UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For quarterly period ended December 31, 20142015
TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from__________to_________from __________ to_________
Commission File Number: 0-6658
__________________________________________________
SCIENTIFIC INDUSTRIES, INC.
___________________________________________________________________________________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 04-2217279
____________________________ _____________________________________________________________________
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or
organization)
7080 Orville Drive, Ste. 102, Bohemia, New York 11716
________________________________________ ___________________________________________________________________________________
(Address of principal executive offices) (Zip Code)
(631)567-4700
____________________________________________________________________
(Registrant=s____________________________________________________
(Registrant's telephone number, including area code)
Not Applicable
_____________________________________________________________________
(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), except for a Report
on Form 8-K required to be filed in February 2014 with respect to an
acquisition and (2) has been
subject to such filing requirements for the past 90 days. Yes X
No __.
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of "large accelerated filer,"
"Accelerated filer" and "smaller reporting company" in Rule 12b-2 of
the Exchange Act.
Large accelerated filer_________filer Accelerated Filer________Filer ____
Non-accelerated filer __________ Smaller reporting company X
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).
Yes X No
The number of shares outstanding of the issuer's common stock par
value, $0.05 per share, as of February 2, 20152016 was 1,479,1121,489,112 shares.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
ITEM 1 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED):
Page
____
Condensed Consolidated Balance Sheets 1
Condensed Consolidated Statements of Operations 2
Condensed Consolidated Statements of Comprehensive
Income (Loss)Loss 3
Condensed Consolidated Statements of Cash Flows 4
Notes to Condensed Consolidated Financial Statements 6
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATIONS 15
ITEM 4 CONTROLS AND PROCEDURES 18
PART II - OTHER INFORMATION
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K 18
SIGNATURE 19
EXHIBITS 20
PART I-FINANCIAL INFORMATION
Item 1. Financial Statements
SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
December 31, June 30,
2014 2014
(Unaudited)
__________2015 2015
_____________ __________
Current Assets: (Unaudited)
Cash and cash equivalents $ 244,000666,900 $ 493,700482,000
Restricted cash 300,000 300,000
Investment securities 338,200 415,400278,200 281,800
Trade accounts receivable, net 731,000 756,700870,100 1,081,700
Inventories 2,416,100 2,309,2003,262,500 2,213,700
Prepaid expenses and other current assets 160,500 123,10055,600 68,600
Deferred taxes 87,800 86,000
__________ __________109,700 114,200
_________ _________
Total current assets 3,977,600 4,184,1005,543,000 4,542,000
Property and equipment at cost, net 261,100 252,100206,500 235,200
Intangible assets, net 1,623,100 1,795,9001,281,200 1,451,900
Goodwill 705,300 705,300
Other assets 53,600 28,20052,500 52,500
Deferred taxes 159,800 146,200190,400 154,500
__________ __________
Total assets $6,780,500 $7,111,800$7,978,900 $7,141,400
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 422,400372,100 $ 373,700227,600
Customer advances 12,000 89,500110,100 76,400
Bank line of credit 250,000470,000 -
Notes payable, current portion - 26,700200,000 200,000
Accrued expenses and taxes 293,900 442,800779,500 519,900
Contingent consideration, current portion 120,000 109,000128,900 106,800
__________ __________
Total current liabilities 1,098,300 1,041,7002,060,600 1,130,700
Contingent consideration, less
current portion 281,100 391,000137,300 260,300
__________ __________
Total liabilities 1,379,400 1,432,7002,197,900 1,391,000
__________ __________
Shareholders' equity:
Common stock, $.05 par value; authorized 7,000,000 shares;
1,498,914 and 1,488,914
issued and1,508,914 outstanding at
December 31, 20142015 and at June 30, 2014 74,900 74,4002015 75,400 75,400
Additional paid-in capital 2,446,000 2,420,7002,487,900 2,486,700
Accumulated other comprehensive gain (loss)loss ( 3,400) 1,1008,200) ( 3,300)
Retained earnings 2,936,000 3,235,3003,278,300 3,244,000
___________ __________
__________
5,453,500 5,731,5005,833,400 5,802,800
Less common stock held in treasury, at cost,
19,802 shares 52,400 52,400
__________ __________
Total shareholders' equity 5,401,100 5,679,1005,781,000 5,750,400
__________ __________
Total liabilities and
Shareholders'shareholders' equity $6,780,500 $7,111,800$7,978,900 $7,141,400
========== ==========
See notes to unaudited condensed consolidated financial statements
1
SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the Three Month For the Six Month
Periods Ended Periods Ended
December 31, December 31,
______________________ ________________________________ __________ __________ __________
2015 2014 20132015 2014
2013
______________________ ________________________________ __________ __________ __________
Revenues $2,028,200 $1,691,100 $1,747,800$3,472,600 $3,353,200 $3,183,900
Cost of sales 1,190,500 1,081,700 929,7002,039,800 2,163,900 1,771,600
__________ __________ __________ __________
Gross profit 837,700 609,400 818,1001,432,800 1,189,300 1,412,300
__________ __________ __________ __________
Operating Expenses:
General & administrative 395,700 446,400 342,900803,900 852,600
645,900
Selling 227,200 229,400 207,900394,200 524,700 404,900
Research & development 84,100 116,100 90,800169,500 223,200 188,000
__________ __________ __________ __________
Total operating
expenses 707,000 791,900 641,6001,367,600 1,600,500 1,238,800
__________ __________ __________ __________
Income (loss) from
operations 130,700 ( 182,500) 176,50065,200 ( 411,200) 173,500
__________ __________ __________ __________
Other income (expense):
Investment income 5,000 7,400 5,400 9,600
8,500
Other 1,400 ( 5,900) 2,200( 3,300) ( 1,100) 5,900
Interest expense ( 14,000) ( 1,400) ( 1,000)22,100) ( 2,700)
( 1,800)__________ __________ _________ _________ _____________________
Total other income,
(expense) net ( 7,600) 100 6,600( 20,000) 5,800
12,600__________ __________ _________ _________ _____________________
Income (loss) before
income tax expense
(benefit) 123,100 ( 182,400) 183,10045,200 ( 405,400)
186,100
_____________________ __________ _________ _________ _____________________
Income tax expense (benefit):
Current 40,900 ( 33,800) 44,80040,900 ( 91,000)
41,700
Deferred ( 12,200) ( 10,600) 3,200( 30,000) ( 15,100)
7,200
___________ _________ _________ _____________________ __________ __________ __________
Total income tax
expense (benefit) 28,700 ( 44,400) 48,00010,900 ( 106,100)
48,900
___________ _________ _________ _____________________ __________ __________
Net income (loss) $ 94,400 ($138,000) $ 135,10034,300 ($299,300) $ 137,200
=========== ========== ========== =====================
Basic and diluted earnings
(loss) per common share $ .06 ($ .09) $ .10.02 ($ .20) $ .10
Cash dividends declared
per common share $ .00 $ .00 $ .00 $ .08
See notes to unaudited condensed consolidated financial statements
2
SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
For the Three Month For the Six Month
Periods Ended Periods Ended
December 31, December 31,
____________________ _______________________________________ __________________
2015 2014 20132015 2014
2013________ __________ ________ __________
Net income (loss) $ 94,400 ($138,000) $135,100$ 34,300 ($299,300) $137,200
__________ ________ __________ ________
Other comprehensive loss:
Unrealized holding loss on investments
arising during period,
net of tax ( 1,100) ( 3,800) ( 800)4,900) ( 4,500) ( 2,600)
__________ _________ __________ __________
Comprehensive income (loss) $ 93,300 ($141,800) $134,300 $303,800) $134,600$ 29,400 ($303,800)
========== ========= ========== ==========
See notes to unaudited condensed consolidated financial statements
3
SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Six Month Periods Ended
December 31, 20142015 December 31, 20132014
_________________ ________________________________
Operating activities:
Net income (loss) $ 34,300 ($ 299,300)
$ 137,200__________ ____________ __________
Adjustments to reconcile net income (loss)
to net cash provided by (used in)used in operating activities:
Loss on sale of investments - 1,300
10,500Loss on asset disposal 2,700 -
Depreciation and amortization 210,800 220,100 88,500
Deferred income tax (benefit)benefit ( 30,000) ( 15,100)
7,200
Stock-based compensation 1,200 2,100 10,200
Income tax benefit of stock options exercised - 4,900 -
Changes in operating assets and liabilities:
Accounts receivable 211,600 25,700
( 110,900)
Inventories (1,048,800) ( 106,900) ( 165,600)
Prepaid expenses and other current assets 13,000 ( 37,200)
( 25,300)
Other assets - ( 25,400)
-
Accounts payable 144,500 48,700 ( 5,700)
Customer advances 33,700 ( 77,500)
194,800
Accrued expenses and taxes 259,600 ( 149,200) ( 94,100)
____________ ____________
Total adjustments ( 108,500)201,700) ( 90,400)108,500)
____________ ____________
Net cash provided by (used in)used in
operating activities ( 167,400) ( 407,800) 46,800
____________ ____________
Investing activities:
Purchase of investment securities,
available-for-sale ( 3,800)2,700) ( 24,300)3,800)
Capital expenditures ( 52,900)8,400) ( 24,600)52,900)
Purchase of intangible assets ( 3,400)5,700) ( 1,900)3,400)
Redemption of investment securities, available
for sale - 75,000
275,300____________ ____________
Net cash provided by
(used in) investing activities ( 16,800) 14,900
____________ ____________
Financing activities:
Line of credit proceeds 470,000 250,000
Payment of contingent consideration ( 100,900) ( 98,900)
Proceeds from exercise of stock options - 18,800
Principal payments on note payable - ( 26,700)
____________ _____________
Net cash provided by investing
activities 14,900 224,500
____________ _____________
Financing activities:
Line of credit proceeds 250,000 50,000
Payment of contingent consideration ( 98,900) -
Proceeds from exercise of stock options 18,800 6,700
Cash dividend declared and paid - ( 107,400)
Principal payments on note payable ( 26,700) ( 38,900)
____________ _____________
Net cash provided by (used in) financing
activities 369,100 143,200 ( 89,600)
____________ _____________
See notes to unaudited condensed consolidated financial statements
4
SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Six Month Periods Ended
December 31, 20142015 December 31, 20132014
_________________ _________________
Net increase (decrease) in cash
and cash equivalents 184,900 ( 249,700) 181,700
Cash and cash equivalents, beginning of year 482,000 493,700 927,300
__________ __________
Cash and cash equivalents, end of period $ 666,900 $ 244,000
$1,109,000
========== ==========__________ __________
Supplemental disclosures:
Cash paid during the period for:
Income taxes $ 18,500 $ 3,500
$ 100,000
Interest 4,400 2,700 1,800
Non-cash investing and financing activities (Note 3)
See notes to unaudited condensed consolidated financial statements
5
SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
General: The accompanying unaudited interim condensed consolidated
financial statements are prepared pursuant to the Securities
and Exchange Commission's rules and regulations for reporting
on Form 10-Q. Accordingly, certain information and footnotes
required by accounting principles generally accepted in the
United States for complete financial statements are not
included herein. The Company believes all adjustments
necessary for a fair presentation of these interim statements
have been included and that they are of a normal and
recurring nature. These interim statements should be read in
conjunction with the Company's financial statements and notes
thereto, included in its Annual Report on Form 10-K, for the
fiscal year ended June 30, 2014.2015. The results for the three
and six months ended December 31, 2014,2015, are not necessarily
an indication of the results for the full fiscal year ending
June 30, 2015.2016.
1. Summary of significant accounting policies:
Principles of consolidation:
The accompanying consolidated financial statements include the
accounts of Scientific Industries, Inc. ("Scientific", a Delaware
corporation), Altamira Instruments, Inc.("Altamira", a wholly-owned
subsidiary and Delaware corporation), Scientific Packaging Industries,
Inc. (an inactive wholly-owned subsidiary and New York corporation)
and Scientific Bioprocessing, Inc. ("SBI", a wholly-owned subsidiary
and Delaware corporation). All are collectively referred to as the
"Company". All material intercompany balances and transactions have
been eliminated.
2. New Accounting Pronouncements:
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with
Customers amending revenue recognition requirements for multiple-
deliverablemultiple-deliverable
revenue arrangements. This update provides guidance on how revenue is
recognized to depict the transfer of promised goods or services to customers
in an amount that reflects the consideration to which the entity expects to
be entitled in exchange for the goods or services. This determination is
made in five steps: (i) identify the contract with the customer;customer: (ii)
identify the performance obligations in the contract; (iii) determine the
transaction price; (iv) allocate the transaction price to the performance
obligations in the contract; and (v) recognize revenue when (or as) the
entity satisfies a performance obligation. The updateIn July 2015, the FASB deferred
the effective date to fiscal years beginning after December 15, 2018, or the
Company's fiscal year ending June 30, 2020, and early adoption of the
standard is permitted, but not before the original effective for the
Company beginning July 1,date of
December 15, 2017. Early adoption is not permitted. The Company is currently evaluating the impacteffect this guidance maywill
have on itsthe consolidated financial conditionstatements and results of operations.related disclosures.
6
In June 2014, the FASB issued ASU 2014-12, Compensation - Stock Compensation
(Topic 718): Accounting for Share-Based Payments When the Terms of an Award
Provide that a Performance Target Could be Achieved After the Requisite
Service Period. This update affects reporting entities that grant their
6
employee's targets that affects vesting could be achieved after the
requisite service period. The new standard requires that a performance
target that affects vesting and that could be achieved after the requisite
services period be treated as a performance condition. The new standard will
be effective for the Company beginning July 1, 2015,2016, and early adoption is
permitted. The Company expects the adoption will not have a material impact
on its financial condition, results of operations or cash flows.
In July 2015, the FASB issued ASU No. 2015-11, "Inventory: Simplifying the
Measurement of Inventory", that requires inventory not measured using
either the last in, first out (LIFO) or the retail inventory method to be
measured at the lower of cost and net realizable value. Net realizable value
is the estimated selling prices in the ordinary course of business, less
reasonably predictable cost of completion, disposal and transportation. The
new standard will be effective for fiscal years beginning after December 15,
2016, including interim periods within those fiscal years, and will be
applied prospectively. Early adoption is permitted. The Company is
evaluating the impact that this standard will have on its consolidated
financial statements.
In November 2015, the FASB issued new guidance simplifying the balance sheet
classification of deferred taxes. The new guidance requires that deferred
tax liabilities and assets be classified as noncurrent in a classified
statement of financial position. The current requirement that deferred tax
liabilities and assets of a tax-paying component of an entity be offset and
presented as a single amount is not affected by the new guidance. The
guidance is effective for public companies for interim and annual reporting
periods beginning after December 15, 2016, with early adoption permitted as
of the beginning of an interim or annual reporting period. The new guidance
may be applied either prospectively to all deferred tax liabilities and
assets or retrospectively to all periods presented. The Company is
evaluating the impact that the new guidance will have on its consolidated
financial statements and related disclosures.
3. Acquisition:
On February 26, 2014, the Company acquired substantially all the assets of a
privately owned company consisting principally of inventory, fixed assets, and
intangible assets related to the production and sale of a variety of
laboratory and pharmacy balances and scales. The acquisition was pursuant to
an asset purchase agreement whereby the Company paid the sellers $700,000 in
cash, 126,449 shares of Common Stock valued at $427,500 (of
which 31,612 are held in escrow for one year) and agreed to make
additional cash payment based on a percentage of net sales of the business
acquired equal to 8% for the period endingended June 30, 2014 annualized, amounting to $98,900, 9% for the
year endingended June 30, 2015, 10% for the year ending June 30, 2016 and 11% for
the year ending June 30, 2017, estimated at a present value of $460,000 on the
date of acquisition. Payments related to this contingent consideration for
each period are due in September following the fiscal year. Contingent
consideration payments amounted to $100,900 and $98,900 during the six month
periods ended December 31, 2015 and 2014, respectively.
7
The products, which are similar to the Company's other Benchtop Laboratory
Equipment, and in many cases used by the same customers, are marketed under
the Torbal(R) brand. The principal customers are pharmacies, pharmacy schools,
universities, government laboratories, and industries utilizing precision
scales. The products are sold primarily on a direct basis, including through
the
Company's e-commerce site.
TheManagement of the Company allocated the purchase price based on its
valuation of the assets acquired, as follows:
Current assets $ 144,000
Property and equipment 118,100
Goodwill* 115,400
Other intangible assets 1,210,000
__________
Total Purchase Price $1,587,500
==========
*See Note 8, "Goodwill and Other Intangible Assets".
Of the $1,210,000 of the acquired other intangible assets, $570,000 was
assigned to technology and websites with a useful life of 5 years, $120,000
was assigned to customer relationships with an estimated useful life of 9
years, $140,000 was assigned to the trade name with an estimated useful
life of 6 years, $110,000 was assigned to the IPR&D with an estimated
useful life of 3 years, and $270,000 was assigned to non-compete agreements
with an estimated useful life of 5 years.
In connection with the acquisition, the Company entered into a three-year
employment agreement with the previous Chief Operating Officer of the
acquired business as President of the Company's new Torbal Division and
Director of Marketing for the Company. The agreement may be extended by
mutual consent for an additional two years.
7
The Company was unable to obtain audited financial statements
of the business acquired in connection with the acquisition.
The inability to include the related audited financial statements
as required by the Securities Exchange Act of 1934 in the related
Report on Form 8-K filing resulted in the inability of the
Company to register under the Securities Act of 1933, as amended,
offerings of the Company's securities during the one year period
ending February 2015.
Pro forma results
The unaudited pro forma condensed consolidated financial
information in the table below summarizes the consolidated
results of operations of the Company including its new Torbal
Division, on a pro forma basis, as though the companies had
been consolidated as of the beginning of the fiscal year
ended June 30, 2014. The unaudited pro forma condensed
financial information presented below is for informational
purposes only and is not intended to represent or be
indicative of the consolidated results of the operations
that would have been achieved if the acquisition had been
completed as of the commencement of the fiscal year presented.
In addition, the Company was unable to obtain audited historical
information and, therefore the information presented is based
on management's best judgment.
For the Three Month For the Six Month
Period Ended Period Ended
December 31, 2013 December 31, 2013
___________________ _________________
Net Revenues $1,955,500 $3,647,600
Net Income $ 85,800 $ 49,000
Net earnings per share
- basic $ .06 $ .03
Net earnings per share
- diluted $ .06 $ .03
4. Segment Information and Concentrations:
The Company views its operations as three segments: the manufacture and
marketing of standard benchtop laboratory equipment for research
in university, hospital and industrial laboratories sold primarily
through laboratory equipment distributors ("Benchtop Laboratory
Equipment"), the manufacture and marketing of custom-made catalyst research
instruments for universities, government laboratories, and chemical and
petrochemical companies sold on a direct basis ("Catalyst Research
Instruments") and the marketing and production of bioprocessing systems for
laboratory research in the biotechnology industry sold directly to
customers and through distributors ("Bioprocessing Systems").
8
Segment information is reported as follows (foreign sales are principally
to customers in Europe and Asia):
8
Benchtop Catalyst Bio- Corporate
Laboratory Research processing and Conso-
Equipment Instruments Systems Other lidated
__________ ___________ __________ _________ ___________
Three months ended December 31, 2015:
Revenues $1,583,500 $ 414,500 $ 30,200 $ - $2,028,200
Foreign Sales 764,400 105,500 - - 869,900
Income (Loss) from
Operations 187,700 ( 10,100) ( 32,900) ( 14,000) 130,700
Assets 4,352,600 2,319,200 728,800 578,300 7,978,900
Long-Lived Asset
Expenditures 1,900 - 5,700 - 7,600
Depreciation and
Amortization 74,200 7,000 24,400 - 105,600
Benchtop Catalyst Bio- Corporate
Laboratory Research processing and Conso-
Equipment Instruments Systems Other lidated
__________ ___________ __________ _________ ___________
Three months ended December 31, 2014:
Revenues $1,247,000 $ 419,600 $ 24,500 $ - $1,691,100
Foreign Sales 722,400 315,700 - - 1,038,100
Loss from
Operations ( 67,200 ( 70,600) ( 44,700) - ( 182,500)
Assets 4,032,700 1,387,900 774,100 585,800 6,780,500
Long-Lived Asset
Expenditures 33,200 - 2,300 - 35,500
Depreciation and
Amortization 76,300 9,200 24,500 - 110,000
Benchtop Catalyst Bio- Corporate
Laboratory Research processingApproximately 53% and Conso-
Equipment Instruments Systems Other lidated
__________ ___________ __________ _________ ___________
Three months ended December 31, 2013:
Revenues $1,154,000 $ 463,400 $ 130,400 $ - $1,747,800
Foreign Sales 823,400 88,900 - - 912,300
Income (Loss)
from Operations 119,800 2,100 64,600 ( 10,000) 176,500
Assets 2,787,400 1,704,400 981,600 829,800 6,303,200
Long-Lived Asset
Expenditures 10,100 - 6,000 - 16,100
Depreciation and
Amortization 11,600 8,500 24,200 - 44,300
Approximately 50% and 65% of net sales of benchtop laboratory equipment
(37%(41% and 43%37% of total revenues) for the three month periods ended
December 31, 20142015 and 2013,2014, respectively, were derived from the Company's
main product, the Vortex-Genie 2(R) mixer, excluding accessories.
Approximately 19% and 21% of totalnet sales of benchtop laboratory equipment
sales(15% of total revenues for both periods) were derived from Torbal brand
products for the three months ended December 31, 2014.2015 and 2014,
respectively.
Two customers accounted in the aggregate for approximately 18%14% and 25%18%
of the net sales of the Benchtop Laboratory Equipment Operations and 13%11%
and 17%13% of total revenues for the three months ended December 31, 2014,2015,
and 2013,2014, respectively. Sales of catalyst research instruments generally
comprise a few very large orders averaging at least $100,000 per order
to a limited number of customers, who differ from order to order. Sales
to four customers and three otherdifferent customers represented approximately 84%92% and 91%84% of
the Catalyst Research Instrument Operations' net sales, respectively,
and 21%19% and 24%21% of total revenues for the three months ended
December 31, 20142015 and 2013,2014, respectively.
9
Benchtop Catalyst Bio- Corporate
Laboratory Research processing and Conso-
Equipment Instruments Systems Other lidated
__________ ___________ __________ _________ ___________
Six months ended December 31, 2015:
Revenues $2,846,500 $ 567,500 $ 58,600 $ - $3,472,600
Foreign Sales 1,363,400 113,300 - - 1,476,700
Income (Loss) from
Operations 242,400 ( 92,200) ( 62,900) ( 22,100) 65,200
Assets 4,352,600 2,319,200 728,800 578,300 7,978,900
Long-Lived Asset
Expenditures 8,400 - 5,700 - 14,100
Depreciation and
Amortization 148,000 13,900 48,900 - 210,800
Benchtop Catalyst Bio- Corporate
Laboratory Research processing and Conso-
Equipment Instruments Systems Other lidated
__________ ___________ __________ _________ ___________
Six months ended December 31, 2014:
Revenues $2,333,400 $ 970,700 $ 49,100 $ - $3,353,200
Foreign Sales 1,133,500 759,200 - - 1,892,700
Loss from
Operations ( 185,300 ( 140,800) ( 85,100) - ( 411,200)
Assets 4,032,700 1,387,900 774,100 585,800 6,780,500
Long-Lived Asset
Expenditures 51,500 900 3,900 - 56,300
Depreciation and
Amortization 152,300 19,000 48,800 - 220,100
Benchtop Catalyst Bio- Corporate
Laboratory Research processingApproximately 50% and Conso-
Equipment Instruments Systems Other lidated
__________ ___________ __________ _________ ___________
Six months ended December 31, 2013:
Revenues $2,223,700 $ 803,100 $ 157,100 $ - $3,183,900
Foreign Sales 1,444,200 162,400 2,000 - 1,608,600
Income (Loss)
from Operations 238,100 ( 101,900) 47,800 ( 10,500) 173,500
Assets 2,787,400 1,704,400 981,600 829,800 6,303,200
Long-Lived Asset
Expenditures 20,000 - 6,500 - 26,500
Depreciation and
Amortization 22,600 17,600 48,300 - 88,500
Approximately 48% and 66% of net sales of benchtop laboratory equipment
(33%(41% and 46%33% of total revenues) for the six month periods ended December
31, 20142015 and 2013,2014, respectively, were derived from the segment's main
product, the Vortex-Genie 2(R) mixer, excluding accessories.
Two benchtop laboratory equipment customers, accounted in the aggregate
for approximately 16%13% and 21%16% of the segment's net sales for the six month
periods ended December 31, 2015 and 2014, and 2013, and 11% and 14%, of total revenues for
each of the six month periods ended December 31, 20142015 and 2013, respectively.2014.
Approximately 20% of totalnet sales of benchtop laboratory equipment sales were
derived from Torbal brand products for each of the six months ended
December 31, 2014.2015 and 2014, and 16% and 14% of total revenues,
respectively.
For the six month periods ended DecmeberDecember 31, 20142015 and 2013,2014, catalyst
research Instruments sales to eightthree and six different customers in each
of the six month periods, accounted for approximately 97%88% and 92%97% of
the segment's net sales and 28%14% and 23%28% of total revenues, respectively.
10
5. Fair Value of Financial Instruments:
The FASB defines the fair value of financial instruments as the amount
that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement
date. Fair value measurements do not include transaction costs.
10
The accounting guidance also expands the disclosure requirements around
fair value and establishes a fair value hierarchy of valuation inputs.
The hierarchy prioritizes the inputs into three levels based on the extent
to which inputs used in measuring fair value are observable in the market.
Each fair value measurement is reported in one of the three levels, which
is determined by the lowest level input that is significant to the fair
value measurement in its entirety. These levels are described below:
Level 1 Inputs that are based upon unadjusted quoted prices for
identical instruments traded in active markets.
Level 2 Quoted prices in markets that are not considered to be
active or financial instruments for which all significant inputs are
observable, either directly or indirectly.
Level 3 Prices or valuation that require inputs that are both
significant to the fair value measurement and unobservable.
The following tables set forth by level within the fair value hierarchy
the Company's financial assets that were accounted for at fair value on a
recurring basis at December 31, 20142015 and June 30, 20142015 according to the
valuation techniques the Company used to determine their fair values:
Fair Value Measurements Using Inputs
Considered as
Assets:
Fair Value at
December 30, 201431, 2015 Level 1 Level 2 Level 3
______________ __________ _______________ ________
Cash and cash equivalents $ 244,000666,900 $ 244,000666,900 $ - $ -
Restricted cash 300,000 300,000 - -
Available for sale securities 338,200 338,200278,200 278,200 - -
__________ __________ ________ _______________ _________
Total $ 582,200 $ 582,200$1,245,100 $1,245,100 $ - $ -
========== ========== ======== =================
Liabilities:
Contingent consideration $ 401,100266,200 $ - $ - $401,100$266,200
========== ========== ======== =================
Fair Value Measurements Using Inputs
Considered as
Assets:
Fair Value at
June 30, 20142015 Level 1 Level 2 Level 3
______________ __________ _______________ ________
Cash and cash equivalents $ 493,700482,000 $ 493,700482,000 $ - $ -
Restricted cash 300,000 300,000 - -
Available for sale securities 415,400 415,400281,800 281,800 - -
__________ __________ _______________ ________
Total $ 909,100 $ 909,100$1,063,800 $1,063,800 $ - $ -
========== ========== =============== ========
Liabilities:
Contingent consideration $ 500,000367,100 $ - $ - $500,000$367,100
========== ========== =============== ========
11
Investments in marketable securities classified as available-for-sale by
security type at December 31, 20142015 and June 30, 20142015 consisted of the
following:
Unrealized
Fair Holding Gain
Cost Value (Loss)
____________ _________ ____________
At December 30, 2014:31, 2015:
Available for sale:
Equity securities $ 29,300 $ 38,50038,200 $ 9,2008,900
Mutual funds 312,300 299,700 ( 12,600)257,100 240,000 (17,100)
_________ _________ _______________________
$ 341,600286,400 $ 338,200 ($ 3,400)278,200 $ ( 8,200)
========= ========= =======================
Unrealized
Fair Holding Gain
Cost Value (Loss)
____________ _________ ____________
At June 30, 2014:2015:
Available for sale:
Equity securities $ 29,300 $ 38,50035,800 $ 9,2006,500
Mutual funds 385,000 376,900255,800 246,000 ( 8,100)9,800)
__________ _________ _________ _____________________
$ 414,300285,100 $ 415,400281,800 $ 1,100( 3,300)
========== ========= ========= =====================
6. Inventories:
Inventories for financial statement purposes are based on perpetual
inventory records at December 31, 20142015 and based on a physical count as
of June 30, 2014.2015. Components of inventory are as follows:
December 31, June 30,
2014 2014
__________2015 2015
____________ __________
Raw Materials $1,568,600 $1,617,100$1,439,000 $1,420,800
Work in process 535,900 366,2001,510,400 442,900
Finished Goods 311,600 325,900313,100 350,000
__________ __________
$2,416,100 $2,309,200$3,262,500 $2,213,700
========== ==========
7. Earnings (loss) per common share:
Basic earnings (loss) per common share are computed by dividing net income
(loss) by the weighted-average number of shares outstanding. Diluted
earnings per common share include the dilutive effect of stock options, if
any.
12
Earnings (loss) per common share was computed as follows:
For the Three Month For the Six Month
Periods Ended Period Ended
December 31, December 31,
____________________________ ______________________
2015 2014 20132015 2014 2013
_______________________ ______________________
Net income (loss) $ 94,400 ($ 138,000) $ 135,10034,300 ($ 299,300)
$ 137,200============ ============= ========= =========== ==========
Weighted average common
shares outstanding 1,489,112 1,479,112 1,342,6631,489,112 1,475,960 1,340,163
Dilutive securities - 6,327 - 6,867
_________ _________ _________ _________- -
__________ __________ __________ __________
Weighted average dilutive
common shares outstanding 1,489,112 1,479,112 1,348,9901,489,112 1,475,960
1,347,030
========= ========= ========= =================== ========== ========== ==========
Basic and diluted earnings
(loss) per common share $ .06 ($ .09) $ .10.02 ($ .20)
$ .10====== ======== ====== ========
======
Approximately 38,500 and 51,000 shares of the Company's Common Stock
issuable upon the exercise of outstanding stock options were excluded from
the calculation of diluted earnings per common share for the three and six
month periods ended December 31, 2015 and 2014, because the effect would be anti-dilutive.
Approximately 5,000 and 28,500 shares of the Company's common stock
issuable upon the exercise of outstanding options were excluded from the
calculation of diluted earnings per common share for each of the three and
six month periods ended December 31, 2013,respectively, because the
effect would be anti-dilutive.
8. Goodwill and Other Intangible Assets:
Goodwill represents the excess of the purchase price over the fair value
of the net assets acquired in connection with the Company's acquisition of
Altamira and SBI's acquisition of assets. Goodwill amounted to $705,300
as of December 31, 20142015 and June 30, 2014,2015, all of which is deductible for
tax purposes.
The components of other intangible assets are as follows:
Useful Accumulated
Lives Cost Amortization Net
______________ __________ ____________ _________
At December 31, 2014:2015:
Technology, trademarks 5/10 yrs. $1,226,800$1,215,800 $ 556,600682,600 $ 670,200533,200
Trade names 6 yrs. 140,000 19,400 120,60042,800 97,200
Websites 5 yrs. 210,000 35,000 175,00077,000 133,000
Customer relationships 9/10 yrs. 357,000 227,300 129,700246,500 110,500
Sublicense agreements 10 yrs. 294,000 91,900 202,100121,300 172,700
Non-compete agreements 5 yrs. 384,000 154,500 229,500
IPR&D210,900 173,100
Intellectual Property,
Research & Development
(IPR&D) 3 yrs. 110,000 30,500 79,50067,200 42,800
Other intangible assets 5 yrs. 160,800 144,300 16,500169,800 151,100 18,700
__________ __________ __________
$2,882,600 $1,259,500 $1,623,100$2,880,600 $1,599,400 $1,281,200
========== ========== ==========
13
Useful Accumulated
Lives Cost Amortization Net
______________ __________ ____________ _________
At June 30, 2014:2015:
Technology, trademarks 5/10 yrs. $1,226,800 $ 489,100624,200 $ 737,700602,600
Trade names 6 yrs. 140,000 7,800 132,20031,100 108,900
Websites 5 yrs. 210,000 14,000 196,00056,000 154,000
Customer relationships 9/10 yrs. 357,000 215,800 141,200236,200 120,800
Sublicense agreements 10 yrs. 294,000 77,200 216,800106,600 187,400
Non-compete agreements 5 yrs. 384,000 126,300 257,700
IPR&D182,700 201,300
Intellectual Property,
Research & Development
(IPR&D) 3 yrs. 110,000 12,200 97,80048,900 61,100
Other intangible assets 5 yrs. 157,400 140,900 16,500164,000 148,200 15,800
__________ __________ __________
$2,879,200 $1,083,300 $1,795,900$2,885,800 $1,433,900 $1,451,900
========== ========== ==========
Total amortization expense was $88,200$87,500 and $28,100$88,200 for the three months ended
December 31, 20142015 and 2013,2014, respectively and $176,300$173,800 and $56,200$176,300 for the six
months ended December 31, 20142015 and 2013,2014, respectively. As of December 31,
2014,2015, estimated future amortization expense related to intangible assets is
$174,400$160,600 for the remainder of the fiscal year ending June 30, 2015, $352,400 for fiscal 2016, $337,100$337,000
for fiscal 2017, $323,300$324,000 for fiscal 2018, $244,800$246,600 for fiscal 2019, $80,400
for fiscal 2020 and $191,100$132,600 thereafter.
14
SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis or Plan of Operations
Certain statements contained in this report are not based on historical facts,
but are forward-looking statements that are based upon various assumptions
about future conditions. Actual events in the future could differ materially
from those described in the forward-looking information. Numerous unknown
factors and future events could cause such differences, including but not
limited to, product demand, market acceptance, impact of competition, the
ability to reach final agreements, the ability to finance and produce to
customers' specifications catalyst research instruments, and to develop
marketable bioprocessing systems, adverse economic conditions, and other
factors affecting the Company's business that are beyond the Company's
control. Consequently, no forward-looking statement can be guaranteed.
We undertake no obligation to publicly update forward-looking
statements, whether as a result of new information, future events or
otherwise.
Liquidity and Capital Resources
Cash and cash equivalents decreasedincreased by $249,700$184,900 to $244,000$666,900 as of December 31,
20142015 from $493,700$482,000 as of June 30, 2015.
Operating activities used $167,400 of cash for the six months ended December
31, 2015 compared to $407,800 used during the six months ended December 31,
2014. Net cashThe current year period reflected significantly higher amounts of work-
in-process inventories related to a large impending order for catalyst research
instruments, partially offset by the income generated during the period
compared to a loss in same period last year. Cash used in operatinginvesting
activities during the six months ended December 31, 2015 was $407,800$16,800 compared
to cash provided of $14,900 for the six months ended December 31, 2014
as comparedprimarily due to $46,800decreased capital expenditures and no redemptions of
investment securities in the current year period. Net cash provided by
operatingfinancing activities increased to $369,100 for the six months ended December
31, 2013, primarily due to the loss in the current
period. Cash provided by investing activities was $14,900 for
the six month period ended December 31, 20142015 compared to $224,500 for the six month period ended December 31, 2013,
mainly due to lower amount of investment securities
redemptions. The Company reflected cash provided by financing
activities of $143,200 in the current year period compared
to $89,600 used in the prior year comparable period due primarily due to
the borrowingincreased loan advances under the Company's bankexport-related line of credit andto finance the
absenceexport-related inventory purchases of a dividend payout this year,
partially offset by the contingent consideration payment
related to the Torbal Division asset acquisition.catalyst research instruments.
The Company's working capital decreasedincreased by $263,000$71,100 to $2,879,400$3,482,400 as of December
31, 20142015 from working capital of $3,142,400$3,411,300 at June 30, 2014,2015, mainly due to the
lossincome generated during the period.
The Company has a linetwo lines of credit with First National Bank of America Merrill
LynchPennsylvania -
an Export-Related Revolving Line of Credit which is guaranteed by the Export-
Import Bank of the United States which provides for maximumexport-related borrowings
of up to $700,000,$998,500 bearing interest at 3.00 percentage points aboveprime plus 2% (currently 5.50%) and an
annual fee of 1.75%; and a second one-year Demand Line of Credit which provides
for borrowings of up to $300,000 for regular working capital needs, bearing
interest at prime, which is collaterized by a cash collateral account of
$300,000 which will be released upon certain financial criteria being met or
the LIBOR
Index, 3.16% as of December 31, 2014line being paid and isterminated, which ever comes first. Advances on both
lines are also secured by a pledge of collateral consisting of the Company's assets including inventory,
accounts, chattel paper, equipment and fixturesgeneral intangibles of the Company.
Outstanding amounts are due and payable by November 30, 2015
with a requirement that the Company is to reduce the outstanding
principal balance to zero during the 30 day period ending on
the expiration date of the promissory note. As
of December 31, 2014, $250,0002015 $470,000 was dueoutstanding under thisthe Export-Related line and
no borrowings were made under the second line.
15
Management believes that the Company will be able to meet its cash flow needs
during the next 12 months from its available financial resources which include
its cash and investment securities, lines of credit, and line of credit.
15
operations.
Results of Operations
Financial Overview
The Company recorded income before income tax expense of $123,100 and $45,200
for the three and six month periods ended December 31, 2015 compared to a net loss of $182,400 and $405,400
before income tax benefit amounting to $182,400 and $405,400 for the three and
six month periods ended December 31, 2014, respectively. The improvement is
primarily due to higher sales and margins generated by the Benchtop Laboratory
Equipment Operations which produced income for the segment compared to income before income taxlosses
last year. The results reflect non-cash amounts for depreciation and
amortization of $183,100$105,600 and $186,100$210,800 for the three and six month periodsmonths ended
December 31, 2013 due2015 compared to losses in each of its business
segments, which included non-cash amounts of $110,000 and $220,100 for depreciation and amortization expenses for the
current three and six month periods, respectively, the
majority of which pertained to amortization of the Torbal
Division assets, compared to $44,300 and $88,500, respectively
for the same periods last year.respectively.
The Three Months Ended December 31, 20142015 Compared With the Three Months Ended
December 31, 20132014
Net revenues for the three months ended December 31, 2014
decreased2015 increased by $56,700 (3.2%$337,100
(19.9%) to $1,691,100$2,028,200 from $1,747,800$1,691,100 for the three months ended December 31,
20132014, primarily as a result of a $105,900
decrease$336,500 increase in revenues by the Bioprocessing SystemsBenchtop
Laboratory Equipment Operations, a decreasewhich reflected $295,500 of $43,800 in catalyst research instrumentsTorbal brand
products sales offset by a $93,000 net increase in sales of benchtop laboratory
products, which includedcompared to $256,000 in new Torbal brand product
sales.the prior year comparable period. Sales
of the benchtop laboratory equipment products generally are pursuant to many
small purchase orders from distributors, while catalyst research instruments
are sold pursuant to a small number of larger orders, typically averaging over
$100,000 each, resulting in significant swings in revenues. The backlog of
orders for catalyst research instruments was $949,000$3,102,000 as of December 31,
2014, all2015, the majority of which are anticipated to be delivered by June 30, 2015;2016;
the backlog as of December 31, 20132014 was $1,063,900.$949,000.
The revenues generated by the
Bioprocessing Systems Operations in the prior comparable
period included a one-time order for prototype bioprocessing
products of approximately $100,000. Although typically
there is no significant backlog of orders for the Benchtop
Laboratory Equipment Operations, due to the production delays
caused by the facilities move during the quarter and a
significant amount of orders received towards the end of the
quarter, the Company had a backlog of such products of
approximately $600,000 as of December 31, 2014.
The decreaseincrease in gross profit percentage for the three months ended December 31,
20142015 to 36.0%41.3% from 46.8%36.0% for the year earlier three month period was primarily
due to the product mix and lower overhead costs of the Benchtop Laboratory
Equipment Operations, which include in
the current year Torbal brand products at lower gross margins and
lower profit margins in the Catalyst Research Instruments
Operations, due to higher overhead costs.Operations.
General and administrative expenses for the three month comparative periods
ended December 31, 20142015 and December 31, 2013 increased2014 decreased by $103,500 (30.1%$50,700 (11.4%) to
$446,400$395,700 from $342,900$446,400 primarily due to expenses incurred in the 2014 period by
the Torbal Division of the Benchtop Laboratory Equipment Operations and costs associated with the Bohemia
facility move in November.move.
Selling expenses for the three months ended December 31, 2014
increased2015 decreased by
$21,500 (10.3%)$2,200 to $229,400$227,200 from $207,900$229,400 for the three months ended December 31, 2013, primarily the result of
selling expenses incurred by the Torbal Division of the Benchtop
Laboratory Equipment Operations.
16
2014.
Research and development expenses for the three months ended December 31, 2014 increased $25,300 (27.9%2015
decreased $32,000 (27.6%) to $116,100$84,100 from $90,800$116,100 for the three months ended
December 31, 2013,2014, primarily the result of increaseddecreased new product development by
the Company?s Bioprocessing Systems Operations.Company's Benchtop Laboratory Equipment Operations due to the release of a
new product.
Total other income (expense), net for the three month period ended December 31,
20142015 decreased by $6,500$7,700 to $100($7,600) from $6,600$100 for the three month period ended
December 31, 2013.2014 due to increased interest expense.
16
For the three months ended December 31, 2014, the2015, income tax benefitexpense was $44,400$28,700
compared to income tax expensebenefit of $48,000
for the three months ended December 31, 2013 due to the loss
for the period.
As a result, the net loss$44,400 for the three months ended December
31, 2014 was $138,000due to the income for the period compared to a loss in the prior year
period.
As a result, the net income of $135,100 for the three months ended December 31, 2013.2015 was
$94,400 compared to a net loss of $138,000 for the three months ended December
31, 2014.
The Six Months Ended December 31, 20142015 Compared With the Six Months
Ended December 31, 20132014
Net revenues for the six months ended December 31, 20142015 increased by
$169,300 (5.3%$119,400 (3.6%) to $3,353,200$3,472,600 compared to $3,183,900$3,353,200 for the six months
ended December 31, 2013,2014, primarily due to increases of $167,500 and $109,800$513,100 in sales of
benchtop laboratory equipment, partially offset by a $403,200 decrease in
catalyst research instruments sales and benchtop laboratory
equipment, respectively, partially offset by decreasedan increase of $9,500 in revenues
of $108,000 of
the Bioprocessing Systems Operations, which
benefitted from a one-time order in the prior comparable period.Operations. The 20142015 benchtop laboratory equipment
sales included $467,500$565,400 of Torbal brand product sales.sales compared to $467,500 in
the prior year period. Sales of benchtop laboratory equipment products
generally are comprised of many small purchase orders from distributors, while
sales of catalyst research instruments are comprised of a small number of large
orders, typically averaging over $100,000 each, resulting in significant swings
in revenues.
The gross profit percentage for the six months ended December 31, 2014 decreased2015
increased to 35.4%41.3% compared to 44.4% for the six
months ended December 31, 2013, due principally to product mix
of the Benchtop Laboratory Equipment Operations, which include
in the current year Torbal brand products at lower gross margins.
General and administrative expenses increased by $206,700
(32.0%) to $852,60035.5% for the six months ended December 31,
2014, due principally to product mix and lower overhead costs of the Benchtop
Laboratory Equipment Operations.
General and administrative expenses decreased by $48,700 (5.7%) to $803,900 for
the six months ended December 31, 2015 from $645,900$852,600 for the comparable period
of the prior year, due primarily to the expenses ofin the new Torbal Division ofprior year period for
the Benchtop Laboratory Equipment Operations, and costs associated with the Bohemia
facility move in November.move.
Selling expenses for the six months ended December 31, 2014
increased2015 decreased by
$119,800 (29.6%$130,500 (24.9%) to $524,700$394,200 from $404,900$524,700 for the six months ended December
31, 2013,2014, primarily the result of expenses of the new Torbal Division of the Benchtop
Laboratory Equipment Operations, anddecreased commissions due to sales mix and
exhibitions expense for the Catalyst Research Instruments Operations.
Research and development expenses for the six months ended December 31,
2014 increased $35,200 (18.7%2015 decreased $53,700 (24.1%) to $223,200$169,500 compared to $188,000$223,200 for the
six months ended December 31, 2013,2014, primarily the result of increaseddecreased new
product development by the Company's Bioprocessing Systems Operations.
17
Benchtop Laboratory Equipment Operations and the
Catalyst Research Instruments Operations as new products were launched.
Total other income (expense), net, for the six month period ended December 31,
2015 decreased to ($20,000) from $5,800 for the six months ended December 31,
2014 decreased by $6,800primarily due to $5,800 from $12,600
forincreased interest expense.
For the six month period ended December 31, 2013.
As a result,2015 income tax expense was $10,900
compared to income tax benefit for the six month period
ended December 31, 2014 wasof $106,100 compared to $48,900
income tax expense for the comparable period of the
prior fiscal year anddue to the income for the period compared to a loss in the
prior year period.
17
As a result, the net lossincome for the six months ended December 31, 20142015 was
$299,300$34,300 compared to a net incomeloss of $137,200$299,300 for the six months ended December
31, 2013.2015.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures. As of the end of the period
covered by this report, based on an evaluation of the Company's disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934), the Chief Executive and Chief Financial
Officer of the Company has concluded that the Company's disclosure controls and
procedures are effective to ensure that information required to be disclosed by
the Company in its Exchange Act reports is recorded, processed, summarized and
reported within the applicable time periods specified by the SEC's rules and
forms. The Company also concluded that information required to be disclosed in
such reports is accumulated and communicated to the Company's management,
including its principal executive and principal financial officer, as
appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting. There was no change in
the Company's internal controls over financial reporting that occurred during
the most recently completed fiscal quarter that materially affected or is
reasonably likely to materially affect the Company's internal controls over
financial reporting.
Part II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit Number: Description
31.1 Certification of Chief Executive Officer and Chief Financial
Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification of Chief Executive Officer and Chief Financial
Officer pursuant to Section 906 of the Sarbanes-
OxleySarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K:
Report dated January 16, 201526, 2016 reporting under Item 1.01 and 5.07.
18
SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES
SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Scientific Industries, Inc.
Registrant
/s/ Helena R. Santos
______________________________________________________________
Helena R. Santos
President, Chief Executive Officer
and Treasurer
Principal Executive, Financial and
Accounting Officer
Date: February 13, 201512, 2016
19