Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
May 31, 2017 | Jul. 31, 2017 | Nov. 30, 2016 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | May 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | SMIT | ||
Entity Registrant Name | SCHMITT INDUSTRIES INC | ||
Entity Central Index Key | 922,612 | ||
Current Fiscal Year End Date | --05-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 2,995,910 | ||
Entity Public Float | $ 3,427,500 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | May 31, 2017 | May 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 867,607 | $ 988,686 |
Accounts receivable, net | 2,344,373 | 2,099,082 |
Inventories | 4,204,723 | 4,727,977 |
Prepaid expenses | 115,756 | 132,230 |
Income taxes receivable | 7,310 | 8,432 |
Total current assets | 7,539,769 | 7,956,407 |
Property and equipment, net | 865,224 | 965,452 |
Other assets | ||
Intangible assets, net | 601,351 | 712,881 |
TOTAL ASSETS | 9,006,344 | 9,634,740 |
Current liabilities | ||
Accounts payable | 1,101,066 | 877,167 |
Accrued commissions | 300,234 | 273,147 |
Accrued payroll liabilities | 360,239 | 148,823 |
Other accrued liabilities | 267,418 | 331,563 |
Total current liabilities | 2,028,957 | 1,630,700 |
Commitments and contingencies (Note 4) | ||
Stockholders' equity | ||
Common stock, no par value, 20,000,000 shares authorized, 2,995,910 shares issued and outstanding at May 31, 2017 and May 31, 2016 | 10,649,287 | 10,569,522 |
Accumulated other comprehensive loss | (427,572) | (394,518) |
Accumulated deficit | (3,244,328) | (2,170,964) |
Total stockholders' equity | 6,977,387 | 8,004,040 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 9,006,344 | $ 9,634,740 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | May 31, 2017 | May 31, 2016 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | ||
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 2,995,910 | 2,995,910 |
Common stock, shares outstanding | 2,995,910 | 2,995,910 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Income Statement [Abstract] | |||
Net sales | $ 12,397,643 | $ 11,685,353 | $ 13,069,091 |
Cost of sales | 7,511,836 | 6,818,058 | 6,928,394 |
Gross profit | 4,885,807 | 4,867,295 | 6,140,697 |
Operating expenses: | |||
General, administration and sales | 5,618,327 | 6,016,097 | 5,826,851 |
Research and development | 256,164 | 287,672 | 378,305 |
Total operating expenses | 5,874,491 | 6,303,769 | 6,205,156 |
Operating loss | (988,684) | (1,436,474) | (64,459) |
Other expense | (56,671) | (58,713) | (19,123) |
Loss before income taxes | (1,045,355) | (1,495,187) | (83,582) |
Provision for income taxes | 28,009 | 20,002 | 10,087 |
Net loss | $ (1,073,364) | $ (1,515,189) | $ (93,669) |
Net loss per common share, basic | $ (0.36) | $ (0.51) | $ (0.03) |
Weighted average number of common shares, basic | 2,995,910 | 2,995,910 | 2,995,910 |
Net loss per common share, diluted | $ (0.36) | $ (0.51) | $ (0.03) |
Weighted average number of common shares, diluted | 2,995,910 | 2,995,910 | 2,995,910 |
Comprehensive loss | |||
Net loss | $ (1,073,364) | $ (1,515,189) | $ (93,669) |
Foreign currency translation adjustment | (33,054) | (27,573) | (103,608) |
Total comprehensive loss | $ (1,106,418) | $ (1,542,762) | $ (197,277) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Cash flows relating to operating activities | |||
Net loss | $ (1,073,364) | $ (1,515,189) | $ (93,669) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 219,082 | 245,824 | 266,572 |
Gain on disposal of property and equipment | (7,223) | (299) | (17,500) |
Stock based compensation | 79,765 | 58,198 | 72,574 |
(Increase) decrease in: | |||
Accounts receivable | (272,506) | 548,650 | (455,905) |
Inventories | 478,532 | (192,509) | 205,399 |
Prepaid expenses | 14,267 | 20,737 | (3,701) |
Income taxes receivable | 1,122 | (7,403) | 310 |
Increase (decrease) in: | |||
Accounts payable | 230,242 | 46,787 | 326,899 |
Accrued liabilities and customer deposits | 181,795 | (24,604) | 89,377 |
Income taxes payable | 0 | 0 | (210) |
Net cash provided by (used in) operating activities | (148,288) | (819,808) | 390,146 |
Cash flows relating to investing activities | |||
Purchase of property and equipment | (52,633) | (3,520) | (66,627) |
Proceeds from sale of property and equipment | 52,535 | 14,950 | 17,500 |
Net cash provided by (used in) investing activities | (98) | 11,430 | (49,127) |
Cash flows relating to financing activities | |||
Common stock issued on exercise of stock options | 0 | 0 | 0 |
Increase in line of credit | 0 | 0 | 0 |
Payments on line of credit | 0 | 0 | 0 |
Net cash provided by financing activities | 0 | 0 | 0 |
Effect of foreign exchange translation on cash | 27,307 | 1,410 | (55,930) |
Increase (decrease) in cash and cash equivalents | (121,079) | (806,968) | 285,089 |
Cash and cash equivalents, beginning of period | 988,686 | 1,795,654 | 1,510,565 |
Cash and cash equivalents, end of period | 867,607 | 988,686 | 1,795,654 |
Supplemental disclosure of cash flow information | |||
Cash paid during the year for income taxes | 27,772 | 27,496 | 9,978 |
Cash paid during the year for interest | $ 2,982 | $ 2,988 | $ 3,452 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Total | Common Stock [Member] | Accumulated Other Comprehensive Loss [Member] | Retained Earnings [Member] |
Beginning balance at May. 31, 2014 | $ 9,613,307 | $ 10,438,750 | $ (263,337) | $ (562,106) |
Beginning balance, shares at May. 31, 2014 | 2,995,910 | |||
Stock based compensation | 72,574 | $ 72,574 | 0 | 0 |
Net loss | (93,669) | 0 | 0 | (93,669) |
Other comprehensive loss | (103,608) | 0 | (103,608) | 0 |
Ending balance at May. 31, 2015 | 9,488,604 | $ 10,511,324 | (366,945) | (655,775) |
Ending balance, shares at May. 31, 2015 | 2,995,910 | |||
Stock based compensation | 58,198 | $ 58,198 | 0 | 0 |
Net loss | (1,515,189) | 0 | 0 | (1,515,189) |
Other comprehensive loss | (27,573) | 0 | (27,573) | 0 |
Ending balance at May. 31, 2016 | $ 8,004,040 | $ 10,569,522 | (394,518) | (2,170,964) |
Ending balance, shares at May. 31, 2016 | 2,995,910 | 2,995,910 | ||
Stock based compensation | $ 79,765 | $ 79,765 | 0 | 0 |
Net loss | (1,073,364) | 0 | 0 | (1,073,364) |
Other comprehensive loss | (33,054) | 0 | (33,054) | 0 |
Ending balance at May. 31, 2017 | $ 6,977,387 | $ 10,649,287 | $ (427,572) | $ (3,244,328) |
Ending balance, shares at May. 31, 2017 | 2,995,910 | 2,995,910 |
The Company
The Company | 12 Months Ended |
May 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company | NOTE 1 THE COMPANY Schmitt Industries, Inc. (the “Company”) designs, manufactures, and sells high precision test and measurement products for two main business segments: the Balancer segment and the Measurement segment. The Company designs, manufactures, and sells computer-controlled vibration detection, balancing and process control systems for the worldwide machine tool industry, particularly for grinding machines (the “Balancer segment”). Through its wholly owned subsidiary, Schmitt Measurement Systems, Inc., the Company designs, manufactures and sells laser and white light sensors for distance, dimensional and area measurement products for a variety of scientific applications, and ultrasonic measurement products that accurately measure the liquid levels of propane and diesel tanks and transmit that data via satellite to a secure web site for display (the “Measurement segment”). |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
May 31, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | NOTE 2 SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation These consolidated financial statements include those of the Company and its wholly owned subsidiaries: Schmitt Measurement Systems, Inc. (“SMS”), Schmitt Europe, Ltd. (“SEL”) and Schmitt Industries (Canada) Limited. All significant intercompany accounts and transactions have been eliminated in the preparation of the consolidated financial statements. Revenue Recognition The Company recognizes revenue for sales and billing for freight charges upon delivery of the product to the customer at a fixed and determinable price with a reasonable assurance of collection, passage of title to the customer as indicated by shipping terms and fulfillment of all significant obligations, pursuant to the guidance provided by Accounting Standards Codification (“ASC”) Topic 605. For sales to all customers, including manufacturer representatives, distributors or their third-party customers, these criteria are met at the time product is shipped. When other significant obligations remain after products are delivered, revenue is recognized only after such obligations are fulfilled. In addition, judgments are required in evaluating the credit worthiness of our customers. Credit is not extended to customers and revenue is not recognized until we have determined that collectability is reasonably assured. The Company estimates customer product returns based on historical return patterns and reduces sales and cost of sales accordingly. Cash and Cash Equivalents The Company generally invests excess cash in money market funds and investment grade highly liquid securities. The Company considers securities that are highly liquid, readily convertible into cash and have original maturities of less than three months when purchased to be cash equivalents. The Company’s cash consists of demand deposits in large financial institutions. At times, balances may exceed federally insured limits. Accounts Receivable The Company maintains credit limits for all customers based upon several factors, including but not limited to financial condition and stability, payment history, published credit reports and use of credit references. Management performs various analyses to evaluate accounts receivable balances to ensure recorded amounts reflect estimated net realizable value. This review includes using accounts receivable agings, other operating trends and relevant business conditions, including general economic factors, as they relate to each of the Company’s domestic and international customers. If these analyses lead management to the conclusion that potential significant accounts are uncollectible, a reserve is provided. The allowance for doubtful accounts was $32,572 and $42,387 as of May 31, 2017 and 2016, respectively. Inventories Inventories are valued at the lower of cost or market with cost determined on the average cost basis. Costs included in inventories consist of materials, labor and manufacturing overhead, which are related to the purchase or production of inventories. Write-downs, when required, are made to reduce excess inventories to their net realizable values. Such estimates are based on assumptions regarding future demand and market conditions. If actual conditions become less favorable than the assumptions used, an additional inventory write-down may be required. As of May 31 inventories consisted of: 2017 2016 Raw materials $ 1,773,368 $ 2,030,655 Work-in-process 937,878 1,059,864 Finished goods 1,493,477 1,637,458 $ 4,204,723 $ 4,727,977 Property and Equipment Property and equipment are stated at cost, less depreciation and amortization. Depreciation is computed using the straight-line method over estimated useful lives of three to seven years for furniture, fixtures, and equipment; three years for vehicles; and twenty-five years for buildings and improvements. Expenditures for maintenance and repairs are charged to expense as incurred. As of May 31 property and equipment consisted of: 2017 2016 Land $ 299,000 $ 299,000 Buildings and improvements 1,814,524 1,814,524 Furniture, fixtures and equipment 1,246,346 1,344,343 Vehicles 44,704 96,587 3,404,574 3,554,454 Less accumulated depreciation (2,539,350 ) (2,589,002 ) $ 865,224 $ 965,452 Intangible Assets Amortizable intangible assets, which include purchased technology and patents, are amortized over their estimated useful lives ranging from five to seventeen years. As of May 31, 2017 and 2016, amortizable intangible assets were $2,200,883, and accumulated amortization was $1,599,532 and $1,488,002, respectively. Amortization expense for each of the following years ending May 31 is expected to be as follows: Year ending May 31, 2018 $ 104,583 2019 104,583 2020 104,583 2021 104,583 2022 104,583 Thereafter 78,436 $ 601,351 Intangible and other long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. Recoverability is determined by comparing the forecasted future net cash flows from the operations to which the assets relate, based on management’s best estimates using the appropriate assumptions and projections at the time, to the carrying amount of the assets. If the carrying value is determined to be in excess of future operating cash flows, the asset is considered impaired and a loss is recognized equal to the amount by which the carrying amount exceeds the estimated fair value of the assets. As of May 31, 2017, no impairment existed. Foreign Currency Financial statements for the Company’s subsidiaries outside the United States are translated into U.S. dollars at year-end exchange rates for assets and liabilities and weighted average exchange rates for income and expenses. The resulting translation adjustments are included as a separate component of stockholders’ equity titled “Accumulated Other Comprehensive Loss.” Transaction gains and losses are included in net income (loss). Advertising Advertising costs included in general, administration and sales, are expensed when the advertising first takes place. Advertising expense was $30,500, $27,762 and $33,451 for the years ended May 31, 2017, 2016 and 2015, respectively. Research and Development Costs Research and development costs, predominately internal labor costs and costs of materials, are charged to expense when incurred. Warranty Reserve Warranty costs, both known and estimated, are charged to cost of sales on the Consolidated Statements of Operations and Comprehensive Loss and cover a defined warranty period. Estimated warranty costs are based on the history of warranty claims for each particular product type. For new product types without a warranty history, preliminary estimates are based on historical information for similar product types. The warranty reserve accruals, included in other accrued liabilities, are reviewed periodically and updated based on warranty trends. Stock-Based Compensation Stock-based compensation includes expense charges for all stock-based awards to employees and directors granted under the Company’s stock option plan. The Company requires the measurement and recognition of compensation for all stock-based awards made to employees and directors including stock options based on estimated fair values. Stock-based compensation recognized during the period is based on the value of the portion of the stock-based award that will vest during the period, adjusted for expected forfeitures. Compensation cost for all stock-based awards is recognized using the straight-line method. Income Taxes The Company applies the asset and liability method in recording income taxes, under which deferred income tax assets and liabilities are determined, based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using currently enacted tax rates and laws. Additionally, deferred tax assets are evaluated and a valuation allowance is established if it is more likely than not that all or a portion of the deferred tax asset will not be realized. Management continues to review the level of the valuation allowance on a quarterly basis. There can be no assurance that the Company’s future operations will produce sufficient earnings so that the deferred tax asset can be fully utilized. The Company currently maintains a full valuation allowance against net deferred tax assets. Earnings (Loss) Per Share Basic earnings (loss) per share is computed using the weighted average number of common shares outstanding. Diluted earnings (loss) per share is computed using the weighted average number of common shares outstanding, adjusted for dilutive incremental shares attributed to outstanding options to purchase common stock. Common stock equivalents for stock options are computed using the treasury stock method. In periods in which a net loss is incurred, no common stock equivalents are included since they are antidilutive and as such all stock options outstanding are excluded from the computation of diluted net loss in those periods. 0, 118 and 3,375 potentially dilutive common shares from outstanding stock options have been excluded from diluted earnings (loss) per share for the years ended May 31, 2017, 2016 and 2015, respectively. Concentration of Credit Risk Financial instruments that potentially expose the Company to concentration of credit risk are trade accounts receivable. Credit terms generally require an invoice to be paid within 30 days or include a discount of 1.5% if the invoice is paid within ten days, with the net amount payable in 30 days. Financial Instruments The carrying value of all other financial instruments potentially subject to valuation risk (principally consisting of cash and cash equivalents, accounts receivable and accounts payable) approximates fair value because of their short-term maturities. Shipping and Handling Charges The Company incurs costs related to shipping and handling of its manufactured products. These costs are expensed as incurred as a component of cost of sales. Shipping and handling charges related to the receipt of raw materials are also incurred, which are recorded as a cost of the related inventory. Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASU 2014-09 affects any entity using U.S. GAAP that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). In August 2015, the FASB issued ASU 2015-14, which defers the effective date of ASU 2014-09 by one year. The new guidance is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted as of the date of the original effective date, for interim and annual reporting periods beginning after December 15, 2016. The Company is currently evaluating the provisions of ASU 2014-09 and the potential impact on its consolidated financial statements. To date, the Company has examined its current revenue streams and does not believe that the adoption of this guidance will have a material impact on revenue recognition patterns as compared to revenue recognition under existing guidance, as the Company expects that revenues generated will continue to be recognized upon the shipment of products to customers. The Company will continue to evaluate the impacts of the provisions of ASU 2014-09 through the date of adoption to ensure that preliminary conclusions continue to remain accurate. Additionally, the Company is assessing ASU 2014-09’s impact on its financial statement disclosures and currently expects to adopt ASU 2014-09 on June 1, 2018 using the modified retrospective method. In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory.” ASU 2015-11 requires an entity to measure in-scope inventory at the lower of cost and net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The amendments in ASU 2015-11 are effective on a prospective basis for public entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early application is permitted as of the beginning of an interim or annual reporting period. This standard is effective for the Company beginning in the first quarter of fiscal year 2018. The adoption of ASU 2015-11 is not expected to have a material impact on the Company’s consolidated financial statements. |
Income Taxes
Income Taxes | 12 Months Ended |
May 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 3 INCOME TAXES The provision for income taxes is as follows: Year ended May 31, 2017 2016 2015 Current $ 28,009 $ 20,002 $ 10,087 Deferred (356,169 ) (533,357 ) 3,558 Change in valuation allowance 356,169 533,357 (3,558 ) Total provision for income taxes $ 28,009 $ 20,002 $ 10,087 Deferred tax assets are comprised of the following components: 2017 2016 Basis difference of assets $ 307,846 $ 321,511 Inventory related items 287,543 276,887 Other reserves and liabilities 122,083 119,460 Net operating loss carryforward 1,723,418 1,369,399 General business and other credit carryforward 449,048 454,246 Other deferred items, net 20,667 12,933 Gross deferred tax assets 2,910,605 2,554,436 Deferred tax asset valuation allowance (2,910,605 ) (2,554,436 ) Net deferred tax asset $ 0 $ 0 Deferred tax assets are evaluated and a valuation allowance is established if it is more likely than not that all or a portion of the deferred tax asset will not be realized. The Company has recorded a substantial deferred tax asset related to temporary differences between book and tax bases of assets and liabilities. During the years ended May 31, 2017, 2016 and 2015, the Company increased its valuation allowance $356,169, $533,357 and $3,558 respectively, as a result of the increase in the Company’s deferred tax assets. The Company has provided a full valuation allowance against all of its deferred tax assets as the recent losses have been given more weight than projected future income when determining the need for a valuation allowance. The Company has federal net operating loss carryforwards of approximately $4.0 million which begin to expire in 2030 along with the federal general business and other credit carryforwards. The Company has state net operating loss carryforwards of approximately $4.6 million which begin to expire in 2024. The provision for income taxes differs from the amount of income taxes determined by applying the U.S. statutory federal tax rate to pre-tax loss due to the following: Year ended May 31, 2017 2016 2015 Statutory federal tax rate (34.0 )% (34.0 )% (34.0 )% State taxes, net of federal benefit (4.4 ) (4.4 ) (4.4 ) Change in deferred tax valuation allowance 34.1 35.7 3.8 Stock-based compensation 2.2 1.2 28.1 R&E tax credits 1.6 0.7 (21.6 ) Effect of foreign income tax rates (0.3 ) 1.1 11.1 Permanent and other differences 3.5 1.0 29.1 Effective tax rate 2.7 % 1.3 % 12.1 % Each year the Company files income tax returns in the various federal, state and local income taxing jurisdictions in which it operates. These tax returns are subject to examination and possible challenge by the taxing authorities. Positions challenged by the taxing authorities may be settled or appealed by the Company. As a result, there is an uncertainty in income taxes recognized in the Company’s financial statements in accordance with ASC Topic 740. The Company applies this guidance by defining criteria that an individual income tax position must meet for any part of the benefit of that position to be recognized in an enterprise’s financial statements and provides guidance on measurement, derecognition, classification, accounting for interest and penalties, accounting in interim periods, disclosure, and transition. The liability for unrecognized tax benefits was $0 as of May 31, 2017 and 2016. Interest and penalties associated with uncertain tax positions are recognized as components of the “Provision for income taxes.” The liability for payment of interest and penalties was $0 as of May 31, 2017 and 2016. Several tax years are subject to examination by major tax jurisdictions. In the United States, federal tax years ended May 31, 2014 and after are subject to examination. In the United Kingdom, tax years ended May 31, 2012 and after are subject to examination. In Canada, tax years ended May 31, 2014 and after are subject to examination. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
May 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 4 COMMITMENTS AND CONTINGENCIES The Company entered into a 5-year lease of manufacturing equipment in May 2014. The lease is classified as a capital lease and the asset, valued at $38,890, is included in the furniture, fixtures and equipment amount in Note 2 – Property and Equipment as of May 31, 2017 and 2016. The future minimum lease payments under the capital lease for each of the years ending May 31 are as follows: Year ending May 31, 2018 $ 7,618 2019 11,713 2020 0 2021 0 2022 0 Thereafter 0 Total minimum lease payments 19,331 Less: amount representing interest (2,073 ) Present value of minimum lease payments (1) $ 17,258 (1) Reflected in other accrued liabilities on the balance sheet as of May 31, 2017 and 2016. The Company leases certain facilities and equipment to support operations under non-cancelable operating leases and other contractual obligations. Total lease expense under operating leases for the years ended May 31, 2017, 2016 and 2015 amounted to $47,695, $73,688 and $59,481, respectively. The future minimum commitments under operating leases for each of the years ending May 31 are as follows: Year ending May 31, 2018 $ 45,055 2019 44,237 2020 44,237 2021 5,370 2022 0 Thereafter 0 In a transaction related to the acquisition of Schmitt Measurement Systems, Inc., formerly TMA Technologies, Inc. (“TMA”), the Company established a royalty pool and vested in each shareholder and debt holder of the acquired company an interest in the royalty pool equal to the amount invested or loaned including interest payable through March 1995. The royalty pool is funded at 5% of net sales (defined as gross sales less returns, allowances and sales commissions) of the Company’s surface measurement products and future derivative products developed by Schmitt Industries, Inc., which utilize these technologies. As part of the royalty pool agreement, each former shareholder and debt holder released TMA from any claims with regard to the acquisition except their rights to future royalties. Royalty expense applicable to the years ended May 31, 2017, 2016 and 2015 amounted to $15,407, $14,825 and $59,712, respectively. |
Segment Information
Segment Information | 12 Months Ended |
May 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | NOTE 5 SEGMENT INFORMATION The Company has two reportable business segments: the design and assembly of dynamic balancing systems and components for the machine tool industry (Balancer), and the design and assembly of laser-based test and measurement systems (Measurement). The Company operates in three principal geographic markets: United States, Europe and Asia. Year Ended May 31, 2017 2016 2015 Balancer Measurement Balancer Measurement Balancer Measurement Gross sales $ 8,319,896 $ 5,331,535 $ 8,257,036 $ 4,728,905 $ 9,132,167 $ 5,191,970 Intercompany sales (1,237,422 ) (16,366 ) (1,294,290 ) (6,298 ) (1,281,931 ) 26,885 Net sales $ 7,082,474 $ 5,315,169 $ 6,962,746 $ 4,722,607 $ 7,850,236 $ 5,218,855 Operating income (loss) $ (931,770 ) $ (56,914 ) $ (992,342 ) $ (444,132 ) $ (323,288 ) $ 258,829 Depreciation expense $ 70,018 $ 37,534 $ 94,954 $ 39,340 $ 103,349 $ 43,991 Amortization expense $ 0 $ 111,530 $ 0 $ 111,530 $ 0 $ 119,232 Capital expenditures $ 46,495 $ 6,138 $ 3,520 $ 0 $ 58,700 $ 7,927 Geographic Information Year Ended May 31, 2017 2016 2015 North America $ 8,162,340 $ 7,749,753 $ 8,165,269 Europe 1,451,293 1,435,280 1,194,186 Asia 2,500,191 2,288,550 3,388,757 Other markets 283,819 211,770 320,879 Total net sales $ 12,397,643 $ 11,685,353 $ 13,069,091 Year Ended May 31, 2017 2016 2015 United States Europe United States Europe United States Europe Operating loss $ (947,514 ) $ (41,170 ) $ (1,255,589 ) $ (180,885 ) $ (69,399 ) $ 4,940 Depreciation expense $ 107,552 $ 0 $ 134,294 $ 0 $ 147,339 $ 0 Amortization expense $ 111,530 $ 0 $ 111,530 $ 0 $ 119,233 $ 0 Capital expenditures $ 52,633 $ 0 $ 3,520 $ 0 $ 66,627 $ 0 Segment and Geographic Assets May 31, 2017 May 31, 2016 Segment assets to total assets Balancer $ 4,791,100 $ 4,727,490 Measurement 3,340,327 3,910,132 Corporate assets 874,917 997,118 Total assets $ 9,006,344 $ 9,634,740 Geographic assets to long-lived assets United States $ 865,224 $ 965,452 Europe 0 0 Total assets $ 865,224 $ 965,452 Geographic assets to total assets United States $ 8,149,507 $ 8,772,666 Europe 856,837 862,074 Total assets $ 9,006,344 $ 9,634,740 Note – Europe is defined as the European subsidiary, Schmitt Europe, Ltd. |
Stock Options and Stock Based C
Stock Options and Stock Based Compensation | 12 Months Ended |
May 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options and Stock Based Compensation | NOTE 6 STOCK OPTIONS AND STOCK BASED COMPENSATION The Board of Directors adopted the 2014 Equity Incentive Plan (2014 Plan) in August 2014, the 2004 Stock Option Plan (2004 Plan) in August 2004 and the 1995 Stock Option Plan (1995 Plan) in December 1995, which was amended in August 1996 and restated in August 1998. The 2014 Plan provides for the grant of (i) stock options (both nonqualified and incentive stock options), (ii) stock appreciation rights or SARs, (iii) restricted stock, (iv) restricted stock units or RSUs, (v) performance awards, and (vi) other share-based awards. An incentive stock option granted under the 2014 Plan is intended to qualify as an incentive stock option (ISO) and nonstatutory stock option granted under the 2014 Plan are not intended to qualify as an ISO. An option granted under the 2004 Plan and/or 1995 Plan (the Plans) might be either an ISO, or an NSO. ISOs may be granted only to employees and members of the Board of Directors of the Company and are subject to certain limitations, in addition to restrictions applicable to all stock options under the Plans. Options not meeting these limitations will be treated as NSOs. The purchase price of ISOs is fair market value on the date of grant; the purchase price of NSOs may vary from fair market value. Vesting is at the discretion of the compensation committee of the Board of Directors, but generally is either 50% at grant date and 16.7% on each anniversary thereafter; 25% at grant date and 25% on each anniversary thereafter or 0% at grant date and 33% on each anniversary thereafter. The Company initially reserved 400,000 shares for issuance under the 1995 Plan and 300,000 shares for issuance under the 2004 Plan and 2014 Plan. The 1995 Plan expired in December 2005 and no additional options may be issued under the 1995 Plan, although expiration of the 1995 Plan did not affect the rights of persons who received stock grants under the 1995 Plan. The 2004 Plan expired in August 2015 and no additional options may be issued under the 2004 Plan. Stock-based compensation recognized in the Company’s Consolidated Financial Statements for the years ended May 31, 2017, 2016 and 2015 includes compensation cost for stock-based awards granted. All outstanding options will expire no later than 2024. The Company uses the Black-Scholes option pricing model as its method of valuation for stock-based awards. The Company’s determination of the fair value of stock-based awards on the date of grant using an option pricing model is affected by our stock price as well as assumptions regarding a number of highly complex and subjective variables. Although the fair value of stock-based awards is determined in accordance with ASC Topic 718, the Black-Scholes option pricing model requires the input of highly subjective assumptions, and other reasonable assumptions could provide differing results. These variables include, but are not limited to: • Risk-Free Interest Rate. • Expected Life. • Expected Volatility. • Expected Dividend Yield. • Expected Forfeitures. The Company has computed, to determine stock-based compensation expense recognized for the years ended May 31, 2017, 2016 and 2015, the value of all stock options granted using the Black-Scholes option pricing model as prescribed by ASC Topic 718 using the following assumptions: Year Ended May 31, 2017 2016 2015 Risk-free interest rate 2.8% N/A 2.7% Expected life 4.7 years N/A 4.7 years Expected volatility 43.4% N/A 55.3% Stock-Based Compensation Under ASC Topic 718 The total stock-based compensation expense recognized under ASC Topic 718 was $79,765, $58,198 and $72,574 during Fiscal 2017, 2016 and 2015, respectively. All stock-based compensation expense has been recorded as general, administration and sales expense in the Consolidated Statements of Operations and Comprehensive Loss. As of May 31, 2017, the Company had a total of 360,000 outstanding stock options (200,830 vested and exercisable and 159,170 non-vested) with a weighted average exercise price of $2.28. The Company estimates that a total of $91,010 will be recorded as additional stock-based compensation expense for all options which were outstanding as of May 31, 2017, but which were not yet vested. The weighted-average period over which this total compensation cost is expected to be recognized is 1.3 years. Options outstanding and exercisable consist of the following as of May 31, 2017: Outstanding Options Exercisable Options Number Weighted Weighted Number Weighted 212,500 $ 1.70 9.9 70,830 $ 1.70 15,000 2.53 6.3 15,000 2.53 77,500 2.85 6.9 60,000 2.85 55,000 3.65 4.0 55,000 3.65 360,000 2.28 8.2 200,830 2.64 Options granted, exercised, canceled and expired under the Company’s stock option plan during the years ended May 31, 2017, 2016 and 2015 are summarized as follows: Number of Weighted Options outstanding - May 31, 2014 281,666 $ 3.77 Options granted 87,500 2.82 Options exercised 0 0.00 Options forfeited/cancelled (36,666 ) 2.30 Options outstanding - May 31, 2015 332,500 3.68 Options granted 0 0.00 Options exercised 0 0.00 Options forfeited/cancelled (185,000 ) 4.13 Options outstanding - May 31, 2016 147,500 3.11 Options granted 212,500 1.70 Options exercised 0 0.00 Options forfeited/cancelled 0 0.00 Options outstanding - May 31, 2017 360,000 2.28 The total intrinsic value of both outstanding and exercisable options was $0 as of May 31, 2017 and 2016. The total intrinsic value of options exercised was $0 in each of the years ended May 31, 2017, 2016 and 2015. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
May 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE 7 EARNINGS PER SHARE The following table is a reconciliation of the numerators and denominators of the basic and diluted per share computations for income (loss) from continuing operations for each of the three years in the period ended May 31: Net income/(loss) Weighted Average Shares (Denominator) Per Share Year ended May 31, 2017 Basic earnings per share Loss available to common stockholders $ (1,073,364 ) 2,995,910 $ (0.36 ) Effect of dilutive securities stock options 0 0 Diluted earnings per share Loss available to common stockholders $ (1,073,364 ) 2,995,910 $ (0.36 ) Year ended May 31, 2016 Basic earnings per share Loss available to common stockholders $ (1,515,189 ) 2,995,910 $ (0.51 ) Effect of dilutive securities stock options 0 0 Diluted earnings per share Loss available to common stockholders $ (1,515,189 ) 2,995,910 $ (0.51 ) Year ended May 31, 2015 Basic earnings per share Loss available to common stockholders $ (93,669 ) 2,995,910 $ (0.03 ) Effect of dilutive securities stock options 0 0 Diluted earnings per share Loss available to common stockholders $ (93,669 ) 2,995,910 $ (0.03 ) |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
May 31, 2017 | |
Postemployment Benefits [Abstract] | |
Employee Benefit Plans | NOTE 8 EMPLOYEE BENEFIT PLANS The Company adopted the Schmitt Industries, Inc. 401(k) Profit Sharing Plan & Trust effective June 1, 1996. Employees must meet certain age and service requirements to be eligible. Participants may contribute up to 15% of their eligible compensation which may be partially matched by the Company. The Company may make further contributions in the form of a profit sharing contribution or a discretionary contribution. The Company made matching contributions in conjunction with employee contributions to the plan totaling $62,622, $57,178 and $51,999 during the years ended May 31, 2017, 2016 and 2015, respectively. |
Significant Accounting Polici15
Significant Accounting Policies (Policies) | 12 Months Ended |
May 31, 2017 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation These consolidated financial statements include those of the Company and its wholly owned subsidiaries: Schmitt Measurement Systems, Inc. (“SMS”), Schmitt Europe, Ltd. (“SEL”) and Schmitt Industries (Canada) Limited. All significant intercompany accounts and transactions have been eliminated in the preparation of the consolidated financial statements. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue for sales and billing for freight charges upon delivery of the product to the customer at a fixed and determinable price with a reasonable assurance of collection, passage of title to the customer as indicated by shipping terms and fulfillment of all significant obligations, pursuant to the guidance provided by Accounting Standards Codification (“ASC”) Topic 605. For sales to all customers, including manufacturer representatives, distributors or their third-party customers, these criteria are met at the time product is shipped. When other significant obligations remain after products are delivered, revenue is recognized only after such obligations are fulfilled. In addition, judgments are required in evaluating the credit worthiness of our customers. Credit is not extended to customers and revenue is not recognized until we have determined that collectability is reasonably assured. The Company estimates customer product returns based on historical return patterns and reduces sales and cost of sales accordingly. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company generally invests excess cash in money market funds and investment grade highly liquid securities. The Company considers securities that are highly liquid, readily convertible into cash and have original maturities of less than three months when purchased to be cash equivalents. The Company’s cash consists of demand deposits in large financial institutions. At times, balances may exceed federally insured limits. |
Accounts Receivable | Accounts Receivable The Company maintains credit limits for all customers based upon several factors, including but not limited to financial condition and stability, payment history, published credit reports and use of credit references. Management performs various analyses to evaluate accounts receivable balances to ensure recorded amounts reflect estimated net realizable value. This review includes using accounts receivable agings, other operating trends and relevant business conditions, including general economic factors, as they relate to each of the Company’s domestic and international customers. If these analyses lead management to the conclusion that potential significant accounts are uncollectible, a reserve is provided. The allowance for doubtful accounts was $32,572 and $42,387 as of May 31, 2017 and 2016, respectively. |
Inventories | Inventories Inventories are valued at the lower of cost or market with cost determined on the average cost basis. Costs included in inventories consist of materials, labor and manufacturing overhead, which are related to the purchase or production of inventories. Write-downs, when required, are made to reduce excess inventories to their net realizable values. Such estimates are based on assumptions regarding future demand and market conditions. If actual conditions become less favorable than the assumptions used, an additional inventory write-down may be required. As of May 31 inventories consisted of: 2017 2016 Raw materials $ 1,773,368 $ 2,030,655 Work-in-process 937,878 1,059,864 Finished goods 1,493,477 1,637,458 $ 4,204,723 $ 4,727,977 |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, less depreciation and amortization. Depreciation is computed using the straight-line method over estimated useful lives of three to seven years for furniture, fixtures, and equipment; three years for vehicles; and twenty-five years for buildings and improvements. Expenditures for maintenance and repairs are charged to expense as incurred. As of May 31 property and equipment consisted of: 2017 2016 Land $ 299,000 $ 299,000 Buildings and improvements 1,814,524 1,814,524 Furniture, fixtures and equipment 1,246,346 1,344,343 Vehicles 44,704 96,587 3,404,574 3,554,454 Less accumulated depreciation (2,539,350 ) (2,589,002 ) $ 865,224 $ 965,452 |
Intangible Assets | Intangible Assets Amortizable intangible assets, which include purchased technology and patents, are amortized over their estimated useful lives ranging from five to seventeen years. As of May 31, 2017 and 2016, amortizable intangible assets were $2,200,883, and accumulated amortization was $1,599,532 and $1,488,002, respectively. Amortization expense for each of the following years ending May 31 is expected to be as follows: Year ending May 31, 2018 $ 104,583 2019 104,583 2020 104,583 2021 104,583 2022 104,583 Thereafter 78,436 $ 601,351 Intangible and other long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. Recoverability is determined by comparing the forecasted future net cash flows from the operations to which the assets relate, based on management’s best estimates using the appropriate assumptions and projections at the time, to the carrying amount of the assets. If the carrying value is determined to be in excess of future operating cash flows, the asset is considered impaired and a loss is recognized equal to the amount by which the carrying amount exceeds the estimated fair value of the assets. As of May 31, 2017, no impairment existed. |
Foreign Currency | Foreign Currency Financial statements for the Company’s subsidiaries outside the United States are translated into U.S. dollars at year-end exchange rates for assets and liabilities and weighted average exchange rates for income and expenses. The resulting translation adjustments are included as a separate component of stockholders’ equity titled “Accumulated Other Comprehensive Loss.” Transaction gains and losses are included in net income (loss). |
Advertising | Advertising Advertising costs included in general, administration and sales, are expensed when the advertising first takes place. Advertising expense was $30,500, $27,762 and $33,451 for the years ended May 31, 2017, 2016 and 2015, respectively. |
Research and Development Costs | Research and Development Costs Research and development costs, predominately internal labor costs and costs of materials, are charged to expense when incurred. |
Warranty Reserve | Warranty Reserve Warranty costs, both known and estimated, are charged to cost of sales on the Consolidated Statements of Operations and Comprehensive Loss and cover a defined warranty period. Estimated warranty costs are based on the history of warranty claims for each particular product type. For new product types without a warranty history, preliminary estimates are based on historical information for similar product types. The warranty reserve accruals, included in other accrued liabilities, are reviewed periodically and updated based on warranty trends. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation includes expense charges for all stock-based awards to employees and directors granted under the Company’s stock option plan. The Company requires the measurement and recognition of compensation for all stock-based awards made to employees and directors including stock options based on estimated fair values. Stock-based compensation recognized during the period is based on the value of the portion of the stock-based award that will vest during the period, adjusted for expected forfeitures. Compensation cost for all stock-based awards is recognized using the straight-line method. |
Income Taxes | Income Taxes The Company applies the asset and liability method in recording income taxes, under which deferred income tax assets and liabilities are determined, based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using currently enacted tax rates and laws. Additionally, deferred tax assets are evaluated and a valuation allowance is established if it is more likely than not that all or a portion of the deferred tax asset will not be realized. Management continues to review the level of the valuation allowance on a quarterly basis. There can be no assurance that the Company’s future operations will produce sufficient earnings so that the deferred tax asset can be fully utilized. The Company currently maintains a full valuation allowance against net deferred tax assets. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) per share is computed using the weighted average number of common shares outstanding. Diluted earnings (loss) per share is computed using the weighted average number of common shares outstanding, adjusted for dilutive incremental shares attributed to outstanding options to purchase common stock. Common stock equivalents for stock options are computed using the treasury stock method. In periods in which a net loss is incurred, no common stock equivalents are included since they are antidilutive and as such all stock options outstanding are excluded from the computation of diluted net loss in those periods. 0, 118 and 3,375 potentially dilutive common shares from outstanding stock options have been excluded from diluted earnings (loss) per share for the years ended May 31, 2017, 2016 and 2015, respectively. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially expose the Company to concentration of credit risk are trade accounts receivable. Credit terms generally require an invoice to be paid within 30 days or include a discount of 1.5% if the invoice is paid within ten days, with the net amount payable in 30 days. |
Financial Instruments | Financial Instruments The carrying value of all other financial instruments potentially subject to valuation risk (principally consisting of cash and cash equivalents, accounts receivable and accounts payable) approximates fair value because of their short-term maturities. |
Shipping and Handling Charges | Shipping and Handling Charges The Company incurs costs related to shipping and handling of its manufactured products. These costs are expensed as incurred as a component of cost of sales. Shipping and handling charges related to the receipt of raw materials are also incurred, which are recorded as a cost of the related inventory. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASU 2014-09 affects any entity using U.S. GAAP that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). In August 2015, the FASB issued ASU 2015-14, which defers the effective date of ASU 2014-09 by one year. The new guidance is effective for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted as of the date of the original effective date, for interim and annual reporting periods beginning after December 15, 2016. The Company is currently evaluating the provisions of ASU 2014-09 and the potential impact on its consolidated financial statements. To date, the Company has examined its current revenue streams and does not believe that the adoption of this guidance will have a material impact on revenue recognition patterns as compared to revenue recognition under existing guidance, as the Company expects that revenues generated will continue to be recognized upon the shipment of products to customers. The Company will continue to evaluate the impacts of the provisions of ASU 2014-09 through the date of adoption to ensure that preliminary conclusions continue to remain accurate. Additionally, the Company is assessing ASU 2014-09’s impact on its financial statement disclosures and currently expects to adopt ASU 2014-09 on June 1, 2018 using the modified retrospective method. In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory.” ASU 2015-11 requires an entity to measure in-scope inventory at the lower of cost and net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The amendments in ASU 2015-11 are effective on a prospective basis for public entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early application is permitted as of the beginning of an interim or annual reporting period. This standard is effective for the Company beginning in the first quarter of fiscal year 2018. The adoption of ASU 2015-11 is not expected to have a material impact on the Company’s consolidated financial statements. |
Significant Accounting Polici16
Significant Accounting Policies (Tables) | 12 Months Ended |
May 31, 2017 | |
Accounting Policies [Abstract] | |
Inventories | As of May 31 inventories consisted of: 2017 2016 Raw materials $ 1,773,368 $ 2,030,655 Work-in-process 937,878 1,059,864 Finished goods 1,493,477 1,637,458 $ 4,204,723 $ 4,727,977 |
Summary of Property and Equipment | As of May 31 property and equipment consisted of: 2017 2016 Land $ 299,000 $ 299,000 Buildings and improvements 1,814,524 1,814,524 Furniture, fixtures and equipment 1,246,346 1,344,343 Vehicles 44,704 96,587 3,404,574 3,554,454 Less accumulated depreciation (2,539,350 ) (2,589,002 ) $ 865,224 $ 965,452 |
Summary of Amortization Expenses | Amortization expense for each of the following years ending May 31 is expected to be as follows: Year ending May 31, 2018 $ 104,583 2019 104,583 2020 104,583 2021 104,583 2022 104,583 Thereafter 78,436 $ 601,351 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
May 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Taxes | The provision for income taxes is as follows: Year ended May 31, 2017 2016 2015 Current $ 28,009 $ 20,002 $ 10,087 Deferred (356,169 ) (533,357 ) 3,558 Change in valuation allowance 356,169 533,357 (3,558 ) Total provision for income taxes $ 28,009 $ 20,002 $ 10,087 |
Components of Deferred Tax Assets | Deferred tax assets are comprised of the following components: 2017 2016 Basis difference of assets $ 307,846 $ 321,511 Inventory related items 287,543 276,887 Other reserves and liabilities 122,083 119,460 Net operating loss carryforward 1,723,418 1,369,399 General business and other credit carryforward 449,048 454,246 Other deferred items, net 20,667 12,933 Gross deferred tax assets 2,910,605 2,554,436 Deferred tax asset valuation allowance (2,910,605 ) (2,554,436 ) Net deferred tax asset $ 0 $ 0 |
Reconciliation of Provision for Income Taxes from Amount of Income Taxes of U.S. Statutory Federal Tax Rate to Pre-Tax Loss | The provision for income taxes differs from the amount of income taxes determined by applying the U.S. statutory federal tax rate to pre-tax loss due to the following: Year ended May 31, 2017 2016 2015 Statutory federal tax rate (34.0 )% (34.0 )% (34.0 )% State taxes, net of federal benefit (4.4 ) (4.4 ) (4.4 ) Change in deferred tax valuation allowance 34.1 35.7 3.8 Stock-based compensation 2.2 1.2 28.1 R&E tax credits 1.6 0.7 (21.6 ) Effect of foreign income tax rates (0.3 ) 1.1 11.1 Permanent and other differences 3.5 1.0 29.1 Effective tax rate 2.7 % 1.3 % 12.1 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
May 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Lease Payments under Capital Lease | The future minimum lease payments under the capital lease for each of the years ending May 31 are as follows: Year ending May 31, 2018 $ 7,618 2019 11,713 2020 0 2021 0 2022 0 Thereafter 0 Total minimum lease payments 19,331 Less: amount representing interest (2,073 ) Present value of minimum lease payments (1) $ 17,258 (1) Reflected in other accrued liabilities on the balance sheet as of May 31, 2017 and 2016. |
Future Minimum Commitments under Operating Leases | The future minimum commitments under operating leases for each of the years ending May 31 are as follows: Year ending May 31, 2018 $ 45,055 2019 44,237 2020 44,237 2021 5,370 2022 0 Thereafter 0 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
May 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Year Ended May 31, 2017 2016 2015 Balancer Measurement Balancer Measurement Balancer Measurement Gross sales $ 8,319,896 $ 5,331,535 $ 8,257,036 $ 4,728,905 $ 9,132,167 $ 5,191,970 Intercompany sales (1,237,422 ) (16,366 ) (1,294,290 ) (6,298 ) (1,281,931 ) 26,885 Net sales $ 7,082,474 $ 5,315,169 $ 6,962,746 $ 4,722,607 $ 7,850,236 $ 5,218,855 Operating income (loss) $ (931,770 ) $ (56,914 ) $ (992,342 ) $ (444,132 ) $ (323,288 ) $ 258,829 Depreciation expense $ 70,018 $ 37,534 $ 94,954 $ 39,340 $ 103,349 $ 43,991 Amortization expense $ 0 $ 111,530 $ 0 $ 111,530 $ 0 $ 119,232 Capital expenditures $ 46,495 $ 6,138 $ 3,520 $ 0 $ 58,700 $ 7,927 |
Geographic Information-Net Sales by Geographic Area | Geographic Information Year Ended May 31, 2017 2016 2015 North America $ 8,162,340 $ 7,749,753 $ 8,165,269 Europe 1,451,293 1,435,280 1,194,186 Asia 2,500,191 2,288,550 3,388,757 Other markets 283,819 211,770 320,879 Total net sales $ 12,397,643 $ 11,685,353 $ 13,069,091 |
Segment Information of Operating Income (Loss) and Expenditure by Geographic Areas | Year Ended May 31, 2017 2016 2015 United States Europe United States Europe United States Europe Operating loss $ (947,514 ) $ (41,170 ) $ (1,255,589 ) $ (180,885 ) $ (69,399 ) $ 4,940 Depreciation expense $ 107,552 $ 0 $ 134,294 $ 0 $ 147,339 $ 0 Amortization expense $ 111,530 $ 0 $ 111,530 $ 0 $ 119,233 $ 0 Capital expenditures $ 52,633 $ 0 $ 3,520 $ 0 $ 66,627 $ 0 |
Segment and Geographic Assets | Segment and Geographic Assets May 31, 2017 May 31, 2016 Segment assets to total assets Balancer $ 4,791,100 $ 4,727,490 Measurement 3,340,327 3,910,132 Corporate assets 874,917 997,118 Total assets $ 9,006,344 $ 9,634,740 Geographic assets to long-lived assets United States $ 865,224 $ 965,452 Europe 0 0 Total assets $ 865,224 $ 965,452 Geographic assets to total assets United States $ 8,149,507 $ 8,772,666 Europe 856,837 862,074 Total assets $ 9,006,344 $ 9,634,740 |
Stock Options and Stock Based20
Stock Options and Stock Based Compensation (Tables) | 12 Months Ended |
May 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Fair Value of Options | The Company has computed, to determine stock-based compensation expense recognized for the years ended May 31, 2017, 2016 and 2015, the value of all stock options granted using the Black-Scholes option pricing model as prescribed by ASC Topic 718 using the following assumptions: Year Ended May 31, 2017 2016 2015 Risk-free interest rate 2.8% N/A 2.7% Expected life 4.7 years N/A 4.7 years Expected volatility 43.4% N/A 55.3% |
Schedule of Outstanding Stock Options | Options outstanding and exercisable consist of the following as of May 31, 2017: Outstanding Options Exercisable Options Number Weighted Weighted Number Weighted 212,500 $ 1.70 9.9 70,830 $ 1.70 15,000 2.53 6.3 15,000 2.53 77,500 2.85 6.9 60,000 2.85 55,000 3.65 4.0 55,000 3.65 360,000 2.28 8.2 200,830 2.64 |
Schedule of Options Granted, Exercised, and Forfeited or Canceled | Options granted, exercised, canceled and expired under the Company’s stock option plan during the years ended May 31, 2017, 2016 and 2015 are summarized as follows: Number of Weighted Options outstanding - May 31, 2014 281,666 $ 3.77 Options granted 87,500 2.82 Options exercised 0 0.00 Options forfeited/cancelled (36,666 ) 2.30 Options outstanding - May 31, 2015 332,500 3.68 Options granted 0 0.00 Options exercised 0 0.00 Options forfeited/cancelled (185,000 ) 4.13 Options outstanding - May 31, 2016 147,500 3.11 Options granted 212,500 1.70 Options exercised 0 0.00 Options forfeited/cancelled 0 0.00 Options outstanding - May 31, 2017 360,000 2.28 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
May 31, 2017 | |
Earnings Per Share [Abstract] | |
Reconciliation of Numerators and Denominators of Basic and Diluted Per Share Computations for Income (Loss) from Continuing Operations | The following table is a reconciliation of the numerators and denominators of the basic and diluted per share computations for income (loss) from continuing operations for each of the three years in the period ended May 31: Net income/(loss) Weighted Average Shares (Denominator) Per Share Year ended May 31, 2017 Basic earnings per share Loss available to common stockholders $ (1,073,364 ) 2,995,910 $ (0.36 ) Effect of dilutive securities stock options 0 0 Diluted earnings per share Loss available to common stockholders $ (1,073,364 ) 2,995,910 $ (0.36 ) Year ended May 31, 2016 Basic earnings per share Loss available to common stockholders $ (1,515,189 ) 2,995,910 $ (0.51 ) Effect of dilutive securities stock options 0 0 Diluted earnings per share Loss available to common stockholders $ (1,515,189 ) 2,995,910 $ (0.51 ) Year ended May 31, 2015 Basic earnings per share Loss available to common stockholders $ (93,669 ) 2,995,910 $ (0.03 ) Effect of dilutive securities stock options 0 0 Diluted earnings per share Loss available to common stockholders $ (93,669 ) 2,995,910 $ (0.03 ) |
The Company - Additional Inform
The Company - Additional Information (Detail) - Segment | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of business segments | 2 | 2 | 2 |
Significant Accounting Polici23
Significant Accounting Policies - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Significant Accounting Policies [Line Items] | |||
Allowance for doubtful accounts | $ 32,572 | $ 42,387 | |
Amortizable intangible assets | 2,200,883 | 2,200,883 | |
Accumulated amortization of intangible assets | 1,599,532 | 1,488,002 | |
Impairment of intangible assets | 0 | ||
Advertising expense | $ 30,500 | $ 27,762 | $ 33,451 |
Stock options excluded from computation of dilutive net loss | 0 | 118 | 3,375 |
Discount on credit | 1.50% | ||
Invoice paid term | 10 days | ||
Accounts receivable credit period | 30 days | ||
Vehicles [Member] | |||
Significant Accounting Policies [Line Items] | |||
Property and equipment, useful life | 3 years | ||
Building and Improvements [Member] | |||
Significant Accounting Policies [Line Items] | |||
Property and equipment, useful life | 25 years | ||
Minimum [Member] | |||
Significant Accounting Policies [Line Items] | |||
Useful life for intangible assets | 5 years | ||
Minimum [Member] | Furniture, Fixtures and Equipment [Member] | |||
Significant Accounting Policies [Line Items] | |||
Property and equipment, useful life | 3 years | ||
Maximum [Member] | |||
Significant Accounting Policies [Line Items] | |||
Useful life for intangible assets | 17 years | ||
Maximum [Member] | Furniture, Fixtures and Equipment [Member] | |||
Significant Accounting Policies [Line Items] | |||
Property and equipment, useful life | 7 years |
Significant Accounting Polici24
Significant Accounting Policies - Schedule of Inventories (Detail) - USD ($) | May 31, 2017 | May 31, 2016 |
Inventory, Net [Abstract] | ||
Raw materials | $ 1,773,368 | $ 2,030,655 |
Work-in-process | 937,878 | 1,059,864 |
Finished goods | 1,493,477 | 1,637,458 |
Inventories | $ 4,204,723 | $ 4,727,977 |
Significant Accounting Polici25
Significant Accounting Policies - Summary of Property and Equipment (Detail) - USD ($) | May 31, 2017 | May 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 3,404,574 | $ 3,554,454 |
Less accumulated depreciation | (2,539,350) | (2,589,002) |
Property, plant and equipment, net | 865,224 | 965,452 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 299,000 | 299,000 |
Building and Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,814,524 | 1,814,524 |
Furniture, Fixtures and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,246,346 | 1,344,343 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 44,704 | $ 96,587 |
Significant Accounting Polici26
Significant Accounting Policies - Summary of Amortization Expenses (Detail) - USD ($) | May 31, 2017 | May 31, 2016 |
Accounting Policies [Abstract] | ||
2,018 | $ 104,583 | |
2,019 | 104,583 | |
2,020 | 104,583 | |
2,021 | 104,583 | |
2,022 | 104,583 | |
Thereafter | 78,436 | |
Total | $ 601,351 | $ 712,881 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Detail) - USD ($) | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Current | $ 28,009 | $ 20,002 | $ 10,087 |
Deferred | (356,169) | (533,357) | 3,558 |
Change in valuation allowance | 356,169 | 533,357 | (3,558) |
Total provision for income taxes | $ 28,009 | $ 20,002 | $ 10,087 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets (Detail) - USD ($) | May 31, 2017 | May 31, 2016 |
Income Tax Disclosure [Abstract] | ||
Basis difference of assets | $ 307,846 | $ 321,511 |
Inventory related items | 287,543 | 276,887 |
Other reserves and liabilities | 122,083 | 119,460 |
Net operating loss carryforward | 1,723,418 | 1,369,399 |
General business and other credit carryforward | 449,048 | 454,246 |
Other deferred items, net | 20,667 | 12,933 |
Gross deferred tax assets | 2,910,605 | 2,554,436 |
Deferred tax asset valuation allowance | (2,910,605) | (2,554,436) |
Net deferred tax asset | $ 0 | $ 0 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Income Tax Contingency [Line Items] | |||
Change in valuation allowance | $ 356,169 | $ 533,357 | $ (3,558) |
Liability for unrecognized tax benefits | 0 | 0 | |
Liability for payment of interest and penalties | $ 0 | $ 0 | |
Earliest tax year [Member] | Canada [Member] | |||
Income Tax Contingency [Line Items] | |||
Income tax examination period under examination | 2,014 | ||
Domestic Tax Authority [Member] | |||
Income Tax Contingency [Line Items] | |||
Net operating loss carryforwards | $ 4,000,000 | ||
Operating loss carryforwards expiration period | 2,030 | ||
Domestic Tax Authority [Member] | Earliest tax year [Member] | |||
Income Tax Contingency [Line Items] | |||
Income tax examination period under examination | 2,014 | ||
Foreign Tax Authority [Member] | Earliest tax year [Member] | United Kingdom [Member] | |||
Income Tax Contingency [Line Items] | |||
Income tax examination period under examination | 2,012 | ||
State [Member] | |||
Income Tax Contingency [Line Items] | |||
Net operating loss carryforwards | $ 4,600,000 | ||
Operating loss carryforwards expiration period | 2,024 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Provision for Income Taxes from Amount of Income Taxes of U.S. Statutory Federal Tax Rate to Pre-Tax Loss (Detail) | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Statutory federal tax rate | (34.00%) | (34.00%) | (34.00%) |
State taxes, net of federal benefit | (4.40%) | (4.40%) | (4.40%) |
Change in deferred tax valuation allowance | 34.10% | 35.70% | 3.80% |
Stock-based compensation | 2.20% | 1.20% | 28.10% |
R&E tax credits | 1.60% | 0.70% | (21.60%) |
Effect of foreign income tax rates | (0.30%) | 1.10% | 11.10% |
Permanent and other differences | 3.50% | 1.00% | 29.10% |
Effective tax rate | 2.70% | 1.30% | 12.10% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | 12 Months Ended | |||
May 31, 2017 | May 31, 2016 | May 31, 2015 | May 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Capital lease obligation period | 5 years | |||
Lease payments | $ 38,890 | $ 38,890 | ||
Total lease expense | $ 47,695 | 73,688 | $ 59,481 | |
Royalty pool interest | 5.00% | |||
Interest payable date | Mar. 31, 1995 | |||
Royalty expense | $ 15,407 | $ 14,825 | $ 59,712 |
Commitments and Contingencies32
Commitments and Contingencies - Future Minimum Lease Payments under Capital Lease (Detail) | May 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 7,618 |
2,019 | 11,713 |
2,020 | 0 |
2,021 | 0 |
2,022 | 0 |
Thereafter | 0 |
Total minimum lease payments | 19,331 |
Less: amount representing interest | (2,073) |
Present value of minimum lease payments | $ 17,258 |
Commitments and Contingencies33
Commitments and Contingencies - Future Minimum Commitments under Operating Leases (Detail) | May 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 45,055 |
2,019 | 44,237 |
2,020 | 44,237 |
2,021 | 5,370 |
2,022 | 0 |
Thereafter | $ 0 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 12 Months Ended |
May 31, 2017SegmentMarkets | |
Segment Reporting [Abstract] | |
Number of reportable business segments | Segment | 2 |
Number of geographic markets in which entity operates | Markets | 3 |
Segment Information - Segment I
Segment Information - Segment Information (Detail) - USD ($) | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Segment Reporting Information [Line Items] | |||
Net sales | $ 12,397,643 | $ 11,685,353 | $ 13,069,091 |
Operating income (loss) | (988,684) | (1,436,474) | (64,459) |
Capital expenditures | 52,633 | 3,520 | 66,627 |
Measurement [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 5,315,169 | 4,722,607 | 5,218,855 |
Operating income (loss) | (56,914) | (444,132) | 258,829 |
Depreciation expense | 37,534 | 39,340 | 43,991 |
Amortization expense | 111,530 | 111,530 | 119,232 |
Capital expenditures | 6,138 | 0 | 7,927 |
Balancer [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 7,082,474 | 6,962,746 | 7,850,236 |
Operating income (loss) | (931,770) | (992,342) | (323,288) |
Depreciation expense | 70,018 | 94,954 | 103,349 |
Amortization expense | 0 | 0 | 0 |
Capital expenditures | 46,495 | 3,520 | 58,700 |
Operating Segments [Member] | Measurement [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 5,331,535 | 4,728,905 | 5,191,970 |
Operating Segments [Member] | Balancer [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 8,319,896 | 8,257,036 | 9,132,167 |
Intersegment Eliminations [Member] | Measurement [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | (16,366) | (6,298) | 26,885 |
Intersegment Eliminations [Member] | Balancer [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | $ (1,237,422) | $ (1,294,290) | $ (1,281,931) |
Segment Information - Geographi
Segment Information - Geographic Information - Net Sales by Geographic Area (Detail) - USD ($) | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total net sales | $ 12,397,643 | $ 11,685,353 | $ 13,069,091 |
North America [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total net sales | 8,162,340 | 7,749,753 | 8,165,269 |
Europe [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total net sales | 1,451,293 | 1,435,280 | 1,194,186 |
Asia [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total net sales | 2,500,191 | 2,288,550 | 3,388,757 |
Other markets [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total net sales | $ 283,819 | $ 211,770 | $ 320,879 |
Segment Information - Segment37
Segment Information - Segment Information of Operating Income (Loss) and Expenditure by Geographic Areas (Detail) - USD ($) | 12 Months Ended | |||
May 31, 2017 | May 31, 2016 | May 31, 2015 | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Operating income (loss) | $ (988,684) | $ (1,436,474) | $ (64,459) | |
Capital expenditures | 52,633 | 3,520 | 66,627 | |
United States [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Operating income (loss) | (947,514) | (1,255,589) | (69,399) | |
Depreciation expense | 107,552 | 134,294 | 147,339 | |
Amortization expense | 111,530 | 111,530 | 119,233 | |
Capital expenditures | 52,633 | 3,520 | 66,627 | |
Europe [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Operating income (loss) | [1] | (41,170) | (180,885) | 4,940 |
Depreciation expense | [1] | 0 | 0 | 0 |
Amortization expense | [1] | 0 | 0 | 0 |
Capital expenditures | [1] | $ 0 | $ 0 | $ 0 |
[1] | Note - Europe is defined as the European subsidiary, Schmitt Europe, Ltd. |
Segment Information - Segment a
Segment Information - Segment and Geographic Assets (Detail) - USD ($) | May 31, 2017 | May 31, 2016 |
Segment Reporting Information [Line Items] | ||
Segment and geographic assets to total assets | $ 9,006,344 | $ 9,634,740 |
Geographic assets to long-lived assets | 865,224 | 965,452 |
Segment and geographic assets to total assets | 9,006,344 | 9,634,740 |
United States [Member] | ||
Segment Reporting Information [Line Items] | ||
Segment and geographic assets to total assets | 8,149,507 | 8,772,666 |
Geographic assets to long-lived assets | 865,224 | 965,452 |
Segment and geographic assets to total assets | 8,149,507 | 8,772,666 |
Europe [Member] | ||
Segment Reporting Information [Line Items] | ||
Segment and geographic assets to total assets | 856,837 | 862,074 |
Geographic assets to long-lived assets | 0 | 0 |
Segment and geographic assets to total assets | 856,837 | 862,074 |
Operating Segments [Member] | Balancer [Member] | ||
Segment Reporting Information [Line Items] | ||
Segment and geographic assets to total assets | 4,791,100 | 4,727,490 |
Segment and geographic assets to total assets | 4,791,100 | 4,727,490 |
Operating Segments [Member] | Measurement [Member] | ||
Segment Reporting Information [Line Items] | ||
Segment and geographic assets to total assets | 3,340,327 | 3,910,132 |
Segment and geographic assets to total assets | 3,340,327 | 3,910,132 |
Corporate Assets [Member] | ||
Segment Reporting Information [Line Items] | ||
Segment and geographic assets to total assets | 874,917 | 997,118 |
Segment and geographic assets to total assets | $ 874,917 | $ 997,118 |
Stock Options and Stock Based39
Stock Options and Stock Based Compensation - Additional Information (Detail) - USD ($) | 12 Months Ended | |||
May 31, 2017 | May 31, 2016 | May 31, 2015 | May 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected dividend rate | 0.00% | |||
Stock-based compensation expense recognized | $ 79,765 | $ 58,198 | $ 72,574 | |
Outstanding stock options, total | 360,000 | 147,500 | 332,500 | 281,666 |
Vested and exercisable stock options | 200,830 | |||
Non-vested shares | 159,170 | |||
Weighted average exercise price | $ 2.28 | $ 3.11 | $ 3.68 | $ 3.77 |
Additional stock-based compensation expense | $ 91,010 | |||
Weighted average period over which unrecognized compensation is expected to be recognized | 1 year 3 months 19 days | |||
Intrinsic value of outstanding options | $ 0 | $ 0 | ||
Intrinsic value of exercisable options | 0 | 0 | ||
Intrinsic value of options exercised | $ 0 | $ 0 | $ 0 | |
Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Outstanding options expiration year | 2,024 | |||
Grant date option one [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentages of stock option granted | 50.00% | |||
Grant date Option two [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentages of stock option granted | 25.00% | |||
Each anniversary option one [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentages of stock option granted | 16.70% | |||
Each anniversary option two [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentages of stock option granted | 25.00% | |||
Grant date option three [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentages of stock option granted | 0.00% | |||
Each anniversary option three [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentages of stock option granted | 33.00% | |||
1995 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares reserved for issuances | 400,000 | |||
Expiry of stock option plan | 2005-12 | |||
Additional option issued under stock option plan | 0 | |||
2004 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares reserved for issuances | 300,000 | |||
Expiry of stock option plan | 2015-08 | |||
Additional option issued under stock option plan | 0 | |||
2014 Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares reserved for issuances | 300,000 |
Stock Options and Stock Based40
Stock Options and Stock Based Compensation - Schedule of Fair Value of Options (Detail) | 12 Months Ended | |
May 31, 2017 | May 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Risk-free interest rate | 2.80% | 2.70% |
Expected life | 4 years 8 months 12 days | 4 years 8 months 12 days |
Expected volatility | 43.40% | 55.30% |
Stock Options and Stock Based41
Stock Options and Stock Based Compensation - Schedule of Outstanding Stock Options (Detail) - $ / shares | 12 Months Ended | |||
May 31, 2017 | May 31, 2016 | May 31, 2015 | May 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of Shares, Outstanding Options | 360,000 | 147,500 | 332,500 | 281,666 |
Weighted Average Exercise Price, Outstanding Options | $ 2.28 | $ 3.11 | $ 3.68 | $ 3.77 |
Weighted Average Remaining Contractual Life (yrs), Outstanding Options | 8 years 2 months 12 days | |||
Exercisable Options, Number of Shares | 200,830 | |||
Exercisable Options, Weighted Average Exercise Price | $ 2.64 | |||
Options 1 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of Shares, Outstanding Options | 212,500 | |||
Weighted Average Exercise Price, Outstanding Options | $ 1.70 | |||
Weighted Average Remaining Contractual Life (yrs), Outstanding Options | 9 years 10 months 25 days | |||
Exercisable Options, Number of Shares | 70,830 | |||
Exercisable Options, Weighted Average Exercise Price | $ 1.70 | |||
Options 2 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of Shares, Outstanding Options | 15,000 | |||
Weighted Average Exercise Price, Outstanding Options | $ 2.53 | |||
Weighted Average Remaining Contractual Life (yrs), Outstanding Options | 6 years 3 months 19 days | |||
Exercisable Options, Number of Shares | 15,000 | |||
Exercisable Options, Weighted Average Exercise Price | $ 2.53 | |||
Options 3 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of Shares, Outstanding Options | 77,500 | |||
Weighted Average Exercise Price, Outstanding Options | $ 2.85 | |||
Weighted Average Remaining Contractual Life (yrs), Outstanding Options | 6 years 10 months 25 days | |||
Exercisable Options, Number of Shares | 60,000 | |||
Exercisable Options, Weighted Average Exercise Price | $ 2.85 | |||
Options 4 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of Shares, Outstanding Options | 55,000 | |||
Weighted Average Exercise Price, Outstanding Options | $ 3.65 | |||
Weighted Average Remaining Contractual Life (yrs), Outstanding Options | 4 years | |||
Exercisable Options, Number of Shares | 55,000 | |||
Exercisable Options, Weighted Average Exercise Price | $ 3.65 |
Stock Options and Stock Based42
Stock Options and Stock Based Compensation - Schedule of Options Granted, Exercised, and Forfeited or Canceled (Detail) - $ / shares | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Number of Shares, Options outstanding - beginning of period | 147,500 | 332,500 | 281,666 |
Number of Shares, Options granted | 212,500 | 0 | 87,500 |
Number of Shares, Options exercised | 0 | 0 | 0 |
Number of Shares, Options forfeited/canceled | 0 | (185,000) | (36,666) |
Number of Shares, Options outstanding - end of period | 360,000 | 147,500 | 332,500 |
Weighted Average Exercise Price, Options outstanding - beginning of period | $ 3.11 | $ 3.68 | $ 3.77 |
Weighted Average Exercise Price, Options granted | 1.70 | 0 | 2.82 |
Weighted Average Exercise Price, Options exercised | 0 | 0 | 0 |
Weighted Average Exercise Price, Options forfeited/canceled | 0 | 4.13 | 2.30 |
Weighted Average Exercise Price, Options outstanding - end of period | $ 2.28 | $ 3.11 | $ 3.68 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation of Numerators and Denominators of Basic and Diluted Per Share Computations for Income (Loss) from Continuing Operations (Detail) - USD ($) | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Basic earnings per share | |||
Loss available to common stockholders, (Numerator) Basic | $ (1,073,364) | $ (1,515,189) | $ (93,669) |
Weighted Average Shares (Denominator), Basic | 2,995,910 | 2,995,910 | 2,995,910 |
Per Share Amount, Basic | $ (0.36) | $ (0.51) | $ (0.03) |
Effect of dilutive securities stock options, Amount | $ 0 | $ 0 | $ 0 |
Effect of dilutive securities stock options | 0 | 0 | 0 |
Diluted earnings per share | |||
Loss available to common stockholders (Numerator), Diluted | $ (1,073,364) | $ (1,515,189) | $ (93,669) |
Weighted Average Shares (Denominator), Diluted | 2,995,910 | 2,995,910 | 2,995,910 |
Per Share Amount, Diluted | $ (0.36) | $ (0.51) | $ (0.03) |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
May 31, 2017 | May 31, 2016 | May 31, 2015 | |
Retirement Benefits [Abstract] | |||
Participants contribution to compensation | 15.00% | ||
Matching contributions in conjunction with employee contributions to plan | $ 62,622 | $ 57,178 | $ 51,999 |