Cover Page
Cover Page - shares | 6 Months Ended | |
Nov. 30, 2019 | Dec. 31, 2019 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Nov. 30, 2019 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | SCHMITT INDUSTRIES INC | |
Trading Symbol | SMIT | |
Entity Central Index Key | 0000922612 | |
Current Fiscal Year End Date | --05-31 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Interactive Data Current | Yes | |
Entity Common Stock, Shares Outstanding | 4,156,632 | |
Title of 12(g) Security | Common Stock | |
Security Exchange Name | NASDAQ | |
Entity Address, State or Province | OR |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Nov. 30, 2019 | May 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 12,105,462 | $ 1,467,435 |
Restricted cash | 420,000 | 0 |
Accounts receivable, net | 395,241 | 631,126 |
Inventories | 1,077,618 | 1,241,132 |
Prepaid expenses | 47,575 | 101,617 |
Current assets held for sale | 0 | 5,192,384 |
Total current assets | 14,045,896 | 8,633,694 |
Property and equipment, net | 657,354 | 676,387 |
Other assets | ||
Intangible assets, net | 339,894 | 392,185 |
Noncurrent assets held for sale | 0 | 162,987 |
TOTAL ASSETS | 15,043,144 | 9,865,253 |
Current liabilities | ||
Accounts payable | 226,266 | 102,566 |
Accrued commissions | 41,516 | 71,663 |
Accrued payroll liabilities | 22,150 | 112,351 |
Customer deposits and prepayments | 103,002 | 78,376 |
Other accrued liabilities | 699,923 | 128,353 |
Income taxes payable | 69,100 | 491 |
Current portion of long-term liabilities | 0 | 20,828 |
Current liabilities held for sale | 0 | 849,149 |
Total current liabilities | 1,161,957 | 1,363,777 |
Long-term liabilities | 0 | 28,543 |
Total liabilities | 1,161,957 | 1,392,320 |
Stockholders' equity | ||
Common stock, no par value, 20,000,000 shares authorized, 4,032,878 shares issued and outstanding at August 31, 2019 and May 31, 2019 | 13,438,041 | 13,245,439 |
Accumulated other comprehensive loss | 0 | (527,827) |
Retained earnings (accumulated deficit) | 443,146 | (4,244,679) |
Total stockholders' equity | 13,881,187 | 8,472,933 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 15,043,144 | $ 9,865,253 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Nov. 30, 2019 | May 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0 | $ 0 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 4,127,632 | 4,032,878 |
Common stock, shares outstanding | 4,127,632 | 4,032,878 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2019 | Nov. 30, 2018 | Nov. 30, 2019 | Nov. 30, 2018 | |
Income Statement [Abstract] | ||||
Net revenue | $ 1,033,102 | $ 1,157,999 | $ 2,127,879 | $ 2,404,121 |
Cost of revenue | 643,348 | 675,872 | 1,260,771 | 1,443,308 |
Gross profit | 389,754 | 482,127 | 867,108 | 960,813 |
Operating expenses: | ||||
General, administration and sales | 993,230 | 800,671 | 1,697,382 | 1,556,651 |
Research and development | 5,377 | 24,832 | 8,463 | 47,408 |
Total operating expenses | 998,607 | 825,503 | 1,705,845 | 1,604,059 |
Operating (loss) | (608,853) | (343,376) | (838,737) | (643,246) |
Other income, net | 5,356 | 6,006 | 9,723 | 12,776 |
(Loss) before income taxes | (603,497) | (337,370) | (829,014) | (630,470) |
Provision for income taxes | (4,439) | 2,114 | (7,829) | 4,227 |
Net (loss) from continuing operations | (599,058) | (339,484) | (821,185) | (634,697) |
Income from discontinued operations, including gain on sale, net of tax | 5,117,005 | 84,212 | 5,509,010 | 167,608 |
Net income (loss) | $ 4,517,947 | $ (255,272) | $ 4,687,825 | $ (467,089) |
Net (loss) per common share from continuing operations: | ||||
Net loss per common share, basic | $ (0.15) | $ (0.08) | $ (0.20) | $ (0.16) |
Weighted average number of common shares, basic | 4,083,538 | 3,994,545 | 4,030,709 | 3,994,545 |
Net loss per common share, diluted | $ (0.15) | $ (0.08) | $ (0.20) | $ (0.16) |
Weighted average number of common shares, diluted | 4,083,538 | 3,994,545 | 4,030,709 | 3,994,545 |
Net income per common share from discontinued operations: | ||||
Net income per common share, basic | $ 1.25 | $ 0.02 | $ 1.37 | $ 0.04 |
Weighted average number of common shares, basic | 4,083,538 | 3,994,545 | 4,030,709 | 3,994,545 |
Net income per common share, diluted | $ 1.25 | $ 0.02 | $ 1.37 | $ 0.04 |
Weighted average number of common shares, diluted | 4,083,538 | 3,994,545 | 4,030,709 | 3,994,545 |
Net income (loss) per common share: | ||||
Net income (loss) per common share, basic | $ 1.11 | $ (0.06) | $ 1.16 | $ (0.12) |
Weighted average number of common shares, basic | 4,083,538 | 3,994,545 | 4,030,709 | 3,994,545 |
Net income (loss) per common share, diluted | $ 1.11 | $ (0.06) | $ 1.16 | $ (0.12) |
Weighted average number of common shares, diluted | 4,083,538 | 3,994,545 | 4,030,709 | 3,994,545 |
Comprehensive income (loss) | ||||
Net income (loss) | $ 4,517,947 | $ (255,272) | $ 4,687,825 | $ (467,089) |
Foreign currency translation adjustment | 527,827 | (5,907) | 527,827 | 73,737 |
Total comprehensive income (loss) | $ 5,045,774 | $ (261,179) | $ 5,215,652 | $ (393,352) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Nov. 30, 2019 | Nov. 30, 2018 | |
Cash flows relating to operating activities | ||
Net income (loss) | $ 4,687,825 | $ (467,089) |
Pre-tax (earnings) from discontinued operations | (532,103) | (176,108) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation and amortization | 83,277 | 88,974 |
Gain on disposal of property and equipment | 65,020 | 0 |
Stock based compensation | 192,602 | 8,987 |
Gain on sale of discontinued operations before income taxes | (5,059,845) | 0 |
(Increase) decrease in: | ||
Accounts receivable | 235,885 | (179,867) |
Inventories | 163,514 | (263,254) |
Prepaid expenses | 54,042 | 31,390 |
Income taxes receivable | 0 | (4,435) |
Increase (decrease) in: | ||
Accounts payable | 123,701 | 255,912 |
Accrued liabilities and customer deposits | 436,683 | (59,095) |
Income taxes payable | 68,609 | (3,993) |
Net cash provided by (used in) operating activities - continuing operations | 519,210 | (768,578) |
Net cash provided by (used in) operating activities - discontinued operations | 172,839 | (84,648) |
Net cash provided by (used in) operating activities | 692,049 | (853,226) |
Cash flows relating to investing activities | ||
Purchases of property and equipment | (14,690) | (5,517) |
Proceeds from the sale of property and equipment | 12,000 | 0 |
Proceeds from sale of net assets of discontinued operations | 10,319,589 | 0 |
Net cash provided by (used in) investing activities - continuing operations | 10,316,899 | (5,517) |
Net cash provided by (used in) investing activities - discontinuing operations | (12,693) | 0 |
Net cash provided by (used in) investing activities | 10,304,206 | (5,517) |
Cash flows relating to financing activities | ||
Payments on long-term liabilities | (10,201) | 0 |
Net cash used in investing activities | (10,201) | 0 |
Effect of foreign exchange translation on cash | 71,973 | 103,679 |
Increase (decrease) in cash, cash equivalents and restricted cash | 11,058,027 | (755,064) |
Cash, cash equivalents and restricted cash, beginning of period | 1,467,435 | 2,111,533 |
Cash, cash equivalents and restricted cash, end of period | 12,525,462 | 1,356,469 |
Supplemental disclosure of cash flow information | ||
Cash paid during the period for income taxes | 4,289 | 21,155 |
Cash paid during the period for interest | $ 2,435 | $ 462 |
Consolidated Statement of Chang
Consolidated Statement of Changes In Stockholders' Equity - USD ($) | Total | Common Stock [Member] | Accumulated Other Comprehensive Loss [Member] | Retained earnings (accumulated deficit) [Member] |
Beginning balance at May. 31, 2018 | $ 9,515,656 | $ 13,085,652 | $ (536,307) | $ (3,033,689) |
Beginning balance, shares at May. 31, 2018 | 3,994,545 | |||
Stock-based compensation | 8,987 | $ 8,987 | 0 | 0 |
Net income (loss) | (467,089) | 0 | 0 | (467,089) |
Other comprehensive loss | 73,737 | 0 | 73,737 | 0 |
Ending balance at Nov. 30, 2018 | 9,131,291 | $ 13,094,639 | (462,570) | (3,500,778) |
Ending balance, shares at Nov. 30, 2018 | 3,994,545 | |||
Beginning balance at May. 31, 2019 | $ 8,472,933 | $ 13,245,439 | (527,827) | (4,244,679) |
Beginning balance, shares at May. 31, 2019 | 4,032,878 | 4,032,878 | ||
Stock compensation expense for restricted stock units granted to employees and directors | $ 192,602 | $ 192,602 | ||
Restricted stock units exercised, shares | 94,754 | |||
Net income (loss) | 4,687,825 | $ 0 | 0 | 4,687,825 |
Other comprehensive loss | 527,827 | 0 | 527,827 | 0 |
Ending balance at Nov. 30, 2019 | $ 13,881,187 | $ 13,438,041 | $ 0 | $ 443,146 |
Ending balance, shares at Nov. 30, 2019 | 4,127,632 | 4,127,632 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Nov. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation In the opinion of management, the accompanying unaudited Consolidated Financial Statements Consolidated Balance Sheet 10-K 10-K As described in Note 8, the Company sold the Schmitt Dynamic Balance Systems (“SBS”) business line on November 22, 2019. After the sale of the SBS business, based on the types of products and services sold, and an analysis of how the Principles of Consolidation These Consolidated Financial Statements include those of the Company and its wholly owned subsidiaries: Schmitt Measurement Systems, Inc. and Schmitt Industries (Canada) Limited. All significant intercompany accounts and transactions have been eliminated in the preparation of the Consolidated Financial Statements. Reclassification Certain amounts in the prior period Consolidated Balance Sheet have been reclassified to conform to the presentation of the current period. Revenue Recognition The Company determines the amount of revenue it recognizes associated with the transfer of each product or service. For sales of products or delivery of monitoring services to all customers, each transaction is evaluated to determine whether there is approval and commitment from both the Company and the customer for the transaction; whether the rights of each party are specifically identified; whether the transaction has commercial substance; whether collectability from the customer is probable at the inception of the contract and whether the transaction amount is defined. If a transaction to sell products or provide monitoring services meets all of the above criteria, revenue is recognized for the sales of product at the time of shipment or for monitoring services at the completion of the month in which monitoring services are provided. The Company incurs commissions associated with the sales of products, which are accrued and expensed at the time the product is shipped. These amounts are recorded within general, administration and sales expense. The Company also incurs costs related to shipping and handling of its products, the costs of which are expensed as incurred as a component of cost of sales. Shipping and handling fees billed to customers, which are recognized at the time of shipment as a component of net revenues, were $6,534 and $7,896 for the six months ended November 30, 2019 and November 30, 2018, respectively. Cash, Cash Equivalents and Restricted Cash The Company generally invests its excess cash in money market funds. The Company’s investment policy also allows for cash to be invested in investment grade highly liquid securities, and 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 and money market funds. At times, balances may exceed federally insured limits. Restricted cash consists of an amount held in escrow related to the sale of the balancer business segment, as described in Note 8. Once certain events are complete, the restrictions on this cash payment will be released. The following table provides a reconciliation of cash and cash equivalents and restricted cash as reported within the Consolidated Balance Sheets as of November 30, 2019 and May 31, 2019 to the sum of the same such amounts as shown in the Consolidated Statement of Cash Flows for the respective periods then ended: Statement of Cash Flows for the six months ended November 30, 2019 and year ended May 31, 2019: November 30, 2019 May 31, 2019 Cash and cash equivalents $ 12,105,462 $ 1,467,435 Restricted cash 420,000 — Total cash, cash equivalents and restricted cash $ 12,525,462 $ 1,467,435 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. In the event there is doubt about whether a customer account is collectible, a reserve is provided. If these analyses lead management to the conclusion that a customer account is uncollectible, the balance will be directly charged to bad debt expense. The allowance for doubtful accounts was $81,158 and $36,826 as of November 30, 2019 and May 31, 2019, respectively. Inventories Inventories are valued at the lower of cost or net realizable value 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 November 30, 2019 and May 31, 2019 inventories consisted of: November 30, 2019 May 31, 2019 Raw materials $ 316,565 $ 347,095 Work-in-process 397,370 376,375 Finished goods 363,683 517,662 $ 1,077,618 $ 1,241,132 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 seven November 30, 2019 May 31, 2019 Land $ 299,000 $ 299,000 Buildings and improvements 1,826,503 1,814,524 Furniture, fixtures and equipment 416,956 421,456 2,542,459 2,534,980 Less accumulated depreciation (1,885,105 ) (1,858,593 ) $ 657,354 $ 676,387 Depreciation expense for the six months ended November 30, 2019 and 2018 was $30,986 and $36,683, respectively. Lease Accounting The Company determines if an arrangement is a lease or a service contract at inception. Where an arrangement is a lease the Company determines if it is an operating lease or a finance lease. Subsequently, if the arrangement is modified the Company reevaluates the classification. Buildings leased to others under operating leases are included in property, plant and equipment. See Note 6. 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 November 30, 2019 and May 31, 2019 Amortization expense for both Customer Deposits and Prepayments Customer deposits and prepayments consists of amounts received from customers as prepayments for orders that have been received and have been produced but have not yet shipped, credit balances for items returned by customers for which refunds have not yet been provided and deposits made by customers in advance of production. 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. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 6 Months Ended |
Nov. 30, 2019 | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS [Abstract] | |
Recently Issued Accounting Pronouncements | NOTE 2: RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In February 2016, the Financial Accounting Standards Board (“FASB”) issued a new accounting standard on leasing. The new standard requires companies to record most leased assets and liabilities on the balance sheet, and also proposed a dual model for recognizing expense. The Company adopted the standard as of June 1, 2019, with retroactive reporting for prior periods (the comparative option). Financial Statements. In January 2017, the FASB issued a new accounting standard which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. This guidance was effective for the Company beginning in 2019. Adoption of these accounting changes did not have a material impact on the Consolidated Financial Statements. In May 2017, the FASB issued a new accounting standard which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in ASC Topic 718. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. This guidance is effective for the Company beginning in 2019. Adoption of these accounting changes did not have a material impact on the Consolidated Financial Statements. In June 2018, the FASB issued a new accounting standard which provides guidance that expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The new guidance is effective for the Company beginning in 2019, with early adoption permitted. Adoption of these accounting changes did not have a material impact on the Consolidated Financial Statements . |
Stock Options And Stock-Based C
Stock Options And Stock-Based Compensation | 6 Months Ended |
Nov. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options And Stock-Based Compensation | NOTE 3: STOCK OPTIONS AND 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. Stock-based compensation recognized during the period is based on the portion of the grant date fair value 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. Stock Options The Company uses the Black-Scholes option pricing model as its method of valuation for stock-based awards. 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. pre-vesting • Expected Volatility. (the “Common Stock”) at the date of grant based on the historical volatility of its C S • Expected Dividend Yield. 0 • Expected Forfeitures. pre-vesting There were no options granted during the six months ended November 30, 2019. At November 30, 2019, the Company had outstanding stock options to purchase shares of Common Stock all of which are Outstanding Options Exercisable Options Number of Shares Weighted Weighted Number Weighted 124,166 $ 1.70 6.2 124,166 $ 1.70 15,000 2.53 2.6 15,000 2.53 37,500 2.82 3.0 37,500 2.82 25,000 2.90 3.4 25,000 2.90 35,000 3.65 0.5 35,000 3.65 236,666 $ 2.35 4.3 236,666 $ 2.35 Options granted, exercised, canceled and expired under the Company’s stock-based compensation plans during the six months ended November 30, 2019 are summarized as follows: Six Months Ended Number of Weighted Weighted Aggregate Options outstanding and exercisable - beginning of period 254,166 $ 2.41 5.8 Options granted 0 0.00 0.0 Options exercised 0 0.00 0.0 Options forfeited/canceled (17,500 ) 3.29 0.0 Options outstanding and exercisable - end of period 236,666 $ 2.35 4.3 $ 556,165 Restricted Stock Units Service-based and market-based restricted stock units are granted to key employees and members of the Company’s Board of Directors. Service-based restricted stock units generally fully vest on the first anniversary date of the award. Market-based restricted stock units are contingent on continued service and vest based on 15-day C S The lattice model utilizes multiple input variables that determine the probability of satisfying the market conditions stipulated in the award and calculates the fair value of each restricted stock unit. The Company used the following assumptions in determining the fair value of the restricted stock units: Year Ended Expected stock price volatility 50.1% - 57.5% Expected divident yield 0% Average risk-free interest rate 2.55% - 2.98% During the six months ended November 30, 2019, three tranches of the market-based restricted stock units granted in F During the six months ended November 30, 2019, 41,976 service-based restricted stock units were granted and 35,754 immediately vested on the date of the grants. Restricted stock unit activity under the Company’s stock-based compensation plans during the six months ended November 30, 2019 is summarized as follows: Number Weighted Aggregate Non-vested 98,000 $ 2.94 Restricted stock units granted 41,976 2.42 Restricted stock units vested (71,754 ) (2.65 ) Non-vested 68,222 $ 2.93 $ 199,890 During the six months ended November 30, 2019, the Company issued 23,000 During the six months ended November 30, 2019, total restricted stock unit compensation expense recognized was $192,602 and has been recorded as general, administration and sales expense in the Consolidated Statements of Operations and Comprehensive Loss. Stock compensation expense related to non-vested restricted stock units with a time vesting condition was $932. |
Weighted Average Shares and Rec
Weighted Average Shares and Reconciliation | 6 Months Ended |
Nov. 30, 2019 | |
Earnings Per Share [Abstract] | |
Weighted Average Shares and Reconciliation | NOTE 4: WEIGHTED AVERAGE SHARES AND RECONCILIATION Basic net income (loss) per share is computed using the weighted average number of shares of Common Stock outstanding. Diluted net income (loss) per share is computed using the weighted average number of shares of Common Stock outstanding, adjusted for dilutive incremental shares attributed to outstanding options to purchase Common Stock and restricted stock units vested but not issued. 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. For the three and six months ended November 30, 2019, potentially dilutive securities consisted of options of 236,666 shares of C S C S C S Basic weighted average shares for the three and six months ended November 30 is as follows: Three Months Ended Six Months Ended 2019 2018 2019 2018 Weighted average shares (basic) 4,083,538 3,994,545 4,030,709 3,994,545 Effect of dilutive stock options — — — — Weighted average shares (diluted) 4,083,538 3,994,545 4,030,709 3,994,545 |
Income Taxes
Income Taxes | 6 Months Ended |
Nov. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 5: INCOME TAXES The Company accounts for income taxes using the asset and liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets 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 to allow for the deferred tax asset to be fully utilized. The Company currently maintains a full valuation allowance against net deferred tax assets. Each year the Company files income tax returns in the various national, 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, de-recognition, Other long-term liabilities related to tax contingencies were $0 as of both November 30, 2019 and May 31, 2019. 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 November 30, 2019 and May 31, 2019. Several tax years are subject to examination by major tax jurisdictions. In the United States, federal tax years ended May 31, 2016 and after are subject to examination. In the United Kingdom, tax years for the years ended May 31, 2018 and after are subject to examination. Effective Tax Rate The effective tax rate for the three months ended November 30, 2019 was 1.5%. The effective tax rate on consolidated net income for the three months ended November 30, 2019 and 2018 differs from the federal statutory tax rate primarily due to changes in the deferred tax valuation allowance and the impact of certain expenses not being deductible for income tax reporting purposes. Management believes the effective tax rate for Fiscal 2020 will be approximately 1.6% due to the items noted above. |
Leases
Leases | 6 Months Ended |
Nov. 30, 2019 | |
Leases [Abstract] | |
Leases | NOTE 6: LEASES On November 22, 2019, the Company entered in a commercial lease agreement, which will be accounted for pursuant to (ASU) No. 2016-02, non-lease The lessor commercial agreement contains a 10-year be Years ending May 31, 2020 $ 139,692 2021 283,578 2022 291,906 2023 300,666 2024 309,870 Thereafter 1,876,764 Total undiscounted cash flow $ 3,202,476 |
Customer Concentration
Customer Concentration | 6 Months Ended |
Nov. 30, 2019 | |
Risks and Uncertainties [Abstract] | |
Customer Concentration | NOTE 7: CUSTOMER CONCENTRATION The Company’s largest 3 customers accounted for 14.6%, 10.1%, and 4.6% of our revenues, respectively, for the three months ended November 30, 2019 and 14.8%, 10.3%, and 4.4% of our revenues, respectively, for the six months ended November 30, 2019. |
Discountinued Operations
Discountinued Operations | 6 Months Ended |
Nov. 30, 2019 | |
Disclosure Text Block [Abstract] | |
Discountinued Operations | NOTE 8: DISCONTINUED OPERATIONS On October 10, 2019, the Company entered into an agreement (“Purchase Agreement”) to sell the Schmitt Dynamic Balance Systems (“SBS”) business line to Tosei Engineering Corp. and Tosei America, Inc. (collectively “Tosei” or Buyer) for a purchase price of $10,500,000 in cash. The transaction closed on November 22, 2019 and included certain assets held by the U.S. parent company and all the outstanding stock of the UK subsidiary, Schmitt Europe Limited. As a result, the financial position, results of operations, and cash flows relating to our SBS business line are reported as discontinued operations in the accompanying financial statements. The purchase agreement contains customary requirements of closing, including adjustments based on the final amount of working capital transferred to the Buyer. The consideration included $9,940,000 in unrestricted cash from the Buyer at closing, plus $420,000 to be placed into an escrow account, net of $140,000 in minimum cash settled via the funds flow at closing. Remaining escrow funds become unrestricted after certain events are completed and after one year from closing. The Purchase Agreement requires an adjustment to purchase price after closing based on the difference between (a) the calculated amount of working capital at closing and (b) the target working capital of $4,200,000. The closing working capital calculation has not been completed; however, the Company does not expect any resulting adjustment to be significant. In connection with the Purchase Agreement, the Company entered into a Transition Service Agreement (“TSA”) with the Buyer during the transition of certain accounting and treasury processes. The Company has collected $196,000 of cash on behalf of the Buyer via the TSA that is included in the cash and cash equivalents and other accrued liabilities balances at November 30, 2019. The following table summarizes the consideration and gain recognized in the quarter ended November 30, 2019 associated with the sale of the SBS Business: Purchase Price $ 10,500,000 Cash in SEL 69,157 Less: Net assets sold 4,460,177 Minimum cash 140,000 Transaction fees 453,287 Release of cumulative translation adjustment from OCI 455,848 Plus or minus: Closing adjustments — Pre-tax $ 5,059,845 Income taxes 82,938 Gain on sale, net of income taxes $ 4,976,907 The following are the carrying amounts of assets and liabilities classified as held for sale and included as a part of discontinued operations: November 30, 2019 May 31, 2019 Accounts receivable, net $ — $ 1,365,114 Inventories — 3,777,913 Prepaid expenses — 49,357 Current assets held for sale $ — $ 5,192,384 Property and equipment, net — 162,987 Noncurrent assets held for sale $ — $ 162,987 Accounts payable $ — $ 393,773 Accrued commissions — 128,453 Accrued payroll liabilities — 127,124 Customer deposits and prepayments — 109,860 Other accrued liabilities — 89,914 Current liabilities held for sale $ — $ 849,124 Net assets held for sale $ — $ 4,506,247 The following is a composition of the line items constituting income from discontinued operations: Three Months Ended November 30, Six Months Ended November 30, 2019 2018 2019 2018 Net revenue $ 2,095,901 $ 2,345,477 $ 4,343,008 $ 4,539,809 Cost of revenue 1,210,126 1,464,499 2,374,251 2,797,717 Gross profit 885,775 880,978 1,968,757 1,742,092 Operating expenses: General, administration and sales 665,365 738,821 1,252,222 1,388,201 Research and development 26,839 23,093 35,920 48,754 Total operating expenses 692,204 761,914 1,288,142 1,436,955 Operating income 193,571 119,064 680,615 305,137 Other expense, net (65,192 ) (30,604 ) (140,923 ) (129,029 ) Income before income taxes 128,379 88,460 539,692 176,108 Provision for income taxes (11,719 ) 4,248 7,589 8,500 Net income from discontinued operations, before gain on sale, net of tax $ 140,098 $ 84,212 $ 532,103 $ 167,608 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Nov. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 9: SUBSEQUENT EVENTS On December 3, 2019, the Company announced that its Board of Directors authorized a share repurchase plan to buy up to $2 million of its C S p On December 1 7 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Nov. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation In the opinion of management, the accompanying unaudited Consolidated Financial Statements Consolidated Balance Sheet 10-K 10-K As described in Note 8, the Company sold the Schmitt Dynamic Balance Systems (“SBS”) business line on November 22, 2019. After the sale of the SBS business, based on the types of products and services sold, and an analysis of how the |
Principles of Consolidation | Principles of Consolidation These Consolidated Financial Statements include those of the Company and its wholly owned subsidiaries: Schmitt Measurement Systems, Inc. and Schmitt Industries (Canada) Limited. All significant intercompany accounts and transactions have been eliminated in the preparation of the Consolidated Financial Statements. |
Reclassification | Reclassification Certain amounts in the prior period Consolidated Balance Sheet have been reclassified to conform to the presentation of the current period. |
Revenue Recognition | Revenue Recognition The Company determines the amount of revenue it recognizes associated with the transfer of each product or service. For sales of products or delivery of monitoring services to all customers, each transaction is evaluated to determine whether there is approval and commitment from both the Company and the customer for the transaction; whether the rights of each party are specifically identified; whether the transaction has commercial substance; whether collectability from the customer is probable at the inception of the contract and whether the transaction amount is defined. If a transaction to sell products or provide monitoring services meets all of the above criteria, revenue is recognized for the sales of product at the time of shipment or for monitoring services at the completion of the month in which monitoring services are provided. The Company incurs commissions associated with the sales of products, which are accrued and expensed at the time the product is shipped. These amounts are recorded within general, administration and sales expense. The Company also incurs costs related to shipping and handling of its products, the costs of which are expensed as incurred as a component of cost of sales. Shipping and handling fees billed to customers, which are recognized at the time of shipment as a component of net revenues, were $6,534 and $7,896 for the six months ended November 30, 2019 and November 30, 2018, respectively. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash The Company generally invests its excess cash in money market funds. The Company’s investment policy also allows for cash to be invested in investment grade highly liquid securities, and 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 and money market funds. At times, balances may exceed federally insured limits. Restricted cash consists of an amount held in escrow related to the sale of the balancer business segment, as described in Note 8. Once certain events are complete, the restrictions on this cash payment will be released. The following table provides a reconciliation of cash and cash equivalents and restricted cash as reported within the Consolidated Balance Sheets as of November 30, 2019 and May 31, 2019 to the sum of the same such amounts as shown in the Consolidated Statement of Cash Flows for the respective periods then ended: Statement of Cash Flows for the six months ended November 30, 2019 and year ended May 31, 2019: November 30, 2019 May 31, 2019 Cash and cash equivalents $ 12,105,462 $ 1,467,435 Restricted cash 420,000 — Total cash, cash equivalents and restricted cash $ 12,525,462 $ 1,467,435 |
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. In the event there is doubt about whether a customer account is collectible, a reserve is provided. If these analyses lead management to the conclusion that a customer account is uncollectible, the balance will be directly charged to bad debt expense. The allowance for doubtful accounts was $81,158 and $36,826 as of November 30, 2019 and May 31, 2019, respectively. |
Inventories | Inventories Inventories are valued at the lower of cost or net realizable value 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 November 30, 2019 and May 31, 2019 inventories consisted of: November 30, 2019 May 31, 2019 Raw materials $ 316,565 $ 347,095 Work-in-process 397,370 376,375 Finished goods 363,683 517,662 $ 1,077,618 $ 1,241,132 |
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 seven November 30, 2019 May 31, 2019 Land $ 299,000 $ 299,000 Buildings and improvements 1,826,503 1,814,524 Furniture, fixtures and equipment 416,956 421,456 2,542,459 2,534,980 Less accumulated depreciation (1,885,105 ) (1,858,593 ) $ 657,354 $ 676,387 Depreciation expense for the six months ended November 30, 2019 and 2018 was $30,986 and $36,683, respectively. |
Lease Accounting | Lease Accounting The Company determines if an arrangement is a lease or a service contract at inception. Where an arrangement is a lease the Company determines if it is an operating lease or a finance lease. Subsequently, if the arrangement is modified the Company reevaluates the classification. Buildings leased to others under operating leases are included in property, plant and equipment. See Note 6. |
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 November 30, 2019 and May 31, 2019 Amortization expense for both |
Customer Deposits and Prepayments | Customer Deposits and Prepayments Customer deposits and prepayments consists of amounts received from customers as prepayments for orders that have been received and have been produced but have not yet shipped, credit balances for items returned by customers for which refunds have not yet been provided and deposits made by customers in advance of production. |
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. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Nov. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash and cash equivalents and restricted cash as reported within the Consolidated Balance Sheets as of November 30, 2019 and May 31, 2019 to the sum of the same such amounts as shown in the Consolidated Statement of Cash Flows for the respective periods then ended: Statement of Cash Flows for the six months ended November 30, 2019 and year ended May 31, 2019: November 30, 2019 May 31, 2019 Cash and cash equivalents $ 12,105,462 $ 1,467,435 Restricted cash 420,000 — Total cash, cash equivalents and restricted cash $ 12,525,462 $ 1,467,435 |
Inventories | As of November 30, 2019 and May 31, 2019 inventories consisted of: November 30, 2019 May 31, 2019 Raw materials $ 316,565 $ 347,095 Work-in-process 397,370 376,375 Finished goods 363,683 517,662 $ 1,077,618 $ 1,241,132 |
Summary of Property and Equipment | Expenditures for maintenance and repairs are charged to expense as incurred. As of November 30, 2019 and May 31, 2019, property and equipment consisted of: November 30, 2019 May 31, 2019 Land $ 299,000 $ 299,000 Buildings and improvements 1,826,503 1,814,524 Furniture, fixtures and equipment 416,956 421,456 2,542,459 2,534,980 Less accumulated depreciation (1,885,105 ) (1,858,593 ) $ 657,354 $ 676,387 |
Stock Options And Stock-Based_2
Stock Options And Stock-Based Compensation (Tables) | 6 Months Ended |
Nov. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of Outstanding Stock Options | Outstanding Options Exercisable Options Number of Shares Weighted Weighted Number Weighted 124,166 $ 1.70 6.2 124,166 $ 1.70 15,000 2.53 2.6 15,000 2.53 37,500 2.82 3.0 37,500 2.82 25,000 2.90 3.4 25,000 2.90 35,000 3.65 0.5 35,000 3.65 236,666 $ 2.35 4.3 236,666 $ 2.35 |
Schedule of Options Granted, Exercised, Canceled and Expired | Options granted, exercised, canceled and expired under the Company’s stock-based compensation plans during the six months ended November 30, 2019 are summarized as follows: Six Months Ended Number of Weighted Weighted Aggregate Options outstanding and exercisable - beginning of period 254,166 $ 2.41 5.8 Options granted 0 0.00 0.0 Options exercised 0 0.00 0.0 Options forfeited/canceled (17,500 ) 3.29 0.0 Options outstanding and exercisable - end of period 236,666 $ 2.35 4.3 $ 556,165 |
Schedule of Fair Value of Options | The Company used the following assumptions in determining the fair value of the restricted stock units: Year Ended Expected stock price volatility 50.1% - 57.5% Expected divident yield 0% Average risk-free interest rate 2.55% - 2.98% |
Schedule of Share-based Compensation, Restricted Stock Units Award Activity | Restricted stock unit activity under the Company’s stock-based compensation plans during the six months ended November 30, 2019 is summarized as follows: Number Weighted Aggregate Non-vested 98,000 $ 2.94 Restricted stock units granted 41,976 2.42 Restricted stock units vested (71,754 ) (2.65 ) Non-vested 68,222 $ 2.93 $ 199,890 |
Weighted Average Shares and R_2
Weighted Average Shares and Reconciliation (Tables) | 6 Months Ended |
Nov. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | Basic weighted average shares for the three and six months ended November 30 is as follows: Three Months Ended Six Months Ended 2019 2018 2019 2018 Weighted average shares (basic) 4,083,538 3,994,545 4,030,709 3,994,545 Effect of dilutive stock options — — — — Weighted average shares (diluted) 4,083,538 3,994,545 4,030,709 3,994,545 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Nov. 30, 2019 | |
Leases [Abstract] | |
Schedule Of Minimum Future Lease Payments Receivable On An Undiscounted Cash Flow Basis | Minimum future lease payments receivable are as follows: Years ending May 31, 2020 $ 139,692 2021 283,578 2022 291,906 2023 300,666 2024 309,870 Thereafter 1,876,764 Total undiscounted cash flow $ 3,202,476 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Nov. 30, 2019 | |
Schmitt Dynamic Balance Systems [Member] | |
Summary Of Consideration And Gain Of Discontinued Operation | The following is a composition of the line items constituting income from discontinued operations: Three Months Ended November 30, Six Months Ended November 30, 2019 2018 2019 2018 Net revenue $ 2,095,901 $ 2,345,477 $ 4,343,008 $ 4,539,809 Cost of revenue 1,210,126 1,464,499 2,374,251 2,797,717 Gross profit 885,775 880,978 1,968,757 1,742,092 Operating expenses: General, administration and sales 665,365 738,821 1,252,222 1,388,201 Research and development 26,839 23,093 35,920 48,754 Total operating expenses 692,204 761,914 1,288,142 1,436,955 Operating income 193,571 119,064 680,615 305,137 Other expense, net (65,192 ) (30,604 ) (140,923 ) (129,029 ) Income before income taxes 128,379 88,460 539,692 176,108 Provision for income taxes (11,719 ) 4,248 7,589 8,500 Net income from discontinued operations, before gain on sale, net of tax $ 140,098 $ 84,212 $ 532,103 $ 167,608 |
Assets And Liabilities [Member] | |
Summary Of Consideration And Gain Of Discontinued Operation | The following are the carrying amounts of assets and liabilities classified as held for sale and included as a part of discontinued operations: November 30, 2019 May 31, 2019 Accounts receivable, net $ — $ 1,365,114 Inventories — 3,777,913 Prepaid expenses — 49,357 Current assets held for sale $ — $ 5,192,384 Property and equipment, net — 162,987 Noncurrent assets held for sale $ — $ 162,987 Accounts payable $ — $ 393,773 Accrued commissions — 128,453 Accrued payroll liabilities — 127,124 Customer deposits and prepayments — 109,860 Other accrued liabilities — 89,914 Current liabilities held for sale $ — $ 849,124 Net assets held for sale $ — $ 4,506,247 |
Gain Recognized [Member] | |
Summary Of Consideration And Gain Of Discontinued Operation | The following table summarizes the consideration and gain recognized in the quarter ended November 30, 2019 associated with the sale of the SBS Business: Purchase Price $ 10,500,000 Cash in SEL 69,157 Less: Net assets sold 4,460,177 Minimum cash 140,000 Transaction fees 453,287 Release of cumulative translation adjustment from OCI 455,848 Plus or minus: Closing adjustments — Pre-tax $ 5,059,845 Income taxes 82,938 Gain on sale, net of income taxes $ 4,976,907 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Summary of Reconciliation of Cash, Cash Equivalents and Restricted Cash (Detail) - USD ($) | Nov. 30, 2019 | May 31, 2019 | Nov. 30, 2018 | May 31, 2018 |
Restricted Cash and Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 12,105,462 | $ 1,467,435 | ||
Restricted cash | 420,000 | 0 | ||
Total cash, cash equivalents and restricted cash shown in the Consolidated Statement of Cash Flows | $ 12,525,462 | $ 1,467,435 | $ 1,356,469 | $ 2,111,533 |
Summary Of Significant Accoun_5
Summary Of Significant Accounting Policies - Additional Information (Detail) - USD ($) | 6 Months Ended | ||
Nov. 30, 2019 | Nov. 30, 2018 | May 31, 2019 | |
Significant Accounting Policies [Line Items] | |||
Allowance for doubtful accounts | $ 81,158 | $ 36,826 | |
Amortizable intangible assets | 2,200,883 | $ 2,200,883 | |
Accumulated amortization of intangible assets | 1,860,989 | $ 1,808,698 | |
Depreciation expense | 30,986 | 36,683 | |
Amortization expense | 52,291 | 52,291 | |
Shipping and Handling [Member] | |||
Significant Accounting Policies [Line Items] | |||
Revenues | $ 6,534 | $ 7,896 | |
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] | Furniture, Fixtures and Equipment [Member] | |||
Significant Accounting Policies [Line Items] | |||
Property and equipment, useful life | 3 years | ||
Maximum [Member] | Furniture, Fixtures and Equipment [Member] | |||
Significant Accounting Policies [Line Items] | |||
Property and equipment, useful life | 7 years |
Summary Of Significant Accoun_6
Summary Of Significant Accounting Policies - Schedule of Inventories (Detail) - USD ($) | Nov. 30, 2019 | May 31, 2019 |
Inventory, Net [Abstract] | ||
Raw materials | $ 316,565 | $ 347,095 |
Work-in-process | 397,370 | 376,375 |
Finished goods | 363,683 | 517,662 |
Inventories | $ 1,077,618 | $ 1,241,132 |
Summary Of Significant Accoun_7
Summary Of Significant Accounting Policies - Summary of Property and Equipment (Detail) - USD ($) | Nov. 30, 2019 | May 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 2,542,459 | $ 2,534,980 |
Less accumulated depreciation | (1,885,105) | (1,858,593) |
Property, plant and equipment, net | 657,354 | 676,387 |
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 | 1,826,503 | 1,814,524 |
Furniture, Fixtures and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 416,956 | $ 421,456 |
Stock Options And Stock-Based_3
Stock Options And Stock-Based Compensation - Additional Information (Detail) - USD ($) | 6 Months Ended | |
Nov. 30, 2019 | May 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected dividend rate | 0.00% | |
Vested and exercisable stock options | 236,666 | 254,166 |
Weighted average exercise price | $ 2.35 | $ 2.41 |
Additional stock-based compensation expense | $ 0 | |
Number of Shares, Options granted | 0 | |
Restricted stock awards, issued during the period | 23,000 | |
Restricted Stock Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense recognized | $ 932 | |
Vested and exercisable stock options | 35,754 | |
Service-based restricted stock units, granted in period | 41,976 | |
Restricted Stock Units (RSUs) [Member] | Selling, General and Administrative Expenses [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense recognized | $ 192,602 | |
Performance Based Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share Based Payment Award Vesting Rights | 15 days |
Stock Options And Stock-Based_4
Stock Options And Stock-Based Compensation - Schedule of Outstanding Stock Options (Detail) - $ / shares | 6 Months Ended | 12 Months Ended |
Nov. 30, 2019 | May 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares, Outstanding Options | 236,666 | 254,166 |
Weighted Average Exercise Price, Outstanding Options | $ 2.35 | $ 2.41 |
Weighted Average Remaining Contractual Life (yrs), Outstanding Options | 4 years 3 months 18 days | 5 years 9 months 18 days |
Exercisable Options, Number of Shares | 236,666 | 254,166 |
Exercisable Options, Weighted Average Exercise Price | $ 2.35 | $ 2.41 |
Options 1 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares, Outstanding Options | 124,166 | |
Weighted Average Exercise Price, Outstanding Options | $ 1.70 | |
Weighted Average Remaining Contractual Life (yrs), Outstanding Options | 6 years 2 months 12 days | |
Exercisable Options, Number of Shares | 124,166 | |
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 | 2 years 7 months 6 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 | 37,500 | |
Weighted Average Exercise Price, Outstanding Options | $ 2.82 | |
Weighted Average Remaining Contractual Life (yrs), Outstanding Options | 3 years | |
Exercisable Options, Number of Shares | 37,500 | |
Exercisable Options, Weighted Average Exercise Price | $ 2.82 | |
Options 4 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares, Outstanding Options | 25,000 | |
Weighted Average Exercise Price, Outstanding Options | $ 2.90 | |
Weighted Average Remaining Contractual Life (yrs), Outstanding Options | 3 years 4 months 24 days | |
Exercisable Options, Number of Shares | 25,000 | |
Exercisable Options, Weighted Average Exercise Price | $ 2.90 | |
Options 5 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares, Outstanding Options | 35,000 | |
Weighted Average Exercise Price, Outstanding Options | $ 3.65 | |
Weighted Average Remaining Contractual Life (yrs), Outstanding Options | 6 months | |
Exercisable Options, Number of Shares | 35,000 | |
Exercisable Options, Weighted Average Exercise Price | $ 3.65 |
Stock Options And Stock-Based_5
Stock Options And Stock-Based Compensation - Schedule of Options Granted, Exercised, Canceled and Expired (Detail) - USD ($) | 6 Months Ended | 12 Months Ended |
Nov. 30, 2019 | May 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Number of Shares, Options outstanding - beginning of period | 254,166 | |
Number of Shares, Options granted | 0 | |
Number of Shares, Options exercised | 0 | |
Number of Shares, Options forfeited/cancelled | (17,500) | |
Number of Shares, Options outstanding - end of period | 236,666 | 254,166 |
Exercisable Options, Number of Shares | 236,666 | 254,166 |
Weighted Average Exercise Price, Options outstanding - beginning of period | $ 2.41 | |
Weighted Average Exercise Price, Options granted | 0 | |
Weighted Average Exercise Price, Options exercised | 0 | |
Weighted Average Exercise Price, Options forfeited/cancelled | 3.29 | |
Weighted Average Exercise Price, Options outstanding - end of period | 2.35 | $ 2.41 |
Exercisable Options, Weighted Average Exercise Price | $ 2.35 | $ 2.41 |
Weighted Average Remaining Contractual Life (yrs), Outstanding Options | 4 years 3 months 18 days | 5 years 9 months 18 days |
Weighted Average Remaining Contractual Term, Exercisable Options | 4 years 3 months 18 days | 5 years 9 months 18 days |
Intrinsic value of outstanding options | $ 556,165 | |
Intrinsic value of exercisable options | $ 556,165 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Fair Value of the Restricted Stock units (Detail) | 6 Months Ended | 12 Months Ended |
Nov. 30, 2019 | May 31, 2019 | |
Expected dividend yield | 0.00% | |
Lattce Model [Member] | Restricted Stock Units (RSUs) [Member] | ||
Expected stock price volatility, Minimum. | 50.10% | |
Expected stock price volatility, Maximum. | 57.50% | |
Expected dividend yield | 0.00% | |
Average risk-free interest rate, Minimum. | 2.55% | |
Average risk-free interest rate, Maximum. | 2.98% |
Stock Options And Stock-Based_6
Stock Options And Stock-Based Compensation - Schedule Of Share Based Compensation Restricted Stock Units Award Activity (Detail) - Restricted Stock Units (RSUs) [Member] | 6 Months Ended |
Nov. 30, 2019USD ($)Customer$ / sharesshares | |
Number of Shares, Non-vested | 98,000 |
Number of Shares, granted | 41,976 |
Number of Shares, vested | (71,754) |
Number of Shares, Non-vested | 68,222 |
Weighted Average Exercise Price, Non-vested | $ / shares | $ 2.94 |
Weighted Average Exercise Price, granted | $ / shares | $ 2.42 |
Weighted Average Exercise Price, vested | Customer | (2.65) |
Weighted Average Exercise Price, Non-vested | $ / shares | $ 2.93 |
Aggregate Intrinsic Value, Non-vested | $ | $ 199,890 |
Weighted Average Shares and R_3
Weighted Average Shares and Reconciliation - Reconciliation of Numerators and Denominators of Basic and Diluted Per Share Computations for Income (Loss) from Continuing Operations (Detail) - shares | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2019 | Nov. 30, 2018 | Nov. 30, 2019 | Nov. 30, 2018 | |
Weighted average shares (basic) | 4,083,538 | 3,994,545 | 4,030,709 | 3,994,545 |
Effect of dilutive stock options | 0 | 0 | 0 | 0 |
Weighted average shares (diluted) | 4,083,538 | 3,994,545 | 4,030,709 | 3,994,545 |
Weighted Average Shares and R_4
Weighted Average Shares and Reconciliation - Additional Information (Detail) | 3 Months Ended | 6 Months Ended |
Nov. 30, 2019$ / sharesshares | Nov. 30, 2019$ / sharesshares | |
Dilutive securities | shares | 236,666 | 236,666 |
Maximum [Member] | ||
Share price | $ 3.65 | $ 3.65 |
Minimum [Member] | ||
Share price | $ 1.70 | $ 1.70 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 6 Months Ended | 12 Months Ended | |
Nov. 30, 2019 | May 31, 2020 | May 31, 2019 | |
Income Tax Contingency [Line Items] | |||
Liability for payment of interest and penalties | $ 0 | $ 0 | |
Other long-term liabilities related to uncertain tax positions | $ 0 | $ 0 | |
Effective tax rate for Fiscal 2019 | 1.50% | ||
Forecast [Member] | |||
Income Tax Contingency [Line Items] | |||
Effective tax rate for Fiscal 2019 | 1.60% | ||
Domestic Tax Authority [Member] | |||
Income Tax Contingency [Line Items] | |||
Income tax examination period under examination | 2016 | ||
Foreign Tax Authority [Member] | United Kingdom [Member] | |||
Income Tax Contingency [Line Items] | |||
Income tax examination period under examination | 2018 |
Leases - Additional Information
Leases - Additional Information (Detail) | Nov. 30, 2019 |
Operating lease term | 10 years |
Leases - Schedule Of Minimum Fu
Leases - Schedule Of Minimum Future Lease Payments Receivable On An Undiscounted Cash Flow Basis (Detail) | May 31, 2019USD ($) |
2020 | $ 139,692 |
2021 | 283,578 |
2022 | 291,906 |
2023 | 300,666 |
2024 | 309,870 |
Thereafter | 1,876,764 |
Total undiscounted cash flow | $ 3,202,476 |
Customer Concentration - Additi
Customer Concentration - Additional Information (Detail) - Sales Revenue, Net [Member] | 3 Months Ended | 6 Months Ended |
Nov. 30, 2019 | Nov. 30, 2019 | |
Customer One [Member] | ||
Concentration Risk, Percentage | 14.60% | 14.80% |
Customer Two [Member] | ||
Concentration Risk, Percentage | 10.10% | 10.30% |
Customer Three [Member] | ||
Concentration Risk, Percentage | 4.60% | 4.40% |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Detail) - USD ($) | Oct. 10, 2019 | Nov. 30, 2019 |
Discontinued Operations purchase price | $ 10,500,000 | |
Schmitt Dynamic Balance Systems [Member] | Discontinued Operations, Held-for-sale [Member] | Purchase Agreement [Member] | ||
Discontinued Operations purchase price | $ 10,500,000 | |
Discontinued Operations unrestricted cash | 9,940,000 | |
Discontinued Operations Deposits in escrow account | 420,000 | |
Discontinued Operations working capital | 140,000 | |
Disposal group Excluding Discontinued Operation Working Capital | 4,200,000 | |
Schmitt Dynamic Balance Systems [Member] | Discontinued Operations, Held-for-sale [Member] | Transition Service Agreement [Member] | ||
Discontinued Operations cash collected | $ 196,000 |
Discontinued Operations - Summa
Discontinued Operations - Summary of consideration and gain of discontinued operation (Detail) | 6 Months Ended |
Nov. 30, 2019USD ($) | |
Discontinued Operations and Disposal Groups [Abstract] | |
Purchase Price | $ 10,500,000 |
Cash in SEL | 69,157 |
Net assets sold | 4,460,177 |
Minimum cash | 140,000 |
Transaction fees | 453,287 |
Release of cumulative translation adjustment from OCI | 455,848 |
Closing adjustments | 0 |
Pre-tax gain on sale | 5,059,845 |
Income taxes | 82,938 |
Gain on sale, net of income taxes | $ 4,976,907 |
Discontinued Operations - Sum_2
Discontinued Operations - Summary of assets and liabilities classified as held for sale of discontinued operations (Detail) - USD ($) | Nov. 30, 2019 | May 31, 2019 |
Discontinued Operations and Disposal Groups [Abstract] | ||
Accounts receivable, net | $ 0 | $ 1,365,114 |
Inventories | 0 | 3,777,913 |
Prepaid expenses | 0 | 49,357 |
Current assets held for sale | 0 | 5,192,384 |
Property and equipment, net | 0 | 162,987 |
Noncurrent assets held for sale | 0 | 162,987 |
Accounts payable | 0 | 393,773 |
Accrued commissions | 0 | 128,453 |
Accrued payroll liabilities | 0 | 127,124 |
Customer deposits and prepayments | 0 | 109,860 |
Other accrued liabilities | 0 | 89,914 |
Current liabilities held for sale | 0 | 849,124 |
Net assets held for sale | $ 0 | $ 4,506,247 |
Discontinued Operations - Sum_3
Discontinued Operations - Summary of constituting income from discontinued operations (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2019 | Nov. 30, 2018 | Nov. 30, 2019 | Nov. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Net revenue | $ 2,095,901 | $ 2,345,477 | $ 4,343,008 | $ 4,539,809 |
Cost of revenue | 1,210,126 | 1,464,499 | 2,374,251 | 2,797,717 |
Gross profit | 885,775 | 880,978 | 1,968,757 | 1,742,092 |
Operating expenses: | ||||
General, administration and sales | 665,365 | 738,821 | 1,252,222 | 1,388,201 |
Research and development | 26,839 | 23,093 | 35,920 | 48,754 |
Total operating expenses | 692,204 | 761,914 | 1,288,142 | 1,436,955 |
Operating income | 193,571 | 119,064 | 680,615 | 305,137 |
Other expense, net | (65,192) | (30,604) | (140,923) | (129,029) |
Income before income taxes | 128,379 | 88,460 | 532,103 | 176,108 |
Provision for income taxes | (11,719) | 4,248 | 7,589 | 8,500 |
Net income from discontinued operations, before gain on sale, net of tax | $ 140,098 | $ 84,212 | $ 532,103 | $ 167,608 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - Subsequent Event [Member] - USD ($) $ / shares in Units, $ in Millions | Dec. 17, 2019 | Dec. 03, 2019 |
Subsequent Event [Line Items] | ||
Share repurchase authorized amount | $ 2 | |
Walter Brown Pistor [Member] | ||
Subsequent Event [Line Items] | ||
Number of shares repurchased | 365,490 | |
Shares repurchased price per share | $ 3.25 |