Note 2. Acquisitions

9 Months Ended

Mar. 31, 2019

Disclosure Text Block [Abstract]

Note 2. Acquisitions

Bird & Cronin

On October 2, 2017, the Company, through its wholly-owned subsidiary Bird & Cronin, LLC, completed the purchase of substantially all the assets of Bird & Cronin, Inc. (“Bird & Cronin”), a manufacturer and distributor of orthopedic soft goods and specialty patient care products. The purchase price is subject to an earn-out payment ranging from $500,000 to $1,500,000, based on sales in fiscal year 2019. The amount recognized for the earn-out liability was $875,000 as of June 30, 2018. The earn-out liability was reduced by $375,000 in the first fiscal quarter of 2019. The change in the fair value of the earn-out liability is included in other income in the accompanying condensed consolidated statements of operations. As of March 31, 2019, the earn-out liability was $500,000. The earn-out liability is combined with the acquisition holdback in the accompanying condensed consolidated balance sheets. 

A holdback of $647,291 cash and 184,560 shares of common stock was retained by the Company for purposes of satisfying adjustments to the purchase price, if any. On October 2, 2018, the Company released to Bird & Cronin cash of $162,845 and 54,572 shares of common stock pursuant to the holdback provisions of the purchase agreement. In addition, the Company canceled 37,708 shares of common stock held back for the benefit of Bird & Cronin, pursuant to the settlement of working capital adjustments as provided in the purchase agreement. 

As of March 31, 2019, the remaining earn-out liability and holdback payable, contingent upon the terms set forth in the purchase agreement, and the maturity dates for such payments, are as follows:

April 2, 2019
August 15, 2019		500,000
Acquisition holdback and earn-out liability	$	966,667

On April 2, 2019, the Company released to Bird & Cronin cash of $466,667 and 92,280 shares of common stock pursuant to the holdback provisions of the purchase agreement. 

Hausmann

On April 3, 2017, the Company, through its wholly-owned subsidiary Hausmann Enterprises, LLC, completed the purchase of substantially all the assets of Hausmann Industries, Inc. (“Hausmann”), a manufacturer of physical therapy rehabilitation equipment.

The purchase price included a holdback of cash totaling $1,044,744 for purposes of satisfying adjustments to the purchase price and indemnification claims, if any. In the second and third fiscal quarters of 2018, the Company released $44,744 and $250,000, respectively, of the holdback to Hausmann. On October 3, 2018, the Company released the remaining holdback amount totaling $750,000.