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RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS | 12 Months Ended
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Sep. 30, 2012
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS [Abstract] |
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS | 3. RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS In August 2013, we announced a delay in filing our Form 10-Q for the three and nine months ended June 30, 2013 until management resolved a complex accounting issue related to the accounting treatment for our outstanding warrants. In the same month, we announced that investors should no longer rely on our previously issued consolidated financial statements and the related independent auditors' reports for the fiscal years ended September 30, 2012 and 2011, or the quarterly financial statements for the first two quarters of fiscal 2013, or any earnings releases relating to these periods, because of errors in such financial statements. As a result of the identification of such errors, we have undertaken a comprehensive review of our previously filed consolidated financial statements. We concluded that the warrants issued in connection with our public offering in May 2011 were incorrectly accounted for as equity and the fair value of the warrants should have been recorded as a liability. As a result, we have restated our previously reported consolidated financial statements for the years ended September 30, 2012 and 2011. The restatement adjustments resulted in a cumulative net decrease to Total shareholders' equity of $1,213 and $1,286 as of September 30, 2012 and 2011, respectively, a decrease to our previously reported net loss for the fiscal year ended September 30, 2012 of $73 and an increase in previously reported net income of $1,759 for the fiscal year ended September 30, 2011. The decrease in our net loss and increase in net income was a result of the changes in the fair value of the warrant liability that is now correctly recorded in other income (expense) as the change in fair value of warrant liability- (increase) decrease. Except as otherwise specified, all information presented in the accompanying consolidated financial statements and the related notes are presented after inclusion of all such adjustments. There was no net effect on the consolidated statements of cash flows for fiscal years 2012 and 2011 as the change in the fair value of the warrant liability is a non-cash item. The following table summarizes the effects of the restatement adjustments, previously discussed, on the consolidated statements of operations and comprehensive income (loss) items for the years ended September 30:
|  | 2012 |  |  | 2011 |
|  | As Reported |  |  | Adjustment |  |  | Restated |  |  | As Reported |  |  | Adjustment |  |  | Restated |
Total revenue |  | $ | 28,208 |  |  | $ | - |  |  | $ | 28,208 |  |  | $ | 33,144 |  |  |  |  |  |  | $ | 33,144 |
Total cost of revenue |  |  | 21,370 |  |  |  | - |  |  |  | 21,370 |  |  |  | 22,638 |  |  |  |  |  |  |  | 22,638 |
Gross profit |  |  | 6,838 |  |  |  | - |  |  |  | 6,838 |  |  |  | 10,506 |  |  |  | - |  |  |  | 10,506 |
Total operating expenses |  |  | 9,329 |  |  |  | - |  |  |  | 9,329 |  |  |  | 9,219 |  |  |  |  |  |  |  | 9,219 |
Restructuring charges |  |  | 3,195 |  |  |  | - |  |  |  | 3,195 |  |  |  | - |  |  |  |  |  |  |  | - |
Operating income (loss) |  |  | (5,686 | ) |  |  | - |  |  |  | (5,686 | ) |  |  | 1,287 |  |  |  | - |  |  |  | 1,287 |
Interest expense |  |  | (714 | ) |  |  | - |  |  |  | (714 | ) |  |  | (706 | ) |  |  |  |  |  |  | (706 | )
Change in fair value of warrant liability - decrease |  |  | - |  |  |  | 73 |  |  |  | 73 |  |  |  | - |  |  |  | 1,759 |  |  |  | 1,759 |
Other income |  |  | 12 |  |  |  | - |  |  |  | 12 |  |  |  | 12 |  |  |  | - |  |  |  | 12 |
Income (loss) before income taxes |  |  | (6,388 | ) |  |  | 73 |  |  |  | (6,315 | ) |  |  | 593 |  |  |  | 1,759 |  |  |  | 2,352 |
Income tax expense |  |  | 2 |  |  |  | - |  |  |  | 2 |  |  |  | 50 |  |  |  |  |  |  |  | 50 |
Net income (loss) |  |  | (6,390 | ) |  |  | 73 |  |  |  | (6,317 | ) |  |  | 543 |  |  |  | 1,759 |  |  |  | 2,302 |
Other comprehensive income (loss): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency translation adjustment |  |  | (22 | ) |  |  | - |  |  |  | (22 | ) |  |  | (49 | ) |  |  | - |  |  |  | (49 | )
Comprehensive income (loss) |  | $ | (6,412 | ) |  | $ | 73 |  |  | $ | (6,339 | ) |  | $ | 494 |  |  | $ | 1,759 |  |  | $ | 2,253 |
Basic EPS |  | $ | (0.89 | ) |  | $ | 0.01 |  |  | $ | (0.88 | ) |  | $ | (0.66 | ) |  | $ | (0.08 | ) |  | $ | (0.74 | )
Diluted EPS |  | $ | (0.89 | ) |  | $ | 0.01 |  |  | $ | (0.88 | ) |  | $ | (0.66 | ) |  | $ | (0.08 | ) |  | $ | (0.74 | )
The following table summarizes the effects of the restatement adjustments, previously discussed, on the consolidated balance sheet items as of September 30:
|  | 2012 |  |  | 2011 |
|  | As Reported |  |  | Adjustment |  |  | Restated |  |  | As Reported |  |  | Adjustment |  |  | Restated |
Total assets |  | $ | 26,975 |  |  | $ | - |  |  | $ | 26,975 |  |  | $ | 32,346 |  |  |  |  |  |  | $ | 32,346 |
Total other current liabilities |  |  | 11,387 |  |  |  | - |  |  |  | 11,387 |  |  |  | 9,847 |  |  |  |  |  |  |  | 9,847 |
Fair value of warrant liability |  |  | - |  |  |  | 1,213 |  |  |  | 1,213 |  |  |  | - |  |  |  | 1,286 |  |  |  | 1,286 |
Total current liabilities |  |  | 11,387 |  |  |  | 1,213 |  |  |  | 12,600 |  |  |  | 9,847 |  |  |  | 1,286 |  |  |  | 11,133 |
Other long-term debt |  |  | 5,998 |  |  |  | - |  |  |  | 5,998 |  |  |  | 6,913 |  |  |  |  |  |  |  | 6,913 |
Total liabilities |  |  | 17,385 |  |  |  | 1,213 |  |  |  | 18,598 |  |  |  | 16,760 |  |  |  | 1,286 |  |  |  | 18,046 |
Shareholders' equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Preferred Shares |  |  | 1,335 |  |  |  | - |  |  |  | 1,335 |  |  |  | 2,135 |  |  |  | - |  |  |  | 2,135 |
Common Shares |  |  | 1,871 |  |  |  | - |  |  |  | 1,871 |  |  |  | 1,698 |  |  |  | - |  |  |  | 1,698 |
Additional paid-in capital |  |  | 20,451 |  |  |  | (816 | ) |  |  | 19,635 |  |  |  | 19,408 |  |  |  | (816 | ) |  |  | 18,592 |
Accumulated deficit |  |  | (14,096 | ) |  |  | (397 | ) |  |  | (14,493 | ) |  |  | (7,706 | ) |  |  | (470 | ) |  |  | (8,176 | )
Accumulated other comprehensive income |  |  | 29 |  |  |  | - |  |  |  | 29 |  |  |  | 51 |  |  |  |  |  |  |  | 51 |
Total shareholders' equity |  |  | 9,590 |  |  |  | (1,213 | ) |  |  | 8,377 |  |  |  | 15,586 |  |  |  | (1,286 | ) |  |  | 14,300 |
Total liabilities and shareholders' equity |  | $ | 26,975 |  |  | $ | - |  |  | $ | 26,975 |  |  | $ | 32,346 |  |  | $ | - |  |  | $ | 32,346 |

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- Definition The entire disclosure for reporting accounting changes and error corrections. It includes the conveyance of information necessary for a user of the Company's financial information to understand all aspects and required disclosure information concerning all changes and error corrections reported in the Company's financial statements for the period. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=6801783&loc=d3e22644-107794 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 45 -Paragraph 23 -URI http://asc.fasb.org/extlink&oid=6368906&loc=d3e21914-107793 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6801783&loc=d3e22595-107794 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6801783&loc=d3e22499-107794 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB TOPIC 1.N.Q3) -URI http://asc.fasb.org/extlink&oid=6369664&loc=d3e30840-122693 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 1 -Section N Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 154 -Paragraph 17, 22, 25, 26 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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