Electromed (ELMD) 10-Q 12 Feb 19 2019 Q2 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	6 Months Ended
	Dec. 31, 2018	Feb. 08, 2019
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	Dec. 31, 2018
Amendment Flag	false
Entity's Reporting Status Current	Yes
Current Fiscal Year End Date	--06-30
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		8,384,184
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,019
Entity Emerging Growth Company	false
Entity Smaller Reporting Company	true

Balance Sheets (Unaudited)

Balance Sheets (Unaudited) - USD ($)	Dec. 31, 2018	Jun. 30, 2018
Current Assets
Cash	$ 7,211,122	$ 7,455,844
Accounts receivable (net of allowances for doubtful accounts of $45,000)	11,937,466	11,811,308
Contract assets	781,806	776,338
Inventories	2,735,934	2,486,848
Prepaid expenses and other current assets	329,327	751,541
Income tax receivable	24,860
Total current assets	23,020,515	23,281,879
Property and equipment, net	2,875,807	3,091,242
Finite-life intangible assets, net	618,034	649,103
Other assets	6,257	5,907
Deferred income taxes	361,000	364,000
Total assets	26,881,613	27,392,131
Current Liabilities
Current maturities of long-term debt, net of debt issuance costs		1,101,043
Accounts payable	713,097	810,644
Accrued compensation	1,195,479	1,269,849
Income tax payable		397,390
Warranty reserve	790,000	760,000
Other accrued liabilities	372,494	464,357
Total current liabilities	3,071,070	4,803,283
Commitments and Contingencies
Shareholders' Equity
Common stock, $0.01 par value; authorized: 13,000,000 shares; 8,384,184 and 8,288,659 issued and outstanding at December 31, 2018 and June 30, 2018, respectively	83,842	82,887
Additional paid-in capital	15,641,714	14,953,103
Retained earnings	8,084,987	7,552,858
Total shareholders' equity	23,810,543	22,588,848
Total liabilities and shareholders' equity	$ 26,881,613	$ 27,392,131

Balance Sheets (Unaudited) (Par

Balance Sheets (Unaudited) (Parenthetical) - USD ($)	Dec. 31, 2018	Jun. 30, 2018
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	8,384,184	8,288,659
Common stock, shares outstanding	8,384,184	8,288,659

Statements of Operations (Unaud

Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Income Statement [Abstract]
Net revenues	$ 8,012,487	$ 6,963,044	$ 15,288,370	$ 13,267,366
Cost of revenues	1,950,040	1,560,427	3,683,039	3,174,032
Gross profit	6,062,447	5,402,617	11,605,331	10,093,334
Operating expenses
Selling, general and administrative	5,152,394	4,575,172	10,428,148	9,096,076
Research and development	237,838	56,794	306,028	127,458
Total operating expenses	5,390,232	4,631,966	10,734,176	9,223,534
Operating income	672,215	770,651	871,155	869,800
Interest income (expense), net	16,521	(4,894)	29,974	(9,093)
Net income before income taxes	688,736	765,757	901,129	860,707
Income tax expense	311,000	346,000	369,000	360,000
Net income	$ 377,736	$ 419,757	$ 532,129	$ 500,707
Income per share:
Basic	$ 0.05	$ 0.05	$ 0.06	$ 0.06
Diluted	$ 0.04	$ 0.05	$ 0.06	$ 0.06
Weighted-average common shares outstanding:
Basic	8,298,961	8,200,167	8,279,493	8,200,167
Diluted	8,669,739	8,648,886	8,658,346	8,645,987

Statements of Cash Flows (Unaud

Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Cash Flows From Operating Activities
Net income	$ 532,129	$ 500,707
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	329,947	329,719
Amortization of finite-life intangible assets	59,863	56,610
Amortization of debt issuance costs	1,958	4,394
Share-based compensation expense	500,745	386,248
Deferred income taxes	3,000	(50,000)
Loss of disposal of property and equipment	1,198
Changes in operating assets and liabilities:
Accounts receivable	(126,158)	347,190
Contract assets	(5,468)	7,356
Inventories	(242,459)	169,723
Prepaid expenses and other assets	421,864	4,074
Income tax receivable	(24,860)
Income tax payable	(397,390)	(72,414)
Accounts payable and accrued liabilities	(233,780)	(153,824)
Net cash provided by operating activities	820,589	1,529,783
Cash Flows From Investing Activities
Expenditures for property and equipment	(122,337)	(228,176)
Expenditures for finite-life intangible assets	(28,794)	(10,038)
Net cash used in investing activities	(151,131)	(238,214)
Cash Flows From Financing Activities
Principal payments on long-term debt including capital lease obligations	(1,103,001)	(25,041)
Issuance of common stock upon exercise of options	188,821
Net cash provided by (used in) financing activities	(914,180)	(25,041)
Net (decrease) increase in cash	(244,722)	1,266,528
Cash
Beginning of period	7,455,844	5,573,709
End of period	$ 7,211,122	$ 6,840,237

Interim Financial Reporting

Interim Financial Reporting	6 Months Ended
	Dec. 31, 2018
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 audited financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2018 (“fiscal 2018”). A summary of the Company’s significant accounting policies follows: Use of estimates: Net income per common share: New accounting pronouncements: The Company adopted the new standard effective July 1, 2018, utilizing the full retrospective method, which required the Company to recast each prior reporting period presented and included adjustments with the cumulative impact of increasing retained earnings by $0.8 million as of July 1, 2017. The Company has updated its control framework for new internal controls and made changes to existing controls related to the new revenue recognition standard. Primary changes resulting from the adoption of ASC 606: The Company’s adoption of ASC 606 resulted in a change to the timing of revenue recognition, primarily driven by the following: ● Some of the SmartVest ® ● The Company sells the SmartVest Systems to patients under circumstances where it believes the criteria for reimbursement under government or commercial payer contracts has been met; however, coverage is unconfirmed or payments are under appeal, leading to uncertainty as to the amount of the transaction price that will be collected. Additionally, amounts due directly from patients for deductibles, coinsurance and copays may be subject to implicit price concessions if the patient becomes unable to pay due to hospitalization or death. Previously, the Company fully deferred revenue at the time of sale until the transaction price for these contracts was deemed to be fixed and determinable (i.e., when the appeal was settled, or payment was received). Under ASC 606, the Company estimates variable consideration in the transaction price at contract inception and reassess throughout the contract period based on historical experience and other relevant factors and recognizes revenue when control of the SmartVest System is transferred to the patient, which occurs at the time of shipment or delivery. Impact on Previously Reported Results: The following tables present a recast of selected unaudited statement of operations line items after giving effect to the adoption of ASC 606: For the three months ended December 31, 2017 As Previously Reported Effect of Adoption As Adjusted Net revenues $ 6,984,626 $ (21,582 ) $ 6,963,044 Cost of revenues 1,398,001 162,426 1,560,427 Gross profit 5,586,625 (184,008 ) 5,402,617 Operating expenses Selling, general and administrative 4,759,652 (184,480 ) 4,575,172 Research and development 56,794 – 56,794 Total operating expenses 4,816,446 (184,480 ) 4,631,966 Operating income 770,179 472 770,651 Interest income (expense), net (4,894 ) – (4,894 ) Net income before income taxes 765,285 472 765,757 Income tax expense 416,000 (70,000 ) 346,000 Net income $ 349,285 $ 70,472 $ 419,757 Income per share: Basic $ 0.04 $ 0.01 $ 0.05 Diluted $ 0.04 $ 0.01 $ 0.05 For the six months ended December 31, 2017 As Previously Reported Effect of Adoption As Adjusted Net revenues $ 13,366,405 $ (99,039 ) $ 13,267,366 Cost of revenues 2,843,286 330,746 3,174,032 Gross profit 10,523,119 (429,785 ) 10,093,334 Operating expenses Selling, general and administrative 9,463,163 (367,087 ) 9,096,076 Research and development 127,458 – 127,458 Total operating expenses 9,590,621 (367,087 ) 9,223,534 Operating income 932,498 (62,698 ) 869,800 Interest income (expense), net (9,093 ) – (9,093 ) Net income before income taxes 923,405 (62,698 ) 860,707 Income tax expense 453,000 (93,000 ) 360,000 Net income $ 470,405 $ 30,302 $ 500,707 Income per share: Basic $ 0.06 $ 0.00 $ 0.06 Diluted $ 0.05 $ 0.01 $ 0.06 The following table presents a recast of selected unaudited balance sheet line items after giving effect to the adoption of ASC 606: June 30, 2018 As Previously Effect of As Adjusted Assets Current Assets Accounts receivable, net of allowances for doubtful accounts $ 11,563,208 $ 248,100 $ 11,811,308 Contract assets – 776,338 $ 776,338 Inventories 2,360,693 126,155 2,486,848 Prepaid expenses and other current assets 832,202 (80,661 ) 751,541 Other assets 91,912 (86,005 ) 5,907 Deferred income taxes 594,000 (230,000 ) 364,000 Liabilities and Shareholders’ Equity Accrued compensation 1,209,738 60,111 1,269,849 Retained earnings 6,859,042 693,816 7,552,858 The following table presents a recast of selected unaudited statement of cash flow line items after giving effect to the adoption of ASC 606: For the six months ended December 31, 2017 As Previously Effect of Adoption As Adjusted Cash Flows From Operating Activities Net income $ 470,405 $ 30,302 $ 500,707 Deferred taxes 43,000 (93,000 ) (50,000 ) Accounts receivable 269,390 77,800 347,190 Contract assets – 7,356 7,356 Inventories 183,617 (13,894 ) 169,723 Prepaid expenses and other assets 8,461 (4,387 ) 4,074 Accounts payable and accrued liabilities (149,647 ) (4,177 ) (153,824 ) Lease Accounting: In February 2016, FASB issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842).” 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 evaluating ASU 2016-02 and expects that it will have no material impact on its financial statements or financial statement disclosures upon adoption based on current facts and circumstances.

Revenues

Revenues	6 Months Ended
	Dec. 31, 2018
Revenue from Contract with Customer [Abstract]
Revenues	Note 2. Revenues Revenue is measured based on consideration specified in the contract with a customer, adjusted for any applicable estimates of variable consideration and other factors affecting the transaction price, including noncash consideration, consideration paid or payable to customers and significant financing components. Revenue from all customers is recognized when a performance obligation is satisfied by transferring control of a distinct good or service to a customer, as further described below under Performance obligations Individual promised goods and services in a contract are considered a performance obligation and accounted for separately if the individual good or service is distinct (i.e., the customer can benefit from the good or service on its own or with other resources that are readily available to the customer and the good or service is separately identifiable from other promises in the arrangement). If an arrangement includes multiple performance obligations, the consideration is allocated between the performance obligations in proportion to their estimated standalone selling price, unless discounts or variable consideration is attributable to one or more but not all the performance obligations. Costs related to products delivered are recognized in the period incurred, unless criteria for capitalization of costs under ASC 340-40, “Other Assets and Deferred Costs”, or other applicable guidance are met. The Company includes shipping and handling fees in net revenues. Shipping and handling costs associated with the shipment of SmartVest Systems after control has transferred to a customer are accounted for as a fulfillment cost and are included in cost of revenues. The timing of revenue recognition, billings and cash collections results in accounts receivable on the condensed balance sheets as further described below under Accounts receivable Contract assets Disaggregation of revenues. For the three months ended December 31, For the six months ended December 31, 2018 2017 2018 2017 Home care $ 7,330,927 $ 6,490,451 $ 14,053,321 $ 12,398,959 Institutional 401,901 306,645 820,806 601,378 International 279,659 165,948 414,243 267,029 Total $ 8,012,487 $ 6,963,044 $ 15,288,370 $ 13,267,366 In the following table, homecare revenue is disaggregated by payer type: For the three months ended December 31, For the six months ended December 31, 2018 2017 2018 2017 Commercial $ 3,477,768 $ 3,062,975 $ 6,834,435 $ 5,872,725 Medicare 3,239,434 2,782,039 6,150,643 5,282,888 Medicaid 465,331 448,827 717,116 871,034 Other 148,394 196,610 351,127 372,312 Total $ 7,330,927 $ 6,490,451 $ 14,053,321 $ 12,398,959 Revenues in the Company’s home care and international markets are recognized at a point in time when control passes to the customer upon product shipment or delivery. Revenues in the Company’s institutional market include sales recognized at a point in time upon shipment or delivery as well as revenues recognized over time under operating leases. Performance obligations and Transaction Price. Home care market The Company makes available to its home care patients limited post-sale services that are not material in the context of the contracts, either individually or taken together, and therefore does not consider them to be performance obligations. The costs associated with the services are accrued and expensed when the related revenues are recognized. As such, transactions in the home care market consist of a single performance obligation, the SmartVest System. Home care patients generally will rely on third-party payers, including commercial payers and governmental payers such as Medicare, Medicaid, and the Veteran’s Administration to cover and reimburse all or part of the cost of the SmartVest System. The third-party payers’ reimbursement programs fall into three types, distinguished by the differences in the timing of payments from the payer, consisting of either (1) outright sale, in which payment is received from the payer based on standard terms, (2) capped installment sale, under which the system is sold for a series of payments that are capped not to exceed a prescribed or negotiated amount over a period of time or (3) installment sale under which Systems are paid for over a period of several months as long as the patient continues to use the System. Regardless of type of transaction, provided criteria for an enforceable contract are met, it is the Company’s long-standing business practice to regard all home care agreements as transferring control to the patient upon shipment or delivery, in spite of possible payment cancelation under government or commercial programs where the payer is controlling the payment over specified time periods. For home care sales that feature installment payments, the ultimate amount of consideration received from Medicare, Medicaid or commercial payers can be significantly less than expected if the contract is terminated due to changes in the patient’s status, including insurance coverage, hospitalization, death, or otherwise becoming unable to use the system. However, once delivered to a patient who needs the System, the patient is under no obligation to return the system should payments be terminated as a result of the described contingencies. As a result, the Company’s product sales qualify for point in time revenue recognition. Control transfers to the patient, and revenue is recognized upon shipment of the system. At this point, physical possession and the significant risks and rewards of ownership are transferred to the patient and either a current or future right to payment is triggered (see additional discussion under Accounts receivable Contract assets The Company’s contractually stated transaction prices in the home care market are generally set by the terms of the contracts negotiated with insurance companies or by government programs. The transaction price for the Company’s products may be further impacted by variable consideration. ASC 606 requires the Company to adjust the transaction price at contract inception and throughout the contract duration for the estimated value of payments to be received from insurance payers based on historical experience and other available information, subject to the constraint on estimates of variable consideration. Transactions requiring estimates of variable consideration primarily include (i) capped installment payments which are subject to the third-party payer’s termination due to changes in insurance coverage, death or the patient’s discontinued use of the system, (ii) contracts under appeal and (iii) patient responsibility amounts for deductibles, coinsurance, copays and other similar payments. Although estimates may be made on a contract-by-contract basis, whenever possible, the Company uses all available information including historical collection patterns to estimate variable consideration for portfolios of contracts. The Company’s estimates of variable consideration consist of amounts it may receive from insurance providers in excess of its initial revenue estimate due to patients meeting deductibles or coinsurance during the payment duration, changes to a patient’s insurance status, changes in an insurance allowable, claims in appeals with Medicare and amounts received directly from patients for their allowable or coinsurance. The Company believes it has representative historical information to estimate the amount of variable consideration in relevant portfolios considering the significant experience it has with each portfolio and the similarity of patient accounts within a portfolio. The analysis includes steps to ensure that revenue recognized on a portfolio basis does not result in a material difference when compared with an individual contract approach. The Company also leverages its historical experience and all available relevant information for each portfolio of contracts to minimize the risk its estimates used to arrive at the transaction price will result in a significant reversal in the amount of cumulative revenue recognized when the uncertainty associated with the variable consideration is subsequently resolved. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. For example, for contracts in which the Company believes the criteria for reimbursement under government or commercial payer contracts have been met but for which coverage is unconfirmed or payments are under appeal, the Company has significant observable evidence of relatively consistent claims recovery experience over the prior three to five years. The Company believes the low volatility in historical claims approval rates for populations of patients whose demographics are similar to those of current patients provides reliable predictive value in arriving at estimates of variable consideration in such contracts. Similarly, historical payment trends for recovery of claims subject to payer installments and payments from patients have remained relatively consistent over the past five years. No significant changes in patient demographics or other relevant factors have occurred that would limit the predictive value of such payment trends in estimating variable consideration for current contracts. As a result, the Company believes its estimates of variable consideration are generally not subject to the risk of significant revenue reversal. For each type of variable consideration discussed above, there are a large number of contracts with similar characteristics with a wide range of possible transaction prices. For that reason, the Company uses the probability-weighted expected value method provided under ASC 606 to estimate variable consideration. The Company often receives payment from third-party payers for the SmartVest System sales over a period of time that may exceed one year. Despite these extended payment terms, no significant financing component is deemed to exist because the purpose of such terms is not to provide financing to the patient, the payer or the Company. Rather, the extended payment terms are mandated by the government or commercial insurance programs; the fundamental purpose of which is to avoid paying the full purchase price of equipment that may potentially be used by the patient for only a short period of time. Institutional market. ● Outright sale – Under these transactions, the Company sells its products for a prescribed or negotiated price. Transfer of control of the product, and associated revenue recognition, occurs at the time of shipment and payment is made within normal credit terms, usually within 30 days. ● Rentals - Under these transactions, the customer obtains a right to use the product for a period of time in exchange for consideration as usage occurs. These transactions are treated as operating leases and revenue is recognized ratably over the applicable rental period. Lease revenue recognized during the six months ended December 31, 2018 and 2017 were approximately $25,000 and $34,000, respectively. International market. Product Warranty. Accounts receivable. Contract assets. Incremental costs to obtain a contract. . Other practical expedients Contract balances. December 31, 2018 June 30, 2018, as Receivables, included in “Accounts receivable, net of allowance for doubtful accounts” $ 11,937,466 $ 11,811,308 Contract assets, included in other current assets $ 781,806 $ 776,338 Significant changes in contract assets during the period are as follows: For the six months Increase (decrease) Contract assets, June 30, 2018 $ 776,338 Reclassification of beginning contract assets to accounts receivable (1,066,882 ) Contract assets recognized, net of reclassification to accounts receivable 1,093,595 Decrease as a result of changes in the estimate of amounts to be realized from payers, excluding amounts transferred to receivables during the period (21,245 ) Contract assets, December 31, 2018 $ 781,806

Inventories

Inventories	6 Months Ended
	Dec. 31, 2018
Inventory Disclosure [Abstract]
Inventories	Note 3. Inventories The components of inventory were approximately as follows: December 31, 2018 June 30, 2018 Parts inventory $ 1,698,000 $ 1,388,000 Work in process 754,000 621,000 Finished goods 434,000 632,000 Estimated inventory to be returned 120,000 126,000 Less: Reserve for obsolescence (270,000 ) (280,000 ) Total $ 2,736,000 $ 2,487,000

Finite-life Intangible Assets

Finite-life Intangible Assets	6 Months Ended
	Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Finite-life Intangible Assets	Note 4. 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. Accumulated amortization was $956,000 and $902,000 at December 31, 2018 and June 30, 2018, respectively. The activity and balances of finite-life intangible assets were approximately as follows: Six Months Ended December 31, 2018 Fiscal Year Ended Balance, beginning $ 649,000 $ 721,000 Additions 29,000 46,000 Abandonments – (4,000 ) Amortization expense (60,000 ) (114,000 ) Balance, ending $ 618,000 $ 649,000

Warranty Liability

Warranty Liability	6 Months Ended
	Dec. 31, 2018
Product Warranties Disclosures [Abstract]
Warranty Liability	Note 5. 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: Six Months Ended December 31, 2018 Fiscal Year Ended Beginning warranty reserve $ 760,000 $ 640,000 Accrual for products sold 103,000 273,000 Expenditures and costs incurred for warranty claims (73,000 ) (153,000 ) Ending warranty reserve $ 790,000 $ 760,000

Income Taxes

Income Taxes	6 Months Ended
	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Income Taxes	Note 6. Income Taxes The Tax Cuts and Jobs Act (the “Tax Act”) significantly revised future and ongoing U.S. corporate tax obligations by, among other things, lowering U.S. corporate income tax rates. Since the Company has a June 30 fiscal year-end, the lower corporate income tax rate was phased in, resulting in a blended U.S. statutory federal rate of approximately 28% for fiscal 2018, and 21% for subsequent fiscal years. The Tax Act also eliminates the domestic production manufacturing deduction effective for the Company’s tax year beginning July 1, 2018. In connection with the adoption of ASC 606, the Company intends to file Form 3115 (Change in Accounting Method) with its federal tax return for the period ending June 30, 2019. Under Rev. Proc. 2018-29, certain accounting method changes related to a taxpayers’ adoption of the new revenue recognition standards under ASC 606 will qualify for automatic approval by the Internal Revenue Service. As a result of the accounting method change, the Company estimates an increase in taxable income of approximately $2.2 million, which is to be recognized over four consecutive years. Therefore, the estimated tax liability resulting from taxable income recognition in year one of approximately $140,000 has been reclassified from deferred taxes to current income tax payable. 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 $311,000 and $369,000 and the effective tax rates were 45.2% and 40.9%, respectively, for the three and six months ended December 31, 2018. Estimated income tax expense for the three and six months ended December 31, 2018 includes a discrete deferred tax expense of approximately $126,000 related to unexercised fully-vested stock options that expired on November 24, 2018 and a discrete current tax benefit of approximately $9,000 related to the excess tax benefit of non-qualified stock options exercised during the period. The net impact of these discrete events increased the estimated effective tax rates by 17.0% and 13.0% during the three and six months ended December 31, 2018, respectively. Income tax expense was estimated at approximately $346,000 and $360,000 and the effective tax rates were 45.2% and 41.8%, respectively, for the three and six months ended December 31, 2017. Estimated income tax expense for the three and six months ended December 31, 2017 includes a discrete deferred tax expense of approximately $160,000 as a result of re-measuring certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in future periods under the Tax Act. Additionally, a discrete tax benefit of approximately $2,000 and $27,000 was recognized during the three and six months ended December 31, 2017, respectively, as a result of greater federal and state research and development tax credits than what was originally estimated in our tax provision for our fiscal year ended June 30, 2017. The net impact of these discrete events increased the estimated effective tax rates by 20.6% and 15.5% during the three and six months ended December 31, 2017, respectively.

Financing Arrangements

Financing Arrangements	6 Months Ended
	Dec. 31, 2018
Debt Disclosure [Abstract]
Financing Arrangements	Note 7. Financing Arrangements The Company has a credit facility that provides for a revolving line of credit and a term loan. Effective December 18, 2018, the Company renewed its $2,500,000 revolving line of credit. There was no outstanding principal balance on the line of credit as of December 31, 2018 or June 30, 2018. Interest on borrowings under the line of credit, if any, accrues at the prime rate (5.50% at December 31, 2018) less 1.00% 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, 2019, if not renewed. At December 31, 2018, 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 had a term loan, which had an outstanding principal balance of approximately $1,103,000 as of June 30, 2018 and an interest rate of 3.88%. The unamortized debt issuance cost associated with this debt was approximately $2,000 as of June 30, 2018. The term loan matured on December 18, 2018, and the Company utilized cash to repay the required balloon payment of approximately $1,085,000. Payment obligations under the term loan were secured by a mortgage on the Company’s real property, which security interest was released upon payoff. The Company no longer has any obligations under the term loan. The documents governing the line of credit 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.

Share-Based Compensation

Share-Based Compensation	6 Months Ended
	Dec. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Share-Based Compensation	Note 8. Stock-Based Compensation In November 2017, the Company’s shareholders approved the 2017 Omnibus Incentive Plan (the “2017 Plan”) which supersedes the 2014 Equity Incentive Plan (the “2014 Plan”). The 2017 Plan allows the Company’s Board of Directors to grant stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards, as well as cash incentive awards to all employees, non-employee directors, and advisors or consultants of the Company. The vesting schedule and term for each award are determined by the Board upon each grant. The maximum number of shares of common stock available for issuance under the 2017 Plan is 900,000. There were 581,751 stock options granted under the 2014 Plan and prior plans outstanding as of December 31, 2018. There were 200,250 stock options and 50,000 restricted shares issued under the 2017 Plan outstanding and 649,750 shares available for grant under the 2017 Plan as of December 31, 2018. The Company recorded approximately $501,000 and $386,000 of compensation expense related to current and past grants of stock options and restricted stock for the six months ended December 31, 2018 and 2017, respectively. This expense is included in selling, general and administrative expense. As of December 31, 2018, approximately $1,164,000 of total unrecognized compensation expense related to non-vested equity awards was expected to be recognized over a weighted average period of approximately 0.9 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 historical 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 stock options granted: Six Months Ended Fiscal Year Ended Risk-free interest rate 2.77% 1.77% - 2.61% Expected term (years) 6 6 Expected volatility 182.4% 125.2% - 176.5% Stock Options The Company issued 181,250 stock options pursuant to the 2017 Plan during the six months ended December 31, 2018. Stock option transactions during the six months ended December 31, 2018 are summarized as follows: Number of Shares Weighted Average Exercise Price per Outstanding at June 30, 2018 902,059 $ 3.47 Granted 181,250 $ 5.42 Exercised (55,525 ) $ 3.40 Cancelled or Forfeited (245,783 ) $ 3.61 Outstanding at December 31, 2018 782,001 $ 3.88 The intrinsic value of an option is the amount by which the fair value of the underlying stock exceeds its exercise price. At December 31, 2018, the weighted average remaining contractual term for all outstanding stock options was 7.49 years and their aggregate intrinsic value was approximately $1,104,000. Outstanding at December 31, 2018 were 782,001 stock options issued to employees, of which 432,340 were exercisable and had an aggregate intrinsic value of approximately $1,047,000. Restricted Stock The Company’s 2017 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 six months ended December 31, 2018, 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 $5.42 per share, and to directors totaling 10,000 shares of common stock, with a vesting term of six months and a fair value of $5.70 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 six months ended December 31, 2018 are summarized as follows: Number of Shares Weighted Average Outstanding Shares of Restricted Stock Unvested at June 30, 2018 29,998 $ 4.96 Granted 40,000 $ 5.49 Vested – – Forfeited – – Outstanding Shares of Restricted Stock Unvested at December 31, 2018 69,998 $ 5.26

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Note 9. 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)	6 Months Ended
	Dec. 31, 2018
Accounting Policies [Abstract]
Use of estimates	Use of estimates:
Net income per common share	Net income per common share:
New Accounting Pronouncements	New accounting pronouncements: The Company adopted the new standard effective July 1, 2018, utilizing the full retrospective method, which required the Company to recast each prior reporting period presented and included adjustments with the cumulative impact of increasing retained earnings by $0.8 million as of July 1, 2017. The Company has updated its control framework for new internal controls and made changes to existing controls related to the new revenue recognition standard. Primary changes resulting from the adoption of ASC 606: The Company’s adoption of ASC 606 resulted in a change to the timing of revenue recognition, primarily driven by the following: ● Some of the SmartVest ® ● The Company sells the SmartVest Systems to patients under circumstances where it believes the criteria for reimbursement under government or commercial payer contracts has been met; however, coverage is unconfirmed or payments are under appeal, leading to uncertainty as to the amount of the transaction price that will be collected. Additionally, amounts due directly from patients for deductibles, coinsurance and copays may be subject to implicit price concessions if the patient becomes unable to pay due to hospitalization or death. Previously, the Company fully deferred revenue at the time of sale until the transaction price for these contracts was deemed to be fixed and determinable (i.e., when the appeal was settled, or payment was received). Under ASC 606, the Company estimates variable consideration in the transaction price at contract inception and reassess throughout the contract period based on historical experience and other relevant factors and recognizes revenue when control of the SmartVest System is transferred to the patient, which occurs at the time of shipment or delivery. Impact on Previously Reported Results: The following tables present a recast of selected unaudited statement of operations line items after giving effect to the adoption of ASC 606: For the three months ended December 31, 2017 As Previously Reported Effect of Adoption As Adjusted Net revenues $ 6,984,626 $ (21,582 ) $ 6,963,044 Cost of revenues 1,398,001 162,426 1,560,427 Gross profit 5,586,625 (184,008 ) 5,402,617 Operating expenses Selling, general and administrative 4,759,652 (184,480 ) 4,575,172 Research and development 56,794 – 56,794 Total operating expenses 4,816,446 (184,480 ) 4,631,966 Operating income 770,179 472 770,651 Interest income (expense), net (4,894 ) – (4,894 ) Net income before income taxes 765,285 472 765,757 Income tax expense 416,000 (70,000 ) 346,000 Net income $ 349,285 $ 70,472 $ 419,757 Income per share: Basic $ 0.04 $ 0.01 $ 0.05 Diluted $ 0.04 $ 0.01 $ 0.05 For the six months ended December 31, 2017 As Previously Reported Effect of Adoption As Adjusted Net revenues $ 13,366,405 $ (99,039 ) $ 13,267,366 Cost of revenues 2,843,286 330,746 3,174,032 Gross profit 10,523,119 (429,785 ) 10,093,334 Operating expenses Selling, general and administrative 9,463,163 (367,087 ) 9,096,076 Research and development 127,458 – 127,458 Total operating expenses 9,590,621 (367,087 ) 9,223,534 Operating income 932,498 (62,698 ) 869,800 Interest income (expense), net (9,093 ) – (9,093 ) Net income before income taxes 923,405 (62,698 ) 860,707 Income tax expense 453,000 (93,000 ) 360,000 Net income $ 470,405 $ 30,302 $ 500,707 Income per share: Basic $ 0.06 $ 0.00 $ 0.06 Diluted $ 0.05 $ 0.01 $ 0.06 The following table presents a recast of selected unaudited balance sheet line items after giving effect to the adoption of ASC 606: June 30, 2018 As Previously Effect of As Adjusted Assets Current Assets Accounts receivable, net of allowances for doubtful accounts $ 11,563,208 $ 248,100 $ 11,811,308 Contract assets – 776,338 $ 776,338 Inventories 2,360,693 126,155 2,486,848 Prepaid expenses and other current assets 832,202 (80,661 ) 751,541 Other assets 91,912 (86,005 ) 5,907 Deferred income taxes 594,000 (230,000 ) 364,000 Liabilities and Shareholders’ Equity Accrued compensation 1,209,738 60,111 1,269,849 Retained earnings 6,859,042 693,816 7,552,858 The following table presents a recast of selected unaudited statement of cash flow line items after giving effect to the adoption of ASC 606: For the six months ended December 31, 2017 As Previously Effect of Adoption As Adjusted Cash Flows From Operating Activities Net income $ 470,405 $ 30,302 $ 500,707 Deferred taxes 43,000 (93,000 ) (50,000 ) Accounts receivable 269,390 77,800 347,190 Contract assets – 7,356 7,356 Inventories 183,617 (13,894 ) 169,723 Prepaid expenses and other assets 8,461 (4,387 ) 4,074 Accounts payable and accrued liabilities (149,647 ) (4,177 ) (153,824 )
Lease Accounting	Lease Accounting: In February 2016, FASB issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842).” 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 evaluating ASU 2016-02 and expects that it will have no material impact on its financial statements or financial statement disclosures upon adoption based on current facts and circumstances.

Interim Financial Reporting (Ta

Interim Financial Reporting (Tables)	6 Months Ended
	Dec. 31, 2018
Accounting Policies [Abstract]
Schedule of recast of selected financial information for adoption of ASC 606	The following tables present a recast of selected unaudited statement of operations line items after giving effect to the adoption of ASC 606: For the three months ended December 31, 2017 As Previously Reported Effect of Adoption As Adjusted Net revenues $ 6,984,626 $ (21,582 ) $ 6,963,044 Cost of revenues 1,398,001 162,426 1,560,427 Gross profit 5,586,625 (184,008 ) 5,402,617 Operating expenses Selling, general and administrative 4,759,652 (184,480 ) 4,575,172 Research and development 56,794 – 56,794 Total operating expenses 4,816,446 (184,480 ) 4,631,966 Operating income 770,179 472 770,651 Interest income (expense), net (4,894 ) – (4,894 ) Net income before income taxes 765,285 472 765,757 Income tax expense 416,000 (70,000 ) 346,000 Net income $ 349,285 $ 70,472 $ 419,757 Income per share: Basic $ 0.04 $ 0.01 $ 0.05 Diluted $ 0.04 $ 0.01 $ 0.05 For the six months ended December 31, 2017 As Previously Reported Effect of Adoption As Adjusted Net revenues $ 13,366,405 $ (99,039 ) $ 13,267,366 Cost of revenues 2,843,286 330,746 3,174,032 Gross profit 10,523,119 (429,785 ) 10,093,334 Operating expenses Selling, general and administrative 9,463,163 (367,087 ) 9,096,076 Research and development 127,458 – 127,458 Total operating expenses 9,590,621 (367,087 ) 9,223,534 Operating income 932,498 (62,698 ) 869,800 Interest income (expense), net (9,093 ) – (9,093 ) Net income before income taxes 923,405 (62,698 ) 860,707 Income tax expense 453,000 (93,000 ) 360,000 Net income $ 470,405 $ 30,302 $ 500,707 Income per share: Basic $ 0.06 $ 0.00 $ 0.06 Diluted $ 0.05 $ 0.01 $ 0.06 The following table presents a recast of selected unaudited balance sheet line items after giving effect to the adoption of ASC 606: June 30, 2018 As Previously Effect of As Adjusted Assets Current Assets Accounts receivable, net of allowances for doubtful accounts $ 11,563,208 $ 248,100 $ 11,811,308 Contract assets – 776,338 $ 776,338 Inventories 2,360,693 126,155 2,486,848 Prepaid expenses and other current assets 832,202 (80,661 ) 751,541 Other assets 91,912 (86,005 ) 5,907 Deferred income taxes 594,000 (230,000 ) 364,000 Liabilities and Shareholders’ Equity Accrued compensation 1,209,738 60,111 1,269,849 Retained earnings 6,859,042 693,816 7,552,858 The following table presents a recast of selected unaudited statement of cash flow line items after giving effect to the adoption of ASC 606: For the six months ended December 31, 2017 As Previously Effect of Adoption As Adjusted Cash Flows From Operating Activities Net income $ 470,405 $ 30,302 $ 500,707 Deferred taxes 43,000 (93,000 ) (50,000 ) Accounts receivable 269,390 77,800 347,190 Contract assets – 7,356 7,356 Inventories 183,617 (13,894 ) 169,723 Prepaid expenses and other assets 8,461 (4,387 ) 4,074 Accounts payable and accrued liabilities (149,647 ) (4,177 ) (153,824 )

Revenues (Tables)

Revenues (Tables)	6 Months Ended
	Dec. 31, 2018
Revenue from Contract with Customer [Abstract]
Schedule of disaggregated revenue	For the three months ended December 31, For the six months ended December 31, 2018 2017 2018 2017 Home care $ 7,330,927 $ 6,490,451 $ 14,053,321 $ 12,398,959 Institutional 401,901 306,645 820,806 601,378 International 279,659 165,948 414,243 267,029 Total $ 8,012,487 $ 6,963,044 $ 15,288,370 $ 13,267,366 In the following table, homecare revenue is disaggregated by payer type: For the three months ended December 31, For the six months ended December 31, 2018 2017 2018 2017 Commercial $ 3,477,768 $ 3,062,975 $ 6,834,435 $ 5,872,725 Medicare 3,239,434 2,782,039 6,150,643 5,282,888 Medicaid 465,331 448,827 717,116 871,034 Other 148,394 196,610 351,127 372,312 Total $ 7,330,927 $ 6,490,451 $ 14,053,321 $ 12,398,959
Schedule of contract assets	The following table provides information about accounts receivable and contracts assets from contracts with customers: December 31, 2018 June 30, 2018, as Receivables, included in “Accounts receivable, net of allowance for doubtful accounts” $ 11,937,466 $ 11,811,308 Contract assets, included in other current assets $ 781,806 $ 776,338 Significant changes in contract assets during the period are as follows: For the six months Increase (decrease) Contract assets, June 30, 2018 $ 776,338 Reclassification of beginning contract assets to accounts receivable (1,066,882 ) Contract assets recognized, net of reclassification to accounts receivable 1,093,595 Decrease as a result of changes in the estimate of amounts to be realized from payers, excluding amounts transferred to receivables during the period (21,245 ) Contract assets, December 31, 2018 $ 781,806

Inventories (Tables)

Inventories (Tables)	6 Months Ended
	Dec. 31, 2018
Inventory Disclosure [Abstract]
Schedule of components of inventories	The components of inventory were approximately as follows: December 31, 2018 June 30, 2018 Parts inventory $ 1,698,000 $ 1,388,000 Work in process 754,000 621,000 Finished goods 434,000 632,000 Estimated inventory to be returned 120,000 126,000 Less: Reserve for obsolescence (270,000 ) (280,000 ) Total $ 2,736,000 $ 2,487,000

Finite-life Intangible Assets (

Finite-life Intangible Assets (Tables)	6 Months Ended
	Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of activity and balances of finite-life intangible assets	The activity and balances of finite-life intangible assets were approximately as follows: Six Months Ended December 31, 2018 Fiscal Year Ended Balance, beginning $ 649,000 $ 721,000 Additions 29,000 46,000 Abandonments – (4,000 ) Amortization expense (60,000 ) (114,000 ) Balance, ending $ 618,000 $ 649,000

Warranty Liability (Tables)

Warranty Liability (Tables)	6 Months Ended
	Dec. 31, 2018
Product Warranties Disclosures [Abstract]
Schedule of changes in warranty liability	Changes in the Company’s warranty liability were approximately as follows: Six Months Ended December 31, 2018 Fiscal Year Ended Beginning warranty reserve $ 760,000 $ 640,000 Accrual for products sold 103,000 273,000 Expenditures and costs incurred for warranty claims (73,000 ) (153,000 ) Ending warranty reserve $ 790,000 $ 760,000

Share-Based Compensation (Table

Share-Based Compensation (Tables)	6 Months Ended
	Dec. 31, 2018
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 stock options granted: Six Months Ended Fiscal Year Ended Risk-free interest rate 2.77% 1.77% - 2.61% Expected term (years) 6 6 Expected volatility 182.4% 125.2% - 176.5%
Schedule of stock option transactions	Stock option transactions during the six months ended December 31, 2018 are summarized as follows: Number of Shares Weighted Average Exercise Price per Outstanding at June 30, 2018 902,059 $ 3.47 Granted 181,250 $ 5.42 Exercised (55,525 ) $ 3.40 Cancelled or Forfeited (245,783 ) $ 3.61 Outstanding at December 31, 2018 782,001 $ 3.88
Schedule of restricted stock transactions	Restricted stock transactions during the six months ended December 31, 2018 are summarized as follows: Number of Shares Weighted Average Outstanding Shares of Restricted Stock Unvested at June 30, 2018 29,998 $ 4.96 Granted 40,000 $ 5.49 Vested – – Forfeited – – Outstanding Shares of Restricted Stock Unvested at December 31, 2018 69,998 $ 5.26

Interim Financial Reporting (De

Interim Financial Reporting (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Jun. 30, 2017
Common stock equivalents excluded from calculation of diluted earnings per share	356,084	177,750	356,084	177,750
Sales	$ 8,012,487	$ 6,963,044	$ 15,288,370	$ 13,267,366
Cumulative effect of adoption of the new standard on retained earnings					$ 800,000
International [Member]
Sales			$ 414,000	$ 267,000

Interim Financial Reporting (_2

Interim Financial Reporting (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Jun. 30, 2018
Net revenues	$ 8,012,487	$ 6,963,044	$ 15,288,370	$ 13,267,366
Cost of revenues	1,950,040	1,560,427	3,683,039	3,174,032
Gross profit	6,062,447	5,402,617	11,605,331	10,093,334
Operating expenses
Selling, general and administrative	5,152,394	4,575,172	10,428,148	9,096,076
Research and development	237,838	56,794	306,028	127,458
Total operating expenses	5,390,232	4,631,966	10,734,176	9,223,534
Operating income	672,215	770,651	871,155	869,800
Interest income (expense), net	16,521	(4,894)	29,974	(9,093)
Net income before income taxes	688,736	765,757	901,129	860,707
Income tax expense	311,000	346,000	369,000	360,000
Net income	$ 377,736	$ 419,757	$ 532,129	$ 500,707
Income per share:
Basic	$ 0.05	$ 0.05	$ 0.06	$ 0.06
Diluted	$ 0.04	$ 0.05	$ 0.06	$ 0.06
Cash Flows From Operating Activities
Deferred income taxes			$ 3,000	$ (50,000)
Accounts receivable			(126,158)	347,190
Contract assets			(5,468)	7,356
Inventories			(242,459)	169,723
Prepaid expenses and other assets			421,864	4,074
Accounts payable and accrued liabilities			(233,780)	(153,824)
Current Assets
Accounts receivable, net of allowances for doubtful accounts	$ 11,937,466		11,937,466		$ 11,811,308
Contract assets	781,806		781,806		776,338
Inventories	2,735,934		2,735,934		2,486,848
Prepaid expenses and other current assets	329,327		329,327		751,541
Other assets	6,257		6,257		5,907
Deferred income taxes	361,000		361,000		364,000
Liabilities and Shareholders' Equity
Accrued compensation	1,195,479		1,195,479		1,269,849
Retained earnings	$ 8,084,987		$ 8,084,987		7,552,858
Effect of Adoption [Member]
Net revenues		$ (21,582)		13,366,405
Cost of revenues		162,426		2,843,286
Gross profit		(184,008)		10,523,119
Operating expenses
Selling, general and administrative		(184,480)		9,463,163
Research and development				127,458
Total operating expenses		(184,480)		9,590,621
Operating income		472		932,498
Interest income (expense), net				(9,093)
Net income before income taxes		472		923,405
Income tax expense		(70,000)		453,000
Net income		$ 70,472		$ 470,405
Income per share:
Basic		$ 0.01		$ 0.06
Diluted		$ 0.01		$ 0.05
Cash Flows From Operating Activities
Deferred income taxes				$ 43,000
Accounts receivable				269,390
Contract assets
Inventories				183,617
Prepaid expenses and other assets				8,461
Accounts payable and accrued liabilities				(149,647)
Current Assets
Accounts receivable, net of allowances for doubtful accounts					248,100
Contract assets					776,338
Inventories					126,155
Prepaid expenses and other current assets					(80,661)
Other assets					(86,005)
Deferred income taxes					(230,000)
Liabilities and Shareholders' Equity
Accrued compensation					60,111
Retained earnings					693,816
As Previously Reported[Member]
Net revenues		$ 6,984,626		(99,039)
Cost of revenues		1,398,001		330,746
Gross profit		5,586,625		(429,785)
Operating expenses
Selling, general and administrative		4,759,652		(367,087)
Research and development		56,794
Total operating expenses		4,816,446		(367,087)
Operating income		770,179		(62,698)
Interest income (expense), net		(4,894)
Net income before income taxes		765,285		(62,698)
Income tax expense		416,000		(93,000)
Net income		$ 349,285		$ 30,302
Income per share:
Basic		$ 0.04		$ 0
Diluted		$ 0.04		$ 0.01
Cash Flows From Operating Activities
Deferred income taxes				$ (93,000)
Accounts receivable				77,800
Contract assets				7,356
Inventories				(13,894)
Prepaid expenses and other assets				(4,387)
Accounts payable and accrued liabilities				$ (4,177)
Current Assets
Accounts receivable, net of allowances for doubtful accounts					11,563,208
Contract assets
Inventories					2,360,693
Prepaid expenses and other current assets					832,202
Other assets					91,912
Deferred income taxes					594,000
Liabilities and Shareholders' Equity
Accrued compensation					1,209,738
Retained earnings					$ 6,859,042

Revenues (Details Narrative)

Revenues (Details Narrative) - USD ($)	6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Revenue from Contract with Customer [Abstract]
Operating lease revenue	$ 25,000	$ 34,000

Revenues (Details)

Revenues (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Revenue	$ 8,012,487	$ 6,963,044	$ 15,288,370	$ 13,267,366
Home Care [Member]
Revenue	7,330,927	6,490,451	14,053,321	12,398,959
Home Care [Member] | Commercial [Member]
Revenue	3,477,768	3,062,975	6,834,435	5,872,725
Home Care [Member] | Medicare [Member]
Revenue	465,331	2,782,039	6,150,643	5,282,888
Home Care [Member] | Medicaid [Member]
Revenue	3,239,434	448,827	717,116	871,034
Home Care [Member] | Other [Member]
Revenue	148,394	196,610	351,127	372,312
Institutional [Member]
Revenue	401,901	306,645	820,806	601,378
International [Member]
Revenue	$ 279,659	$ 165,948	$ 414,243	$ 267,029

Revenues (Details 1)

Revenues (Details 1) - USD ($)	6 Months Ended
	Dec. 31, 2018	Dec. 31, 2018	Jun. 30, 2018
Revenue from Contract with Customer [Abstract]
Accounts receivable, net of allowances for doubtful accounts		$ 11,937,466	$ 11,811,308
Contract assets	$ 781,806	$ 781,806	$ 776,338
Contract assets, June 30, 2018	776,338
Reclassification of beginning contract assets to accounts receivable	(1,066,882)
Contract assets recognized, net of reclassification to accounts receivable	1,093,595
Decrease as a result of changes in the estimate of amounts to be realized from payers, excluding amounts transferred to receivables during the period	(21,245)
Contract assets, September 30, 2018	$ 781,806

Inventories (Details)

Inventories (Details) - USD ($)	Dec. 31, 2018	Jun. 30, 2018
Inventory Disclosure [Abstract]
Parts inventory	$ 1,698,000	$ 1,388,000
Work in process	754,000	621,000
Finished goods	434,000	632,000
Estimated inventory to be returned	120,000	126,000
Less: Reserve for obsolescence	(270,000)	(280,000)
Total	$ 2,735,934	$ 2,486,848

Finite-life Intangible Assets_2

Finite-life Intangible Assets (Details Narrative) - USD ($)	6 Months Ended
	Dec. 31, 2018	Jun. 30, 2018
Finite-Lived Intangible Assets [Line Items]
Accumulated amortization	$ 956,000	$ 902,000
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated useful life	15 years
Trademarks [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated useful life	12 years

Finite-life Intangible Assets_3

Finite-life Intangible Assets (Details) - USD ($)	6 Months Ended	12 Months Ended
	Dec. 31, 2018	Jun. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Balance, beginning	$ 649,103	$ 721,000
Additions	29,000	46,000
Abandonments		(4,000)
Amortization expenses	(60,000)	(114,000)
Balance, ending	$ 618,034	$ 649,103

Warranty Liability (Details)

Warranty Liability (Details) - USD ($)	6 Months Ended	12 Months Ended
	Dec. 31, 2018	Jun. 30, 2018
Warranty reserve:
Warranty reserve, beginning	$ 760,000	$ 640,000
Accrual for products sold	103,000	273,000
Expenditures and costs incurred for warranty claims	(73,000)	(153,000)
Warranty reserve, ending	$ 790,000	$ 760,000

Income Taxes (Details Narrative

Income Taxes (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Jun. 30, 2019
U.S. statutory federal rate			28.00%
Effective tax rate	45.20%	45.20%	45.20%	41.80%
Income tax expense	$ 311,000	$ 346,000	$ 369,000	$ 360,000
Increase in taxable income from change in accounting principle			2,200,000
Increase in income taxes payable from change in accounting principle			140,000
Discrete deferred tax expense (benefit)		$ (2,000)	126,000	$ (27,000)
Discrete current tax benefit from exercise non-qualified stock options exercised			$ 9,000
Impact of lapse of statue of limitations on uncertain tax posistions on effective tax rate				26.30%
Effective tax rate of discrete items	17.00%	20.60%	13.00%	15.50%
Discrete tax expense re-measuring of deferred tax assets and liabilities		$ 160,000		$ 160,000
Subsequent Fiscal Years [Member]
U.S. statutory federal rate					21.00%

Financing Arrangements (Details

Financing Arrangements (Details Narrative) - USD ($)	6 Months Ended
	Dec. 31, 2018	Jun. 30, 2018
Term Loan [Member]
Interest rate	3.88%
Principal loan amount	$ 1,103,000	$ 1,103,000
Unamortized debt issuance cost	1,000	$ 2,000
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, 2018
Credit facility expiration date	Dec. 18, 2019
Basis spread on rate	(1.00%)
Variable interest base rate	5.50%
Borrowing capacity of eligible accounts receivable	$ 2,500,000
Borrowing capacity of eligible accounts receivable (percent)	57.00%
Available borrowing capacity	$ 2,500,000

Share-Based Compensation (Detai

Share-Based Compensation (Details Narrative) - USD ($)	6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Nov. 01, 2017
Share-based compensation expense	$ 500,745	$ 386,248
Unrecognized compensation expense	$ 1,164,000
Unrecognized compensation expense, period for recognition	10 months 25 days
Options outstanding, intrinsic value	$ 1,104,000
Options exercisable, intrinsic value	$ 1,047,000
Options exercisable	432,340
Weighted average contractual term outstanding stock options	7 years 5 months 27 days
Restricted Stock [Member]
Restricted stock awards issued	40,000
Fair value on grant date	$ 5.49
Restricted Stock [Member] | Director [Member]
Restricted stock awards issued	10,000
Vesting term of awards	6 months
Fair value on grant date	$ 5.70
2017 Plan [Member]
Shares available for issuance			900,000
Available for grant, shares			649,750
Options outstanding (shares)	200,250
2017 Plan [Member] | Restricted Stock [Member]
Restricted Stock outstanding (shares)	50,000
2014 Plan [Member]
Options outstanding (shares)	581,751
Employees [Member] | Restricted Stock [Member]
Restricted stock awards issued	30,000
Fair value on grant date	$ 5.42
Employees [Member] | Restricted Stock [Member] | Minimum [Member]
Vesting term of awards	1 year
Employees [Member] | Restricted Stock [Member] | Maximum [Member]
Vesting term of awards	3 years

Share-Based Compensation (Det_2

Share-Based Compensation (Details) - Stock Options [Member]	6 Months Ended	12 Months Ended
	Dec. 31, 2018	Jun. 30, 2018
Risk free interest rate - minimum		1.77%
Risk free interest rate - maximum		2.61%
Risk free interest rate	2.77%
Expected term (year)	6 years	6 years
Expected volatility	182.40%
Expected volatility - minimum		125.20%
Expected volatility - maximum		176.50%

Share-Based Compensation (Det_3

Share-Based Compensation (Details 1) - Stock Options [Member]	6 Months Ended
	Dec. 31, 2018$ / sharesshares
Number of Shares
Options outstanding, beginning | shares	902,059
Granted | shares	181,250
Exercised | shares	(55,525)
Cancelled or Forfeited | shares	(245,783)
Options outstanding, ending | shares	782,001
Weighted Average Exercise Price
Options outstanding, beginning | $ / shares	$ 3.47
Granted | $ / shares	5.42
Exercised | $ / shares	3.40
Cancelled or Forfeited | $ / shares	3.61
Options outstanding, ending | $ / shares	$ 3.88

Share-Based Compensation (Det_4

Share-Based Compensation (Details 2) - Restricted Stock [Member]	6 Months Ended
	Dec. 31, 2018$ / sharesshares
Number of Shares
Outstanding, beginning | shares	29,998
Granted | shares	40,000
Outstanding, ending | shares	69,998
Weighted Average Grant Date Fair Value
Outstanding, beginning | $ / shares	$ 4.96
Granted | $ / shares	5.49
Outstanding, ending | $ / shares	$ 5.26