Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2016 | Oct. 10, 2016 | Dec. 31, 2015 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | ESCALON MEDICAL CORP. | ||
Entity Central Index Key | 862,668 | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Filer Category | Smaller Reporting Company | ||
Document Type | 10-K | ||
Document Period End Date | Jun. 30, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 7,551,430 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 7,526,430 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 538,114 | $ 1,516,761 |
Accounts receivable, net | 1,614,549 | 1,785,928 |
Inventory, net | 2,283,148 | 2,219,615 |
Other current assets | 281,330 | 245,520 |
Total current assets | 4,717,141 | 5,767,824 |
Property and equipment, net | 81,206 | 48,013 |
Goodwill | 125,027 | 125,027 |
Trademarks and trade names | 605,006 | 605,006 |
Patents, net | 2,000 | 3,200 |
Total assets | 5,530,380 | 6,549,070 |
Current liabilities: | ||
Current portion of post-retirement benefits | 101,891 | 101,891 |
Accounts payable | 1,091,923 | 1,044,199 |
Accrued expenses | 1,226,842 | 1,529,428 |
Notes Payable, Related Parties | 275,000 | 0 |
Liabilities of discontinued operations | 88,660 | 86,176 |
Total current liabilities | 2,784,316 | 2,761,694 |
Accrued post-retirement benefits, net of current portion | 835,589 | 797,431 |
Total long-term liabilities | 835,589 | 797,431 |
Total liabilities | 3,619,905 | 3,559,125 |
Shareholders equity: | ||
Common stock, $0.001 par value; 35,000,000 shares authorized; 7,551,430 and 7,526,430 issued and outstanding as of June 30, 2016 and 2015, respectively | 7,551 | 7,526 |
Additional paid-in capital | 69,701,907 | 69,629,889 |
Accumulated deficit | (67,798,983) | (66,647,470) |
Total shareholders' equity | 1,910,475 | 2,989,945 |
Total liabilities and shareholders' equity | $ 5,530,380 | $ 6,549,070 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2016 | Jun. 30, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 35,000,000 | 35,000,000 |
Common stock, shares issued | 7,526,430 | 7,526,430 |
Common stock, shares outstanding | 7,526,430 | 7,526,430 |
Consolidated Statements Of Oper
Consolidated Statements Of Operations - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Net revenues: | ||
Product revenue | $ 11,576,466 | $ 13,136,203 |
Revenues, net | 11,576,466 | 13,136,203 |
Costs and expenses: | ||
Cost of goods sold | 6,197,739 | 7,006,770 |
Marketing, general and administrative | 5,068,950 | 5,879,852 |
Research and development | 1,450,069 | 1,301,782 |
Total costs and expenses | 12,716,758 | 14,188,404 |
Loss from continuing operations | (1,140,292) | (1,052,201) |
Other (expense) income: | ||
Interest income | 179 | 105 |
Interest expense | 11,400 | 0 |
Total other (expense) income | (11,221) | 105 |
Net (loss) from continuing operations | (1,151,513) | (1,052,096) |
Income from discontinued operations before taxes | 0 | 510,851 |
Benefit (provision) for income taxes | 0 | 0 |
Net income from discontinued operations | 0 | 510,851 |
Net (loss) | $ (1,151,513) | $ (541,245) |
Basic: | ||
Continuing operations | $ (0.15) | $ (0.14) |
Discontinued operations | 0 | 0.07 |
Net income (loss) | (0.15) | (0.07) |
Diluted: | ||
Continuing operations | (0.15) | (0.14) |
Discontinued operations | 0 | 0.07 |
Net income (loss) | $ (0.15) | $ (0.07) |
Weighted average shares - basic | 7,541,013 | 7,526,430 |
Weighted average shares - diluted | 7,541,013 | 7,526,430 |
Consolidated Statement of Other
Consolidated Statement of Other Comprehensive Income - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Net (loss) income | $ (1,151,513) | $ (541,245) |
Consolidated Statements Of Shar
Consolidated Statements Of Shareholders' Equity and Comprehensive Loass - USD ($) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Shareholders' Equity [Member] |
Balance at Jun. 30, 2014 | $ 3,463,823 | $ 7,526 | $ 69,562,522 | $ (66,106,225) | |
Balance, shares at Jun. 30, 2014 | 7,526,430 | ||||
Net loss | 541,245 | $ 0 | 0 | 541,245 | |
Compensation expense | 67,367 | 0 | 67,367 | 0 | |
Balance at Jun. 30, 2015 | 2,989,945 | $ 7,526 | 69,629,889 | (66,647,470) | |
Balance, shares at Jun. 30, 2015 | 7,526,430 | ||||
Net loss | $ 1,151,513 | $ 0 | 0 | 1,151,513 | |
Stock Issued During Period, Shares, New Issues | 25,000 | ||||
Temporary Equity, Stock Issued During Period, Value, New Issues | $ 25 | ||||
Adjustments to Additional Paid in Capital, Stock Issued, Issuance Costs | 19,725 | 0 | $ 19,750 | ||
Compensation expense | 52,293 | 0 | 52,293 | 0 | |
Balance at Jun. 30, 2016 | $ 1,910,475 | $ 7,551 | $ 69,701,907 | $ (67,798,983) | |
Balance, shares at Jun. 30, 2016 | 7,551,430 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Repayments of related party note payable | $ 275,000 | $ 0 |
Net Cash Provided by (Used in) Financing Activities, Continuing Operations | 275,000 | 0 |
Cash Flows from Operating Activities: | ||
Net (loss) | (1,151,513) | (541,245) |
Adjustments to reconcile net (loss) to cash used in operating activities of continuing operations: | ||
Net loss (income) from discontinued operations | 0 | (510,851) |
Depreciation and amortization | 24,651 | 14,302 |
Compensation expense related to stock options | 52,293 | 67,367 |
Increase (decrease) in liabilities of discontinued operations | 2,484 | 0 |
Change in accrued post-retirement benefits | 38,158 | (44,268) |
Issuance of Stock and Warrants for Services or Claims | 19,750 | 0 |
Change in operating assets and liabilities: | ||
Accounts receivable, net | 171,379 | (95,772) |
Inventory, net | (63,533) | 691,112 |
Other current and long-term assets | (35,810) | 41,027 |
Accounts payable and accrued expenses | (254,862) | (82,397) |
Net cash (used in) operating activities from continuing operations | (1,197,003) | (460,725) |
Net cash (used in) provided by operating activities from discontinued operations | 0 | 4,191 |
Net cash (used in) operating activities | (1,197,003) | (456,534) |
Cash Flows from Investing Activities: | ||
Purchase of fixed assets | (56,644) | (36,259) |
Net cash (used in) investing activities from continuing operations | (56,644) | (36,259) |
Net (decrease) in cash and cash equivalents | (978,647) | (492,793) |
Cash and cash equivalents, beginning of period | 1,516,761 | |
Cash and cash equivalents, end of period | $ 538,114 | $ 1,516,761 |
Organization and Description of
Organization and Description of Business and Business Conditions | 12 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business and Business Conditions | Organization and Description of Business and Business Conditions The Company is a Pennsylvania corporation initially incorporated in California in 1987, and reincorporated in Pennsylvania in November 2001. Within this document, the “Company” collectively shall mean Escalon and its wholly owned subsidiaries: Sonomed, Inc. (“Sonomed”), Trek, Inc. (“Trek”), Escalon Medical Europe GmbH (inactive), Escalon Digital Solutions, Inc. (“EMI”), Escalon Pharmaceutical, Inc. (“Pharmaceutical” inactive), Escalon Holdings, Inc. (“EHI”), Escalon IP Holdings, Inc., Sonomed IP Holdings, Inc., Drew Scientific Holdings, Inc. (discontinued), Drew Scientific Inc. (discontinued), and Drew Scientific Group, Plc (“Drew”) and its subsidiaries (discontinued). All intercompany accounts and transactions have been eliminated. The Company operates in the healthcare market, specializing in the development, manufacture, marketing and distribution of medical devices and pharmaceuticals in the area of ophthalmology. The Company and its products are subject to regulation and inspection by the United States Food and Drug Administration (the “FDA”). The FDA requires extensive testing of new products prior to sale and has jurisdiction over the safety, efficacy and manufacture of products, as well as product labeling and marketing. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred recurring operating losses and negative cash flows from operating activities. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that impact the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents For the purposes of reporting cash flows, the Company considers all cash accounts, which are not subject to withdrawal restrictions or penalties, and highly liquid investments with original maturities of 90 days or less to be cash and cash equivalents. From time to time cash balances exceed federal insurance limits. Fair Value of Financial Instruments On July 1, 2008, the Company adopted Financial Accounting Standards Board (“FASB”) issued authoritative guidance related to fair value measurement for financial assets and liabilities. The carrying amounts for cash and cash equivalents, accounts receivable, post-retirement benefits, accounts payable and accrued liabilities approximate their fair value because of their short-term maturity. The carrying amounts of long-term post retirement benefits approximate fair value since the Company utilizes approximate current market interest rates to calculate the liability. While we believe the carrying value of the assets and liabilities is reasonable, considerable judgment is used to develop estimates of fair value; thus the estimates are not necessarily indicative of the amounts that could be realized in a current market exchange. Revenue Recognition The Company recognizes revenue from the sale of its products at the time of shipment, when title and risk of loss transfer. The Company provides products to its distributors at agreed wholesale prices and to the balance of its customers at set retail prices. Distributors can receive discounts for accepting high volume shipments. The discounts are reflected immediately in the net invoice price, which is the basis for revenue recognition. No further material discounts or sales incentives are given. The Company’s considerations for recognizing revenue upon shipment of product to a distributor are based on the following: • Persuasive evidence that an arrangement (purchase order and sales invoice) exists between a willing buyer (distributor) and the Company that outlines the terms of the sale (company information, quantity of goods, purchase price and payment terms). The buyer (distributor) does not have a right of return. • Shipping terms are ex-factory shipping point. At this point the buyer (distributor) takes title to the goods and is responsible for all risks and rewards of ownership, including insuring the goods as necessary. • The Company’s price to the buyer (distributor) is fixed and determinable as specifically outlined on the sales invoice. The sales arrangement does not have customer cancellation or termination clauses. • The buyer (distributor) places a purchase order with the Company; the terms of the sale are cash, COD or credit. Customer credit is determined based on the Company’s policy and procedures related to the buyer’s (distributor’s) creditworthiness. Based on this determination, the Company believes that collectibility is reasonably assured. Provision has been made for estimated sales returns based on historical experience. Shipping and Handling Revenues and Costs Shipping and handling revenues are included in product revenue and the related costs are included in cost of goods sold. Inventory Raw materials, work in process and finished goods are recorded at lower of cost (first-in, first-out) or market. The composition of inventory is as follows: June 30, 2016 2015 Raw materials $ 1,093,526 $ 1,111,730 Work in process 362,766 333,526 Finished goods 826,856 774,359 Total inventory $ 2,283,148 $ 2,219,615 Valuation allowance activity for the years ended June 30, 2016 and 2015 was as follows: June 30, 2016 2015 Balance, July 1 $ 198,120 $ 198,120 Provision for valuation allowance — — Write-off — — Balance, June 30 $ 198,120 $ 198,120 Accounts Receivable Accounts receivable are recorded at net realizable value. The Company performs ongoing credit evaluations of customers’ financial condition and does not require collateral for accounts receivable arising in the normal course of business. The Company maintains allowances for potential credit losses based on the Company’s historical trends, specific customer issues and current economic trends. Accounts are written off when they are determined to be uncollectible based on management’s assessment of individual accounts. Allowance for doubtful accounts activity for the years ended June 30, 2016 and 2015 was as follows: June 30, 2016 2015 Balance, July 1 $ 230,544 $ 311,713 Provision for bad debts 3,914 181,976 Write-offs (31,791 ) (263,145 ) Balance, June 30 $ 202,667 $ 230,544 As of June 30, 2016, the Company has one customer that represents approximately 11% of the total accounts receivable balance. As of June 30, 2015 no customers represented more than 10% of the total accounts receivable balance. Property and Equipment Property and equipment are recorded at cost. Leasehold improvements are amortized on a straight-line basis over the lesser of the estimated useful life of the asset or lease term. Depreciation on property and equipment is recorded using the straight-line method over the estimated economic useful life of the related assets. Estimated useful lives are generally 3 to 5 years for computer equipment and software, 5 to 7 years for furniture and fixtures and 5 to 10 years for production and test equipment. Depreciation and amortization expense for the years ended June 30, 2016 and 2015 was approximately $22,000 and $12,000 , respectively. Property and equipment consist of the following at: June 30, 2016 2015 Equipment $ 695,311 $ 638,667 Furniture and Fixtures 99,321 99,321 Leasehold Improvement 28,549 28,549 823,181 766,537 Less: Accumulated depreciation and amortization (741,975 ) (718,524 ) $ 81,206 $ 48,013 Long-lived Assets Long-lived assets and certain identifiable intangibles to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. An asset’s value is impaired if management’s estimate of the aggregate future cash flows, undiscounted and without interest charges, to be generated by the asset are less than the carrying value of the asset. Such cash flows consider factors such as expected future operating income and historical trends, as well as the effects of demand and competition. To the extent impairment has occurred, the loss will be measured as the excess of the carrying amount of the asset over the fair value of the asset. Such estimates require the use of judgment and numerous subjective assumptions which, if actual experience varies, could result in material differences in the requirements for impairment charges. Intangible Assets The Company follows FASB issued authoritative guidance for recording goodwill and other intangible assets, which discontinues the amortization of goodwill and identifiable intangible assets that have indefinite lives. In accordance with FASB issued authoritative guidance, these goodwill and identifiable intangible assets that have indefinite lives are tested for impairment on an annual basis. Accrued Warranties The Company provides a limited one year warranty against manufacturer’s defects on its products sold to customers. The Company’s standard warranties require the Company to repair or replace, at the Company’s discretion, defective parts during such warranty period. The Company accrues for its product warranty liabilities based on estimates of costs to be incurred during the warranty period, based on historical repair information for warranty costs. Business Combinations The Company allocates the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. When acquisitions are deemed material by management, the Company engages independent third-party appraisal firms to assist in determining the fair values of assets acquired and liabilities assumed. Such a valuation requires management to make significant estimates and assumptions, especially with respect to intangible assets. Stock-Based Compensation Stock-based compensation expense for all share-based payment awards granted after July 1, 2006 is based on the grant date fair value estimate in accordance with the provisions of FASB issued authoritative guidance. As of June 30, 2016 and 2015 there was $0 and $39,613 , respectively, of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted to employees under the plans. There is no remaining cost under the plan. For the years ended June 30, 2016 and 2015 , $39,613 and $52,103 , respectively, was recorded as compensation expense. Valuations are based upon highly subjective assumptions about the future, including stock price volatility and exercise patterns. The fair value of share-based payment awards was estimated using the Black-Scholes option pricing model. Expected volatilities are based on the historical volatility of the Company’s stock. The Company uses historical data to estimate option exercise and employee terminations. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The Company has historically granted options under the Company’s option plans with an option exercise price equal to the closing market value of the stock on the date of the grant and with vesting, primarily for Company employees, either in equal annual amounts over a two to five year period or immediately, and, primarily for non-employee directors, immediately. The Company did not receive any cash from share option exercises under stock-based payment plans for the years ended June 30, 2016 and 2015 . The Company did not realize any tax effect, which would be a reduction in its tax rate, on options due to the full valuation allowances established on its deferred tax assets. The Company measures compensation expense for non-employee stock-based awards based on the fair value of the options issued, as this measurement is used to measure the transaction, and is more reliable than the fair value of the services received. Fair value is measured as the value of the Company’s common stock on the date that the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete. The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital. For the years ended June 30, 2016 and 2015 , non-employee compensation expense was $12,680 and $15,264 , respectively. During 2016 the Company issued 25,000 shares to a consultant resulting in $19,750 in compensation expense. Research and Development All research and development costs are charged to operations as incurred. Advertising Costs Advertising costs are charged to operations as incurred. Advertising expense for the years ended June 30, 2016 and 2015 was $33,000 and $ 64,000 , respectively. Net Income (loss) Per Share Earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the year. All outstanding stock options and warrants are considered potential common stock. The dilutive effect, if any, of stock options and warrants is calculated using the treasury stock method. A reconciliation of the denominator of the basic and diluted earnings per share for the years ended June 30, 2016 and 2015 is as follows: 2016 2015 Basic Weighted average shares outstanding 7,541,013 7,526,430 Effect of dilutive securities—Stock options and warrants — — Diluted weighted average shares outstanding 7,541,013 7,526,430 For the years ended June 30, 2016 and 2015 , the impact of all dilutive securities was omitted from the diluted earnings per share calculation as they reduce the loss per share (anti-dilutive). All of the outstanding options were excluded from the calculation of diluted earnings per share as the exercise price of the options exceeded the average share price of the Company’s common stock making the options anti-dilutive. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. The Company follows the FASB issued authoritative guidance for accounting for income taxes which provides a comprehensive model for the recognition, measurement, and disclosure in financial statements of uncertain income tax positions that a company has taken or expects to take on a tax return. Under FASB Accounting Standards Codification ("ASC") 740-10, a company can recognize the benefit of an income tax position only if it is more likely than not (greater than 50% ) that the tax position will be sustained upon tax examination, based solely on the technical merits of the tax position. Otherwise, no benefit can be recognized. The tax benefits recognized are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. Additionally, companies are required to accrue interest and related penalties, if applicable, on all tax exposures for which reserves have been established consistent with jurisdictional tax laws. The Company has elected to recognize interest expense and penalties related to uncertain tax positions as a component of its provision for income taxes, if necessary. Subsequent Events The Company has evaluated subsequent events through October 12, 2016 , which is the date the consolidated financial statements were available to be issued. New Accounting Pronouncements Recently Issued Accounting Standards In April 2014 FASB issued Accounting Standards Update 2014-08 Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360) Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. Under the new provision only those disposals of components of an entity that represent a strategic shift that has (or will have) a major effect on an entity’s operations and financial results will be reported as discontinued operations in the financial statements; a business or nonprofit activity that, on acquisition, meets the criteria to be classified as held for sale is reported in discontinued operations; and a disposal of an equity method investment that meets the definition of discontinued operation is reported in discontinued operations. A public business entity and a non-for-profit entity that has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market should apply the amendments prospectively to all disposals that occur within annual periods beginning on or after December 15, 2014, and interim periods within those years. The adoption of this standard did not have a material impact to the Company’s consolidated financial statements. In May 2014 FASB issued Accounting Standards Update 2014-09 Revenue from Contracts with Customers (Topic 606). Under the new provision, an entity should apply five steps for revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. For a public entity, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. In August 2015 FASB issued accounting Standards Update No. 2015-13 Revenue from Contracts with Customers (Topic 606) deferral of the effective date. The amendments in this Update defer the effective date of Update 2014-09 for all entities by one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in Update 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within the reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within the reporting period. Management is evaluating the standard's impact on the consolidated financial statements. In June 2014 FASB issued Accounting Standards Update 2014-11 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. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. For all entities, the amendments in this Update are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In August 2014 FASB issued Presentation of Financial Statements-Going Concern (Subtopic 205-40) Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards.The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In November 2014 FASB issued Derivatives and Hedging (Topic 815)Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity. For hybrid financial instruments issued in the form of a share, an entity should determine the nature of the host contract by considering the economic characteristics and risks of the entire hybrid financial instrument, including the embedded derivative feature that is being evaluated for separate accounting from the host contract.The amendments in this Update are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In December 2014 FASB issued Business Combinations (Topic 805) Accounting for Identifiable Intangible Assets in a Business Combination. An entity within the scope of this Update that elects the accounting alternative to recognize or otherwise consider the fair value of intangible assets as a result of any in-scope transactions should no longer recognize separately from goodwill.The amendments in this Update, at an entity’s election, apply to all entities except for public business entities and not-for-profit entities The decision to adopt the accounting alternative in this Update must be made upon the occurrence of the first transaction within the scope of this accounting alternative in fiscal years beginning after December 15, 2015, and the effective date of adoption depends on the timing of that first in-scope transaction. (1) customer-related intangible assets unless they are capable of being sold or licensed independently from the other assets of the business and (2) noncompetition agreements. The amendments in this Update are effective on November 18, 2014. The adoption of this standard did not have a material impact to the Company’s consolidated financial statements as it is not applicable to public companies. In January 2015, FASB issued Accounting Standards Update 2015-01 Income Statement - Extraordinary and Unusual Items simplifying Income Statement presentation by eliminating the concept of extraordinary items. The amendment will be effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In February 2015, FASB issued Accounting Standards Update 2015-02 Consolidation Amendments to the consolidation analysis. The amendments affect those entities who are required to evaluate whether they should consolidate certain legal entities and affect the following areas: limited partnership and similar legal entities, evaluating fees paid to a decision maker or a service provider as a variable interest, the effect of fee arrangements on the primary beneficiary determination, the effect of related parties on the primary beneficiary determination, and certain investment funds. The amendments in this update are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. For all other entities, the amendments in this Update are effective for fiscal year beginning after December 15, 2016, and for interim periods within fiscal years beginning after December 15, 2017. Early adoption is permitted. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In April 2015, FASB issued Accounting Standards Update 2015-03 Interest-Imputation of Interest to simply the presentation of debt issuance costs. For public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal year. For all other entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15,2015, and interim periods within fiscal years beginning after December 15, 2016. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In April 2015, FASB issued Accounting Standards Update 2015-04 Compensation-Retirement Benefits (Topic 715) to provide practical expedient for the measurement date of an employer’s defined benefit obligation and plan assets. The amendments in this Update are effective for public business entities for financial statements issued for fiscal year beginning after December 15, 2015, and interim periods within those fiscal year. For all other entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. Earlier adoption is permitted. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In April 2015, FASB issued Accounting Standards Update 2015-05 Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) to provide guidance to customers about whether a cloud computing arrangement includes a software license. For public business entities, the amendments will be effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. For all other entities, the amendments will be effective for annual periods beginning after December 15, 2015, and interim periods in annual periods beginning after December 15, 2016. Early adoption is permitted for all entities. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In April 2015, FASB issued Accounting Standards Update 2015-06 Earnings Per Share (Topic 260). The Amendments specify that for purposes of calculating historical earnings per unit under the two-class method, the earnings (losses) of a transferred business before the date of a dropdown transaction should be allocated entirely to the general partner. Qualitative disclosures about how the rights to the earnings (losses) differ before and after the dropdown transaction occurs for purposes of computing earnings per unit under the two-class method are required. The amendments are effective for fiscal year beginning after December 15, 2015, and interim periods within those fiscal years. Earlier application is permitted. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In May 2015, FASB issued Accounting Standards Update 2015-07 Fair Value Measurement (Topic 820). The amendments remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The amendments also remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. The amendments apply to reporting entities that elect to measure the friar value of an investment within the scope of paragraph 820-10-15-4 through 15-5 using the net asset value per share (or its equivalent) practical expedient in paragraph 820-35-59. The amendments in this Update are effective for public business entities for fiscal year beginning after December 15, 2015, and interim periods within those fiscal years. For all other entities, the amendments in this update are effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In May 2015, FASB issued Accounting Standard Update 2015-08 Business Combinations (Topic 805) as amendments to various SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 115. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In May 2015, FASB issued Accounting Standard Update 2015-09 Financial Services-Insurance (Topic 944). The amendments apply to all insurance entities that issue short-duration contracts as defined in Topic 944, Financial Service-Insurance. The amendments require insurance entities to provide additional disclosure for annual reporting periods about liability for unpaid claims and claim adjustment expenses. For public entities, the amendments in this Update are effective for annual periods beginning after December 15, 2015, and interim periods within annual periods beginning after December 15, 2016. For all other entities, the amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within annual periods beginning after December 15, 2017. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In June 2015, FASB issued Accounting Standards Update 2015-10 Technical Correction and Update. The amendments affect wide variety of Topics in Codification in the following four categories: Amendments related to differences between original guidance and the codification, guidance clarification and reference corrections, simplification and minor improvements. The amendments in this Update that require transition guidance are effective for all entities for fiscal year, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. In July 2015 FASB issued Accounting Standards Update No. 2015-11 Inventory simplifying the Measurement of Inventory. Inventory measured using any method other than LIFO or the retail or average cost shall be measured at the lower of cost and net realizable value. For public business entities, the amendments in this update are effective for fiscal year beginning after December 15, 2016, including interim periods within those fiscal Years. The amendments should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements.In July 2015 FASB issued Accounting Standards Update No. 2015-12 (Part I) Plan Accounting: Defined Contribution Pension Plans (Topic 962) Health and Welfare Benefit Plans (Topic 965) to reduce the complexity in employee benefit plan accounting. Under the amendments, fully benefit-responsive investment contracts are measured, presented, and disclosed only at contract value. The amendments in Part I of this Update are effective for fiscal years beginning after December 15, 2015. Earlier application is permitted.The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In August 2015 FASB issued Accounting Standard Update No. 2015-13 Derivatives and Hedging (Topic 815) Application of the Normal Purchases and Normal Sales Scope Exception to Certain Electricity Contracts within Nodal Energy Markets. The amendments apply to entities that enter into contracts for the purchase or sale of electricity on a forward basis and arrange for transmission through, or delivery to a location within, a nodal energy market whereby one of the contracting parties incurs charges (or credits) for the transmission of that electricity based in part on locational marginal pricing differences payable to (or receivable from) an independent system operator. The amendments specify that the use of locational marginal pricing by the independent system operator does not constitute the net settlement of the contract. If the physical delivery criterion is met, along with all of the other criteria of the normal purchase and normal scales scope exception, an entity may elect to designate that contract as a normal purchase or normal sale. The amendments in the Update are effective upon issuance and should be applied prospectively. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In August 2015 FASB issued Accounting Standards Update No. 2015-15 Interest -Imputation of Interest (Subtopic 835-30). This update adds SEC paragraphs pursuant to the SEC Staff Announcement at the June 18, 2015 Emerging Issues Task Force (EIFF) meeting about the presentation of subsequent measurement of debt issuance costs associated with line-of-credit arrangements. Given the absence of authoritative guidance within Update 2015-03 for debt issuance costs related to line-of-credit arrangements, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance cots ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In September 2015 FASB issued Accounting Standards Update No. 2015-16 Business Combinations (Topic 805) Simplifying the Accounting for Measurement-Period Adjustments. The amendments in this Update require t |
Intangible Assets
Intangible Assets | 12 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Goodwill, Trademarks and Trade Names Goodwill, trademarks and trade names represent intangible assets obtained from EOI, Endologix and Sonomed acquisitions. Goodwill represents the excess of purchase price over the fair value of net assets acquired. The Company adopted FASB authoritative guidance effective July 1, 2001 for goodwill and identified intangible assets that have indefinite lives. These assets are no longer amortized but reviewed for impairment annually or more frequently if certain indicators arise. In accordance with authoritative guidance effective July 1, 2001, the Company discontinued the amortization of goodwill and identifiable intangible assets that have indefinite lives. Intangible assets that have finite lives continue to be amortized over their estimated useful lives. Management has evaluated the carrying value of goodwill and its identifiable intangible assets that have indefinite lives during each of the fiscal years subsequent to July 1, 2001, utilizing discounted cash flows of the respective business units. In accordance with ASC 350-20, these intangible assets will continue to be assessed on an annual basis, and impairment, if any, would be recorded as a charge against income from operations. The authoritative guidance makes use of the concept of reporting units. All acquisitions must be assigned to a reporting segment or unit. Reporting units have been defined under the standards to be the same as or one level below an operating segment, as defined by FASB issued authoritative guidance related to disclosures about segments of an enterprise and related information. The Company tests goodwill for possible impairment on an annual basis at June 30, and at any other time events occur or circumstances indicate that the carrying amount of goodwill may be impaired. As a result of the Company's testing during the years ended June 30, 2016 and 2015 , no impairments were recorded. The following tables present unamortized intangible assets as of June 30, 2016 and 2015 : 2016 Net 2015 Net Goodwill Sonomed-Escalon $ 125,027 $ 125,027 Total $ 125,027 $ 125,027 2016 Net 2015 Net Trademarks and trade names Sonomed-Escalon $ 605,006 $ 605,006 Total $ 605,006 $ 605,006 Patents It is the Company’s practice to seek patent protection on processes and products in various countries. Patent application costs are capitalized and amortized over their estimated useful lives, not exceeding 17 years, on a straight-line basis from the date the related patents are issued. Costs associated with patents no longer being pursued are expensed. Accumulated amortization on patents from continuing operations was approximately $89,000 and $88,000 at June 30, 2016 and 2015 , respectively. Amortization expense from continuing operations for the years ended June 30, 2016 and 2015 was approximately $1,000 and $2,000 , respectively. Amortization expense, relating entirely to patents, is estimated to be approximately $ 2,000 related to patents in 2017. The following table presents amortized intangible assets as of June 30, 2016 : Gross Carrying Amount Impairment Adjusted Gross Carrying Amount Accumulated Amortization Net Carrying Value Amortized Intangible Assets Patents Sonomed-Escalon $ 90,962 $ — $ 90,962 $ (88,962 ) $ 2,000 Total $ 90,962 $ — $ 90,962 $ (88,962 ) $ 2,000 The following table presents amortized intangible assets as of June 30, 2015 : Gross Carrying Amount Impairment Adjusted Gross Carrying Amount Accumulated Amortization Net Carrying Value Amortized Intangible Assets Patents Sonomed-Escalon $ 90,962 $ — $ 90,962 $ (87,762 ) $ 3,200 Total $ 90,962 $ — $ 90,962 $ (87,762 ) $ 3,200 |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Jun. 30, 2016 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses The following table presents accrued expenses: June 30, 2016 June 30, Accrued compensation $ 426,600 $ 513,942 Deferred revenue 334,791 340,239 Other accruals 465,451 675,247 Total accrued expenses $ 1,226,842 $ 1,529,428 Accrued compensation as of June 30, 2016 and 2015 primarily relates to payroll, vacation accruals, and payroll tax liabilities. Other accruals as of June 30, 2016 and 2015 includes warranties and customer deposits. |
Capital Stock Transactions
Capital Stock Transactions | 12 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Capital Stock Transactions | Capital Stock Transactions Stock Option Plans As of June 30, 2016 , the Company had in effect 2 employee stock option plans that provide for incentive and non-qualified stock options. After accounting for shares issued upon exercise of options, a total of 995,846 shares of the Company’s common stock remain available for issuance as of June 30, 2016 . Under the terms of the plans, options may not be granted for less than the fair market value of the Common Stock at the date of grant. Vesting generally occurs ratably between one and five years and for non-employee directors, immediately and the options are exercisable over a period no longer than 10 years after the grant date. As of June 30, 2016 , options to purchase 616,500 shares of the Company’s common stock were outstanding, of which 616,500 were exercisable, and 0 shares were unvested. The following is a summary of Escalon’s stock option activity and related information for the fiscal years ended June 30, 2016 and 2015 : 2016 2015 Common Stock Options Weighted Average Exercise Price Common Stock Options Weighted Average Exercise Price Outstanding at the beginning of the year 813,942 $ 3.36 995,846 $ 3.89 Granted 21,000 0.79 — — Exercised — — — — Forfeited (218,442 ) 6.58 (181,904 ) $ 6.29 Outstanding at the end of the year 616,500 $ 2.27 813,942 $ 3.36 Exercisable at the end of the year 616,500 747,083 — Weighted average fair value of options granted during the year $ 12,680 $ — The following table summarizes information about stock options outstanding as of June 30, 2016 : Number Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number Exercisable at June 30, 2015 Weighted Average Exercise Price Range of Exercise Prices $0.79 21,000 9.83 $ 0.79 21,000 $ 0.79 $1.45 to $2.12 192,000 6.54 $ 1.55 192,000 $ 1.55 $2.21 to $3.05 403,500 1.37 $ 2.61 403,500 $ 2.48 Total 616,500 616,500 Compensation expense related to stock options for the years ended June 30, 2016 and 2015 was $52,293 and $67,367 , respectively. Stock Compensation During 2016 the Company issued 25,000 shares to a consultant resulting in $19,750 in compensation expense. |
Income Taxes
Income Taxes | 12 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes for the years ended June 30, 2016 and 2015 consists of the following: 2016 2015 Current income tax (benefit) provision Federal $ — $ — State — — — — Deferred income tax provision Federal 241,250 182,843 State 42,575 32,266 Change in valuation allowance (283,825 ) (215,109 ) — — Income tax (benefit) $ — $ — Income taxes (benefit) as a percentage of income (loss) for the years ended June 30, 2016 and 2015 differ from statutory federal income tax rate due to the following: 2016 2015 Statutory federal income tax rate 34.00 % 34.00 % Increase (Decrease) in deductable timing differences 7.00 % 43.00 % Net operating loss carryforward (41.00 )% (77.00 )% Effective income tax rate 0.00 % 0.00 % As of June 30, 2016 , the Company had deferred income tax assets of $12,018,000 . The deferred income tax assets have a valuation allowance of $11,913,000 . The valuation allowance is based on uncertainty with respect to the ultimate realization of net operating loss carryforwards. The components of the net deferred income tax assets and liabilities as of June 30, 2016 and 2015 are as follows: 2016 2015 Deferred income tax assets: Net operating loss carryforward $ 11,222,477 $ 10,882,593 Executive post retirement costs 318,743 305,769 General business credit 207,698 207,698 Allowance for doubtful accounts 68,910 78,385 Accrued vacation 105,816 116,418 Inventory reserve 67,361 67,361 Accelerated depreciation 16,340 34,878 Warranty reserve 10,907 10,907 Total deferred income tax assets 12,018,252 11,704,009 Valuation allowance (11,913,221 ) (11,629,396 ) 105,031 74,613 Deferred income tax liabilities: Accelerated depreciation (105,031 ) (74,613 ) Total deferred income tax liabilities (105,031 ) (74,613 ) $ — $ — As of June 30, 2016 , the Company has a valuation allowance of $11,913,221 , which primarily relates to the federal net operating loss carryforwards. The valuation allowance is a result of management evaluating its estimates of the net operating losses available to the Company as they relate to the results of operations of acquired businesses subsequent to their being acquired by the Company. The Company evaluates a variety of factors in determining the amount of the valuation allowance, including the Company’s earnings history, the number of years the Company’s operating loss and tax credits can be carried forward, the existence of taxable temporary differences, and near-term earnings expectations. Future reversal of the valuation allowance will be recognized either when the benefit is realized or when it has been determined that it is more likely than not that the benefit will be realized through future earnings. Any tax benefits related to stock options that may be recognized in the future through reduction of the associated valuation allowance will be recorded as additional paid-in capital. The Company has available federal and state net operating loss carry forwards of approximately $32,066,000 and $3,345,000 , respectively, of which $4,619,000 and $1,533,000 , respectively, will expire over the next 10 years, and $27,447,000 and $1,812,000, respectively, will expire in years 11 through twenty . The Company continues to monitor the realization of its deferred tax assets based on changes in circumstances, for example, recurring periods of income for tax purposes following historical periods of cumulative losses or changes in tax laws or regulations. The Company’s income tax provision and management’s assessment of the realizability of the Company’s deferred tax assets involve significant judgments and estimates. If taxable income expectations change, in the near term the Company may be required to reduce the valuation allowance which would result in a material benefit to the Company’s results of operations in the period in which the benefit is determined by the Company. Effective July 1, 2007, the Company adopted the FASB authoritative guidance which prescribes a model for the recognition and measurement of a tax position taken or expected to be taken in a tax return, and provides guidance on derecognition, classification, interest, penalties, disclosure and transition. Implementation of the FASB authoritative guidance did not result in a cumulative effect adjustment to retained earnings. With few exceptions, the Company is no longer subject to audits by tax authorities for tax years prior to 2011. However, to the extent allowed by law, the tax authorities may have the right to examine prior periods where net operating losses were generated and carried forward, and make adjustments up to the amount of the net operating loss amount. At June 30, 2016 , the Company did not have any significant unrecognized tax positions. The Company has provided what it believes to be an appropriate amount of tax for items that involve interpretation to the tax law. However, events may occur in the future that will cause the Company to reevaluate the current provision and may result in an adjustment to the liability for taxes. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments The Company leases its manufacturing, research and corporate office facilities and certain equipment under non-cancelable operating lease arrangements. The future annual amounts to be paid under these arrangements as of June 30, 2016 are as follows: Year Ending June 30, Lease Obligations 2017 $ 495,216 2018 245,783 2019 145,564 2020 100,183 2021 9,637 Total $ 996,383 Rent expense charged to continuing operations during the years ended June 30, 2016 and 2015 was approximately $572,000 and $506,000 , respectively, including equipment rent and property rent. The Company guaranteed the lease payment for BHH and during fiscal year 2015 the Company was informed by French Counsel that the total amount claimed by the BHH landlord in the liquidation of BHH was approximately $86,000 . The Company did not have insight into the French liquidation process due to the Liquidator's reticence to communicate with the Company. As such, the Company had accrued the present value of the maximum amount potentially due under the lease guaranteed by the Company on behalf of BHH. The landlord's claim under liquidation can not be revisited by the landlord and can only be potentially increased by interest or sundry expenses.The Company has accrued lease termination costs of $89,000 and $86,000 as of June 30, 2016 and 2015 , respectively. Legal Proceedings The Company, from time to time is involved in various legal proceedings and disputes that arise in the normal course of business. These matters have included intellectual property disputes, contract disputes, employment disputes and other matters. The Company does not believe that the resolution of any of these matters has had or is likely to have a material adverse impact on the Company’s business, financial condition or results of operations. |
Retirement and Post-Retirement
Retirement and Post-Retirement Plans | 12 Months Ended |
Jun. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Retirement and Post-Retirement Plans | Retirement and Post-Retirement Plans The Company adopted a 401(k) retirement plan effective January 1, 1994. The Company’s employees become eligible for the plan commencing on the date of employment. Company contributions are discretionary, and no Company contributions have been made since the plan’s inception. On January 14, 2000, the Company acquired Sonomed. Sonomed adopted a 401(k) retirement plan effective on January 1, 1993. This plan has continued subsequent to the acquisition and is available only to Sonomed employees. There were no discretionary contributions for the fiscal years ended June 30, 2016 and 2015 . On June 23, 2005, the Company entered into a Supplemental Executive Retirement Benefit Agreement with its Chairman. The agreement provides for the payment of supplemental retirement benefits to the covered executive in the event of the covered executive’s termination of services with the Company under the following circumstances: • If the covered executive retires, the Company would be obligated to pay the executive $8,491 per month for life, with payments commencing the month after retirement. If the covered executive were to die within a period of three years after such retirement, the Company would be obligated to continue making such payments until a minimum of 36 months payments have been made to the covered executive and his beneficiaries in the aggregate. • If the covered executive dies before his retirement while employed by the Company, the Company would be obligated to make 36 months payments to his beneficiaries of $8,491 per month commencing in the month after his death. • If the covered executive were to become disabled while employed by the Company, the Company would be obligated to pay the executive $8,000 per month for life, with payments commencing the month after he suffers such disability. If the covered executive were to die within three years after suffering such disability, the Company would be obligated to continue making such payments until a minimum of 36 months payments have been made to the covered executive and his beneficiaries in the aggregate. • If the covered executive’s employment with the Company is terminated by the Company, or if the executive terminates his employment with the Company for good reason, as defined in the agreement, the Company would be obligated to pay the executive $8,491 per month for life. If the covered executive were to die within a period of three years after such termination, the Company would be obligated to continue making such payments until a minimum of 36 months payments have been made to the covered executive and his beneficiaries in the aggregate. As of June 30, 2016 and 2015 approximately $937,000 and $899,000 was accrued for retirement benefits, respectively. These amounts represent the approximate present value of the supplemental retirement benefits awarded using 3.9% discount rate. The Company began making monthly payments under this agreement on January 1, 2013. The changes related to post-retirement plans for the years ended June 30, 2016 and 2015 were as follows: 2016 2015 Balance July 1, $899,322 $943,590 Actuarial adjustment 140,049 57,623 Payment of benefits (101,891) (101,891) Balance June 30, $937,480 $899,322 |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Jun. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations BH Holdings, S.A.S ("BHH") On January 12, 2012 BHH initiated the filing of an insolvency declaration with the Tribunal de Commerce de Rennes, France ("Commercial Court"). The Commercial Court on January 18, 2012 opened the liquidation proceedings with continuation of BHH's activity for 3 months and named an administrator to manage BHH . Since Drew no longer had a controlling financial interest in BHH it was deconsolidated in the December 31, 2011 quarterly consolidated financial statements and prior period amounts are presented as discontinued operations. The following table summarizes the results of discontinued operations of BHH for the years ended June 30, 2016 and 2015 (in thousands): For the years ended June 30, 2016 2015 Revenue, net $ — $ — Cost of goods — — Marketing, general and administrative — 2 Research & development — — Total costs and expenses — 2 Loss from discontinued operations $ — $ (2 ) Other income and expenses: Adjustment to lease termination accrual — 507 Loss before income taxes — 505 Income tax — — Net loss $ — $ 505 Assets and liabilities of discontinued operations of BHH included in the consolidated balance sheets are summarized as follows at June 30, 2016 and 2015 (in thousands): June 30, June 30, 2016 2015 Assets Total assets $ — $ — Liabilities Accrued lease termination costs 89 86 Total liabilities 89 86 Net assets of discontinued operations $ (89 ) $ (86 ) During fiscal year 2015 the Company was informed by French Counsel that the total amount claimed by the BHH landlord in the liquidation of BHH was approximately $86,000 . The Company did not have insight into the French liquidation process due to the Liquidator's reticence to communicate with the Company. As such, the Company had accrued the present value of the maximum amount potentially due under the lease guaranteed by the Company on behalf of BHH. The landlord's claim under liquidation of approximately $86,000 can not be revisited by the landlord and can only be potentially increased by interest or sundry expenses. Beginning in 2016 any changes to this liability are included in continuing operations. Discontinued operation of ECD The following tables summarize the results of discontinued operations for the years ended June, 2016 and 2015 (in thousands): For the years ended June 30, 2016 2015 Revenue, net $ — $ — Cost of goods sold — — Marketing, general and administrative — 1 Research & development — — Total costs and expenses — 1 Other income — 7 Net income from discontinued operations, net of tax $ — $ 6 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. Related Party Transactions During the year ended June 30, 2016, Richard J. DePiano, Sr., the Company’s Chairman, participated in an accounts receivable factoring program that was implemented by the Company. Under the program, Mr. DePiano advanced the Company $150,000 in February 2016 and $125,000 in May 2016. Interest on the transaction was 1.25% per month, which was equal to the best price offered by the Company’s usual factoring agent. The transaction excluded fees typically charged by the factoring agent and provided much needed liquidity to the Company. Related party interest expense for the year ended June 30, 2016 and 2015 was $11,400 and $0 , respectively. Repayment is due upon the Company receiving payment from the underlying receivables purchased by Mr. DePiano. In the near term Mr. DePiano will roll-over the original $275,000 investment as the receivables are collected and additional receivables will be assigned as collateral until such time as the Company no longer needs the liquidity. The Company purchased furniture from DePiano Interiors, L.L.C. which is owned by the mother of the Company's Chief Executive Officer, Richard DePiano, Jr. Total purchases were $0 and $ 32,033 for the fiscal years ended June 30, 2016 and 2015, respectively. The Company rented an apartment from Richard DePiano, Sr. for use by a visiting Company Executive. Total rent for the fiscal years ended June 30, 2016 and 2015 was $0 and $10,000 , respectively. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements On July 1, 2008, the Company adopted the FASB-issued authoritative guidance for the fair value of financial assets and liabilities. This standard defines fair value and establishes a hierarchy for reporting the reliability of input measurements used to assess fair value for all assets and liabilities. The FASB issued authoritative guidance defines fair value as the selling price that would be received for an asset, or paid to transfer a liability, in the principal or most advantageous market on the measurement date. The hierarchy established prioritizes fair value measurements based on the types of inputs used in the valuation technique. The inputs are categorized into the following levels: Level 1—Observable inputs such as quoted prices in active markets for identical assets or liabilities. Level 2—Directly or indirectly observable inputs for quoted and other than quoted prices for identical or similar assets and liabilities in active or non-active markets. Level 3—Unobservable inputs not corroborated by market data, therefore requiring the entity to use the best available information available in the circumstances, including the entity’s own data. Certain financial instruments are carried at cost on the consolidated balance sheets, which approximates fair value due to their short-term, highly liquid nature. These instruments include cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and related party note payable. |
Going concern (Notes)
Going concern (Notes) | 12 Months Ended |
Jun. 30, 2016 | |
Going concern [Abstract] | |
Liquidity Disclosure [Policy Text Block] | 1. Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Escalon Medical Corp. (“Escalon” or the “Company”) has incurred recurring operating losses and negative cash flows from operating activities and the fourth quarter was hampered by the transition to new products which involved the discounting of our older product inventory and a material exchange rate reduction between the Euro and the US Dollar. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The 2016 consolidated financial statements do not include any adjustments relating to the realization of the carrying value of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company's continuance as a going concern is dependent on its future profitability and on the on-going support of its shareholders, affiliates and creditors. In order to mitigate the going concern issues, the Company is actively pursuing business partnerships, managing our continuing operations, and seeking to sell certain assets. The Company may not be successful in any of these efforts. The Company’s forecast of the period of time through which its financial resources will be adequate to support its operations is a forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors, including the factors discussed in “Risk Factors”. If the Company raises funds in the future, the Company may be required to raise those funds through public or private financings, strategic relationships or other arrangements at prices and other terms that my not be as favorable as they would without such qualification. The sale of additional equity and debt securities may result in additional dilution to the Company’s shareholders. Additional financing may not be available in amounts or on terms acceptable to the Company or at all. |
Significant Accounting Polici20
Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated. |
Use of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that impact the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | For the purposes of reporting cash flows, the Company considers all cash accounts, which are not subject to withdrawal restrictions or penalties, and highly liquid investments with original maturities of 90 days or less to be cash and cash equivalents. From time to time cash balances exceed federal insurance limits. |
Fair Value of Financial Instruments | On July 1, 2008, the Company adopted Financial Accounting Standards Board (“FASB”) issued authoritative guidance related to fair value measurement for financial assets and liabilities. The carrying amounts for cash and cash equivalents, accounts receivable, post-retirement benefits, accounts payable and accrued liabilities approximate their fair value because of their short-term maturity. The carrying amounts of long-term post retirement benefits approximate fair value since the Company utilizes approximate current market interest rates to calculate the liability. While we believe the carrying value of the assets and liabilities is reasonable, considerable judgment is used to develop estimates of fair value; thus the estimates are not necessarily indicative of the amounts that could be realized in a current market exchange. |
Revenue Recognition | The Company recognizes revenue from the sale of its products at the time of shipment, when title and risk of loss transfer. The Company provides products to its distributors at agreed wholesale prices and to the balance of its customers at set retail prices. Distributors can receive discounts for accepting high volume shipments. The discounts are reflected immediately in the net invoice price, which is the basis for revenue recognition. No further material discounts or sales incentives are given. The Company’s considerations for recognizing revenue upon shipment of product to a distributor are based on the following: • Persuasive evidence that an arrangement (purchase order and sales invoice) exists between a willing buyer (distributor) and the Company that outlines the terms of the sale (company information, quantity of goods, purchase price and payment terms). The buyer (distributor) does not have a right of return. • Shipping terms are ex-factory shipping point. At this point the buyer (distributor) takes title to the goods and is responsible for all risks and rewards of ownership, including insuring the goods as necessary. • The Company’s price to the buyer (distributor) is fixed and determinable as specifically outlined on the sales invoice. The sales arrangement does not have customer cancellation or termination clauses. • The buyer (distributor) places a purchase order with the Company; the terms of the sale are cash, COD or credit. Customer credit is determined based on the Company’s policy and procedures related to the buyer’s (distributor’s) creditworthiness. Based on this determination, the Company believes that collectibility is reasonably assured. Provision has been made for estimated sales returns based on historical experience. |
Shipping and Handling Revenues and Costs | Shipping and handling revenues are included in product revenue and the related costs are included in cost of goods sold. |
Inventory | Raw materials, work in process and finished goods are recorded at lower of cost (first-in, first-out) or market. |
Accounts Receivable | Accounts receivable are recorded at net realizable value. The Company performs ongoing credit evaluations of customers’ financial condition and does not require collateral for accounts receivable arising in the normal course of business. The Company maintains allowances for potential credit losses based on the Company’s historical trends, specific customer issues and current economic trends. Accounts are written off when they are determined to be uncollectible based on management’s assessment of individual accounts. |
Property and Equipment | Property and equipment are recorded at cost. Leasehold improvements are amortized on a straight-line basis over the lesser of the estimated useful life of the asset or lease term. Depreciation on property and equipment is recorded using the straight-line method over the estimated economic useful life of the related assets. Estimated useful lives are generally 3 to 5 years for computer equipment and software, 5 to 7 years for furniture and fixtures and 5 to 10 years for production and test equipment. |
Long-lived Assets | Long-lived assets and certain identifiable intangibles to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. An asset’s value is impaired if management’s estimate of the aggregate future cash flows, undiscounted and without interest charges, to be generated by the asset are less than the carrying value of the asset. Such cash flows consider factors such as expected future operating income and historical trends, as well as the effects of demand and competition. To the extent impairment has occurred, the loss will be measured as the excess of the carrying amount of the asset over the fair value of the asset. Such estimates require the use of judgment and numerous subjective assumptions which, if actual experience varies, could result in material differences in the requirements for impairment charges. |
Intangible Assets | The Company follows FASB issued authoritative guidance for recording goodwill and other intangible assets, which discontinues the amortization of goodwill and identifiable intangible assets that have indefinite lives. In accordance with FASB issued authoritative guidance, these goodwill and identifiable intangible assets that have indefinite lives are tested for impairment on an annual basis. |
Accrued Warranties | The Company provides a limited one year warranty against manufacturer’s defects on its products sold to customers. The Company’s standard warranties require the Company to repair or replace, at the Company’s discretion, defective parts during such warranty period. The Company accrues for its product warranty liabilities based on estimates of costs to be incurred during the warranty period, based on historical repair information for warranty costs. |
Business Combinations | The Company allocates the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. When acquisitions are deemed material by management, the Company engages independent third-party appraisal firms to assist in determining the fair values of assets acquired and liabilities assumed. Such a valuation requires management to make significant estimates and assumptions, especially with respect to intangible assets. |
Stock-Based Compensation | Stock-based compensation expense for all share-based payment awards granted after July 1, 2006 is based on the grant date fair value estimate in accordance with the provisions of FASB issued authoritative guidance. As of June 30, 2016 and 2015 there was $0 and $39,613 , respectively, of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted to employees under the plans. There is no remaining cost under the plan. For the years ended June 30, 2016 and 2015 , $39,613 and $52,103 , respectively, was recorded as compensation expense. Valuations are based upon highly subjective assumptions about the future, including stock price volatility and exercise patterns. The fair value of share-based payment awards was estimated using the Black-Scholes option pricing model. Expected volatilities are based on the historical volatility of the Company’s stock. The Company uses historical data to estimate option exercise and employee terminations. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The Company has historically granted options under the Company’s option plans with an option exercise price equal to the closing market value of the stock on the date of the grant and with vesting, primarily for Company employees, either in equal annual amounts over a two to five year period or immediately, and, primarily for non-employee directors, immediately. The Company did not receive any cash from share option exercises under stock-based payment plans for the years ended June 30, 2016 and 2015 . The Company did not realize any tax effect, which would be a reduction in its tax rate, on options due to the full valuation allowances established on its deferred tax assets. The Company measures compensation expense for non-employee stock-based awards based on the fair value of the options issued, as this measurement is used to measure the transaction, and is more reliable than the fair value of the services received. Fair value is measured as the value of the Company’s common stock on the date that the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete. The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital. For the years ended June 30, 2016 and 2015 , non-employee compensation expense was $12,680 and $15,264 , respectively. |
Research and Development | All research and development costs are charged to operations as incurred. |
Advertising Costs | Advertising costs are charged to operations as incurred. |
Net Income (loss) Per Share | Earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the year. All outstanding stock options and warrants are considered potential common stock. The dilutive effect, if any, of stock options and warrants is calculated using the treasury stock method. A reconciliation of the denominator of the basic and diluted earnings per share for the years ended June 30, 2016 and 2015 is as follows: 2016 2015 Basic Weighted average shares outstanding 7,541,013 7,526,430 Effect of dilutive securities—Stock options and warrants — — Diluted weighted average shares outstanding 7,541,013 7,526,430 For the years ended June 30, 2016 and 2015 , the impact of all dilutive securities was omitted from the diluted earnings per share calculation as they reduce the loss per share (anti-dilutive). All of the outstanding options were excluded from the calculation of diluted earnings per share as the exercise price of the options exceeded the average share price of the Company’s common stock making the options anti-dilutive. |
Income Taxes | Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. The Company follows the FASB issued authoritative guidance for accounting for income taxes which provides a comprehensive model for the recognition, measurement, and disclosure in financial statements of uncertain income tax positions that a company has taken or expects to take on a tax return. Under FASB Accounting Standards Codification ("ASC") 740-10, a company can recognize the benefit of an income tax position only if it is more likely than not (greater than 50% ) that the tax position will be sustained upon tax examination, based solely on the technical merits of the tax position. Otherwise, no benefit can be recognized. The tax benefits recognized are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. Additionally, companies are required to accrue interest and related penalties, if applicable, on all tax exposures for which reserves have been established consistent with jurisdictional tax laws. The Company has elected to recognize interest expense and penalties related to uncertain tax positions as a component of its provision for income taxes, if necessary. |
Subsequent Events | The Company has evaluated subsequent events through October 12, 2016 , which is the date the consolidated financial statements were available to be issued. |
New Accounting Pronouncements | Recently Issued Accounting Standards In April 2014 FASB issued Accounting Standards Update 2014-08 Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360) Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. Under the new provision only those disposals of components of an entity that represent a strategic shift that has (or will have) a major effect on an entity’s operations and financial results will be reported as discontinued operations in the financial statements; a business or nonprofit activity that, on acquisition, meets the criteria to be classified as held for sale is reported in discontinued operations; and a disposal of an equity method investment that meets the definition of discontinued operation is reported in discontinued operations. A public business entity and a non-for-profit entity that has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market should apply the amendments prospectively to all disposals that occur within annual periods beginning on or after December 15, 2014, and interim periods within those years. The adoption of this standard did not have a material impact to the Company’s consolidated financial statements. In May 2014 FASB issued Accounting Standards Update 2014-09 Revenue from Contracts with Customers (Topic 606). Under the new provision, an entity should apply five steps for revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. For a public entity, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. In August 2015 FASB issued accounting Standards Update No. 2015-13 Revenue from Contracts with Customers (Topic 606) deferral of the effective date. The amendments in this Update defer the effective date of Update 2014-09 for all entities by one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in Update 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within the reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within the reporting period. Management is evaluating the standard's impact on the consolidated financial statements. In June 2014 FASB issued Accounting Standards Update 2014-11 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. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. For all entities, the amendments in this Update are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In August 2014 FASB issued Presentation of Financial Statements-Going Concern (Subtopic 205-40) Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards.The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In November 2014 FASB issued Derivatives and Hedging (Topic 815)Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity. For hybrid financial instruments issued in the form of a share, an entity should determine the nature of the host contract by considering the economic characteristics and risks of the entire hybrid financial instrument, including the embedded derivative feature that is being evaluated for separate accounting from the host contract.The amendments in this Update are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In December 2014 FASB issued Business Combinations (Topic 805) Accounting for Identifiable Intangible Assets in a Business Combination. An entity within the scope of this Update that elects the accounting alternative to recognize or otherwise consider the fair value of intangible assets as a result of any in-scope transactions should no longer recognize separately from goodwill.The amendments in this Update, at an entity’s election, apply to all entities except for public business entities and not-for-profit entities The decision to adopt the accounting alternative in this Update must be made upon the occurrence of the first transaction within the scope of this accounting alternative in fiscal years beginning after December 15, 2015, and the effective date of adoption depends on the timing of that first in-scope transaction. (1) customer-related intangible assets unless they are capable of being sold or licensed independently from the other assets of the business and (2) noncompetition agreements. The amendments in this Update are effective on November 18, 2014. The adoption of this standard did not have a material impact to the Company’s consolidated financial statements as it is not applicable to public companies. In January 2015, FASB issued Accounting Standards Update 2015-01 Income Statement - Extraordinary and Unusual Items simplifying Income Statement presentation by eliminating the concept of extraordinary items. The amendment will be effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In February 2015, FASB issued Accounting Standards Update 2015-02 Consolidation Amendments to the consolidation analysis. The amendments affect those entities who are required to evaluate whether they should consolidate certain legal entities and affect the following areas: limited partnership and similar legal entities, evaluating fees paid to a decision maker or a service provider as a variable interest, the effect of fee arrangements on the primary beneficiary determination, the effect of related parties on the primary beneficiary determination, and certain investment funds. The amendments in this update are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. For all other entities, the amendments in this Update are effective for fiscal year beginning after December 15, 2016, and for interim periods within fiscal years beginning after December 15, 2017. Early adoption is permitted. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In April 2015, FASB issued Accounting Standards Update 2015-03 Interest-Imputation of Interest to simply the presentation of debt issuance costs. For public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal year. For all other entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15,2015, and interim periods within fiscal years beginning after December 15, 2016. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In April 2015, FASB issued Accounting Standards Update 2015-04 Compensation-Retirement Benefits (Topic 715) to provide practical expedient for the measurement date of an employer’s defined benefit obligation and plan assets. The amendments in this Update are effective for public business entities for financial statements issued for fiscal year beginning after December 15, 2015, and interim periods within those fiscal year. For all other entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. Earlier adoption is permitted. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In April 2015, FASB issued Accounting Standards Update 2015-05 Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) to provide guidance to customers about whether a cloud computing arrangement includes a software license. For public business entities, the amendments will be effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. For all other entities, the amendments will be effective for annual periods beginning after December 15, 2015, and interim periods in annual periods beginning after December 15, 2016. Early adoption is permitted for all entities. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In April 2015, FASB issued Accounting Standards Update 2015-06 Earnings Per Share (Topic 260). The Amendments specify that for purposes of calculating historical earnings per unit under the two-class method, the earnings (losses) of a transferred business before the date of a dropdown transaction should be allocated entirely to the general partner. Qualitative disclosures about how the rights to the earnings (losses) differ before and after the dropdown transaction occurs for purposes of computing earnings per unit under the two-class method are required. The amendments are effective for fiscal year beginning after December 15, 2015, and interim periods within those fiscal years. Earlier application is permitted. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In May 2015, FASB issued Accounting Standards Update 2015-07 Fair Value Measurement (Topic 820). The amendments remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The amendments also remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. The amendments apply to reporting entities that elect to measure the friar value of an investment within the scope of paragraph 820-10-15-4 through 15-5 using the net asset value per share (or its equivalent) practical expedient in paragraph 820-35-59. The amendments in this Update are effective for public business entities for fiscal year beginning after December 15, 2015, and interim periods within those fiscal years. For all other entities, the amendments in this update are effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In May 2015, FASB issued Accounting Standard Update 2015-08 Business Combinations (Topic 805) as amendments to various SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 115. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In May 2015, FASB issued Accounting Standard Update 2015-09 Financial Services-Insurance (Topic 944). The amendments apply to all insurance entities that issue short-duration contracts as defined in Topic 944, Financial Service-Insurance. The amendments require insurance entities to provide additional disclosure for annual reporting periods about liability for unpaid claims and claim adjustment expenses. For public entities, the amendments in this Update are effective for annual periods beginning after December 15, 2015, and interim periods within annual periods beginning after December 15, 2016. For all other entities, the amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within annual periods beginning after December 15, 2017. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In June 2015, FASB issued Accounting Standards Update 2015-10 Technical Correction and Update. The amendments affect wide variety of Topics in Codification in the following four categories: Amendments related to differences between original guidance and the codification, guidance clarification and reference corrections, simplification and minor improvements. The amendments in this Update that require transition guidance are effective for all entities for fiscal year, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. In July 2015 FASB issued Accounting Standards Update No. 2015-11 Inventory simplifying the Measurement of Inventory. Inventory measured using any method other than LIFO or the retail or average cost shall be measured at the lower of cost and net realizable value. For public business entities, the amendments in this update are effective for fiscal year beginning after December 15, 2016, including interim periods within those fiscal Years. The amendments should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements.In July 2015 FASB issued Accounting Standards Update No. 2015-12 (Part I) Plan Accounting: Defined Contribution Pension Plans (Topic 962) Health and Welfare Benefit Plans (Topic 965) to reduce the complexity in employee benefit plan accounting. Under the amendments, fully benefit-responsive investment contracts are measured, presented, and disclosed only at contract value. The amendments in Part I of this Update are effective for fiscal years beginning after December 15, 2015. Earlier application is permitted.The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In August 2015 FASB issued Accounting Standard Update No. 2015-13 Derivatives and Hedging (Topic 815) Application of the Normal Purchases and Normal Sales Scope Exception to Certain Electricity Contracts within Nodal Energy Markets. The amendments apply to entities that enter into contracts for the purchase or sale of electricity on a forward basis and arrange for transmission through, or delivery to a location within, a nodal energy market whereby one of the contracting parties incurs charges (or credits) for the transmission of that electricity based in part on locational marginal pricing differences payable to (or receivable from) an independent system operator. The amendments specify that the use of locational marginal pricing by the independent system operator does not constitute the net settlement of the contract. If the physical delivery criterion is met, along with all of the other criteria of the normal purchase and normal scales scope exception, an entity may elect to designate that contract as a normal purchase or normal sale. The amendments in the Update are effective upon issuance and should be applied prospectively. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In August 2015 FASB issued Accounting Standards Update No. 2015-15 Interest -Imputation of Interest (Subtopic 835-30). This update adds SEC paragraphs pursuant to the SEC Staff Announcement at the June 18, 2015 Emerging Issues Task Force (EIFF) meeting about the presentation of subsequent measurement of debt issuance costs associated with line-of-credit arrangements. Given the absence of authoritative guidance within Update 2015-03 for debt issuance costs related to line-of-credit arrangements, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance cots ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In September 2015 FASB issued Accounting Standards Update No. 2015-16 Business Combinations (Topic 805) Simplifying the Accounting for Measurement-Period Adjustments. The amendments in this Update require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments require that the acquirer record in the same period’s financial statements the effect on earnings of changes in depreciation, amortization or other income effects, if any, as result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. Under this Update an entity must present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 2016, and interim periods within fiscal years beginning after December 15, 2017. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In November 2015 FASB issued Accounting Standards Update No. 2015-17 Income Taxes (Topic 740) Balance Sheet Classification of Deferred Taxes to reduce complexity in accounting standards. The amendments require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. For public business entities, the amendments in this Update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. For all other entities, the amendments in this Update are effective for financial statements issued for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In January 2016 FASB issued Accounting Standards Update No. 2016-01 Financial Instruments-Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities. Under the amendment, equity investments (with exceptions) must be evaluated at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Qualitative assessment is required for impairment assessment of equity investments without readily determinable fair values to identify impairment. When a qualitative assessment indicates that impairment exists, an entity is required to measure the investment at fair value. Public business entities are required to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. An entity must present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. Financial assets and financial liabilities must be presented separately by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements. For public business entities, the amendments in this In February 2016 FASB issued Account Standards Update No. 2016-02 Leases (Topic 842) that changes the recognition of lease assets and lease liabilities by lessess for those leases classified as operating lease. The amendments in this Update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years for a public business entity. Early adoption is permitted. Management is evaluating the standard's impact on the consolidated financial statements. In March 2016 FASB issued Account Standards Update No. 2016-03 Intangibles-Goodwill and other (Topic 350), Business Combinations (Topic 805) Consolidation (Topic 810) and Derivatives and Hedging (Topic 815) The amendments in this Update could affect all private companies within the scope of Update 2014-02; Update 2014-03; Update 2014-07, Consolidation (Topic 810): Applying Variable Interest Entities Guidance to Common Control Leasing Arrangements; or Update 2014-18, Business Combinations (Topic 805): Accounting for Identifiable Intangible Assets in a Business Combination. The amendments in this Update make the guidance in Updates 2014-02, 2014-03, 2014-07, and 2014-18 effective immediately by removing their effective dates. The amendments also include transition provisions that provide that private companies are able to forgo a preferability assessment the first time they elect the accounting alternatives within the scope of this Update. Any subsequent change to an accounting policy election requires justification that the change is preferable under Topic 250, Accounting Changes and Error Corrections. The amendments in this Update also extend the transition guidance in Updates 2014-02, 2014-03, 2014-07, and 2014-18 indefinitely. While this Update extends transition guidance for Updates 2014-07 and 2014-18, there is no intention to change how transition is applied for those two Updates. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In March 2016 FASB issued Account Standards Update No. 2016-07 Investments-Equity Method and Joint Ventures (Topic 323) The amendments in this Update affect all entities that have an investment that becomes qualified for the equity method of accounting as a result of an increase in the level of ownership interest or degree of influence. It eliminates the requirement to retroactively adopt the equity method of accounting for adjustment of the investment. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The amendments should be applied prospectively upon their effective date to increases in the level of ownership interest or degree of influence that result in the adoption of the equity method. Earlier application is permitted. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In March 2016 FASB issued Account Standards Update No. 2016-08 Revenue from Contracts with Customers (Topic) Principal vs. Agent Considerations. The amendments in this Update do not change the core principle of the guidance. The amendments clarify the implementation guidance on principal versus agent considerations. The amendments in this Update affect the guidance in Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), which is not yet effective. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements of Update 2014-09. Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year. The effective date is same as the date for Update No. 2014-09. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In March 2016 FASB issued Account Standards Update No. 2016-09 Compensation-Stock Compensation -(Topic 718) Improvements to employee share-based payments accounting as part of simplicity initiatives. This update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Some of the areas for simplification apply only to nonpublic entities. For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. For all other entities, the amendments are effective for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. Early adoption is permitted for any entity in any interim or annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. |
Significant Accounting Polici21
Significant Accounting Policies (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Composition of Inventory | The composition of inventory is as follows: June 30, 2016 2015 Raw materials $ 1,093,526 $ 1,111,730 Work in process 362,766 333,526 Finished goods 826,856 774,359 Total inventory $ 2,283,148 $ 2,219,615 |
Schedule of Inventory Allowance | Valuation allowance activity for the years ended June 30, 2016 and 2015 was as follows: June 30, 2016 2015 Balance, July 1 $ 198,120 $ 198,120 Provision for valuation allowance — — Write-off — — Balance, June 30 $ 198,120 $ 198,120 |
Schedule of Allowance for Doubtful Accounts | Allowance for doubtful accounts activity for the years ended June 30, 2016 and 2015 was as follows: June 30, 2016 2015 Balance, July 1 $ 230,544 $ 311,713 Provision for bad debts 3,914 181,976 Write-offs (31,791 ) (263,145 ) Balance, June 30 $ 202,667 $ 230,544 |
Schedule of Property, Plant and Equipment | Property and equipment consist of the following at: June 30, 2016 2015 Equipment $ 695,311 $ 638,667 Furniture and Fixtures 99,321 99,321 Leasehold Improvement 28,549 28,549 823,181 766,537 Less: Accumulated depreciation and amortization (741,975 ) (718,524 ) $ 81,206 $ 48,013 |
Schedule of Reconcilliation of Denominator of Basic and Diluted Earnings per Shares | A reconciliation of the denominator of the basic and diluted earnings per share for the years ended June 30, 2016 and 2015 is as follows: 2016 2015 Basic Weighted average shares outstanding 7,541,013 7,526,430 Effect of dilutive securities—Stock options and warrants — — Diluted weighted average shares outstanding 7,541,013 7,526,430 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following tables present unamortized intangible assets as of June 30, 2016 and 2015 : 2016 Net 2015 Net Goodwill Sonomed-Escalon $ 125,027 $ 125,027 Total $ 125,027 $ 125,027 |
Schedule of Unamortized Intangible Assets by Business Segment | 2016 Net 2015 Net Trademarks and trade names Sonomed-Escalon $ 605,006 $ 605,006 Total $ 605,006 $ 605,006 |
Schedule of Amortized Intangible Assets by Business Segment | The following table presents amortized intangible assets as of June 30, 2016 : Gross Carrying Amount Impairment Adjusted Gross Carrying Amount Accumulated Amortization Net Carrying Value Amortized Intangible Assets Patents Sonomed-Escalon $ 90,962 $ — $ 90,962 $ (88,962 ) $ 2,000 Total $ 90,962 $ — $ 90,962 $ (88,962 ) $ 2,000 The following table presents amortized intangible assets as of June 30, 2015 : Gross Carrying Amount Impairment Adjusted Gross Carrying Amount Accumulated Amortization Net Carrying Value Amortized Intangible Assets Patents Sonomed-Escalon $ 90,962 $ — $ 90,962 $ (87,762 ) $ 3,200 Total $ 90,962 $ — $ 90,962 $ (87,762 ) $ 3,200 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | The following table presents accrued expenses: June 30, 2016 June 30, Accrued compensation $ 426,600 $ 513,942 Deferred revenue 334,791 340,239 Other accruals 465,451 675,247 Total accrued expenses $ 1,226,842 $ 1,529,428 |
Capital Stock Transactions (Tab
Capital Stock Transactions (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Schedule of Stock Options Activity | The following is a summary of Escalon’s stock option activity and related information for the fiscal years ended June 30, 2016 and 2015 : 2016 2015 Common Stock Options Weighted Average Exercise Price Common Stock Options Weighted Average Exercise Price Outstanding at the beginning of the year 813,942 $ 3.36 995,846 $ 3.89 Granted 21,000 0.79 — — Exercised — — — — Forfeited (218,442 ) 6.58 (181,904 ) $ 6.29 Outstanding at the end of the year 616,500 $ 2.27 813,942 $ 3.36 Exercisable at the end of the year 616,500 747,083 — Weighted average fair value of options granted during the year $ 12,680 $ — |
Schedule of Stock Option Outstanding by Exercise Price Range | The following table summarizes information about stock options outstanding as of June 30, 2016 : Number Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number Exercisable at June 30, 2015 Weighted Average Exercise Price Range of Exercise Prices $0.79 21,000 9.83 $ 0.79 21,000 $ 0.79 $1.45 to $2.12 192,000 6.54 $ 1.55 192,000 $ 1.55 $2.21 to $3.05 403,500 1.37 $ 2.61 403,500 $ 2.48 Total 616,500 616,500 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The provision for income taxes for the years ended June 30, 2016 and 2015 consists of the following: 2016 2015 Current income tax (benefit) provision Federal $ — $ — State — — — — Deferred income tax provision Federal 241,250 182,843 State 42,575 32,266 Change in valuation allowance (283,825 ) (215,109 ) — — Income tax (benefit) $ — $ — |
Schedule of Effective Income Tax Rate Reconciliation | Income taxes (benefit) as a percentage of income (loss) for the years ended June 30, 2016 and 2015 differ from statutory federal income tax rate due to the following: 2016 2015 Statutory federal income tax rate 34.00 % 34.00 % Increase (Decrease) in deductable timing differences 7.00 % 43.00 % Net operating loss carryforward (41.00 )% (77.00 )% Effective income tax rate 0.00 % 0.00 % |
Schedule of Deferred Tax Assets and Liabilities | The components of the net deferred income tax assets and liabilities as of June 30, 2016 and 2015 are as follows: 2016 2015 Deferred income tax assets: Net operating loss carryforward $ 11,222,477 $ 10,882,593 Executive post retirement costs 318,743 305,769 General business credit 207,698 207,698 Allowance for doubtful accounts 68,910 78,385 Accrued vacation 105,816 116,418 Inventory reserve 67,361 67,361 Accelerated depreciation 16,340 34,878 Warranty reserve 10,907 10,907 Total deferred income tax assets 12,018,252 11,704,009 Valuation allowance (11,913,221 ) (11,629,396 ) 105,031 74,613 Deferred income tax liabilities: Accelerated depreciation (105,031 ) (74,613 ) Total deferred income tax liabilities (105,031 ) (74,613 ) $ — $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | The future annual amounts to be paid under these arrangements as of June 30, 2016 are as follows: Year Ending June 30, Lease Obligations 2017 $ 495,216 2018 245,783 2019 145,564 2020 100,183 2021 9,637 Total $ 996,383 |
Retirement and Post-Retiremen27
Retirement and Post-Retirement Plans (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of Change in Assets | The changes related to post-retirement plans for the years ended June 30, 2016 and 2015 were as follows: 2016 2015 Balance July 1, $899,322 $943,590 Actuarial adjustment 140,049 57,623 Payment of benefits (101,891) (101,891) Balance June 30, $937,480 $899,322 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
BHH [Member] | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block] | The following table summarizes the results of discontinued operations of BHH for the years ended June 30, 2016 and 2015 (in thousands): For the years ended June 30, 2016 2015 Revenue, net $ — $ — Cost of goods — — Marketing, general and administrative — 2 Research & development — — Total costs and expenses — 2 Loss from discontinued operations $ — $ (2 ) Other income and expenses: Adjustment to lease termination accrual — 507 Loss before income taxes — 505 Income tax — — Net loss $ — $ 505 Assets and liabilities of discontinued operations of BHH included in the consolidated balance sheets are summarized as follows at June 30, 2016 and 2015 (in thousands): June 30, June 30, 2016 2015 Assets Total assets $ — $ — Liabilities Accrued lease termination costs 89 86 Total liabilities 89 86 Net assets of discontinued operations $ (89 ) $ (86 ) |
Significant Accounting Polici29
Significant Accounting Policies (Cash and Cash Equivalents) (Details) | 12 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Maximum maturity of highly liquid investments, period | 90 days |
Significant Accounting Polici30
Significant Accounting Policies (Inventory) (Details) - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Accounting Policies [Abstract] | ||
Raw materials | $ 1,093,526 | $ 1,111,730 |
Work in process | 362,766 | 333,526 |
Finished goods | 826,856 | 774,359 |
Total inventory | $ 2,283,148 | $ 2,219,615 |
Significant Accounting Polici31
Significant Accounting Policies (Inventory Allowance) (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Inventory, Valuation Allowance [Roll Forward] | ||
Valuation allowance, beginning balance | $ 198,120 | $ 198,120 |
Provision for valuation allowance | 0 | 0 |
Write-off's | 0 | 0 |
Valuation allowance, ending balance | $ 198,120 | $ 198,120 |
Significant Accounting Polici32
Significant Accounting Policies (Accounts Receivable) (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Allowance for doubtful accounts receivable, beginning balance | $ 230,544 | $ 311,713 |
Provision for bad debts | 3,914 | 181,976 |
Write off's | (31,791) | (263,145) |
Allowance for doubtful accounts receivable, ending balance | $ 202,667 | $ 230,544 |
Significant Accounting Polici33
Significant Accounting Policies (Property and Equipment) (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Property and Equipment [Line Items] | ||
Depreciation and amortization expense | $ 24,651 | $ 14,302 |
Property and equipment, gross | 823,181 | 766,537 |
Leasehold Improvements, Gross | 28,549 | 28,549 |
Less: Accumulated depreciation and amortization | (741,975) | (718,524) |
Property and equipment, net | $ 81,206 | 48,013 |
Computer Equipment [Member] | Minimum [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, useful life | 3 years | |
Computer Equipment [Member] | Maximum [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, useful life | 5 years | |
Furniture and Fixtures [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | $ 99,321 | 99,321 |
Furniture and Fixtures [Member] | Minimum [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, useful life | 5 years | |
Furniture and Fixtures [Member] | Maximum [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, useful life | 7 years | |
Equipment [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, gross | $ 695,311 | 638,667 |
Equipment [Member] | Minimum [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, useful life | 5 years | |
Equipment [Member] | Maximum [Member] | ||
Property and Equipment [Line Items] | ||
Property and equipment, useful life | 10 years | |
Property and Equipment [Member] | ||
Property and Equipment [Line Items] | ||
Depreciation and amortization expense | $ 22,000 | $ 12,000 |
Significant Accounting Polici34
Significant Accounting Policies (Stock-Based Compensation) (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost related to non-vested share-based compensation | $ 0 | $ 39,613 |
Non-employee compensation expense | $ 12,680 | 15,264 |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock option plans, vesting period | 2 years | |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock option plans, vesting period | 5 years | |
Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Recognized share-based compensation expense | $ 39,613 | $ 52,103 |
Stock option plans, vesting period | 5 years |
Significant Accounting Polici35
Significant Accounting Policies (Advertising Costs) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Accounting Policies [Abstract] | ||
Advertising costs | $ 33 | $ 64 |
Significant Accounting Polici36
Significant Accounting Policies (Net Income (loss) Per Share) (Details) - shares | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Accounting Policies [Abstract] | ||
Basic Weighted average shares outstanding | 7,541,013 | 7,526,430 |
Weighted Average Number Diluted Shares Outstanding Adjustment | 0 | 0 |
Diluted weighted average shares outstanding | 7,541,013 | 7,526,430 |
Intangible Assets (Unamortized
Intangible Assets (Unamortized Intangible Assets by Business Segment) (Detail) - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Intangible Assets and Goodwill [Line Items] | ||
Goodwill | $ 125,027 | $ 125,027 |
Trademarks and tradenames | 605,006 | 605,006 |
Sonomed-Escalon [Member] | ||
Intangible Assets and Goodwill [Line Items] | ||
Goodwill | 125,027 | 125,027 |
Trademarks and tradenames | $ 605,006 | $ 605,006 |
Intangible Assets (Accumulated
Intangible Assets (Accumulated Amortization and Expense) (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Amortization Expense, Year Five | $ 2,000 | |
Patents [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Accumulated amortization | 88,962 | $ 87,762 |
Amortization expense | 52,000 | 67,000 |
Amortization expense, 2015 | 2,000 | |
Amortization expense, 2016 | 2,000 | |
Amortization expense, 2017 | 2,000 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | $ 1,000 | $ 2,000 |
Maximum [Member] | Patents [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 17 years |
Intangible Assets (Amortized In
Intangible Assets (Amortized Intangible Assets by Business Segment) (Details) - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
Net Carrying Value | $ 2,000 | $ 3,200 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 90,962 | 90,962 |
Impairment | 0 | 0 |
Adjusted Gross Carrying Amount | 90,962 | 90,962 |
Accumulated Amortization | (88,962) | (87,762) |
Net Carrying Value | 2,000 | 3,200 |
Patents [Member] | Sonomed-Escalon [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 90,962 | 90,962 |
Impairment | 0 | 0 |
Adjusted Gross Carrying Amount | 90,962 | 90,962 |
Accumulated Amortization | (88,962) | (87,762) |
Net Carrying Value | $ 2,000 | $ 3,200 |
Accrued Expenses (Schedule of A
Accrued Expenses (Schedule of Accrued Expenses) (Details) - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Loss Contingencies [Line Items] | ||
Accrued compensation | $ 426,600 | $ 513,942 |
Other accruals | 465,451 | 675,247 |
Deferred Revenue | 334,791 | 340,239 |
Total accrued expenses | 1,226,842 | 1,529,428 |
Performance Guarantee [Member] | ||
Loss Contingencies [Line Items] | ||
Accrued lease termination cost | $ 89,000 | $ 86,000 |
Capital Stock Transactions (Sto
Capital Stock Transactions (Stock Option Plans) (Narrative) (Details) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2016USD ($)planshares | Jun. 30, 2015USD ($)shares | Jun. 30, 2014shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options reserved for future grants, number | 0 | ||
Options outstanding, number | 616,500 | 813,942 | 995,846 |
Options exercisable, number | 616,500 | 747,083 | |
Employee Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of Plans | plan | 2 | ||
Options reserved for future grants, number | 995,846 | ||
Vesting period | 5 years | ||
Exercise period | 10 years | ||
Patents [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Amortization of Intangible Assets | $ | $ 52 | $ 67 |
Capital Stock Transactions (S42
Capital Stock Transactions (Stock Option Activity) (Details) - $ / shares | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 12,680 | $ 0 |
Common Stock Options [Roll Forward] | ||
Outstanding at the beginning of the year | 813,942 | 995,846 |
Granted | 21,000 | 0 |
Exercised | 0 | 0 |
Forfeited | (218,442) | (181,904) |
Outstanding at the end of the year | 616,500 | 813,942 |
Exercisable at the end of the year | 616,500 | 747,083 |
Weighted Average Exercise Price [Roll Forward] | ||
Beginning of the year, in dollars per share | $ 3.36 | $ 3.89 |
Granted, in dollars per share | 0.79 | 0 |
Exercised, in dollars per share | 0 | 0 |
Forfeited, in dollars per share | 6.58 | 6.29 |
End of the year, in dollars per share | $ 2.27 | $ 3.36 |
Capital Stock Transactions (S43
Capital Stock Transactions (Stock Option Outstanding) (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Number Outstanding | 616,500 | 813,942 | 995,846 |
Weighted Average Exercise Price | $ 2.27 | $ 3.36 | $ 3.89 |
Number Exercisable | 616,500 | 747,083 | |
$1.45 to $2.12 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Number Outstanding | 192,000 | ||
Weighted Average Remaining Contractual Life | 6 years 6 months 15 days | ||
Weighted Average Exercise Price | $ 1.55 | ||
Number Exercisable | 192,000 | ||
Weighted Average Exercise Price | $ 1.55 | ||
$1.45 to $2.12 [Member] | Minimum [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Weighted Average Exercise Price | 1.45 | ||
$1.45 to $2.12 [Member] | Maximum [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Weighted Average Exercise Price | $ 2.12 | ||
$2.37 to $2.77 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Number Outstanding | 403,500 | ||
Weighted Average Remaining Contractual Life | 1 year 4 months 13 days | ||
Weighted Average Exercise Price | $ 2.61 | ||
Number Exercisable | 403,500 | ||
Weighted Average Exercise Price | $ 2.48 | ||
$2.37 to $2.77 [Member] | Minimum [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Weighted Average Exercise Price | 2.37 | ||
$2.37 to $2.77 [Member] | Maximum [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Weighted Average Exercise Price | $ 2.77 | ||
$4.97 to $5.59 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Number Outstanding | 21,000 | ||
Weighted Average Remaining Contractual Life | 9 years 9 months 29 days | ||
Weighted Average Exercise Price | $ 0.79 | ||
Number Exercisable | 21,000 | ||
Weighted Average Exercise Price | $ 0.79 | ||
$4.97 to $5.59 [Member] | Minimum [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Weighted Average Exercise Price | 4.97 | ||
$4.97 to $5.59 [Member] | Maximum [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Weighted Average Exercise Price | 5.59 | ||
$6.19 to $6.19 [Member] | Minimum [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Weighted Average Exercise Price | 6.19 | ||
$6.19 to $6.19 [Member] | Maximum [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Weighted Average Exercise Price | 6.19 | ||
$6.94 to $8.06 [Member] | Minimum [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Weighted Average Exercise Price | 6.94 | ||
$6.94 to $8.06 [Member] | Maximum [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Weighted Average Exercise Price | $ 8.06 | ||
Employee Stock Option [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Recognized share-based compensation expense | $ 39,613 | $ 52,103 | |
Patents [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Amortization of Intangible Assets | $ 52,000 | $ 67,000 |
Capital Stock Transactions Comp
Capital Stock Transactions Compensation related cost (Details) | 12 Months Ended |
Jun. 30, 2016USD ($)shares | |
Share-based Goods and Nonemployee Services Transaction [Line Items] | |
Shares, Issued | shares | 25,000 |
8742 Services, Management Consulting Services [Member] | |
Share-based Goods and Nonemployee Services Transaction [Line Items] | |
Compensation expense related to stock options | $ | $ 19,750 |
Income Taxes (Provision for Inc
Income Taxes (Provision for Income Taxes) (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Operating Leased Assets [Line Items] | ||
Income (Loss) from Continuing Operations before Income Taxes, Foreign | $ 0 | $ 0 |
Current Income Tax Expense (Benefit), Continuing Operations [Abstract] | ||
Federal | 0 | 0 |
State | 0 | 0 |
Total | 0 | 0 |
Deferred income tax provision | ||
Federal | 241,250 | 182,843 |
State | 42,575 | 32,266 |
Change in valuation allowance | $ (283,825) | (215,109) |
Deferred income tax provision | $ 0 |
Income Taxes (Effective Income
Income Taxes (Effective Income Tax Rate) (Details) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal income tax rate | 34.00% | 34.00% |
Increase in deductable timing differences | 7.00% | 43.00% |
Net operating loss carryforward | (41.00%) | (77.00%) |
Effective income tax rate | 0.00% | 0.00% |
Income Taxes (Components of Net
Income Taxes (Components of Net Deferred Income Tax Assets and Liabilities) (Details) - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforward | $ 11,222,477 | $ 10,882,593 |
Executive post retirement costs | 318,743 | 305,769 |
General business credit | 207,698 | 207,698 |
Allowance for doubtful accounts | 68,910 | 78,385 |
Accrued vacation | 105,816 | 116,418 |
Inventory reserve | 67,361 | 67,361 |
Accelerated depreciation | 16,340 | 34,878 |
Warranty reserve | 10,907 | 10,907 |
Total deferred income tax assets | 12,018,252 | 11,704,009 |
Valuation allowance | (11,913,221) | (11,629,396) |
Deferred income tax liabilities: | ||
Deferred Tax Assets, Net of Valuation Allowance | 105,031 | 74,613 |
Deferred Tax Liabilities, Property, Plant and Equipment | 105,031 | 74,613 |
Deferred Tax Liabilities, Gross | 105,031 | 74,613 |
Deferred Tax Assets, Net | $ 0 | $ 0 |
Income Taxes Operation loss car
Income Taxes Operation loss carry forward (Details) $ in Thousands | 12 Months Ended |
Jun. 30, 2016USD ($) | |
State and Local Jurisdiction [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | $ 3,345 |
Internal Revenue Service (IRS) [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards | $ 32,066 |
Expiration Period, One [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net Operating Loss, Expiration Period | 10 years |
Expiration Period, One [Member] | State and Local Jurisdiction [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards, Subject to Expiration | $ 1,533 |
Expiration Period, One [Member] | Internal Revenue Service (IRS) [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards, Subject to Expiration | 4,619 |
Expiration Period, Two [Member] | Internal Revenue Service (IRS) [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards, Subject to Expiration | $ 27,447 |
Minimum [Member] | Expiration Period, Two [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net Operating Loss, Expiration Period | 11 years |
Maximum [Member] | Expiration Period, Two [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net Operating Loss, Expiration Period | 20 years |
Commitments and Contingencies49
Commitments and Contingencies (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Schedule of Contractual Obligations [Line Items] | ||
2,015 | $ 495,216 | |
2,016 | 245,783 | |
2,017 | 145,564 | |
2,018 | 100,183 | |
2,019 | 9,637 | |
Total | 996,383 | |
Leases, Operating [Abstract] | ||
Rent expense | 572,000 | $ 506,000 |
Performance Guarantee [Member] | ||
Leases, Operating [Abstract] | ||
Accrued lease termination cost | $ 89,000 | $ 86,000 |
Retirement and Post-Retiremen50
Retirement and Post-Retirement Plans (Details) - USD ($) | 12 Months Ended | ||||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2013 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Accrued benefits | $ 899,322 | $ 899,322 | $ 937,480 | $ 899,322 | $ 943,590 |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||||
Beginning Balance | 899,322 | ||||
Actuarial adjustment | 140,049 | 57,623 | |||
Payment of benefits | (101,891) | $ (101,891) | |||
Ending Balance | $ 937,480 | $ 899,322 | |||
Retirement [Member] | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Coverage period for qualifying event | 3 years | ||||
Payment period after qualifying event | 36 months | ||||
Death [Member] | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Payment period after qualifying event | 36 months | ||||
Disability [Member] | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Benefit payment | 8,000 | ||||
Coverage period for qualifying event | 3 years | ||||
Payment period after qualifying event | 36 months | ||||
Termination [Member] | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Benefit payment | $ 0 | ||||
Coverage period for qualifying event | 3 years | ||||
Payment period after qualifying event | 36 months |
Discontinued Operations Narrati
Discontinued Operations Narrative (Details) - USD ($) $ in Thousands | Jan. 18, 2012 | Jun. 30, 2016 | Jun. 30, 2015 |
BHH [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Net (loss) income from discontinued operations | $ 0 | $ (2) | |
BHH [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Bankruptcy Proceedings, Operating Period During Liquidation | 3 months |
Discontinued Operations (Result
Discontinued Operations (Results of Discontinued Operations - BH Holdings, S.A.S) (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Income from discontinued operations before taxes | $ 0 | $ 510,851 |
Net income from discontinued operations | 0 | 510,851 |
Benefit (provision) for income taxes | 0 | 0 |
BHH [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Revenue, net | 0 | 0 |
Cost of goods | 0 | 0 |
Market, general and administrative | 0 | 2,000 |
Research and development | 0 | 0 |
Total costs and expenses | 0 | 2,000 |
Net (loss) income from discontinued operations | 0 | (2,000) |
Discontinued Operation, Gain (Loss) from Disposal of Discontinued Operation, before Income Tax | 0 | 507,000 |
Income from discontinued operations before taxes | 0 | |
Net income from discontinued operations | 0 | 505,000 |
Benefit (provision) for income taxes | $ 0 | $ 0 |
Discontinued Operations (Assets
Discontinued Operations (Assets and Liabilities of Discontinued Operations - BH Holdings, S.A.S) (Details) - BHH [Member] - USD ($) $ in Thousands | Jun. 30, 2016 | Jun. 30, 2015 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Disposal Group, Including Discontinued Operation, Assets | $ 0 | $ 0 |
Liabilities [Abstract] | ||
Other current liabilities | 89 | 86 |
Total liabilities | 89 | 86 |
Assets (Liabilities) of Disposal Group, Including Discontinued Operation, Net | $ (89) | $ (86) |
Discontinued Operations Results
Discontinued Operations Results of discontinued operations -ECD (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net income (loss) from discontinued operations before tax | $ 0 | $ 510,851 |
Income tax benefit (expense) | 0 | 0 |
BH Holdings, S.A.S [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Revenue, net | 0 | 0 |
Cost of goods sold | 0 | 0 |
Marketing, general and administrative | 0 | 2,000 |
Research & development | 0 | 0 |
Total costs and expenses | 0 | 2,000 |
Net (loss) income from discontinued operations | 0 | (2,000) |
Gain from sale of assets and debt settlement net of tax (CTA included) | 0 | 507,000 |
Net income (loss) from discontinued operations before tax | 0 | |
Income tax benefit (expense) | 0 | 0 |
ECD [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Revenue, net | 0 | 0 |
Cost of goods sold | 0 | 0 |
Marketing, general and administrative | 0 | 1,000 |
Research & development | 0 | 0 |
Total costs and expenses | 1,000 | |
Other income | 7,000 | |
Net income from discontinued operations, net of tax | $ 0 | $ 6,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | |
Related Party Transaction [Line Items] | ||||
Related Party Transaction, Amounts of Transaction | $ 125,000 | $ 150,000 | ||
Related Party Transaction, Rate | 1.25% | |||
Interest Expense, Related Party | $ 11,400 | $ 0 | ||
Related Party Transaction, Due from (to) Related Party | $ 275,000 | $ 275,000 | ||
Related Party Transaction, Purchases from Related Party | 32,033 | |||
Related Party Transaction, Expenses from Transactions with Related Party | $ 10,000 |