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Note 16 - Subsequent Events | 6 Months Ended
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Mar. 31, 2016
Notes to Financial Statements |
Subsequent Events [Text Block] | 16. Subsequent Events Debt Restructuring On April 29, 2016, the stockholders of the Company approved several measures intended to improve the financial viability of the Company. First, the stockholders approved the issuance of up to 4,700,000 shares of the Company’s Common Stock upon conversion of outstanding term notes and the issuance of warrants to purchase up to an aggregate of 470,000 shares of the Company’s Common Stock and the issuance of the shares of the Common Stock issuable upon exercise of such warrants. Since December 2014, the Company has issued a total of $3 million in term notes to certain individual accredited investors (the “Outstanding Term Notes”). The Outstanding Term Notes contain interest rates ranging from 8.0% to 9.5% per annum and mature on March 1, 2017. Certain of the Outstanding Term Notes contain a prepayment penalty payable by the Company in the event such note is repaid prior to the maturity date. As of March 31, 2016, a total of $170 in interest has accrued under the Outstanding Term Notes and the Outstanding Term Notes had an aggregate prepayment penalty of $250. The Outstanding Term Notes are held as follows:
| ● | Michael Taglich – $2,450 million in aggregate principal amount;
| ● | Robert Taglich – $450 in aggregate principal amount; and
| ● | Roger Kahn - $100 in aggregate principal amount.
The Company and the holders of the Outstanding Term Notes have agreed to amend the Outstanding Term Notes to provide the Company with the option to convert all outstanding principal and accrued but unpaid interest due under such Outstanding Term Notes into shares of Common Stock of the Company at a conversion price of $0.75 per share. Each of the shareholders have committed in writing to the conversion to equity, and as such, the Company has presented this debt as long-term in the Condensed Consolidated Balance Sheet. In addition, the Company has agreed to issue the Company’s placement agent, Taglich Brothers, Inc., or its affiliates, warrants to purchase an aggregate of up to 470,000 shares of the Company’s Common Stock in return for services provided by Taglich Brothers, Inc. in connection with the conversion of the Outstanding Term Notes. The warrants will have a term of five years and an exercise price equal to the closing price of the Common Stock on the date of the warrants are issued. The warrants will only be issued if (i) the stockholders approve the issuance of the warrants and the issuance of the shares of Common Stock upon exercise of the warrants as described in this proposal at the Meeting and (ii) the Outstanding Term Notes convert into shares of Common Stock of the Company as described above. The holders of the Outstanding Term Notes include officers, directors and consultants of the Company. Michael Taglich and Robert Taglich aremembers of the Board of Directors of the Company, and Roger Kahn is the Company’s President and Chief Executive Officer. Michael Taglich and Robert Taglich are executives of Taglich Brothers, Inc. Secondly, the stockholders approved the issuance of up to 4,000,000 shares of the Company’s Common Stock upon conversion of $3 million outstanding convertible notes, which accrue interest at a rate of 11.5% per annum, paid quarterly in cash. The convertible notes mature on March 1, 2017 and are convertible prior to maturity at the election of the holder into Common Stock at a conversion price of $6.50 per share. Because the conversion price of the convertible notes is significantly greater than the current trading price of the Common Stock, the Company did not expect any holders of the convertible notes to convert such notes. Rather, the Company expects to repay such convertible notes in cash on the Maturity Date. Therefore, the Company proposed and the shareholders approved an amendment to the convertible notes to reduce the conversion price to $0.75 per share in order to provide an incentive to the holders of such Convertible Notes to convert the outstanding principal into shares of Common Stock. This decrease in the conversion price would result in an increase in the aggregate number of shares of Common Stock issuable upon conversion of the convertible notes from 461,539 shares to 4,000,000 shares. Due to the uncertainty of the holders intent to convert these notes into common stock, the Company has presented this debt as short-term in the Condensed Consolidated Balance Sheet. Lastly, the stockholders approved issuance of up to 2,666,667 shares of the Company’s Common Stock upon conversion of term notes to be issued in a private placement. The Company is in the process of offering term notes to certain accredited investors in a private placement of term notes in an aggregate principal amount of up to $2 million (the “Term Notes”). The Term Notes have an interest rate of 10%, with no interest accruing until July 1, 2016, and mature on March 31, 2017. Under the provisions of the Term Notes, all outstanding principal and any accrued and unpaid interest under the Term Notes will automatically convert into shares of Common Stock of the Company at a conversion price of $0.75 per share two trading days after receipt of stockholder approval of the issuance of up to 2,666,667 shares of Common Stock upon conversion of the Term Notes. The conversion of the Term Notes, including all principal and accrued interest, would result in the issuance of approximately 2,666,667 shares of the Company’s Common Stock. The Common Stock issued upon conversion of the Term Notes may be issued at a discount if the trading price of the Common Stock at the time of conversion is below $0.75 per share. On May 11, 2016, the Company issued 1,806,680 shares of common stock for net proceeds of $1.2 million in connection with the first closing of the conversion of these term notes.

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References No definition available. + Details
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