Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Sep. 30, 2018 | Nov. 06, 2018 | |
Document and Entity Information: | ||
Entity Registrant Name | DYNATRONICS CORP | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Trading Symbol | dynt | |
Amendment Flag | false | |
Entity Central Index Key | 720,875 | |
Current Fiscal Year End Date | --06-30 | |
Entity Common Stock, Shares Outstanding | 8,188,815 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Current Reporting Status | Yes | |
Document Fiscal Year Focus | 2,019 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2018 | Jun. 30, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 436,697 | $ 1,696,116 |
Trade accounts receivable, less allowance for doubtful accounts of $357,817 as of September 30, 2018 and $370,300 as of June 30, 2018 | 8,529,395 | 7,810,846 |
Other receivables | 60,457 | 52,819 |
Inventories, net | 10,524,115 | 10,987,855 |
Prepaid expenses | 866,027 | 778,654 |
Income tax receivable | 97,285 | 95,501 |
Total current assets | 20,513,976 | 21,421,791 |
Property and equipment, net | 5,917,095 | 5,850,899 |
Intangible assets, net | 6,950,872 | 7,131,758 |
Goodwill | 7,116,614 | 7,116,614 |
Other assets | 533,141 | 532,872 |
Total assets | 41,031,698 | 42,053,934 |
Current liabilities: | ||
Accounts payable | 4,043,843 | 3,412,960 |
Accrued payroll and benefits expense | 1,529,276 | 1,929,465 |
Accrued expenses | 1,111,742 | 830,243 |
Warranty reserve | 205,850 | 205,850 |
Line of credit | 5,029,712 | 6,286,037 |
Current portion of long-term debt | 166,587 | 164,003 |
Current portion of capital lease | 225,801 | 226,727 |
Current portion of deferred gain | 150,448 | 150,448 |
Current portion of acquisition holdback and earn-out liability | 1,879,512 | 1,379,512 |
Total current liabilities | 14,342,771 | 14,585,245 |
Long-term debt, net of current portion | 260,719 | 303,348 |
Capital lease obligations, net of current portion | 2,915,132 | 2,972,540 |
Deferred gain, net of current portion | 1,491,941 | 1,529,553 |
Acquisition holdback and earn-out liability, net of current portion | 0 | 875,000 |
Other liabilities | 285,094 | 411,466 |
Total liabilities | 19,295,657 | 20,677,152 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, no par value: Authorized 50,000,000 shares; 4,899,000 shares and 4,899,000 shares issued and outstanding as of September 30, 2018 and June 30, 2018, respectively | 11,641,816 | 11,641,816 |
Common stock, no par value: Authorized 100,000,000 shares; 8,161,029 shares and 8,089,398 shares issued and outstanding as of September 30, 2018 and June 30, 2018, respectively | 20,455,402 | 20,225,107 |
Accumulated deficit | (10,361,177) | (10,490,141) |
Total stockholders' equity | 21,736,041 | 21,376,782 |
Total liabilities and stockholders' equity | $ 41,031,698 | $ 42,053,934 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2018 | Jun. 30, 2018 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 357,817 | $ 370,300 |
Preferred stock shares authorized | 50,000,000 | 5,000,000 |
Preferred stock shares issued | 4,899,000 | 4,899,000 |
Preferred stock shares outstanding | 4,899,000 | 4,899,000 |
Common stock shares authorized | 100,000,000 | 50,000,000 |
Common stock shares issued | 8,161,029 | 8,089,398 |
Common stock shares outstanding | 8,161,029 | 8,089,398 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||
Net sales | $ 17,065,836 | $ 12,797,971 |
Cost of sales | 11,518,611 | 8,458,580 |
Gross profit | 5,547,225 | 4,339,391 |
Selling, general, and administrative expenses | 5,496,623 | 4,074,550 |
Operating income | 50,602 | 264,841 |
Other income (expense): | ||
Interest expense, net | (120,842) | (76,808) |
Other income, net | 385,841 | 10,614 |
Net other income (expense) | 264,999 | (66,194) |
Income before income taxes | 315,601 | 198,647 |
Income tax provision | 0 | 0 |
Net income | 315,601 | 198,647 |
Convertible preferred stock dividend, in common stock | (186,637) | (187,061) |
Net income attributable to common stockholders | $ 128,964 | $ 11,586 |
Net income per common share | ||
Basic | $ 0.02 | $ 0 |
Diluted | $ 0.02 | $ .00 |
Weighted-average common shares outstanding: | ||
Basic | 8,160,431 | 4,748,049 |
Diluted | 8,400,824 | 4,748,309 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 315,601 | $ 198,647 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization of property and equipment | 130,358 | 67,822 |
Amortization of intangible assets | 180,886 | 71,283 |
Amortization of other assets | 12,189 | 86,245 |
Amortization of capital lease assets | 68,617 | 62,983 |
Gain on sale of property and equipment | 0 | (5,197) |
Stock-based compensation expense | 43,658 | 71,786 |
Change in allowance for doubtful accounts receivable | (12,483) | (9,118) |
Change in allowance for inventory obsolescence | (31,046) | (11,827) |
Amortization deferred gain on sale/leaseback | (37,612) | (37,612) |
Change in fair value of earn-out liability | (375,000) | 0 |
Change in operating assets and liabilities: | ||
Trade accounts receivable | (713,704) | (652,811) |
Inventories | 255,680 | 255,111 |
Prepaid expenses | (87,373) | (88,905) |
Other assets | (12,458) | (152,637) |
Income tax payable/receivable | (1,784) | 1,152 |
Accounts payable and accrued expenses | 385,821 | 601,901 |
Net cash provided by operating activities | 121,350 | 458,823 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (26,065) | (24,779) |
Proceeds from sale of property and equipment | 0 | 10,905 |
Net cash used in investing activities | (26,065) | (13,874) |
Cash flows from financing activities: | ||
Principal payments on long-term debt | (40,045) | (35,485) |
Principal payments on long-term capital lease | (58,334) | (47,446) |
Net change in line of credit | (1,256,325) | 4,931,491 |
Net cash (used in) provided by financing activities | (1,354,704) | 4,848,560 |
Net change in cash and cash equivalents | (1,259,419) | 5,293,509 |
Cash and cash equivalents at beginning of the period | 1,696,116 | 254,705 |
Cash and cash equivalents at end of the period | 436,697 | 5,548,214 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 133,811 | 78,301 |
Supplemental disclosure of non-cash investing and financing activity: | ||
Preferred stock dividends paid or to be paid in common stock | 186,637 | 187,061 |
Inventory reclassified to demonstration equipment | $ 239,106 | $ 0 |
Note 1. Presentation and Summar
Note 1. Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Sep. 30, 2018 | |
Disclosure Text Block [Abstract] | |
Note 1. Presentation and Summary of Significant Accounting Policies | Basis of Presentation The accompanying unaudited condensed consolidated balance sheets as of September 30, 2018 and June 30, 2018, the condensed consolidated statements of operations for the three months ended September 30, 2018 and 2017, and condensed consolidated statements of cash flows for the three months ended September 30, 2018 and 2017, should be read in conjunction with the audited financial statements and notes thereto as of and for the year ended June 30, 2018 included in the Dynatronics Corporation and subsidiaries (the “Company”) Annual Report on Form 10-K (“Annual Report”) filed with the U.S. Securities and Exchange Commission (the “SEC”) on September 27, 2018. The accompanying financial statements have been prepared by us in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of our management, the accompanying condensed consolidated financial statements for the periods presented reflect all adjustments, consisting of only normal, recurring adjustments, necessary to fairly state our financial position, results of operations and cash flows. The September 30, 2018 condensed consolidated balance sheet was derived from audited financial statements, but does not include all GAAP disclosures. The unaudited condensed consolidated financial statements for the interim periods are not necessarily indicative of results for the full year. The preparation of these unaudited condensed consolidated financial statements requires our management to make estimates and judgments that affect the amounts reported in the financial statements and the accompanying notes. The Company’s actual results may differ from these estimates under different assumptions or conditions. Research and Development Costs Research and development costs are expensed as incurred. Research and development expenses for the three months ended September 30, 2018 and 2017 totaled $11,306 and $251,848, respectively. Research and development expenses are included in Selling, general, and administrative expenses in the condensed consolidated statement of operations. Reclassification Certain amounts in the prior year's condensed consolidated statement of operations have been reclassified for comparative purposes to conform to the presentation in the current year's condensed consolidated statement of operations. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-02, Leases (Topic 842,) a new guidance on leases. This guidance replaces the prior lease accounting guidance in its entirety. The underlying principle of the new standard is the recognition of lease assets and lease liabilities by lessees for substantially all leases, with an exception for leases with terms of less than twelve months. The standard also requires additional quantitative and qualitative disclosures. The guidance is effective for interim and annual reporting periods beginning after December 15, 2018, and early adoption is permitted. The standard requires a modified retrospective approach, which includes several optional practical expedients. Accordingly, the standard is effective for the Company on July 1, 2019. The Company is currently evaluating the impact that this guidance will have on the consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customer |
Note 2. Acquisitions
Note 2. Acquisitions | 3 Months Ended |
Sep. 30, 2018 | |
Disclosure Text Block [Abstract] | |
Note 2. Acquisitions | Bird & Cronin On October 2, 2017, the Company, through its wholly-owned subsidiary Bird & Cronin, LLC, completed the purchase of substantially all the assets of Bird & Cronin, Inc. (“Bird & Cronin”), a manufacturer and distributor of orthopedic soft goods and specialty patient care products. The purchase price is subject to an earn-out payment ranging from $500,000 to $1,500,000, based on sales in fiscal year 2019. The amount recognized for the earn-out liability was $875,000 as of June 30, 2018. The amount recognized for the earn-out liability was decreased by $375,000 to $500,000 as of September 30, 2018. The change in the fair value of the earn-out liability is included in other income in the accompanying condensed consolidated statements of operations. The earn-out liability is combined with the acquisition holdback in the accompanying condensed consolidated balance sheets. In addition, the Company has withheld approximately 185,000 shares of common stock to be released to Bird & Cronin pursuant to the holdback provisions in the asset purchase agreement. These shares are included in common stock on the Company’s balance sheet at September 30, 2018. Certain principals of Bird & Cronin are holders of the Company’s issued and outstanding common stock and two of the principals, Michael Cronin and Jason Anderson, are employees of the Company. As of September 30, 2018, the earn-out liability and holdbacks of $1,129,512 are payable, contingent upon the terms set forth in the purchase agreement, as follows: October 2, 2018 $ 162,845 April 2, 2019 466,667 August 15, 2019 500,000 Acquisition holdback and earn-out liability $ 1,129,512 On October 2, 2018, the Company released to Bird & Cronin $162,845 and 54,572 shares of common stock pursuant to the holdback provisions of the purchase agreement. Hausmann On April 3, 2017, the Company, through its wholly-owned subsidiary Hausmann Enterprises, LLC, completed the purchase of substantially all the assets of Hausmann Industries, Inc. (“Hausmann”), a manufacturer of physical therapy rehabilitation equipment. The purchase price included a holdback of cash totaling $1,044,744 for purposes of satisfying adjustments to the purchase price and indemnification claims, if any. In the second and third fiscal quarters of 2018, the Company released $44,744 and $250,000, respectively, of the holdback to the sellers. As of September 30, 2018, the Company retained a holdback of $750,000 due to be paid to the seller. On October 3, 2018, the Company released the remaining holdback amount totaling $750,000. Certain principals of Hausmann are holders of the Company’s Series B Convertible Preferred Stock (the "Series B Preferred") and one of the principals, David Hausmann, is an employee of the Company. |
Note 3. Net Income per Common S
Note 3. Net Income per Common Share | 3 Months Ended |
Sep. 30, 2018 | |
Disclosure Text Block [Abstract] | |
Note 3. Net Income per Common Share | Net income per common share is computed based on the weighted-average number of common shares outstanding and, when appropriate, dilutive potential common stock outstanding during the period. Stock options, convertible preferred stock and warrants are considered to be potential common stock. The computation of diluted net income per common share does not assume exercise or conversion of securities that would have an anti-dilutive effect. Basic net income per common share is the amount of net income for the period available to each weighted-average share of common stock outstanding during the reporting period. Diluted net income per common share is the amount of net income for the period available to each weighted-average share of common stock outstanding during the reporting period and to each share of potential common stock outstanding during the period, unless inclusion of potential common stock would have an anti-dilutive effect. The reconciliations between the basic and diluted weighted-average number of common shares outstanding for the three months ended September 30 are as follows: 2018 2017 Basic weighted-average number of common shares outstanding during the period 8,160,431 4,748,049 Weighted-average number of dilutive potential common shares outstanding during the period 240,393 260 Diluted weighted-average number of common and potential common shares outstanding during the period 8,400,824 4,748,309 Certain outstanding options, warrants and convertible preferred stock for common shares are not included in the computation of diluted net income per common share because they were anti-dilutive, which for the three months ended September 30, 2018, and 2017, totaled 2,776,106 and 8,910,190, respectively. |
Note 4. Convertible Preferred S
Note 4. Convertible Preferred Stock and Common Stock Warrants | 3 Months Ended |
Sep. 30, 2018 | |
Disclosure Text Block [Abstract] | |
Note 4. Convertible Preferred Stock and Common Stock Warrants | During the three months ended September 30 2017, the Company issued 75,000 shares of common stock upon conversion of 75,000 shares of Series B Preferred. No conversions occurred during the quarter ended September 30, 2018. As of September 30, 2018, the Company had issued and outstanding a total of 2,000,000 shares of Series A 8% Convertible Preferred Stock (“Series A Preferred”) and 1,459,000 shares of Series B Preferred outstanding. The Series A Preferred and Series B Preferred are convertible into a total of 3,459,000 shares of common stock. Dividends payable on these preferred shares accrue at the rate of 8% per year and are payable quarterly in stock or cash at the option of the Company. The Company generally pay the dividends on the preferred stock by issuring shares of our common stock. The formula for paying this dividend using common stock in lieu of cash can change the effective yield on the dividend to more or less than 8% depending on the market price of the common stock at the time of issuance. As of September 30, 2018, there were also issued and outstanding 1,440,000 shares of Series C Non-Voting Convertible Preferred Stock (“Series C Preferred”). The Series C Preferred shares are non-voting, do not receive dividends, and have no liquidation preferences or redemption rights. |
Note 5. Comprehensive Income
Note 5. Comprehensive Income | 3 Months Ended |
Sep. 30, 2018 | |
Disclosure Text Block [Abstract] | |
Note 5. Comprehensive Income | For the three months ended September 30, 2018 and 2017, comprehensive income was equal to the net income as presented in the accompanying condensed consolidated statements of operations. |
Note 6. Inventories
Note 6. Inventories | 3 Months Ended |
Sep. 30, 2018 | |
Disclosure Text Block [Abstract] | |
Note 6. Inventories | Inventories consisted of the following: September 30, 2018 June 30, 2018 Raw materials $ 5,602,615 $ 6,216,150 Work in process 576,780 625,830 Finished goods 4,772,063 4,604,264 Inventory obsolescence reserve (427,343 ) (458,389 ) $ 10,524,115 $ 10,987,855 |
Note 7. Related-party Transacti
Note 7. Related-party Transactions | 3 Months Ended |
Sep. 30, 2018 | |
Disclosure Text Block [Abstract] | |
Note 7. Related-party Transactions | The Company leases office, manufacturing and warehouse facilities in Detroit, Michigan, Hopkins, Minnesota, Northvale, New Jersey and Eagan, Minnesota from employees, shareholders and entities controlled by shareholders, who were previously principals of businesses acquired by the Company. The combined expenses associated with these related-party transactions totaled $261,780 and $108,000 for the three months ended September 30, 2018 and 2017, respectively. Certain significant shareholders, officers and directors of the Company have from time to time participated as investors in the private placements of the Company’s equity securities. The terms of these offerings were reviewed and approved by disinterested members of the Company’s Board of Directors who did not invest in the private placements in question. The affiliated investors who participated in these offerings did so on terms that were no more favorable than the terms granted to investors who were not affiliated with the Company. |
Note 8. Line of Credit
Note 8. Line of Credit | 3 Months Ended |
Sep. 30, 2018 | |
Disclosure Text Block [Abstract] | |
Note 8. Line of Credit | On March 31, 2017, the Company entered into an $8,000,000, loan and security agreement with Bank of the West to provide asset-based financing to the Company for funding acquisitions and for working capital (“Line of Credit”). The Line of Credit provided for revolving credit borrowings by the Company in an amount up to the lesser of $8,000,000 or the calculated borrowing base. The borrowing base is computed monthly and is equal to the sum of stated percentages of eligible accounts receivable and inventory, less a reserve. Amounts outstanding bear interest at LIBOR plus 2.25%. On September 28, 2017, the Company modified the Line of Credit to provide asset-based financing to be used for funding the Bird & Cronin acquisition and for operating capital. The Line of Credit, as amended, provided for revolving credit borrowings by the Company in an amount up to the lesser of $11,000,000 or the calculated borrowing base. The Line of Credit, as amended, matures September 30, 2019. On July 13, 2018, the Company further amended the Line of Credit to modify the maximum monthly consolidated leverage and a minimum monthly consolidated fixed charge coverage ratio. An additional modification was executed on November 12, 2018, to extend the maturity date to December 15, 2020. Borrowings on the Line of Credit were $5,029,712 and $6,286,037 as of September 30, 2018 and June 30, 2018, respectively. As of September 30, 2018, there was approximately $3,456,000 available to borrow. |
Note 9. Accrued Payroll and Ben
Note 9. Accrued Payroll and Benefits Expense | 3 Months Ended |
Sep. 30, 2018 | |
Disclosure Text Block [Abstract] | |
Note 9. Accrued Payroll and Benefits Expense | As of September 30, 2018 and June 30, 2018, the accrued payroll and benefits expense balance included $499,038 and $473,146, respectively, of accrued severance expense. As of September 30, 2018 and June 30, 2018, long-term severance accrual included in other liabilities was $125,000 and $258,145, respectively. Quarterly payments will be made in cash through March 31, 2020. The Company recognized $103,858 in severance expense during the three months ended September 30, 2018 related to the termination of four employees on August 1, 2018. Severance expense is included in selling, general, and administrative expenses. |
Note 10. Revenue
Note 10. Revenue | 3 Months Ended |
Sep. 30, 2018 | |
Disclosure Text Block [Abstract] | |
Note 10. Revenue | On July 1, 2018, the Company adopted ASC 606, Revenue from Contracts with Customers Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied which occurs upon the transfer of control of a product. This occurs either upon shipment or delivery of goods, depending on whether the contract is FOB origin or FOB destination. Contracts sometimes allow for forms of variable consideration including rebates and incentives. In these cases, the Company estimate the amount of consideration to which it will be entitled in exchange for transferring products to customers utilizing the most likely amount method. Rebates and incentives are estimated based on contractual terms or historical experience and a liability is maintained for rebates and incentives that have been earned but are unpaid. As of September 30, 2018 and 2017, the rebate liability was $164,000 and $0, respectively. The rebate liability is included in accrued expenses in the accompanying condensed consolidated balance sheets. Revenue is reduced by estimates of potential future contractual discounts including prompt payment discounts. Provisions for contractual discounts are recorded as a reduction to revenue in the period sales are recognized. Estimates are made of the contractual discounts that will eventually be incurred. Contractual discounts are estimated based on negotiated contracts and historical experience. As of September 30, 2018 and 2017, the allowance for sales discounts was $14,500 and $0, respectively. The allowance for sales discounts is included in trade accounts receivable, less allowance for doubtful accounts in the accompanying condensed consolidated balance sheets. The Company made an accounting policy election to account for shipping and handling activities as fulfillment activities. As such, shipping and handling are not considered promised services to our customers. Costs for shipping and handling of products to customers are recorded as cost of sales. The following table disaggregates revenue by major product category for the three months ended September 30: 2018 2017 Orthopedic Soft Goods and Medical Supplies $ 7,692,115 $ 2,195,788 Physical Therapy and Rehabilitation Equipment 9,224,895 10,418,155 Other 148,826 184,028 $ 17,065,836 $ 12,797,971 |
Note 11. Subsequent Events
Note 11. Subsequent Events | 3 Months Ended |
Sep. 30, 2018 | |
Disclosure Text Block [Abstract] | |
Note 11. Subsequent Events | In October 2018, the Company paid approximately $190,000 of preferred stock dividends with respect to the Series A Preferred and Series B Preferred that accrued during the three months ended September 30, 2018, by issuing 65,494 shares of common stock. |
Note 1. Presentation and Summ_2
Note 1. Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Sep. 30, 2018 | |
Policy Text Block [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated balance sheets as of September 30, 2018 and June 30, 2018, the condensed consolidated statements of operations for the three months ended September 30, 2018 and 2017, and condensed consolidated statements of cash flows for the three months ended September 30, 2018 and 2017, should be read in conjunction with the audited financial statements and notes thereto as of and for the year ended June 30, 2018 included in the Dynatronics Corporation and subsidiaries (the “Company”) Annual Report on Form 10-K (“Annual Report”) filed with the U.S. Securities and Exchange Commission (the “SEC”) on September 27, 2018. The accompanying financial statements have been prepared by us in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of our management, the accompanying condensed consolidated financial statements for the periods presented reflect all adjustments, consisting of only normal, recurring adjustments, necessary to fairly state our financial position, results of operations and cash flows. The September 30, 2018 condensed consolidated balance sheet was derived from audited financial statements, but does not include all GAAP disclosures. The unaudited condensed consolidated financial statements for the interim periods are not necessarily indicative of results for the full year. The preparation of these unaudited condensed consolidated financial statements requires our management to make estimates and judgments that affect the amounts reported in the financial statements and the accompanying notes. The Company’s actual results may differ from these estimates under different assumptions or conditions. |
Research and Development Costs | Research and development costs are expensed as incurred. Research and development expenses for the three months ended September 30, 2018 and 2017 totaled $11,306 and $251,848, respectively. Research and development expenses are included in Selling, general, and administrative expenses in the condensed consolidated statement of operations. |
Reclassification | Certain amounts in the prior year's condensed consolidated statement of operations have been reclassified for comparative purposes to conform to the presentation in the current year's condensed consolidated statement of operations. |
Recent Accounting Pronouncements | In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-02, Leases (Topic 842,) a new guidance on leases. This guidance replaces the prior lease accounting guidance in its entirety. The underlying principle of the new standard is the recognition of lease assets and lease liabilities by lessees for substantially all leases, with an exception for leases with terms of less than twelve months. The standard also requires additional quantitative and qualitative disclosures. The guidance is effective for interim and annual reporting periods beginning after December 15, 2018, and early adoption is permitted. The standard requires a modified retrospective approach, which includes several optional practical expedients. Accordingly, the standard is effective for the Company on July 1, 2019. The Company is currently evaluating the impact that this guidance will have on the consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customer |
Note 2. Acquisitions (Tables)
Note 2. Acquisitions (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Table Text Block Supplement [Abstract] | |
Acquisition | October 2, 2018 $ 162,845 April 2, 2019 466,667 August 15, 2019 500,000 Acquisition holdback and earn-out liability $ 1,129,512 |
Note 3. Net Income per Common_2
Note 3. Net Income per Common Share (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Table Text Block Supplement [Abstract] | |
Schedule of Dilutive Shares | 2018 2017 Basic weighted-average number of common shares outstanding during the period 8,160,431 4,748,049 Weighted-average number of dilutive potential common shares outstanding during the period 240,393 260 Diluted weighted-average number of common and potential common shares outstanding during the period 8,400,824 4,748,309 |
Note 6. Inventories (Tables)
Note 6. Inventories (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Table Text Block Supplement [Abstract] | |
Schedule of Inventory, Current | September 30, 2018 June 30, 2018 Raw materials $ 5,602,615 $ 6,216,150 Work in process 576,780 625,830 Finished goods 4,772,063 4,604,264 Inventory obsolescence reserve (427,343 ) (458,389 ) $ 10,524,115 $ 10,987,855 |
Note 10. Revenue (Tables)
Note 10. Revenue (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Table Text Block Supplement [Abstract] | |
Disaggregation of revenue | 2018 2017 Orthopedic Soft Goods and Medical Supplies $ 7,692,115 $ 2,195,788 Physical Therapy and Rehabilitation Equipment 9,224,895 10,418,155 Other 148,826 184,028 $ 17,065,836 $ 12,797,971 |
Note 1. Presentation and Summ_3
Note 1. Presentation and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Accounting Policies [Abstract] | ||
Research and development costs | $ 11,306 | $ 251,848 |
Note 2. Acquisitions (Details)
Note 2. Acquisitions (Details) | 3 Months Ended |
Sep. 30, 2018USD ($) | |
Acquisition holdback and earn-out liability | $ 1,129,512 |
October 2, 2018 | |
Acquisition holdback and earn-out liability | 162,845 |
April 1, 2019 | |
Acquisition holdback and earn-out liability | 466,667 |
August 15, 2019 | |
Acquisition holdback and earn-out liability | $ 500,000 |
Note 3. Net Income per Common_3
Note 3. Net Income per Common Share (Details) - shares | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share [Abstract] | ||
Basic weighted-average number of common shares outstanding during the period | 8,160,431 | 4,748,049 |
Weighted-average number of dilutive potential common shares outstanding during the period | 240,393 | 260 |
Diluted weighted-average number of common and potential common shares outstanding during the period | 8,400,824 | 4,748,309 |
Note 3. Net Income per Common_4
Note 3. Net Income per Common Share (Details Narrative) - shares | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share [Abstract] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,776,106 | 8,910,190 |
Note 6. Inventories_ Schedule o
Note 6. Inventories: Schedule of Inventory, Current (Details) - USD ($) | Sep. 30, 2018 | Jun. 30, 2018 |
Inventory, Net [Abstract] | ||
Raw Materials | $ 5,602,615 | $ 6,216,150 |
Work in Process | 576,780 | 625,830 |
Finished Goods | 4,772,063 | 4,604,264 |
Inventory Obsolescence Reserve | (427,343) | (458,389) |
Inventories, Net | $ 10,524,115 | $ 10,987,855 |
Note 7. Related-party Transac_2
Note 7. Related-party Transactions (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Related Party Transactions [Abstract] | ||
Related Party Transaction, Expenses from Transactions with Related Party | $ 261,780 | $ 108,000 |
Note 8. Line of Credit (Details
Note 8. Line of Credit (Details Narrative) - USD ($) | Sep. 30, 2018 | Jun. 30, 2018 |
Line of Credit Facility [Abstract] | ||
Line of Credit | $ 5,029,712 | $ 6,286,037 |
Line of Credit Facility, Current Borrowing Capacity | $ 3,456,000 |
Note 9. Accrued Payroll and B_2
Note 9. Accrued Payroll and Benefits Expense (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Jun. 30, 2018 | |
Accrued Liabilities [Abstract] | ||
Accrued Severance | $ 499,038 | $ 473,146 |
Long-term Accrued Severance | 125,000 | $ 258,145 |
Severance Costs | $ 103,858 |
Note 10. Revenue (Details)
Note 10. Revenue (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Net sales | $ 17,065,836 | $ 12,797,971 |
Orthopedic Soft Goods and Medical Supplies | ||
Net sales | 7,692,115 | 2,195,788 |
Physical Therapy and Rehabilitation Equipment | ||
Net sales | 9,224,895 | 10,418,155 |
Other | ||
Net sales | $ 148,826 | $ 184,028 |