Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Mar. 31, 2017 | May 11, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Electromed, Inc. | |
Entity Central Index Key | 1,488,917 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 8,230,167 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2017 | Jun. 30, 2016 |
Current Assets | ||
Cash | $ 5,401,943 | $ 5,123,355 |
Accounts receivable (net of allowances for doubtful accounts of $45,000) | 8,933,426 | 7,611,437 |
Inventories | 2,587,635 | 2,480,443 |
Prepaid expenses and other current assets | 491,968 | 419,616 |
Income tax receivable | 192,685 | |
Total current assets | 17,414,972 | 15,827,536 |
Property and equipment, net | 3,288,480 | 3,375,189 |
Finite-life intangible assets, net | 762,853 | 904,033 |
Other assets | 101,441 | 127,759 |
Deferred income taxes | 330,000 | 343,000 |
Total assets | 21,897,746 | 20,577,517 |
Current Liabilities | ||
Current maturities of long-term debt | 50,203 | 46,309 |
Accounts payable | 593,806 | 589,225 |
Accrued compensation | 917,742 | 1,489,798 |
Income taxes payable | 17,024 | |
Warranty reserve | 670,000 | 660,000 |
Other accrued liabilities | 524,564 | 287,194 |
Total current liabilities | 2,773,339 | 3,072,526 |
Long-term debt, less current maturities and net of debt issuance costs | 1,108,921 | 1,146,395 |
Total liabilities | 3,882,260 | 4,218,921 |
Shareholders' Equity | ||
Common stock, $0.01 par value; authorized: 13,000,000 shares; 8,230,167 and 8,187,112 issued and outstanding at March 31, 2017 and June 30, 2016, respectively | 82,302 | 81,871 |
Additional paid-in capital | 13,923,033 | 13,549,551 |
Retained earnings | 4,010,151 | 2,727,174 |
Total shareholders' equity | 18,015,486 | 16,358,596 |
Total liabilities and shareholders' equity | $ 21,897,746 | $ 20,577,517 |
Condensed Balance Sheets (Unau3
Condensed Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Mar. 31, 2017 | Jun. 30, 2016 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 45,000 | $ 45,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 13,000,000 | 13,000,000 |
Common stock, shares issued | 8,230,167 | 8,187,112 |
Common stock, shares outstanding | 8,230,167 | 8,187,112 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||||
Net revenues | $ 6,669,638 | $ 6,035,700 | $ 18,587,243 | $ 17,298,995 |
Cost of revenues | 1,357,093 | 1,408,716 | 4,020,615 | 3,913,984 |
Gross profit | 5,312,545 | 4,626,984 | 14,566,628 | 13,385,011 |
Operating expenses | ||||
Selling, general and administrative | 4,195,156 | 3,806,885 | 11,979,261 | 10,631,539 |
Research and development | 80,613 | 84,410 | 532,255 | 183,043 |
Total operating expenses | 4,275,769 | 3,891,295 | 12,511,516 | 10,814,582 |
Operating income | 1,036,776 | 735,689 | 2,055,112 | 2,570,429 |
Interest expense, net of interest income of $4,956, $4,978, $11,925 and $8,525 respectively | 8,831 | 13,064 | 41,135 | 51,150 |
Net income before income taxes | 1,027,945 | 722,625 | 2,013,977 | 2,519,279 |
Income tax expense | (380,000) | (256,000) | (731,000) | (644,000) |
Net income | $ 647,945 | $ 466,625 | $ 1,282,977 | $ 1,875,279 |
Income per share: | ||||
Basic | $ 0.08 | $ 0.06 | $ 0.16 | $ 0.23 |
Diluted | $ 0.08 | $ 0.06 | $ 0.15 | $ 0.23 |
Weighted-average common shares outstanding: | ||||
Basic | 8,167,112 | 8,133,857 | 8,167,112 | 8,133,857 |
Diluted | 8,452,942 | 8,287,237 | 8,449,201 | 8,215,472 |
Condensed Statements of Operat5
Condensed Statements of Operations (Unaudited) (Parenthetical) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||||
Interest income | $ 4,956 | $ 4,978 | $ 11,925 | $ 8,525 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash Flows From Operating Activities | ||
Net income | $ 1,282,977 | $ 1,875,279 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 473,813 | 458,850 |
Amortization of finite-life intangible assets | 89,813 | 91,815 |
Amortization of debt issuance costs | 10,871 | 13,672 |
Share-based compensation expense | 373,913 | 153,465 |
Deferred taxes | 13,000 | (337,000) |
Loss on disposal of property and equipment | 520 | 38,667 |
Loss on disposal of intangible assets | 111,498 | 7,848 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,321,989) | (791,915) |
Inventories | (65,630) | (220,417) |
Prepaid expenses and other assets | (49,140) | (22,711) |
Income tax receivable | 192,685 | (180,785) |
Income tax payable | 17,024 | (122,657) |
Accounts payable and accrued liabilities | (323,453) | 706,236 |
Net cash provided by operating activities | 805,902 | 1,670,347 |
Cash Flows From Investing Activities | ||
Expenditures for property and equipment | (425,838) | (256,806) |
Expenditures for finite-life intangible assets | (60,131) | (27,752) |
Net cash used in investing activities | (485,969) | (284,558) |
Cash Flows From Financing Activities | ||
Principal payments on long-term debt including capital lease obligations | (36,473) | (36,397) |
Payment of deferred financing costs | (4,872) | (13,520) |
Net cash used in financing activities | (41,345) | (49,917) |
Net increase in cash | 278,588 | 1,335,872 |
Cash | ||
Beginning of period | 5,123,355 | 3,598,240 |
End of period | $ 5,401,943 | $ 4,934,112 |
Interim Financial Reporting
Interim Financial Reporting | 9 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Interim Financial Reporting | Note 1. Interim Financial Reporting Basis of presentation: The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial statements and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. In the opinion of management, the accompanying unaudited condensed financial statements reflect all adjustments consisting of normal recurring adjustments necessary for a fair presentation of the Company’s financial position and results of operations as required by Regulation S-X. Interim results of operations are not necessarily indicative of the results that may be achieved for the full year. The financial statements and related notes do not include all information and footnotes required by U.S. GAAP for annual reports. This interim report should be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2016 (“fiscal 2016”). A summary of the Company’s significant accounting policies follows: Use of estimates: Net income per common share: New accounting pronouncements: In April 2015, FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” This standard became effective on July 1, 2016 for the Company and requires that debt issuance costs be presented as a direct deduction from the carrying amount of long-term debt on the balance sheet. The new guidance aligns the presentation of debt issuance costs with debt discounts and premiums. The Company adopted this guidance retrospectively effective as of July 1, 2016. As a result, the Company presented $10,000 of unamortized debt issuance costs that had been included in “Other assets” on its condensed balance sheet as of June 30, 2016 as a direct deduction from the carrying amounts of the related long-term debt liability. In July 2015, FASB issued ASU 2015-11, “Inventory (Topic 330) Related to Simplifying the Measurement of Inventory,” which applies to all inventory except that which is measured using last-in, first-out (“LIFO”) or the retail inventory method. Inventory measured using first-in, first-out (“FIFO”) or average cost is within the scope of the new guidance and should be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable cost of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments will be effective for public business entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The new guidance should be applied prospectively, and earlier application is permitted as of the beginning of an interim or annual reporting period. The Company is evaluating the impact of the standard on its financial statements. In February 2016, FASB issued ASU 2016-02, “Leases.” This standard requires the recognition of all lease transactions with terms in excess of 12 months on the balance sheet as a lease liability and a right-of-use asset (as defined in the standard). ASU 2016-02 will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with earlier application permitted. Upon adoption, the lessee will apply the new standard retrospectively to all periods presented or retrospectively using a cumulative effect adjustment in the year of adoption. The Company is currently assessing the effect the standard will have on its financial statements. In March 2016, FASB issued ASU 2016-09, “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting,” which reduces complexity in accounting standards related to share-based payment transactions, including, among others, (1) accounting for income taxes, (2) classification of excess tax benefits on the statement of cash flow, (3) forfeitures, and (4) statutory tax withholding requirements. The ASU will be effective for annual reporting periods beginning on or after December 15, 2016, and interim periods within those annual periods, with earlier application permitted. The Company is evaluating the impact of the standard on its financial statements. Reclassifications: |
Inventories
Inventories | 9 Months Ended |
Mar. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 2. Inventories The components of inventory were approximately as follows: March 31, 2017 June 30, 2016 Parts inventory $ 1,800,000 $ 1,615,000 Work in process 175,000 165,000 Finished goods 793,000 850,000 Less: Reserve for obsolescence (180,000 ) (150,000 ) Total $ 2,588,000 $ 2,480,000 |
Finite-life Intangible Assets
Finite-life Intangible Assets | 9 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Finite-life Intangible Assets | Note 3. Finite-life Intangible Assets The carrying value of patents and trademarks includes the original cost of obtaining the patents, periodic renewal fees, and other costs associated with maintaining and defending patent and trademark rights. Patents and trademarks are amortized over their estimated useful lives, generally 15 and 12 years, respectively. During the nine months ended March 31, 2017 and the year ended June 30, 2016, the Company abandoned certain domestic and foreign patents with net values of approximately $111,000 and $18,000, respectively, which were included as an expense in selling, general and administrative expense on the statements of operations. The majority of the pending patents that were abandoned related to the initial development of our SQL SmartVest technology. During a review of the Company’s patent portfolio it was determined that certain patents proved redundant to a subsequent SQL patent filing and were therefore abandoned. A smaller portion of expense was related to patents that covered technology that management considered outdated, and was no longer in use. Accumulated amortization was $818,000 and $820,000 at March 31, 2017 and June 30, 2016, respectively. The activity and balances of finite-life intangible assets were approximately as follows: March 31, 2017 June 30, 2016 Balance, beginning $ 904,000 $ 1,000,000 Additions 60,000 45,000 Abandonments (111,000 ) (18,000 ) Amortization expense (90,000 ) (123,000 ) Balance, ending $ 763,000 $ 904,000 |
Warranty Liability
Warranty Liability | 9 Months Ended |
Mar. 31, 2017 | |
Product Warranties Disclosures [Abstract] | |
Warranty Liability | Note 4. Warranty Liability The Company provides a lifetime warranty on its products to the prescribed patient for sales within the U.S. and a three-year warranty for all institutional sales and sales to individuals outside the U.S. The Company estimates the costs that may be incurred under its warranty and records a liability in the amount of such costs at the time the product is shipped. Factors that affect the Company’s warranty liability include the number of units shipped, historical and anticipated rates of warranty claims, the product’s useful life and cost per claim. The Company periodically assesses the adequacy of its recorded warranty liability and adjusts the amounts as necessary. Changes in the Company’s warranty liability were approximately as follows: Nine Months Ended Fiscal Year Ended March 31, 2017 June 30, 2016 Beginning warranty reserve $ 660,000 $ 660,000 Accrual for products sold 124,000 152,000 Expenditures and costs incurred for warranty claims (114,000 ) (152,000 ) Ending warranty reserve $ 670,000 $ 660,000 |
Income Taxes
Income Taxes | 9 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 5. Income Taxes On a quarterly basis, the Company estimates its effective tax rate for the full fiscal year and records a quarterly income tax provision based on the anticipated rate. As the year progresses, the Company refines its estimate based on the facts and circumstances by each tax jurisdiction. Income tax expense was estimated at approximately $731,000 and the effective tax rate was 36.3% for the nine months ended March 31, 2017. Estimated income tax expense for the nine months ended March 31, 2017 includes a recognized tax benefit of approximately $32,000 as a result of the lapse of the statute of limitations on uncertain tax positions, which reduced the effective tax rate by 1.6% for that period. Income tax expense was estimated at approximately $644,000 and the effective tax rate was 25.5% for the nine months ended March 31, 2016. Estimated income tax expense during the nine months ended March 31, 2016 includes a current tax expense of $938,000 and a discrete tax benefit of $294,000 due primarily to the Company’s release of the full valuation allowance against all of its net U.S. federal and state deferred tax assets. |
Financing Arrangements
Financing Arrangements | 9 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Financing Arrangements | Note 6. Financing Arrangements The Company has a credit facility that provides for a revolving line of credit and a term loan. Effective December 18, 2016, the Company renewed its $2,500,000 revolving line of credit. There was no outstanding principal balance on the line of credit as of March 31, 2017 or June 30, 2016. Interest on borrowings under the line of credit, if any, would accrue at the prime rate (4.00% at March 31, 2017) and is payable monthly. The amount eligible for borrowing on the line of credit is limited to the lesser of $2,500,000 or 57.00% of eligible accounts receivable and the line of credit expires on December 18, 2017, if not renewed. At March 31, 2017, the maximum $2,500,000 was eligible for borrowing. The line of credit is secured by a security interest in substantially all of the tangible and intangible assets of the Company. In connection with the credit facility, the Company also has a term loan, which had an outstanding principal balance of approximately $1,166,000 at March 31, 2017 and $1,200,000 as of June 30, 2016. The term loan was refinanced effective December 18, 2016, reducing the interest rate from 5.00% to 3.88%. The unamortized debt issuance cost associated with this debt was approximately $7,000 and $10,000 as of March 31, 2017 and June 30, 2016, respectively. The term loan bears interest at 3.88%, with monthly payments of principal and interest of approximately $7,900 and a final payment of principal and interest of approximately $1,085,000 due on the maturity date of December 18, 2018. Payment obligations under the term loan are secured by a mortgage on the Company’s real property. The documents governing the line of credit and term loan contain certain financial and nonfinancial covenants that include a minimum tangible net worth covenant of not less than $10,125,000 and restrictions on the Company’s ability to incur certain additional indebtedness or pay dividends. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Note 7. Stock-Based Compensation The Company recorded approximately $374,000 and $153,000 of compensation expense related to current and past grants of stock options and restricted stock for the nine months ended March 31, 2017 and 2016, respectively. This expense is included in selling, general and administrative expense. As of March 31, 2017, approximately $403,000 of total unrecognized compensation expense related to non-vested equity awards is expected to be recognized over a weighted average period of approximately 0.8 years. The Company recognizes compensation expense related to share-based payment transactions in the financial statements based on the estimated fair value of the award issued. The fair value of each option is estimated using the Black-Scholes pricing model at the time of award grant. The Company estimates the expected life of options based on the expected holding period by the option holder. The risk-free interest rate is based upon observed U.S. Treasury interest rates for the expected term of the options. The Company makes assumptions with respect to expected stock price volatility based upon the volatility of its stock price. Forfeitures are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from initial estimates. Forfeitures are estimated based on the percentage of awards expected to vest, taking into consideration the seniority level of the award recipient. The following assumptions were used to estimate the fair value of options granted: Nine Months Ended March 31, 2017 Fiscal Year Ended June 30, 2016 Risk-free interest rate 1.14% - 1.27% 1.40% - 1.92% Expected term (years) 6 6 Expected volatility 100.5% - 105.8% 89.3% - 93.1% Stock Options The Company issued 176,500 stock options pursuant to its 2014 Stock Compensation Plan during the nine months ended March 31, 2017. Stock option transactions during the nine months ended March 31, 2017 are summarized as follows: Weighted Average Number of Shares Exercise Price per Share Outstanding at June 30, 2016 599,800 $2.62 Granted 176,500 $3.91 Exercised – – Cancelled or Forfeited (4,500 ) 3.82 Outstanding at March 31, 2017 771,800 $2.91 The intrinsic value of an option is the amount by which the fair value of the underlying stock exceeds its exercise price. At March 31, 2017, the weighted average remaining contractual term for all outstanding stock options was 5.66 years and their aggregate intrinsic value was approximately $1,559,000. Outstanding at March 31, 2017 were 771,800 stock options issued to employees, of which approximately 474,000 were exercisable and had an aggregate intrinsic value of approximately $1,006,000. Restricted Stock The Company’s 2014 Stock Compensation Plan permits the grant of other stock-based awards. Historically, the Company makes restricted stock grants to key employees and non-employee directors that vest over six months to three years. During the nine months ended March 31, 2017, the Company issued restricted stock awards to employees totaling 30,000 shares of common stock, with a vesting term of one to three years and a fair value of $3.82 per share and to directors totaling 13,055 shares of common stock, with a vesting term of six months and a fair value of $3.83 per share. The restricted stock’s fair value per share represents the closing price of its common stock on the date of the grant. Restricted stock transactions during the nine months ended March 31, 2017 are summarized as follows: Weighted Average Grant Date Fair Value Number of Shares per Share Unvested shares at June 30, 2016 19,999 $1.80 Granted 43,055 $3.82 Vested – – Forfeited – – Unvested at March 31, 2017 63,054 $3.18 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 8. Commitments and Contingencies The Company is occasionally involved in claims and disputes arising in the ordinary course of business. The Company insures its business risks where possible to mitigate the financial impact of individual claims, and establishes reserves for an estimate of any probable cost of settlement or other disposition. |
Interim Financial Reporting (Po
Interim Financial Reporting (Policies) | 9 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of Estimates | Use of estimates: |
Net income per common share | Net income per common share: |
New Accounting Pronouncements | New accounting pronouncements: In April 2015, FASB issued ASU 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” This standard became effective on July 1, 2016 for the Company and requires that debt issuance costs be presented as a direct deduction from the carrying amount of long-term debt on the balance sheet. The new guidance aligns the presentation of debt issuance costs with debt discounts and premiums. The Company adopted this guidance retrospectively effective as of July 1, 2016. As a result, the Company presented $10,000 of unamortized debt issuance costs that had been included in “Other assets” on its condensed balance sheet as of June 30, 2016 as a direct deduction from the carrying amounts of the related long-term debt liability. In July 2015, FASB issued ASU 2015-11, “Inventory (Topic 330) Related to Simplifying the Measurement of Inventory,” which applies to all inventory except that which is measured using last-in, first-out (“LIFO”) or the retail inventory method. Inventory measured using first-in, first-out (“FIFO”) or average cost is within the scope of the new guidance and should be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable cost of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments will be effective for public business entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The new guidance should be applied prospectively, and earlier application is permitted as of the beginning of an interim or annual reporting period. The Company is evaluating the impact of the standard on its financial statements. In February 2016, FASB issued ASU 2016-02, “Leases.” This standard requires the recognition of all lease transactions with terms in excess of 12 months on the balance sheet as a lease liability and a right-of-use asset (as defined in the standard). ASU 2016-02 will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with earlier application permitted. Upon adoption, the lessee will apply the new standard retrospectively to all periods presented or retrospectively using a cumulative effect adjustment in the year of adoption. The Company is currently assessing the effect the standard will have on its financial statements. In March 2016, FASB issued ASU 2016-09, “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting,” which reduces complexity in accounting standards related to share-based payment transactions, including, among others, (1) accounting for income taxes, (2) classification of excess tax benefits on the statement of cash flow, (3) forfeitures, and (4) statutory tax withholding requirements. The ASU will be effective for annual reporting periods beginning on or after December 15, 2016, and interim periods within those annual periods, with earlier application permitted. The Company is evaluating the impact of the standard on its financial statements. |
Reclassifications | Reclassifications: |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of components of inventory | The components of inventory were approximately as follows: March 31, 2017 June 30, 2016 Parts inventory $ 1,800,000 $ 1,615,000 Work in process 175,000 165,000 Finished goods 793,000 850,000 Less: Reserve for obsolescence (180,000 ) (150,000 ) Total $ 2,588,000 $ 2,480,000 |
Finite-life Intangible Assets (
Finite-life Intangible Assets (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of finite-life intangible assets | The activity and balances of finite-life intangible assets were approximately as follows: March 31, 2017 June 30, 2016 Balance, beginning $ 904,000 $ 1,000,000 Additions 60,000 45,000 Abandonments (111,000 ) (18,000 ) Amortization expense (90,000 ) (123,000 ) Balance, ending $ 763,000 $ 904,000 |
Warranty Liability (Tables)
Warranty Liability (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Product Warranties Disclosures [Abstract] | |
Schedule of changes in warranty liability | Changes in the Company’s warranty liability were approximately as follows: Nine Months Ended Fiscal Year Ended March 31, 2017 June 30, 2016 Beginning warranty reserve $ 660,000 $ 660,000 Accrual for products sold 124,000 152,000 Expenditures and costs incurred for warranty claims (114,000 ) (152,000 ) Ending warranty reserve $ 670,000 $ 660,000 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of assumptions used to estimate fair value of options granted | The following assumptions were used to estimate the fair value of options granted: Nine Months Ended March 31, 2017 Fiscal Year Ended June 30, 2016 Risk-free interest rate 1.14% - 1.27% 1.40% - 1.92% Expected term (years) 6 6 Expected volatility 100.5% - 105.8% 89.3% - 93.1% |
Schedule of stock options activity | Stock option transactions during the nine months ended March 31, 2017 are summarized as follows: Weighted Average Number of Shares Exercise Price per Share Outstanding at June 30, 2016 599,800 $2.62 Granted 176,500 $3.91 Exercised – – Cancelled or Forfeited (4,500 ) 3.82 Outstanding at March 31, 2017 771,800 $2.91 |
Schedule of restricted stock awards activity | Restricted stock transactions during the nine months ended March 31, 2017 are summarized as follows: Weighted Average Grant Date Fair Value Number of Shares per Share Unvested shares at June 30, 2016 19,999 $1.80 Granted 43,055 $3.82 Vested – – Forfeited – – Unvested at March 31, 2017 63,054 $3.18 |
Interim Financial Reporting (De
Interim Financial Reporting (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Jun. 30, 2016 | |
Common stock equivalents excluded from calculation of diluted earnings per share | 196,500 | 159,000 | 196,500 | 163,500 | |
Unamortized debt issuance costs | $ 10,000 | ||||
International [Member] | |||||
Sales | $ 487,000 | $ 591,000 |
Inventories (Details)
Inventories (Details) - USD ($) | Mar. 31, 2017 | Jun. 30, 2016 |
Inventory Disclosure [Abstract] | ||
Parts inventory | $ 1,800,000 | $ 1,615,000 |
Work in process | 175,000 | 165,000 |
Finished goods | 793,000 | 850,000 |
Less: Reserve for obsolescence | (180,000) | (150,000) |
Total | $ 2,587,635 | $ 2,480,443 |
Finite-life Intangible Assets22
Finite-life Intangible Assets (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Jun. 30, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated amortization | $ 818,000 | $ 820,000 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 15 years | |
Abandoned patents | $ 111,000 | $ 18,000 |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 12 years |
Finite-life Intangible Assets23
Finite-life Intangible Assets (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Balance, beginning | $ 904,033 | $ 1,000,000 | $ 1,000,000 |
Additions | 60,000 | 45,000 | |
Abandonments | (111,000) | (18,000) | |
Amortization expense | (89,813) | $ (91,815) | (123,000) |
Balance, ending | $ 762,853 | $ 904,033 |
Warranty Liability (Details Nar
Warranty Liability (Details Narratives) | 9 Months Ended |
Mar. 31, 2017 | |
Product Warranties Disclosures [Abstract] | |
Warranty term for institional sales and sales outside U.S. | 3 years |
Warranty Liability (Details)
Warranty Liability (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Jun. 30, 2016 | |
Product Warranties Disclosures [Abstract] | ||
Warranty reserve, beginning | $ 660,000 | $ 660,000 |
Accrual for products sold | 124,000 | 152,000 |
Expenditures and costs incurred for warranty claims | (114,000) | (152,000) |
Warranty reserve, ending | $ 670,000 | $ 660,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 36.30% | 25.50% | ||
Income tax expense | $ 380,000 | $ 256,000 | $ 731,000 | $ 644,000 |
Recognized tax benefit on uncertain tax positions | $ 32,000 | |||
Effective tax rate, change in uncertain tax positions | (1.60%) | |||
Current income tax expense | 938,000 | |||
Change in deferred valuation allowance | $ 294,000 |
Financing Arrangements (Details
Financing Arrangements (Details Narrative) - USD ($) | 9 Months Ended | |
Mar. 31, 2017 | Jun. 30, 2016 | |
Term Loan [Member] | ||
Interest rate | 3.88% | 5.00% |
Principal loan amount | $ 1,166,000 | $ 1,200,000 |
Unamortized debt issuance cost | 7,000 | $ 10,000 |
Monthly payments of principal and interest | 7,900 | |
Final payment of principal and interest | $ 1,085,000 | |
Term loan maturity date | Dec. 18, 2018 | |
Minimum tangible net worth to be maintained | $ 10,125,000 | |
Credit Facility [Member] | ||
Maximum borrowing capacity | $ 2,500,000 | |
Credit facility effective date | Dec. 18, 2016 | |
Credit facility expiration date | Dec. 18, 2017 | |
Effective interest rate | 4.00% | |
Borrowing capacity of eligible accounts receivable | $ 2,500,000 | |
Borrowing capacity of eligible accounts receivable (percent) | 57.00% |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) | 9 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Share-based compensation expense | $ 373,913 | $ 153,465 |
Unrecognized compensation expense | $ 403,000 | |
Unrecognized compensation expense, period for recognition | 9 months 18 days | |
Employee Stock Options [Member] | ||
Weighted average remaining contractual term of options outstanding | 5 years 7 months 28 days | |
Options outstanding, intrinsic value | $ 1,559,000 | |
Options exercisable | 474,000 | |
Options exercisable, intrinsic value | $ 1,006,000 | |
Employees Restricted Stock Awards [Member] | ||
Granted | 30,000 | |
Fair value of restricted stock granted | $ 3.82 | |
Employees Restricted Stock Awards [Member] | Minimum [Member] | ||
Award vesting period | 1 year | |
Employees Restricted Stock Awards [Member] | Maximum [Member] | ||
Award vesting period | 3 years | |
Restricted Stock Awards [Member] | ||
Granted | 43,055 | |
Fair value of restricted stock granted | $ 3.82 | |
Restricted Stock Awards [Member] | Directors [Member] | ||
Award vesting period | 6 months | |
Granted | 13,055 | |
Fair value of restricted stock granted | $ 3.83 |
Stock-Based Compensation (Det29
Stock-Based Compensation (Details) - Employee Stock Options [Member] | 9 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Jun. 30, 2016 | |
Risk free interest rate - minimum | 1.14% | 1.40% |
Risk free interest rate - maximum | 1.27% | 1.92% |
Expected term (year) | 6 years | 6 years |
Expected volatility - minimum | 100.50% | 89.30% |
Expected volatility - maximum | 105.80% | 93.10% |
Stock-Based Compensation (Det30
Stock-Based Compensation (Details 1) - 2014 Stock Compensation Plan [Member] | 9 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Number of Shares | |
Options outstanding, beginning | shares | 599,800 |
Granted | shares | 176,500 |
Cancelled or Forfeited | shares | (4,500) |
Options outstanding, ending | shares | 771,800 |
Weighted Average Exercise Price | |
Options outstanding, beginning | $ / shares | $ 2.62 |
Granted | $ / shares | 3.91 |
Cancelled or Forfeited | $ / shares | 3.82 |
Options outstanding, ending | $ / shares | $ 2.91 |
Stock-Based Compensation (Det31
Stock-Based Compensation (Details 2) - Restricted Stock Awards [Member] | 9 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Number of Shares | |
Outstanding, beginning | shares | 19,999 |
Granted | shares | 43,055 |
Outstanding, ending | shares | 63,054 |
Weighted Average Grant Date Fair Value | |
Outstanding, beginning | $ / shares | $ 1.80 |
Granted | $ / shares | 3.82 |
Outstanding, ending | $ / shares | $ 3.18 |