Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Sep. 30, 2014 | Oct. 03, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'SCIENTIFIC INDUSTRIES INC | ' |
Entity Central Index Key | '0000087802 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--06-30 | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' |
Is Entity a Voluntary Filer? | 'No | ' |
Is Entity's Reporting Status Current? | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 1,479,112 |
Document Fiscal Period Focus | 'Q1 | ' |
Document Fiscal Year Focus | '2015 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2014 | Jun. 30, 2014 |
Current Assets: | ' | ' |
Cash and cash equivalents | $388,100 | $493,700 |
Investment securities | 338,000 | 415,400 |
Trade accounts receivable, net | 795,300 | 756,700 |
Inventories | 2,282,900 | 2,309,200 |
Prepaid expenses and other current assets | 184,800 | 123,100 |
Deferred taxes | 86,700 | 86,000 |
Total current assets | 4,075,800 | 4,184,100 |
Property and equipment, net | 249,800 | 252,100 |
Intangible assets, net | 1,708,900 | 1,795,900 |
Goodwill | 705,300 | 705,300 |
Other assets | 53,600 | 28,200 |
Deferred taxes | 150,300 | 146,200 |
Total assets | 6,943,700 | 7,111,800 |
Current Liabilities: | ' | ' |
Accounts payable | 342,100 | 373,700 |
Customer advances | 92,800 | 89,500 |
Bank line of credit | 200,000 | 0 |
Notes payable, current portion | 6,900 | 26,700 |
Accrued expenses and taxes | 358,900 | 442,800 |
Contingent consideration payable, current portion | 120,000 | 109,000 |
Total current liabilities | 1,120,700 | 1,041,700 |
Contingent consideration payable, less current portion | 281,100 | 391,000 |
Total liabilities | 1,401,800 | 1,432,700 |
Shareholders' equity: | ' | ' |
Common stock, $.05 par value; authorized 7,000,000 shares; 1,498,914 and 1,488,914 issued and outstanding at September 30, 2014 and 1,357,465 at June 30, 2014 | 74,900 | 74,400 |
Additional paid-in capital | 2,445,000 | 2,420,700 |
Accumulated other comprehensive gain | 400 | 1,100 |
Retained earnings | 3,074,000 | 3,235,300 |
Total | 5,594,300 | 5,731,500 |
Less common stock held in treasury, at cost, 19,802 shares | 52,400 | 52,400 |
Total shareholders' equity | 5,541,900 | 5,679,100 |
Total liabilities and shareholders' equity | $6,943,700 | $7,111,800 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2014 | Jun. 30, 2014 |
Shareholders' equity: | ' | ' |
Common stock,par value | $0.05 | $0.05 |
Common stock, authorized shares | 7,000,000 | 7,000,000 |
Common stock, issued shares | 1,498,914 | 1,488,914 |
Common stock, outstanding shares | 1,498,914 | 1,488,914 |
Stock held in treasury, shares | 19,802 | 19,802 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Income Statement [Abstract] | ' | ' |
Revenues | $1,662,100 | $1,436,100 |
Cost of sales | 1,161,900 | 841,900 |
Gross profit | 500,200 | 594,200 |
Operating expenses: | ' | ' |
General & administrative | 326,500 | 303,000 |
Selling | 295,300 | 197,000 |
Research & development | 107,100 | 97,200 |
Total operating expenses | 728,900 | 597,200 |
Loss from operations | -228,700 | -3,000 |
Other income (expense): | ' | ' |
Investment income | 800 | 3,100 |
Other income | 6,200 | 3,700 |
Interest expense | -1,200 | -800 |
Total other income expense, net | 5,800 | 6,000 |
Income (loss) before income taxes (benefit) | -222,900 | 3,000 |
Income tax expense (benefit): Current | -57,200 | -3,100 |
Income tax expense (benefit): Deferred | -4,400 | 4,000 |
Total income tax expense (benefit) | -61,600 | 900 |
Net income (loss) | ($161,300) | $2,100 |
Basic earnings (loss) per common share | ($0.11) | $0 |
Diluted earnings (loss) per common share | ($0.11) | $0 |
Cash dividends declared per common share | $0 | $0.08 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 3 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Condensed Consolidated Statements Of Comprehensive Income Loss | ' | ' |
Net income (loss) | ($161,300) | $2,100 |
Other comprehensive income (loss): | ' | ' |
Unrealized holding loss arising during period, net of tax | -700 | -1,800 |
Comprehensive income (loss) | ($162,000) | $300 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Operating activities: | ' | ' |
Net income (loss) | ($161,300) | $2,100 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ' | ' |
Loss on sale of investments | 1,300 | 0 |
Depreciation and amortization | 110,100 | 44,200 |
Deferred income taxes | -4,400 | 4,000 |
Stock-based compensation | 1,000 | 800 |
Income tax benefit of stock options exercised | 4,900 | 0 |
Changes in operating assets and liabilities | ' | ' |
Accounts receivable | -38,500 | 100 |
Inventories | 26,300 | -77,800 |
Prepaid expenses and other current assets | -61,600 | -46,900 |
Other assets | -25,400 | 0 |
Accounts payable | -31,500 | 5,000 |
Customer advances | 3,300 | 27,500 |
Accrued expenses and taxes | -83,900 | -118,100 |
Total adjustments | -98,400 | -161,200 |
Net cash used in operating activities | -259,700 | -159,100 |
Investing activities: | ' | ' |
Redemption of investment securities, available-for-sale | 75,000 | 0 |
Purchase of investment securities, available for sale | 0 | -5,700 |
Capital expenditures | -19,700 | -8,500 |
Purchase of other intangible assets | -1,100 | -1,900 |
Net cash provided by (used in) investing activities | 54,200 | -16,100 |
Financing activities: | ' | ' |
Line of credit proceeds | 200,000 | 0 |
Payments of contingent consideration | -98,900 | 0 |
Proceeds from exercise of stock options | 18,800 | 0 |
Principal payments on note payable | -20,000 | -19,400 |
Net cash provided by (used in) financing activities | 99,900 | -19,400 |
Net decrease in cash and cash equivalents | -105,600 | -194,600 |
Cash and cash equivalents, beginning of year | 493,700 | 927,300 |
Cash and cash equivalents, end of period | 388,100 | 732,700 |
Cash paid during the period for: | ' | ' |
Income Taxes | 3,500 | 100,000 |
Interest | $1,200 | $800 |
1_Summary_of_significant_accou
1. Summary of significant accounting policies | 3 Months Ended |
Sep. 30, 2014 | |
Notes to Financial Statements | ' |
Summary of significant accounting policies | ' |
Principles of consolidation: | |
The accompanying consolidated financial statements include the | |
accounts of Scientific Industries, Inc. (“Scientific”, a Delaware | |
corporation), Altamira Instruments, Inc.(“Altamira”, a wholly owned | |
subsidiary and Delaware corporation), Scientific Packaging | |
Industries, Inc. (an inactive wholly owned subsidiary and New York | |
corporation) and Scientific Bioprocessing, Inc., (“SBI”, a wholly | |
owned subsidiary and Delaware corporation). All are collectively | |
referred to as the “Company”. All material intercompany balances and | |
transactions have been eliminated. |
2_New_Accounting_Pronouncement
2. New Accounting Pronouncements | 3 Months Ended |
Sep. 30, 2014 | |
Notes to Financial Statements | ' |
New Accounting Pronouncements | ' |
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers amending revenue recognition requirements for multiple-deliverable revenue arrangements. This update provides guidance on how revenue is recognized 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 the goods or services. This determination is made in five steps: (i) identify the contract with the customer: (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The update is effective for the Company beginning July 1, 2017. Early adoption is not permitted. | |
The Company is currently evaluating the impact this guidance may have on its financial condition and results of operations. | |
In June 2014, the FASB issued ASU 2014-12, Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide that a Performance Target Could be Achieved After the Requisite Service Period. This update affects reporting entities that grant their employee’s targets that affects vesting could be achieved after the requisite service period. The new standard requires that a performance target that affects vesting and that could be achieved after the requisite services period be treated as a performance condition. The new standard will be effective for the Company beginning July 1, 2015, and early adoption is permitted. The Company expects the adoption will not have a material impact on its financial condition, results of operations or cash flows. |
3_Acquisition
3. Acquisition | 3 Months Ended | ||
Sep. 30, 2014 | |||
Text Block [Abstract] | ' | ||
Acquisition | ' | ||
On February 26, 2014, the Company acquired substantially all the assets of a privately owned company consisting principally of inventory, fixed assets, and intangible assets related to the production and sale of a variety of laboratory and pharmacy balances and scales. The acquisition was pursuant to an asset purchase agreement whereby the Company paid the sellers $700,000 in cash, 126,449 shares of Common Stock valued at $427,500 (of which 31,612 are held in escrow for one year) and agreed to make additional cash payments based on a percentage of net sales of the business acquired equal to 8% for the period ending June 30, 2014 annualized, 9% for the year ending June 30, 2015, 10% for the year ending June 30, 2016 and 11% for the year ending June 30, 2017, estimated at a present value of $460,000 on the date of acquisition. Payments related to this contingent consideration for each period are due in September following the fiscal year. | |||
The products, which are similar to the Company’s other Benchtop Laboratory Equipment, and in many cases used by the same customers, are marketed under the Torbal® brand. The principal customers are pharmacies, pharmacy schools, universities, government laboratories, and industries utilizing a precision scale. The products are sold primarily on a direct basis, including through the Company’s e-commerce site. | |||
Management of the Company allocated the purchase price based on its valuation of the assets acquired, as follows: | |||
Current assets | $144,000 | ||
Property and equipment | 118,100 | ||
Goodwill* | 115,400 | ||
Other intangible assets | 1,210,000 | ||
Total Purchase Price | $1,587,500 | ||
*See Note 8, “Goodwill and Other Intangible Assets”. | |||
Of the $1,210,000 of the acquired other intangible assets, $570,000 was assigned to technology and websites with a useful life of 5 years, $120,000 was assigned to customer relationships with an estimated useful life of 9 years, $140,000 was assigned to the trade name with an estimated useful life of 6 years, $110,000 was assigned to the IPR&D with an estimated useful life of 3 years, and $270,000 was assigned to non-compete agreements with an estimated useful life of 5 years. | |||
In connection with the acquisition, the Company entered into a three-year employment agreement with the previous Chief Operating Officer of the acquired business as President of the Company’s new Torbal Division and Director of Marketing for the Company. The agreement may be extended by mutual consent for an additional two years. | |||
The Company was unable to obtain audited financial statements of the business acquired in connection with the acquisition. The inability to include the related audited financial statements as required by the Securities Exchange Act of 1934 in the related Report on Form 8-K filing resulted in the inability of the Company to register under the Securities Act of 1933, as amended, offerings of the Company’s securities during the one year period ending February 2015. | |||
Pro forma results | |||
The unaudited pro forma condensed consolidated financial information in the table below summarizes the consolidated results of operations of the Company including its new Torbal Division, on a pro forma basis, as though the companies had been consolidated as of the beginning of the fiscal year ended June 30, 2014. The unaudited pro forma condensed financial information presented below is for informational purposes only and is not intended to represent or be indicative of the consolidated results of the operations that would have been achieved if the acquisition had been completed as of the commencement of the fiscal year presented. In addition, the Company was unable to obtain audited historical information and, therefore the information presented is based on management’s best judgment: | |||
For the Three Month | |||
Periods Ended | |||
30-Sep-13 | |||
Net Revenues | $ 1,692,100 | ||
Net income loss | $ (32,700) | ||
Net loss per share - basic | $ (0.02) | ||
Net loss per share - diluted | $ (0.02) | ||
4_Segment_Information_and_Conc
4. Segment Information and Concentrations | 3 Months Ended | |||||
Sep. 30, 2014 | ||||||
Segment Reporting [Abstract] | ' | |||||
Segment Information and Concentrations | ' | |||||
The Company views its operations as three segments: the manufacture and marketing of standard benchtop laboratory equipment including the balances and scales by its Torbal Scales Division for research in university, hospital and industrial laboratories sold primarily through laboratory equipment distributors and on a direct basis (“Benchtop Laboratory Equipment”), the manufacture and marketing of custom-made catalyst research instruments for universities, government laboratories, and chemical and petrochemical companies sold on a direct basis (“Catalyst Research Instruments”) and the marketing and production of bioprocessing systems for laboratory research in the biotechnology industry sold directly to customers and through distributors (“Bioprocessing Systems”). | ||||||
Segment information is reported as follows: | ||||||
Benchtop Laboratory Equipment | Catalyst Research Instruments | Bioprocessing Systems | Corporate and Other | Consolidated | ||
Three months ended September 30, 2014 | ||||||
Revenues | $ 1,086,400 | $ 551,100 | $ 24,600 | $ - | $ 1,662,100 | |
Foreign Sales | 411,100 | 443,500 | - | - | 854,600 | |
Loss from Operations | (118,100) | (70,200) | (40,400) | - | (228,700) | |
Assets | 4,074,800 | 1,507,400 | 786,600 | 574,900 | 6,943,700 | |
Long-Lived Asset Expenditures | 18,300 | 900 | 1,600 | - | 20,800 | |
Depreciation and Amortization | 76,000 | 9,800 | 24,300 | - | 110,100 | |
Benchtop Laboratory Equipment | Catalyst Research Instruments | Bioprocessing Systems | Corporate and Other | Consolidated | ||
Three months ended September 30, 2013 | ||||||
Revenues | $ 1,069,700 | $ 339,700 | $ 26,700 | $ - | $ 1,436,100 | |
Foreign Sales | 620,800 | 73,500 | 2,000 | - | 696,300 | |
Income (Loss) from Operations | 117,800 | (104,000) | (16,800) | - | (3,000) | |
Assets | 2,470,200 | 1,587,200 | 890,600 | 1,101,100 | 6,049,100 | |
Long-Lived Asset Expenditures | 9,900 | - | 500 | - | 10,400 | |
Depreciation and Amortization | 11,000 | 9,100 | 24,100 | - | 44,200 | |
Approximately 46% and 68% of net sales of benchtop laboratory equipment for the three month periods ended September 30, 2014 and 2013, respectively, were derived from the Company’s main product, the Vortex-Genie 2® mixer, excluding accessories. | ||||||
Approximately 19% of total benchtop laboratory equipment sales were derived from the new Torbal Scales Division for the three months ended September 30, 2014. | ||||||
For the three months ended September 30, 2014, and 2013, respectively, two customers accounted in the aggregate for approximately 13% and 15% of the net sales of the Benchtop Laboratory Equipment Operations and 9% and 11% of the Company’s revenues. Sales of catalyst research instruments generally comprise a few very large orders averaging at least $100,000 per order to a limited number of customers, who differ from order to order. Sales to five and three customers during the three months ended September 30, 2014 and 2013, respectively, accounted for approximately 99% and 94% of the Catalyst Research Instrument Operations’ revenues and 33% and 22% of the Company’s total revenues. | ||||||
The Company’s foreign sales are principally to customers in Europe and Asia. |
5_Fair_Value_of_Financial_Inst
5. Fair Value of Financial Instruments | 3 Months Ended | ||||
Sep. 30, 2014 | |||||
Investments, All Other Investments [Abstract] | ' | ||||
Fair Value of Financial Instruments | ' | ||||
The FASB defines the fair value of financial instruments as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements do not include transaction costs. | |||||
The accounting guidance also expands the disclosure requirements around fair value and establishes a fair value hierarchy of valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels, which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are described below: | |||||
Level 1 Inputs that are based upon unadjusted quoted prices for identical instruments traded in active markets. | |||||
Level 2 Quoted prices in markets that are not considered to be active or financial instruments for which all significant inputs are observable, either directly or indirectly. | |||||
Level 3 Prices or valuation that require inputs that are both significant | |||||
to the fair value measurement and unobservable. | |||||
The following tables set forth by level within the fair value hierarchy the Company’s financial assets that were accounted for at fair value on a recurring basis at September 30, 2014 and June 30, 2014 according to the valuation techniques the Company used to determine their fair values: | |||||
Fair Value Measurements Using Inputs Considered as | |||||
Assets: | |||||
Fair Value at September 30, 2014 | Level 1 | Level 2 | Level 3 | ||
Cash and cash equivalents | $ 388,100 | $ 388,100 | $ - | $ - | |
Available for sale securities | 338,000 | 338,000 | - | - | |
Total | $ 726,100 | $ 726,100 | $ - | $ - | |
Liabilities: | |||||
Contingent consideration | $ 401,100 | $ - | $ - | $ 401,100 | |
Fair Value Measurements Using Inputs Considered as | |||||
Assets: | |||||
Fair Value at June 30, 2014 | Level 1 | Level 2 | Level 3 | ||
Cash and cash equivalents | $ 493,700 | $ 493,700 | $ - | $ - | |
Available for sale securities | 415,400 | 415,400 | - | - | |
Total | $ 909,100 | $ 909,100 | $ - | $ - | |
Liabilities: | |||||
Contingent consideration | $ 500,000 | $ - | $ - | $ 500,000 | |
Investments in marketable securities classified as available-for-sale by security type at September 30, 2014 and June 30, 2014 consisted of the following: | |||||
Cost | Fair Value | Unrealized Holding Gain (Loss) | |||
At September 30, 2014: | |||||
Available for sale: | |||||
Equity securities | $ 29,300 | $ 38,300 | $ 9,000 | ||
Mutual funds | 308,300 | 299,700 | (8,600) | ||
$ 337,600 | $ 338,000 | $ 400 | |||
Cost | Fair Value | Unrealized Holding Gain (Loss) | |||
At June 30, 2014: | |||||
Available for sale: | |||||
Equity securities | $ 29,300 | $ 38,500 | $ 9,200 | ||
Mutual funds | 385,000 | 376,900 | (8,100) | ||
$ 414,300 | $ 415,400 | $ 1,100 |
6_Inventories
6. Inventories | 3 Months Ended | ||
Sep. 30, 2014 | |||
Inventory Disclosure [Abstract] | ' | ||
Inventories | ' | ||
Inventories for financial statement purposes are based on perpetual inventory records at September 30, 2014 and based on a physical count as of June 30, 2014. Components of inventory are as follows: | |||
30-Sep-14 | 30-Jun-14 | ||
Raw materials | $ 1,580,500 | $ 1,617,100 | |
Work in process | 345,100 | 366,200 | |
Finished goods | 357,300 | 325,900 | |
$ 2,282,900 | $ 2,309,200 |
7_Earnings_Loss_per_common_sha
7. Earnings (Loss) per common share | 3 Months Ended | ||
Sep. 30, 2014 | |||
Equity [Abstract] | ' | ||
Earnings (Loss) per common share | ' | ||
Basic earnings (loss) per common share are computed by dividing net income or loss by the weighted-average number of shares outstanding. Diluted earnings per common share include the dilutive effect of stock options, if any. | |||
Earnings (Loss) per common share was computed as follows: | |||
For the Three Month | |||
Periods Ended | |||
September 30, | |||
2014 | 2013 | ||
Net income (loss) | $ (161,300) | $ 2,100 | |
Weighted average common shares outstanding | 1,469,112 | 1,337,663 | |
Dilutive securities | - | 7,408 | |
Weighted average dilutive common shares outstanding | 1,469,112 | 1,345,071 | |
Basic earnings (loss) per common share | $ (0.11) | $ - | |
Diluted earnings (loss) per common share | $ (0.11) | $ - | |
Approximately 51,000 shares of the Company's Common Stock issuable upon the exercise of outstanding options were excluded from the calculation of diluted loss per common share, for the three months ended September 30, 2014, because the effect would be anti-dilutive due to the loss for the period. | |||
Approximately 28,500 shares of the Company’s Common Stock issuable upon the exercise of outstanding stock options were excluded from the calculation of diluted earnings per common share for the three months ended September 30, 2013 because the effect would be anti-dilutive. |
8_Goodwill_and_Other_Intangibl
8. Goodwill and Other Intangible Assets | 3 Months Ended | ||||
Sep. 30, 2014 | |||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||
Goodwill and Other Intangible Assets | ' | ||||
Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in connection with the Company's acquisition of Altamira and SBI’s acquisition of assets. Goodwill amounted to $705,300 as of September 30, 2014 and June 30, 2014, all of which is expected to be deductible for tax purposes. | |||||
The components of other intangible assets are as follows: | |||||
Useful Lives | Cost | Accumulated Amortization | Net | ||
At September 30, 2014: | |||||
Technology, trademarks | 5/10 yrs. | $ 1,226,800 | $ 522,900 | $ 703,900 | |
Trade names | 6 yrs. | 140,000 | 13,600 | 126,400 | |
Websites | 5 yrs. | 210,000 | 24,500 | 185,500 | |
Customer relationships | 9/10 yrs. | 357,000 | 221,500 | 135,500 | |
Sublicense agreements | 10 yrs. | 294,000 | 84,500 | 209,500 | |
Non-compete agreements | 5 yrs. | 384,000 | 140,400 | 243,600 | |
IPR&D | 3 yrs. | 110,000 | 21,400 | 88,600 | |
Other intangible assets | 5 yrs. | 158,500 | 142,600 | 15,900 | |
$ 2,880,300 | $ 1,171,400 | $ 1,708,900 | |||
Useful Lives | Cost | Accumulated Amortization | Net | ||
At June 30, 2014: | |||||
Technology, trademarks | 5/10 yrs. | $ 1,226,800 | $ 489,100 | $ 737,700 | |
Trade names | 6 yrs. | 140,000 | 7,800 | 132,200 | |
Websites | 5 yrs. | 210,000 | 14,000 | 196,000 | |
Customer relationships | 10 yrs. | 357,000 | 215,800 | 141,200 | |
Sublicense agreements | 10 yrs. | 294,000 | 77,200 | 216,800 | |
Non-compete agreements | 5 yrs. | 384,000 | 126,300 | 257,700 | |
IPR&D | 3 yrs. | 110,000 | 12,200 | 97,800 | |
Other intangible assets | 5 yrs. | 157,400 | 140,900 | 16,500 | |
$ 2,879,200 | $ 1,083,300 | $ 1,795,900 |
1_Summary_of_significant_accou1
1. Summary of significant accounting policies (Policies) | 3 Months Ended |
Sep. 30, 2014 | |
Notes to Financial Statements | ' |
Principles of consolidation | ' |
The accompanying consolidated financial statements include the accounts of Scientific Industries, Inc. (“Scientific”, a Delaware corporation), Altamira Instruments, Inc.(“Altamira”, a wholly owned subsidiary and Delaware corporation), Scientific Packaging Industries, Inc. (an inactive wholly owned subsidiary and New York corporation) and Scientific Bioprocessing, Inc., (“SBI”, a wholly owned subsidiary and Delaware corporation). All are collectively referred to as the “Company”. All material intercompany balances and transactions have been eliminated. | |
New Accounting Pronouncements | ' |
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers amending revenue recognition requirements for multiple-deliverable revenue arrangements. This update provides guidance on how revenue is recognized 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 the goods or services. This determination is made in five steps: (i) identify the contract with the customer: (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The update is effective for the Company beginning July 1, 2017. Early adoption is not permitted. | |
The Company is currently evaluating the impact this guidance may have on its financial condition and results of operations. | |
In June 2014, the FASB issued ASU 2014-12, Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide that a Performance Target Could be Achieved After the Requisite Service Period. This update affects reporting entities that grant their employee’s targets that affects vesting could be achieved after the requisite service period. The new standard requires that a performance target that affects vesting and that could be achieved after the requisite services period be treated as a performance condition. The new standard will be effective for the Company beginning July 1, 2015, and early adoption is permitted. The Company expects the adoption will not have a material impact on its financial condition, results of operations or cash flows. | |
3_Acquisition_Tables
3. Acquisition (Tables) | 3 Months Ended | ||
Sep. 30, 2014 | |||
Text Block [Abstract] | ' | ||
Purchase Price Allocation | ' | ||
Curent Assets | $ 144,000 | ||
Property, Plant & Equipment | 118,100 | ||
Goodwill | 115,400 | ||
Other Intangible Assets | 1,210,000 | ||
Total Purchase Price | $ 1,587,500 | ||
Pro Forma Results | ' | ||
For the Three Month | |||
Periods Ended | |||
30-Sep-13 | |||
Net Revenues | $ 1,692,100 | ||
Net income loss | $ (32,700) | ||
Net loss per share - basic | $ (0.02) | ||
Net loss per share - diluted | $ (0.02) | ||
4_Segment_Information_and_Conc1
4. Segment Information and Concentrations (Tables) | 3 Months Ended | |||||
Sep. 30, 2014 | ||||||
Segment Reporting [Abstract] | ' | |||||
Segment Information | ' | |||||
Benchtop Laboratory Equipment | Catalyst Research Instruments | Bioprocessing Systems | Corporate and Other | Consolidated | ||
Three months ended September 30, 2014 | ||||||
Revenues | $ 1,086,400 | $ 551,100 | $ 24,600 | $ - | $ 1,662,100 | |
Foreign Sales | 411,100 | 443,500 | - | - | 854,600 | |
Loss from Operations | (118,100) | (70,200) | (40,400) | - | (228,700) | |
Assets | 4,074,800 | 1,507,400 | 786,600 | 574,900 | 6,943,700 | |
Long-Lived Asset Expenditures | 18,300 | 900 | 1,600 | - | 20,800 | |
Depreciation and Amortization | 76,000 | 9,800 | 24,300 | - | 110,100 | |
Benchtop Laboratory Equipment | Catalyst Research Instruments | Bioprocessing Systems | Corporate and Other | Consolidated | ||
Three months ended September 30, 2013 | ||||||
Revenues | $ 1,069,700 | $ 339,700 | $ 26,700 | $ - | $ 1,436,100 | |
Foreign Sales | 620,800 | 73,500 | 2,000 | - | 696,300 | |
Income (Loss) from Operations | 117,800 | (104,000) | (16,800) | - | (3,000) | |
Assets | 2,470,200 | 1,587,200 | 890,600 | 1,101,100 | 6,049,100 | |
Long-Lived Asset Expenditures | 9,900 | - | 500 | - | 10,400 | |
Depreciation and Amortization | 11,000 | 9,100 | 24,100 | - | 44,200 | |
5_Fair_Value_of_Financial_Inst1
5. Fair Value of Financial Instruments (Tables) | 3 Months Ended | ||||
Sep. 30, 2014 | |||||
Investments, All Other Investments [Abstract] | ' | ||||
Fair Value Inputs | ' | ||||
Fair Value Measurements Using Inputs Considered as | |||||
Assets: | |||||
Fair Value at September 30, 2014 | Level 1 | Level 2 | Level 3 | ||
Cash and cash equivalents | $ 388,100 | $ 388,100 | $ - | $ - | |
Available for sale securities | 338,000 | 338,000 | - | - | |
Total | $ 726,100 | $ 726,100 | $ - | $ - | |
Liabilities: | |||||
Contingent consideration | $ 401,100 | $ - | $ - | $ 401,100 | |
Fair Value Measurements Using Inputs Considered as | |||||
Assets: | |||||
Fair Value at June 30, 2014 | Level 1 | Level 2 | Level 3 | ||
Cash and cash equivalents | $ 493,700 | $ 493,700 | $ - | $ - | |
Available for sale securities | 415,400 | 415,400 | - | - | |
Total | $ 909,100 | $ 909,100 | $ - | $ - | |
Liabilities: | |||||
Contingent consideration | $ 500,000 | $ - | $ - | $ 500,000 | |
Investments in Marketable Securitites | ' | ||||
Cost | Fair Value | Unrealized Holding Gain (Loss) | |||
At September 30, 2014: | |||||
Available for sale: | |||||
Equity securities | $ 29,300 | $ 38,300 | $ 9,000 | ||
Mutual funds | 308,300 | 299,700 | (8,600) | ||
$ 337,600 | $ 338,000 | $ 400 | |||
Cost | Fair Value | Unrealized Holding Gain (Loss) | |||
At June 30, 2014: | |||||
Available for sale: | |||||
Equity securities | $ 29,300 | $ 38,500 | $ 9,200 | ||
Mutual funds | 385,000 | 376,900 | (8,100) | ||
$ 414,300 | $ 415,400 | $ 1,100 |
6_Inventories_Tables
6. Inventories (Tables) | 3 Months Ended | ||
Sep. 30, 2014 | |||
Inventory Disclosure [Abstract] | ' | ||
Inventories | ' | ||
30-Sep-14 | 30-Jun-14 | ||
Raw materials | $ 1,580,500 | $ 1,617,100 | |
Work in process | 345,100 | 366,200 | |
Finished goods | 357,300 | 325,900 | |
$ 2,282,900 | $ 2,309,200 |
7_Earnings_Loss_per_common_sha1
7. Earnings (Loss) per common share (Tables) | 3 Months Ended | ||
Sep. 30, 2014 | |||
Equity [Abstract] | ' | ||
Earnings per common share | ' | ||
For the Three Month | |||
Periods Ended | |||
September 30, | |||
2014 | 2013 | ||
Net income (loss) | $ (161,300) | $ 2,100 | |
Weighted average common shares outstanding | 1,469,112 | 1,337,663 | |
Dilutive securities | - | 7,408 | |
Weighted average dilutive common shares outstanding | 1,469,112 | 1,345,071 | |
Basic earnings (loss) per common share | $ (0.11) | $ - | |
Diluted earnings (loss) per common share | $ (0.11) | $ - | |
8_Goodwill_and_Other_Intangibl1
8. Goodwill and Other Intangible Assets (Tables) | 3 Months Ended | ||||
Sep. 30, 2014 | |||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||
Intangible Assets | ' | ||||
The components of other intangible assets are as follows: | |||||
Useful Lives | Cost | Accumulated Amortization | Net | ||
At September 30, 2014: | |||||
Technology, trademarks | 5/10 yrs. | $ 1,226,800 | $ 522,900 | $ 703,900 | |
Trade names | 6 yrs. | 140,000 | 13,600 | 126,400 | |
Websites | 5 yrs. | 210,000 | 24,500 | 185,500 | |
Customer relationships | 9/10 yrs. | 357,000 | 221,500 | 135,500 | |
Sublicense agreements | 10 yrs. | 294,000 | 84,500 | 209,500 | |
Non-compete agreements | 5 yrs. | 384,000 | 140,400 | 243,600 | |
IPR&D | 3 yrs. | 110,000 | 21,400 | 88,600 | |
Other intangible assets | 5 yrs. | 158,500 | 142,600 | 15,900 | |
$ 2,880,300 | $ 1,171,400 | $ 1,708,900 | |||
Useful Lives | Cost | Accumulated Amortization | Net | ||
At June 30, 2014: | |||||
Technology, trademarks | 5/10 yrs. | $ 1,226,800 | $ 489,100 | $ 737,700 | |
Trade names | 6 yrs. | 140,000 | 7,800 | 132,200 | |
Websites | 5 yrs. | 210,000 | 14,000 | 196,000 | |
Customer relationships | 10 yrs. | 357,000 | 215,800 | 141,200 | |
Sublicense agreements | 10 yrs. | 294,000 | 77,200 | 216,800 | |
Non-compete agreements | 5 yrs. | 384,000 | 126,300 | 257,700 | |
IPR&D | 3 yrs. | 110,000 | 12,200 | 97,800 | |
Other intangible assets | 5 yrs. | 157,400 | 140,900 | 16,500 | |
$ 2,879,200 | $ 1,083,300 | $ 1,795,900 |
3_Acquisition_Details
3. Acquisition (Details) (USD $) | Sep. 30, 2014 |
Acquisition Details | ' |
Current Assets | $144,000 |
Property, Plant & Equipment | 118,100 |
Goodwill | 115,400 |
Other Intangible Assets | 1,210,000 |
Total Purchase Price | $1,587,500 |
3_Acquisition_Details_1
3. Acquisition (Details 1) (USD $) | 3 Months Ended |
Sep. 30, 2013 | |
Text Block [Abstract] | ' |
Net Sales | $1,692,100 |
Net Income loss | ($32,700) |
Net loss per share - basic | ($0.02) |
Net loss per share - diluted | ($0.02) |
4_Segment_Information_and_Conc2
4. Segment Information and Concentrations (Details) (USD $) | 3 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Depreciation and Amortization | $110,100 | $44,200 |
Benchtop Laboratory Equipment [Member] | ' | ' |
Revenues | 1,086,400 | 1,069,700 |
Foreign Sales | 411,100 | 620,800 |
Loss Operations | -118,100 | 117,800 |
Assets | 4,074,800 | 2,470,200 |
Long-lived Asset Expenditures | 18,300 | 9,900 |
Depreciation and Amortization | 76,000 | 11,000 |
Catalyst Research Instruments [Member] | ' | ' |
Revenues | 551,100 | 339,700 |
Foreign Sales | 443,500 | 73,500 |
Loss Operations | -70,200 | -104,000 |
Assets | 1,507,400 | 1,587,200 |
Long-lived Asset Expenditures | 900 | 0 |
Depreciation and Amortization | 9,800 | 9,100 |
Bioprocessing Systems [Member] | ' | ' |
Revenues | 24,600 | 26,700 |
Foreign Sales | 0 | 2,000 |
Loss Operations | -40,400 | -16,800 |
Assets | 786,600 | 890,600 |
Long-lived Asset Expenditures | 1,600 | 500 |
Depreciation and Amortization | 24,300 | 24,100 |
Corporate and Other [Member] | ' | ' |
Revenues | 0 | 0 |
Foreign Sales | 0 | 0 |
Loss Operations | 0 | 0 |
Assets | 574,900 | 1,101,100 |
Long-lived Asset Expenditures | 0 | 0 |
Depreciation and Amortization | 0 | 0 |
Consolidated [Member] | ' | ' |
Revenues | 1,662,100 | 1,436,100 |
Foreign Sales | 854,600 | 696,300 |
Loss Operations | -228,700 | -3,000 |
Assets | 6,943,700 | 6,049,100 |
Long-lived Asset Expenditures | 20,800 | 10,400 |
Depreciation and Amortization | $110,100 | $44,200 |
4_Segment_Information_and_Conc3
4. Segment Information and Concentrations (Details Narrative) | 3 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
TwoCustomers [Member] | Benchtop Laboratory Equipment [Member] | ' | ' |
Net sales | 13.00% | 15.00% |
Consolidated sales | 9.00% | 11.00% |
Three Different Customers [Member] | Catalyst Research Instruments [Member] | ' | ' |
Net sales | ' | 94.00% |
Consolidated sales | ' | 22.00% |
Five Customers [Member] | Catalyst Research Instruments [Member] | ' | ' |
Net sales | 99.00% | ' |
Consolidated sales | 33.00% | ' |
5_Fair_Value_of_Financial_Inst2
5. Fair Value of Financial Instruments (Details) (USD $) | Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2013 |
Cash and cash equivalents | $388,100 | $493,700 | $732,700 | $927,300 |
Available for sale securities | 338,000 | 415,400 | ' | ' |
Total | 726,100 | 909,100 | ' | ' |
Liabilities: | ' | ' | ' | ' |
Contingent consideration | 401,100 | 500,000 | ' | ' |
Level 1 | ' | ' | ' | ' |
Cash and cash equivalents | 388,100 | 493,700 | ' | ' |
Available for sale securities | 338,000 | 415,400 | ' | ' |
Total | 726,100 | 909,100 | ' | ' |
Liabilities: | ' | ' | ' | ' |
Contingent consideration | 0 | 0 | ' | ' |
Level 2 | ' | ' | ' | ' |
Cash and cash equivalents | 0 | 0 | ' | ' |
Available for sale securities | 0 | 0 | ' | ' |
Total | 0 | 0 | ' | ' |
Liabilities: | ' | ' | ' | ' |
Contingent consideration | 0 | 0 | ' | ' |
Level 3 | ' | ' | ' | ' |
Cash and cash equivalents | 0 | 0 | ' | ' |
Available for sale securities | 0 | 0 | ' | ' |
Total | 0 | 0 | ' | ' |
Liabilities: | ' | ' | ' | ' |
Contingent consideration | $401,100 | $500,000 | ' | ' |
5_Fair_Value_of_Financial_Inst3
5. Fair Value of Financial Instruments (Details 1) (USD $) | Sep. 30, 2014 | Jun. 30, 2014 |
Cost | $337,600 | $414,300 |
Fair Value | 338,000 | 415,400 |
Unrealized Holding Gain (Loss) | 400 | 1,100 |
Equity Securities | ' | ' |
Cost | 29,300 | 29,300 |
Fair Value | 38,300 | 38,500 |
Unrealized Holding Gain (Loss) | 9,000 | 9,200 |
Mutual Funds | ' | ' |
Cost | 308,300 | 385,000 |
Fair Value | 299,700 | 376,900 |
Unrealized Holding Gain (Loss) | ($8,600) | ($8,100) |
6_Inventories_Details
6. Inventories (Details) (USD $) | Sep. 30, 2014 | Jun. 30, 2014 |
Inventories Details | ' | ' |
Raw materials | $1,580,500 | $1,617,100 |
Work-in-process | 345,100 | 366,200 |
Finished goods | 357,300 | 325,900 |
Inventory | $2,282,900 | $2,309,200 |
7_Earnings_Loss_per_common_sha2
7. Earnings (Loss) per common share (Details) (USD $) | 3 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Earnings Loss Per Common Share Details | ' | ' |
Net income (loss) | ($161,300) | $2,100 |
Weighted average common shares outstanding | 1,469,112 | 1,337,663 |
Effect of dilutive securities | 0 | 7,408 |
Weighted average dilutive common shares outstanding | 1,469,112 | 1,345,071 |
Basic earnings/(loss) per common share | ($0.11) | $0 |
Diluted earnings/(loss) per common share | ($0.11) | $0 |
7_Earnings_Loss_per_common_sha3
7. Earnings (Loss) per common share (Details Narrative) | 3 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Equity [Abstract] | ' | ' |
Common stock issuable upon the exercise of outstanding options | 51,000 | 28,500 |
8_Goodwill_and_Other_Intangibl2
8. Goodwill and Other Intangible Assets (Details) (USD $) | 3 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Jun. 30, 2014 | |
Cost | $2,880,300 | $2,879,200 |
Accumulated Amortization | 1,171,400 | 1,083,300 |
Net | 1,708,900 | 1,795,900 |
Technology, trademarks | ' | ' |
Useful Lives Minimum | '5 years | '5 years |
Useful Lives Maximum | '10 years | '10 years |
Cost | 1,226,800 | 1,226,800 |
Accumulated Amortization | 522,900 | 489,100 |
Net | 703,900 | 737,700 |
Trade names [Member] | ' | ' |
Useful Lives | '6 years | '6 years |
Cost | 140,000 | 140,000 |
Accumulated Amortization | 13,600 | 7,800 |
Net | 126,400 | 132,200 |
Websites [Member] | ' | ' |
Useful Lives | '5 years | '5 years |
Cost | 210,000 | 210,000 |
Accumulated Amortization | 24,500 | 14,000 |
Net | 185,500 | 196,000 |
Customer relationships | ' | ' |
Useful Lives | ' | '10 years |
Useful Lives Minimum | '9 years | ' |
Useful Lives Maximum | '10 years | ' |
Cost | 357,000 | 357,000 |
Accumulated Amortization | 221,500 | 215,800 |
Net | 135,500 | 141,200 |
Sublicense agreements | ' | ' |
Useful Lives | '10 years | '10 years |
Cost | 294,000 | 294,000 |
Accumulated Amortization | 84,500 | 77,200 |
Net | 209,500 | 216,800 |
Non-compete agreements | ' | ' |
Useful Lives | '5 years | '5 years |
Cost | 384,000 | 384,000 |
Accumulated Amortization | 140,400 | 126,300 |
Net | 243,600 | 257,700 |
IPR and D [Member] | ' | ' |
Useful Lives | '3 years | '3 years |
Cost | 110,000 | 110,000 |
Accumulated Amortization | 21,400 | 12,200 |
Net | 88,600 | 97,800 |
Other intangible assets | ' | ' |
Useful Lives | '5 years | '5 years |
Cost | 158,500 | 157,400 |
Accumulated Amortization | 142,600 | 140,900 |
Net | $15,900 | $16,500 |
8_Goodwill_and_Other_Intangibl3
8. Goodwill and Other Intangible Assets (Details Narrative) (USD $) | 3 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | |
Goodwill And Other Intangible Assets Details Narrative | ' | ' | ' |
Estimated future amortization expense 2015 | $260,200 | ' | ' |
Estimated future amortization expense 2016 | 352,400 | ' | ' |
Estimated future amortization expense 2017 | 337,100 | ' | ' |
Estimated future amortization expense 2018 | 323,300 | ' | ' |
Estimated future amortization expense 2019 | 244,800 | ' | ' |
Estimated future amortization expense thereafter | 191,100 | ' | ' |
Total amortization expense | 88,100 | 28,100 | ' |
Goodwill | $705,300 | ' | $705,300 |