Pennsylvania | 33-0272839 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer | o | Accelerated filer | o | |||
Non-accelerated filer | x | Smaller reporting company | x | |||
Emerging growth company | o |
Page | ||
Item 4. | ||
Item 6. | Selected Financial Data—omitted pursuant to item 301(c) of Regulation S-K | |
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk—omitted pursuant to item 305(e) of Regulation S-K | |
• | The timing and expense of new product introductions by the Company or its competitors, although the Company might not successfully develop new products and any such new products may not gain market acceptance; |
• | The cancellation or delays in the purchase of the Company’s products; |
• | Fluctuations in customer demand for the Company’s products; |
• | Changes in domestic and foreign regulations; |
• | The gain or loss of significant customers; |
• | Changes in the mix of products sold by the Company; |
• | Competitive pressures on prices at which the Company can sell its products; |
• | Announcements of new strategic relationships by the Company or its competitors; |
• | Litigation costs and settlements; and |
• | General economic conditions and other external factors such as energy costs. |
• | The price of the products; |
• | The continued receipt of regulatory approvals for multiple indications; |
• | The establishment and demonstration of the clinical safety and efficacy of the Company’s products; and |
• | The advantages of the Company’s products over those marketed by the Company’s competitors. |
• | Properly identify customer needs; |
• | Innovate and develop new technologies, services and applications; |
• | Establish adequate product distribution coverage; |
• | Obtain and maintain required regulatory approvals from the FDA and other regulatory agencies; |
• | Protect the Company’s intellectual property; |
• | Successfully commercialize new technologies in a timely manner; |
• | Manufacture and deliver the Company’s products in sufficient volumes on time; |
• | Differentiate the Company’s offerings from the offerings of the Company’s competitors; |
• | Price the Company’s products competitively; |
• | Anticipate competitors’ announcements of new products, services or technological innovations; and |
• | Anticipate general market and economic conditions. |
• | Acquisitions, strategic alliances, joint ventures and divestitures that the Company effects, if any; |
• | Announcements of technological innovations; |
• | Changes in marketing, product pricing and sales strategies or new products by the Company’s competitors; |
• | Changes in domestic or foreign governmental regulations or regulatory requirements; and |
• | Developments or disputes relating to patent or proprietary rights and public concern as to the safety and efficacy of the procedures for which the Company’s products are used. |
• | sales returns; |
• | allowances for doubtful accounts; |
• | inventories |
• | intangible assets; |
• | income and other tax accruals; |
• | deferred tax asset valuation allowances; |
• | sales discounts; |
• | warranty obligations; and |
• | accrued lease termination costs |
• | contingencies and litigation. |
• | Consolidated net revenue decreased approximately $1,775,000 or 15.6%, to $9,627,000 during the year ended June 30, 2019 as compared to the last fiscal year. The decrease in net revenue is attributed to a decrease in EMI's total product sales of $316,000, related to a decrease in ophthalmic fundus photography system product sales of $384,000 as the Company discontinued the manufacturing of ophthalmic fundus photography systems offset by an increase in revenue from service plans of $68,000, a decrease in sales of Trek products of $243,000 due to back order related to sterilization and a decrease in sales in Sonomed's ultrasound products of $1,216,000, primarily attributable to decreases within North America, Latin America, Asia Pacific markets and Middle East. |
• | Consolidated cost of goods sold totaled approximately $4,997,000, or 51.9%, of total revenue for the year ended June 30, 2019, as compared to $6,300,000, or 55.3%, of total revenue for the of the prior fiscal year. The decrease of 3.4% in cost of goods sold as a percentage of total revenue is mainly due to changes in product sales mix and improved pricing. |
• | Consolidated marketing, general and administrative expenses decreased $255,000, or 5.8%, to $4,142,000 for the fiscal year ended June 30, 2019, as compared to the prior fiscal year. The decrease is mainly due to decreased legal expense, decreased salary, commission and fringe benefits expense offset by increased consulting expense. |
• | Consolidated research and development expenses increased $240,000, or 48.0%, to $740,000 for the fiscal year ended June 30, 2019, as compared to the prior fiscal year. Research and development expenses were primarily expenses associated with the introduction of new or enhanced products. The increase in research and development expense is mainly due to expense for AXIS software development work and ultrasound certification costs incurred during the fiscal year ended June 30, 2019. |
For the years ended June 30, | |||||||||||
2019 | 2018 | % Change | |||||||||
Net Revenue: | |||||||||||
Products | $ | 8,707 | $ | 10,550 | (17.5 | )% | |||||
Service plans | $ | 920 | $ | 852 | 8.0 | % | |||||
Total | $ | 9,627 | $ | 11,402 | (15.6 | )% |
For the years ended June 30, | ||||||||||||||
2019 | 2018 | |||||||||||||
Domestic | $ | 5,587 | 58.0 | % | $ | 6,802 | 59.7 | % | ||||||
Foreign | 4,040 | 42.0 | % | 4,600 | 40.3 | % | ||||||||
Total | $ | 9,627 | 100.0 | % | $ | 11,402 | 100.0 | % |
For the years ended June 30, | ||||||||||||||
2019 | % | 2018 | % | |||||||||||
Cost of Goods Sold: | ||||||||||||||
$ | 4,997 | 51.9 | % | $ | 6,300 | 55.3 | % | |||||||
Total | $ | 4,997 | 51.9 | % | $ | 6,300 | 55.3 | % |
For the years ended June 30, | |||||||||||
2019 | 2018 | % Change | |||||||||
Marketing, General and Administrative: | |||||||||||
$ | 4,142 | $ | 4,397 | (5.8 | )% | ||||||
Total | $ | 4,142 | $ | 4,397 | (5.8 | )% |
For the years ended June 30, | |||||||||||
2019 | 2018 | % Change | |||||||||
Research and Development: | |||||||||||
$ | 740 | $ | 500 | 48.0 | % | ||||||
Total | $ | 740 | $ | 500 | 48.0 | % |
June 30, | June 30, | |||
2019 | 2018 | |||
Current Ratio: | ||||
Current assets | $4,313 | $4,584 | ||
Less: Current liabilities | 2,260 | 2,247 | ||
Working capital | $2,053 | $2,337 | ||
Current ratio | 1.91 to 1 | 2.04 to 1 | ||
Debt to Total Capital Ratio: | ||||
Line of credit and note payable | $220 | $186 | ||
Total debt | 220 | 186 | ||
Total equity | 2,162 | 2,412 | ||
Total capital | $2,382 | $2,598 | ||
Total debt to total capital | 9.2% | 7.0% |
Page | |
/s/ Friedman LLP | |
We have served as the Company’s auditor since 2018. | |
Marlton, New Jersey | |
September 27, 2019 | |
ESCALON MEDICAL CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS | |||||||
June 30, 2019 | June 30, 2018 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 409,743 | $ | 874,002 | |||
Restricted cash | 253,135 | 250,000 | |||||
Accounts receivable, net | 1,496,105 | 1,387,133 | |||||
Inventories | 1,878,860 | 1,823,414 | |||||
Other current assets | 274,993 | 249,620 | |||||
Total current assets | 4,312,836 | 4,584,169 | |||||
Property and equipment, net | 67,896 | 76,268 | |||||
Trademarks and trade names | 605,006 | 605,006 | |||||
License, net | 141,700 | 161,350 | |||||
Total assets | $ | 5,127,438 | $ | 5,426,793 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Line of credit | $ | 201,575 | $ | 165,000 | |||
Current portion of note payable | 3,401 | 3,153 | |||||
Accounts payable | 666,510 | 528,844 | |||||
Accrued expenses | 656,707 | 762,032 | |||||
Related party accrued interest | 112,389 | 112,389 | |||||
Current portion of post-retirement benefits (related party) | 101,891 | 101,891 | |||||
Deferred revenue | 426,803 | 481,180 | |||||
Liabilities of discontinued operations | 90,933 | 92,532 | |||||
Total current liabilities | 2,260,209 | 2,247,021 | |||||
Note payable, net of current portion | 14,896 | 18,037 | |||||
Accrued post-retirement benefits, net of current portion (related party) | 690,094 | 749,480 | |||||
Total long-term liabilities | 704,990 | 767,517 | |||||
Total liabilities | 2,965,199 | 3,014,538 | |||||
Commitments and contingencies (Note 8) | |||||||
Shareholders' equity: | |||||||
Series A convertible preferred stock, $0.001 par value; 2,000,000 shares authorized; 2,000,000 shares issued and outstanding (liquidation value of $715,968 and $664,368) | 645,000 | 645,000 | |||||
Common stock, $0.001 par value; 35,000,000 shares authorized; 7,415,329 shares issued and outstanding as of June 30, 2019 and June 30, 2018 | 7,415 | 7,415 | |||||
Additional paid-in capital | 69,702,043 | 69,702,043 | |||||
Accumulated deficit | (68,192,219 | ) | (67,942,203 | ) | |||
Total shareholders’ equity | 2,162,239 | 2,412,255 | |||||
Total liabilities and shareholders’ equity | $ | 5,127,438 | $ | 5,426,793 |
ESCALON MEDICAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
For the Years Ended June 30, | ||||||||
2019 | 2018 | |||||||
Net revenues: | ||||||||
Products | $ | 8,707,154 | $ | 10,550,272 | ||||
Service plans | 919,509 | 852,000 | ||||||
Revenues, net | 9,626,663 | 11,402,272 | ||||||
Costs and expenses: | ||||||||
Cost of goods sold | 4,997,461 | 6,299,720 | ||||||
Marketing, general and administrative | 4,142,392 | 4,397,498 | ||||||
Research and development | 739,765 | 500,334 | ||||||
Total costs and expenses | 9,879,618 | 11,197,552 | ||||||
(Loss) income from operations | (252,955 | ) | 204,720 | |||||
Other income (expense) | ||||||||
Other income | 11,122 | 500,000 | ||||||
Interest income | 9,170 | 4,642 | ||||||
Interest expense | (17,353 | ) | (125,687 | ) | ||||
Total other income, net | 2,939 | 378,955 | ||||||
Net (loss) income | (250,016 | ) | 583,675 | |||||
Undeclared dividends on preferred stocks | 51,600 | 19,368 | ||||||
Net (loss) income applicable to common shareholders | $ | (301,616 | ) | $ | 564,307 | |||
Net (loss) income per share | ||||||||
Basic (loss) income per share | $ | (0.04 | ) | $ | 0.07 | |||
Diluted (loss) income per share | $ | (0.04 | ) | $ | 0.06 | |||
Weighted average shares—basic | 7,415,329 | 7,551,057 | ||||||
Weighted average shares—diluted | 7,415,329 | 9,141,468 |
ESCALON MEDICAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY FOR THE YEARS ENDED JUNE 30, 2019 AND 2018 | |||||||||||||||||||||||||||||||
Common Stock | Series A Convertible Preferred Stock | Additional Paid-in Capital | Accumulated Deficit | Total Shareholders’ Equity | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||
Balance at June 30, 2018 | 7,415,329 | $ | 7,415 | 2,000,000 | $ | 645,000 | $ | 69,702,043 | $ | (67,942,203 | ) | $ | 2,412,255 | ||||||||||||||||||
Net loss | — | — | — | — | — | — | (250,016 | ) | (250,016 | ) | |||||||||||||||||||||
Balance at June 30, 2019 | 7,415,329 | $ | 7,415 | — | 2,000,000 | — | $ | 645,000 | — | $ | 69,702,043 | — | $ | (68,192,219 | ) | — | $ | 2,162,239 |
Common Stock | Series A Convertible Preferred Stock | Additional Paid-in Capital | Accumulated Deficit | Total Shareholders’ Equity | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||
Balance at June 30, 2017 | 7,551,430 | $ | 7,551 | — | $ | — | $ | 69,701,907 | $ | (68,525,878 | ) | $ | 1,183,580 | ||||||||||||||||||
Issuance of stock for debt | — | — | 2,000,000 | 645,000 | — | — | 645,000 | ||||||||||||||||||||||||
Net income | — | — | — | — | — | 583,675 | 583,675 | ||||||||||||||||||||||||
Cancellation of common stock | (136,101 | ) | (136 | ) | — | — | 136 | — | — | ||||||||||||||||||||||
Balance at June 30, 2018 | 7,415,329 | $ | 7,415 | — | 2,000,000 | — | $ | 645,000 | — | $ | 69,702,043 | — | $ | (67,942,203 | ) | — | $ | 2,412,255 |
ESCALON MEDICAL CORP. AND SUBSIDIARIES | |||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
For the years ended June 30, | |||||||
2019 | 2018 | ||||||
Cash Flows from Operating Activities: | |||||||
Net (loss) income | $ | (250,016 | ) | $ | 583,675 | ||
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | |||||||
Recovery of allowance of doubtful accounts | (5,450 | ) | (53,190 | ) | |||
Other income | — | (500,000 | ) | ||||
Depreciation and amortization | 50,139 | 49,218 | |||||
Change in operating assets and liabilities: | |||||||
Accounts receivable | (103,522 | ) | 149,827 | ||||
Inventories | (55,446 | ) | 94,524 | ||||
Other current assets | (25,373 | ) | (40,076 | ) | |||
Accounts payable | 137,666 | (518,619 | ) | ||||
Accrued expenses | (105,325 | ) | 237,930 | ||||
Related party accrued interest | — | 59,162 | |||||
Accrued post-retirement benefits (related party) | (59,386 | ) | (49,867 | ) | |||
Deferred revenue | (54,377 | ) | 92,745 | ||||
Liabilities of discontinued operations | (1,599 | ) | 1,407 | ||||
Net cash (used in) provided by operating activities | (472,689 | ) | 106,736 | ||||
Cash Flows from Investing Activities: | |||||||
Proceeds from sales of source code licensing agreement | — | 500,000 | |||||
Purchase of equipment | (22,117 | ) | (29,352 | ) | |||
Purchase of licenses | — | (12,500 | ) | ||||
Net cash (used in) provided by investing activities | (22,117 | ) | 458,148 | ||||
Cash Flows from Financing Activities: | |||||||
Proceeds from related party note payable | — | 100,000 | |||||
Repayment of note payable | (2,893 | ) | — | ||||
Proceeds from (repayment of ) line of credit | 36,575 | (85,000 | ) | ||||
Net cash provided by financing activities | 33,682 | 15,000 | |||||
Net (decrease) increase in cash, cash equivalents and restricted cash | (461,124 | ) | 579,884 | ||||
Cash, cash equivalents and restricted cash, beginning of year | 1,124,002 | 544,118 | |||||
Cash, cash equivalents and restricted cash, end of year | $ | 662,878 | $ | 1,124,002 | |||
Cash, cash equivalents and restricted cash consist of the following: | |||||||
End of year | |||||||
Cash and cash equivalents | $ | 409,743 | $ | 874,002 | |||
Restricted cash | 253,135 | 250,000 | |||||
$ | 662,878 | $ | 1,124,002 | ||||
Beginning of year | |||||||
Cash and cash equivalents | $ | 874,002 | $ | 544,118 | |||
Restricted cash | 250,000 | — |
$ | 1,124,002 | $ | 544,118 | ||||
Supplemental Schedule of Cash Flow Information: | |||||||
Interest paid | $ | 44,315 | $ | 37,811 | |||
Non Cash Finance and Investing Activities | |||||||
Note payable for acquisition of vehicle | $ | — | $ | 22,372 | |||
Related party note payable converted to preferred stock | $ | — | $ | 645,000 |
June 30, | |||||||
2019 | 2018 | ||||||
Balance, July 1 | $ | 118,930 | $ | 172,120 | |||
Recovery in bad debts | (5,450 | ) | (45,593 | ) | |||
Write-offs | (2,973 | ) | (7,597 | ) | |||
Balance, June 30 | $ | 110,507 | $ | 118,930 |
For the years ended June 30, | |||||||
2019 | 2018 | ||||||
Raw materials | $ | 874,985 | $ | 652,613 | |||
Work in process | 225,254 | 192,287 | |||||
Finished goods | 778,621 | 978,514 | |||||
Total inventories | $ | 1,878,860 | $ | 1,823,414 |
Property Plant and Equipment | |||||||
June 30, | |||||||
2019 | 2018 | ||||||
Equipment | $ | 717,460 | $ | 701,848 | |||
Furniture and fixtures | 149,835 | 143,330 | |||||
Leasehold improvements | 28,549 | 28,549 | |||||
895,844 | 873,727 | ||||||
Less: Accumulated depreciation and amortization | (827,948 | ) | (797,459 | ) | |||
$ | 67,896 | $ | 76,268 |
For the years ended June 30, | |||||||||
2019 | 2018 | ||||||||
Numerator: | |||||||||
Numerator for basic earnings (loss) per share: | |||||||||
Net (loss) income | $ | (250,016 | ) | $ | 583,675 | ||||
Undeclared dividends on preferred stock | 51,600 | 19,368 | |||||||
Net (loss) income applicable to common shareholders | $ | (301,616 | ) | $ | 564,307 | ||||
Numerator for diluted earnings per share: | |||||||||
Net (loss) income applicable to common shareholders | $ | (301,616 | ) | $ | 564,307 | ||||
Undeclared dividends on preferred stock | 51,600 | 19,368 | |||||||
Net (loss) income | $ | (250,016 | ) | $ | 583,675 | ||||
Denominator: | |||||||||
Denominator for basic earnings (loss) per share - weighted average shares outstanding | 7,415,329 | 7,551,057 | |||||||
Weighted average preferred stock converted to common stock | — | 1,590,411 | |||||||
Denominator for diluted earnings (loss) per share - weighted average and assumed conversion | 7,415,329 | — | 9,141,468 | ||||||
Net (loss) income per share: | |||||||||
Basic net (loss) income per share | $ | (0.04 | ) | $ | 0.07 | ||||
Diluted net (loss) income per share | $ | (0.04 | ) | $ | 0.06 |
For the years ended June 30, | ||||||
2019 | 2018 | |||||
Stock options | 213,000 | 367,500 | ||||
Convertible preferred stock | 4,773,120 | — | ||||
Total potential dilutive securities not included in income per share | 4,986,120 | 367,500 |
2019 | 2018 | ||||||
Trademarks and trade names | |||||||
Net carrying amount | $ | 605,006 | $ | 605,006 | |||
Total | $ | 605,006 | $ | 605,006 |
Gross Carrying Amount | Impairment | Adjusted Gross Carrying Amount | Accumulated Amortization | Net Carrying Value | |||||||||||||||
Amortized Intangible Assets Licenses | |||||||||||||||||||
$ | 199,000 | $ | — | $ | 199,000 | $ | (57,300 | ) | $ | 141,700 | |||||||||
Total | $ | 199,000 | $ | — | $ | 199,000 | $ | (57,300 | ) | $ | 141,700 |
Gross Carrying Amount | Impairment | Adjusted Gross Carrying Amount | Accumulated Amortization | Net Carrying Value | |||||||||||||||
Amortized Intangible Assets Licenses | |||||||||||||||||||
$ | 199,000 | $ | — | $ | 199,000 | $ | (37,650 | ) | $ | 161,350 | |||||||||
Total | $ | 199,000 | $ | — | $ | 199,000 | $ | (37,650 | ) | $ | 161,350 |
June 30, 2019 | June 30, 2018 | ||||||
Accrued compensation | $ | 396,609 | $ | 424,871 | |||
Line of credit interest accrual | 1,013 | 29,797 | |||||
Customer deposits | 16,006 | 61,494 | |||||
Warranty reserve | 32,078 | 32,078 | |||||
Sales tax payable | 100,582 | 104,539 | |||||
Rent payable | 70,587 | 49,458 | |||||
Other accruals | 39,832 | 59,795 | |||||
Total accrued expenses | $ | 656,707 | $ | 762,032 |
2019 | 2018 | ||||||||||||
Common Stock Options | Weighted Average Exercise Price | Common Stock Options | Weighted Average Exercise Price | ||||||||||
Outstanding at the beginning of the year | 367,500 | $ | 1.78 | 502,000 | $ | 2.12 | |||||||
Granted | — | — | — | — | |||||||||
Exercised | — | — | — | — | |||||||||
Forfeited | (154,500 | ) | 2.21 | (134,500 | ) | $ | 3.05 | ||||||
Outstanding at the end of the year | 213,000 | $ | 1.48 | 367,500 | $ | 1.78 | |||||||
Exercisable at the end of the year | 213,000 | $ | 1.48 | 367,500 | 1.78 | ||||||||
Weighted average fair value of options granted during the year | $ | — | $ | — |
Number Outstanding at June 30, 2019 | Weighted Average Remaining Contractual Life (Years) | Weighted Average Exercise Price | Number Exercisable at June 30, 2019 | Weighted Average Exercise Price | |||||||||||
Range of Exercise Prices | |||||||||||||||
$0.79 | 21,000 | 6.83 | $ | 0.79 | 21,000 | $ | 0.79 | ||||||||
$1.45 to $2.12 | 192,000 | 3.52 | $ | 1.55 | 192,000 | $ | 1.55 | ||||||||
Total | 213,000 | 213,000 |
2019 | 2018 | ||||||
Current income tax (benefit) provision | |||||||
Federal | $ | — | $ | — | |||
State | — | — | |||||
— | — | ||||||
Deferred income tax provision | |||||||
Federal | 44,287 | (3,498,532 | ) | ||||
State | 12,653 | (999,581 | ) | ||||
Change in valuation allowance | (56,941 | ) | 4,498,113 | ||||
— | — | ||||||
Income tax (benefit) | $ | — | $ | — |
2019 | 2018 | ||||
Statutory federal income tax rate | 21.00 | % | 34.00 | % | |
Permanent differences | 0.00 | % | (0.51 | )% | |
Tax Act-revaluation of net deferred tax assets | 0.00 | % | (33.49 | )% | |
Valuation allowance | (21.00 | )% | 0.00 | % | |
Effective income tax rate | 0.00 | % | 0.00 | % |
2019 | 2018 | ||||||
Deferred income tax assets: | |||||||
Net operating loss carryforward | $ | 7,102,298 | $ | 7,042,134 | |||
Executive post retirement costs | 166,317 | 178,788 | |||||
General business credit | 207,698 | 207,698 | |||||
Allowance for doubtful accounts | 23,207 | 24,975 | |||||
Accrued vacation | 40,565 | 46,527 | |||||
Inventory reserve | 102,002 | 96,813 | |||||
Accelerated depreciation | 127,642 | 119,980 | |||||
Warranty reserve | 6,736 | 6,736 | |||||
Total deferred income tax assets | 7,776,465 | 7,723,651 | |||||
Valuation allowance | (7,619,657 | ) | (7,562,716 | ) | |||
156,808 | 160,935 | ||||||
Deferred income tax liabilities: | |||||||
Accelerated depreciation | (156,808 | ) | (160,935 | ) | |||
Total deferred income tax liabilities | (156,808 | ) | (160,935 | ) | |||
$ | — | $ | — |
Year Ending June 30, | Lease Obligations | ||
2020 | 356,414 | ||
2021 | 272,881 | ||
2022 | 256,311 | ||
2023 | 188,755 | ||
2024 | 189,790 | ||
Thereafter | 96,830 | ||
Total | $ | 1,360,981 |
2019 | 2018 | |
Balance July 1, | $851,371 | $901,238 |
Actuarial adjustment | 42,505 | 52,024 |
Payment of benefits | (101,891) | (101,891) |
Balance June 30, | $791,985 | $851,371 |
June 30, | June 30, | ||||||
2019 | 2018 | ||||||
Assets | |||||||
Total assets | $ | — | $ | — | |||
Liabilities | |||||||
Accrued lease termination costs | 91 | 93 | |||||
Total liabilities | 91 | 93 | |||||
Net liabilities of discontinued operations | $ | (91 | ) | $ | (93 | ) |
For the years ended June 30, | ||||||||||||||
2019 | 2018 | |||||||||||||
Domestic | $ | 5,587 | 58.0 | % | $ | 6,802 | 59.7 | % | ||||||
Foreign | 4,040 | 42.0 | % | 4,600 | 40.3 | % | ||||||||
Total | $ | 9,627 | 100.0 | % | $ | 11,402 | 100.0 | % |
• | Unsatisfied Performance Obligations - all performance obligations relate to contracts with a duration of less than one year, the Company has elected to apply the optional exemption provided in ASC 606 and therefore, is not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. |
• | Contract Costs - all incremental customer contract acquisition costs are expensed as they are incurred as the amortization period of the asset that the Company otherwise would have recognized is one year or less in duration. |
• | Significant Financing Component - the Company does not adjust the promised amount of consideration for the effects of a significant financing component as the Company expects, at contract inception, that the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. |
• | Sales Tax Exclusion from the Transaction Price - the Company excludes from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from the customer. |
• | Shipping and Handling Activities - the Company elected to account for shipping and handling activities as a fulfillment cost rather than as a separate performance obligation. |
• | Modified Retrospective Method - the Company adopted ASC 606 on July 1, 2018 utilizing the modified retrospective method allowing the Company to not retrospectively adjust prior periods. The Company applied the modified retrospective method only to contracts that were not completed at July 1, 2018 and accounted for the aggregate effect of any contract modifications upon adoption. |
• | Portfolio Approach - the Company applied the Portfolio Approach to contract reviews within its identified revenue streams that have similar characteristics and the Company believes this approach would not differ materially than if applying Topic 606 to each individual contract. |
Years ended June 30, | ||||||||
2019 | 2018 | |||||||
Beginning of Year | $ | 481,000 | $ | 388,000 | ||||
Additions | 888,000 | 969,000 | ||||||
Revenue Recognized | 942,000 | 876,000 | ||||||
End of Year | $ | 427,000 | $ | 481,000 |
• | Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets; |
• | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and directors; and |
• | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on our financial statements. |
ITEM 11. | EXECUTIVE COMPENSATION |
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES |
1. | Documents Filed as Part of This Annual Report on Form 10-K: |
a. | Financial Statements |
2. | Financial Statement Schedules |
3. | EXHIBITS |
3.1 | (a) | Restated Articles of Incorporation of the Company. (8) | |
(b) | Agreement and Plan of Merger dated as of September 28, 2001 between Escalon Pennsylvania, Inc. and Escalon Medical Corp. (8) | ||
(c) | Statement with respect to shares dated February 15, 2018. (18) | ||
3.2 | Bylaws of Registrant. (8) | ||
10.6 | Employment Agreement between the Company and Richard J. DePiano dated May 12, 1998. (6)** | ||
10.7 | Non-Exclusive Distributorship Agreement between Company and Scott Medical Products dated October 12, 2000. (9) | ||
10.13 | Supply Agreement between the Company and Bausch & Lomb Surgical, Inc. dated August 13, 1999. (5) | ||
10.29 | Company’s amended and restated 1999 Equity Incentive Plan. (13) ** |
10.33 | Manufacturing Supply and Distribution Agreement between Sonomed, Inc. and Ophthalmic Technologies, Inc. dated as of March 11, 2004. (15) | |
10.34 | Supplemental Executive Retirement Benefit Agreement for Richard DePiano dated June 23, 2005. (16)** | |
10.35 | Settlement Agreement with Intralase Corp, dated February 27, 2008 (4). | |
10.36 | Vascular Access Sales Agreement with Vascular Solutions, Inc. dated April 28, 2010 (17) | |
10.37 | 2013 Equity Incentive Plan dated December 27, 2013 incorporate by reference. | |
10.38 | Debt Exchange Agreement as of February 14, 2018 (18) | |
10.39 | Business Loan Agreement with TD Bank, N.A. dated June 29, 2018. (19) | |
10.40 | Promissory Note dated June 29, 2018 between the Company and TD Bank N.A. (19) | |
10.41 | Agreement of Deposit Account dated June 29, 2018 between the Company and TD Bank N.A. (19) | |
21 | Subsidiaries. (11) | |
23.1 | ||
31.1 | ||
31.2 | ||
32.1 | ||
32.2 |
* | Filed herewith |
** | Management contract of compensatory plan |
(1) | Filed as an exhibit to Pre-Effective Amendment No. 2 to the Company’s Registration Statement on Form S-1 dated November 9, 1993 (Registration No. 33-69360). |
(2) | Filed as an exhibit to the Company’s Form 10-KSB for the year ended June 30, 1994. |
(3) | Filed as an exhibit to the Company’s Form 10-KSB for the year ended June 30, 1995. |
(4) | Filed as an exhibit to the Company’s Form 8-K dated February 27, 2008. |
(5) | Filed as an exhibit to the Company’s Form 10-KSB for the year ended June 30, 1999. |
(6) | Filed as an exhibit to the Company’s Form 8-K/A, dated March 31, 2000 |
(7) | Filed as an exhibit to the Company’s Registration Statement on Form s-* dated February 25, 2000 (Registration No. 333-31138). |
(8) | Filed as an exhibit to the Company’s Proxy Statement on Schedule 14A, as filed by the Company with the SEC on September 21, 2001. |
(9) | Filed as an exhibit to the Company’s Form 10-KSB for the year ended June 30, 2001. |
(10) | Filed as an exhibit to the Company’s Form 10-Q for the quarter ended March 31, 2001. |
(11) | Filed as an exhibit to the Company’s Form 10-KSB/A for the year ended June 30, 2002. |
(12) | Filed as an exhibit to the Company’s Form 10-Q for the quarter ended December 31, 2002. |
(13) | Filed as an exhibit to the Company’s Form 10-Q for the quarter ended December 31, 2003. |
(14) | Filed as an exhibit to the Company’s Registration Statement on Form S-3 dated April 8, 2004 (Registration No. 333-114332). |
(15) | Filed as an exhibit to the Company’s Form 10-Q for the quarter ended March 31, 2004. |
(16) | Filed as an exhibit to the Company’s Form 8-K, dated June 23, 2005. |
(17) | Filed as an exhibit to the Company’s Form 8-K, dated May 6, 2010. |
(18) | Filed as an exhibit to the Company's Form 8-K, dated February 15, 2018 |
(19) | Filed as exhibit to the Company's Form 8-K dated July 6, 2018 |
Escalon Medical Corp. | |||
(Registrant) | |||
By: | /s/ Richard J. DePiano, Jr. | ||
Richard J. DePiano, Jr. Chief Executive Officer |
By: | /s/ Richard J. DePiano | Chairman | September 27, 2019 |
Richard J. DePiano | |||
By: | /s/ Richard J. DePiano, Jr. | Chief Executive Officer (Principal Executive Officer) | September 27, 2019 |
Richard J. DePiano, Jr. | |||
By: | /s/ Mark Wallace | Chief Operating Officer and Principal Financial & Accounting Officer | September 27, 2019 |
Mark Wallace | |||
By: | /s/ John P. Dogum | Director | September 27, 2019 |
John P. Dogum | |||
By: | /s/ Lisa Napolitano | Director | September 27, 2019 |
Lisa Napolitano | |||
By: | /s/ C. Todd Trusk | Director | September 27, 2019 |
C. Todd Trusk | |||
By: | /s/ David J Jacovini | Director | September 27, 2019 |
David J Jacovini | |||
1. | I have reviewed this annual report on Form 10-K for the fiscal year ended June 30, 2019 of Escalon Medical Corp.; |
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; |
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 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant 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 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. |
/s/ Richard J. DePiano Jr. | |
Richard J. DePiano Jr. | |
Chief Executive Officer | |
Date: September 27, 2019 |
1. | I have reviewed this annual report on Form 10-K for the fiscal year ended June 30, 2019 of Escalon Medical Corp.; |
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; |
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 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant 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 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. |
/s/ Mark Wallace | |
Mark Wallace | |
Date: September 27, 2019 |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Richard J. DePiano Jr. | |
Richard J. DePiano Jr. | |
Chief Executive Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Mark Wallace | |
Mark Wallace | |
Chief Operating Officer and Principal Accounting & Financial Officer |
Intangible assets (Tables) |
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Significant Accounting Policies (Inventory) (Details) - USD ($) |
Jun. 30, 2019 |
Jun. 30, 2018 |
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schedule of inventory [Abstract] | ||
Inventory, Raw Materials, Net of Reserves | $ 874,985 | $ 652,613 |
Inventory, Work in Process, Net of Reserves | 225,254 | 192,287 |
Inventory, Finished Goods, Net of Reserves | 778,621 | 978,514 |
Inventory, net | $ 1,878,860 | $ 1,823,414 |
Label | Element | Value |
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Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents | $ 544,118 |
Cash | us-gaap_Cash | 544,118 |
Preferred Stock [Member] | ||
Net Income (Loss) Attributable to Parent | us-gaap_NetIncomeLoss | 0 |
Additional Paid-in Capital [Member] | ||
Net Income (Loss) Attributable to Parent | us-gaap_NetIncomeLoss | 0 |
Retained Earnings [Member] | ||
Net Income (Loss) Attributable to Parent | us-gaap_NetIncomeLoss | (250,016) |
Common Stock [Member] | ||
Net Income (Loss) Attributable to Parent | us-gaap_NetIncomeLoss | $ 0 |
Income Taxes |
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Income Tax Disclosure [Text Block] | Income Taxes The provision for income taxes for the years ended June 30, 2019 and 2018 consists of the following:
Income taxes (benefit) as a percentage of income (loss) for the years ended June 30, 2019 and 2018 differ from statutory federal income tax rate due to the following:
On December 22, 2017, the legislation commonly referred to as the Tax Cuts and Jobs Act (the "Tax Act") was enacted. The Tax Act revises the U.S. corporate income tax by, among other things, lowering the corporate income tax rate from 35% to 21%, adopting a quasi-territorial income tax system and setting limitations on deductibility of certain costs (e.g., interest expense). Due to the complexities involved in the accounting for the Tax Act, on December 22, 2017, the Securities and Exchange Commission's Staff Accounting Bulletin ("SAB")118 was issued to provide guidance to companies that have not yet completed their accounting for the tax Act in the period of enactment. SAB 118 provides that the Company include in its consolidated financial statements a reasonable estimate of the impacts on the Tax Act on earnings to the extent such estimate has been determined. Accordingly, the U.S. provision for income tax for 2018 is based on the reasonable estimate guidance provided by SAB 118. Pursuant to the SAB 118, the Company is allowed a measurement period of up to one year after the enactment date of the Tax Act to finalize the recording of the related tax impacts. As of December 22, 2018, the Company has completed the accounting for the effects of the Tax Act and there were no additional measurement adjustments. The components of the net deferred income tax assets and liabilities as of June 30, 2019 and 2018 are as follows:
As of June 30, 2019, the Company has a valuation allowance of $7,619,657, which primarily relates to the federal net operating loss carryforwards. During the year ended June 30, 2019, the valuation allowance increased by $56,941 and during the year ended June 30, 2018, the valuation decreased by $4,498,113. The valuation allowance is a result of management evaluating its estimates of the net operating losses available to the Company as they relate to the results of operations of acquired businesses subsequent to their being acquired by the Company. The Company evaluates a variety of factors in determining the amount of the valuation allowance, including the Company’s earnings history, the number of years the Company’s operating loss and tax credits can be carried forward, the existence of taxable temporary differences, and near-term earnings expectations. Future reversal of the valuation allowance will be recognized either when the benefit is realized or when it has been determined that it is more likely than not that the benefit will be realized through future earnings. Any tax benefits related to stock options that may be recognized in the future through reduction of the associated valuation allowance will be recorded as additional paid-in capital. The Company has available federal and state net operating loss carry forwards of approximately $32,329,000 and $3,273,000, respectively, of which $14,528,000 and $2,811,000, respectively, will expire over the next ten years, $17,353,000 and $461,000, respectively, will expire in years eleven through twenty, and $448,000 and $0, respectively, which will not expire. The Company continues to monitor the realization of its deferred tax assets based on changes in circumstances, for example, recurring periods of income for tax purposes following historical periods of cumulative losses or changes in tax laws or regulations. The Company’s income tax provision and management’s assessment of the realizability of the Company’s deferred tax assets involve significant judgments and estimates. If taxable income expectations change, in the near term the Company may be required to reduce the valuation allowance which would result in a material benefit to the Company’s results of operations in the period in which the benefit is determined by the Company. With few exceptions, the Company is no longer subject to audits by tax authorities for tax years prior to the year ended June 30, 2016. However, to the extent allowed by law, the tax authorities may have the right to examine prior periods where net operating losses were generated and carried forward, and make adjustments up to the amount of the net operating loss amount. At June 30, 2019, the Company did not have any significant unrecognized tax positions. The Company has provided what it believes to be an appropriate amount of tax for items that involve interpretation to the tax law. However, events may occur in the future that will cause the Company to reevaluate the current provision and may result in an adjustment to the liability for taxes. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Commitments The Company leases its manufacturing, research and corporate office facilities and certain equipment under non-cancelable operating lease arrangements. The future annual amounts to be paid under these arrangements as of June 30, 2019 are as follows:
The Company's current corporate office lease of 3,954 square feet located in 435 Devon Park Drive, Wayne, Pennsylvania will expire in December 31, 2019. In July 23, 2019 the Company entered into a lease agreement to lease 2,186 square feet located at 800 Devon Park Drive, Wayne, Pennsylvania under a five-year lease agreement after the current lease term ends. This lease agreement is effective January 1, 2020 with annual lease payments ranging between $62,301 and $68,769. Legal Proceedings The Company, from time to time is involved in various legal proceedings and disputes that arise in the normal course of business. These matters have included intellectual property disputes, contract disputes, employment disputes and other matters. The Company does not believe that the resolution of any of these matters has had or is likely to have a material adverse impact on the Company’s business, financial condition or results of operations. |
Accrued expense (Details) - USD ($) |
Jun. 30, 2019 |
Jun. 30, 2018 |
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Accrued expenses [Abstract] | ||
Employee-related Liabilities, Current | $ 424,871 | |
Interest Payable, Current | $ 112,389 | 112,389 |
Customer Deposits, Current | 61,494 | |
Product Warranty Accrual, Current | 32,078 | |
Sales and Excise Tax Payable | 104,539 | |
Accrued Rent | 49,458 | |
Other Accrued Liabilities, Current | 59,795 | |
Accrued Liabilities, Current | $ 656,707 | $ 762,032 |
Discontinued operation (Details) - USD ($) $ in Thousands |
Jan. 18, 2012 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2015 |
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BH Holdings, S.A.S [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Disposal Group, Including Discontinued Operation, Assets | $ 0 | $ 0 | ||
Disposal Group, Including Discontinued Operation, Other Liabilities, Current | 91 | 93 | $ 86 | |
Disposal Group, Including Discontinued Operation, Liabilities | 91 | 93 | ||
Assets (Liabilities) of Disposal Group, Including Discontinued Operation, Net | $ (91) | $ (93) | ||
BH Holdings, S.A.S [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Bankruptcy Proceedings, Operating Period During Liquidation | 3 months |
Concentration of credit risk (Details) - USD ($) |
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Jun. 30, 2019 |
Jun. 30, 2018 |
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Concentration Risk [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedules of Concentration of Risk, by Risk Factor [Table Text Block] | Concentration of Credit Risk Credit Risk Financial Instruments, which potentially subject the Company to concentration of credit risk, consist principally of cash and cash equivalents, restricted cash and trade receivables. Concentration of credit risk with respect to trade receivables is generally diversified due to the large number of entities comprising the Company's customer base and their dispersion across geographic areas principally within the United States and international. The Company routinely address the financial strength of its customer and, as a consequence, believes that its receivable credit risk exposure is limited. The Company does not require customers to post collateral. Major Customer No customer accounted for more than 10% of net sales during the years ended June 30, 2019 and 2018. As of June 30, 2019 the Company had no customer that represents more than 10% of the total accounts receivable balance. As of June 30, 2018 the Company had one customer that represents approximately 11% of the total accounts receivable balance. Major Supplier The Company's two largest suppliers accounted for 30% and 11% of the total purchase for the year ended June 30, 2019. The Company's two largest suppliers accounted for of total purchases for more than 41% and 36% of total purchase in in the year ended June 30, 2018. Foreign Sales Domestic and international sales from continuing operations are as follows: Table amounts are in thousands:
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Concentration Risk, Customer | 0.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration Risk, Credit Risk, Financial Instruments | 0.10 | 0.11 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Customer One [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration Risk [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration Risk, Supplier | 0.30 | 0.41 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Customer Two [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration Risk [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration Risk, Supplier | 0.11 | 0.36 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales Revenue, Net [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration Risk [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration Risk, Customer | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration Risk [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration Risk, Customer | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales Revenue, Net [Member] | Geographic Concentration Risk [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration Risk [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration Risk, Percentage | 100.00% | 100.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | $ 9,626,663 | $ 11,402,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Domestic [Member] | Sales Revenue, Net [Member] | Geographic Concentration Risk [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration Risk [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration Risk, Percentage | 58.03% | 59.66% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | $ 5,586,308 | $ 6,802,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
International [Member] | Sales Revenue, Net [Member] | Geographic Concentration Risk [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration Risk [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration Risk, Percentage | 41.97% | 40.34% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | $ 4,040,355 | $ 4,600,000 |
Capital Stock Transactions Compensation related cost (Details) |
12 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
| |
Share-based Goods and Nonemployee Services Transaction [Line Items] | |
Allocated Share-based Compensation Expense | $ 0 |
Income Taxes Schedule of deferred tax assets and liabilities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Deferred Tax Assets and Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] |
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Concentration of credit risk (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedules of Concentration of Risk, by Risk Factor [Table Text Block] | Concentration of Credit Risk Credit Risk Financial Instruments, which potentially subject the Company to concentration of credit risk, consist principally of cash and cash equivalents, restricted cash and trade receivables. Concentration of credit risk with respect to trade receivables is generally diversified due to the large number of entities comprising the Company's customer base and their dispersion across geographic areas principally within the United States and international. The Company routinely address the financial strength of its customer and, as a consequence, believes that its receivable credit risk exposure is limited. The Company does not require customers to post collateral. Major Customer No customer accounted for more than 10% of net sales during the years ended June 30, 2019 and 2018. As of June 30, 2019 the Company had no customer that represents more than 10% of the total accounts receivable balance. As of June 30, 2018 the Company had one customer that represents approximately 11% of the total accounts receivable balance. Major Supplier The Company's two largest suppliers accounted for 30% and 11% of the total purchase for the year ended June 30, 2019. The Company's two largest suppliers accounted for of total purchases for more than 41% and 36% of total purchase in in the year ended June 30, 2018. Foreign Sales Domestic and international sales from continuing operations are as follows: Table amounts are in thousands:
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Retirement and post retirement plans (Notes) |
12 Months Ended | |||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||
Retirement Benefits [Abstract] | ||||||||||||||||||||||
Postemployment Benefit Plans, Policy [Policy Text Block] | Retirement and Post-Retirement Plans The Company adopted a 401(k) retirement plan effective January 1, 1994. The Company’s employees become eligible for the plan commencing on the date of employment. Company contributions are discretionary, and no Company contributions have been made since the plan’s inception. On January 14, 2000, the Company acquired Sonomed. Sonomed adopted a 401(k) retirement plan effective on January 1, 1993. This plan has continued subsequent to the acquisition and is available only to Sonomed employees. There were no discretionary contributions for the fiscal years ended June 30, 2019 and 2018. On June 23, 2005 the Company entered into a Supplemental Executive Retirement Benefit Agreement with its Chairman, Mr. DePiano. The agreement provides for the payment of supplemental retirement benefits to the covered executive in the event of the covered executive’s termination of services. In January 2013 the covered executive retired and the Company is obligated to pay the executive $8,491 per month per life per life, with payments commencing the month after retirement. As of June 30, 2019 and 2018 approximately $792,000 and $851,000 was accrued for Mr. DePiano's retirement benefits, respectively. These amounts represent the approximate present value of the supplemental retirement benefits awarded using a discount rate of 4.5% as of June 30, 2019 and 2018, respectively. The changes related to post-retirement plans for the years ended June 30, 2019 and 2018 were as follows:
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Organization and Description of Business |
12 Months Ended |
---|---|
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business and Business Conditions | Escalon Medical Corp. ("Escalon" or "Company") is a Pennsylvania corporation initially incorporated in California in 1987, and reincorporated in Pennsylvania in November 2001. Within this document, the “Company” collectively shall mean Escalon, which includes its division called "Trek" and its wholly owned subsidiaries: Sonomed, Inc. (“Sonomed”), Escalon Digital Solutions, Inc. (“EMI”), Escalon Holdings, Inc. (“EHI”), Escalon IP Holdings, Inc., and Sonomed IP Holdings, Inc. The Company operates in the healthcare market, specializing in the development, manufacture, marketing and distribution of medical devices and pharmaceuticals in the area of ophthalmology. The Company and its products are subject to regulation and inspection by the United States Food and Drug Administration (the “FDA”). The FDA and other government authorities requires extensive testing of new products prior to sale and has jurisdiction over the safety, efficacy and manufacture of products, as well as product labeling and marketing. The Company’s common stock trades on the OTCQB Market under the symbol “ESMC.” |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Jun. 30, 2019 |
Jun. 30, 2018 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred Stock, Shares Issued | 2,000,000 | 2,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 35,000,000 | 35,000,000 |
Common stock, shares issued | 7,415,329 | 7,415,329 |
Common stock, shares outstanding | 7,415,329 | 7,415,329 |
Income Taxes (Provision for Income Taxes) (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Operating Leased Assets [Line Items] | |||
Current Federal Tax Expense (Benefit) | $ 0 | ||
Current State and Local Tax Expense (Benefit) | 0 | ||
Current Income Tax Expense (Benefit) | 0 | ||
Deferred Federal Income Tax Expense (Benefit) | $ 44,287 | (3,498,532) | |
Deferred State and Local Income Tax Expense (Benefit) | 12,653 | (999,581) | |
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ (56,941) | 4,498,113 | |
Deferred Income Tax Expense (Benefit) | 0 | $ 0 | |
Income (Loss) from Continuing Operations before Income Taxes, Foreign | $ 0 |
Related Party Transactions (Details) - USD ($) |
3 Months Ended | 9 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Mar. 31, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Feb. 14, 2018 |
|
Related Party Transaction [Line Items] | ||||||
Related Party Transaction, Amounts of Transaction | $ 100,000 | $ 545,000 | ||||
Related Party Transaction, Rate | 1.25% | |||||
Interest Expense, Related Party | $ 59,162 | $ 0 | ||||
accrued interest related party | 112,389 | |||||
Related Party Transaction, Due from (to) Related Party | $ 0 | $ 645,000 | ||||
Preferred Stock, Shares Issued | 2,000,000 | 2,000,000 | ||||
Common Stock, Voting Rights | 0.7781 | |||||
Convertible Preferred Stock, Shares Issued upon Conversion | 2.15 | |||||
Common Stock, Conversion Basis | 4300000 | |||||
Equity Method Investment, Ownership Percentage | 36.70% | |||||
Dividends Payable, Date to be Paid | $ 70,968 | $ 19,368 | ||||
Dividends Payable, Amount Per Share | $ (0.0355) | $ (0.01) | $ (0.03) |
Revenue from contracts with customers (Details) - USD ($) |
9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Movement in Deferred Revenue [Roll Forward] | ||||
Deferred Revenue | $ 481,180 | $ 426,804 | $ 481,180 | $ 388,434 |
Deferred Revenue, Additions | 968,971 | 887,980 | ||
Deferred Revenue, Revenue Recognized | $ 876,225 | $ 942,356 |
Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases | The future annual amounts to be paid under these arrangements as of June 30, 2019 are as follows:
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Accrued expense (Notes) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable, Accrued Liabilities, and Other Liabilities Disclosure, Current [Text Block] | Accrued Expenses The following table presents accrued expenses:
Accrued compensation as of June 30, 2019 and 2018 primarily relates to payroll, vacation accruals, and payroll tax liabilities. |
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Schedule of Accrued Liabilities [Table Text Block] |
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Income Taxes Schedule of Components of income tax expense (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Deferred Tax Assets and Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] |
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Significant Accounting Policies advertising expense (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
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Advertising costs [Abstract] | ||
Advertising Expense | $ 33,000 | $ 27,000 |
Accrued expense (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Liabilities [Table Text Block] |
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Significant Accounting Policies (Accounts Receivable) (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Accounting Policies [Abstract] | |||
Allowance for Doubtful Accounts Receivable | $ 110,507 | $ 118,930 | $ 172,120 |
Allowance for Doubtful Accounts Receivable, Recoveries | (5,450) | (45,593) | |
Allowance for Doubtful Accounts Receivable, Write-offs | $ (2,973) | $ (7,597) |
Capital Stock Transactions |
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Capital stock transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note Disclosure [Text Block] | Capital Stock Transactions Stock Option Plans As of June 30, 2019, the Company had in effect two employee stock option plans that provide for incentive and non-qualified stock options. After accounting for shares issued upon exercise of options, a total of 213,000 shares of the Company’s common stock remain available for issuance as of June 30, 2019. Under the terms of the plans, options may not be granted for less than the fair market value of the Common Stock at the date of grant. Vesting generally occurs ratably between one and five years and for non-employee directors, immediately, and the options are exercisable over a period no longer than 10 years after the grant date. As of June 30, 2019, options to purchase 213,000 shares of the Company’s common stock were outstanding, of which 213,000 were exercisable, and 0 shares were unvested. The following is a summary of Escalon’s stock option activity and related information for the fiscal years ended June 30, 2019 and 2018:
The following table summarizes information about stock options outstanding as of June 30, 2019:
There was no compensation expense related to stock options for the years ended June 30, 2019 and 2018. |
Line of credit (Notes) |
12 Months Ended |
---|---|
Jun. 30, 2019 | |
Line of Credit Facility [Line Items] | |
Debt Disclosure [Text Block] | Line of Credit On December 29, 2016, the Company entered into a credit agreement providing the Company up to an aggregate of $250,000 in cash, secured by the Company’s inventory. The Company, and its wholly owned subsidiary Sonomed, Inc., entered into an Inventory Advance Agreement as of December 29, 2016 (the "Agreement"), with CDS Business Services, Inc., doing business as Newtek Business Credit ("Newtek"). Newtek made in its discretion loans against the Company’s Eligible Inventory in an aggregate amount outstanding at any time up to the lesser of (i) fifty percent (50%) of the Inventory Value or (ii) the Inventory Advance Limit, as those terms were defined in the Agreement, which was $250,000. The credit agreement renewed annually and could be terminated upon 90 days written notice from the Company or 30 days written notice from Newtek. Interest accrued on the daily balance at the per annum rate of 5.00% above the Prime Rate, but not less than 5.0%. All interest payable under the financing documents was computed on the basis of a 360 day year for the actual number of days elapsed on the daily balance. The Company was also obligated to pay to Newtek a closing fee equal to 1.00% of the Advance Limit. Upon any renewal of the Agreement, an annual fee was due from Company equal to 1.00% of the Advance Limit. In consideration of monitoring, ledgering and other administrative functions undertaken by Newtek in connection with the Company’s inventory, and the merchant processor, Company was obligated pay Newtek a monthly collateral monitoring fee calculated by multiplying (i) seventy basis points (0.70%) (approximately an annual rate of 8.5%) (except during the existence of an Event of Default at which time it shall be 1%) by (ii) the amount of the average daily balances during the calendar month preceding the month for which the calculation is made. On June 29, 2018 the Company entered a business loan agreement with TD bank receiving a line of credit evidenced by a promissory note of $250,000. The interest is subject to change based on changes in an independent index which the Wall Street Journal Prime. The index rate at the date of the agreement is 5.000% per annum. Interest on the unpaid principal balance of the note is calculated using a rate of 0.740 percentage points over the index, adjusted if necessary for any minimum and maximum rate limitations, resulting in an initial rate of 5.740% per annum based on a year of 360 days. The interest rate was 6.24% as of June 30, 2019. The Company was required to put $250,000 in the TD bank savings account as collateral. Mr. Richard J. DePiano chairman of the Company executed a guarantee of the loan in favor of TD Bank. Upon signing the agreement the Company also authorizes TD bank to payoff the line of credit with Netwtek. The total payment was $201,575 which includes $165,000 of outstanding line of credit, $2,579 accrued interest, administrative/legal fee of $1,000, prime plus fee through July 12, 2018 of $1,895 and underminimum fees of $28,797. The underminimum fees of $28,797 was included in accrued expense as of June 30, 2018. As of June 30, 2019 and June 30, 2018, the line of credit balance was $201,575 with TD bank and $165,000 from Newtek, respectively. The line of credit interest expense was $17,000 and $37,000 for the years ended ended June 30, 2019 and 2018, respectively. The line of credit from Newtek was paid off on July 3, 2018. |
Income Taxes (Effective Income Tax Rate) (Details) - USD ($) |
12 Months Ended | |
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Jun. 30, 2019 |
Jun. 30, 2018 |
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Income Tax Disclosure [Abstract] | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 34.00% |
Maximum income tax rate | 35.00% | |
Minimum income tax rate | $ 0.21 | |
Effective Income Tax Rate Reconciliation, Deduction, Percent | 0.00% | (0.51%) |
Effective Income Tax Rate Reconciliation, Other Adjustments, Percent | 0.00% | (33.49%) |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent | (21.00%) | 0.00% |
Effective Income Tax Rate Reconciliation, Percent | 0.00% | 0.00% |
Commitments and Contingencies (Details) |
12 Months Ended | |
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Jun. 30, 2019
USD ($)
ft²
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Jul. 31, 2019 |
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Operating Leased Assets [Line Items] | ||
Operating Leases, Future Minimum Payments Due, Next Twelve Months | $ 356,414 | |
Operating Leases, Future Minimum Payments, Due in Two Years | 272,881 | |
thereafter | 96,830 | |
Operating Leases, Future Minimum Payments, Due in Three Years | 256,311 | |
Operating Leases, Future Minimum Payments, Due in Four Years | 188,755 | |
Operating Leases, Future Minimum Payments, Due in Five Years | 189,790 | |
Total | $ 1,360,981 | |
Operating Lease, Square Footage | ft² | 3,954 | |
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Operating Leased Assets [Line Items] | ||
Lessee, Operating Lease, Term of Contract | 5 years |
Going concern (Notes) |
12 Months Ended |
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Jun. 30, 2019 | |
Going concern [Abstract] | |
Liquidity Disclosure [Policy Text Block] | . Going Concern The Company’s operations are subject to a number of factors that can affect its operating results and financial condition. Such factors include, but are not limited to: the continuous enhancement of the current products, development of new products; changes in domestic and foreign regulations; ability of manufacture successfully; competition from products manufactured and sold or being developed by other companies; the price of, and demand for, the Company’s products and its ability to raise capital to support its operations. To date, the Company’s operations have not generated sufficient revenues to enable profitability. As of June 30, 2019, the Company had an accumulated deficient of $68 million, and incurred recurring losses from operations and incurred recurring negative cash flows from operating activities. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These consolidated financial statements do not include any adjustments relating to the realization of the carrying value of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company's continuance as a going concern is dependent on its future profitability and on the on-going support of its shareholders, affiliates and creditors. In order to mitigate the going concern issues, the Company is actively pursuing business partnerships, managing its continuing operations, implementing cost-cutting measures and seeking to sell certain assets. The Company may not be successful in any of these efforts. |
Capital Stock Transactions (Tables) |
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Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block] |
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Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Research and Development Expense, Policy [Policy Text Block] | All research and development costs are charged to operations as incurred. |
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Restrictions on Cash and Cash Equivalents [Table Text Block] | As of June 30, 2019 and June 30, 2018 restricted cash included approximately $253,000 and $250,000 respectively, which was pursuant to the requirements in the TD Bank Loan entered into June 2018 |
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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 loss were immaterial for the fiscal years ended June 30, 2019 and 2018. |
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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. |
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Use of Estimates | The preparation of financial statements in conformity with accounting principles generally affected in the United States of America ("US GAAP") requires 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. |
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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. |
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Fair Value of Financial Instruments | The carrying amounts for cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities 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. |
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Revenue Recognition | Revenue Recognition The Company recognizes revenue when its performance obligations with its customers have been satisfied. At contract inception, the Company determines if the contract is within the scope of Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, and then evaluates the contract using the following five steps: (1) identify the contract with the customer; (2) identify the performance obligations; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only recognizes revenue to the extent that it is probable that a significant revenue reversal will not occur in a future period. The Company recognizes revenue when its performance obligations with its customers have been satisfied. At contract inception, the Company determines if the contract is within the scope of Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, and then evaluates the contract using the following five steps: (1) identify the contract with the customer; (2) identify the performance obligations; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only recognizes revenue to the extent that it is probable that a significant revenue reversal will not occur in a future period. |
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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. |
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Inventory | Inventories include freight-in materials, labor and overhead costs, and are stated at the lower of cost (first-in, first-out) or net realizable value.The Company writes down its inventories as it becomes aware of any situation where the carrying amount exceeds the estimated realizable value based on assumptions about future demands and market conditions.
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Property, Plant and Equipment, Policy [Policy Text Block] | 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, 2019 and 2018 was approximately $30,000 and $29,000, respectively. Property and equipment consist of the following:
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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. 2018. Allowance for doubtful accounts activity for the years ended June 30, 2019 and 2018 was as follows:
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Intangible Assets | Intangible assets deemed to have indefinite lives (including trademark and trade names) 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 the other intangible assets for impairment at that time. 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. During the years ended June 30, 2019 and June 30, 2018, no impairments were recorded. |
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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. |
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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 period 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 30, 2019 and 2018, the average market prices for the years then ended are less than the exercise price of all the outstanding stock options and, therefore, the inclusion of the the stock options would be anti-dilutive. In addition, since the effect of common stock equivalents is anti-dilutive with respect to losses, the convertible preferred stock has also been excluded from the Company’s computation of loss per common for the year ended June 30, 2019. Therefore, basic and diluted loss per common share for the year ended June 30, 2019 are 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.
The following table summarizes convertible preferred stock and securities that, if exercised would have an anti-dilutive effect on earnings 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 period 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 30, 2019 and 2018, the average market prices for the years then ended are less than the exercise price of all the outstanding stock options and, therefore, the inclusion of the the stock options would be anti-dilutive. In addition, since the effect of common stock equivalents is anti-dilutive with respect to losses, the convertible preferred stock has also been excluded from the Company’s computation of loss per common for the year ended June 30, 2019. Therefore, basic and diluted loss per common share for the year ended June 30, 2019 are 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.
The following table summarizes convertible preferred stock and securities that, if exercised would have an anti-dilutive effect on earnings per share.
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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, 2019 and June 30, 2018, 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 statements of operations. As of June 30, 2019 and June 30, 2018, no accrued interest or penalties were required to be included on the related tax liability line in the consolidated balance sheets. |
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New Accounting Pronouncements | Recently Issued Accounting Standards The Company considers the applicability and impact of all accounting standards updates ("ASUs"). Management periodically reviews new accounting standards that are issued. New Accounting Pronouncements Recently Adopted In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC 606”), to clarify the principles of recognizing revenue and create common revenue recognition guidance under US GAAP and International Financial Reporting Standards. 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 replaces 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. The timing of revenue recognition and treatment of contract costs remains unchanged under Topic 606. As such, the adoption of Topic 606 did not have a material impact on the Company’s consolidated financial statements. The information presented for the periods prior to July 1, 2018 has not been restated and is reported under the accounting standard in effect for those periods. See Note 15 for further information regarding the Company’s implementation and disclosures in accordance with ASC 606. In August 2016 FASB issued ASU 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 was permitted, including adoption in an interim period. The Company adopted ASU No. 2016-15 on July 1, 2018 using a retrospective transition method. The adoption of this standard did not have an impact on 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. The amendments should be applied retrospectively to each period presented. Early adoption was 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 Company adopted ASU No. 2016-18 on July 1, 2018. As a result, restricted cash has been included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The adoption of this standard did not have a material impact on 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. The Company applied the amendments in this update prospectively to an award modified on or after July 1, 2018 and the application of this guidance didn't have an impact on the Company’s consolidated financial position or results of operations. New Accounting Pronouncements Not yet Adopted In February 2016 FASB issued ASU No. 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-02 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early application is permitted for all entities. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial application, with an option to elect to use certain transition relief. In July 2018, the FASB issued ASU No. 2018-10, "Codification Improvements to Topic 842, Leases." The amendments in ASU 2018-10 clarify, correct or remove inconsistencies in the guidance provided under ASU 2016-02 related to nineteen specific issues identified. Also in July 2018, the FASB issued ASU No. 2018-11 "Leases (Topic 842): Targeted Improvement" which now allows entities the option of recognizing the cumulative effect of applying the new standard as an adjustment to the opening balance of retained earnings in the year of adoption while continuing to present all prior periods under previous lease accounting guidance. The effective date and transition requirements for these two ASUs are the same as the effective date and transition requirements as ASU 2016-02. The Company determined that this standard will have a material effect on the Company's balance sheet. While the Company continues to asses all of the effects of the adoption, the Company currently believes the most significant impact relates to recording the right-to-use assets and related lease liabilities on the consolidated balance sheets. On adoption as of July 1st 2019 the Company will recognize total lease liabilities of approximately $1,200,000 with corresponding ROU assets of almost the same amount based on the present value of the remaining lease minimum rental payments under the current leasing standards for existing operating lease. 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 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 consolidated financial statements. |
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Advertising Costs, Policy [Policy Text Block] | Advertising costs are charged to operations as incurred. Advertising expense for the years ended June 30, 2019 and 2018 was $33,000 and $27,000, respectively. |
Other income (Notes) |
12 Months Ended |
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Jun. 30, 2019 | |
Other Income and Expenses [Abstract] | |
Other Income and Other Expense Disclosure [Text Block] | Other Income On October 2, 2017 Escalon and Modernizing Medicine Inc. (“MMI”) entered into a Source Code Software Licensing Agreement . The Agreement provided MMI a non-exclusive perpetual license to the source code of Escalon’s proprietary image management software (“AXIS source code”) for a one-time payment of $500,000. MMI continues to be an authorized reseller of the AXIS product. |
Concentration of credit risk (Notes) |
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Concentration Risk [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration Risk Disclosure [Text Block] | Concentration of Credit Risk Credit Risk Financial Instruments, which potentially subject the Company to concentration of credit risk, consist principally of cash and cash equivalents, restricted cash and trade receivables. Concentration of credit risk with respect to trade receivables is generally diversified due to the large number of entities comprising the Company's customer base and their dispersion across geographic areas principally within the United States and international. The Company routinely address the financial strength of its customer and, as a consequence, believes that its receivable credit risk exposure is limited. The Company does not require customers to post collateral. Major Customer No customer accounted for more than 10% of net sales during the years ended June 30, 2019 and 2018. As of June 30, 2019 the Company had no customer that represents more than 10% of the total accounts receivable balance. As of June 30, 2018 the Company had one customer that represents approximately 11% of the total accounts receivable balance. Major Supplier The Company's two largest suppliers accounted for 30% and 11% of the total purchase for the year ended June 30, 2019. The Company's two largest suppliers accounted for of total purchases for more than 41% and 36% of total purchase in in the year ended June 30, 2018. Foreign Sales Domestic and international sales from continuing operations are as follows: Table amounts are in thousands:
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Discontinued operation (Notes) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | Discontinued Operations BH Holdings, S.A.S ("BHH") Drew Scientific, Inc. ("Drew"), an inactive subsidiary of the Company which was sold in 2012 has a controlling interest in BHH Holidngs, S.A.S ("BHH). On January 12, 2012 BHH, initiated the filing of an insolvency declaration with the Tribunal de Commerce de Rennes, France ("Commercial Court"). The Commercial Court on January 18, 2012 opened the liquidation proceedings with continuation of BHH's activity for three months and named an administrator to manage BHH. Since Drew no longer had a controlling financial interest in BHH it was deconsolidated in the December 31, 2011 quarterly consolidated financial statements and prior period amounts are presented as discontinued operations. Assets and liabilities of discontinued operations of BHH included in the consolidated balance sheets are summarized as follows at June 30, 2019 and June 30, 2018 (in thousands):
During fiscal year 2015 the Company was informed by French Counsel that the total amount claimed by the BHH landlord in the liquidation of BHH was approximately $86,000. The Company did not have insight into the French liquidation process due to the Liquidator's reticence to communicate with the Company. As such, the Company had accrued the present value of the maximum amount potentially due under the lease guaranteed by the Company on behalf of BHH. The landlord's claim under liquidation of approximately $86,000 cannot be revisited by the landlord and can only be potentially increased by interest or sundry expenses. Beginning in 2016 any changes to this liability are included in continuing operations. As of June 30, 2019 and June 30, 2018 the liability was approximately $91,000 and $93,000, respectively. |
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BH Holdings, S.A.S [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations [Table Text Block] |
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Significant Accounting Policies (Cash and Cash Equivalents) (Details) - USD ($) |
12 Months Ended | ||
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Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Accounting Policies [Abstract] | |||
Restricted Cash | $ 253,135 | $ 250,000 | $ 0 |
Maximum maturity of highly liquid investments, period | 90 days |
Retirement and post retirement plans (Details) - USD ($) |
12 Months Ended | ||
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Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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Accrued expenses [Abstract] | |||
Multiemployer Plans, Plan Contributions | $ 0 | ||
Payment for Pension and Other Postretirement Benefits | 8,491 | ||
Liability, Retirement and Postemployment Benefits | $ 791,985 | 851,371 | $ 901,238 |
Pension and post-retirement benifits obligation actuarial adjustments | 42,505 | 52,024 | |
Deferred Compensation Arrangement with Individual, Distribution Paid | $ (101,891) | $ (101,891) | |
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate | 4.50% |
Revenue from contracts with customers (Notes) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Text Block] | Revenue from Contracts with Customers 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. Under ASC 606, the Company recognizes revenue when its performance obligations with its customers have been satisfied. The Company generates product revenue from the sale of medical device products and the sale and installation of the Company's AXIS image management system software. Revenue for service plans relate to the customer care plans for the Company’s equipment and AXIS image management system software. Revenue Recognition Revenue is recognized upon transfer of control of the promised goods or services to the customer for an amount that reflects the consideration that the Company expects to be entitled in exchange for those goods or services. The Company’s performance obligations are for product sales, installation of AXIS image management system software and customer care plans. The performance obligations are determined at contract inception based upon promises within the contract that are distinct. The product sales and installation of AXIS image management system software performance obligations are satisfied at a point in time, which is upon shipment for product sales and upon successful installation for the AXIS image management system. The performance obligation for customer care plans is satisfied over time as the customer receives and consumes the Company’s services. The Company invoices its customers upon shipment for product sales. For the installation of AXIS image management system software and customer care plans, the Company invoices its customers upon successful installation. Invoice payments are generally due within 30 days of invoice date. The transaction price is determined based on fixed consideration in the Company’s customer contracts and is recorded net of variable consideration. In determining the transaction price, a significant financing component does not exist since the timing from when the Company invoices its customers to when payment is received as it is less than one year. Revenue for product sales and installation of AXIS image management system software is recognized when delivered or installed. The customer care plan revenues are recognized proportionately over the service period, which is a 12-month period. The Company has elected the following practical expedients in applying ASC 606:
Deferred Revenues The Company records deferred revenues when cash payments are received or due in advance of its performance. The Company’s deferred revenues relate to payments received for the customer care plans for a 12-month period. The consideration received is recognized monthly over the service period.
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Related Party Transactions |
12 Months Ended |
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Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions and Preferred Stock Richard J. DePiano, Sr., (“Mr. DePiano”), the Company’s Chairman, participated in an accounts receivable factoring program that was implemented by the Company. Under the program, Mr. DePiano advanced the Company $545,000 as of June 30, 2017 and advanced an additional $100,000 during fiscal year 2018 prior to the Debt Exchange Agreement noted below. Interest on the transaction was 1.25% per month. The transactions excluded fees typically charged by the factoring agent and provided much needed liquidity to the Company. Related party interest expense for the years ended ended June 30, 2019 and 2018 was $0 and $59,162, respectively. As of both June 30, 2019 and June 30, 2018, accrued interest of $112,389 was recorded. On February 14, 2018, the Company entered into a Debt Exchange Agreement (the “Exchange Agreement”) with Mr. DePiano, the Company's Chairman and DP Associates Inc. Profit-Sharing Plan of which Mr. DePiano is the sole owner and sole trustee (the “Holders”). Pursuant to the terms of the Exchange Agreement, effective February 15, 2018, the Holders exchanged a total of $645,000 principal amount of debt related to the accounts receivable factoring program the Company owes the Holders for 2,000,000 shares of Series A Convertible Preferred Stock (the “Preferred Stock”). Each share of Preferred Stock entitles the Holder thereof to 13 votes per share and will vote together with all other classes and series of stock of the Company as a single class on all actions to be taken by the Company’s stockholders. As a result of this voting power, the Holders as of June 30, 2019 beneficially own approximately 77.81% of the voting power on all actions to be taken by the Company’s shareholders. Subject to the terms and conditions of Preferred Stock, the holder of any share or shares of the Preferred Stock has the right, at its option at any time, to convert each such share of Preferred Stock (except that, upon any liquidation of the Company, the right of conversion will terminate at the close of business on the business day fixed for payment of the amounts distributable on the Preferred Stock) into 2.15 shares of Common Stock (the “Conversion Ratio”). The Conversion Ratio is subject to standard provisions for adjustment in the event of a subdivision or combination of the Company’s Common Stock and upon any reorganization or reclassification of the capital stock of the Company. If the Holders were to convert their shares of Preferred Stock into Common Stock at the Conversion Ratio the Holders would receive a total of 4,300,000 shares of Common Stock, or approximately 36.70% of the then outstanding shares of Common Stock assuming such conversion. Each outstanding share of the Preferred Stock accrues dividends calculated cumulatively at the annual rate of $.0258 per share (such amount subject to equitable adjustment in the event of any stock dividend, stock split, combination, reclassification other similar event), payable upon the earlier of (i) a liquidation, dissolution or winding up of the Company or (ii) conversion of the Preferred Stock into Common Stock. Upon either of such events, all such accrued and unpaid dividends, whether or not earned or declared, to and until the date of such event, will become immediately due and payable and will be paid in full. The dividends payable to the holders of the Preferred Stock is payable in cash or, at the election of any such holder, in a number of additional shares of Common Stock equal to the amount of the dividend expressed in dollars divided by the then applicable Conversion Ratio, described above. As of June 30, 2019 and June 30, 2018 the cumulative dividends payable is $70,968 ($0.0355 per share) and $19,368 ($0.0097 per share), respectively. |
Intangible assets (Notes) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets Disclosure [Text Block] | Intangible Assets The Company's intangible assets consist of the following:
Patents It is the Company’s practice to seek patent protection on processes and products in various countries. Patent application costs are capitalized and amortized over their estimated useful lives, not exceeding 17 years, on a straight-line basis from the date the related patents are issued. Costs associated with patents no longer being pursued are expensed. The gross carrying amount on patents was approximately $91,000 at June 30, 2019 and 2018. The parents have been fully amortized on June 30, 2018. Amortization expense for the years ended June 30, 2019 and 2018 was approximately $0 and $400, respectively. Licenses The Company purchased new licenses of $0 and $12,500 for year end June 30, 2019 and 2018, respectively and the cost is capitalized and amortized over 10 years. Amortization expense is approximately $20,000 for each of the years ended June 30, 2019 and 2018. Annual amortization related entirely to licenses is estimated to be approximately $20,000 for the years ending June 30, 2020 through 2024 and $42,000 thereafter. The following table presents amortized licenses as of June 30, 2019:
The following table presents amortized licenses as of June 30, 2018:
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Retirement and post retirement plans (Tables) |
12 Months Ended | |||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||
Retirement Benefits [Abstract] | ||||||||||||||||||||||
Schedule of Changes in Fair Value of Plan Assets [Table Text Block] |
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Significant Accounting Policies (Net Income (loss) Per Share) (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
Jun. 30, 2018 |
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Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Net (loss) income | $ (250,016) | $ (250,016) | $ 583,675 |
Net Income (Loss) from Continuing Operations Available to Common Shareholders, Basic | $ (301,616) | $ 564,307 | |
Basic Weighted average shares outstanding | 7,415,329 | 7,551,057.0 | |
Weighted average shares - diluted | 7,415,329 | 9,141,468 |
Other income (Details) |
9 Months Ended |
---|---|
Mar. 31, 2018
USD ($)
| |
Other Income and Expenses [Abstract] | |
Other Income | $ 500,000 |
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