Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Jun. 30, 2014 | Sep. 18, 2014 | Dec. 31, 2013 | |
Document and Entity Information | ' | ' | ' |
Entity Registrant Name | 'DYNATRONICS CORP | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 30-Jun-14 | ' | ' |
Amendment Flag | 'false | ' | ' |
Entity Central Index Key | '0000720875 | ' | ' |
Current Fiscal Year End Date | '--06-30 | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Document Fiscal Year Focus | '2014 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 2,520,389 | ' |
Entity Public Float | ' | ' | $9,600,000 |
Entity Incorporation, State Country Name | 'Utah | ' | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Current assets: | ' | ' |
Cash and cash equivalents | $332,800 | $302,050 |
Trade accounts receivable, less allowance for doubtful accounts of $325,355 as of June 30, 2014 and $247,708 as of June 30, 2013 | 3,165,396 | 3,246,712 |
Other receivables | 15,594 | 27,197 |
Inventories, net | 6,157,848 | 6,407,553 |
Prepaid expenses and other | 298,370 | 506,836 |
Current portion of deferred income tax assets | 408,919 | 389,101 |
Total current assets | 10,378,927 | 10,879,449 |
Property and equipment, net | 2,980,677 | 3,324,947 |
Intangible assets, net | 235,440 | 280,078 |
Other assets | 396,456 | 422,672 |
Deferred income tax assets, net of current portion | 303,644 | 197,441 |
Total assets | 14,295,144 | 15,104,587 |
Current liabilities: | ' | ' |
Current portion of long-term debt | 302,274 | 322,573 |
Line of credit | 3,521,209 | 3,496,390 |
Warranty reserve | 157,753 | 178,148 |
Accounts payable | 2,433,534 | 2,751,894 |
Accrued expenses | 342,716 | 347,221 |
Accrued payroll and benefits expense | 243,394 | 216,266 |
Income tax payable | 30,452 | 21,369 |
Total current liabilities | 7,031,332 | 7,333,861 |
Long-term debt, net of current portion | 1,255,133 | 1,561,776 |
Total liabilities | 8,286,465 | 8,895,637 |
Commitments and contingencies | ' | ' |
Stockholders' equity: | ' | ' |
Common stock, no par value: Authorized 50,000,000 shares; 2,520,389 shares and 2,518,904 shares issued and outstanding at June 30, 2014 and June 30, 2013, respectively | 7,149,812 | 7,078,941 |
Accumulated deficit | -1,141,133 | -869,991 |
Total stockholders' equity | 6,008,679 | 6,208,950 |
Total liabilities and stockholders' equity | $14,295,144 | $15,104,587 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets Parenthetical (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Consolidated Balance Sheets Parenthetical | ' | ' |
Allowance for doubtful accounts | $325,355 | $247,708 |
Common stock par value | ' | ' |
Common stock shares authorized | 50,000,000 | 50,000,000 |
Common stock shares issued | 2,520,389 | 2,518,904 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Consolidated Statements of Income | ' | ' |
Net sales | $27,444,223 | $29,538,275 |
Cost of sales | 17,423,851 | 18,451,673 |
Gross profit | 10,020,372 | 11,086,602 |
Selling, general, and administrative expenses | 9,213,433 | 9,860,964 |
Research and development expenses | 992,729 | 1,120,887 |
Operating income | -185,790 | 104,751 |
Other income (expense): | ' | ' |
Interest income | 44 | 681 |
Interest expense | -231,865 | -260,699 |
Other income, net | 20,446 | 24,142 |
Total other income (expense) | -211,375 | -235,876 |
Loss before income tax benefit | -397,165 | -131,125 |
Income tax benefit | 126,023 | 86,754 |
Net loss | ($271,142) | ($44,371) |
Basic and diluted net loss per common share | ($0.11) | ($0.02) |
Weighted-average basic and diluted common shares outstanding | 2,519,490 | 2,526,533 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Common Stock | Accumulated deficit | Total |
Balance at Jun. 30, 2012 | $7,091,935 | ($825,620) | $6,266,315 |
Balance - Shares at Jun. 30, 2012 | 2,537,730 | ' | ' |
Repurchase of common stock | -99,997 | ' | -99,997 |
Repurchase of common stock - shares | -32,786 | ' | ' |
Stock-based compensation expense | 86,639 | ' | 86,639 |
Stock-based compensation - shares | 13,689 | ' | ' |
Issuance of common stock upon exercise of employee stock options | 364 | ' | 364 |
Issuance of common stock upon exercise of employee stock options - shares | 208 | ' | -208 |
Shares issued due to stock split rounding - shares | 63 | ' | ' |
Net loss | ' | -44,371 | -44,371 |
Balance at Jun. 30, 2013 | 7,078,941 | -869,991 | 6,208,950 |
Balance - Shares at Jun. 30, 2013 | 2,518,904 | ' | ' |
Stock-based compensation expense | 70,871 | ' | 70,871 |
Stock-based compensation - shares | 1,485 | ' | ' |
Net loss | ' | -271,142 | -271,142 |
Balance at Jun. 30, 2014 | $7,149,812 | ($1,141,133) | $6,008,679 |
Balance - Shares at Jun. 30, 2014 | 2,520,389 | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Cash flows from operating activities: | ' | ' |
Net loss | ($271,142) | ($44,371) |
Depreciation and amortization of property and equipment | 433,014 | 435,366 |
Amortization of intangible and other assets | 147,901 | 118,335 |
Gain on sale of assets | ' | -2,993 |
Stock-based compensation expense | 70,871 | 86,639 |
Change in deferred income tax assets | -126,021 | -86,754 |
Provision for doubtful accounts receivable | 96,000 | 180,000 |
Provision for inventory obsolescence | 120,000 | 206,460 |
Change in Receivables | -3,081 | 224,895 |
Change in Inventories | 129,705 | -515,416 |
Change in Prepaid expenses and other assets | 216,324 | -281,855 |
Change in Prepaid income taxes | 20,248 | 23,615 |
Change in Accounts payable and accrued expenses | -327,297 | 299,185 |
Net cash provided by operating activities | 506,522 | 643,106 |
Cash flows from investing activities: | ' | ' |
Purchase of property and equipment | -176,958 | -100,438 |
Proceeds from sale of property and equipment | ' | 345 |
Net cash used in investing activities | -176,958 | -100,093 |
Cash flows from financing activities: | ' | ' |
Principal payments on long-term debt | -323,633 | -418,386 |
Net change in line of credit | 24,819 | -1,207 |
Proceeds from issuance of common stock | ' | 364 |
Purchase and retirement of common stock | ' | -99,997 |
Net cash used in financing activities | -298,814 | -519,226 |
Net change in cash and cash equivalents | 30,750 | 23,787 |
Cash and cash equivalents at beginning of the year | 302,050 | 278,263 |
Cash and cash equivalents at end of the year | 332,800 | 302,050 |
Supplemental disclosure of cash flow information: | ' | ' |
Cash paid for interest | $232,571 | $259,794 |
1_Basis_of_Presentation_and_Su
(1) Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended | |||
Jun. 30, 2014 | ||||
Notes | ' | |||
(1) Basis of Presentation and Summary of Significant Accounting Policies | ' | |||
(1) Basis of Presentation and Summary of Significant Accounting Policies | ||||
(a) Description of Business | ||||
Dynatronics Corporation (the Company), a Utah corporation, distributes and markets a broad line of medical and aesthetic products, many of which are designed and manufactured by the Company. Among the products offered by the Company are therapeutic, diagnostic, and rehabilitation equipment, medical supplies and soft goods, treatment tables and aesthetic medical devices to an expanding market of physical therapists, podiatrists, orthopedists, chiropractors, plastic surgeons, dermatologists, and other medical professionals. | ||||
(b) Principles of Consolidation | ||||
The consolidated financial statements include the accounts and operations of Dynatronics Corporation and its wholly owned subsidiary, Dynatronics Distribution Company, LLC. All significant intercompany account balances and transactions have been eliminated in consolidation. | ||||
(c) Cash Equivalents | ||||
Cash equivalents include all highly liquid investments with maturities of three months or less at the date of purchase. Also included within cash equivalents are deposits in-transit from banks for payments related to third-party credit card and debit card transactions. | ||||
(d) Inventories | ||||
Finished goods inventories are stated at the lower of standard cost (first-in, first-out method), which approximates actual cost, or market. Raw materials are stated at the lower of cost (first in, first out method) or market. The Company periodically reviews the value of items in inventory and provides write-downs or write-offs of inventory based on its assessment of slow moving or obsolete inventory. Write-downs and write-offs are charged against the reserve. | ||||
(e) Trade Accounts Receivable | ||||
Trade accounts receivable are recorded at the invoiced amount and do not bear interest, although a finance charge may be applied to such receivables that are past the due date. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on a combination of statistical analysis, historical collections, customers’ current credit worthiness, the age of the receivable balance both individually and in the aggregate and general economic conditions that may affect the customer’s ability to pay. All account balances are reviewed on an individual basis. Account balances are charged off against the allowance when the potential for recovery is considered remote. Recoveries of receivables previously charged off are recognized when payment is received. | ||||
(f) Property and Equipment | ||||
Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight line method over the estimated useful lives of the assets. The building and its component parts are being depreciated over their estimated useful lives that range from 5 to 31.5 years. Estimated lives for all other depreciable assets range from 3 to 7 years. | ||||
(g) Long-Lived Assets | ||||
Long–lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the difference between the carrying amount of the asset and the fair value of the asset. Assets to be disposed of are separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. | ||||
(h) Intangible Assets | ||||
Costs associated with the acquisition of trademarks, trade names, license rights and non-compete agreements are capitalized and amortized using the straight-line method over periods ranging from 3 months to 20 years. | ||||
(i) Revenue Recognition | ||||
The Company recognizes revenue when products are shipped FOB shipping point under an agreement with a customer, risk of loss and title have passed to the customer, and collection of any resulting receivable is reasonably assured. Amounts billed for shipping and handling of products are recorded as sales revenue. Costs for shipping and handling of products to customers are recorded as cost of sales. | ||||
(j) Research and Development Costs | ||||
Direct research and development costs are expensed as incurred. | ||||
(k) Product Warranty Costs | ||||
Costs estimated to be incurred in connection with the Company’s product warranty programs are charged to expense as products are sold based on historical warranty rates. | ||||
(l) Net Income (Loss) per Common Share | ||||
Net income (loss) per common share is computed based on the weighted-average number of common shares outstanding and, when appropriate, dilutive common stock equivalents outstanding during the year. Stock options are considered to be common stock equivalents. The computation of diluted net income (loss) per common share does not assume exercise or conversion of securities that would have an anti-dilutive effect. | ||||
Basic net income (loss) per common share is the amount of net income (loss) for the year available to each weighted-average share of common stock outstanding during the year. Diluted net income (loss) per common share is the amount of net income (loss) for the year available to each weighted-average share of common stock outstanding during the year and to each common stock equivalent outstanding during the year, unless inclusion of common stock equivalents would have an anti-dilutive effect. | ||||
On December 19, 2012, the Company completed a 1-for-5 reverse split of its common stock. All common stock share and per share information in the accompanying consolidated financial statements and notes thereto have been adjusted to reflect retrospective application of the reverse stock split, except for par value per share and the number of authorized shares, which were not affected by the reverse stock split. | ||||
The reconciliation between the basic and diluted weighted-average number of common shares for the years ended June 30, 2014 and 2013 is summarized as follows: | ||||
2014 | 2013 | |||
Basic weighted-average number of common shares outstanding during the year | 2,519,490 | 2,526,533 | ||
Weighted-average number of dilutive common stock options outstanding during the year | - | - | ||
Diluted weighted-average number of common and common equivalent shares outstanding during the year | 2,519,490 | 2,526,533 | ||
Outstanding options not included in the computation of diluted net loss per common share totaled 145,987 as of June 30, 2014 and 161,454 as of June 30, 2013. These common stock equivalents were not included in the computation because to do so would have been antidilutive. | ||||
(m) Income Taxes | ||||
The Company recognizes an asset or liability for the deferred income tax consequences of all temporary differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements that will result in taxable or deductible amounts in future years when the reported amounts of the assets and liabilities are recovered or settled. Accruals for uncertain tax positions are provided for in accordance with the requirements of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 740-10, Income Taxes. Under ASC 740-10, the Company may recognize the tax benefits from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740-10 also provides guidance on derecognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and income tax disclosures. Judgment is required in assessing the future tax consequences of events that have been recognized in the financial statements or tax returns. Variations in the actual outcome of these future tax consequences could materially impact the Company’s financial position, results of operations and cash flows. | ||||
The Company evaluates the need for a valuation allowance on deferred taxes on a quarterly and annual base. This evaluation considers the level of historical taxable income and projections for future taxable income over the periods which the deferred income tax assets are deductible. If management determines that it is more likely than not that the Company will not realize the benefits of these deductible differences, a valuation allowance is recorded. | ||||
(n) Stock-Based Compensation | ||||
The Company accounts for stock-based compensation in accordance with FASB ASC 718, Stock Compensation. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the applicable vesting period of the stock award (generally five years) using the straight-line method. | ||||
(o) Concentration of Risk | ||||
In the normal course of business, the Company provides unsecured credit to its customers. Most of the Company’s customers are involved in the medical industry. The Company performs ongoing credit evaluations of its customers and maintains allowances for probable losses which, when realized, have been within the range of management’s expectations. The Company maintains its cash in bank deposit accounts which at times may exceed federally insured limits. The Company believes it is not exposed to any significant credit risks with respect to cash or cash equivalents. | ||||
As of June 30, 2014, the Company has approximately $82,800 in cash and cash equivalents in excess of the FDIC limits. The Company has not experienced any losses in such accounts. | ||||
(p) Operating Segments | ||||
The Company operates in one line of business: the development, marketing, and distribution of a broad line of medical products for the physical therapy and aesthetics markets. As such, the Company has only one reportable operating segment. | ||||
The Company groups its sales into physical medicine products and aesthetic products. Physical medicine products made up 91% of net sales for both the years ended June 30, 2014 and 2013. Aesthetics products made up 1% of net sales for both the years ended June 30, 2014 and 2013. Chargeable repairs, billable freight and other miscellaneous revenues account for the remaining 8% of net sales for both the years ended June 30, 2014 and 2013. | ||||
(q) Use of Estimates | ||||
Management of the Company has made a number of estimates and assumptions relating to the reporting of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities in accordance with US Generally Accepted Accounting Principles (US GAAP). Significant items subject to such estimates and assumptions include the carrying amount of property and equipment; valuation allowances for receivables, income taxes, and inventories; accrued product warranty costs; and estimated recoverability of intangible assets. Actual results could differ from those estimates. | ||||
(r) Advertising Costs | ||||
Advertising costs are expensed as incurred. Advertising expense for the years ended June 30, 2014 and 2013 was approximately $111,900 and $127,400, respectively. |
2_Inventories
(2) Inventories | 12 Months Ended | |||||||||||
Jun. 30, 2014 | ||||||||||||
Notes | ' | |||||||||||
(2) Inventories | ' | |||||||||||
(2) Inventories | ||||||||||||
Inventories consist of the following as of June 30: | ||||||||||||
2014 | 2013 | |||||||||||
Raw materials | $ | 2,783,306 | 2,732,363 | |||||||||
Finished goods | 3,709,897 | 4,002,709 | ||||||||||
Inventory reserve | -335,355 | -327,519 | ||||||||||
$ | 6,157,848 | 6,407,553 | ||||||||||
3_Property_and_Equipment
(3) Property and Equipment | 12 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
Notes | ' | ||||||||||
(3) Property and Equipment | ' | ||||||||||
(3) Property and Equipment | |||||||||||
Property and equipment consist of the following as of June 30: | |||||||||||
2014 | 2013 | ||||||||||
Land | $ | 354,743 | 354,743 | ||||||||
Buildings | 3,758,524 | 3,746,472 | |||||||||
Machinery and equipment | 1,598,770 | 1,550,633 | |||||||||
Office equipment | 266,563 | 263,861 | |||||||||
Computer equipment | 1,980,746 | 1,963,414 | |||||||||
Vehicles | 236,987 | 266,946 | |||||||||
8,196,333 | 8,146,069 | ||||||||||
Less accumulated depreciation and amortization | -5,215,656 | -4,821,122 | |||||||||
$ | 2,980,677 | 3,324,947 | |||||||||
Depreciation expense for the years ended June 30, 2014 and 2013 was $433,014 and $435,366, respectively. |
4_Intangible_Assets
(4) Intangible Assets | 12 Months Ended | |||||||||||
Jun. 30, 2014 | ||||||||||||
Notes | ' | |||||||||||
(4) Intangible Assets | ' | |||||||||||
(4) Intangible Assets | ||||||||||||
Identifiable intangible assets and their useful lives consist of the following as of June 30: | ||||||||||||
2014 | 2013 | |||||||||||
Trade name –15 years | $ | 339,400 | 339,400 | |||||||||
Domain name –15 years | 5,400 | 5,400 | ||||||||||
Non-compete covenant –4 years | 149,400 | 149,400 | ||||||||||
Customer relationships –7 years | 120,000 | 120,000 | ||||||||||
Trademark licensing agreement –20 years | 45,000 | 45,000 | ||||||||||
Backlog of orders –3 months | 2,700 | 2,700 | ||||||||||
Customer database –7 years | 38,100 | 38,100 | ||||||||||
License agreement –10 years | 73,240 | 73,240 | ||||||||||
Total identifiable intangibles | 773,240 | 773,240 | ||||||||||
Less accumulated amortization | -537,800 | -493,162 | ||||||||||
Net carrying amount | $ | 235,440 | 280,078 | |||||||||
Trade name –15 years | ||||||||||||
Domain Name –15 years | ||||||||||||
Non-compete covenant –4 years | ||||||||||||
Customer relationships –7 years | ||||||||||||
Trademark licensing agreement –20 years | ||||||||||||
Backlog of orders - 3 months | ||||||||||||
Customer database –7 years | ||||||||||||
License agreement –10 years | ||||||||||||
Amortization expense associated with the intangible assets was $44,637 for both fiscal years 2014 and 2013. Estimated amortization expense for the identifiable intangibles is expected to be as follows: 2015, $30,680; 2016, $30,680; 2017, $30,680; 2018, $26,430; 2019, $26,430 and thereafter $90,540. | ||||||||||||
5_Warranty_Reserve
(5) Warranty Reserve | 12 Months Ended | ||||||||||||||
Jun. 30, 2014 | |||||||||||||||
Notes | ' | ||||||||||||||
(5) Warranty Reserve | ' | ||||||||||||||
(5) Warranty Reserve | |||||||||||||||
A reconciliation of the change in the warranty reserve consists of the following for the fiscal years ended June 30: | |||||||||||||||
2014 | 2013 | ||||||||||||||
Beginning warranty reserve balance | $ | 178,148 | 181,000 | ||||||||||||
Warranty repairs | -141,471 | -160,267 | |||||||||||||
Warranties issued | 153,648 | 127,863 | |||||||||||||
Changes in estimated warranty costs | -32,572 | 29,552 | |||||||||||||
Ending warranty reserve | $ | 157,753 | 178,148 | ||||||||||||
6_Line_of_Credit
(6) Line of Credit | 12 Months Ended |
Jun. 30, 2014 | |
Notes | ' |
(6) Line of Credit | ' |
(6) Line of Credit | |
The Company has a revolving line-of-credit facility with a commercial bank in the amount of $4,500,000. Borrowing limitations are based on 45% of eligible inventory and up to 80% of eligible accounts receivable resulting in a borrowing base of $4,845,000, subject to the $4,500,000 limitation as described above, as of June 30, 2014. As of June 30, 2014 and 2013, the outstanding balance was approximately $3,521,000$3,521,209 and $3,496,000$3,496,390, respectively. Available borrowings as of June 30, 2014 were $979,000. The line of credit is collateralized by inventory and accounts receivable and bears interest at a rate based on the lender’s 90-day LIBOR rate plus 3%. The interest rate was 3.7% and 3.8% as of June 30, 2014 and 2013, respectively. This line is subject to biennial renewal and matures on October 15, 2014. However, if the line of credit is not extended, the Company will need to find additional sources of financing. Failure to obtain additional financing would have a material adverse effect on our business operations. All borrowings under the line of credit are presented as current liabilities in the accompanying condensed consolidated balance sheet. | |
Accrued interest is payable monthly. The Company’s revolving line of credit agreement includes covenants requiring the Company to maintain certain financial ratios. As of June 30, 2014, the Company was not in compliance with one of the loan covenants, however, the bank granted a waiver for the period. | |
The Company believes that amounts available under the line of credit as well as cash generated from operating activities will continue to be sufficient to meet our short term operating requirements. |
7_LongTerm_Debt
(7) Long-Term Debt | 12 Months Ended | |||||||||
Jun. 30, 2014 | ||||||||||
Notes | ' | |||||||||
(7) Long-Term Debt | ' | |||||||||
(7) Long Term Debt | ||||||||||
Long term debt consists of the following as of June 30: | ||||||||||
2014 | 2013 | |||||||||
6.44% promissory note secured by trust deed on real property, maturing January 2021, payable in monthly installments of $13,278 | $ | 853,090 | 953,929 | |||||||
5.235% promissory note secured by building, maturing December 2017, payable in monthly installments of $16,985 | 644,962 | 808,326 | ||||||||
Promissory note secured by a vehicle, payable in monthly installments of $639 through February 2019 | 33,913 | 43,449 | ||||||||
8.49% promissory note secured by equipment, payable in monthly installments of $2,097 through December 2014 | 12,279 | 35,332 | ||||||||
5.887% promissory note secured by a vehicle, payable in monthly installments of $390 through March 2017 | 12,140 | 15,970 | ||||||||
13.001% promissory note secured by equipment, payable in monthly installments of $70 through October 2015 | 1,023 | 1,683 | ||||||||
14.305% promissory note secured by equipment, payable in monthly installments of $2,338 through May 2014 | - | 23,965 | ||||||||
5.75% promissory note secured by a vehicle, payable in monthly installments of $435 through October 2013 | - | 1,695 | ||||||||
1,557,407 | 1,884,349 | |||||||||
Less current portion | -302,274 | -322,573 | ||||||||
$ | 1,255,133 | 1,561,776 | ||||||||
The aggregate maturities of long term debt for each of the years subsequent to 2014 are as follows: 2015, $302,274; 2016, $307,773; 2017, $325,687; 2018, $240,098; 2019, $144,707 and thereafter $236,868. | ||||||||||
8_Leases
(8) Leases | 12 Months Ended |
Jun. 30, 2014 | |
Notes | ' |
(8) Leases | ' |
(8) Leases | |
The Company leases vehicles under noncancelable operating lease agreements. Lease expense for the years ended June 30, 2014 and 2013, was $16,106 and $15,076, respectively. Future minimum lease payments required under noncancelable operating leases that have initial or remaining lease terms in excess of one year as of 2014 are as follows: 2015, $16,106 and 2016, $7,403. | |
The Company rents office, warehouse and storage space and office equipment under agreements which run one year or more in duration. The rent expense for the years ended June 30, 2014 and 2013 was $203,361 and $191,659, respectively. Future minimum rental payments required under operating leases that have a duration of one year or more as of June 30, 2014 are as follows: 2015, $94,752; 2016, $84,777; 2017, $54,852; 2018, $5,088 and 2019, $2,544. | |
During fiscal year 2014, the office and warehouse spaces in Detroit, Michigan and Hopkins, Minnesota were leased on an annual/monthly basis from employees/stockholders; or entities controlled by stockholders, who were previously principals of the dealers acquired in July 2007. The leases are related-party transactions with two employee/stockholders, however, management believes the lease agreements have been conducted on an arms-length basis and the terms are similar to those that would be available to other third parties. During fiscal year 2013 the Company also leased office and warehouse space in Pleasanton, California from an employee/stockholder. In December, 2012, the Company moved its Pleasanton operation to a new, larger location in Livermore, California and entered into a lease agreement with an unaffiliated third party. The expense associated with these related-party transactions totaled $52,200 and $93,300 expense for the fiscal years ended June 30, 2014 and 2013. |
9_Income_Taxes
(9) Income Taxes | 12 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Notes | ' | ||||||||||||
(9) Income Taxes | ' | ||||||||||||
(9) Income Taxes | |||||||||||||
Income tax benefit (provision) for the years ended June 30 consists of: | |||||||||||||
Current | Deferred | Total | |||||||||||
2014:00:00 | |||||||||||||
U.S. federal | $ | - | 107,439 | 107,439 | |||||||||
State and local | - | 18,584 | 18,584 | ||||||||||
$ | - | 126,023 | 126,023 | ||||||||||
2013:00:00 | |||||||||||||
U.S. federal | $ | - | 83,198 | 83,198 | |||||||||
State and local | - | 3,556 | 3,556 | ||||||||||
$ | - | 86,754 | 86,754 | ||||||||||
The actual income tax benefit (provision) differs from the “expected” tax benefit (provision) computed by applying the U.S. federal corporate income tax rate of 34% to income (loss) before income taxes for the years ended June 30, are as follows: | |||||||||||||
2014 | 2013 | ||||||||||||
Expected tax benefit (provision) | $ | 135,036 | 44,583 | ||||||||||
State taxes, net of federal tax benefit | 12,265 | 2,359 | |||||||||||
R&D tax credit | - | 55,000 | |||||||||||
Incentive stock options | -4,852 | -10,213 | |||||||||||
Other, net | -16,426 | -4,975 | |||||||||||
$ | 126,023 | 86,754 | |||||||||||
Deferred income tax assets and liabilities related to the tax effects of temporary differences are as follow as of June 30: | |||||||||||||
2014 | 2013 | ||||||||||||
Net deferred income tax assets – current: | |||||||||||||
Inventory capitalization for income tax purposes | $ | 68,748 | 72,058 | ||||||||||
Inventory reserve | 130,788 | 127,732 | |||||||||||
Warranty reserve | 61,524 | 69,477 | |||||||||||
Accrued product liability | 20,970 | 23,228 | |||||||||||
Allowance for doubtful accounts | 126,889 | 96,606 | |||||||||||
Total deferred income tax assets – current | $ | 408,919 | 389,101 | ||||||||||
2014 | |||||||||||||
2013 | |||||||||||||
Net deferred income tax assets (liabilities) – non-current: | |||||||||||||
Property and equipment, principally due to differences in depreciation | $ | -255,835 | -262,726 | ||||||||||
Research and development credit carryover | 370,757 | 383,226 | |||||||||||
Other intangibles | -91,822 | -109,231 | |||||||||||
Operating loss carry forwards | 280,544 | 186,172 | |||||||||||
Total deferred income tax assets (liabilities) – non-current | $ | 303,644 | 197,441 | ||||||||||
In assessing the realizability of deferred income tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the years in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods which the deferred income tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deductible differences. | |||||||||||||
The Company has available at June 30, 2014 and 2013 estimated federal and state net operating loss (“NOL”) carry forwards of $745,605 and $974,484, respectively. The federal NOL will expire in 2030. The state NOLs will expire depending upon the various rules in the states in which the Company operates. | |||||||||||||
The Company’s federal and state income tax returns for June 30, 2011, 2012 and 2013 are open tax years. |
10_Major_Customers_and_Sales_B
(10) Major Customers and Sales By Geographic Location | 12 Months Ended |
Jun. 30, 2014 | |
Notes | ' |
(10) Major Customers and Sales By Geographic Location | ' |
(10) Major Customers and Sales by Geographic Location | |
During the fiscal years ended June 30, 2014 and 2013, sales to any single customer did not exceed 10% of total net sales. | |
The Company exports products to approximately 30 countries. Sales outside North America totaled $749,341 or 2.7% of net sales, for the fiscal year ended June 30, 2014 compared to $647,047, or 2.2% of net sales, for the fiscal year ended June 30, 2013. |
11_Common_Stock_and_Common_Sto
(11) Common Stock and Common Stock Equivalents | 12 Months Ended | ||||||||||||||
Jun. 30, 2014 | |||||||||||||||
Notes | ' | ||||||||||||||
(11) Common Stock and Common Stock Equivalents | ' | ||||||||||||||
(11) Common Stock and Common Stock Equivalents | |||||||||||||||
On July 15, 2003, the board of directors (board) approved an open-market share repurchase program for up to $500,000 of the Company’s common stock. On November 27, 2007, the board approved an additional $250,000 for the open-market share repurchase program after the original $500,000 was used. In February 2011, the board approved an additional $1,000,000 for repurchases under the program. During fiscal year 2010, the board authorized the repurchase of up to $100,000 of stock annually for three years from each of two former distributors that were acquired by the Company in 2007. During the year ended June 30, 2014, the Company did not acquire any shares of common stock. During the year ended June 30, 2013, the Company acquired and retired 32,786 shares of common stock for $99,997. | |||||||||||||||
During the years ended June 30, 2014 and 2013, the Company granted 1,485 and 13,689 shares, respectively, of restricted common stock to directors and officers in connection with compensation arrangements. | |||||||||||||||
The Company maintains a 2005 equity incentive plan for the benefit of employees. Incentive and nonqualified stock options, restricted common stock, stock appreciation rights, and other share-based awards may be granted under the plan. Awards granted under the plan may be performance-based. Effective November 27, 2007, the plan was amended, as approved by the shareholders, to increase the number of shares available by 1,000,000 shares. As of June 30, 2014, 117,451 shares of common stock were authorized and reserved for issuance, but were not granted under the terms of the 2005 equity incentive plan as amended. | |||||||||||||||
The Company granted options to acquire common stock under its 2005 equity incentive plan during fiscal years 2014 and 2013. The options are granted at not less than 100% of the market price of the stock at the date of grant. Option terms are determined by the board, and exercise dates may range from 6 months to 10 years from the date of grant. | |||||||||||||||
The fair value of each option grant was estimated on the date of grant using the Black Scholes option pricing model with the following assumptions: | |||||||||||||||
2014 | 2013 | ||||||||||||||
Expected dividend yield | 0% | 0% | |||||||||||||
Expected stock price volatility | 69% | 69% | |||||||||||||
Risk-free interest rate | 2.53% | 1.74% | |||||||||||||
Expected life of options | 10 years | 10 years | |||||||||||||
The weighted average fair value of options granted during fiscal years 2014 and 2013 was $1.89 and $2.03, respectively. | |||||||||||||||
The following table summarizes the Company’s stock option activity during the reported fiscal years: | |||||||||||||||
2014 | 2013 | ||||||||||||||
Weighted | |||||||||||||||
Weighted | average | Weighted | |||||||||||||
Number | average | remaining | Number | average | |||||||||||
of | exercise | contractual | of | exercise | |||||||||||
shares | price | term | shares | price | |||||||||||
Options outstanding at | |||||||||||||||
beginning of the year | 163,868 | $ | 6.51 | 4.12 years | 173,089 | $ | 6.48 | ||||||||
Options granted | 3,598 | 2.42 | 1,352 | 2.7 | |||||||||||
Options exercised | - | - | -208 | 1.75 | |||||||||||
Options canceled or expired | -11,862 | 6.01 | -10,365 | 5.69 | |||||||||||
Options outstanding at end | |||||||||||||||
of the year | 155,604 | 6.45 | 3.56 years | 163,868 | 6.51 | ||||||||||
Options exercisable at end | |||||||||||||||
of the year | 137,804 | 7.09 | 138,920 | 7.2 | |||||||||||
Range of exercise prices at | |||||||||||||||
end of the year | $ | 1.75 – 8.60 | $ | 1.75 – 8.60 | |||||||||||
The Company recognized $70,871 and $86,639 in stock-based compensation for the years ended June 30, 2014 and 2013, respectively, which is included in selling, general, and administrative expenses in the consolidated statements of operations. The stock-based compensation includes amounts for both restricted stock and stock options under ASC 718. | |||||||||||||||
As of June 30, 2014 there was $387,855 of unrecognized stock-based compensation cost that is expected to be expensed over periods of four to nine years. | |||||||||||||||
The aggregate intrinsic value on the date of exercise of options exercised during the year ended June 30, 2013 was $386. No options were exercised during the fiscal year 2014. The aggregate intrinsic value of the outstanding options as of June 30, 2014 and 2013 was $8,732 and $734, respectively. |
12_Employee_Benefit_Plan
(12) Employee Benefit Plan | 12 Months Ended |
Jun. 30, 2014 | |
Notes | ' |
(12) Employee Benefit Plan | ' |
(12) Employee Benefit Plan | |
The Company has a deferred savings plan which qualifies under Internal Revenue Code Section 401(k). The plan covers all employees of the Company who have at least six months of service and who are age 20 or older. For fiscal years 2014 and 2013, the Company made matching contributions of 25% of the first $2,000 of each employee’s contribution. The Company’s contributions to the plan for 2014 and 2013 were $39,056 and $35,167, respectively. Company matching contributions for future years are at the discretion of the board of directors. |
13_Subsequent_Events
(13) Subsequent Events | 12 Months Ended |
Jun. 30, 2014 | |
Notes | ' |
(13) Subsequent Events | ' |
(13) Subsequent Events | |
On August 8, 2014, the Company sold the building that houses its operations in Utah and leased back the premises for a term of 15 years. The sale price was $3.8 million3,800,000. Proceeds from the sale were used to reduce debt obligations of the Company. The profit generated from the sale will be sufficient to utilize the majority, if not all of the Company’s deferred tax assets. As a result of this repayment of debt, our maximum credit facility under the line of credit was changed to $2,500,000 in August, 2014. |
14_Recent_Accounting_Pronounce
(14) Recent Accounting Pronouncements | 12 Months Ended |
Jun. 30, 2014 | |
Notes | ' |
(14) Recent Accounting Pronouncements | ' |
(14) Recent Accounting Pronouncements | |
In June 2014, the FASB issued ASU 2014-12, Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. This Update clarifies the accounting for equity awards in which the performance target (ie IPO) could be achieved after the requisite service period. The guidance require a performance target that affects vesting and that could be achieved after the service period be treated as a performance condition and not be reflected in the fair value of the award. Therefore, the compensation costs will begin to be recognized when it becomes probable that the performance target will be achieved. If the requisite service period is complete, the entire amount of compensation costs should be recognized at that time. This Update is effective for reporting periods beginning after December 15, 2015. The Company currently does not have any stock-based awards meeting the criteria noted so the Company doesn’t expect this Update to have a significant impact on its financials However, it will evaluate new grants and ensure the guidance is followed if these types of grants are made. | |
In June 2014, the FASB issued ASU 2014-11, Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures. This Update eliminates different accounting treatments for repurchase agreements so the accounting for repurchase-to-maturity and linked repurchase financings to secured borrowings is consistent with other repurchase agreements. The amendment also requires an entity to disclose information on transfers accounted for as sales in transactions that are economically similar to repurchase agreements and increased transparency about the types of collateral pledged in repurchase agreements and similar transactions accounted for as secured borrowings. This Update is effective for reporting periods beginning after December 15, 2014. Since the Company does not have the repurchase agreements identified in the Update, the Company doesn’t expect this Update to have a significant impact on its financials. | |
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customer (Topic 606). This Update provides new revenue recognition guidance that will be applicable for all industries and develops a common revenue standard for GAAP and IFRS. The main purpose of the new guidance is to remove inconsistencies, provide a more robust framework, improve comparability among industries, improve disclosure requirements and reduce the number of requirements to which an entity must refer. The guidance outlines the following five steps that should be followed in recognizing revenue: | |
1. Identify contract with customer | |
2. Identify the performance obligations in the contract | |
3. Determine the transaction price | |
4. Allocate the transaction price to the performance obligations in the contract | |
5. Recognize revenue when the performance obligation is satisfied. | |
The update also provides disclosure requirements requiring entities to provide sufficient information to enable users to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. This Update is effective for public entities for reporting periods beginning after December 15, 2016 and for all other entities, it is effective for periods beginning after December 15, 2017. Due to the extensive nature of this Update, the Company is evaluating the impact this new guidance will have on its financials. | |
In March 2014, the FASB issued ASU 2014-07, Applying Variable Interest Entities Guidance to Common Control Leasing Arrangements. Under the amendments in this update, a private company could elect, when certain conditions exist, not to apply VIE guidance to a lessor entity under common control. This update is not applicable to public business entities; therefore, the update is not applicable to our Company. | |
In March 2014, the FASB issued ASU 2014-06, Technical Corrections and Improvements Related to Glossary Terms. The amendments in this update represent changes to clarify the Master Glossary of the Codification, consolidate multiple instances of the same term into a single definition, or make minor improvements to the Master Glossary that are not expected to result in substantive changes to the application of existing guidance or create a significant administrative cost to most entities. Additionally, the amendments will make the Master Glossary easier to understand, as well as reduce the number of terms appearing in the Master Glossary. The amendments in this update are effective immediately. The Company reviewed and noted the changes made in this update, which can be categorized into four sections: 1) Deletion of Master Glossary Terms, 2) Addition of Master Glossary Term Links, 3) Duplicate Master Glossary Terms, and 4) Other Technical Corrections Related to Glossary Terms. The Company implemented the update upon issuance, but the changes did not have a significant impact on our financial statements. | |
In January 2014, the FASB issued ASU 2014-05, Service Concession Arrangements (Topic 853) a consensus of the FASB Emerging Issues Task Force. Current U.S. GAAP does not contain specific guidance for the accounting for service concession arrangements. Depending on the terms of a service concession arrangement, an operating entity may or may not conclude that a service concession arrangement meets the lease criteria in Topic 840. Consequently, the amendments in this update improve financial reporting by clarifying that a service concession arrangement within the scope of this update should not be accounted for as a lease in accordance with Topic 840 and, thereby, alleviates the confusion that arises for preparers when determining whether a service concession arrangement is a lease. A service concession arrangement is an arrangement between a public-sector entity grantor and an operating entity under which the operating entity operates the grantor’s infrastructure (for example, airports, roads, and bridges). The operating entity also may provide the construction, upgrading, or maintenance services of the grantor’s infrastructure. The update is effective for annual periods beginning after December 15, 2014, and interim periods within annual periods beginning after December 15, 2015. The Company does not receive any service concession arrangements from any public-sector entity; therefore, the Company does not believe this update will have a significant impact on our financial statements. | |
In July 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740) – Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. This update indicates that an unrecognized tax benefit should be presented in the financial statements as a reduction to a deferred tax asset except in circumstances where a net operating loss carryforward or tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction. This update is effective for years beginning after December 15, 2013 for public companies. The adoption of this pronouncement had no significant effect on the Company’s financial statements. |
1_Basis_of_Presentation_and_Su1
(1) Basis of Presentation and Summary of Significant Accounting Policies: (a) Description of Business (Policies) | 12 Months Ended |
Jun. 30, 2014 | |
Policies | ' |
(a) Description of Business | ' |
(a) Description of Business | |
Dynatronics Corporation (the Company), a Utah corporation, distributes and markets a broad line of medical and aesthetic products, many of which are designed and manufactured by the Company. Among the products offered by the Company are therapeutic, diagnostic, and rehabilitation equipment, medical supplies and soft goods, treatment tables and aesthetic medical devices to an expanding market of physical therapists, podiatrists, orthopedists, chiropractors, plastic surgeons, dermatologists, and other medical professionals. | |
1_Basis_of_Presentation_and_Su2
(1) Basis of Presentation and Summary of Significant Accounting Policies: (b) Principles of Consolidation (Policies) | 12 Months Ended |
Jun. 30, 2014 | |
Policies | ' |
(b) Principles of Consolidation | ' |
(b) Principles of Consolidation | |
The consolidated financial statements include the accounts and operations of Dynatronics Corporation and its wholly owned subsidiary, Dynatronics Distribution Company, LLC. All significant intercompany account balances and transactions have been eliminated in consolidation. | |
1_Basis_of_Presentation_and_Su3
(1) Basis of Presentation and Summary of Significant Accounting Policies: (c) Cash Equivalents (Policies) | 12 Months Ended |
Jun. 30, 2014 | |
Policies | ' |
(c) Cash Equivalents | ' |
(c) Cash Equivalents | |
Cash equivalents include all highly liquid investments with maturities of three months or less at the date of purchase. Also included within cash equivalents are deposits in-transit from banks for payments related to third-party credit card and debit card transactions. | |
1_Basis_of_Presentation_and_Su4
(1) Basis of Presentation and Summary of Significant Accounting Policies: (d) Inventories (Policies) | 12 Months Ended |
Jun. 30, 2014 | |
Policies | ' |
(d) Inventories | ' |
(d) Inventories | |
Finished goods inventories are stated at the lower of standard cost (first-in, first-out method), which approximates actual cost, or market. Raw materials are stated at the lower of cost (first in, first out method) or market. The Company periodically reviews the value of items in inventory and provides write-downs or write-offs of inventory based on its assessment of slow moving or obsolete inventory. Write-downs and write-offs are charged against the reserve. | |
1_Basis_of_Presentation_and_Su5
(1) Basis of Presentation and Summary of Significant Accounting Policies: (e) Trade Accounts Receivable (Policies) | 12 Months Ended |
Jun. 30, 2014 | |
Policies | ' |
(e) Trade Accounts Receivable | ' |
(e) Trade Accounts Receivable | |
Trade accounts receivable are recorded at the invoiced amount and do not bear interest, although a finance charge may be applied to such receivables that are past the due date. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on a combination of statistical analysis, historical collections, customers’ current credit worthiness, the age of the receivable balance both individually and in the aggregate and general economic conditions that may affect the customer’s ability to pay. All account balances are reviewed on an individual basis. Account balances are charged off against the allowance when the potential for recovery is considered remote. Recoveries of receivables previously charged off are recognized when payment is received. | |
1_Basis_of_Presentation_and_Su6
(1) Basis of Presentation and Summary of Significant Accounting Policies: (f) Property and Equipment (Policies) | 12 Months Ended |
Jun. 30, 2014 | |
Policies | ' |
(f) Property and Equipment | ' |
(f) Property and Equipment | |
Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight line method over the estimated useful lives of the assets. The building and its component parts are being depreciated over their estimated useful lives that range from 5 to 31.5 years. Estimated lives for all other depreciable assets range from 3 to 7 years. | |
1_Basis_of_Presentation_and_Su7
(1) Basis of Presentation and Summary of Significant Accounting Policies: (g) Long-Lived Assets (Policies) | 12 Months Ended |
Jun. 30, 2014 | |
Policies | ' |
(g) Long-Lived Assets | ' |
(g) Long-Lived Assets | |
Long–lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the difference between the carrying amount of the asset and the fair value of the asset. Assets to be disposed of are separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. | |
1_Basis_of_Presentation_and_Su8
(1) Basis of Presentation and Summary of Significant Accounting Policies: (h) Intangible Assets (Policies) | 12 Months Ended |
Jun. 30, 2014 | |
Policies | ' |
(h) Intangible Assets | ' |
(h) Intangible Assets | |
Costs associated with the acquisition of trademarks, trade names, license rights and non-compete agreements are capitalized and amortized using the straight-line method over periods ranging from 3 months to 20 years. | |
1_Basis_of_Presentation_and_Su9
(1) Basis of Presentation and Summary of Significant Accounting Policies: (i) Revenue Recognition (Policies) | 12 Months Ended |
Jun. 30, 2014 | |
Policies | ' |
(i) Revenue Recognition | ' |
(i) Revenue Recognition | |
The Company recognizes revenue when products are shipped FOB shipping point under an agreement with a customer, risk of loss and title have passed to the customer, and collection of any resulting receivable is reasonably assured. Amounts billed for shipping and handling of products are recorded as sales revenue. Costs for shipping and handling of products to customers are recorded as cost of sales. | |
Recovered_Sheet1
(1) Basis of Presentation and Summary of Significant Accounting Policies: (j) Research and Development Costs (Policies) | 12 Months Ended |
Jun. 30, 2014 | |
Policies | ' |
(j) Research and Development Costs | ' |
(j) Research and Development Costs | |
Direct research and development costs are expensed as incurred. | |
Recovered_Sheet2
(1) Basis of Presentation and Summary of Significant Accounting Policies: (k) Product Warranty Costs (Policies) | 12 Months Ended |
Jun. 30, 2014 | |
Policies | ' |
(k) Product Warranty Costs | ' |
(k) Product Warranty Costs | |
Costs estimated to be incurred in connection with the Company’s product warranty programs are charged to expense as products are sold based on historical warranty rates. | |
Recovered_Sheet3
(1) Basis of Presentation and Summary of Significant Accounting Policies: (l) Net Income (loss) Per Common Share (Policies) | 12 Months Ended | |||
Jun. 30, 2014 | ||||
Policies | ' | |||
(l) Net Income (loss) Per Common Share | ' | |||
(l) Net Income (Loss) per Common Share | ||||
Net income (loss) per common share is computed based on the weighted-average number of common shares outstanding and, when appropriate, dilutive common stock equivalents outstanding during the year. Stock options are considered to be common stock equivalents. The computation of diluted net income (loss) per common share does not assume exercise or conversion of securities that would have an anti-dilutive effect. | ||||
Basic net income (loss) per common share is the amount of net income (loss) for the year available to each weighted-average share of common stock outstanding during the year. Diluted net income (loss) per common share is the amount of net income (loss) for the year available to each weighted-average share of common stock outstanding during the year and to each common stock equivalent outstanding during the year, unless inclusion of common stock equivalents would have an anti-dilutive effect. | ||||
On December 19, 2012, the Company completed a 1-for-5 reverse split of its common stock. All common stock share and per share information in the accompanying consolidated financial statements and notes thereto have been adjusted to reflect retrospective application of the reverse stock split, except for par value per share and the number of authorized shares, which were not affected by the reverse stock split. | ||||
The reconciliation between the basic and diluted weighted-average number of common shares for the years ended June 30, 2014 and 2013 is summarized as follows: | ||||
2014 | 2013 | |||
Basic weighted-average number of common shares outstanding during the year | 2,519,490 | 2,526,533 | ||
Weighted-average number of dilutive common stock options outstanding during the year | - | - | ||
Diluted weighted-average number of common and common equivalent shares outstanding during the year | 2,519,490 | 2,526,533 | ||
Outstanding options not included in the computation of diluted net loss per common share totaled 145,987 as of June 30, 2014 and 161,454 as of June 30, 2013. These common stock equivalents were not included in the computation because to do so would have been antidilutive. |
Recovered_Sheet4
(1) Basis of Presentation and Summary of Significant Accounting Policies: (m) Income Taxes (Policies) | 12 Months Ended |
Jun. 30, 2014 | |
Policies | ' |
(m) Income Taxes | ' |
(m) Income Taxes | |
The Company recognizes an asset or liability for the deferred income tax consequences of all temporary differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements that will result in taxable or deductible amounts in future years when the reported amounts of the assets and liabilities are recovered or settled. Accruals for uncertain tax positions are provided for in accordance with the requirements of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 740-10, Income Taxes. Under ASC 740-10, the Company may recognize the tax benefits from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740-10 also provides guidance on derecognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and income tax disclosures. Judgment is required in assessing the future tax consequences of events that have been recognized in the financial statements or tax returns. Variations in the actual outcome of these future tax consequences could materially impact the Company’s financial position, results of operations and cash flows. | |
The Company evaluates the need for a valuation allowance on deferred taxes on a quarterly and annual base. This evaluation considers the level of historical taxable income and projections for future taxable income over the periods which the deferred income tax assets are deductible. If management determines that it is more likely than not that the Company will not realize the benefits of these deductible differences, a valuation allowance is recorded. |
Recovered_Sheet5
(1) Basis of Presentation and Summary of Significant Accounting Policies: (n) Stock-based Compensation (Policies) | 12 Months Ended |
Jun. 30, 2014 | |
Policies | ' |
(n) Stock-based Compensation | ' |
(n) Stock-Based Compensation | |
The Company accounts for stock-based compensation in accordance with FASB ASC 718, Stock Compensation. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the applicable vesting period of the stock award (generally five years) using the straight-line method. |
Recovered_Sheet6
(1) Basis of Presentation and Summary of Significant Accounting Policies: (o) Concentration of Risk (Policies) | 12 Months Ended |
Jun. 30, 2014 | |
Policies | ' |
(o) Concentration of Risk | ' |
(o) Concentration of Risk | |
In the normal course of business, the Company provides unsecured credit to its customers. Most of the Company’s customers are involved in the medical industry. The Company performs ongoing credit evaluations of its customers and maintains allowances for probable losses which, when realized, have been within the range of management’s expectations. The Company maintains its cash in bank deposit accounts which at times may exceed federally insured limits. The Company believes it is not exposed to any significant credit risks with respect to cash or cash equivalents. | |
As of June 30, 2014, the Company has approximately $82,800 in cash and cash equivalents in excess of the FDIC limits. The Company has not experienced any losses in such accounts. |
Recovered_Sheet7
(1) Basis of Presentation and Summary of Significant Accounting Policies: (p) Operating Segments (Policies) | 12 Months Ended |
Jun. 30, 2014 | |
Policies | ' |
(p) Operating Segments | ' |
(p) Operating Segments | |
The Company operates in one line of business: the development, marketing, and distribution of a broad line of medical products for the physical therapy and aesthetics markets. As such, the Company has only one reportable operating segment. | |
The Company groups its sales into physical medicine products and aesthetic products. Physical medicine products made up 91% of net sales for both the years ended June 30, 2014 and 2013. Aesthetics products made up 1% of net sales for both the years ended June 30, 2014 and 2013. Chargeable repairs, billable freight and other miscellaneous revenues account for the remaining 8% of net sales for both the years ended June 30, 2014 and 2013. |
Recovered_Sheet8
(1) Basis of Presentation and Summary of Significant Accounting Policies: (q) Use of Estimates (Policies) | 12 Months Ended |
Jun. 30, 2014 | |
Policies | ' |
(q) Use of Estimates | ' |
(q) Use of Estimates | |
Management of the Company has made a number of estimates and assumptions relating to the reporting of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities in accordance with US Generally Accepted Accounting Principles (US GAAP). Significant items subject to such estimates and assumptions include the carrying amount of property and equipment; valuation allowances for receivables, income taxes, and inventories; accrued product warranty costs; and estimated recoverability of intangible assets. Actual results could differ from those estimates. | |
Recovered_Sheet9
(1) Basis of Presentation and Summary of Significant Accounting Policies: (r) Advertising Costs (Policies) | 12 Months Ended |
Jun. 30, 2014 | |
Policies | ' |
(r) Advertising Costs | ' |
(r) Advertising Costs | |
Advertising costs are expensed as incurred. Advertising expense for the years ended June 30, 2014 and 2013 was approximately $111,900 and $127,400, respectively. |
Recovered_Sheet10
(1) Basis of Presentation and Summary of Significant Accounting Policies: (l) Net Income (loss) Per Common Share: Reconciliation between the basic and diluted weighted-average number of common shares (Tables) | 12 Months Ended | |||
Jun. 30, 2014 | ||||
Tables/Schedules | ' | |||
Reconciliation between the basic and diluted weighted-average number of common shares | ' | |||
2014 | 2013 | |||
Basic weighted-average number of common shares outstanding during the year | 2,519,490 | 2,526,533 | ||
Weighted-average number of dilutive common stock options outstanding during the year | - | - | ||
Diluted weighted-average number of common and common equivalent shares outstanding during the year | 2,519,490 | 2,526,533 |
2_Inventories_Schedule_of_Inve
(2) Inventories: Schedule of Inventories (Tables) | 12 Months Ended | |||||||||||
Jun. 30, 2014 | ||||||||||||
Tables/Schedules | ' | |||||||||||
Schedule of Inventories | ' | |||||||||||
2014 | 2013 | |||||||||||
Raw materials | $ | 2,783,306 | 2,732,363 | |||||||||
Finished goods | 3,709,897 | 4,002,709 | ||||||||||
Inventory reserve | -335,355 | -327,519 | ||||||||||
$ | 6,157,848 | 6,407,553 | ||||||||||
3_Property_and_Equipment_Prope
(3) Property and Equipment: Property and Equipment (Tables) | 12 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
Tables/Schedules | ' | ||||||||||
Property and Equipment | ' | ||||||||||
2014 | 2013 | ||||||||||
Land | $ | 354,743 | 354,743 | ||||||||
Buildings | 3,758,524 | 3,746,472 | |||||||||
Machinery and equipment | 1,598,770 | 1,550,633 | |||||||||
Office equipment | 266,563 | 263,861 | |||||||||
Computer equipment | 1,980,746 | 1,963,414 | |||||||||
Vehicles | 236,987 | 266,946 | |||||||||
8,196,333 | 8,146,069 | ||||||||||
Less accumulated depreciation and amortization | -5,215,656 | -4,821,122 | |||||||||
$ | 2,980,677 | 3,324,947 |
4_Intangible_Assets_Identifiab
(4) Intangible Assets: Identifiable intangible assets and their useful lives (Tables) | 12 Months Ended | |||||||||||
Jun. 30, 2014 | ||||||||||||
Tables/Schedules | ' | |||||||||||
Identifiable intangible assets and their useful lives | ' | |||||||||||
2014 | 2013 | |||||||||||
Trade name –15 years | $ | 339,400 | 339,400 | |||||||||
Domain name –15 years | 5,400 | 5,400 | ||||||||||
Non-compete covenant –4 years | 149,400 | 149,400 | ||||||||||
Customer relationships –7 years | 120,000 | 120,000 | ||||||||||
Trademark licensing agreement –20 years | 45,000 | 45,000 | ||||||||||
Backlog of orders –3 months | 2,700 | 2,700 | ||||||||||
Customer database –7 years | 38,100 | 38,100 | ||||||||||
License agreement –10 years | 73,240 | 73,240 | ||||||||||
Total identifiable intangibles | 773,240 | 773,240 | ||||||||||
Less accumulated amortization | -537,800 | -493,162 | ||||||||||
Net carrying amount | $ | 235,440 | 280,078 | |||||||||
5_Warranty_Reserve_Schedule_of
(5) Warranty Reserve: Schedule of Product Warranty Liability (Tables) | 12 Months Ended | ||||||||||||||
Jun. 30, 2014 | |||||||||||||||
Tables/Schedules | ' | ||||||||||||||
Schedule of Product Warranty Liability | ' | ||||||||||||||
2014 | 2013 | ||||||||||||||
Beginning warranty reserve balance | $ | 178,148 | 181,000 | ||||||||||||
Warranty repairs | -141,471 | -160,267 | |||||||||||||
Warranties issued | 153,648 | 127,863 | |||||||||||||
Changes in estimated warranty costs | -32,572 | 29,552 | |||||||||||||
Ending warranty reserve | $ | 157,753 | 178,148 | ||||||||||||
7_LongTerm_Debt_Schedule_of_Lo
(7) Long-Term Debt: Schedule of Long -term Debt (Tables) | 12 Months Ended | |||||||||
Jun. 30, 2014 | ||||||||||
Tables/Schedules | ' | |||||||||
Schedule of Long -term Debt | ' | |||||||||
2014 | 2013 | |||||||||
6.44% promissory note secured by trust deed on real property, maturing January 2021, payable in monthly installments of $13,278 | $ | 853,090 | 953,929 | |||||||
5.235% promissory note secured by building, maturing December 2017, payable in monthly installments of $16,985 | 644,962 | 808,326 | ||||||||
Promissory note secured by a vehicle, payable in monthly installments of $639 through February 2019 | 33,913 | 43,449 | ||||||||
8.49% promissory note secured by equipment, payable in monthly installments of $2,097 through December 2014 | 12,279 | 35,332 | ||||||||
5.887% promissory note secured by a vehicle, payable in monthly installments of $390 through March 2017 | 12,140 | 15,970 | ||||||||
13.001% promissory note secured by equipment, payable in monthly installments of $70 through October 2015 | 1,023 | 1,683 | ||||||||
14.305% promissory note secured by equipment, payable in monthly installments of $2,338 through May 2014 | - | 23,965 | ||||||||
5.75% promissory note secured by a vehicle, payable in monthly installments of $435 through October 2013 | - | 1,695 | ||||||||
1,557,407 | 1,884,349 | |||||||||
Less current portion | -302,274 | -322,573 | ||||||||
$ | 1,255,133 | 1,561,776 |
9_Income_Taxes_Schedule_of_Com
(9) Income Taxes: Schedule of Components of Income Tax Expense (Benefit) (Tables) | 12 Months Ended | ||||||||||||
Jun. 30, 2014 | |||||||||||||
Tables/Schedules | ' | ||||||||||||
Schedule of Components of Income Tax Expense (Benefit) | ' | ||||||||||||
Current | Deferred | Total | |||||||||||
2014:00:00 | |||||||||||||
U.S. federal | $ | - | 107,439 | 107,439 | |||||||||
State and local | - | 18,584 | 18,584 | ||||||||||
$ | - | 126,023 | 126,023 | ||||||||||
2013:00:00 | |||||||||||||
U.S. federal | $ | - | 83,198 | 83,198 | |||||||||
State and local | - | 3,556 | 3,556 | ||||||||||
$ | - | 86,754 | 86,754 |
9_Income_Taxes_Schedule_of_Eff
(9) Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Tables) | 12 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
Tables/Schedules | ' | ||||||||||
Schedule of Effective Income Tax Rate Reconciliation | ' | ||||||||||
2014 | 2013 | ||||||||||
Expected tax benefit (provision) | $ | 135,036 | 44,583 | ||||||||
State taxes, net of federal tax benefit | 12,265 | 2,359 | |||||||||
R&D tax credit | - | 55,000 | |||||||||
Incentive stock options | -4,852 | -10,213 | |||||||||
Other, net | -16,426 | -4,975 | |||||||||
$ | 126,023 | 86,754 |
9_Income_Taxes_Schedule_of_Def
(9) Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Tables) | 12 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
Tables/Schedules | ' | ||||||||||
Schedule of Deferred Tax Assets and Liabilities | ' | ||||||||||
2014 | 2013 | ||||||||||
Net deferred income tax assets – current: | |||||||||||
Inventory capitalization for income tax purposes | $ | 68,748 | 72,058 | ||||||||
Inventory reserve | 130,788 | 127,732 | |||||||||
Warranty reserve | 61,524 | 69,477 | |||||||||
Accrued product liability | 20,970 | 23,228 | |||||||||
Allowance for doubtful accounts | 126,889 | 96,606 | |||||||||
Total deferred income tax assets – current | $ | 408,919 | 389,101 | ||||||||
2014 | |||||||||||
2013 | |||||||||||
Net deferred income tax assets (liabilities) – non-current: | |||||||||||
Property and equipment, principally due to differences in depreciation | $ | -255,835 | -262,726 | ||||||||
Research and development credit carryover | 370,757 | 383,226 | |||||||||
Other intangibles | -91,822 | -109,231 | |||||||||
Operating loss carry forwards | 280,544 | 186,172 | |||||||||
Total deferred income tax assets (liabilities) – non-current | $ | 303,644 | 197,441 |
11_Common_Stock_and_Common_Sto1
(11) Common Stock and Common Stock Equivalents: Fair Value Assumptions (Tables) | 12 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
Tables/Schedules | ' | ||||||||||
Fair Value Assumptions | ' | ||||||||||
2014 | 2013 | ||||||||||
Expected dividend yield | 0% | 0% | |||||||||
Expected stock price volatility | 69% | 69% | |||||||||
Risk-free interest rate | 2.53% | 1.74% | |||||||||
Expected life of options | 10 years | 10 years |
11_Common_Stock_and_Common_Sto2
(11) Common Stock and Common Stock Equivalents: Stock Option Activity (Tables) | 12 Months Ended | ||||||||||||||
Jun. 30, 2014 | |||||||||||||||
Tables/Schedules | ' | ||||||||||||||
Stock Option Activity | ' | ||||||||||||||
2014 | 2013 | ||||||||||||||
Weighted | |||||||||||||||
Weighted | average | Weighted | |||||||||||||
Number | average | remaining | Number | average | |||||||||||
of | exercise | contractual | of | exercise | |||||||||||
shares | price | term | shares | price | |||||||||||
Options outstanding at | |||||||||||||||
beginning of the year | 163,868 | $ | 6.51 | 4.12 years | 173,089 | $ | 6.48 | ||||||||
Options granted | 3,598 | 2.42 | 1,352 | 2.7 | |||||||||||
Options exercised | - | - | -208 | 1.75 | |||||||||||
Options canceled or expired | -11,862 | 6.01 | -10,365 | 5.69 | |||||||||||
Options outstanding at end | |||||||||||||||
of the year | 155,604 | 6.45 | 3.56 years | 163,868 | 6.51 | ||||||||||
Options exercisable at end | |||||||||||||||
of the year | 137,804 | 7.09 | 138,920 | 7.2 | |||||||||||
Range of exercise prices at | |||||||||||||||
end of the year | $ | 1.75 – 8.60 | $ | 1.75 – 8.60 |
Recovered_Sheet11
(1) Basis of Presentation and Summary of Significant Accounting Policies: (a) Description of Business (Details) | 12 Months Ended |
Jun. 30, 2014 | |
Details | ' |
Entity Incorporation, State Country Name | 'Utah |
Recovered_Sheet12
(1) Basis of Presentation and Summary of Significant Accounting Policies: (f) Property and Equipment (Details) | 12 Months Ended |
Jun. 30, 2014 | |
Minimum | Building | ' |
Property, Plant and Equipment, Useful Life | '5 years |
Minimum | Other Capitalized Property Plant and Equipment | ' |
Property, Plant and Equipment, Useful Life | '3 years |
Maximum | Building | ' |
Property, Plant and Equipment, Useful Life | '31 years 6 months |
Maximum | Other Capitalized Property Plant and Equipment | ' |
Property, Plant and Equipment, Useful Life | '7 years |
Recovered_Sheet13
(1) Basis of Presentation and Summary of Significant Accounting Policies: (l) Net Income (loss) Per Common Share (Details) | 1 Months Ended | 12 Months Ended |
Dec. 31, 2012 | Jun. 30, 2014 | |
Details | ' | ' |
Stockholders' Equity, Reverse Stock Split | 'On December 19, 2012, the Company completed a 1-for-5 reverse split of its common stock. | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | ' | 145,987 |
Recovered_Sheet14
(1) Basis of Presentation and Summary of Significant Accounting Policies: (l) Net Income (loss) Per Common Share: Reconciliation between the basic and diluted weighted-average number of common shares (Details) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Details | ' | ' |
Basic weighted-average number of common shares outstanding during the year | 2,519,490 | 2,526,533 |
Diluted weighted-average number of common and common equivalent shares outstanding during the year | 2,519,490 | 2,526,533 |
Recovered_Sheet15
(1) Basis of Presentation and Summary of Significant Accounting Policies: (o) Concentration of Risk (Details) (USD $) | Jun. 30, 2014 |
Details | ' |
Cash and cash equivalents in excess of FDIC limits | $82,800 |
Recovered_Sheet16
(1) Basis of Presentation and Summary of Significant Accounting Policies: (p) Operating Segments (Details) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Details | ' | ' |
Physical Medicine Products Percentage of Total Sales | 91.00% | 91.00% |
Aesthetics Products Percentage of Total Sales | 1.00% | 1.00% |
Chargeable Repairs, Billing Freight and Other Miscellaneous Revenues as a Percentage of Total Sales | 8.00% | 8.00% |
Recovered_Sheet17
(1) Basis of Presentation and Summary of Significant Accounting Policies: (r) Advertising Costs (Details) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Details | ' | ' |
Advertising Expense | $111,900 | $127,400 |
2_Inventories_Schedule_of_Inve1
(2) Inventories: Schedule of Inventories (Details) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Details | ' | ' |
Raw Materials | $2,783,306 | $2,732,363 |
Finished Goods | 3,709,897 | 4,002,709 |
Inventory Reserves | -335,355 | -327,519 |
Inventories, net | $6,157,848 | $6,407,553 |
3_Property_and_Equipment_Prope1
(3) Property and Equipment: Property and Equipment (Details) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Gross Property and Equipment | $8,196,333 | $8,146,069 |
Accumulated depreciation and amortization | -5,215,656 | -4,821,122 |
Property and equipment, net | 2,980,677 | 3,324,947 |
Land | ' | ' |
Gross Property and Equipment | 354,743 | 354,743 |
Building | ' | ' |
Gross Property and Equipment | 3,758,524 | 3,746,472 |
Machinery and Equipment | ' | ' |
Gross Property and Equipment | 1,598,770 | 1,550,633 |
Office Equipment | ' | ' |
Gross Property and Equipment | 266,563 | 263,861 |
Computer Equipment | ' | ' |
Gross Property and Equipment | 1,980,746 | 1,963,414 |
Vehicles | ' | ' |
Gross Property and Equipment | $236,987 | $266,946 |
3_Property_and_Equipment_Detai
(3) Property and Equipment (Details) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Details | ' | ' |
Depreciation and amortization of property and equipment | $433,014 | $435,366 |
4_Intangible_Assets_Identifiab1
(4) Intangible Assets: Identifiable intangible assets and their useful lives (Details) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Total identifiable intangibles | $773,240 | $773,240 |
Accumulated amortization | -537,800 | -493,162 |
Intangible assets, net | 235,440 | 280,078 |
Trade Names | ' | ' |
Total identifiable intangibles | 339,400 | 339,400 |
Internet Domain Names | ' | ' |
Total identifiable intangibles | 5,400 | 5,400 |
Noncompete Agreements | ' | ' |
Total identifiable intangibles | 149,400 | 149,400 |
Customer Relationships | ' | ' |
Total identifiable intangibles | 120,000 | 120,000 |
Trademarks | ' | ' |
Total identifiable intangibles | 45,000 | 45,000 |
Order or Production Backlog | ' | ' |
Total identifiable intangibles | 2,700 | 2,700 |
Customer Lists | ' | ' |
Total identifiable intangibles | 38,100 | 38,100 |
Licensing Agreements | ' | ' |
Total identifiable intangibles | $73,240 | $73,240 |
4_Intangible_Assets_Details
(4) Intangible Assets (Details) | 12 Months Ended |
Jun. 30, 2014 | |
Trade Names | ' |
Finite-Lived Intangible Asset, Useful Life | '15 years |
Internet Domain Names | ' |
Finite-Lived Intangible Asset, Useful Life | '15 years |
Noncompete Agreements | ' |
Finite-Lived Intangible Asset, Useful Life | '4 years |
Customer Relationships | ' |
Finite-Lived Intangible Asset, Useful Life | '7 years |
Trademarks | ' |
Finite-Lived Intangible Asset, Useful Life | '20 years |
Order or Production Backlog | ' |
Finite-Lived Intangible Asset, Useful Life | '3 years |
Customer Lists | ' |
Finite-Lived Intangible Asset, Useful Life | '7 years |
Licensing Agreements | ' |
Finite-Lived Intangible Asset, Useful Life | '10 years |
4_Intangible_Assets_Amortizati
(4) Intangible Assets: Amortization Expense (Details) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Details | ' | ' |
Amortization of Intangible Assets | $44,637 | $44,637 |
Estimated amortization expense 2015 | 30,680 | ' |
Estimated amortization expense 2016 | 30,680 | ' |
Estimated amortization expense 2017 | 30,680 | ' |
Estimated amortization expense 2018 | 26,430 | ' |
Estimated amortization expense 2019 | 26,430 | ' |
Estimated amortization expense thereafter | $90,540 | ' |
5_Warranty_Reserve_Schedule_of1
(5) Warranty Reserve: Schedule of Product Warranty Liability (Details) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Details | ' | ' |
Beginning warranty reserve balance | $178,148 | $181,000 |
Warranty repairs | -141,471 | -160,267 |
Warranties issued | 153,648 | 127,863 |
Changes in estimated warranty costs | -32,572 | 29,552 |
Warranty Reserve Balance | $157,753 | $178,148 |
6_Line_of_Credit_Details
(6) Line of Credit (Details) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Details | ' | ' |
Revolving Line of Credit | $4,500,000 | ' |
Borrowing Limitation as a Percent of Eligible Inventory | 45.00% | ' |
Borrowing Limitation as a Percent of Eligible Accounts Receivable | 80.00% | ' |
Current Borrowing Limit on Line of Credit | 4,845,000 | ' |
Long-term Line of Credit | 3,521,209 | 3,496,390 |
Available Borrowings | $979,000 | ' |
Basis of Interest Rate on Line of Credit | '90-day LIBOR rate plus 3% | ' |
Interest Rate | 3.70% | 3.80% |
7_LongTerm_Debt_Schedule_of_Lo1
(7) Long-Term Debt: Schedule of Long -term Debt (Details) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Total long-term debt | $1,557,407 | $1,884,349 |
Less current portion | -302,274 | -322,573 |
Long-term debt, net of current portion | 1,255,133 | 1,561,776 |
Note 1 | ' | ' |
Total long-term debt | 853,090 | 953,929 |
Note 2 | ' | ' |
Total long-term debt | 644,962 | 808,326 |
Note 3 | ' | ' |
Total long-term debt | 33,913 | 43,449 |
Note 4 | ' | ' |
Total long-term debt | 12,279 | 35,332 |
Note 5 | ' | ' |
Total long-term debt | 12,140 | 15,970 |
Note 6 | ' | ' |
Total long-term debt | 1,023 | 1,683 |
Note 7 | ' | ' |
Total long-term debt | ' | 23,965 |
Note 8 | ' | ' |
Total long-term debt | ' | $1,695 |
7_LongTerm_Debt_Details
(7) Long-Term Debt (Details) (USD $) | Jun. 30, 2014 |
Details | ' |
Aggregate Maturities 2015 | $302,274 |
Aggregate Maturities 2016 | 307,773 |
Aggregate Maturities 2017 | 325,687 |
Aggregate Maturities 2018 | 240,098 |
Aggregate Maturities 2019 | 144,707 |
Aggregate Maturities Thereafter | $236,868 |
8_Leases_Details
(8) Leases (Details) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Details | ' | ' |
Lease Expense | $16,106 | $15,076 |
Future Minimum Lease Payments 2015 | 16,106 | ' |
Future Minimum Lease Payments 2016 | 7,403 | ' |
Operating Leases, Rent Expense, Net | 203,361 | 191,659 |
Future Minimum Rental Payments 2015 | 94,752 | ' |
Future Minimum Rental Payments 2016 | 84,777 | ' |
Future Minimum Rental Payments 2017 | 54,852 | ' |
Future Minimum Rental Payments 2018 | 5,088 | ' |
Future Minimum Rental Payments 2019 | 2,544 | ' |
Related Party Transaction, Expenses from Transactions with Related Party | $52,200 | $93,300 |
9_Income_Taxes_Schedule_of_Com1
(9) Income Taxes: Schedule of Components of Income Tax Expense (Benefit) (Details) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Details | ' | ' |
Deferred Federal Income Tax Expense (Benefit) | $107,439 | $83,198 |
Federal Income Tax Expense (Benefit), Continuing Operations | 107,439 | 83,198 |
Deferred State and Local Income Tax Expense (Benefit) | 18,584 | 3,556 |
State and Local Income Tax Expense (Benefit), Continuing Operations | 18,584 | 3,556 |
Change in deferred income tax assets | 126,023 | 86,754 |
Income tax benefit | $126,023 | $86,754 |
9_Income_Taxes_Schedule_of_Eff1
(9) Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Details | ' | ' |
Effective Income Tax Rate Reconciliation at Federal Statutory Income Tax Rate, Amount | $135,036 | $44,583 |
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Amount | 12,265 | 2,359 |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Research and Development, Amount | ' | 55,000 |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Share-based Compensation Cost, Amount | -4,852 | -10,213 |
Effective Income Tax Rate Reconciliation, Other Adjustments, Amount | -16,426 | -4,975 |
Income tax benefit | $126,023 | $86,754 |
9_Income_Taxes_Schedule_of_Def1
(9) Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Details) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Details | ' | ' |
Deferred Tax Liabilities, Inventory | $68,748 | $72,058 |
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Reserves | 130,788 | 127,732 |
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Warranty Reserves | 61,524 | 69,477 |
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Accrued Liabilities | 20,970 | 23,228 |
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Allowance for Doubtful Accounts | 126,889 | 96,606 |
Current portion of deferred income tax assets | 408,919 | 389,101 |
Deferred Tax Liabilities, Property, Plant and Equipment | -255,835 | -262,726 |
Deferred Tax Liabilities, Deferred Expense, Capitalized Research and Development Costs | 370,757 | 383,226 |
Deferred Tax Assets, Goodwill and Intangible Assets | -91,822 | -109,231 |
Deferred Tax Assets, Operating Loss Carryforwards | 280,544 | 186,172 |
Deferred income tax assets, net of current portion | $303,644 | $197,441 |
9_Income_Taxes_Details
(9) Income Taxes (Details) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Details | ' | ' |
Operating Loss Carryforwards | $745,605 | $974,484 |
10_Major_Customers_and_Sales_B1
(10) Major Customers and Sales By Geographic Location (Details) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Details | ' | ' |
Sales outside North America | $749,341 | $647,047 |
Percentage of Sales outside North America | 2.70% | 2.20% |
11_Common_Stock_and_Common_Sto3
(11) Common Stock and Common Stock Equivalents (Details) (USD $) | 12 Months Ended | |||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2010 | Feb. 01, 2011 | Nov. 27, 2007 | Jul. 15, 2003 | |
Details | ' | ' | ' | ' | ' | ' |
Value of Shares Approved for Repurchase | ' | ' | ' | ' | ' | $500,000 |
Additional Value of Shares Approved for Repurchase | ' | ' | ' | ' | 250,000 | ' |
Value of Shares Approved for Repurchase Subsequent to Initial Approvals | ' | ' | ' | 1,000,000 | ' | ' |
Value of Shares Approved for Repurchase During 2010 | ' | ' | 100,000 | ' | ' | ' |
Shares Acquired and Retired | ' | 32,786 | ' | ' | ' | ' |
Value of Shares Acquired and Retired | ' | 99,997 | ' | ' | ' | ' |
Weighted average fair value of options granted | $1.89 | $2.03 | ' | ' | ' | ' |
Stock-based compensation expense | 70,871 | 86,639 | ' | ' | ' | ' |
Unrecognized stock-based compensation cost | 387,855 | ' | ' | ' | ' | ' |
Aggregate intrinsic value of options exercised | 386 | ' | ' | ' | ' | ' |
Aggregate intrinsic value of options outstanding | $8,732 | $734 | ' | ' | ' | ' |
11_Common_Stock_and_Common_Sto4
(11) Common Stock and Common Stock Equivalents: Restricted Common Stock (Details) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Details | ' | ' |
Restricted common stock granted to directors and officers | $1,485 | $13,689 |
11_Common_Stock_and_Common_Sto5
(11) Common Stock and Common Stock Equivalents: Equity Incentive Plan (Details) | 12 Months Ended | |
Jun. 30, 2014 | Nov. 27, 2007 | |
Details | ' | ' |
Increase in shares available for grant under the 2005 equity incentive plan | ' | 1,000,000 |
Shares authorized and reserved for issuance | 117,451 | ' |
Percentage of market price at which options are granted - minimum | 100.00% | ' |
Range of exercise dates - minimum in months | 6 | ' |
Range of exercise dates - maximum in years | 10 | ' |
11_Common_Stock_and_Common_Sto6
(11) Common Stock and Common Stock Equivalents: Fair Value Assumptions (Details) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Details | ' | ' |
Expected dividend yield | 0.00% | 0.00% |
Expected stock price volatility | 69.00% | 69.00% |
Risk-free interest rate | 2.53% | 1.74% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | '10 years | '10 years |
11_Common_Stock_and_Common_Sto7
(11) Common Stock and Common Stock Equivalents: Stock Option Activity (Details) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Details | ' | ' |
Options outstanding at beginning of the year | 163,868 | 173,089 |
Weighted average exercise price - outstanding at beginning of the year | $6.51 | $6.48 |
Weighted average remaining contractual term - options outstanding at beginning of year | 4.12 | ' |
Options granted | 3,598 | 1,352 |
Weighted average exercise price - options granted | $2.42 | $2.70 |
Issuance of common stock upon exercise of employee stock options - shares | ' | -208 |
Weighted average exercise price - options exercised | ' | $1.75 |
Options canceled or expired | -11,862 | -10,365 |
Weighted average exercise price - canceled or expired | $6.01 | $5.69 |
Options outstanding at end of the year | 155,604 | 163,868 |
Weighted average exercise price - outstanding at beginning of the year | $6.45 | $6.51 |
Weighted average remaining contractual term - options outstanding at end of year | 3.56 | ' |
Options exerciseable at end of the year | 137,804 | 138,920 |
Weighted average exercise price - exercisable options | $7.09 | $7.20 |
Range of exercise prices at end of the year - lower | $1.75 | $1.75 |
Range of exercise prices at end of the year - upper | $8.60 | $8.60 |
12_Employee_Benefit_Plan_Detai
(12) Employee Benefit Plan (Details) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Details | ' | ' |
401(k) Age of Participation | 20 | ' |
Matching Contribution Percentage | 25.00% | ' |
Employee Contribution upon which Match is Based | $2,000 | ' |
Company Contributions | $39,056 | $35,167 |
13_Subsequent_Events_Details
(13) Subsequent Events (Details) (USD $) | 1 Months Ended |
Aug. 31, 2014 | |
Details | ' |
Proceeds from Sale of Buildings | $3,800,000 |
Line of Credit Facility, Maximum Borrowing Capacity | $2,500,000 |