10-Q/A

SECURITIES & EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q/A

(Amendment No. 1) 

[x] Quarterly Report Under Section 13 or 15 (d) of
the Securities Exchange Act of 1934

For Quarterly Period Ended September 30, 2016

[ ] Transition Report Under Section 13 or 18(d) of the Exchange Act

Commission File Number: 0-17449

PROCYON CORPORATION

(Exact Name of Small Business Issuer as specified in its charter)

COLORADO                   59-3280822     

        (State of Incorporation)        (IRS Employer Identification Number)

1300 S. Highland Ave. Clearwater, FL 33756

(Address of Principal Offices)

(727) 447-2998

(Issuer’s Telephone Number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐

Non-accelerated filer (Do not check if a smaller reporting company) ☐ Smaller reporting company ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: Common stock, no par value; 8,060,388 shares outstanding as of November 6, 2016.

EXPLANATORY NOTE

This Amendment No. 1 on Form 10-Q/A (this “Amendment No. 1”) amends our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2016 that was filed with the U.S. Securities and Exchange Commission (“SEC”) on November 14, 2016 (the “Original Filing”). We are filing this Amendment No. 1 to update Part II, Item 6 and furnish Exhibit 101 to the Original Filing.

Except as set forth in Part II, Item 6 below and in any exhibits attached hereto, no other changes are made to the Original Filing. The Original Filing continues to speak as of the date of the Original Filing. Unless expressly stated, this Amendment No. 1 does not reflect events occurring after the filing date of the Original Filing, nor does it modify or update in any way the disclosures contained in the Original Filing.

2

 PART II

 ITEM 6. EXHIBITS

(A)  EXHIBITS

31.1	Certification of Regina W. Anderson pursuant to Exchange Act Rule 13a-14(a)/15d-14(a) (filed herewith).
31.2	Certification of James B. Anderson pursuant to Exchange Act Rule 13a-14(a)/15d-14(a) (filed herewith).
32.1	Certification Pursuant to 18 U.S.C.§1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002 (filed herewith).
101.INS	XBRL Instance Document (furnished herewith).
101.SCH	XBRL Taxonomy Extension Schema Document (furnished herewith).
101.CAL	XBRL Taxonomy Presentation Linkbase Document (furnished herewith).
101.DEF	XBRL Taxonomy Calculation Linkbase Document (furnished herewith).
101.LAB	XBRL Taxonomy Label Linkbase Document (furnished herewith).
101.PRE	XBRL Taxonomy Extension Definition Linkbase Document (furnished herewith).

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this Amendment No. 1 to its Quarterly Report on Form 10-Q/A to be signed on its behalf by the undersigned, there unto duly authorized.

	PROCYON CORPORATION
November 15, 2016	By:/s/ REGINA W. ANDERSON
Date	Regina W. Anderson, Chief Executive Officer

3

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Regina W. Anderson, Chief Executive Officer of Procyon Corporation, certify that:

1.	I have reviewed this quarterly report on Form 10-Q/A of Procyon Corporation
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; and

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant issuer and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 15, 2016

/s/ REGINA W. ANDERSON

Regina W. Anderson, Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, James B. Anderson, Chief Financial Officer of Procyon Corporation, certify that:

1.	I have reviewed this quarterly report on Form 10-Q/A of Procyon Corporation
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; and

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant issuer and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 15, 2016

/s/ JAMES B. ANDERSON

James B. Anderson, Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. §1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Procyon Corporation (the "Company") on Form 10-Q/A for the period ended September 30, 2016, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), we, the undersigned Chief Executive Officer and Chief Financial Officer of the Company, do each certify, to our knowledge, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Dated: November 15, 2016

/s/ REGINA W. ANDERSON	/s/ JAMES B. ANDERSON
Regina W. Anderson, Chief Executive Officer	James B. Anderson, Chief Financial Officer

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Document and Entity Information - shares	3 Months Ended
	Sep. 30, 2016	Nov. 06, 2016
Entity Registrant Name	Procyon Corporation
Entity Central Index Key	0000812306
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--06-30
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2016
Common Stock
Entity Common Stock, Shares Outstanding		8,060,388
Cumulative Preferred Stock
Entity Common Stock, Shares Outstanding		194,100

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Consolidated Balance Sheets - USD ($)	Sep. 30, 2016	Jun. 30, 2016
CURRENT ASSETS
Cash	$ 53,213	$ 59,173
Certificates of Deposit, plus accrued interest	152,304	151,995
Accounts Receivable, less allowance for doubtful accounts of $2,633 and $2,665, respectively	239,164	538,202
Other Receivables	150,000	150,000
Inventories	695,778	688,691
Prepaid Expenses	245,878	165,207
Deferred Tax Asset	165,456	128,529
TOTAL CURRENT ASSETS	1,701,793	1,881,797
CERTIFICATES OF DEPOSIT, PLUS ACCRUED INTEREST	141,021	140,563
PROPERTY AND EQUIPMENT, NET	531,370	540,603
OTHER ASSETS
Deposits	4,192	4,192
Deferred Tax Asset	495,846	551,817
TOTAL OTHER AND DEFERRED ASSETS	500,038	556,009
TOTAL ASSETS	2,874,222	3,118,972
CURRENT LIABILITIES
Bank Overdraft	44,126
Accounts Payable	202,837	358,177
Capital Lease Liability	3,788	3,788
Line of Credit	95,000	125,000
Accrued Expenses	224,260	355,732
TOTAL CURRENT LIABILITIES	570,011	842,697
CAPITAL LEASE LIABILITY	4,951	5,898
COMMITMENTS AND CONTINGENCIES (NOTE G)
STOCKHOLDERS' EQUITY
Preferred Stock, 496,000,000 shares authorized, none issued
Series A Cumulative Convertible Preferred Stock, no par value, 4,000,000 shares authorized; 194,100 shares issued and outstanding	$ 149,950	$ 149,950
Common Stock, no par value, 80,000,000 shares authorized; 8,060,388 shares issued and outstanding	$ 4,421,676	$ 4,421,676
Paid-in Capital	$ 11,140	$ 11,140
Accumulated Deficit	(2,283,506)	(2,312,389)
TOTAL STOCKHOLDERS' EQUITY	2,299,260	2,270,377
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 2,874,222	$ 3,118,972

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Consolidated Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2016	Jun. 30, 2016
Statement of Financial Position [Abstract]
Accounts receivable, less allowance for doubtful accounts	$ 2,633	$ 2,665
Preferred stock, shares authorized	496,000,000	496,000,000
Preferred stock, shares issued	0	0
Series A Cumulative Convertible Preferred stock, shares authorized	4,000,000	4,000,000
Series A Cumulative Convertible Preferred stock, shares issued	194,100	194,100
Series A Cumulative Convertible Preferred stock, shares outastanding	194,100	194,100
Common stock, shares authorized	80,000,000	80,000,000
Common stock, shares issued	8,060,388	8,060,388
Common stock, shares outstanding	8,060,388	8,060,388

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Consolidated Statements of Operations - USD ($)	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Income Statement [Abstract]
NET SALES	$ 879,733	$ 855,042
COST OF SALES	256,792	230,935
GROSS PROFIT	622,941	624,107
OPERATING EXPENSES
Salaries and Benefits	338,264	308,759
Selling, General and Administrative	235,790	247,249
TOTAL OPERATING EXPENSES	574,054	556,008
INCOME / (LOSS) FROM OPERATIONS	48,887	68,099
OTHER INCOME (EXPENSE)
(Loss) on Disposal of Assets		(3,195)
Interest Expense	(1,730)	(869)
Interest Income	770	249
TOTAL OTHER INTEREST AND EXPENSES	(960)	(3,815)
INCOME / (LOSS) BEFORE INCOME TAXES	47,927	64,284
INCOME TAX (EXPENSE) / BENEFIT	19,044	26,091
NET INCOME / (LOSS)	28,883	38,193
Dividend requirements on preferred stock	(4,853)	(4,853)
Basic net income (loss) available to common shares	$ 24,030	$ 33,340
Basic net income (loss) per common share	$ 0.00	$ 0.00
Weighted average number of common shares outstanding	8,060,388	8,060,388
Diluted net income (loss) per common share	$ 0.00	$ 0.00
Weighted average number of common shares outstanding, diluted	8,264,679	8,254,488

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Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income / (Loss)	$ 28,883	$ 38,193
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation	11,217	9,993
Loss on Disposal of Assets		3,195
Deferred Income Taxes	19,044	26,091
Accrued Interest on Certificates of Deposit	(767)	(133)
Decrease (increase) in:
Accounts Receivable	299,038	47,562
Inventory	(7,087)	(68,414)
Prepaid Expenses	(80,671)	26,782
Increase (decrease) in:
Bank Overdraft	44,126
Accounts Payable	(155,340)	(34,073)
Accrued Expenses	(131,472)	(28,287)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	26,971	20,909
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property & equipment	(1,984)	(7,939)
NET CASH (USED IN) INVESTING ACTIVITIES	(1,984)	(7,939)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds on Line of Credit	70,000
Payments on Line of Credit	(100,000)
Payments on Capital Lease	(947)
NET CASH (USED IN) FINANCING ACTIVITIES	(30,947)
NET CHANGE IN CASH	(5,960)	12,970
CASH AT BEGINNING OF PERIOD	59,173	204,227
CASH AT END OF PERIOD	53,213	217,191
SUPPLEMENTAL DISCLOSURES
Interest Paid	1,730	869
Taxes Paid

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SUMMARY OF ACCOUNTING POLICIES

3 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

SUMMARY OF ACCOUNTING POLICIES

NOTE A - SUMMARY OF ACCOUNTING POLICIES 

The interim consolidated financial statements included herein have been prepared by the Company without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) have been condensed or omitted as allowed by such rules and regulations. The Company believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements dated June 30, 2016. The results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year.

Management of the Company has prepared the accompanying unaudited condensed consolidated financial statements prepared in conformity with generally accepted accounting principles, which require the use of management estimates, contain all adjustments (including normal recurring adjustments) necessary to present fairly the operations and cash flows for the period presented and to make the financial statements not misleading.

STOCK-BASED COMPENSATION

Stock based compensation is accounted for in accordance with Topic 718 - Compensation -Stock Compensation in the Accounting Standards Codification. Pursuant to Topic 718, all share-based payments to employees, including grants of employee stock options, are to be recognized in the statement of operations based upon their fair values. Topic 718 rescinds the acceptance of pro forma disclosure. In December 2009, our shareholders approved the adoption of a new stock option plan, providing the Company a continued means of offering stock-based compensation.

On September 30, 2016, there were 40,000 outstanding options to purchase shares of our common stock.

The fair value of a stock option is determined using the Black-Scholes option-pricing model, which values options based on the stock price at the grant date, the expected life of the option, the estimated volatility of the stock, the expected dividend payments, and the risk-free interest rate over the life of the option. There were no options granted during the quarter ended September 30, 2016.

The Black-Scholes option valuation model was developed for estimating the fair value of traded options that have no vesting restrictions and are fully transferable. Because option valuation models require the use of subjective assumptions, changes in these assumptions can materially affect the fair value of the options. Our options do not have the characteristics of traded options, therefore, the option valuation models do not necessarily provide a reliable measure of the fair value of our options.

EARNINGS PER SHARE

Basic earnings per share (EPS) is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that would occur if dilutive securities such as stock options and other contracts to issue Common Stock were exercised or converted into Common Stock or resulted in the issuance of Common Stock that then shared in earnings. We use the treasury stock method to compute potential common shares from stock options and the as-if-converted method to compute potential common shares from Preferred Stock.

For the three months ended September 30, 2016, the potential dilutive effects of the preferred stock and stock options were included in the weighted-average shares outstanding.

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INVENTORIES

3 Months Ended

Sep. 30, 2016

Inventory Disclosure [Abstract]

INVENTORIES

NOTE B - INVENTORIES

Inventories consisted of the following:	September 30,		June 30,
	2016		2016
Finished Goods	$	450,573	$	460,166
Raw Materials		245,205		228,525
	$	695,778	$	688,691

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STOCKHOLDERS' EQUITY

3 Months Ended

Sep. 30, 2016

Equity [Abstract]

STOCKHOLDERS' EQUITY

NOTE C - STOCKHOLDERS’ EQUITY

During January 1995, the Company's Board of Directors authorized the issuance of up to 4,000,000 shares of Series A Cumulative Convertible Preferred Stock (“Series A Preferred Stock”). The preferred stockholders are entitled to receive, as and if declared by the board of directors, quarterly dividends at an annual rate of $.10 per share of Series A Preferred Stock per annum. Dividends will accrue without interest and will be cumulative from the date of issuance of the Series A Preferred Stock and will be payable quarterly in arrears in cash or publicly traded common stock when and if declared by the Board of Directors. As of September 30, 2016, no dividends have been declared. Dividends in arrears on the outstanding preferred shares total $375,594 as of September 30, 2016.

Holders of the Preferred Stock have the right to convert their shares of Preferred Stock into an equal number of shares of Common Stock of the Company. In addition, Preferred Stock holders have the right to vote the number of shares into which their shares are convertible into Common Stock. Such preferred shares will automatically convert into one share of Common Stock at the close of a public offering of Common Stock by the Company provided the Company receives gross proceeds of at least $1,000,000, and the initial offering price of the Common Stock sold in such offering is equal to or in excess of $1 per share. The Company is obligated to reserve an adequate number of shares of its common stock to satisfy the conversion of all the outstanding Series A Preferred Stock. There were no shares converted during the reporting period. So long as any share of Series A Preferred Stock is outstanding, the Company is prohibited from declaring dividends

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INCOME TAXES AND AVAILABLE CARRYFORWARD

3 Months Ended

Sep. 30, 2016

Income Tax Disclosure [Abstract]

INCOME TAXES AND AVAILABLE CARRYFORWARD

NOTE D - INCOME TAXES AND AVAILABLE CARRYFORWARD

As of September 30, 2016, the Company had consolidated income tax net operating loss ("NOL") carryforward for federal income tax purposes of approximately $1,739,000. The NOL will expire in various years ending through the year 2035. The utilization of certain of the loss carryforwards are limited under Section 382 of the Internal Revenue Code.

The components of the provision for income tax benefits (expense) attributable to continued operations are as follows:

	Three Months 9/30/2016		Three Months 9/30/2015
Current
Federal	$	0	$	0
State		0		0
	$	0	$	0
Deferred
Federal	$	16,260	$	22,278
State		2,784		3,813
	$	19,044	$	26,091
Total Income Tax Benefit (Expense)	$	19,044	$	26,091

Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:

	Current		Non-Current
Deferred tax assets
NOL and contribution carryforwards	$	156,110	$	498,325
PTO Accounts		8,355		—
Excess of tax over book depreciation		—		(2,479	)
Allowance for doubtful accounts		991		—
Net deferred tax asset	$	165,456	$	495,846

Management believes it is more likely than not that it will realize the benefit of the NOL carryforward, because of its previous trend of earnings. Therefore, a valuation allowance is not considered necessary at this time.

      Income taxes for the periods ended September 30, 2016 and 2015 differ from the amounts computed by applying the effective income tax rates of 37.63%, to income taxes as a result of the following:

	Three Months Sep. 30, 2016		Three Months Sep. 30, 2015
Expected benefit (provision) at US statutory rate	$	16,295	$	21,856
State income tax net of federal benefit (provision)		1,740		2,333
Nondeductible Expense		1,009		1,902
Income Tax Benefit (Expense)	$	19,044	$	26,091

The earliest tax year still subject to examination by a major taxing jurisdiction is fiscal year end June 30, 2013.

The Company made a review of its uncertain tax positions in accordance with applicable standards of the Financial Accounting Standards Board ("FASB"). In this regard, an uncertain tax position represents the Company's expected treatment of a tax position taken in a filed tax return, or planned to be taken in a future tax return, that has not been reflected in measuring income tax expense for financial reporting purposes. As a result of this review, the Company concluded that at this time there are no uncertain tax positions, and there has been no cumulative effect on retained earnings.

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LINE OF CREDIT

3 Months Ended

Sep. 30, 2016

Debt Disclosure [Abstract]

LINE OF CREDIT

NOTE E - LINE OF CREDIT

The Company has a $250,000, due-on-demand line of credit with a financial institution, collateralized by the Company’s inventory of $695,778 and net accounts receivable assets of $239,164. The line of credit is renewable annually in April. Our Chief Executive Officer personally guaranteed the line of credit to the Company. At September 30, 2016 and June 30, 2016, the Company owed $95,000 and $125,000 respectively, on the line of credit. The line of credit extends terms of cash advances at a variable rate set equal to the prime rate at the time of advance. The interest rate can fluctuate according to the changes in its published prime rate.

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RELATED PARTY TRANSACTIONS

3 Months Ended

Sep. 30, 2016

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE F - RELATED PARTY TRANSACTIONS

Our Chief Executive Officer, Regina W. Anderson, guarantees a $250,000 line of credit for the Company.

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CONTINGENCIES

3 Months Ended

Sep. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

CONTINGENCIES

NOTE G - CONTINGENCIES

The Company was able to close three open recalls with the FDA and is currently involved with one open voluntary product recall initiated May 20, 2016. Total recall costs incurred with the sole remaining open recall through September 30, 2016 were $3,197, of which $3,197 occurred in the quarter ending September 30, 2016. Future recall costs are not expected.

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SUBSEQUENT EVENTS

3 Months Ended

Sep. 30, 2016

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE H - SUBSEQUENT EVENTS

We have evaluated subsequent events through November 11, 2016, which is the date the financial statements were available to be issued.

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SUMMARY OF ACCOUNTING POLICIES (Policies)

3 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

ACCOUNTING POLICIES

The interim consolidated financial statements included herein have been prepared by the Company without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) have been condensed or omitted as allowed by such rules and regulations. The Company believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements dated June 30, 2016. The results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year.

Management of the Company has prepared the accompanying unaudited condensed consolidated financial statements prepared in conformity with generally accepted accounting principles, which require the use of management estimates, contain all adjustments (including normal recurring adjustments) necessary to present fairly the operations and cash flows for the period presented and to make the financial statements not misleading.

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

Stock based compensation is accounted for in accordance with Topic 718 - Compensation -Stock Compensation in the Accounting Standards Codification. Pursuant to Topic 718, all share-based payments to employees, including grants of employee stock options, are to be recognized in the statement of operations based upon their fair values. Topic 718 rescinds the acceptance of pro forma disclosure. In December 2009, our shareholders approved the adoption of a new stock option plan, providing the Company a continued means of offering stock-based compensation.

On September 30, 2016, there were 40,000 outstanding options to purchase shares of our common stock.

The fair value of a stock option is determined using the Black-Scholes option-pricing model, which values options based on the stock price at the grant date, the expected life of the option, the estimated volatility of the stock, the expected dividend payments, and the risk-free interest rate over the life of the option. There were no options granted during the quarter ended September 30, 2016.

The Black-Scholes option valuation model was developed for estimating the fair value of traded options that have no vesting restrictions and are fully transferable. Because option valuation models require the use of subjective assumptions, changes in these assumptions can materially affect the fair value of the options. Our options do not have the characteristics of traded options, therefore, the option valuation models do not necessarily provide a reliable measure of the fair value of our options.

EARNINGS PER SHARE

EARNINGS PER SHARE

Basic earnings per share (EPS) is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that would occur if dilutive securities such as stock options and other contracts to issue Common Stock were exercised or converted into Common Stock or resulted in the issuance of Common Stock that then shared in earnings. We use the treasury stock method to compute potential common shares from stock options and the as-if-converted method to compute potential common shares from Preferred Stock.

For the three months ended September 30, 2016, the potential dilutive effects of the preferred stock and stock options were included in the weighted-average shares outstanding.

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INVENTORIES (Tables)

3 Months Ended

Sep. 30, 2016

Inventory Disclosure [Abstract]

INVENTORIES

Inventories consisted of the following:	September 30,		June 30,
	2016		2016
Finished Goods	$	450,573	$	460,166
Raw Materials		245,205		228,525
	$	695,778	$	688,691

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INCOME TAXES AND AVAILABLE CARRYFORWARD (Tables)

3 Months Ended

Sep. 30, 2016

Income Tax Disclosure [Abstract]

Income Tax Benefits

	Three Months 9/30/2016		Three Months 9/30/2015
Current
Federal	$	0	$	0
State		0		0
	$	0	$	0
Deferred
Federal	$	16,260	$	22,278
State		2,784		3,813
	$	19,044	$	26,091
Total Income Tax Benefit (Expense)	$	19,044	$	26,091

Deferred Tax Assets

	Current		Non-Current
Deferred tax assets
NOL and contribution carryforwards	$	156,110	$	498,325
PTO Accounts		8,355		—
Excess of tax over book depreciation		—		(2,479	)
Allowance for doubtful accounts		991		—
Net deferred tax asset	$	165,456	$	495,846

Tax Computation Expense

	Three Months Sep. 30, 2016		Three Months Sep. 30, 2015
Expected benefit (provision) at US statutory rate	$	16,295	$	21,856
State income tax net of federal benefit (provision)		1,740		2,333
Nondeductible Expense		1,009		1,902
Income Tax Benefit (Expense)	$	19,044	$	26,091

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INVENTORIES (Details) - USD ($)	Sep. 30, 2016	Jun. 30, 2016
Inventories
Finished Goods	$ 450,573	$ 460,166
Raw Materials	245,205	228,525
Total	$ 695,778	$ 688,691

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STOCKHOLDERS' EQUITY (Details Narrative)	3 Months Ended
	Sep. 30, 2016 USD ($) shares
Stockholders Equity Details Narrative
Preferred stock authorized for conversion | shares	4,000,000
Preferred stock, number of shares converted	$ 0
Preferred stock dividends declared	0
Preferred stock dividends owed	$ 375,594
Stock repurclase plan, percent of outstanding shares	10
Stock repurchased during period | shares	0

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INCOME TAXES AND AVAILABLE CARRYFORWARD - Income Tax Benefits (Details) - USD ($)	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Current
Federal	$ 0	$ 0
State	0	0
Total current	0	0
Deferred
Federal	16,260	22,278
State	2,784	3,813
Total deferred	19,044	26,091
Total Income Tax Benefit (Expense)	$ 19,044	$ 26,091

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INCOME TAXES AND AVAILABLE CARRYFORWARD - Deferred Tax Aspects (Details)	Sep. 30, 2016 USD ($)
Deferred tax assets
NOL and contribution carryforwards	$ 156,110
PTO Accounts	8,355
Excess of book over tax depreciation
Allowance for doubtful accounts	991
Net deferred tax asset	165,456
Deferred tax assets
NOL and contribution carryforwards	498,325
PTO Accounts
Excess of book over tax depreciation	(2,479)
Allowance for doubtful accounts
Net deferred tax asset	$ 495,846

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INCOME TAXES AND AVAILABLE CARRYFORWARD - Tax Computation Expense (Details) - USD ($)	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Income Taxes And Available Carryforward - Tax Computation Expense Details
Expected benefit (provision) at US statutory rate	$ 16,295	$ 21,856
State income tax net of federal benefit (provision)	1,740	2,333
Nondeductible Expense	1,009	1,902
Income Tax Benefit (Expense)	$ 19,044	$ 26,091

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INCOME TAXES AND AVAILABLE CARRYFORWARD (Details Narrative)	3 Months Ended
	Sep. 30, 2016 USD ($)
Income Taxes And Available Carryforward Details Narrative
Tax net operating loss	$ 1,739,000
Tax net operating loss carryforward expiration date	will expire in various years ending through the year 2035

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INCOME TAXES AND AVAILABLE CARRYFORWARD (Details Narrative 1)	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Income Taxes And Available Carryforward Details Narrative 1
Effective income tax rates	37.63%	37.63%

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LINE OF CREDIT (Details Narrative) - USD ($)	Sep. 30, 2016	Jun. 30, 2016
Line Of Credit Details Narrative
Line of credit	$ 250,000
Inventory collateral	695,778
Net accounts receivable assets collateral	239,164
Owed on line of credit	$ 95,000	$ 125,000

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RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	Sep. 30, 2016	Jun. 30, 2016
Related Party Transactions Details Narrative
Line of credit guarantee by related party	$ 250,000

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CONTINGENCIES (Details Narrative) - USD ($)	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Contingencies Details Narrative
Recall costs incurred	$ 3,197	$ 3,197