Significant Accounting Policies (Policies)

12 Months Ended

Jun. 30, 2018

Restrictions on Cash and Cash Equivalents [Table Text Block]

As of June 30, 2018 and June 30, 2017 restricted cash included $250,000 and $0 respectively, which was pursuant to the requirements in the TD Bank Loan entered into June 2018.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

The Company's functional currency is the US dollar. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Foreign currency transaction gains or losses included in net income (loss) were immaterial for the years ended June 30, 2018 and 2017.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires ("US GAAP") management to make estimates and assumptions that impact the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

For the purposes of reporting cash flows, the Company considers all cash accounts, which are not subject to withdrawal restrictions or penalties, and highly liquid investments with original maturities of 90 days or less to be cash and cash equivalents. From time to time cash balances exceed federal insurance limits.

Fair Value of Financial Instruments

The carrying amounts for cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued liabilities and related party note payable approximate their fair value because of their short-term maturity. The carrying amount of the accrued post retirement benefits approximates fair value since the Company utilizes approximate current market interest rates to calculate the liability. The Company determined that the carrying amount of the note payable approximates fair value since such debt borrowing bears interest at the approximate current market rate. While the Company believes the carrying value of the assets and liabilities are reasonable, considerable judgment is used to develop estimates of fair value; thus the estimates are not necessarily indicative of the amounts that could be realized in a current market exchange.

Revenue Recognition

Product revenue includes the sale of medical device products and the sale and installation of the Company's AXIS image management system software. Revenue is recognized for medical device products at the time of shipment and for software when the software is delivered and installed.

The Company provides products to its distributors at agreed wholesale prices and to the balance of its customers at set retail prices. Distributors can receive discounts for accepting high volume shipments. The discounts are reflected immediately in the net invoice price, which is the basis for revenue recognition. No further material discounts or sales incentives are given. The Company’s considerations for recognizing revenue are based on the following:

- Persuasive evidence of an arrangement exists

- Delivery has occurred

-The Company's price or fee is fixed or determinable

-Collectability is reasonably assured

License and services plan revenues are recognized proportionally over the service period, which for both licenses and service plans are typically one year. Deferred revenue related to licenses and services plans was approximately $481,000 and $388,000 as of June 30, 2018 and June 30, 2017, respectively in the accompanying consolidated balance sheets.

Shipping and Handling Cost, Policy [Policy Text Block]

Shipping and handling revenues are included in product revenue and the related costs are included in cost of goods sold.

Inventory

Raw materials, work in process and finished goods are recorded at lower of cost (first-in, first-out) or net realizable value. The composition of inventory, net is as follows:



	For the years ended June 30,
	2018		2017
Raw materials	$	652,613	$	864,813
Work in process	192,287		336,934
Finished goods	978,514		716,191
Total inventory	$	1,823,414	$	1,917,938

Valuation allowance activity for the years ended June 30, 2018 and 2017 was as follows:



	For the years ended June 30,
	2018		2017
Balance, July 1	$	347,014	$	198,120
Provision for valuation allowance	114,000		150,000
Write-off	—		(1,106		)
Balance, June 30	$	461,014	$	347,014

Accounts Receivable

Accounts receivable are recorded at net realizable value. The Company performs ongoing credit evaluations of customers’ financial condition and does not require collateral for accounts receivable arising in the normal course of business. The Company maintains allowances for potential credit losses based on the Company’s historical trends, specific customer issues and current economic trends. Accounts are written off against the allowance when they are determined to be uncollectible based on management’s assessment of individual accounts. Allowance for doubtful accounts activity for the years ended June 30, 2018 and 2017 was as follows:



	June 30,
	2018			2017
Balance, July 1	$	172,120		$	202,667
Recovery in bad debts	(45,593		)	—
Write-offs	(7,597		)	(30,547		)
Balance, June 30	$	118,930		$	172,120

Property and Equipment

Property and equipment are recorded at cost. Leasehold improvements are amortized on a straight-line basis over the lesser of the estimated useful life of the asset or lease term. Depreciation on property and equipment is recorded using the straight-line method over the estimated economic useful life of the related assets. Estimated useful lives are generally three years to five years for computer equipment and software, five years to seven years for furniture and fixtures and five years to ten years for production and test equipment. Depreciation and amortization expense for the years ended June 30, 2018 and 2017 was approximately $29,000 and $26,000, respectively.

Property and equipment consist of the following at:



	June 30,
	2018			2017
Equipment	$	701,848		$	695,311
Furniture and fixtures	143,330			99,321
Leasehold improvement	28,549			28,549
	873,727			823,181
Less: Accumulated depreciation and amortization	(797,459		)	(768,289		)
	$	76,268		$	54,892

Intangible Assets

Intangible assets deemed to have indefinite lives (including trademark and trade names) and goodwill are not amortized but, instead, are subject to an annual impairment assessment. additionally, if events or conditions were to indicate the carrying value or a reporting unit may not be recoverable, the Company would evaluate goodwill and other intangible assets for impairment at that time. As it relates to the goodwill assessment the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment testing described in ASU topic No. 350, Intangibles - Goodwill and other.

Long-lived assets including intangible assets deemed to have finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Impairment indicators include, among other conditions, cash flow deficits, historic or anticipated declines in revenue or operating profit or material adverse changes in the business climate that indicate that the carrying amount of an asset may be impaired. When impairment indicators are present, the recoverability of the asset is measured by comparing the carrying value of the asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the projected undiscounted cash flows from the asset are less than the carrying value of the asset the asset is considered to be impaired. The impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. As a result of the Company's testing during the year ended June 30, 2017, the goodwill carrying amount of $125,027 was deemed impaired and written off. During the year ended June 30, 2018, no impairments were recorded.

Accrued Warranties

The Company provides a limited one year warranty against manufacturer’s defects on its products sold to customers. The Company’s standard warranties require the Company to repair or replace, at the Company’s discretion, defective parts during such warranty period. The Company accrues for its product warranty liabilities based on estimates of costs to be incurred during the warranty period, based on historical repair information for warranty costs.

Stock-Based Compensation

Stock-based compensation expense for all share-based payment awards granted after July 1, 2006 is based on the grant date fair value estimate in accordance with the provisions of Financial Accounting Standards Board ("FASB") issued authoritative guidance. As of June 30, 2018 and 2017 there was no unrecognized compensation cost related to non-vested share-based compensation arrangements granted to employees under the plans. There is no remaining cost under the plan. For the years ended June 30, 2018 and 2017, there was no compensation expense.

Valuations are based upon highly subjective assumptions about the future, including stock price volatility and exercise patterns. The fair value of share-based payment awards was estimated using the Black-Scholes option pricing model. Expected volatilities are based on the historical volatility of the Company’s stock. The Company uses historical data to estimate option exercise and employee terminations. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant.

The Company has historically granted options under the Company’s option plans with an option exercise price equal to the closing market value of the stock on the date of the grant and with vesting, primarily for Company employees, either in equal annual amounts over a two to five year period or immediately, and, primarily for non-employee directors, immediately.

The Company did not receive any cash from share option exercises under stock-based payment plans for the years ended June 30, 2018 and 2017. The Company did not realize any tax effect, which would be a reduction in its tax rate, on options due to the full valuation allowances established on its deferred tax assets.

The Company measures compensation expense for non-employee stock-based awards based on the fair value of the options issued, as this measurement is used to measure the transaction, and is more reliable than the fair value of the services received. Fair value is measured as the value of the Company’s common stock on the date that the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete. The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital. For the years ended June 30, 2018 and 2017, there were no non-employee compensation expense.

Research and Development

All research and development costs are charged to operations as incurred.

Advertising Costs

Advertising costs are charged to operations as incurred. Advertising expense for the years ended June 30, 2018 and 2017 was $27,000 and $31,000, respectively.

Net Income (loss) Per Share

Earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the year. All outstanding stock options are considered potential common stock. All outstanding convertible preferred stock are considered common stock at the beginning of the year or at the time of issuance, if later, pursuant to the if-converted method. The dilutive effect, if any, of stock options is calculated using the treasury stock method. As of June, 2018 and 2017, the average market prices for the year are less than the exercise price of all the outstanding stock options and, therefore, the inclusion of the stock options would be anti-dilutive. In addition, since the effect of common stock equivalents is anti-dilutive with respect to losses, the stock options have been excluded from the Company’s computation of loss per common for the year ended June 30, 2017. Therefore, the basic and diluted loss per common share for the year ended June 30, 2017 were the same. For the year ended June 30, 2018, the if converted method was used for the convertible preferred stock to calculate the dilutive earnings per share.



	For the Year Ended June 30,		For the Year Ended June 30,
	2018		2017
Numerator:
Numerator for basic earnings per share
Net income (loss)	$	583,675	$	(726,895	)
Undeclared dividends on preferred stock	19,368		—
Net income (loss) applicable to common shareholders	$	564,307	$	(726,895	)
Numerator for diluted earnings per share:
Net income (loss) applicable to common shareholders	$	564,307	$	(726,895	)
Undeclared dividends on preferred stock	19,368		—
Net income (loss)	$	583,675	$	(726,895	)
Denominator:
Denominator for basic earnings per share - weighted average shares outstanding	7,551,057		7,551,430
Weighted average preferred stock converted to common stock	1,590,411		—
Denominator for diluted earnings per share - weighted average and assumed conversion	9,141,468		7,551,430

Net income (loss) per share
Basic net income (loss) per share	$	0.07	$	(0.10	)
Diluted net income (loss) per share	$	0.06	$	(0.10	)

The following table summarizes securities that, if exercised would have an anti-dilutive effect on earnings per share.



	For the Year Ended June 30,	For the Year Ended June 30,
	2018	2017
Stock options	367,500	502,000
Total potential dilutive securities not included in income per share	367,500	502,000

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. As of June 30, 2018 and June 30, 2017, the Company has a fully recorded valuation allowance against its deferred tax assets.

The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statements of operations. As of June 30, 2018 and June 30, 2017, no accrued interest or penalties were required to be included on the related tax liability line in the consolidated balance sheets.

Reclassifications [Text Block]

Certain items in the June 30, 2017 consolidated financial statements have been reclassified to conform to the current period presentation.

Subsequent Events

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated.

Use of Estimates

Cash and Cash Equivalents

Restricted Cash

As of June 30, 2018 and June 30, 2017 restricted cash included $250,000 and $0 respectively, which was pursuant to the requirements in the TD Bank Loan entered into June 2018. (see Note 12)

Foreign Currency Translation

Accounts Receivable



	June 30,
	2018			2017
Balance, July 1	$	172,120		$	202,667
Recovery in bad debts	(45,593		)	—
Write-offs	(7,597		)	(30,547		)
Balance, June 30	$	118,930		$	172,120

Inventory

Raw materials, work in process and finished goods are recorded at lower of cost (first-in, first-out) or net realizable value. The composition of inventory, net is as follows:



	For the years ended June 30,
	2018		2017
Raw materials	$	652,613	$	864,813
Work in process	192,287		336,934
Finished goods	978,514		716,191
Total inventory	$	1,823,414	$	1,917,938

Valuation allowance activity for the years ended June 30, 2018 and 2017 was as follows:



	For the years ended June 30,
	2018		2017
Balance, July 1	$	347,014	$	198,120
Provision for valuation allowance	114,000		150,000
Write-off	—		(1,106		)
Balance, June 30	$	461,014	$	347,014

Property and Equipment

Property and equipment consist of the following at:



	June 30,
	2018			2017
Equipment	$	701,848		$	695,311
Furniture and fixtures	143,330			99,321
Leasehold improvement	28,549			28,549
	873,727			823,181
Less: Accumulated depreciation and amortization	(797,459		)	(768,289		)
	$	76,268		$	54,892

Intangible Assets and Long-Lived Assets

Accrued Warranties

Fair Value of Financial Instruments

Revenue Recognition

- Persuasive evidence of an arrangement exists

- Delivery has occurred

-The Company's price or fee is fixed or determinable

-Collectability is reasonably assured

Shipping and Handling Revenues and Costs

Shipping and handling revenues are included in product revenue and the related costs are included in cost of goods sold.

Stock-Based Compensation

Research and Development

All research and development costs are charged to operations as incurred.

Advertising Costs

Advertising costs are charged to operations as incurred. Advertising expense for the years ended June 30, 2018 and 2017 was $27,000 and $31,000, respectively.

Earnings (Loss) Per Share



	For the Year Ended June 30,		For the Year Ended June 30,
	2018		2017
Numerator:
Numerator for basic earnings per share
Net income (loss)	$	583,675	$	(726,895	)
Undeclared dividends on preferred stock	19,368		—
Net income (loss) applicable to common shareholders	$	564,307	$	(726,895	)
Numerator for diluted earnings per share:
Net income (loss) applicable to common shareholders	$	564,307	$	(726,895	)
Undeclared dividends on preferred stock	19,368		—
Net income (loss)	$	583,675	$	(726,895	)
Denominator:
Denominator for basic earnings per share - weighted average shares outstanding	7,551,057		7,551,430
Weighted average preferred stock converted to common stock	1,590,411		—
Denominator for diluted earnings per share - weighted average and assumed conversion	9,141,468		7,551,430

Net income (loss) per share
Basic net income (loss) per share	$	0.07	$	(0.10	)
Diluted net income (loss) per share	$	0.06	$	(0.10	)

The following table summarizes securities that, if exercised would have an anti-dilutive effect on earnings per share.



	For the Year Ended June 30,	For the Year Ended June 30,
	2018	2017
Stock options	367,500	502,000
Total potential dilutive securities not included in income per share	367,500	502,000

Income Taxes

Reclassifications

Certain items in the June 30, 2017 consolidated financial statements have been reclassified to conform to the current period presentation.

New Accounting Pronouncements

Recently Issued Accounting Standards

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, to clarify the principles of recognizing revenue and create common revenue recognition guidance under US GAAP and International Financial Reporting Standards. Following the FASB's finalization of a one year deferral of this standard, the ASU is now effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017, with early adoption permitted for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2016. This ASU can be adopted either retrospectively to each reporting period presented or as a cumulative effect adjustment as of the date of the adoption. The standard supersedes existing revenue recognition guidance and places it with a five step revenue model with a core principle that an entity recognizes revenue to reflect the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services.

The Company adopted the new guidance on July 1, 2018, using the modified retrospective transition method and applying this approach to those contracts that were not completed as of that date. The Company completed its evaluation of customer agreements and changes to its controls to support recognition and disclosures under the new guidance. The Company does not expect the adoption of the standards to have a material impact on its consolidated financial statements.

In November 2015 FASB issued Accounting Standards Update No. 2015-17 Income Taxes (Topic 740) Balance Sheet Classification of Deferred Taxes to reduce complexity in accounting standards. The amendments require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. For public business entities, the amendments in this Update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The adoption of this standard did not have a material impact to the Company’s consolidated financial statements.

In February 2016 FASB issued Accounting Standards Update No. 2016-02 Leases (Topic 842) that changes the recognition of lease assets and lease liabilities by lessees for those leases classified as operating lease. The amendments in this Update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years for a public business entity. Early adoption is permitted. Management is evaluating the standard's impact on the consolidated financial statements.

In March 2016 FASB issued Accounting Standards Update No. 2016-09 Compensation-Stock Compensation -(Topic 718) Improvements to employee share-based payments accounting as part of simplicity initiatives. This update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Some of the areas for simplification apply only to nonpublic entities. For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The adoption of this standard did not have a material impact to the Company’s consolidated financial statements.

In June 2016 the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which adds a new Topic 326 to the Codification and removes the thresholds that companies apply to measure credit losses on financial instruments measured at amortized cost, such as loans, receivables, and held-to-maturity debt securities. The guidance in ASU 2016-13 is effective for “public business entities,” as defined, that are SEC filers for fiscal years and for interim periods with those fiscal years beginning after December 15, 2019. Early adoption of the guidance is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements.

In August 2016 FASB issued Accounting Standards Update No. 2016-15 Statement of Cash Flows (Topic 230)Classification of Certain Cash Receipts and Cash Payments. The amendments in this Update provide guidance on the eight specific cash flow issues and apply to all entities, including both business entities and not-for-profit entities that are required to present a statement of cash flows under Topic 230. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements.

In November 2016 the FASB issued ASU 2016-18 Statement of Cash Flows (Topic 230)The amendments in this Update require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The adoption of this standard does not have a material impact to the Company’s consolidated financial statements.

In January 2017 FASB issued Accounting Standards Update No. 2017-04 Intangibles—Goodwill and Other (Topic 350)Simplifying the Test for Goodwill Impairment.Under the amendments in this update an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The amendments in this Update are required for public business entities and other entities that have goodwill reported in their financial statements and have not elected the private company alternative for the subsequent measurement of goodwill. A public business entity that is a U.S. Securities and Exchange Commission (SEC) filer should adopt the amendments in this Update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements.

In May 2017 FASB issued the amendments in ASU 2017-09- Compensation-Stock Compensation (“ASC Topic 718”): Scope of Modification Accounting: These amendments provide guidance on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting under Topic 718. For public companies, these amendments are effective for annual periods beginning after December 15, 2017, including interim periods within those periods. While early application is permitted, including adoption in an interim period, the Company has not elected to early adopt. The effectiveness of this update is not expected to have a significant effect on the Company’s consolidated financial position or results of operations.

In June 2018 the FASB issued ASU 2018-07 "Improvements to Nonemployee Share-Based Payment Accounting (Topic 718)" that expands the scope to include share-based payment transactions for acquiring goods and services from non-employees. An entity should apply the requirements to nonemployee awards except for certain exemptions specified in the amendment. The guidance is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within that fiscal year. Early adoption is permitted. The Company does not anticipate the adoption of ASU 2018-07 will have a material impact on the Company's financial condition or results of operations.