Dynatronics (DYNT) 10-Q 12 Nov 21 2021 Q3 Quarterly report Financial data

Cover

Cover - shares	9 Months Ended
	Sep. 30, 2021	Nov. 08, 2021
Cover [Abstract]
Entity Registrant Name	Dynatronics Corporation
Entity Central Index Key	0000720875
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Sep. 30, 2021
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2021
Entity Common Stock Shares Outstanding		17,732,440
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	0-12697
Entity Incorporation State Country Code	UT
Entity Tax Identification Number	87-0398434
Entity Address Address Line 1	1200 Trapp Road
Entity Address City Or Town	Eagan
Entity Address State Or Province	MN
Entity Address Postal Zip Code	55121
City Area Code	801
Local Phone Number	568-7000
Security 12b Title	Common Stock, no par value per share
Trading Symbol	DYNT
Security Exchange Name	NASDAQ
Entity Interactive Data Current	Yes

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2021	Jun. 30, 2021
Current assets:
Cash and cash equivalents	$ 5,341,968	$ 6,102,447
Restricted cash	151,197	151,197
Trade accounts receivable, less allowance for doubtful accounts of $349,252 and $398,887 as of September 30, 2021 and June 30, 2021, respectively	6,094,695	5,643,016
Other receivables	1,301,575	1,201,888
Inventories, net	7,188,705	6,526,095
Prepaid expenses	1,702,559	1,281,223
Total current assets	21,780,699	20,905,866
Property and equipment, net	3,165,588	3,328,185
Operating lease assets	2,237,653	2,456,539
Intangible assets, net	4,752,400	4,928,875
Goodwill	7,116,614	7,116,614
Other assets	404,779	403,916
Total assets	39,457,733	39,139,995
Current liabilities:
Accounts payable	4,379,533	3,737,930
Accrued payroll and benefits expense	1,495,230	1,656,311
Accrued expenses	1,074,309	1,485,123
Warranty reserve	196,707	196,707
Line of credit	0	0
Current portion of long-term debt	13,610	13,448
Current portion of finance lease liability	340,508	335,444
Current portion of deferred gain	150,448	150,448
Current portion of operating lease liability	876,094	864,081
Other liabilities	33,194	33,194
Total current liabilities	8,559,633	8,472,686
Long-term debt, net of current portion	1,998	5,362
Finance lease liability, net of current portion	2,173,641	2,260,815
Deferred gain, net of current portion	1,040,598	1,078,210
Operating lease liability, net of current portion	1,373,831	1,605,477
Other liabilities	205,472	203,920
Total liabilities	13,355,173	13,626,470
Stockholders' equity:
Preferred stock, no par value: Authorized 50,000,000 shares; 3,351,000 shares issued and outstanding as of September 30, 2021 and June 30, 2021, respectively	7,980,788	7,980,788
Common stock, no par value: Authorized 100,000,000 shares; 17,604,296 shares and 17,364,654 shares issued and outstanding as of September 30, 2021 and June 30, 2021, respectively	32,914,949	32,621,471
Accumulated deficit	(14,793,177)	(15,088,734)
Total stockholders' equity	26,102,560	25,513,525
Total liabilities and stockholders' equity	$ 39,457,733	$ 39,139,995

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2021	Jun. 30, 2021
Condensed Consolidated Balance Sheets
Allowance for doubtful accounts	$ 349,252	$ 398,887
Preferred stock, par value	$ 0	$ 0
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued	3,351,000	3,351,000
Preferred stock, shares outstanding	3,351,000	3,351,000
Common stock, par value	$ 0	$ 0
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	17,604,296	17,364,654
Common stock, shares outstanding	17,604,296	17,364,654

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Condensed Consolidated Statements of Operations (Unaudited)
Net sales	$ 12,300,896	$ 12,132,768
Cost of sales	8,636,590	8,230,815
Gross profit	3,664,306	3,901,953
Selling, general, and administrative expenses	4,096,622	4,245,627
Operating loss	(432,316)	(343,674)
Other income (expense):
Interest expense, net	(40,100)	(39,943)
Other income, net	955,056	5,913
Net other income (expense)	914,956	(34,030)
Income (loss) before income taxes	482,640	(377,704)
Income tax (provision) benefit	0	0
Net income (loss)	482,640	(377,704)
Preferred stock dividend, in common stock, issued or to be issued	(187,083)	(194,226)
Net income (loss) attributable to common stockholders	$ 295,557	$ (571,930)
Net income (loss) per common share
Basic and diluted	$ 0.02	$ (0.04)
Weighted-average common shares outstanding
Basic and diluted	17,565,211	14,080,361

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)	Total	Common Stock	Preferred Stock	Retained Earnings (Accumulated Deficit)
Balance, shares at Jun. 30, 2020		13,803,855	3,681,000
Balance, amount at Jun. 30, 2020	$ 19,895,881	$ 27,474,411	$ 8,770,798	$ (16,349,328)
Stock-based compensation, shares		84,661
Stock-based compensation, amount	47,470	$ 47,470	0	0
Preferred stock dividend, in common stock, issued or to be issued, shares		207,736
Preferred stock dividend, in common stock, issued or to be issued, amount	194,226	$ 194,226	0	(194,226)
Net loss	(377,704)	$ 0	$ 0	(377,704)
Balance, shares at Sep. 30, 2020		14,096,252	3,681,000
Balance, amount at Sep. 30, 2020	19,565,647	$ 27,716,107	$ 8,770,798	(16,921,258)
Stock-based compensation, shares		16,940
Stock-based compensation, amount	50,781	$ 50,781	0	0
Preferred stock dividend, in common stock, issued or to be issued, shares		276,519
Preferred stock dividend, in common stock, issued or to be issued, amount	0	$ 182,085	0	(182,085)
Net loss	(672,832)	$ 0	$ 0	(672,832)
Preferred stock converted to common stock, shares		330,000	(330,000)
Preferred stock converted to common stock, amount	0	$ 790,010	$ (790,010)	0
Preferred stock beneficial conversion and accretion of discount	51,352	0	51,352	0
Dividend of beneficial conversion and accretion of discount	(51,352)	$ 0	$ (51,352)	0
Balance, shares at Dec. 31, 2020		14,719,711	3,351,000
Balance, amount at Dec. 31, 2020	18,943,596	$ 28,738,983	$ 7,980,788	(17,776,175)
Stock-based compensation, amount	30,106	$ 30,106	0	0
Preferred stock dividend, in common stock, issued or to be issued, shares		224,797
Preferred stock dividend, in common stock, issued or to be issued, amount	0	$ 181,877	0	(181,877)
Net loss	118,209	$ 0	0	118,209
Issuance of common stock, net of issuance costs of $137,547, shares		2,230,600
Issuance of common stock, net of issuance costs of $137,547, amount	3,462,195	$ 3,462,195	$ 0	0
Balance, shares at Mar. 31, 2021		17,205,108	3,351,000
Balance, amount at Mar. 31, 2021	22,554,106	$ 32,413,161	$ 7,980,788	(17,839,843)
Preferred stock dividend, in common stock, issued or to be issued, shares		159,546
Preferred stock dividend, in common stock, issued or to be issued, amount	0	$ 182,467	0	(182,467)
Net loss	2,933,576	0	0	2,933,576
Stock-based compensation	25,843	$ 25,843	$ 0	0
Balance, shares at Jun. 30, 2021		17,364,654	3,351,000
Balance, amount at Jun. 30, 2021	25,513,525	$ 32,621,471	$ 7,980,788	(15,088,734)
Stock-based compensation, shares		85,002
Stock-based compensation, amount	106,395	$ 106,395	0	0
Preferred stock dividend, in common stock, issued or to be issued, shares		154,640
Preferred stock dividend, in common stock, issued or to be issued, amount	187,083	$ 187,083	0	(187,083)
Net loss	482,640	$ 0	$ 0	482,640
Balance, shares at Sep. 30, 2021		17,604,296	3,351,000
Balance, amount at Sep. 30, 2021	$ 26,102,560	$ 32,914,949	$ 7,980,788	$ (14,793,177)

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Cash flows from operating activities:
Net income (loss)	$ 482,640	$ (377,704)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization of property and equipment	181,934	244,353
Amortization of intangible assets	176,475	181,096
Amortization of other assets	4,644	6,402
Gain on sale of property and equipment	0	(6,240)
Stock-based compensation	106,395	47,470
Change in allowance for doubtful accounts receivable	(49,635)	33,566
Change in allowance for inventory obsolescence	(202,854)	(76,246)
Amortization deferred gain on sale/leaseback	(37,612)	(37,612)
Change in operating assets and liabilities:
Trade accounts receivable	(402,044)	(749,186)
Inventories	(459,756)	1,299,498
Prepaid expenses and other receivables	(521,023)	(327,001)
Other assets	(5,507)	7,154
Accounts payable, accrued expenses, and other current liabilities	71,260	878,249
Net cash (used in) provided by operating activities	(655,083)	1,123,799
Cash flows from investing activities:
Purchase of property and equipment	(20,084)	(16,034)
Net cash used in investing activities	(20,084)	(16,034)
Cash flows from financing activities:
Principal payments on long-term debt	(3,202)	(42,964)
Principal payments on finance lease liability	(82,110)	(77,578)
Net change in line of credit	0	(1,012,934)
Net cash used in financing activities	(85,312)	(1,133,476)
Net change in cash and cash equivalents and restricted cash	(760,479)	(25,711)
Cash and cash equivalents and restricted cash at beginning of the period	6,253,644	2,316,301
Cash and cash equivalents and restricted cash at end of the period	5,493,165	2,290,590
Supplemental disclosure of cash flow information:
Cash paid for interest	40,100	39,930
Supplemental disclosure of non-cash investing and financing activities:
Preferred stock dividend, in common stock, issued or to be issued	$ 187,083	$ 194,227

Presentation and Summary of Sig

Presentation and Summary of Significant Accounting Policies	3 Months Ended
	Sep. 30, 2021
Presentation and Summary of Significant Accounting Policies
Note 1. Presentation and Summary of Significant Accounting Policies	Note 1. Presentation and Summary of Significant Accounting Policies Business Dynatronics Corporation (“Company,” “Dynatronics”) is a leading medical device company committed to providing high-quality restorative products designed to accelerate optimal health. The Company designs, manufactures, and sells a broad range of restorative products for clinical use in physical therapy, rehabilitation, orthopedics, pain management, and athletic training. Through its distribution channels, Dynatronics markets and sells to orthopedists, physical therapists, chiropractors, athletic trainers, sports medicine practitioners, clinics, and hospitals. Basis of Presentation The accompanying unaudited condensed consolidated financial statements (the “Condensed Consolidated Financial Statements”) have been prepared by the Company in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. As such, these Condensed Consolidated Financial Statements should be read in conjunction with the Company’s audited financial statements and accompanying notes included in its Annual Report on Form 10-K for the fiscal year ended June 30, 2021 (the “Annual Report”) filed with the SEC on September 23, 2021. The Condensed Consolidated Balance Sheet at June 30, 2021, has been derived from the Annual Report. The accounting policies followed by the Company are set forth in Part II, Item 8, Note 1, Basis of Presentation and Summary of Accounting Policies, of the Notes to Financial Statements included in the Company’s Annual Report. In the opinion of management, the Condensed Consolidated Financial Statements contain all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Company’s financial position as of September 30, 2021 and its results of operations and its cash flows for the periods presented. The results of operations for the first three months of the fiscal year are not necessarily indicative of results for the full year or any future periods. The Company’s fiscal year begins on July 1 and ends on June 30 and references made to “fiscal year 2022” and “fiscal year 2021” refer to the Company’s fiscal year ending June 30, 2022 and the fiscal year ended June 30, 2021, respectively. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods presented. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ materially from those estimates and assumptions. Employee Retention Credit The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) provided an employee retention credit which was a refundable tax credit against certain employment taxes. The Consolidated Appropriations Act extended and expanded the availability of the employee retention credit through June 30, 2021. Subsequently, the American Rescue Plan Act of 2021 extended the availability of the employee retention credit through December 31, 2021. This new legislation amended the employee retention credit to be equal to 70% of qualified wages paid to employees after December 31, 2020, and before January 1, 2022. During calendar year 2021, a maximum of $10,000 in qualified wages for each employee per qualifying calendar quarter may be counted in determining the 70% credit. Therefore, the maximum tax credit that can be claimed by an eligible employer is $7,000 per employee per qualifying calendar quarter of 2021. The Company qualifies for the employee retention credit for quarters that experience a significant decline in gross receipts, defined as quarterly gross receipts that are less than 80 percent of its gross receipts for the same calendar quarter in 2019. The Company qualified for the credit beginning on January 1, 2021 and received credits for qualified wages through September 30, 2021. During the quarter ended September 30, 2021, the Company recorded an employee retention credit totaling $1,143,000, of which, $97,000, $103,000, and $943,000 was recorded within cost of sales, selling, general, and administrative, and other income, respectively, on the Company’s condensed consolidated statements of operations. Other Receivables Other receivables consist of amounts due from the U.S. federal government for the employee retention credit and amounts due from our contract manufacturer for raw materials components provided for use in the production of our products. Payments are due from our contract manufacturer based on the usage of raw material components. As of September 30, 2021, other receivables include $556,000 due from the employee retention credit and $746,000 due from our contract manufacturer. Reclassification Certain amounts in the September 30, 2020 condensed consolidated statement of cash flows have been reclassified for comparative purposes to conform to the presentation in the September 30, 2021 condensed consolidated statement of cash flows. Recent Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes Simplifying the Accounting for Income Taxes In August 2020, the FASB issued ASU 2020-06, Debt— Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity

Net Income (Loss) per Common Sh

Net Income (Loss) per Common Share	3 Months Ended
	Sep. 30, 2021
Net income (loss) per common share
Note 2. Net Income (Loss) per Common Share	Note 2. 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 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 (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 period available to each weighted-average share of common stock outstanding during the reporting period. Diluted net income (loss) per common share is the amount of net income (loss) 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. All outstanding options, warrants and convertible preferred stock for common shares are not included in the computation of diluted net income (loss) per common share because they are anti-dilutive, which for the three months ended September 30, 2021, and 2020, totaled 7,714,500 and 11,777,500, respectively.

Convertible Preferred Stock

Convertible Preferred Stock	3 Months Ended
	Sep. 30, 2021
Convertible Preferred Stock
Note 3. Convertible Preferred Stock	Note 3. As of September 30, 2021, the Company had issued and outstanding a total of 1,992,000 shares of Series A 8% Convertible Preferred Stock (“Series A Preferred”) and 1,359,000 shares of Series B Convertible Preferred Stock ("Series B Preferred"). The Series A Preferred and Series B Preferred are convertible into a total of 3,451,000 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 pays the dividends on the preferred stock by issuing shares of its common stock. The formula for paying these dividends 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. In October 2021, the Company paid approximately $187,000 of preferred stock dividends with respect to the Series A Preferred and Series B Preferred that accrued during the three months ended September 30, 2021, by issuing 128,144 shares of common stock.

Comprehensive Income

Comprehensive Income	3 Months Ended
	Sep. 30, 2021
Comprehensive Income
Note 4. Comprehensive Income	Note 4. Comprehensive Income For the three months ended September 30, 2021 and 2020, comprehensive income (loss) was equal to the net income (loss) as presented in the accompanying condensed consolidated statements of operations.

Inventories

Inventories	3 Months Ended
	Sep. 30, 2021
Inventories
Note 5. Inventories	Note 5. Inventories Inventories consisted of the following: September 30, 2021 June 30, 2021 Raw materials $ 4,606,488 $ 3,863,212 Work in process 610,717 784,460 Finished goods 2,395,623 2,505,399 Inventory obsolescence reserve (424,123 ) (626,976 ) $ 7,188,705 $ 6,526,095

Related-Party Transactions

Related-Party Transactions	3 Months Ended
	Sep. 30, 2021
Related-Party Transactions
Note 6. Related-Party Transactions	Note 6. Related-Party Transactions The Company leases office, manufacturing and warehouse facilities in 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 $248,953 and $264,703 for the three months ended September 30, 2021 and 2020, respectively.

Line of Credit

Line of Credit	3 Months Ended
	Sep. 30, 2021
Line of Credit
Note 7. Line of Credit	Note 7. Line of Credit Borrowings on the Line of Credit were $0 as of September 30, 2021 and June 30, 2021, respectively. As of September 30, 2021, there was approximately $5,200,000 available to borrow.

Revenue

Revenue	3 Months Ended
	Sep. 30, 2021
Revenue
Note 8. Revenue	Note 8. Revenue As of September 30, 2021 and June 30, 2021, the rebate liability was $300,763 and $219,591, respectively. The rebate liability is included in accrued expenses in the accompanying condensed consolidated balance sheets. As of September 30, 2021 and June 30, 2021, the allowance for sales discounts was $14,167 and $9,000, 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 following table disaggregates revenue by major product category for the three months ended September 30: 2021 2020 Orthopedic Soft Bracing Products $ 5,573,474 $ 5,559,918 Physical Therapy and Rehabilitation Products 6,698,356 6,497,230 Other 29,066 75,620 $ 12,300,896 $ 12,132,768

Presentation and Summary of S_2

Presentation and Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Sep. 30, 2021
Presentation and Summary of Significant Accounting Policies
Business	Dynatronics Corporation (“Company,” “Dynatronics”) is a leading medical device company committed to providing high-quality restorative products designed to accelerate optimal health. The Company designs, manufactures, and sells a broad range of restorative products for clinical use in physical therapy, rehabilitation, orthopedics, pain management, and athletic training. Through its distribution channels, Dynatronics markets and sells to orthopedists, physical therapists, chiropractors, athletic trainers, sports medicine practitioners, clinics, and hospitals.
Basis of Presentation	The accompanying unaudited condensed consolidated financial statements (the “Condensed Consolidated Financial Statements”) have been prepared by the Company in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. As such, these Condensed Consolidated Financial Statements should be read in conjunction with the Company’s audited financial statements and accompanying notes included in its Annual Report on Form 10-K for the fiscal year ended June 30, 2021 (the “Annual Report”) filed with the SEC on September 23, 2021. The Condensed Consolidated Balance Sheet at June 30, 2021, has been derived from the Annual Report. The accounting policies followed by the Company are set forth in Part II, Item 8, Note 1, Basis of Presentation and Summary of Accounting Policies, of the Notes to Financial Statements included in the Company’s Annual Report. In the opinion of management, the Condensed Consolidated Financial Statements contain all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Company’s financial position as of September 30, 2021 and its results of operations and its cash flows for the periods presented. The results of operations for the first three months of the fiscal year are not necessarily indicative of results for the full year or any future periods. The Company’s fiscal year begins on July 1 and ends on June 30 and references made to “fiscal year 2022” and “fiscal year 2021” refer to the Company’s fiscal year ending June 30, 2022 and the fiscal year ended June 30, 2021, respectively.
Use of Estimates	The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods presented. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ materially from those estimates and assumptions.
Employee Retention Credit	The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) provided an employee retention credit which was a refundable tax credit against certain employment taxes. The Consolidated Appropriations Act extended and expanded the availability of the employee retention credit through June 30, 2021. Subsequently, the American Rescue Plan Act of 2021 extended the availability of the employee retention credit through December 31, 2021. This new legislation amended the employee retention credit to be equal to 70% of qualified wages paid to employees after December 31, 2020, and before January 1, 2022. During calendar year 2021, a maximum of $10,000 in qualified wages for each employee per qualifying calendar quarter may be counted in determining the 70% credit. Therefore, the maximum tax credit that can be claimed by an eligible employer is $7,000 per employee per qualifying calendar quarter of 2021. The Company qualifies for the employee retention credit for quarters that experience a significant decline in gross receipts, defined as quarterly gross receipts that are less than 80 percent of its gross receipts for the same calendar quarter in 2019. The Company qualified for the credit beginning on January 1, 2021 and received credits for qualified wages through September 30, 2021. During the quarter ended September 30, 2021, the Company recorded an employee retention credit totaling $1,143,000, of which, $97,000, $103,000, and $943,000 was recorded within cost of sales, selling, general, and administrative, and other income, respectively, on the Company’s condensed consolidated statements of operations.
Other Receivables	Other receivables consist of amounts due from the U.S. federal government for the employee retention credit and amounts due from our contract manufacturer for raw materials components provided for use in the production of our products. Payments are due from our contract manufacturer based on the usage of raw material components. As of September 30, 2021, other receivables include $556,000 due from the employee retention credit and $746,000 due from our contract manufacturer.
Reclassification	Certain amounts in the September 30, 2020 condensed consolidated statement of cash flows have been reclassified for comparative purposes to conform to the presentation in the September 30, 2021 condensed consolidated statement of cash flows.
Recent Accounting Pronouncements	In December 2019, the FASB issued ASU 2019-12, Income Taxes Simplifying the Accounting for Income Taxes In August 2020, the FASB issued ASU 2020-06, Debt— Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity

Inventories (Tables)

Inventories (Tables)	3 Months Ended
	Sep. 30, 2021
Inventories
Inventory	September 30, 2021 June 30, 2021 Raw materials $ 4,606,488 $ 3,863,212 Work in process 610,717 784,460 Finished goods 2,395,623 2,505,399 Inventory obsolescence reserve (424,123 ) (626,976 ) $ 7,188,705 $ 6,526,095

Revenue (Tables)

Revenue (Tables)	3 Months Ended
	Sep. 30, 2021
Revenue
Disaggregation of revenue	2021 2020 Orthopedic Soft Bracing Products $ 5,573,474 $ 5,559,918 Physical Therapy and Rehabilitation Products 6,698,356 6,497,230 Other 29,066 75,620 $ 12,300,896 $ 12,132,768

Presentation and Summary of S_3

Presentation and Summary of Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Due from the employee retention credit	$ 556,000
Due from our contract manufacturer	746,000
Selling, general, and administrative	4,096,622	$ 4,245,627
Other income	955,056	$ 5,913
Economic Security Act [Member]
Employee retention credit	1,143,000
Cost of sales	97,000
Selling, general, and administrative	103,000
Other income	$ 943,000

Net Income (Loss) per Common _2

Net Income (Loss) per Common Share (Details Narrative) - shares	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Net income (loss) per common share
Antidilutive securities excluded from computation of earnings per share	7,714,500	11,777,500

Convertible Preferred Stock (De

Convertible Preferred Stock (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended
	Oct. 31, 2021	Sep. 30, 2021
Common stock shares issuing		128,144
Preferred stock upon conversion of common stock		3,451,000
Preferred stock dividends	$ 187,000
Series A Preferred
Convertible Preferred Stock shares issued		1,992,000
Series B Preferred
Convertible Preferred Stock shares issued		1,359,000

Inventories (Details)

Inventories (Details) - USD ($)	Sep. 30, 2021	Jun. 30, 2021
Inventories
Raw materials	$ 4,606,488	$ 3,863,212
Work in process	610,717	784,460
Finished goods	2,395,623	2,505,399
Inventory reserve	(424,123)	(626,976)
Inventories, net	$ 7,188,705	$ 6,526,095

Related-Party Transactions (Det

Related-Party Transactions (Details Narrative) - USD ($)	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Related-Party Transactions
Related-party transaction expenses	$ 248,953	$ 264,703

Line of Credit (Details Narrati

Line of Credit (Details Narrative) - USD ($)	Sep. 30, 2021	Jun. 30, 2021
Line of Credit
Line of credit	$ 0	$ 0
Line of credit facility, current borrowing capacity	$ 5,200,000

Revenue (Details)

Revenue (Details) - USD ($)	3 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Net sales	$ 12,300,896	$ 12,132,768
Other
Net sales	29,066	75,620
Physical Therapy and Rehabilitation Products
Net sales	6,698,356	6,497,230
Orthopedic Soft Bracing Products
Net sales	$ 5,573,474	$ 5,559,918

Revenue (Details Narrative)

Revenue (Details Narrative) - USD ($)	Sep. 30, 2021	Jun. 30, 2021
Revenue
Rebate liability	$ 300,763	$ 219,591
Allowance for sales discounts	$ 14,167	$ 9,000