aggregate reductions in that liability for payments made (in cash or in kind) under the warranty, the aggregate changes in the liability for accruals related to product warranties issued during the reporting period, the aggregate changes in the liability for accruals related to preexisting warranties (including adjustments related to changes in estimates), and the ending balance of the aggregate product warranty liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 460 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 8 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482425/460-10-50-8 + Details
Name: | us-gaap_ScheduleOfProductWarrantyLiabilityTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed. May include but not limited to the following: (a) acquired receivables; (b) contingencies recognized at the acquisition date; and (c) the fair value of noncontrolling interests in the acquiree. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Paragraph 1 -Section 50 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479907/805-20-50-1 + Details
Name: | us-gaap_ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumedTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration