10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

FORM 10-K

For the Fiscal year ended June 30, 2023

Commission File Number 0-20127

Escalon Medical Corp.

(Exact name of registrant as specified in its charter)

Pennsylvania	33-0272839
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

435 Devon Park Drive, Suite 824, Wayne, PA 19087

(Address of principal executive offices, including zip code)

(610) 688-6830

(Registrant’s telephone number, including area code)

             Securities Registered Pursuant to Section 12(b) of the Act: NONE

Securities Registered Pursuant to Section 12(g) of the Act: NONE

Common Stock, par value $0.001

Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act.    Yes  o    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.     Yes  o    No  x

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

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

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

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	x
		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  o 

If securities are registered pursuant to Section 12 (b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.                                                  o  

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). o 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). o  Yes  x  No

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant on December 31, 2022 was approximately $178,455, computed by reference to the price at which the common equity was last sold on the OTCQB Market on such date.

As of October 12, 2023, the registrant had 7,415,329 shares of common stock outstanding.

		Page
	PART I
Item 1.	Business	2
Item 1A.	Risk Factors	6
Item 1B.	Unresolved Staff Comments	14
Item 2.	Properties	14
Item 3.	Legal Proceedings	14
Item 4.	Mine Safety Disclosures	14
	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	14
Item 6.	[Reserved]
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk—omitted pursuant to item 305(e) of Regulation S-K
Item 8.	Financial Statements and Supplementary Data	21
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	42
Item 9A.	Controls and Procedures	42
Item 9B.	Other Information	43
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	43
Item 11.	Executive Compensation	45
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	47
Item 13.	Certain Relationships and Related Transactions, and Director Independence	48
Item 14.	Principal Accounting Fees and Services	49
	PART IV
Item 15.	Exhibits and Financial Statement Schedules	49

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PART 1

Cautionary Factors That May Affect Future Results

    Certain statements contained in, or incorporated by reference in, this report are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which provide current expectations or forecasts of future events. Such statements can be identified by the use of terminology such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “possible,” “project,” “should,” “will,” “would,” “seek,” and similar words or expressions. The Company’s forward-looking statements include certain information relating to general business strategy, growth strategies, financial results, liquidity, product development, the introduction of new products, the enhancement of existing products, the potential markets and uses for the Company’s products, the Company’s regulatory filings with the FDA, acquisitions, the development of joint venture opportunities, intellectual property and patent protection and infringement, the loss of revenue due to the expiration on termination of certain agreements, the effect of competition on the structure of the markets in which the Company competes, increased legal, accounting and Sarbanes-Oxley compliance costs, the Company's ability to continue as a going concern, defending the Company in litigation matters and the Company’s cost-saving initiatives. The reader must carefully consider forward-looking statements and understand that such statements involve a variety of risks and uncertainties, known and unknown, and may be affected by assumptions that fail to materialize as anticipated. Consequently, no forward-looking statement can be guaranteed, and actual results may vary materially. It is not possible to foresee or identify all factors affecting the Company’s forward-looking statements, and the reader therefore should not consider the following list of risk factors to be an exhaustive statement of all risks, uncertainties or potentially inaccurate assumptions. The Company cautions the reader to consider carefully these factors as well as the specific factors discussed with each specific forward-looking statement in this Form 10-K annual report and in the Company’s other filings with the Securities and Exchange Commission (the “SEC”). In some cases, these factors have impacted, and in the future (together with other unknown factors) could impact, the Company’s ability to implement the Company’s business strategy and may cause actual results to differ materially from those contemplated by such forward-looking statements. Any expectation, estimate or projection contained in a forward-looking statement may not be achieved. The Company also cautions the reader that forward-looking statements speak only as of the date made. The Company undertakes no obligation to update any forward-looking statement, but investors are advised to consult any further disclosures by the Company on this subject in the Company’s filings with the SEC.

ITEM 1. BUSINESS

Company Overview

     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”), and Sonomed IP Holdings, Inc. All intercompany accounts and transactions have been eliminated.

    The Company operates in the healthcare market, specializing in the development, manufacture, marketing and distribution of medical devices for ophthalmic applications. 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.

A-Scans

The A-Scan provides information about the internal structure of the eye by sending a beam of ultrasound along a fixed axis through the eye and displaying the various echoes reflected from the surfaces intersected by the beam. The principal echoes occur at the cornea, both surfaces of the lens and the retina. The system displays the position and magnitudes of the echoes on an electronic display. The A-Scan also includes software for measuring distances within the eye. This information is primarily used to calculate lens power for implants.

B-Scans

The B-Scan is primarily a diagnostic tool that supplies information to physicians where the media within the eye are cloudy or opaque. Whereas physicians normally use light, which cannot pass through such media, the ultrasound beam is capable of passing through the opacity and displaying an image of the internal structures of the eye. Unlike the A-Scan, the B-Scan transducer is not in a fixed position; it swings through a 60 degree sector to provide a two-dimensional image of the eye.

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UBM

The UBM is a high frequency/high resolution ultrasound device, designed to provide highly detailed information about the anterior segment of the eye. The UBM is used for glaucoma evaluation, tumor evaluation and differentiation, pre- and post-intraocular lens implantation and corneal refractive surgery. The device allows the surgeons to perform precise measurements within the anterior chamber of the eye.

Pachymeters

The pachymeter uses the same principles as the A-Scan, but the system is tailored to measure the thickness of the cornea. Central corneal thickness is used in the calculation of intraocular pressure. Pachymetry is also used by refractive surgeons to screen candidates and help plan surgery.

Ispan Intraocular Gases

The Company distributes two intraocular gas products C3F8 and SF6, which are used by vitreoretinal surgeons as a temporary tamponade in detached retina surgery. Under a non-exclusive distribution agreement with AirGas, Inc. (AirGas"), the Company distributes packages of AirGas gases in canisters containing up to 25 grams of gas. Along with the intraocular gases, the Company manufactures and distributes a patented disposable universal gas kit, which delivers the gas from the canister to the patient.

Surgical Packs

The Company markets disposable surgical packs used in vitreoretinal surgery, including packs which aid surgeons in the process of injecting and extracting silicone oil.

AXIS Image Management

The AXIS Image Management system easily manages ophthalmic diagnostic images via a web browser from any device regardless of modality, device manufacturer or location.

Research and Development

The development of ultrasound ophthalmic equipment and AXIS Image Management system are performed at the Company’s Lake Success, New York facility. Company-sponsored research and development expenditures from operations for the fiscal years ended June 30, 2023 and 2022 were approximately $820,000 and $991,000, respectively.

Manufacturing and Distribution

The Company assembles and distributes its ophthalmic surgical products at its 7,440 square foot leased facility in New Berlin, WI. The Company designs, assembles, and services its ophthalmic ultrasound products at its 6,278 square foot leased facility in Lake Success, NY. In addition to performing its own assembly, the Company subcontracts component manufacturing, sterilization, and other services to various qualified vendors.

The Company has registered its facilities with the FDA and has attained ISO 13485 certification for its facilities and medical devices. ISO 13485 requires an implemented quality system that applies to product design, manufacture, installation, and servicing. Certification can be obtained only after an audit of a company’s quality system by a qualified independent outside auditor and requires regular reexamination. The Company has obtained European Community certification (“CE-Mark”) for many of its medical devices.

The manufacture, testing, and marketing of each of the Company’s products entails risk of product liability. The Company carries product liability insurance to cover primary risk.

Governmental Regulations

The Company’s products are subject to stringent ongoing regulation by the FDA and similar health authorities, and if these governmental approvals or clearances of the Company’s products are restricted or revoked, the Company could face delays that would impair the Company’s ability to generate funds from operations.

The Company has received the necessary FDA and other necessary regulations clearances and approvals for all products that the Company currently markets. The FDA and comparable agencies in state and local jurisdictions and in foreign countries impose substantial requirements upon the manufacturing and marketing of pharmaceutical and medical device equipment and related disposables, including the obligation to adhere to the FDA’s Good Manufacturing Practice regulations. Compliance with

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these regulations requires detailed validation of manufacturing and quality control practices, FDA periodic inspections and other procedures. If the FDA finds any deficiencies the FDA may impose restrictions on marketing the specific products until such deficiencies are corrected.

The FDA and similar health authorities in foreign countries extensively regulate the Company’s activities. The Company must obtain either 510(K) clearances or pre-market approvals and new drug application approvals prior to marketing a product in the United States. Foreign regulation also requires that the Company obtain other approvals from foreign government agencies prior to the sale of products in those countries. Also, the Company may be required to obtain FDA clearance or approval before exporting a product or device that has not received FDA marketing clearance or approval.

The Company has received CE approval on several of the Company’s products that allows the Company to sell the products in the countries comprising the European Community. CE marking indicates that a product has been assessed by the manufacturer and deemed to meet EU safety, health and environmental protection requirements. In addition to the CE mark, some foreign countries require separate individual foreign regulatory clearances.

Marketing and Sales

The Company's products are sold through independent sales representatives, a network of distributors, and internal sales employees directly to medical institutions, throughout the world.

Service and Support

The Company maintains a full-service program for all products sold. The Company provides limited warranties on all products against defects and performance. Product repairs are made at the Company's New York facility for ultrasound products. Service support for AXIS Imaging Management and surgical products are provided remotely.

Patents, Trademarks and Licenses

The pharmaceutical and medical device communities place considerable importance on obtaining patent and trade secret protection for new technologies, products and processes for the purpose of strengthening the Company’s position in the market place and protecting the Company’s economic interests. The Company’s policy is to protect its technology by aggressively obtaining patent protection for substantially all of its developments and products, both in the United States and in selected countries outside the United States. It is the Company’s policy to file for patent protection in those foreign countries in which the Company believes such protection is necessary to protect its economic interests. The duration of the Company’s patents, trademarks and licenses vary through 2027. The Company has 2 United States patents that cover the Company’s technology. The Company believes that the impact of the patents is minimal in that our current products and revenue are driven less by our patents and more by our knowledge and trade secrets.

The Company intends to vigorously defend its patents if the need arises.

Competition

There are numerous direct and indirect competitors of the Company in the United States and abroad. These competitors include ophthalmic-oriented companies that market a broad portfolio of products, including companies that market prescription devices and pharmaceuticals exclusively for ophthalmic indications and integrated companies that market products for ophthalmic and other indications.

Several large companies dominate the ophthalmic market, with the balance of the industry being highly fragmented and comprised of smaller companies ranging from start-up entities to established market players. The ophthalmic market in general is intensely competitive, with each company eager to expand its market share. The Company’s strategy is to compete primarily on the basis of technological innovation to which it has proprietary rights. The Company believes, therefore, that its business will depend in large part on protecting its intellectual property through maintaining trade secrets, patents, and other governmental regulations.

Sonomed’s principal competitors are Quantel, Inc., and Accutome, Inc.. Sonomed has had a leading presence in the ophthalmic ultrasound industry for over 30 years. Management believes that this has helped Sonomed build a reputation as a long-standing operation that provides a quality product, which has enabled the Company to establish effective distribution coverage throughout the world. Various competitors offering similar products at a lower price could threaten Sonomed’s market position. The development of optical technologies for ophthalmic biometrics and imaging may also diminish the Company’s market position. This equipment can be used instead of ultrasound equipment in certain applications with some advantage. Such equipment, however, is more expensive.

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Trek’s competitor for the ISPAN® gases is Alcon Laboratories. Trek’s competitors for its surgical packs include Alcon Laboratories and Bausch & Lomb. To remain competitive, the Company needs to maintain a low-cost operation. There are numerous other companies that can provide this manufacturing service.

EMI’s principal competitors are Carl Zeiss Meditec Inc. and Topcon Healthcare Solutions. The Company believes it establishes competitive advantage by offering technical innovation, product features, low total cost of ownership, and capable and responsive technical support.

Human Capital

As of June 30, 2023, the Company employed 38 employees. Of these employees, 20 of the Company’s employees are employed in manufacturing, 12 are employed in general and administrative positions, 5 are employed in sales and marketing and 1 is employed in research and development. The Company’s employees are not covered by a collective bargaining agreement, and the Company considers its relationship with its employees to be good.

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ITEM 1A. RISK FACTORS

In addition to other information contained in this report on Form 10-K, the following Risk Factors should be considered carefully in evaluating our business. If any of the following risks actually occur, our financial condition and results of operations could be materially and adversely affected.

Financial Risks

Due to the Company’s history of operating losses, we have complied these financial statements based on the assumption the Company cannot continue as a going concern.

Our operations are subject to a number of factors that can affect our 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, our products and our ability to raise capital to support our operations.

As of June 30, 2023, we had an accumulated deficit of $68.4 million, and had incurred historical recurring losses from operations and negative cash flows from operating activities in prior years. For the fiscal year ending June 30, 2023, the Company generated net income from operations of $479,000 and generated cash inflow of $325,000 from operating activities. While the overall trend has been toward profitability, having just one year out of the last five of income, the question is whether the Company will keep the profitability trend and sales growth. These factors raise substantial doubt regarding our ability to continue as a going concern.

As a result of above matters, our independent auditors have indicated in their report on our June 30, 2023 financial statements that there is substantial doubt about our ability to continue as a going concern. A "going concern" opinion indicates that the financial statements have been prepared assuming we will continue as a going concern and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets, or the amounts and classification of liabilities that may result if we do not continue as a going concern. Therefore, you should not rely on our consolidated balance sheet as an indication of the amount of proceeds that would be available to satisfy claims of our creditors, and potentially be available for distribution to our stockholders, in the event of liquidation.

Our continued operations will ultimately depend on the ability to be profitable from our operations and the on-going support of our stockholders and creditors.

There are inherent uncertainties involved in estimates, judgments and assumptions used in the preparation of financial statements in accordance with United States GAAP. Any changes in estimates, judgments and assumptions used could have a material adverse effect on the Company’s business, financial position and operating results.

The consolidated financial statements included in the periodic reports the Company files with the SEC are prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. The preparation of financial statements in accordance with GAAP involves making estimates, judgments and assumptions that affect reported amounts of assets (including intangible assets), liabilities and inventories, revenues, expenses and income. This includes estimates, judgments and assumptions for assessing the recoverability of the Company’s other intangible assets, pursuant to Financial Accounting Standards Board (“FASB”) issued authoritative guidance. If any estimates, judgments or assumptions change in the future, the Company may be required to record additional expenses or impairment charges. Any resulting expense or impairment loss would be recorded as a charge against the Company's earnings and could have a material adverse impact on the Company's financial condition and operating results. Estimates, judgments and assumptions are inherently subject to change in the future, and any such changes could result in corresponding changes to the amounts of assets (including goodwill and other intangible assets), liabilities, revenues, expenses and income. Any such changes could have a material adverse effect on the Company’s financial position and operating results.

On an on-going basis, the Company evaluates its estimates, including, among others, those relating to:

•sales returns;

•allowances for doubtful accounts;

•inventories;

•intangible assets;

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•right-of-use assets;

•income and other tax accruals;

•deferred tax asset valuation allowances;

•sales discounts;

•warranty obligations;

•contingencies and litigation.

The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The Company’s assumptions and estimates may, however, prove to have been incorrect and the Company’s actual results may differ from these estimates under different assumptions or conditions. While the Company believes the assumptions and estimates it makes are reasonable, any changes to the Company’s assumptions or estimates, or any actual results which differ from the Company’s assumptions or estimates, could have a material adverse effect on the Company’s financial position and operating results. Improper design and implementation of internal control related to the estimates could result in misstatement of financial reports.

Operational Risk

Any acquisitions, strategic alliances, joint ventures and divestitures that the Company effects, if any, could result in financial results that differ from market expectations.

In the normal course of business, the Company engages in discussions with third parties regarding possible acquisitions, strategic alliances, joint ventures and divestitures. As a result of any such transactions, of which the Company cannot assure that any will occur, the Company’s financial results may differ from the investment community’s expectations in a given quarter. In addition, acquisitions and alliances may require the Company to integrate a different company culture, management team, business infrastructure, accounting systems and financial reporting systems. The Company may not be able to effect any such acquisitions or alliances. The Company may have difficulty developing, manufacturing and marketing the products of a newly acquired business in a way that enhances the performance of the Company’s combined businesses or product lines to realize the value from any expected synergies. Depending on the size and complexity of an acquisition, the Company’s successful integration of the entity depends on a variety of factors, including the retention of key employees and the management of facilities and employees in separate geographical areas. These efforts require varying levels of management resources, which may divert the Company’s attention from other business operations. Also, the Company’s results may be adversely impacted because of acquisition-related costs, amortization costs for certain intangible assets and impairment losses related to goodwill in connection with such transactions. Finally, acquisitions or alliances by the Company may not occur, which could impair the Company’s growth.

The Company’s results fluctuate from quarter to quarter.

The Company has experienced quarterly fluctuations in operating results and anticipates continued fluctuations in the future. A number of factors contribute to these fluctuations:

•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.

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The Company sets its spending levels in advance of each quarter based, in part, on the Company’s expectations of product orders and shipments during that quarter. A shortfall in revenue, therefore, in any particular quarter as compared to the Company’s plan could have a material adverse impact on the Company’s results of operations and cash flows. Also, the Company’s quarterly results could fluctuate due to general market conditions in the healthcare industry or global economy generally, or market volatility unrelated to the Company’s business and operating results.

Failure of the market to accept the Company’s products could adversely impact the Company’s business and financial condition.

The Company’s business and financial condition will depend in part upon the market acceptance of the Company’s products. The Company’s products may not achieve or maintain market acceptance. Market acceptance depends on a number of factors including:

•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.

Any failure to achieve or maintain significant market acceptance of the Company’s products will have a material adverse impact on the Company’s business.

The success of products with which the Company’s products compete could have an adverse impact on the Company’s business.

The Company faces intense competition in the medical device and pharmaceutical markets, which are characterized by rapidly changing technology, short product life cycles, cyclical oversupply and rapid price erosion. Many of the Company’s competitors have substantially greater financial, technical, marketing, distribution and other resources. The Company’s strategy is to compete primarily on the basis of technological innovation, reliability, quality and price of the Company’s products. Without timely introductions of new products and enhancements, the Company’s products will become technologically obsolete over time, in which case the Company’s revenues and operating results would suffer. The success of the Company’s new product offerings will depend on several factors, including the Company’s ability to:

•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.

The Company may not be able to compete effectively in the competitive environments in which the Company operates.

Lack of availability of key system components could result in delays, increased costs or costly redesign of the Company’s products.

Although some of the parts and components used to manufacture the Company’s products are available from multiple sources, the Company currently purchases most of the Company’s components and outsourced finished goods from single sources in an effort to obtain volume discounts. Lack of availability of any of these parts, components and finished goods could result in production delays, increased costs or costly redesign of the Company’s products. Any loss of availability of an essential component or finished good could result in a material adverse change to the Company’s business, financial condition and results of operations. Some of the Company’s suppliers are subject to the FDA’s Good

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Manufacturing Practice regulations. Failure of these suppliers to comply with those regulations could result in the delay or limitation of the supply of parts or components to the Company, which would adversely impact the Company’s financial condition and results of operations.

The supply chain challenges could increase the costs of products and the numbers of backorders and could adversely affect our results of operations.

The Company is dependent on its management and key personnel to succeed.

The Company’s principal executive officers and technical personnel have extensive experience with the Company’s products, the Company’s research and development efforts, the development of marketing and sales programs and the necessary support services to be provided to the Company’s customers. Also, the Company competes with other companies, universities, research entities and other organizations to attract and retain qualified personnel. The loss of the services of any of the Company’s executive officers or other technical personnel, or the Company’s failure to attract and retain other skilled and experienced personnel, could have a material adverse impact on the Company’s ability to maintain or expand businesses.

Legal, Regulatory and Global

The Company’s products are subject to stringent ongoing regulation by the FDA and similar domestic and foreign health care regulatory authorities, and if the regulatory approvals or clearances of the Company’s products are restricted or revoked, the Company could face delays that would impair the Company’s ability to generate funds from operations.

The FDA and similar health care regulatory authorities in foreign countries extensively regulate the Company’s activities. The Company must obtain either 510(K) clearances or pre-market approvals and new drug application approvals prior to marketing any products in the United States. Foreign regulation also requires that the Company obtain other approvals from foreign government agencies prior to the sale of products in those countries. Also, the Company may be required to obtain FDA approval before exporting a product or device that has not received FDA marketing clearance or approval.

The Company has received the necessary FDA approvals for all products that the Company currently markets in the United States. Any restrictions on or revocation of the FDA approvals and clearances that the Company has obtained, however, would prevent the continued marketing of the impacted products and other devices. The restrictions or revocations could result from the discovery of previously unknown problems with the product. Consequently, FDA revocation would impair the Company’s ability to generate funds from operations.

The FDA and comparable agencies in state and local jurisdictions and in foreign countries impose substantial requirements upon the manufacturing and marketing of pharmaceutical and medical device equipment and related disposables, including the obligation to adhere to the FDA’s Good Manufacturing Practice regulations. Compliance with these regulations requires time-consuming detailed validation of manufacturing and quality control processes, FDA periodic inspections and other procedures. If the FDA finds any deficiencies in the validation processes, for example, the FDA may impose restrictions on marketing the specific products until such deficiencies are corrected.

The Company has received CE approval on several of the Company’s products that allows the Company to sell the products in the countries comprising the European Community. In addition to the CE mark, however, some foreign countries may require separate individual foreign regulatory clearances. The Company may not be able to obtain regulatory clearances for other products in the United States or foreign markets.

The process for obtaining regulatory clearances and approvals underlying clinical studies for any new products or devices and for multiple indications for existing products is lengthy and will require substantial commitments of Company’s financial resources and Company’s management’s time and effort. Any delay in obtaining clearances or approvals or any changes in existing regulatory requirements would materially adversely impact the Company’s business.

The Company’s failure to comply with the applicable regulations would subject the Company to fines, delays or suspensions of approvals or clearances, seizures or recalls of products, operating restrictions, injunctions or civil or criminal penalties, which would adversely impact the Company’s business, financial condition and results of operations.

The Company’s products employ proprietary technology, and this technology may infringe on the intellectual property rights of third parties.

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The Company holds several United States and foreign patents for the Company’s products. Other parties, however, hold patents relating to similar products and technologies. If patents held by others were adjudged valid and interpreted broadly in an adversarial proceeding, the court or agency could deem them to cover one or more aspects of the Company’s products or procedures. Any claims for patent infringements or claims by the Company for patent enforcement would consume time, result in costly litigation, divert technical and management personnel or require the Company to develop non-infringing technology or enter into royalty or licensing agreements. The Company may become subject to one or more claims for patent infringement. The Company may not prevail in any such action, and the Company’s patents may not afford protection against competitors with similar technology.

If a court determines that any of the Company’s products infringes, directly or indirectly, on a patent in a particular market, the court may enjoin the Company from making, using or selling the product. Furthermore, the Company may be required to pay damages or obtain a royalty-bearing license, if available, on acceptable terms.

The Company’s ability to market or sell the Company’s products may be adversely impacted by limitations on reimbursements by government programs, private insurance plans and other third-party payers.

The Company’s customers bill various third party-payers, including government programs and private insurance plans, for the health care services provided to their patients. Third-party payers may reimburse the customer, usually at a fixed rate based on the procedure performed, or may deny reimbursement if they determine that the use of the Company’s products was elective, unnecessary, inappropriate, not cost-effective, experimental or used for a non-approved indication. Third-party payers may deny reimbursement notwithstanding FDA approval or clearance of a product and may challenge the prices charged for the medical products and services. The Company’s ability to sell the Company’s products on a profitable basis may be adversely impacted by denials of reimbursement or limitations on reimbursement, compared with reimbursement available for competitive products and procedures. New legislation that further reduces reimbursements under the capital cost pass-through system utilized in connection with the Medicare program could also adversely impact the marketing of the Company’s products.

The Company may become involved in product liability litigation, which may subject the Company to liability and divert management attention.

The testing and marketing of the Company’s products entails an inherent risk of product liability, resulting in claims based upon injuries or alleged injuries or a failure to diagnose associated with a product defect. Some of these injuries may not become evident for a number of years. Although the Company is not currently involved in any product liability litigation, the Company may be party to litigation in the future as a result of an alleged claim. Litigation, regardless of the merits of the claim or outcome, could consume a great deal of the Company’s time and attention away from the Company’s core businesses. The Company maintains limited product liability insurance coverage of $1,000,000 per occurrence and $2,000,000 in the aggregate, with umbrella policy coverage of $5,000,000 in excess of such amounts. A successful product liability claim in excess of any insurance coverage may adversely impact the Company’s financial condition and results of operations. The Company’s product liability insurance coverage may not continue to be available to the Company in the future on reasonable terms or at all.

The Company’s international operations could be adversely impacted by changes in laws or policies of foreign governmental agencies and social and economic conditions in the countries in which the Company operates.

The Company derives a portion of its revenue from sales outside the United States. Changes in the laws or policies of governmental agencies, as well as social and economic conditions, in the countries in which the Company operates could impact the Company’s business in these countries and the Company’s results of operations. Also, economic factors, including inflation and fluctuations in interest rates and foreign currency exchange rates, and competitive factors such as price competition, business combinations of competitors or a decline in industry sales from continued economic weakness, both in the United States and other countries in which the Company conducts business, could adversely impact the Company’s results of operations.

The impact of terrorism or acts of war could have a material adverse impact on the Company’s business.

Terrorist acts or acts of war, whether in the United States or abroad, could cause damage or disruption to the Company’s operations, its suppliers, channels to market or customers, or could cause costs to increase, or create political or economic instability, any of which could have a material adverse impact on the Company’s business.

In February 2022, Russia invaded Ukraine. As military activity proceeds and sanctions, export controls and other measures are imposed by many countries against Russia, Belarus and specific areas of Ukraine, the war is

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increasingly affecting the global economy and financial markets, as well as exacerbating ongoing economic challenges, including rising inflation and global supply-chain disruption. The Company has operations or activities in countries and regions outside the United States. As a result, its global operations are affected by economic, political and other conditions in the foreign countries in which it does business as well as U.S. laws regulating international trade, although the Company has not yet assessed that the war has had a material effect on its financial position or results of operations.     

The Company’s charter documents and Pennsylvania law may inhibit a takeover.

Certain provisions of Pennsylvania law and the Company’s Bylaws could delay or impede the removal of incumbent directors and could make it more difficult for a third party to acquire, or discourage a third party from attempting to acquire, control of the Company. These provisions could limit the share price that certain investors might be willing to pay in the future for shares of the Company’s common stock. The Company’s Board of Directors is divided into three classes, with directors in each class elected for three-year terms. The Bylaws impose various procedural and other requirements that could make it more difficult for stockholders to effect certain corporate actions. The Company’s Board of Directors may issue shares of preferred stock without stockholder approval on such terms and conditions, and having such rights, privileges and preferences, as the Board may determine. The rights of the holders of common stock will be subject to, and may be adversely impacted by, the rights of the holders of any preferred stock that may be issued in the future.

    Healthcare policy changes, including pending proposals to reform the U.S. healthcare system and implementation of the Affordable Healthcare Act, may have a material adverse effect on the Company.

Healthcare costs have risen significantly over the past decade. There have been and continue to be proposals by legislators, regulators and third-party payors to keep these costs down. Certain proposals, if passed, would impose limitations on the prices the Company will be able to charge for the Company’s products, or the amounts of reimbursement available for its products from governmental agencies or third-party payers. These limitations could have a material adverse effect on the Company’s financial position and results of operations.

Changes in the healthcare industry in the U.S. and elsewhere could adversely affect the demand for the Company’s products as well as the way in which the Company conducts the Company’s business. The 2010 Affordable Care Act provides that most individuals must have health insurance, establishes new regulations on health plans, and creates insurance pooling mechanisms and other expanded public health care measures.

The Company anticipates that the healthcare reform legislation will further reduce Medicare spending on services provided by hospitals and other providers and further forms sales or excise tax on the medical device manufacturing sector. Various healthcare reform proposals have also emerged at the federal and state level. The Company cannot predict what healthcare initiatives, if any, will be implemented at the federal or state level, or the effect any future legislation or regulation will have on the Company. However, an expansion in government’s role in the U.S. healthcare industry may lower reimbursements for the Company’s products, reduce medical procedure volumes and adversely affect the Company’s business, possibly materially.

Future legislation or changes in government programs may adversely impact the market for the Company’s products.

From time to time, the federal government and Congress have made proposals to change aspects of the delivery and financing of health care services. The Company cannot predict what form any future legislation or regulation may take or its impact on the Company’s business. Legislation that sets price limits and utilization controls adversely impact the rate of growth of the markets in which the Company participates. If any future health care legislation or regulations were to adversely impact those markets, the Company’s product marketing could also suffer, which would adversely impact the Company’s business.

Information Security, cybersecurity and Data Privacy Risks

Cybersecurity incidents could disrupt business operations, result in the loss of critical and confidential information and adversely impact the Company's reputation and results of operations.

The Company is subject to cyber security risks and may incur increasing costs in efforts to minimize those risks and to comply with regulatory standards. The Company employs information technology systems and Internet systems, including websites, which allow for the secure storage and transmission of proprietary or confidential information regarding the Company’s customers, employees and others, including credit card information and personal identification information. The Company has made significant efforts to secure its computer network to mitigate the risk of possible

11

cyber-attacks and is continuously working to upgrade its existing information technology systems and provide employee awareness training around phishing, malware, and other cyber risks to ensure that the Company is protected, to the greatest extent possible, against cyber risks and security breaches. Despite these efforts security of the Company’s computer networks could be compromised which could impact operations and confidential information could be misappropriated, which could lead to negative publicity, loss of sales and profits or cause the Company to incur significant costs to reimburse third-parties for damages which could adversely impact profits.

Other

The Company’s Chairman and Chief Executive Officer, Richard DePiano Jr. is the Company’s controlling stockholder and has sufficient voting power to determine the outcome of all matters submitted to the Company’s stockholders for approval.

    In February 2018, the Company entered into a Debt Exchange Agreement (the "Exchange Agreement") with Mr. DePiano Sr. 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, the Holders exchanged a total of $645,000 principal amount of debt the Company owed the Holders under factoring agreements and notes (the "Notes") the Company entered into with the Holders in February and March of 2016 for 2,000,000 shares of Series A Convertible Preferred Stock (the "Preferred Stock"). Each share the 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 currently beneficially own approximately 77.81% of the voting power on all actions to be taken by the Company’s stockholders. If the Holders were to convert their shares of Preferred Stock into common stock at the current conversion ratio, the Holders would receive a total of 4,300,000 shares of Common Stock, or approximately 36.70% of the currently outstanding shares of Common Stock assuming such conversion.

    The Holders, therefore, control the election of all of the members of the Company’s board of directors and control the outcome of any corporate transaction or other matter submitted to a vote of the Company’s stockholders for approval, including mergers or other acquisition proposals and the sale of all or substantially all of the Company’s assets, in each case regardless of how all of the Company’s stockholders other than the Holders vote their shares. The interests of the Holders in maintaining this voting control of the Company may have an adverse effect on the price of the Company’s common stock because of the absence of any potential “takeover” premium and may, therefore, be inconsistent with the interest of the Company’s stockholders other than the Holders. The voting control by the Holders could also discourage a third party from attempting to acquire control of the Company and may make it more difficult for a third party to acquire control of the Company. Mr. DePiano Sr. passed away on October 3, 2019 and left a will by which he appointed Richard J. DePiano, Jr., the Chief Executive Officer of the Company, as executor. Richard DePiano Jr. was elected to serve as chairman of the Company's board. Mr. DePiano, Jr. qualified as executor and has control over the shares in his capacity as executor of Mr. DePiano Sr.'s estate.

The market price of the Company’s stock has historically been volatile, and the Company has not paid cash dividends.

The volatility of the Company’s common stock imposes a greater risk of capital losses on stockholders as compared to less volatile stocks. In addition, such volatility makes it difficult to ascribe a stable valuation to a stockholder’s holdings of the Company’s common stock. The following factors have and may continue to have a significant impact on the market price of the Company’s common stock:

•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.

Moreover, the possibility exists that the stock market could experience extreme price and volume fluctuations unrelated to operating performance.

The Company has not paid cash dividends on its common stock and does not anticipate paying cash dividends in the foreseeable future.

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If the Company raises funds in the future, the Company may be required to raise those funds through public or private financings, strategic relationships or other arrangements at prices and other terms that may not be favorable. The sale of additional equity and debt securities may result in additional dilution to the Company’s stockholders. Additional financing may not be available in amounts or on terms acceptable to the Company or at all.

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ITEM 1B. UNSOLVED SEC STAFF COMMENTS

The Company does not believe there are any unresolved SEC staff comments.

ITEM 2. PROPERTIES

As of June 30, 2023 the Company leased an aggregate of 16,354 square feet of space for its (i) corporate offices in Wayne, Pennsylvania, (ii) Sonomed's manufacturing facility in Lake Success, New York, and (iii) Trek’s distribution facility in New Berlin, Wisconsin. The Company's current corporate office lease of 2,186 square feet will expire on December 2024. The New York facility lease of 6,728 square feet will expire on December 31, 2024. The Company's Wisconsin warehouse of 7,440 square feet will end on April 30, 2025.

ITEM 3. 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 previously and could pertain to intellectual property disputes, commercial 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.

ITEM 4. MINE SAFETY DISCLOSURES

     Not applicable

Part II.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The Company’s common stock trades on the OTCQB Market under the symbol “ESMC.” Any over the counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not present actual transactions.

    As of October 12, 2023 there were 1,267 holders of record of the Company’s common stock. On October 12, 2023 the closing price of the Company’s Common Stock as reported by the OTCQB Market was $0.37 per share.

    The Company has never declared or paid a cash dividend on its common stock and presently intends to retain any future earnings to finance future growth and working capital needs.

    The Company’s forecast of the period of time through which its financial resources will be adequate to support its operations is a forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors, including the factors discussed in “Risk Factors” included in this Form 10-K. If the Company raises funds in the future, the Company may be required to raise those funds through public or private financings, strategic relationships or other arrangements at prices and other terms that may not be as favorable as they would without such qualification. The sale of additional equity and debt securities may result in additional dilution to the Company’s stockholders. Additional financing may not be available in amounts or on terms acceptable to the Company or at all.

ITEM 6. [Reserved]

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

    The following discussion and analysis should be read together with the consolidated financial statements and notes thereto and other financial information contained elsewhere in this Form 10-K and the discussion under “Risk Factors” included in Item 1A of this Form 10-K.

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•Consolidated net revenue increased approximately $1,477,000 or 13.8%, to $12,180,000 during the year ended June 30, 2023 as compared to the prior fiscal year. The increase in net revenue is attributed to an increase of approximately $1,192,000 in sales of Sonomed's ultrasound products mainly due to fulfillment of back orders during the current year, an increase of approximately $335,000 in sales of Trek products, and an increase of $49,000 of other Digital revenue. The increase is offset by a decrease in service plans revenue of $99,000.

•Consolidated cost of revenue totaled approximately $6,699,000, or 55.0%, of total revenue during the year ended June 30, 2023, as compared to $6,096,000, or 57.0%, of total revenue of the prior fiscal year. The decrease of 2.0% in cost of revenue as a percentage of total revenue is mainly due to change of product mix.

•Consolidated marketing, general and administrative expenses increased $98,000, or 2.4%, to $4,184,000 during the year ended June 30, 2023, as compared to the prior fiscal year. The increase in marketing, general and administrate expenses is mainly due to increased network expense of $169,000 and sales compensation of $106,000, trade show related expenses of $70,000, offset by the recovery of bad debt expense of $113,000 and reduced consulting expense related to AXIS regulatory filing of $60,000.

•Consolidated research and development expenses decreased $172,000 or 17.4%, to $819,000 during the year ended June 30, 2023 as compared to the same period of the prior fiscal year. Research and development expenses were primarily expenses associated with the introduction of new or enhanced products. The decrease in research and development expense is mainly due to decreased consulting expense in year ended June 30, 2023.

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Results of Operations

Years Ended June 30, 2023 and 2022

The following table shows consolidated net revenue, as well as identifying trends in revenues for the years ended June 30, 2023 and 2022. Table amounts are in thousands:

	For the Years Ended June 30,
	2023		2022		% Change
Net Revenue:
Products	$	11,556	$	9,980	15.8	%
Service plans	624		723		(13.7)	%
Total	$	12,180	$	10,703	13.8	%

Consolidated net revenue increased approximately $1,477,000 or 13.8%, to $12,180,000 during the year ended June 30, 2023 as compared to the prior fiscal year. The increase in net revenue is attributed to an increase of approximately $1,192,000 in sales of Sonomed's ultrasound products mainly due to fulfillment of back orders during the current year, an increase of approximately $335,000 in sales of Trek products, and an increase of $49,000 of other Digital revenue. The increase is offset by a decrease in service plans revenue of $99,000.

Foreign sales

    The following table presents domestic and international sales from continuing operations. Table amounts are in thousands:

	For the Years Ended June 30,
	2023				2022
Domestic	$	7,044	57.8	%	$	5,720	53.4	%
Foreign	5,136		42.2	%	4,983		46.6	%
Total	$	12,180	100.0	%	$	10,703	100.0	%

The following table presents consolidated cost of revenue and as a percentage of revenues for the years ended June 30, 2023 and 2022. Table amounts are in thousands:

 

	For the Years Ended June 30,
	2023		%		2022		%
Cost of Revenue:
	$	6,699	55.0	%	$	6,096	57.0	%
Total	$	6,699	55.0	%	$	6,096	57.0	%

    Consolidated cost of revenue totaled approximately $6,699,000, or 55.0%, of total revenue during the year ended June 30, 2023, as compared to $6,096,000, or 57.0%, of total revenue of the prior fiscal year. The decrease of 2.0% in cost of revenue as a percentage of total revenue is mainly due to change of product mix.

    The following table presents consolidated marketing, general and administrative expenses for the years ended June 30, 2023 and 2022. Table amounts are in thousands:

 

	For the Years Ended June 30,
	2023		2022		% Change
Marketing, General and Administrative:
	$	4,184	$	4,086	2.4	%
Total	$	4,184	$	4,086	2.4	%

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Consolidated marketing, general and administrative expenses increased $98,000, or 2.4%, to $4,184,000 during the year ended June 30, 2023 as compared to the prior fiscal year. The increase in marketing, general and administrate expenses is mainly due to increased network expense of $169,000 and sales compensation of $106,000, trade show related expenses of $70,000, offset by the recovery of bad debt expense of $113,000 and reduced consulting expense related to AXIS regulatory filing of $60,000.

The following table presents consolidated research and development expenses for the years ended June 30, 2023 and 2022.

Table amounts are in thousands:

	For the Years Ended June 30,
	2023		2022		% Change
Research and Development:
	$	819	$	991	(17.4)	%
Total	$	819	$	991	(17.4)	%

Consolidated research and development expenses decreased $172,000, or 17.4%, to $819,000 during the year ended June 30, 2023 as compared to the prior fiscal year. Research and development expenses were primarily expenses associated with the introduction of new or enhanced products. The decrease in research and development expense is mainly due to decreased consulting expense in year ended June 30, 2023.

Other income (expense)

On April 27, 2020, the Company entered into a PPP loan for $500,000 in connection with the CARES Act related to COVID-19. The promissory note has a fixed payment schedule. The Company submitted the loan forgiveness application on August 2, 2021. The full amount of the PPP loan and accrued interest of $6,305 were forgiven on August 13, 2021 and reported as other income during the year ended June 30, 2022.

Russia-Ukraine War

In February 2022, Russia invaded Ukraine. As military activity proceeds and sanctions, export controls and other measures are imposed by many countries against Russia, Belarus and specific areas of Ukraine, the war is increasingly affecting the global economy and financial markets, as well as exacerbating ongoing economic challenges, including rising inflation and global supply-chain disruption. The Company has operations or activities in countries and regions outside the United States. As a result, its global operations are affected by economic, political and other conditions in the foreign countries in which it does business as well as U.S. laws regulating international trade, although the Company has not yet assessed that the war has had a material effect on its financial position or results of operations.

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Liquidity and Capital Resources

Our total cash as of June 30, 2023 consisted approximately $890,000 of cash on hand and restricted cash of approximately $256,000 compared to approximately $594,000 of cash on hand and restricted cash of $256,000 as of June 30, 2022.

Because our operations have not historically generated sufficient revenues to enable profitability we will continue to monitor costs and expenses closely and may need to raise additional capital in order to fund operations.

We expect to continue to fund operations from cash on hand and through capital raising sources if possible and available, which may be dilutive to existing stockholders, through revenues from the licensing of our products, or through strategic alliances. Additionally, we may seek to sell additional equity or debt securities through one or more discrete transactions, or enter into a strategic alliance arrangement, but can provide no assurances that any such financing or strategic alliance arrangement will be available on acceptable terms, or at all. Moreover, the incurrence of indebtedness in connection with a debt financing would result in increased fixed obligations and could contain covenants that would restrict our operations.

As of June 30, 2023 we had an accumulated deficit of approximately $68.4 million, incurred historically recurring losses from operations and negative cash flows from operating activities in prior years. For the fiscal year ending June 30, 2023, the Company generated net income from operations of $479,000 and generated cash inflow of $325,000 from operating activities. While the overall trend has been toward profitability, having just one year out of the last five of income, the question is whether the Company will keep the profitability trend and sales growth. These factors raise substantial doubt regarding our ability to continue as a going concern, and our ability to generate cash to meet our cash requirements for the following twelve months as of the filing date of this form 10-K.

The following table presents overall liquidity and capital resources as of June 30, 2023 and 2022. Table amounts are in thousands:

 

	June 30,	June 30,
	2023	2022
Current Ratio:
Current assets	$4,637	$4,186
Less: Current liabilities	2,853	3,002
Working capital	$1,784	$1,184
Current ratio	1. 63 to 1	1.39 to 1
Debt to Total Capital Ratio:
Line of credit, note payable, lease liabilities, and EIDL loan	$890	$1,205
Total debt	890	1,205
Total equity	1,935	1,478
Total capital	$2,825	$2,683
Total debt to total capital	31.5%	44.9%

Working Capital Position

Working capital increased approximately $600,000 to $1,784,000 as of June 30, 2023, and the current ratio increased to 1. 63 to 1 to from 1.39 to 1 when compared to June 30, 2022.

The increase in working capital is due to a decrease in current liabilities of $149,000 when a loan of $201,575 was converted to a sixty-month note payable on March 29, 2023, and an increase in current assets of approximately $451,000 as of June 30, 2023 due to operating income.

Debt to total capital ratio was 31.5% and 44.9% as of June 30, 2023 and June 30, 2022, respectively.

Cash Flow Provided By (Used In) Operating Activities

During year ended June 30, 2023 the Company provided by approximately $325,000 of cash in operating activities as compared to approximately $1,050,000 of cash used in operating activities during the year ended June 30, 2022.

    For the year ended June 30, 2023, its cash provided by operations is mainly due to a decrease in inventory of $44,000, an increase in accounts payable of $193,000 and an increase in deferred revenue of $94,000. The cash inflow is offset by a

18

decrease in accrued expense of $250,000. The remaining offsetting items for cash used in operations is comprised of less significant items.

For the year ended June 30, 2022, its cash used in operations is mainly due to non-cash other income of $506,000, an increase in inventory of $187,000, an increase in accounts receivable of $615,000, and a decrease in accounts payable of $90,000. The cash outflow is offset by an increase in accrued expense of $218,000. The remaining offsetting items for cash used in operations is comprised of less significant items.

Cash Flows Used In Investing Activities

Cash flows used in investing activities for the year ended June 30, 2023 was due to purchase of the licenses of $7,000 and purchase of the fixed assets of $7,000. There was no cash flow used in investing activities for the year ended June 30, 2022.

Any necessary capital expenditures have generally been funded out of cash from operations, and the Company is not aware of any factors that would cause historical capital expenditure levels to not be indicative of capital expenditures in the future and, accordingly, does not believe that the Company will have to commit material resources to capital investment for the foreseeable future.

Cash Flows Used in Financing Activities

For the year ended June 30, 2023 the cash used in the financing activities of $12,000 was due to repayment of notes payable and repayment of EIDL loan of $3,000.

For the year ended June 30, 2022 the cash used in the financing activities of $4,000 was due to auto loan payment and repayment of EIDL loan of $3,000.

Off-balance Sheet Arrangements and Contractual Obligations

    The Company was not a party to any off-balance sheet arrangements during the years ended June 30, 2023 and 2022.

Critical Accounting Estimates and policies

The preparation of financial statements requires management to make estimates and assumptions that impact amounts reported therein. The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America, and, as such, include amounts based on informed estimates and judgments of management.

The following items require significant estimation or judgment:

Accounts receivable-uncollectible receivables, and

Inventories- obsolete inventory,

Actual results achieved in the future could differ from current estimates. The Company used what it believes are reasonable assumptions and, where applicable, established valuation techniques in making its estimates.

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.

Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is determined on a first-in, first-out basis and include freight-in materials, labor and overhead costs. Inventories are written down if the estimated net realizable value is less than the recorded value. The Company reviews the carrying cost of inventories by product to determine the adequacy of reserves for obsolescence. In accounting for inventories, the Company must make estimates regarding the estimated realizable value of inventory. The estimate is based on, in part, age of inventory. If actual conditions are less favorable than those the Company has projected, the Company may need to increase its reserves for excess and obsolete inventories. Any increases in the reserves will adversely impact the Company’s results of operations. The establishment of a reserve for excess and obsolete

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inventory establishes a new cost basis in the inventory. Such reserves are not reduced until the product is sold. If the Company is able to sell such inventory any related reserves would be reversed in the period of sale. In accordance with industry practice, service parts inventory is included in current assets, although service parts are carried for established requirements during the serviceable lives of the products and, therefore, not all parts are expected to be sold within one year.

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.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (“ASC 326”), authoritative guidance amending how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance requires the application of a current expected credit loss model, which is a new impairment model based on expected losses. The new guidance is effective for interim and annual reporting periods beginning after December 15, 2022. The Company is currently evaluating the impact of the new guidance on the Company's consolidated financial statements.

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FINANCIAL STATEMENTS AND SUPPLIMENTARY DATA

Escalon Medical Corp.

Index to Consolidated Financial Statements

	Page
Report of Independent Registered Public Accounting Firm (PCAOB ID 688)	22
Report of Independent Registered Public Accounting Firm (PCAOB ID 711)	23
Consolidated Balance Sheets at June 30, 2023 and 2022	24
Consolidated Statements of Operations for the Years Ended June 30, 2023 and 2022	25
Consolidated Statements of Stockholders’ Equity for the Years Ended June  30, 2023 and 2022	26
Consolidated Statements of Cash Flows for the Years Ended June 30, 2023 and 2022	27
Notes to Consolidated Financial Statements	29

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of Escalon Medical Corp.

Opinion on the Financial Statements

We have audited the accompanying balance sheet of Escalon Medical Corp. (the “Company”) and Subsidiaries as of June 30, 2023, the related consolidated statements of operations, stockholders’ equity and cash flows for the year ended June 30, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2023, and the results of its operations and its cash flows for the year ended June 30, 2023, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 2, the Company's historical recurring losses from operations and negative cash flows from operating activities raise substantial doubt about the Company’s ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

/s/ Marcum LLP

Marcum LLP

We have served as the Company’s auditor since 2010 (such date takes into account the acquisition of certain assets of Friedman LLP by Marcum LLP effective September 1, 2022)

Marlton, New Jersey

October 13, 2023

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of Escalon Medical Corp.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Escalon Medical Corp. (the “Company”) and Subsidiaries as of June 30, 2022, the related consolidated statements of operations, stockholders’ equity and cash flows for the year ended June 30, 2022, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2022, and the results of its operations and its cash flows for the year ended June 30, 2022, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 2, the Company has not generated sufficient revenues to enable profitability and the Company has a significant accumulated deficit. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ Friedman LLP

Friedman LLP

We served as the Company’s auditor from 2018 to 2022.

Marlton, New Jersey

September 28, 2022

23

ESCALON MEDICAL CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	June 30, 2023		June 30, 2022
ASSETS
Current assets:
Cash	$	889,674	$	593,869
Restricted cash	256,293		256,165
Accounts receivable, net	1,653,721		1,541,750
Inventories, net	1,587,989		1,603,955
Other current assets	249,790		190,043
Total current assets	4,637,467		4,185,782
Property and equipment, net	34,064		52,660
Right-of-use assets	503,647		788,257
License, net	69,986		82,750
Other long term assets	62,787		62,788
Total assets	$	5,307,951	$	5,172,237
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Line of credit	$	—	$	201,575
Current portion of note payable	37,087		3,401
Current portion of EIDL loan	3,105		3,105
Accounts payable	1,205,510		1,012,451
Accrued expenses	651,978		901,996
Related party accrued interest	112,389		112,389
Current portion of operating lease liabilities	329,638		304,737
Deferred revenue	426,227		332,383
Other short term liabilities	87,125		129,961
Total current liabilities	2,853,059		3,001,998
Note payable, net of current portion	159,511		3,888
Operating lease liabilities, net of current portion	214,103		538,794
EIDL loan, net of current portion	146,435		149,540
Total long-term liabilities	520,049		692,222
Total liabilities	3,373,108		3,694,220
Commitments and Contingencies (Note 10)
Stockholders' 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 $922,331 and $870,731)	645,000		645,000
Common stock, $0.001 par value; 35,000,000 shares authorized; 7,415,329 shares issued and outstanding	7,415		7,415
Additional paid-in capital	69,702,043		69,702,043
Accumulated deficit	(68,419,615)		(68,876,441)
Total stockholders’ equity	1,934,843		1,478,017
Total liabilities and stockholders’ equity	$	5,307,951	$	5,172,237

See notes to consolidated financial statements

24

ESCALON MEDICAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
	For the Years Ended June 30,
	2023		2022
Net revenues:
Products	$	11,555,907	$	9,980,343
Service plans	624,314		722,727
Revenues, net	12,180,221		10,703,070
Costs and expenses:
Cost of revenue	6,698,858		6,096,169
Marketing, general and administrative	4,184,051		4,085,982
Research and development	818,769		990,982
Total costs and expenses	11,701,678		11,173,133
Income (loss) from operations	478,543		(470,063)
Other income (expense)
Other income	—		506,305
Interest income	128		245
Interest expense	(21,845)		(18,406)
Total other income (expense), net	(21,717)		488,144
Income tax expense	$	—	$	—
Net income	456,826		18,081
Less undeclared dividends on preferred stocks	51,600		51,600
Less income allocated to convertible preferred stocks	183,695		—
Net income (loss) applicable to common stockholders	$	221,531	$	(33,519)
Net income per share
Basic income per share applicable to common stockholder	$	0.03	$	0.00
Diluted income per share	$	0.03	$	0.00
Weighted average shares—basic	7,415,329		7,415,329
Weighted average shares—diluted	13,564,202		13,220,202

See notes to consolidated financial statements

25

ESCALON MEDICAL CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED JUNE 30, 2023 AND 2022

	Series A Convertible Preferred Stock			Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount		Shares	Amount
Balance at June 30, 2022	2,000,000	$	645,000	7,415,329	$	7,415	$	69,702,043	$	(68,876,441)	$	1,478,017
Net income	—	—		—	—		—		456,826		456,826
Balance at June 30, 2023	2,000,000	$	645,000	7,415,329	$	7,415	$	69,702,043	$	(68,419,615)	$	1,934,843

	Series A Convertible Preferred Stock			Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount		Shares	Amount
Balance at June 30, 2021	2,000,000	$	645,000	7,415,329	$	7,415	$	69,702,043	$	(68,894,522)	$	1,459,936
Net income	—	—		—	—		—		18,081		18,081
Balance at June 30, 2022	2,000,000	$	645,000	7,415,329	$	7,415	$	69,702,043	$	(68,876,441)	$	1,478,017

See notes to consolidated financial statements

26

ESCALON MEDICAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
	For the Years Ended June 30,
	2023		2022
Cash Flows from Operating Activities:
Net income	$	456,826	$	18,081
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Increase in accounts receivable allowance	118,000		155,267
Increase in inventory reserve	60,000		—
Other income-gain on PPP loan forgiveness	—		(506,305)
Depreciation and amortization	45,202		48,432
Non cash lease expense	289,557		279,719
Change in operating assets and liabilities:
Accounts receivable	(229,971)		(615,315)
Inventories	(44,034)		(187,229)
Other current assets	(59,746)		(2,684)
Accounts payable	193,059		(89,674)
Accrued expenses	(250,018)		218,373
Change in operating lease liability	(304,737)		(290,267)
Deferred revenue	93,844		(31,317)
Other short-term and long-term liabilities	(42,836)		(47,006)
Net cash provided by (used in) operating activities	325,146		(1,049,925)
Cash Flows from Investing Activities:
Purchase of equipment	(6,687)		—
Purchase of license	(7,155)		—
Net cash used in investing activities	(13,842)		—
Cash Flows from Financing Activities:
Repayment of EIDL loan	(3,105)		(2,980)
Repayment of note payable	(12,266)		(3,951)
Net cash used in financing activities	(15,371)		(6,931)
Net increase (decrease) in cash, cash equivalents and restricted cash	295,933		(1,056,856)
Cash, and restricted cash, beginning of year	850,034		1,906,890
Cash, and restricted cash, end of year	$	1,145,967	$	850,034
Cash, and restricted cash consist of the following:
End of year
Cash	$	889,674	$	593,869
Restricted cash	256,293		256,165
	$	1,145,967	$	850,034
Beginning of year
Cash	$	593,869	$	1,650,970
Restricted cash	256,165		255,920
	$	850,034	$	1,906,890
Supplemental Schedule of Cash Flow Information:
Interest paid	$	22,281	$	18,406

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Non Cash Finance Activities
Record right-of-use assets per ASC 842	$	—	$	224,417
Record lease liability per ASC 842	$	—	$	224,417

See notes to consolidated financial statements

28

Escalon Medical Corp. and Subsidiaries

Notes to Consolidated Financial Statements

1. Organization and Basis of Presentation

          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”), 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 require extensive testing of new products prior to sale and have 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.”

2. 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. Through June 30, 2023, the Company had incurred historical recurring losses from operations and incurred negative cash flows from operating activities in prior years. For the fiscal year ending June 30, 2023, the Company generated net income from operations of $479,000 and generated cash inflow of $325,000 from operating activities. While the overall trend has been toward profitability, having just one year out of the last five of income, the question is whether the Company will keep the profitability trend and sales growth. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern for the following twelve months as of the filing date of this form 10-K.

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 stockholders, 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. The Company may not be successful in any of these efforts.

3. Summary of Significant Accounting Policies

Principles of Consolidation

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

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("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.

29

Cash

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. As of June 30, 2023 there were no cash equivalents.

Restricted Cash

As of June 30, 2023 and 2022 restricted cash included approximately $256,000, which was pursuant to the requirements in the TD Bank Loan entered into June 2018 (see Note 6).

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. The Company recorded an allowance for doubtful accounts of approximately $154,000 and $236,000 as of June 30, 2023 and 2022.

	June 30,
	2023		2022
Balance, July 1	$	236,349	$	100,480
Increase in allowance	118,000		155,267
Recovery in bad debts	(113,400)		—
Write-offs	(87,071)		(19,398)
Balance, June 30	$	153,878	$	236,349

Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is determined on a first-in, first-out basis and include freight-in materials, labor and overhead costs. Inventories are written down if the estimated net realizable value is less than the recorded value. The Company reviews the carrying cost of inventories by product to determine the adequacy of reserves for obsolescence. In accounting for inventories, the Company must make estimates regarding the estimated realizable value of inventory. The estimate is based, in part, on age of inventory. If actual conditions are less favorable than those the Company has projected, the Company may need to increase its reserves for excess and obsolete inventories. Any increases in the reserves will adversely impact the Company’s results of operations. The establishment of a reserve for excess and obsolete inventory establishes a new cost basis in the inventory. Such reserves are not reduced until the product is sold. If the Company is able to sell such inventory any related reserves would be reversed in the period of sale. In accordance with industry practice, service parts inventory is included in current assets, although service parts are carried for established requirements during the serviceable lives of the products and, therefore, not all parts are expected to be sold within one year. The Company recorded a $150,000 inventory write-off of inventory that was previously reserved and increased the reserve $60,000 for additional slow moving inventory in the current period resulting in a net reduction of $90,000 as of June 30, 2023 as compared to June 30, 2022.

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	For the years ended June 30,
	2023		2022
Raw materials	$	882,093	$	1,010,471
Work in process	85,575		138,182
Finished goods	880,717		805,698
Total inventories	$	1,848,385	$	1,954,351
Allowance for obsolete inventory	(260,396)		(350,396)
Inventories, net	$	1,587,989	$	1,603,955

Property and Equipment

    Property and equipment are recorded at cost. Leasehold improvements are amortized on a straight-line basis over the lesser of the estimated useful life of the asset or lease term. Depreciation on property and equipment is recorded using the straight-line method over the estimated economic useful life of the related assets. Estimated useful lives are generally three years to five years for computer equipment and software, five years to seven years for furniture and fixtures and five years to ten years for production and test equipment. Depreciation and amortization expense for the years ended June 30, 2023 and 2022 was approximately $25,000 and $29,000, respectively.

    Property and equipment consist of the following:

	June 30,
	2023		2022
Equipment	$	777,785	$	771,097
Furniture and fixtures	128,499		128,499
Leasehold improvements	39,048		39,048
	945,332		938,644
Less: Accumulated depreciation and amortization	(911,268)		(885,984)
	$	34,064	$	52,660

Intangible Assets and Long-Lived Assets

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. At June 30, 2023 and 2022 the Company concluded that there were no triggering event that would result in impairment of the long-lived assets, including the ROU assets.

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.

Fair Value of Financial Instruments

The carrying amounts for cash and cash equivalents, restricted cash, accounts receivable, and accounts payable approximate their fair value because of their short-term maturity. The Company determined that the carrying amount of the

31

notes payable and lease liabilities approximates fair value since such debt borrowing bears interest at the approximate current market rate. While the Company believes the carrying value of the assets and liabilities are reasonable, considerable judgment is used to develop estimates of fair value; thus the estimates are not necessarily indicative of the amounts that could be realized in a current market exchange.

Revenue Recognition

    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 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 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:

•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.

•Portfolio Approach - the Company applied the Portfolio Approach to contract reviews within its identified

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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.

    Deferred Revenue

    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.

	Years ended June 30,
	2023		2022
Beginning of Year	$	333,000	$	364,000
Additions	717,000		692,000
Revenue Recognized	(624,000)		(722,000)
End of Year	$	426,000	$	333,000

Included in accrued expenses as of June 30, 2023 and 2022 is approximately $129,000 and $213,000, respectively of customer deposits that will be recorded as income in the consecutive period once the products have been shipped. Revenue recorded that included within prior period deferred revenue was $315,000 and $362,000, respectively for year ended June 30, 2023 and 2022.

Shipping and Handling Revenues and Costs

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

Research and Development

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

Earnings Per Share    

The Company used the two-class method to compute net income per common share. These participating securities included the Company’s convertible preferred stock which accrues dividends payable. The two-class method requires earnings for the period to be allocated between common stock and participating securities based upon their respective rights to receive distributed and undistributed earnings.

Under the two-class method, for periods with net income, basic net income per common share is computed by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Net income attributable to common stockholders is computed by subtracting from net income the portion of current period earnings that the participating securities would have been entitled to receive pursuant to their dividend rights had all of the period’s earnings been distributed. No such adjustment to earnings is made during periods with a net loss, as the holders of the participating securities have no obligation to fund losses.

Diluted net income per common share is computed under the two-class method by using the weighted average number of shares of common stock outstanding, plus, for periods with net income attributable to common stockholders, the potential dilutive effects of stock options. The Company analyzed the potential dilutive effect of any outstanding dilutive securities under the “if-converted” method and treasury-stock method when calculating diluted earnings per share, in which it is assumed that the outstanding participating securities convert into common stock at the beginning of the period or date of issuance, if later. The Company reports the more dilutive of the approaches (two-class or “if-converted”) as its diluted net income per share during the period. per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. As of June 30, 2023 and 2022, 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 stock options would be anti-dilutive.

33

	For the Years Ended June 30,
	2023		2022
Numerator:
Numerator for basic earnings (loss) per share:
Net income	$	456,826	$	18,081
Less undeclared dividends on convertible stocks	51,600		51,600
Less net income allocated to convertible preferred stocks	183,695		—
Net income (loss) applicable to common stockholders	$	221,531	$	(33,519)
Numerator for diluted earnings (loss) per share:
Net income	$	456,826	$	18,081
Undeclared dividends on convertible stocks	51,600		51,600
Net income (loss) applicable to convertible common stockholders	$	405,226	$	(33,519)
Denominator:
Denominator for basic earnings per share - weighted average shares outstanding	7,415,329		7,415,329
Weighted average preferred stock converted to common stock	6,148,873		5,804,873
Denominator for diluted earnings per share - weighted average and assumed conversion	13,564,202		13,220,202
Net income per share:
Basic net income per share	$	0.03	$	0.00
Diluted net income per share	$	0.03	$	0.00

The following table summarizes convertible preferred stock and securities that, if exercised would have an anti-dilutive effect

on earnings per share.

	For the Years Ended June 30,
	2023	2022
Stock options	157,000	157,000
Convertible preferred stock	—	—
Total potential dilutive securities not included in income per share	157,000	157,000

Income Taxes

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

    The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. As of June 30, 2023 and June 30, 2022, the Company has recorded a full valuation allowance against its deferred tax assets.

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

    The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statements of operations. As of June 30, 2023 and June 30, 2022, no accrued interest or penalties were required to be included on the related tax liability line in the consolidated balance sheets. The Company dissolved Escalon Holdings, Inc. and Escalon IP Holdings, Inc. in a tax-free dissolution under Section 332 of the Internal Revenue Code during the year ended June 30, 2022. There is no tax impact on the consolidated financial statements of the Company's current and prior years.

Leases

    The Company determines if an arrangement is a lease at the inception of a contract. Operating lease right-of-use ("ROU") assets are included in right-of-use assets on the consolidated balance sheets. The current and long-term components of operating lease liabilities are included in the current portion of operating lease liabilities and operating lease liabilities, net of current portion, respectively on the consolidated balance sheets.

    Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. Certain leases may include options to extend or terminate the lease. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

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.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (“ASC 326”), authoritative guidance amending how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance requires the application of a current expected credit loss model, which is a new impairment model based on expected losses. The new guidance is effective for interim and annual reporting periods beginning after December 15, 2022. The Company is currently evaluating the impact of the new guidance on the Company's consolidated financial statements.

4. Intangible Assets

The Company's intangible assets consist of the following:

Licenses

    The Company capitalized and amortized its purchased licenses over 10 years. Amortization expense is approximately $20,000 for each of the years ended June 30, 2023 and 2022. Annual amortization related entirely to licenses is estimated to be $20,676 for the years ending June 30, 2024 through 2026 and $7,958 thereafter.

The following table presents amortized licenses as of June 30, 2023:

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	Gross Carrying Amount		Impairment		Adjusted Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Amortized Intangible Assets Licenses
	$	206,155	$	—	$	206,155	$	(136,169)	$	69,986
Total	$	206,155	$	—	$	206,155	$	(136,169)	$	69,986

The following table presents amortized licenses as of June 30, 2022:

	Gross Carrying Amount		Impairment		Adjusted Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Amortized Intangible Assets Licenses
	$	199,000	$	—	$	199,000	$	(116,250)	$	82,750
Total	$	199,000	$	—	$	199,000	$	(116,250)	$	82,750

5. Accrued Expenses

The following table presents accrued expenses:

	June 30,
	2023		2022
Accrued compensation	$	470,896	$	445,651
Warranty reserve	32,078		32,078
Tax payable	101,103		100,380
Other accruals	47,901		323,887
Total accrued expenses	$	651,978	$	901,996

Accrued compensation as of June 30, 2023 and 2022 primarily relates to payroll, vacation accruals, and sales tax payable.

6. Line of Credit

    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 Company was required to put $250,000 in the TD bank savings account as collateral. Mr. Richard J. DePiano Sr. executed a guarantee of the loan in favor of TD Bank. Mr. DePiano Sr. passed away on October 3, 2019, therefore the guarantee is now assumed by his estate.

    As of June 30, 2022, the line of credit balance was $201,575 with TD bank. TD bank elected to exercise the term note conversion option to convert the loan balance of $201,575 to a five-year term note effective March 29, 2023 ("the Conversion Date"). The scheduled monthly principal and interest payments in the amount of $4,247 began on April 29, 2023. Commencing on the Conversion Date, the aggregate principal balance outstanding bears interest at a fixed per annum rate of 9.49% pursuant to the loan's terms and conditions. $168,313 was reported as long term note payable as of March 31, 2023.

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Year ending June 30,	TD Note Payment
2024	$	34,057
2025	37,434
2026	41,145
2027	45,224
2028	35,708
Total	$	193,568

7. Long-term debt

Paycheck Protection Program ("PPP") loan

    On April 27, 2020, the Company entered into a PPP loan for $500,000 in connection with the CARES Act related to COVID-19. The full amount of the PPP loan was classified as current as of June 30, 2022. The full amount of the PPP loan and accrued interest were forgiven on August 13, 2021, and reported as other income during the year ended June 30, 2022.

Economic Injury Disaster ("EIDL") loan

    EIDL is designed to provide economic relief to businesses that are currently experiencing a temporary loss of revenue due to the Coronavirus (COVID-19) pandemic. EIDL proceeds can be used to cover a wide array of working capital and normal operating expenses, such as continuation to health care benefits, rent, utilities, and fixed debt payments. The Company received $150,000 EIDL loan. The annual interest rate is 3.75%. The payment term is 30 years and the monthly payment is $731 from July 1, 2021. The EIDL loan is secured by the tangible and intangible personal property of the Company. The EIDL loan is secured by the tangible and intangible personal property of the Company.

The future annual principal amounts and accrued interest to be paid as of June 30, 2023 are as follows:

Year ending June 30,	EIDL Loan Payment
2024	$	3,105
2025	3,202
2026	3,324
2027	3,744
2028	3,594
Thereafter	132,571
Total	$	149,540

8. Capital Stock Transactions

Stock Option Plans

As of June 30, 2023, the Company had in effect two employee stock option plans that provide for incentive and non-qualified stock options. 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, 2023, options to purchase 157,000 shares of the Company’s common stock were outstanding and exercisable.

The following is a summary of Escalon’s stock option activity and related information for the fiscal years ended June 30, 2023 and 2022:

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	2023			2022
	Common Stock Options	Weighted Average Exercise Price		Common Stock Options	Weighted Average Exercise Price
Outstanding at the beginning of the year	157,000	$	1.47	157,000	$	1.47
Granted	—	—		—	—
Exercised	—	—		—	—
Forfeited	—	—		—	$	—
Outstanding at the end of the year	157,000	$	1.47	157,000	$	1.47
Exercisable at the end of the year	157,000	$	1.47	157,000	1.47

The following table summarizes information about stock options outstanding as of June 30, 2023:

	Number Outstanding at June 30, 2023	Weighted Average Remaining Contractual Life (Years)	Weighted Average Exercise Price		Number Exercisable at June 30, 2023	Weighted Average Exercise Price
Range of Exercise Prices
$0.79	21,000	2.83	$	0.79	21,000	$	0.79
$1.45 to $2.12	136,000	0.83	$	1.57	136,000	$	1.57
Total	157,000				157,000

There was no compensation expense related to stock options for the years ended June 30, 2023 and 2022.

9. Income Taxes

The provision for income taxes for the years ended June 30, 2023 and 2022 consists of the following:

	2023		2022
Current income tax provision
Federal	$	—	$	—
State	—		—
	—		—
Deferred income tax provision
Federal	64,399		(82,615)
State	30,666		(23,605)
Change in valuation allowance	(95,065)		106,220
	—		—
Income tax expense (benefit)	$	—	$	—

Income tax expense (benefit) as a percentage of loss for the years ended June 30, 2023 and 2022 differ from statutory federal income tax rate due to the following:

	2023		2022
Statutory federal income tax rate	21.00	%	21.00	%
Permanent differences	0.00	%	0.00	%
Valuation allowance	(21.00)	%	(21.00)	%
Effective income tax rate	0.00	%	0.00	%

The components of the net deferred income tax assets and liabilities as of June 30, 2023 and 2022 are as follows:

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	2023		2022
Deferred income tax assets:
Net operating loss carryforward	$	7,028,242	7,430,299
Stock options	33,877		—
Operating lease liability	155,111		—
Allowance for doubtful accounts	47,391		49,633
Accrued vacation	70,084		48,969
Inventory reserve	107,914		73,583
Accelerated depreciation	290,921		57,628
Warranty reserve	9,879		6,736
Total deferred income tax assets	7,743,419		7,666,848
Valuation allowance	(7,554,406)		(7,649,471)
	189,013		17,377
Deferred income tax liabilities:
Accelerated depreciation	(21,554)		(17,377)
Right of use asset	(167,459)		—
Total deferred income tax liabilities	(189,013)		(17,377)
	$	—	$	—

As of June 30, 2023, the Company has a valuation allowance of $7,554,406, which primarily relates to the federal net operating loss carryforwards. During the year ended June 30, 2023, the valuation allowance decreased by $95,065 and during the year ended June 30, 2022, the valuation increased by $106,220. 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 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. The Company has available federal and state net operating loss carry forwards of approximately $32,814,000 and $2,427,000, respectively, of which $25,376,000 and $2,029,000, respectively, will expire over the next ten years, $5,209,000 and $398,000, respectively, will expire in years eleven through twenty, and $2,229,000 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.

Fiscal year ended June 30, 2019 and subsequent years remain open to tax examination. 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, 2023, 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.

10. Commitments and Contingencies

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.

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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.

11. Related Party Transactions and Preferred Stock

    On February 14, 2018, the Company entered into a Debt Exchange Agreement (the “Exchange Agreement”) with Mr. DePiano Sr., the Company's former Chairman and DP Associates Inc. Profit-Sharing Plan of which Mr. DePiano Sr. 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 for 2,000,000 shares of Series A Convertible Preferred Stock (the “Preferred Stock”). As of June 30, 2023 and 2022, the related party interest accrual of $112,389 related to the debt prior to the exchange, remained as an on demanded payable.

    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, 2023 beneficially own approximately 77.81% of the voting power on all actions to be taken by the Company’s stockholders.

    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, 2023 and 2022 the cumulative dividends payable is $277,331 ($0.1387 per share) and $225,731 ($0.1129 per share), respectively.

    Mr. DePiano Sr. passed away on October 3, 2019 and left a will by which he appointed Richard J. DePiano, Jr., the Chief Executive Officer of the Company, as executor. Richard DePiano Jr. was elected to serve as chairman of the Company's board. Mr. DePiano, Jr. qualified as executor and has control over the listed shares in his capacity as executor of Mr. DePiano Sr.'s estate.

12. 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

    One customer accounted for approximately 11% of net sales during the year ended June 30, 2023. One customer accounted for approximately 11% of net sales during the year ended June 30, 2022.

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    As of June 30, 2023 the Company had one customer that represents approximately 24% of the total accounts receivable balance. As of June 30, 2022 the Company had one customer that represents approximately 13% of the total accounts receivable balance.

Major Supplier

    The Company's two largest suppliers accounted for 42% and 11% of the total purchases for the year ended June 30, 2023. The Company's two largest suppliers accounted for the total purchases for 39% and 12% of total purchases for the year ended June 30, 2022. As of June 30, 2023 the Company had two suppliers that represent approximately 36% and 11% of the total accounts payable balance. As of June 30, 2022 the Company had one supplier that represents 36% of the total accounts payable balance.

Foreign Sales

    Domestic and international sales from continuing operations are as follows:

(in thousands)	For the Years Ended June 30,
	2023				2022
Domestic	$	7,044	57.8	%	$	5,720	53.4	%
Foreign	5,136		42.2	%	4,983		46.6	%
Total	$	12,180	100.0	%	$	10,703	100.0	%

13. Leases

    The Company leases certain facilities and equipment under operating leases. Total lease expense, under ASC 842, was included in cost of revenue and marketing, general and administrative costs in the Company's unaudited condensed consolidated statement of operations for the years ended June 30, 2023 and 2022 as follows:

	Year Ended June 30,
	2023		2022
Operating lease costs:
Fixed	$	341,136	$	337,774
Total:	$	341,136	$	337,774

    Supplemental cash flow information was as follows:

	Year Ended June 30,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases	$	343,241	$	334,912
Total	$	343,241	$	334,912

    Leases recorded on the balance sheet consist of the following:

		June 30,
Leases (operating)	Classification on the Balance Sheet	2023		2022
Assets
Operating lease ROU assets	Right-of-use asset	$	503,647	$	788,257
Liabilities
Current	Current portion of operating lease liabilities	$	329,638	$	304,737
Non-current	Operating lease liabilities	$	214,103	$	538,794

    The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate)

under noncancelable operating leases with terms of more than one year to the total operating lease liabilities

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recognized on the consolidated balance sheets as of June 30, 2023:

    The aggregate future lease payments for operating leases as of June 30, 2023 were as follows:

	Operating
2024	$	351,042
2025	212,415
2026	3,928
2027	1,200
2028	1,200
Thereafter	600
Total lease payments	570,385
Less interest	26,644
Present value of lease liabilities	$	543,741

    Average lease terms and discount rates were as follows:

	June 30,
	2023		2022
Weighted-average remaining lease terms (years)
Operating leases	1.67		3.35
Weighted-average discount rate
Operating leases	5.69	%	5.65	%

.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Annual Report on Form 10-K, the Company’s management

evaluated, with the participation of the Company’s principal executive officer and principal financial officer, the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based upon that evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures are not effective in ensuring that information required to be disclosed by the Company in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to our management, including the Company’s principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934). The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that:

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•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.

As of the end of the period covered by this Annual Report on Form 10-K, the Company’s management evaluated, with the participation of its principal executive officer and principal financial officer, the effectiveness of the Company’s internal control over financial reporting. This evaluation was conducted using the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission 2013. We identified a material weakness in internal control related to the proper design and implementation of controls over our estimates relating to the valuation of inventory specifically over the precision of management’s review. Based on our evaluation and as a result of the material weakness identified, our management, with the participation of our principal executive officer and principal financial officer, concluded that our internal control over financial reporting was not effective as of June 30, 2023.

Remediation Plan for Existing Material Weakness

Management is committed to the remediation of the material weakness described above. As such, controls will be added to both increase the precision of the review of all assumptions used in the valuation of inventory and allowance for doubtful accounts, as well as to conduct senior management reviews of any and all material estimates that are applied in these instances

Pursuant to the rules of the SEC, the Company’s management’s report on internal control over financial reporting is furnished with this Annual Report on Form 10-K and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933 or Securities Exchange Act of 1934.

This Annual Report on Form 10-K does not include an attestation report of the Company’s independent registered public accounting firm regarding the Company's internal control over financial reporting. The Company’s management’s report on internal control over financial reporting was not subject to attestation by the Company’s independent registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permits the Company to provide only the Company’s management’s report on internal control over financial reporting in this Annual Report on Form 10-K.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our fourth fiscal quarter of 2023 that would have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None

PART III.

ITEM 10 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

    Directors and Executive Officers

The following table sets forth information with respect to our directors and our executive officers.

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Name	Age	Position
Richard J. DePiano, Jr.	57	Chief Executive Officer, President and General Counsel and Director
Mark G. Wallace	54	Chief Operating Officer and Principal Financial & Accounting Officer
Lisa A. Napolitano	60	Director
C. Todd Trusk	56	Director
John P. Dogum	57	Director
David J. Jocavini	47	Director

Set forth below are the names, positions held and business experience, including during the past five years, of our directors and executive officers as of October 13, 2023. Officers serve at the discretion of the board of directors.

Mr. DePiano, Jr. has been a Class I director since May 9, 2013, and was appointed our President and General Counsel of the Company on January 1, 2008 and our Chief Executive Officer on September 28, 2013. Previously, he was Chief Operating Officer and General Counsel. Mr. DePiano, Jr. joined us in November of 2000 as Vice President Corporate and Legal Affairs. He currently serves as a member of the board of directors, and served as President from 2008 to 2009 of the Delaware Valley Corporate Counsel Association (“DELVACCA”). Mr. DePiano, Jr. also serves as a member of the nominations committee, Chairman of the law school initiative committee and member of the pro-bono committee of DELVACCA. He also is vice chairman of the board of directors of the Montgomery County Industrial Development Authority.

Mr. Wallace was appointed our Chief Operating Officer on January 1, 2008. He was also appointed the Principal Financial and Accounting Officer on July 7, 2017. Mr. Wallace has worked with us since 1997. Previous to being appointed Chief Operating Officer he was Executive Vice President of our Escalon Digital Solutions and Trek Medical subsidiaries. He has jointly held the position of Vice President-Quality, with quality and regulatory responsibilities for all of our companies, and has also previously served as Operations Manager at Sonomed, Inc. and our Quality Manager. He had previously worked with Lunar Corp. (now GE Healthcare) and Trek Medical. He holds a B.S. in Industrial Engineering and a M.S. in Manufacturing Systems Engineering, both from the University of Wisconsin-Madison, is a senior member of the American Society of Quality, and has over 20 years experience in the medical device industry.

Ms. Napolitano has served on our board of directors since 2003. She is a Class II director. Ms. Napolitano has served as a Tax Manager at Global Tax Management, Inc., a provider of compliance support services for both federal and state taxes, since 1998. Ms. Napolitano is a Certified Public Accountant in Pennsylvania. Ms. Napolitano qualifies for our board of directors and audit committee based on her extensive experience in public accounting and through her understanding of internal controls, accounting principles, business operations and regulatory compliance. We believe that Ms. Napolotano’s financial, operational and regulatory experience qualifies her to serve as a member of our board of directors and our audit committee.

Mr. Trusk was appointed as a member of our Board in 2015 as a Class I director. He is President of BroadBase Solutions, Inc., an information technology staffing and consulting firm since 2000. Mr. Trusk was a sales executive with CB Technologies an IT consulting firm based in the Philadelphia suburbs. Before joining CB Technologies Mr. Trusk held several sales and sales management positions within the disposable medical equipment markets. B. Braun Medical from 1994 to 1997 and Calgon Vestal Labs, a subsidiary of Merck & Co.; Inc. from 1991 to 1994. We believe Mr. Trusk’s operational, executive and professional experience qualifies him to serve as a member of our Board and our Audit Committee.

Mr. Jacovini was appointed as a Class III Director in February 2018. He previously served as the Chief Financial Officer of LaFrance Corp, a global manufacturer specializing in on-product branding. Previously, he was President and Founder of Innovator Management LLC, a sponsor of mutual funds and exchange traded funds, from 2011 to 2017. He served as Chief Executive Officer and portfolio manager of Academy Asset Management LLC from 2007 to 2015. Between 2007 and 2017 he held the positions of President, Treasurer, and Trustee of the Academy Funds Trust, a registered investment company. Prior to that, he worked on Wall Street as a derivatives marketer at Deutsche Bank AG and as a municipal strategist at Prudential Securities Incorporated. He holds a BA from the College of the Holy Cross and an MBA from the MIT Sloan School of Management. We believe Mr. Jacovini's operational, executive and professional experience qualifies him to serve as a member of our Board and our Audit Committee.

Mr. Dogum was appointed as a Class II director in February 2018. John P. Dogum is a partner at Martin Law where he has been working since 2003. He has concentrated his practice on litigating Pennsylvania workers’ compensation cases since 1992. Mr. Dogum has served as consultant to major insurers in addition to frequently appearing before Workers’ Compensation

44

Judges in the Eastern region of Pennsylvania. Mr. Dogum has argued a case of first impression before the Third Circuit Court of Appeals. He has also litigated claims under the Federal Longshore and Harbor Workers’ Compensation Act. Mr. Dogum has been listed as a Pennsylvania Super Lawyer since 2009 as well as a Top 100 Philadelphia Super Lawyer in 2009. He has been listed as a Best Lawyer since 2013 by Best Lawyers in America. He holds a BS from the Susquehanna University and JD from the Widener University School of Law. We believe Mr. Dogum's operational, executive and professional experience qualifies him to serve as a member of our Board and our Audit Committee.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers and 10% stockholders to file initial reports of ownership and reports of changes in ownership of our common stock and other equity securities with the Securities and Exchange Commission (the "SEC"). The directors, executive officers and 10% stockholders are required to furnish us with copies of all Section 16(a) reports they file. Based on a review of the copies of such reports furnished to us and written representations from our directors and executive officers that no other reports were required, we believe that our directors, executive officers and 10% stockholders complied with all Section 16(a) filing requirements applicable to them for the year ended June 30, 2023.

Code of Conduct and Ethics

Our board of directors has adopted a Code of Conduct and Ethics, which applies to all of our directors, the principal executive officer, principal financial officer, principal accounting officer or controller and persons performing similar functions, officers and employees. Our Code of Conduct and Ethics is posted in the “Corporate Governance” section of our Internet web site at www.escalonmed.com. Any amendments to, or grant of waiver with respect to, any provision of our Code of Conduct and Ethics, will be disclosed noting the nature of such amendment or waiver in the “Corporate Governance” section of our Internet web site at www.escalonmed.com or by other appropriate means as required or permitted under the applicable regulations of the SEC.

Audit Committee Members and Financial Expert

The members of the audit committee of our board of directors are Ms. Napolitano, Mr. Trusk, John P. Dogum and David J. Jacovini. Our board of directors has determined that each audit member has the attributes, education and experience of, and therefore is, an “audit committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K, and that each member of our audit committee is “independent,” as such term is defined in the applicable regulations of the Securities.

ITEM 11. EXECUTIVE COMPENSATION

    Overview of Executive Employment Agreements and Equity-Based Awards

On February 14, 2018, the Company entered into a Debt Exchange Agreement (the “Exchange Agreement”) with Mr. DePiano Sr., the Company's former Chairman and DP Associates Inc. Profit-Sharing Plan of which Mr. DePiano Sr. 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 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, 2023 beneficially own approximately 77.81% of the voting power on all actions to be taken by the Company’s stockholders.

    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,

45

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, 2023 and 2022 the cumulative dividends payable is $277,331 ($0.1387 per share) and $225,731 ($0.1129 per share), respectively.

    Mr. DePiano Sr. passed away on October 3, 2019 and left a will by which he appointed Richard J. DePiano, Jr., the Chief Executive Officer of the Company, as executor. Richard DePiano Jr. was elected to serve as chairman of the Company's board. Mr. DePiano, Jr. qualified as executor and has control over the listed shares in his capacity as executor of Mr. DePiano Sr.'s estate.    

Compensation of Named Executive Officers

Summary Compensation Table

The following table sets forth certain summary information concerning compensation that we paid or accrued to or on behalf of each of our executive officers (the “Named Executive Officers”) during each of the fiscal years ended June 30, 2023, 2022 and 2021.

Name and Principal Position	Year	Salary		Bonus		Stock Awards		Option Awards (1)		Non-Equity Incentive Plan Compensation		Nonqualified Deferred Compensation Earnings		All Other Compensation (1)		Total
Richard J. DePiano, Jr. Chief Executive Officer, President and General Counsel	2023	$	182,000	$	—	$	—	$	—	$	—	$	—	$	22,000	$	204,000
	2022	$	182,000	$	—	$	—	$	—	$	—	$	—	$	22,000	$	204,000
	2021	$	182,000	$	—	$	—	$	—	$	—	$	—	$	22,000	$	204,000
Mark Wallace Chief Operating Officer and Principal Financial & Accounting Officer	2023	$	149,000	$	—	$	—	$	—	$	—	$	—	$	12,810	$	161,810
	2022	$	149,000	$	—	$	—	$	—	$	—	$	—	$	12,810	$	161,810
	2021	$	149,000	$	—	$	—	$	—	$	—	$	—	$	12,810	$	161,810

(1)Includes payment of, (a) an automobile allowance and (b) insurance premiums paid for life insurance.

Grants of Plan Based Awards

Outstanding Equity Awards at Fiscal Year-End

            The following table sets forth certain information regarding grants of equity awards held by the named executive officers as of June 30, 2023.

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Option Awards
Name	Number of Securities Underlying Unexercised Options	Number of Securities Underlying Unexercised Options	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options	Option Exercise Price		Option Expiration Date
	Exercisable	Unexercisable
Richard J. DePiano, Jr.
	10,000	—	—	$	1.57	5/7/2024
	10,000	—	—	$	0.79	5/7/2026
	45,000	—	—	$	1.57	5/7/2024
Mark Wallace
	35,000	—	—	$	1.57	5/7/2024

 

Compensation of Directors

    The compensation committee of our board recommends director compensation to our board of directors based on factors it considers appropriate, market conditions and trends and the recommendations of management. In fiscal 2023, none of our non-employee directors received any compensation.

Accounting and Tax Considerations

On July 1, 2007, we adopted in the FASB issued authoritative guidance related to share based payments. Under this accounting standard, we are required to value stock options granted in fiscal year 2007 and in subsequent fiscal years under the fair value method and expense those amounts in the income statement over the vesting period of the stock option. We were also required to value unvested stock options granted prior to our adoption of the FASB issued authoritative guidance related to share based payments under the fair value method and amortize such expense in the income statement over the stock option’s remaining vesting period. A material portion of such amortizing expense relates to option grants made to our executive officers.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

    Security Ownership of Certain Beneficial Owners and Management

    The following table indicates, as of October 13, 2023 information about the beneficial ownership of our common stock by (1) each director as of October 13, 2023, (2) each Named Executive Officer, (3) all directors and executive officers as of October 13, 2023 as a group and (4) each person who we know beneficially owns more than 5% of our common stock. All such shares were owned directly with sole voting and investment power unless otherwise indicated.

Beneficial Ownership Table

Name (1)	Amount of Beneficial Ownership of Outstanding Shares (1)		Percent of Class		Amount of Beneficial Ownership of Shares Underlying Options	Amount of Aggregate Beneficial Ownership		Aggregate Percent of Class
Richard J. DePiano, Jr.	4,440,833	(2)	59.9	%	65,000	4,505,833	(2)	59.5	%
Mark G. Wallace	—		—	%	35,000	35,000		*
Lisa A. Napolitano	—		—	%	2,000	2,000		*
C. Todd Trusk	250		—	%	7,000	7,250		*
John P. Dogum	—		—	%	—	—		*
David J. Jocavinni	—		—	%	—	—		*
All Directors and Executive Officers as a group (7 persons)	4,441,083		59.9	%	109,000	4,550,083		60.1	%

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(*) Less than one percent

(1)Information furnished by each individual named. This table includes shares that are owned jointly, in whole or in part with the person’s spouse, or individually by his or her spouse. No shares held by board members or named executive officers are pledged as collateral.

(2) Includes the shares of Mr. Depiano Sr. as Mr. DePiano, Jr. qualified as executor and has control over the listed shares in his capacity as executor of Mr. DePiano.Sr.'s estate.

Equity Compensation Plan Information

    The following table sets forth information, as of June 30, 2023, with respect to compensation plans under which shares of our common stock are authorized for issuance.

Plan Category	Number of Shares to be issued upon exercise of outstanding stock options (a)	Weighted-average exercise price of outstanding stock options (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column a)) (c)
Equity Compensation plans approved by stockholders	157,000	$	1.47
Equity Compensation plans not approved by stockholders	—	—		—
	157,000	$	1.47	—

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

    Related Person Transactions

    We recognize that related person transactions present a heightened risk of conflicts of interest and can create the appearance of a conflict of interest. Therefore, all proposed related person transactions are disclosed to our board of directors before we enter into the transaction, and, if the transaction continues for more than one year, the continuation is reviewed annually by our board of directors.

On February 14, 2018, the Company entered into a Debt Exchange Agreement (the “Exchange Agreement”) with Mr. DePiano Sr., the Company's former Chairman and DP Associates Inc. Profit-Sharing Plan of which Mr. DePiano Sr. 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 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, 2023 beneficially own approximately 77.81% of the voting power on all actions to be taken by the Company’s stockholders.

    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

48

(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, 2023 and 2022 the cumulative dividends payable is $277,331 ($0.1387 per share) and $225,731 ($0.1129 per share), respectively.

    Mr. DePiano Sr. passed away on October 3, 2019 and left a will by which he appointed Richard J. DePiano, Jr., the Chief Executive Officer of the Company, as executor. Richard DePiano Jr. was elected to serve as chairman of the Company's board. Mr. DePiano, Jr. qualified as executor and has control over the listed shares in his capacity as executor of Mr. DePiano Sr.'s estate.

Director Independence

    Our board of directors has determined that, Lisa Napolitano, C. Todd Trusk, John P. Dogum and David J. Jocavini are

“independent,” as such term is defined in the applicable rules of the SEC.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

    The following table summarizes the aggregate fees billed to Escalon Medical Corp. by Friedman LLP (through September 2022) and its post-merger successor Marcum LLP (after September 2022), for the fiscal years ended June 30, 2023 and 2022.

 

	For the years ended June 30,
	2023		2022
Audit Fees	$	129,000	$	129,000
Audit-Related Fees	—		—
Tax Fees	40,000		—
All Other Fees	—		—
Total Fees	$	169,000	$	129,000

    In the table above, pursuant to definitions under the applicable regulations of the SEC, “audit fees” are fees for professional services rendered for the audit of our annual financial statements and review of our financial statements included in our quarterly reports on Form 10-Q and for services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements; “audit-related fees” are fees for assurance and related services that are reasonably related to the performance of the audit and review of our financial statements, and primarily include accounting consultations and audits in connection with potential acquisitions; “tax fees” are fees for tax compliance, tax advice and tax planning; and “all other fees” are fees for any services not included in the first three categories.

    Our audit committee is responsible for pre-approving all audit services and permitted non-audit services to be performed by our principal accountant, except in those instances which do not require such pre-approval pursuant to the applicable regulations of the SEC. The audit committee has established policies and procedures for its pre-approval of audit services and permitted non-audit services and, from time to time, the audit committee reviews and revises its policies and procedures for pre-approval.

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

1.Documents Filed as Part of This Annual Report on Form 10-K:

a.Financial Statements

The following consolidated financial statements of the Company and its subsidiaries are included in Part II, Item 8 of this Annual Report on Form 10-K:

Report of Independent Registered Public Accounting Firm (PCAOB ID 688)

Report of Independent Registered Public Accounting Firm (PCAOB ID 711)

Consolidated Balance Sheets as of June 30, 2023 and 2022

49

Consolidated Statements of Operations for the years ended June 30, 2023 and 2022

Consolidated Statements of Stockholders’ Equity for the years ended June 30, 2023 and 2022

Consolidated Statements of Cash Flows for the years ended June 30, 2023 and 2022

Notes to Consolidated Financial Statements

2.Financial Statement Schedules

All other schedules have been omitted because the required information is not applicable or the information is included in the Company’s Consolidated Financial Statements or the related Notes to Consolidated Financial Statements.

3.EXHIBITS

The following is a list of exhibits filed as part of this Annual Report on Form 10-K, where so indicated by footnote, exhibits that were previously filed, are incorporated by reference. For exhibits incorporated by reference, the location of the exhibit in the previous filing is indicated parenthetically, followed by the footnote reference to the previous filing.

3.1	(a)	Restated Articles of Incorporation of the Company.
	(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)
4.1		Description of Securities
10.1		Employment Agreement between the Company and Richard J. DePiano dated May 12, 1998. (6)**
10.2		Company’s amended and restated 1999 Equity Incentive Plan. (13) **

10.30	Manufacturing Supply and Distribution Agreement between Sonomed, Inc. and Ophthalmic Technologies, Inc. dated as of March 11, 2004. (15)
10.40	Supplemental Executive Retirement Benefit Agreement for Richard DePiano dated June 23, 2005. (16)**
10.5	2013 Equity Incentive Plan dated December 27, 2013 incorporate by reference.
10.6	Business Loan Agreement with TD Bank, N.A. dated June 29, 2018. (19)
10.70	Promissory Note dated June 29, 2018 between the Company and TD Bank N.A. (19)
10.8	Agreement of Deposit Account dated June 29, 2018 between the Company and TD Bank N.A. (19)
21	Subsidiaries. (11)
23.1	Consent of Independent Registered Public Accounting Firm (*).
23.3	Consent of Independent Registered Public Accounting Firm (*).
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (*).
31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (*).
32.1	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (*).
32.2	Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (*).

101. CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document

101. DEF Inline XBRL Taxonomy Extension Definition Linkbase Document

101. LAB Inline XBRL Taxonomy Extension Label Linkbase Document

101. PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document

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*	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

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Escalon Medical Corp.
(Registrant)
	By:	/s/  Richard J. DePiano, Jr.
		Richard J. DePiano, Jr.       Chief Executive Officer

Dated: October 13, 2023

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

51

By:	/s/  Richard J. DePiano, Jr.	Chairman and Chief Executive Officer (Principal Executive Officer)	October 13, 2023
	Richard J. DePiano, Jr.
By:	/s/   Mark Wallace	Chief Operating Officer and Principal Financial & Accounting Officer	October 13, 2023
	Mark Wallace
By:	/s/   John P. Dogum	Director	October 13, 2023
	John P. Dogum
By:	/s/  Lisa Napolitano	Director	October 13, 2023
	Lisa Napolitano
By:	/s/  C. Todd Trusk	Director	October 13, 2023
	C. Todd Trusk
By:	/s/   David J Jacovini	Director	October 13, 2023
	David J Jacovini

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EX-23.1

Exhibit 23.1

Independent Registered Public Accounting Firm’s Consent

We consent to the incorporation by reference in the Registration Statement of Escalon Medical Corp. on Form S-3 (Nos. 333-157174, 333-44513, and 333-114332) and Form S-8 (Nos. 33-54994, 33-80162, 333-31138, 333-54980, and 333-83392) of our report October 13, 2023, which includes an explanatory paragraph as to the Company's ability to continue as a going concern, with respect to our audit of the consolidated financial statements of Escalon Medical Corp. as of June 30, 2023 and for the year ended June 30, 2023 which report is included in this Annual Report on Form 10-K of Escalon Medical Corp. for the year ended June 30, 2023.

/s/ Marcum LLP

Marcum LLP

Marlton, New Jersey

October 13, 2023

EX-23.3

Exhibit 23.3

Independent Registered Public Accounting Firm’s Consent

We consent to the incorporation by reference in the Registration Statement of Escalon Medical Corp. on Form S-3 (Nos. 333-157174, 333-44513, and 333-114332) and Form S-8 (Nos. 33-54994, 33-80162, 333-31138, 333-54980, and 333-83392) of our report dated September 28, 2022, which includes an explanatory paragraph as to the Company’s ability to continue as a going concern, with respect to our audit of the consolidated financial statements of Escalon Medical Corp. as of June 30, 2022 and for the year ended June 30, 2022 appearing in the Annual Report on Form 10-K of Escalon Medical Corp. for the year ended June 30, 2023. We resigned as auditors on September 1, 2022 and, accordingly, we have not performed any audit or review procedures with respect to any financial statements for the periods after the date of our resignation.

/s/ Friedman LLP

Friedman LLP

Marlton, New Jersey

October 13, 2023

EX-31.1

Exhibit 31.1

Certification of Principal Executive Officer

I, Richard J. DePiano, certify that:

1.I have reviewed this annual report on Form 10-K for the fiscal year ended June 30, 2023 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: October 13, 2023

EX-31.2

Exhibit 31.2

Certification of Principal Financial Officer

I, Mark Wallace, certify that:

1.I have reviewed this annual report on Form 10-K for the fiscal year ended June 30, 2023 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: October 13, 2023

EX-32.1

Exhibit 32.1

Certification pursuant to 18 U.S.C. Section 1350,

as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report on Form 10-K of Escalon Medical Corp. (the “Company”) for the fiscal year ended June 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard J. DePiano, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, 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.

Date: October 13, 2023

/s/    Richard J. DePiano Jr.

Richard J. DePiano Jr.

Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification pursuant to 18 U.S.C. Section 1350,

as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report on Form 10-K of Escalon Medical Corp. (the “Company”) for the fiscal year ended June 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark Wallace, Chief Operating Officer and Principal Financial & Accounting Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, 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.

Date: October 13, 2023

/s/    Mark Wallace

Mark Wallace

Chief Operating Officer and Principal Accounting & Financial Officer

XML

Cover - USD ($)	12 Months Ended
	Jun. 30, 2023	Oct. 12, 2023	Dec. 31, 2022
Cover [Abstract]
Document Type	10-K
Entity Registrant Name	Escalon Medical Corp.
Entity Incorporation, State or Country Code	PA
Entity Tax Identification Number	33-0272839
Entity Address, Address Line One	435 Devon Park Drive, Suite 824
Entity Address, City or Town	Wayne
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	19087
Local Phone Number	688-6830
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Public Float			$ 178,455
Entity Common Stock, Shares Outstanding		7,415,329
City Area Code	610

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Document And Entity Information - USD ($)	12 Months Ended
	Jun. 30, 2023	Oct. 12, 2023	Dec. 31, 2022
Document And Entity Information [Abstract]
Entity Central Index Key	0000862668
Current Fiscal Year End Date	--06-30
Document Type	10-K
Document Period End Date	Jun. 30, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Small Business	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		7,415,329
Document Annual Report	true
Document Transition Report	false
Entity File Number	0-20127
Entity Address, State or Province	PA
Entity Incorporation, State or Country Code	PA
Entity Tax Identification Number	33-0272839
Entity Address, Address Line One	435 Devon Park Drive, Suite 824
Entity Address, City or Town	Wayne
City Area Code	610
Local Phone Number	688-6830
Entity Address, Postal Zip Code	19087
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Voluntary Filers	No
Entity Public Float			$ 178,455

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Audit Information	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Audit Information [Abstract]
Auditor Name	Marcum LLP	Friedman LLP
Auditor Firm ID	688	711
Auditor Location	Marlton, New Jersey	Marlton, New Jersey

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Consolidated Balance Sheets - USD ($)	Jun. 30, 2023	Jun. 30, 2022
Current assets:
Cash and cash equivalents	$ 889,674	$ 593,869
Restricted Cash, Current	256,293	256,165
Accounts receivable, net	1,653,721	1,541,750
Inventory, net	1,587,989	1,603,955
Other current assets	249,790	190,043
Total current assets	4,637,467	4,185,782
Property, Plant and Equipment, Net	34,064	52,660
Operating Lease, Right-of-Use Asset	503,647	788,257
Finite-Lived Intangible Assets, Net	69,986	82,750
Deposits Assets, Noncurrent	62,787	62,788
Total assets	5,307,951	5,172,237
Current liabilities:
Short-term Debt	0	201,575
Notes Payable to Bank, Current	37,087	3,401
Secured Debt, Current	3,105	3,105
Accounts payable	1,205,510	1,012,451
Accrued expenses	651,978	901,996
Interest Payable, Current	112,389	112,389
Operating Lease, Liability, Current	329,638	304,737
Deferred Revenue, Current	426,227	332,383
Liabilities of discontinued operations	87,125	129,961
Total current liabilities	2,853,059	3,001,998
Other Notes Payable, Noncurrent	159,511	3,888
Operating Lease, Liability, Noncurrent	214,103	538,794
Total long-term liabilities	520,049	692,222
Total liabilities	3,373,108	3,694,220
Shareholders equity:
Series A convertible preferred stock, $0.001 par value; 2,000,000 shares authorized;2,000,000 issued and outstanding	645,000	645,000
Common stock, $0.001 par value; 35,000,000 shares authorized; 7,415,329 shares issued and outstanding	7,415	7,415
Additional paid-in capital	69,702,043	69,702,043
Accumulated deficit	(68,419,615)	(68,876,441)
Total shareholders' equity	1,934,843	1,478,017
Total liabilities and shareholders' equity	5,307,951	5,172,237
Secured Debt [Member]
Current liabilities:
Long-term Debt	$ 146,435	$ 149,540

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Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2023	Jun. 30, 2022
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

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Consolidated Statements Of Operations - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Revenues, net	$ 12,180,221	$ 10,703,070
Cost of Goods and Services Sold	6,698,858	6,096,169
Marketing, general and administrative	4,184,051	4,085,982
Research and development	818,769	990,982
Total costs and expenses	11,701,678	11,173,133
Operating Income (Loss)	478,543	(470,063)
Other Nonoperating Income (Expense)	0	506,305
Interest income	128	245
Interest Expense	21,845	18,406
Nonoperating Income (Expense)	(21,717)	488,144
Income Tax Expense (Benefit)	0	0
Net income	456,826	18,081
Undistributed Earnings (Loss) Allocated to Participating Securities, Basic	183,695	0
Net income (loss) applicable to common stockholders	$ 221,531	$ (33,519)
Earnings (Loss) Per Share, Basic	$ 0.03	$ (0.00)
Earnings (Loss) Per Share, Diluted	$ 0.03	$ (0.00)
Weighted average shares - basic	7,415,329	7,415,329
Weighted average shares - diluted	13,564,202	13,220,202
Less income allocated to convertible preferred stocks	$ 51,600
Product [Member]
Revenues, net	11,555,907	$ 9,980,343
Service [Member]
Revenues, net	$ 624,314	$ 722,727

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Consolidated Statements Of Shareholders' Equity and Comprehensive Loss - USD ($)	Total	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]
Preferred Stock, Shares Outstanding		2,000,000
Preferred Stock, Value, Issued		$ 645,000
Balance at Jun. 30, 2021	$ 1,459,936		$ 7,415	$ 69,702,043	$ (68,894,522)
Balance, shares at Jun. 30, 2021			7,415,329
Net income	18,081	$ 0	$ 0	0	18,081
Balance at Jun. 30, 2022	1,478,017		$ 7,415	69,702,043	(68,876,441)
Balance, shares at Jun. 30, 2022			7,415,329
Preferred Stock, Shares Outstanding		2,000,000
Preferred Stock, Value, Issued	645,000	$ 645,000
Net income	456,826	$ 0	$ 0	0	456,826
Balance at Jun. 30, 2023	1,934,843		$ 7,415	$ 69,702,043	$ (68,419,615)
Balance, shares at Jun. 30, 2023			7,415,329
Preferred Stock, Shares Outstanding		2,000,000
Preferred Stock, Value, Issued	$ 645,000	$ 645,000

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Consolidated Statements Of Cash Flows - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash Flows from Operating Activities:
Net income	$ 456,826	$ 18,081
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Increase in accounts receivable allowance	118,000	155,267
Increase in inventory reserve	60,000	0
Other income-gain on PPP loan forgiveness	0	(506,305)
Depreciation and amortization	45,202	48,432
Non cash lease expense	289,557	279,719
Change in operating assets and liabilities:
Accounts receivable	(229,971)	(615,315)
Inventories	(44,034)	(187,229)
Other current assets	(59,746)	(2,684)
Accounts payable	193,059	(89,674)
Accrued expenses	(250,018)	218,373
Change in operating lease liability	(304,737)	(290,267)
Deferred revenue	93,844	(31,317)
Other short-term and long-term liabilities	(42,836)	(47,006)
Net cash provided by (used in) operating activities	325,146	(1,049,925)
Cash Flows from Investing Activities:
Purchase of equipment	(6,687)	0
Purchase of license	(7,155)	0
Net cash used in investing activities	(13,842)	0
Cash Flows from Financing Activities:
Repayment of EIDL loan	(3,105)	(2,980)
Repayment of note payable	(12,266)	(3,951)
Net cash used in financing activities	(15,371)	(6,931)
Net increase (decrease) in cash, cash equivalents and restricted cash	295,933	(1,056,856)
Cash, and restricted cash, beginning of year	850,034	1,906,890
Cash, and restricted cash, end of year	1,145,967	850,034
Cash and cash equivalents, beginning of period	889,674	593,869
Restricted Cash	256,293	256,165
Supplemental Schedule of Cash Flow Information:
Interest paid	22,281	18,406
Non Cash Finance Activities
Record right-of-use assets per ASC 842	0	224,417
Record lease liability per ASC 842	$ 0	$ 224,417

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Organization and Description of Business	12 Months Ended
	Jun. 30, 2023
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”), 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 require extensive testing of new products prior to sale and have 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.”

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Going concern (Notes)

12 Months Ended

Jun. 30, 2023

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. Through June 30, 2023, the Company had incurred historical recurring losses from operations and incurred negative cash flows from operating activities in prior years. For the fiscal year ending June 30, 2023, the Company generated net income from operations of $479,000 and generated cash inflow of $325,000 from operating activities. While the overall trend has been toward profitability, having just one year out of the last five of income, the question is whether the Company will keep the profitability trend and sales growth. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern for the following twelve months as of the filing date of this form 10-K.

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 stockholders, 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. The Company may not be successful in any of these efforts.

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Significant Accounting Policies

12 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Significant Accounting Policies

Summary of Significant Accounting Policies

Principles of Consolidation

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

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("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.

Cash

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. As of June 30, 2023 there were no cash equivalents.

Restricted Cash

As of June 30, 2023 and 2022 restricted cash included approximately $256,000, which was pursuant to the requirements in the TD Bank Loan entered into June 2018 (see Note 6).

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. The Company recorded an allowance for doubtful accounts of approximately $154,000 and $236,000 as of June 30, 2023 and 2022.

	June 30,
	2023		2022
Balance, July 1	$	236,349	$	100,480
Increase in allowance	118,000		155,267
Recovery in bad debts	(113,400)		—
Write-offs	(87,071)		(19,398)
Balance, June 30	$	153,878	$	236,349

Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is determined on a first-in, first-out basis and include freight-in materials, labor and overhead costs. Inventories are written down if the estimated net realizable value is less than the recorded value. The Company reviews the carrying cost of inventories by product to determine the adequacy of reserves for obsolescence. In accounting for inventories, the Company must make estimates regarding the estimated realizable value of inventory. The estimate is based, in part, on age of inventory. If actual conditions are less favorable than those the Company has projected, the Company may need to increase its reserves for excess and obsolete inventories. Any increases in the reserves will adversely impact the Company’s results of operations. The establishment of a reserve for excess and obsolete inventory establishes a new cost basis in the inventory. Such reserves are not reduced until the product is sold. If the Company is able to sell such inventory any related reserves would be reversed in the period of sale. In accordance with industry practice, service parts inventory is included in current assets, although service parts are carried for established requirements during the serviceable lives of the products and, therefore, not all parts are expected to be sold within one year. The Company recorded a $150,000 inventory write-off of inventory that was previously reserved and increased the reserve $60,000 for additional slow moving inventory in the current period resulting in a net reduction of $90,000 as of June 30, 2023 as compared to June 30, 2022.

	For the years ended June 30,
	2023		2022
Raw materials	$	882,093	$	1,010,471
Work in process	85,575		138,182
Finished goods	880,717		805,698
Total inventories	$	1,848,385	$	1,954,351
Allowance for obsolete inventory	(260,396)		(350,396)
Inventories, net	$	1,587,989	$	1,603,955

Property and Equipment

    Property and equipment are recorded at cost. Leasehold improvements are amortized on a straight-line basis over the lesser of the estimated useful life of the asset or lease term. Depreciation on property and equipment is recorded using the straight-line method over the estimated economic useful life of the related assets. Estimated useful lives are generally three years to five years for computer equipment and software, five years to seven years for furniture and fixtures and five years to ten years for production and test equipment. Depreciation and amortization expense for the years ended June 30, 2023 and 2022 was approximately $25,000 and $29,000, respectively.

    Property and equipment consist of the following:

	June 30,
	2023		2022
Equipment	$	777,785	$	771,097
Furniture and fixtures	128,499		128,499
Leasehold improvements	39,048		39,048
	945,332		938,644
Less: Accumulated depreciation and amortization	(911,268)		(885,984)
	$	34,064	$	52,660

Intangible Assets and Long-Lived Assets

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. At June 30, 2023 and 2022 the Company concluded that there were no triggering event that would result in impairment of the long-lived assets, including the ROU assets.

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.

Fair Value of Financial Instruments

The carrying amounts for cash and cash equivalents, restricted cash, accounts receivable, and accounts payable approximate their fair value because of their short-term maturity. The Company determined that the carrying amount of the

notes payable and lease liabilities approximates fair value since such debt borrowing bears interest at the approximate current market rate. While the Company believes the carrying value of the assets and liabilities are reasonable, considerable judgment is used to develop estimates of fair value; thus the estimates are not necessarily indicative of the amounts that could be realized in a current market exchange.

Revenue Recognition

    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 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 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:

•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.

•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.

    Deferred Revenue

    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.

	Years ended June 30,
	2023		2022
Beginning of Year	$	333,000	$	364,000
Additions	717,000		692,000
Revenue Recognized	(624,000)		(722,000)
End of Year	$	426,000	$	333,000

Included in accrued expenses as of June 30, 2023 and 2022 is approximately $129,000 and $213,000, respectively of customer deposits that will be recorded as income in the consecutive period once the products have been shipped. Revenue recorded that included within prior period deferred revenue was $315,000 and $362,000, respectively for year ended June 30, 2023 and 2022.

Shipping and Handling Revenues and Costs

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

Research and Development

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

Earnings Per Share    

The Company used the two-class method to compute net income per common share. These participating securities included the Company’s convertible preferred stock which accrues dividends payable. The two-class method requires earnings for the period to be allocated between common stock and participating securities based upon their respective rights to receive distributed and undistributed earnings.

Under the two-class method, for periods with net income, basic net income per common share is computed by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Net income attributable to common stockholders is computed by subtracting from net income the portion of current period earnings that the participating securities would have been entitled to receive pursuant to their dividend rights had all of the period’s earnings been distributed. No such adjustment to earnings is made during periods with a net loss, as the holders of the participating securities have no obligation to fund losses.

Diluted net income per common share is computed under the two-class method by using the weighted average number of shares of common stock outstanding, plus, for periods with net income attributable to common stockholders, the potential dilutive effects of stock options. The Company analyzed the potential dilutive effect of any outstanding dilutive securities under the “if-converted” method and treasury-stock method when calculating diluted earnings per share, in which it is assumed that the outstanding participating securities convert into common stock at the beginning of the period or date of issuance, if later. The Company reports the more dilutive of the approaches (two-class or “if-converted”) as its diluted net income per share during the period. per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. As of June 30, 2023 and 2022, 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 stock options would be anti-dilutive.

	For the Years Ended June 30,
	2023		2022
Numerator:
Numerator for basic earnings (loss) per share:
Net income	$	456,826	$	18,081
Less undeclared dividends on convertible stocks	51,600		51,600
Less net income allocated to convertible preferred stocks	183,695		—
Net income (loss) applicable to common stockholders	$	221,531	$	(33,519)
Numerator for diluted earnings (loss) per share:
Net income	$	456,826	$	18,081
Undeclared dividends on convertible stocks	51,600		51,600
Net income (loss) applicable to convertible common stockholders	$	405,226	$	(33,519)
Denominator:
Denominator for basic earnings per share - weighted average shares outstanding	7,415,329		7,415,329
Weighted average preferred stock converted to common stock	6,148,873		5,804,873
Denominator for diluted earnings per share - weighted average and assumed conversion	13,564,202		13,220,202
Net income per share:
Basic net income per share	$	0.03	$	0.00
Diluted net income per share	$	0.03	$	0.00

The following table summarizes convertible preferred stock and securities that, if exercised would have an anti-dilutive effect

on earnings per share.

	For the Years Ended June 30,
	2023	2022
Stock options	157,000	157,000
Convertible preferred stock	—	—
Total potential dilutive securities not included in income per share	157,000	157,000

Income Taxes

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

    The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. As of June 30, 2023 and June 30, 2022, the Company has recorded a full valuation allowance against its deferred tax assets.

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

    The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statements of operations. As of June 30, 2023 and June 30, 2022, no accrued interest or penalties were required to be included on the related tax liability line in the consolidated balance sheets. The Company dissolved Escalon Holdings, Inc. and Escalon IP Holdings, Inc. in a tax-free dissolution under Section 332 of the Internal Revenue Code during the year ended June 30, 2022. There is no tax impact on the consolidated financial statements of the Company's current and prior years.

Leases

    The Company determines if an arrangement is a lease at the inception of a contract. Operating lease right-of-use ("ROU") assets are included in right-of-use assets on the consolidated balance sheets. The current and long-term components of operating lease liabilities are included in the current portion of operating lease liabilities and operating lease liabilities, net of current portion, respectively on the consolidated balance sheets.

    Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. Certain leases may include options to extend or terminate the lease. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

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.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (“ASC 326”), authoritative guidance amending how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance requires the application of a current expected credit loss model, which is a new impairment model based on expected losses. The new guidance is effective for interim and annual reporting periods beginning after December 15, 2022. The Company is currently evaluating the impact of the new guidance on the Company's consolidated financial statements.

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Intangible assets (Notes)

12 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets Disclosure [Text Block]

Intangible Assets

The Company's intangible assets consist of the following:

Licenses

    The Company capitalized and amortized its purchased licenses over 10 years. Amortization expense is approximately $20,000 for each of the years ended June 30, 2023 and 2022. Annual amortization related entirely to licenses is estimated to be $20,676 for the years ending June 30, 2024 through 2026 and $7,958 thereafter.

The following table presents amortized licenses as of June 30, 2023:

	Gross Carrying Amount		Impairment		Adjusted Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Amortized Intangible Assets Licenses
	$	206,155	$	—	$	206,155	$	(136,169)	$	69,986
Total	$	206,155	$	—	$	206,155	$	(136,169)	$	69,986

The following table presents amortized licenses as of June 30, 2022:

	Gross Carrying Amount		Impairment		Adjusted Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Amortized Intangible Assets Licenses
	$	199,000	$	—	$	199,000	$	(116,250)	$	82,750
Total	$	199,000	$	—	$	199,000	$	(116,250)	$	82,750

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Accrued expense (Notes)

12 Months Ended

Jun. 30, 2023

Payables and Accruals [Abstract]

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

	June 30,
	2023		2022
Accrued compensation	$	470,896	$	445,651
Warranty reserve	32,078		32,078
Tax payable	101,103		100,380
Other accruals	47,901		323,887
Total accrued expenses	$	651,978	$	901,996

Accrued compensation as of June 30, 2023 and 2022 primarily relates to payroll, vacation accruals, and sales tax payable.

Schedule of Accrued Liabilities [Table Text Block]

	June 30,
	2023		2022
Accrued compensation	$	470,896	$	445,651
Warranty reserve	32,078		32,078
Tax payable	101,103		100,380
Other accruals	47,901		323,887
Total accrued expenses	$	651,978	$	901,996

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Line of credit (Notes)

12 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

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 Company was required to put $250,000 in the TD bank savings account as collateral. Mr. Richard J. DePiano Sr. executed a guarantee of the loan in favor of TD Bank. Mr. DePiano Sr. passed away on October 3, 2019, therefore the guarantee is now assumed by his estate.     As of June 30, 2022, the line of credit balance was $201,575 with TD bank. TD bank elected to exercise the term note conversion option to convert the loan balance of $201,575 to a five-year term note effective March 29, 2023 ("the Conversion Date"). The scheduled monthly principal and interest payments in the amount of $4,247 began on April 29, 2023. Commencing on the Conversion Date, the aggregate principal balance outstanding bears interest at a fixed per annum rate of 9.49% pursuant to the loan's terms and conditions. $168,313 was reported as long term note payable as of March 31, 2023.

Year ending June 30,	TD Note Payment
2024	$	34,057
2025	37,434
2026	41,145
2027	45,224
2028	35,708
Total	$	193,568

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Long-term Debt (Notes)

12 Months Ended

Jun. 30, 2023

Long-Term Debt, Unclassified [Abstract]

Long-term Debt [Text Block]

Long-term debt

Paycheck Protection Program ("PPP") loan

    On April 27, 2020, the Company entered into a PPP loan for $500,000 in connection with the CARES Act related to COVID-19. The full amount of the PPP loan was classified as current as of June 30, 2022. The full amount of the PPP loan and accrued interest were forgiven on August 13, 2021, and reported as other income during the year ended June 30, 2022.

Economic Injury Disaster ("EIDL") loan

    EIDL is designed to provide economic relief to businesses that are currently experiencing a temporary loss of revenue due to the Coronavirus (COVID-19) pandemic. EIDL proceeds can be used to cover a wide array of working capital and normal operating expenses, such as continuation to health care benefits, rent, utilities, and fixed debt payments. The Company received $150,000 EIDL loan. The annual interest rate is 3.75%. The payment term is 30 years and the monthly payment is $731 from July 1, 2021. The EIDL loan is secured by the tangible and intangible personal property of the Company. The EIDL loan is secured by the tangible and intangible personal property of the Company.

The future annual principal amounts and accrued interest to be paid as of June 30, 2023 are as follows:

Year ending June 30,	EIDL Loan Payment
2024	$	3,105
2025	3,202
2026	3,324
2027	3,744
2028	3,594
Thereafter	132,571
Total	$	149,540

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Capital Stock Transactions

12 Months Ended

Jun. 30, 2023

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

Stock Option Plans

As of June 30, 2023, the Company had in effect two employee stock option plans that provide for incentive and non-qualified stock options. 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, 2023, options to purchase 157,000 shares of the Company’s common stock were outstanding and exercisable.

The following is a summary of Escalon’s stock option activity and related information for the fiscal years ended June 30, 2023 and 2022:

	2023			2022
	Common Stock Options	Weighted Average Exercise Price		Common Stock Options	Weighted Average Exercise Price
Outstanding at the beginning of the year	157,000	$	1.47	157,000	$	1.47
Granted	—	—		—	—
Exercised	—	—		—	—
Forfeited	—	—		—	$	—
Outstanding at the end of the year	157,000	$	1.47	157,000	$	1.47
Exercisable at the end of the year	157,000	$	1.47	157,000	1.47

The following table summarizes information about stock options outstanding as of June 30, 2023:

	Number Outstanding at June 30, 2023	Weighted Average Remaining Contractual Life (Years)	Weighted Average Exercise Price		Number Exercisable at June 30, 2023	Weighted Average Exercise Price
Range of Exercise Prices
$0.79	21,000	2.83	$	0.79	21,000	$	0.79
$1.45 to $2.12	136,000	0.83	$	1.57	136,000	$	1.57
Total	157,000				157,000

There was no compensation expense related to stock options for the years ended June 30, 2023 and 2022.

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Income Taxes

12 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

The provision for income taxes for the years ended June 30, 2023 and 2022 consists of the following:

	2023		2022
Current income tax provision
Federal	$	—	$	—
State	—		—
	—		—
Deferred income tax provision
Federal	64,399		(82,615)
State	30,666		(23,605)
Change in valuation allowance	(95,065)		106,220
	—		—
Income tax expense (benefit)	$	—	$	—

Income tax expense (benefit) as a percentage of loss for the years ended June 30, 2023 and 2022 differ from statutory federal income tax rate due to the following:

	2023		2022
Statutory federal income tax rate	21.00	%	21.00	%
Permanent differences	0.00	%	0.00	%
Valuation allowance	(21.00)	%	(21.00)	%
Effective income tax rate	0.00	%	0.00	%

The components of the net deferred income tax assets and liabilities as of June 30, 2023 and 2022 are as follows:

	2023		2022
Deferred income tax assets:
Net operating loss carryforward	$	7,028,242	7,430,299
Stock options	33,877		—
Operating lease liability	155,111		—
Allowance for doubtful accounts	47,391		49,633
Accrued vacation	70,084		48,969
Inventory reserve	107,914		73,583
Accelerated depreciation	290,921		57,628
Warranty reserve	9,879		6,736
Total deferred income tax assets	7,743,419		7,666,848
Valuation allowance	(7,554,406)		(7,649,471)
	189,013		17,377
Deferred income tax liabilities:
Accelerated depreciation	(21,554)		(17,377)
Right of use asset	(167,459)		—
Total deferred income tax liabilities	(189,013)		(17,377)
	$	—	$	—

As of June 30, 2023, the Company has a valuation allowance of $7,554,406, which primarily relates to the federal net operating loss carryforwards. During the year ended June 30, 2023, the valuation allowance decreased by $95,065 and during the year ended June 30, 2022, the valuation increased by $106,220. 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 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. The Company has available federal and state net operating loss carry forwards of approximately $32,814,000 and $2,427,000, respectively, of which $25,376,000 and $2,029,000, respectively, will expire over the next ten years, $5,209,000 and $398,000, respectively, will expire in years eleven through twenty, and $2,229,000 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.

Fiscal year ended June 30, 2019 and subsequent years remain open to tax examination. 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, 2023, 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.

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Commitments and Contingencies

12 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

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.

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Retirement and post retirement plans (Notes)

12 Months Ended

Jun. 30, 2023

Retirement Benefits [Abstract]

Retirement and Post-Retirement Plans

Retirement and Post-Retirement Plans

    On June 23, 2005 the Company entered into a Supplemental Executive Retirement Benefit Agreement with its former Chairman, Mr. DePiano Sr.. The agreement provided 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 was obligated to pay the executive $8,491 per month for life, with payments commencing the month after retirement.

As of July 1, 2019 approximately $792,000 was accrued for Mr. DePiano, Sr.'s retirement benefits. The amount represented the approximate present value of the supplemental retirement benefits awarded using a discount rate of ### as of July 1, 2019. Mr. DePiano Sr. passed away on October 3, 2019. According to the agreement, the benefits terminate upon Mr. DePiano, Sr.'s death. Therefore, the Company recognized a gain with the termination of the retirement benefit obligation of $758,000, which has been reported as other income for the year ended June 30, 2020.

	2023		2022
Balance July 1,	$	—	$	791,985
Actuarial adjustment	—		(758,021)
Payment of benefits	—		(33,964)
Balance June 30,	$	—	$	—

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Related Party Transactions

12 Months Ended

Jun. 30, 2023

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions and Preferred Stock

    On February 14, 2018, the Company entered into a Debt Exchange Agreement (the “Exchange Agreement”) with Mr. DePiano Sr., the Company's former Chairman and DP Associates Inc. Profit-Sharing Plan of which Mr. DePiano Sr. 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 for 2,000,000 shares of Series A Convertible Preferred Stock (the “Preferred Stock”). As of June 30, 2023 and 2022, the related party interest accrual of $112,389 related to the debt prior to the exchange, remained as an on demanded payable.

    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, 2023 beneficially own approximately 77.81% of the voting power on all actions to be taken by the Company’s stockholders.

    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, 2023 and 2022 the cumulative dividends payable is $277,331 ($0.1387 per share) and $225,731 ($0.1129 per share), respectively.

    Mr. DePiano Sr. passed away on October 3, 2019 and left a will by which he appointed Richard J. DePiano, Jr., the Chief Executive Officer of the Company, as executor. Richard DePiano Jr. was elected to serve as chairman of the Company's board. Mr. DePiano, Jr. qualified as executor and has control over the listed shares in his capacity as executor of Mr. DePiano Sr.'s estate.

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Concentration of credit risk (Notes)

12 Months Ended

Jun. 30, 2023

Concentration Risk [Line Items]

Concentration Risk Disclosure [Text Block]

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

    One customer accounted for approximately 11% of net sales during the year ended June 30, 2023. One customer accounted for approximately 11% of net sales during the year ended June 30, 2022.

    As of June 30, 2023 the Company had one customer that represents approximately 24% of the total accounts receivable balance. As of June 30, 2022 the Company had one customer that represents approximately 13% of the total accounts receivable balance.

Major Supplier

    The Company's two largest suppliers accounted for 42% and 11% of the total purchases for the year ended June 30, 2023. The Company's two largest suppliers accounted for the total purchases for 39% and 12% of total purchases for the year ended June 30, 2022. As of June 30, 2023 the Company had two suppliers that represent approximately 36% and 11% of the total accounts payable balance. As of June 30, 2022 the Company had one supplier that represents 36% of the total accounts payable balance.

Foreign Sales

    Domestic and international sales from continuing operations are as follows:

(in thousands)	For the Years Ended June 30,
	2023				2022
Domestic	$	7,044	57.8	%	$	5,720	53.4	%
Foreign	5,136		42.2	%	4,983		46.6	%
Total	$	12,180	100.0	%	$	10,703	100.0	%

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Leases (Notes)

12 Months Ended

Jun. 30, 2023

Leases 842 [Abstract]

Lessee, Operating Leases

The Company leases certain facilities and equipment under operating leases. Total lease expense, under ASC 842, was included in cost of revenue and marketing, general and administrative costs in the Company's unaudited condensed consolidated statement of operations for the years ended June 30, 2023 and 2022 as follows:

	Year Ended June 30,
	2023		2022
Operating lease costs:
Fixed	$	341,136	$	337,774
Total:	$	341,136	$	337,774

    Supplemental cash flow information was as follows:

	Year Ended June 30,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases	$	343,241	$	334,912
Total	$	343,241	$	334,912

    Leases recorded on the balance sheet consist of the following:

		June 30,
Leases (operating)	Classification on the Balance Sheet	2023		2022
Assets
Operating lease ROU assets	Right-of-use asset	$	503,647	$	788,257
Liabilities
Current	Current portion of operating lease liabilities	$	329,638	$	304,737
Non-current	Operating lease liabilities	$	214,103	$	538,794

    The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate)

under noncancelable operating leases with terms of more than one year to the total operating lease liabilities

recognized on the consolidated balance sheets as of June 30, 2023:

    The aggregate future lease payments for operating leases as of June 30, 2023 were as follows:

	Operating
2024	$	351,042
2025	212,415
2026	3,928
2027	1,200
2028	1,200
Thereafter	600
Total lease payments	570,385
Less interest	26,644
Present value of lease liabilities	$	543,741

    Average lease terms and discount rates were as follows:

	June 30,
	2023		2022
Weighted-average remaining lease terms (years)
Operating leases	1.67		3.35
Weighted-average discount rate
Operating leases	5.69	%	5.65	%

.

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Significant Accounting Policies (Policies)

12 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Restrictions on Cash and Cash Equivalents [Table Text Block]

As of June 30, 2023 and 2022 restricted cash included approximately $256,000, which was pursuant to the requirements in the TD Bank Loan entered into June 2018 (see Note 6).

Principles of Consolidation

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

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("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.

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. As of June 30, 2023 there were no cash equivalents.

Fair Value of Financial Instruments

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

Revenue Recognition

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 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 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:

•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.

•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.

    Deferred Revenue

    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.

	Years ended June 30,
	2023		2022
Beginning of Year	$	333,000	$	364,000
Additions	717,000		692,000
Revenue Recognized	(624,000)		(722,000)
End of Year	$	426,000	$	333,000

Included in accrued expenses as of June 30, 2023 and 2022 is approximately $129,000 and $213,000, respectively of customer deposits that will be recorded as income in the consecutive period once the products have been shipped. Revenue recorded that included within prior period deferred revenue was $315,000 and $362,000, respectively for year ended June 30, 2023 and 2022.

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 revenue.

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, 2023 and 2022 was approximately $25,000 and $29,000, respectively.

    Property and equipment consist of the following:

	June 30,
	2023		2022
Equipment	$	777,785	$	771,097
Furniture and fixtures	128,499		128,499
Leasehold improvements	39,048		39,048
	945,332		938,644
Less: Accumulated depreciation and amortization	(911,268)		(885,984)
	$	34,064	$	52,660

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. The Company recorded an allowance for doubtful accounts of approximately $154,000 and $236,000 as of June 30, 2023 and 2022.

	June 30,
	2023		2022
Balance, July 1	$	236,349	$	100,480
Increase in allowance	118,000		155,267
Recovery in bad debts	(113,400)		—
Write-offs	(87,071)		(19,398)
Balance, June 30	$	153,878	$	236,349

Intangible Assets

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. At June 30, 2023 and 2022 the Company concluded that there were no triggering event that would result in impairment of the long-lived assets, including the ROU assets.

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.

Net Income (loss) Per Share

The Company used the two-class method to compute net income per common share. These participating securities included the Company’s convertible preferred stock which accrues dividends payable. The two-class method requires earnings for the period to be allocated between common stock and participating securities based upon their respective rights to receive distributed and undistributed earnings.

Under the two-class method, for periods with net income, basic net income per common share is computed by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Net income attributable to common stockholders is computed by subtracting from net income the portion of current period earnings that the participating securities would have been entitled to receive pursuant to their dividend rights had all of the period’s earnings been distributed. No such adjustment to earnings is made during periods with a net loss, as the holders of the participating securities have no obligation to fund losses.

Diluted net income per common share is computed under the two-class method by using the weighted average number of shares of common stock outstanding, plus, for periods with net income attributable to common stockholders, the potential dilutive effects of stock options. The Company analyzed the potential dilutive effect of any outstanding dilutive securities under the “if-converted” method and treasury-stock method when calculating diluted earnings per share, in which it is assumed that the outstanding participating securities convert into common stock at the beginning of the period or date of issuance, if later. The Company reports the more dilutive of the approaches (two-class or “if-converted”) as its diluted net income per share during the period. per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. As of June 30, 2023 and 2022, 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 stock options would be anti-dilutive.

	For the Years Ended June 30,
	2023		2022
Numerator:
Numerator for basic earnings (loss) per share:
Net income	$	456,826	$	18,081
Less undeclared dividends on convertible stocks	51,600		51,600
Less net income allocated to convertible preferred stocks	183,695		—
Net income (loss) applicable to common stockholders	$	221,531	$	(33,519)
Numerator for diluted earnings (loss) per share:
Net income	$	456,826	$	18,081
Undeclared dividends on convertible stocks	51,600		51,600
Net income (loss) applicable to convertible common stockholders	$	405,226	$	(33,519)
Denominator:
Denominator for basic earnings per share - weighted average shares outstanding	7,415,329		7,415,329
Weighted average preferred stock converted to common stock	6,148,873		5,804,873
Denominator for diluted earnings per share - weighted average and assumed conversion	13,564,202		13,220,202
Net income per share:
Basic net income per share	$	0.03	$	0.00
Diluted net income per share	$	0.03	$	0.00

The following table summarizes convertible preferred stock and securities that, if exercised would have an anti-dilutive effect

on earnings per share.

	For the Years Ended June 30,
	2023	2022
Stock options	157,000	157,000
Convertible preferred stock	—	—
Total potential dilutive securities not included in income per share	157,000	157,000

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.    The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. As of June 30, 2023 and June 30, 2022, the Company has recorded a full valuation allowance against its deferred tax assets.

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

    The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statements of operations. As of June 30, 2023 and June 30, 2022, no accrued interest or penalties were required to be included on the related tax liability line in the consolidated balance sheets. The Company dissolved Escalon Holdings, Inc. and Escalon IP Holdings, Inc. in a tax-free dissolution under Section 332 of the Internal Revenue Code during the year ended June 30, 2022. There is no tax impact on the consolidated financial statements of the Company's current and prior years.

Lessee, Leases [Policy Text Block]

The Company determines if an arrangement is a lease at the inception of a contract. Operating lease right-of-use ("ROU") assets are included in right-of-use assets on the consolidated balance sheets. The current and long-term components of operating lease liabilities are included in the current portion of operating lease liabilities and operating lease liabilities, net of current portion, respectively on the consolidated balance sheets.     Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. Certain leases may include options to extend or terminate the lease. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

New Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (“ASC 326”), authoritative guidance amending how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance requires the application of a current expected credit loss model, which is a new impairment model based on expected losses. The new guidance is effective for interim and annual reporting periods beginning after December 15, 2022. The Company is currently evaluating the impact of the new guidance on the Company's consolidated financial statements.

Research, Development, and Computer Software, Policy [Policy Text Block]

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

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Significant Accounting Policies (Tables)

12 Months Ended

Jun. 30, 2023

Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

The Company used the two-class method to compute net income per common share. These participating securities included the Company’s convertible preferred stock which accrues dividends payable. The two-class method requires earnings for the period to be allocated between common stock and participating securities based upon their respective rights to receive distributed and undistributed earnings.

Under the two-class method, for periods with net income, basic net income per common share is computed by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Net income attributable to common stockholders is computed by subtracting from net income the portion of current period earnings that the participating securities would have been entitled to receive pursuant to their dividend rights had all of the period’s earnings been distributed. No such adjustment to earnings is made during periods with a net loss, as the holders of the participating securities have no obligation to fund losses.

Diluted net income per common share is computed under the two-class method by using the weighted average number of shares of common stock outstanding, plus, for periods with net income attributable to common stockholders, the potential dilutive effects of stock options. The Company analyzed the potential dilutive effect of any outstanding dilutive securities under the “if-converted” method and treasury-stock method when calculating diluted earnings per share, in which it is assumed that the outstanding participating securities convert into common stock at the beginning of the period or date of issuance, if later. The Company reports the more dilutive of the approaches (two-class or “if-converted”) as its diluted net income per share during the period. per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the year. As of June 30, 2023 and 2022, 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 stock options would be anti-dilutive.

	For the Years Ended June 30,
	2023		2022
Numerator:
Numerator for basic earnings (loss) per share:
Net income	$	456,826	$	18,081
Less undeclared dividends on convertible stocks	51,600		51,600
Less net income allocated to convertible preferred stocks	183,695		—
Net income (loss) applicable to common stockholders	$	221,531	$	(33,519)
Numerator for diluted earnings (loss) per share:
Net income	$	456,826	$	18,081
Undeclared dividends on convertible stocks	51,600		51,600
Net income (loss) applicable to convertible common stockholders	$	405,226	$	(33,519)
Denominator:
Denominator for basic earnings per share - weighted average shares outstanding	7,415,329		7,415,329
Weighted average preferred stock converted to common stock	6,148,873		5,804,873
Denominator for diluted earnings per share - weighted average and assumed conversion	13,564,202		13,220,202
Net income per share:
Basic net income per share	$	0.03	$	0.00
Diluted net income per share	$	0.03	$	0.00

The following table summarizes convertible preferred stock and securities that, if exercised would have an anti-dilutive effect

on earnings per share.

	For the Years Ended June 30,
	2023	2022
Stock options	157,000	157,000
Convertible preferred stock	—	—
Total potential dilutive securities not included in income per share	157,000	157,000

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	For the Years Ended June 30,
	2023		2022
Numerator:
Numerator for basic earnings (loss) per share:
Net income	$	456,826	$	18,081
Less undeclared dividends on convertible stocks	51,600		51,600
Less net income allocated to convertible preferred stocks	183,695		—
Net income (loss) applicable to common stockholders	$	221,531	$	(33,519)
Numerator for diluted earnings (loss) per share:
Net income	$	456,826	$	18,081
Undeclared dividends on convertible stocks	51,600		51,600
Net income (loss) applicable to convertible common stockholders	$	405,226	$	(33,519)
Denominator:
Denominator for basic earnings per share - weighted average shares outstanding	7,415,329		7,415,329
Weighted average preferred stock converted to common stock	6,148,873		5,804,873
Denominator for diluted earnings per share - weighted average and assumed conversion	13,564,202		13,220,202
Net income per share:
Basic net income per share	$	0.03	$	0.00
Diluted net income per share	$	0.03	$	0.00

The following table summarizes convertible preferred stock and securities that, if exercised would have an anti-dilutive effect

on earnings per share.

	For the Years Ended June 30,
	2023	2022
Stock options	157,000	157,000
Convertible preferred stock	—	—
Total potential dilutive securities not included in income per share	157,000	157,000

Deferred Revenue, by Arrangement, Disclosure [Table Text Block]

	Years ended June 30,
	2023		2022
Beginning of Year	$	333,000	$	364,000
Additions	717,000		692,000
Revenue Recognized	(624,000)		(722,000)
End of Year	$	426,000	$	333,000

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Significant Accounting Policies Property Plant and Equipment (Tables)

12 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Line Items]

Property, Plant and Equipment [Table Text Block]

	June 30,
	2023		2022
Equipment	$	777,785	$	771,097
Furniture and fixtures	128,499		128,499
Leasehold improvements	39,048		39,048
	945,332		938,644
Less: Accumulated depreciation and amortization	(911,268)		(885,984)
	$	34,064	$	52,660

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Significant Accounting Policies Deferred revenue (Tables)

12 Months Ended

Jun. 30, 2023

Revenue Recognition and Deferred Revenue [Abstract]

Deferred Revenue, by Arrangement, Disclosure [Table Text Block]

	Years ended June 30,
	2023		2022
Beginning of Year	$	333,000	$	364,000
Additions	717,000		692,000
Revenue Recognized	(624,000)		(722,000)
End of Year	$	426,000	$	333,000

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Intangible assets (Tables)

12 Months Ended

Jun. 30, 2023

Licensing Agreements [Member]

Finite-Lived Intangible Assets [Line Items]

Schedule of Finite-Lived Intangible Assets [Table Text Block]

	Gross Carrying Amount		Impairment		Adjusted Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Amortized Intangible Assets Licenses
	$	206,155	$	—	$	206,155	$	(136,169)	$	69,986
Total	$	206,155	$	—	$	206,155	$	(136,169)	$	69,986

The following table presents amortized licenses as of June 30, 2022:

	Gross Carrying Amount		Impairment		Adjusted Gross Carrying Amount		Accumulated Amortization		Net Carrying Value
Amortized Intangible Assets Licenses
	$	199,000	$	—	$	199,000	$	(116,250)	$	82,750
Total	$	199,000	$	—	$	199,000	$	(116,250)	$	82,750

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Accrued expense (Tables)

12 Months Ended

Jun. 30, 2023

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities [Table Text Block]

	June 30,
	2023		2022
Accrued compensation	$	470,896	$	445,651
Warranty reserve	32,078		32,078
Tax payable	101,103		100,380
Other accruals	47,901		323,887
Total accrued expenses	$	651,978	$	901,996

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Line of credit (Tables)

12 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Schedule of Maturities of Long-term Debt

Year ending June 30,	TD Note Payment
2024	$	34,057
2025	37,434
2026	41,145
2027	45,224
2028	35,708
Total	$	193,568

The future annual principal amounts and accrued interest to be paid as of June 30, 2023 are as follows:

Year ending June 30,	EIDL Loan Payment
2024	$	3,105
2025	3,202
2026	3,324
2027	3,744
2028	3,594
Thereafter	132,571
Total	$	149,540

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Long-term Debt EIDL maturities (Tables)

12 Months Ended

Jun. 30, 2023

Debt Instrument [Line Items]

Schedule of Maturities of Long-term Debt

Year ending June 30,	TD Note Payment
2024	$	34,057
2025	37,434
2026	41,145
2027	45,224
2028	35,708
Total	$	193,568

The future annual principal amounts and accrued interest to be paid as of June 30, 2023 are as follows:

Year ending June 30,	EIDL Loan Payment
2024	$	3,105
2025	3,202
2026	3,324
2027	3,744
2028	3,594
Thereafter	132,571
Total	$	149,540

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Income Taxes (Tables)

12 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

The provision for income taxes for the years ended June 30, 2023 and 2022 consists of the following:

	2023		2022
Current income tax provision
Federal	$	—	$	—
State	—		—
	—		—
Deferred income tax provision
Federal	64,399		(82,615)
State	30,666		(23,605)
Change in valuation allowance	(95,065)		106,220
	—		—
Income tax expense (benefit)	$	—	$	—

Income tax expense (benefit) as a percentage of loss for the years ended June 30, 2023 and 2022 differ from statutory federal income tax rate due to the following:

	2023		2022
Statutory federal income tax rate	21.00	%	21.00	%
Permanent differences	0.00	%	0.00	%
Valuation allowance	(21.00)	%	(21.00)	%
Effective income tax rate	0.00	%	0.00	%

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

The components of the net deferred income tax assets and liabilities as of June 30, 2023 and 2022 are as follows:

	2023		2022
Deferred income tax assets:
Net operating loss carryforward	$	7,028,242	7,430,299
Stock options	33,877		—
Operating lease liability	155,111		—
Allowance for doubtful accounts	47,391		49,633
Accrued vacation	70,084		48,969
Inventory reserve	107,914		73,583
Accelerated depreciation	290,921		57,628
Warranty reserve	9,879		6,736
Total deferred income tax assets	7,743,419		7,666,848
Valuation allowance	(7,554,406)		(7,649,471)
	189,013		17,377
Deferred income tax liabilities:
Accelerated depreciation	(21,554)		(17,377)
Right of use asset	(167,459)		—
Total deferred income tax liabilities	(189,013)		(17,377)
	$	—	$	—

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Retirement and post retirement plans (Tables)

12 Months Ended

Jun. 30, 2023

Retirement Benefits [Abstract]

Rollforward of Supplemental Retirement Benefits

	2023		2022
Balance July 1,	$	—	$	791,985
Actuarial adjustment	—		(758,021)
Payment of benefits	—		(33,964)
Balance June 30,	$	—	$	—

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Concentration of credit risk (Tables)

12 Months Ended

Jun. 30, 2023

Concentration Risk [Line Items]

Schedules of Concentration of Risk, by Risk Factor [Table Text Block]

Domestic and international sales from continuing operations are as follows:

(in thousands)	For the Years Ended June 30,
	2023				2022
Domestic	$	7,044	57.8	%	$	5,720	53.4	%
Foreign	5,136		42.2	%	4,983		46.6	%
Total	$	12,180	100.0	%	$	10,703	100.0	%

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Leases (Tables)

12 Months Ended

Jun. 30, 2023

Leases 842 [Abstract]

Lease, Cost [Table Text Block]

	Year Ended June 30,
	2023		2022
Operating lease costs:
Fixed	$	341,136	$	337,774
Total:	$	341,136	$	337,774

	Year Ended June 30,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases	$	343,241	$	334,912
Total	$	343,241	$	334,912

	June 30,
	2023		2022
Weighted-average remaining lease terms (years)
Operating leases	1.67		3.35
Weighted-average discount rate
Operating leases	5.69	%	5.65	%

.

Lessee, Operating Lease, Liability, Maturity

	Operating
2024	$	351,042
2025	212,415
2026	3,928
2027	1,200
2028	1,200
Thereafter	600
Total lease payments	570,385
Less interest	26,644
Present value of lease liabilities	$	543,741

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Going concern (Details) - USD ($)	Jun. 30, 2023	Jun. 30, 2022
Going concern [Abstract]
Retained Earnings (Accumulated Deficit)	$ (68,419,615)	$ (68,876,441)

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Significant Accounting Policies (Cash and Cash Equivalents) (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2021
Accounting Policies [Abstract]
Restricted Cash	$ 256,293	$ 256,165	$ 255,920
Maximum maturity of highly liquid investments, period	90 days

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Significant Accounting Policies (Inventory) (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
schedule of inventory [Abstract]
Inventory, net	$ 1,587,989	$ 1,603,955
Inventory Valuation Reserves	(260,396)	(350,396)
Inventory, Raw Materials, Gross	882,093	1,010,471
Inventory, Work in Process, Gross	85,575	138,182
Inventory, Finished Goods, Gross	880,717	805,698
Inventory, Gross	1,848,385	1,954,351
Inventory Write-down	150,000
Increase in inventory reserve	60,000	$ 0
Inventory reserve change	$ 90,000

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Significant Accounting Policies (Accounts Receivable) (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2021
Accounting Policies [Abstract]
Accounts Receivable, Allowance for Credit Loss	$ 153,878	$ 236,349	$ 100,480
SEC Schedule, 12-09, Valuation Allowances and Reserves, Additions, Charge to Cost and Expense	118,000	155,267
Accounts Receivable, Allowance for Credit Loss, Writeoff	(87,071)	(19,398)
Accounts Receivable, Allowance for Credit Loss, Recovery	$ (113,400)	$ 0

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Significant Accounting Policies (Net Income (loss) Per Share) (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net income	$ 456,826	$ 18,081
Net Income (Loss) from Continuing Operations Available to Common Shareholders, Basic	221,531	(33,519)
Net income (loss) applicable to convertible common stockholders	$ 405,226	$ (33,519)
Basic Weighted average shares outstanding	7,415,329	7,415,329
Weighted average shares - diluted	13,564,202	13,220,202

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Significant Accounting Policies Earning per share details (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net income	$ 456,826	$ 18,081
Preferred Stock Dividends, Income Statement Impact	51,600	51,600
Net income (loss) applicable to convertible common stockholders	$ 405,226	$ (33,519)
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	157,000	157,000
Net Income (Loss) from Continuing Operations Available to Common Shareholders, Basic	$ 221,531	$ (33,519)
Convertible Preferred Dividends, Net of Tax	$ 51,600
Dilutive Securities, Effect on Basic Earnings Per Share, Dilutive Convertible Securities		$ 51,600
Weighted average shares - basic	7,415,329	7,415,329
Incremental Common Shares Attributable to Dilutive Effect of Conversion of Preferred Stock	6,148,873	5,804,873
Weighted average shares - diluted	13,564,202	13,220,202
Earnings (Loss) Per Share, Basic	$ 0.03	$ (0.00)
Earnings (Loss) Per Share, Diluted	$ 0.03	$ (0.00)
Convertible Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	157,000	157,000
Equity Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	0	0

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Significant Accounting Policies Property pant and equipment (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 945,332	$ 938,644
Less: Accumulated depreciation and amortization	(911,268)	(885,984)
Property, Plant and Equipment, Net	34,064	52,660
Depreciation and amortization	45,202	48,432
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	39,048	39,048
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	128,499	128,499
Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 777,785	$ 771,097

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Significant Accounting Policies deferred revenue (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2021
Revenue Recognition and Deferred Revenue [Abstract]
Deferred Revenue	$ 426,000	$ 333,000	$ 364,000
Deferred Revenue, Additions	717,000	692,000
Deferred Revenue, Revenue Recognized	(624,000)	(722,000)
Contract with Customer, Liability	129,000	213,000
Contract with Customer, Performance Obligation Satisfied in Previous Period	$ 315,000	$ 362,000

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Intangible assets (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2022
Finite-Lived Intangible Assets, Net	$ 69,986		$ 82,750
Finite-lived tangible assets, accumulated impairment	0		0
Licensing Agreements [Member]
Amortized Intangible Assets Licenses	(136,169)		(116,250)
Finite-Lived Intangible Assets, Net	69,986		82,750
Finite-Lived Intangible Asset, Expected Amortization, after Year Five	7,958
Finite-Lived Intangible Assets, Gross	206,155		199,000
Finite-lived intangible assets, net of impairment	206,155		$ 199,000
Finite-Lived Intangible Asset, Expected Amortization, Year Two	$ 20,000
Licensing Agreements [Member] | Scenario, Forecast
Finite-Lived Intangible Assets, Amortization Expense, Rolling Year Two		$ 20,676
Licensing Agreements [Member] | Maximum [Member]
Finite-Lived Intangible Assets, Amortization Method	10

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Accrued expense (Details) - USD ($)	Jun. 30, 2023	Jun. 30, 2022
Payables and Accruals [Abstract]
Employee-related Liabilities, Current	$ 470,896	$ 445,651
Product Warranty Accrual, Current	32,078	32,078
Sales and Excise Tax Payable	101,103	100,380
Other Accrued Liabilities, Current	47,901	323,887
Accrued Liabilities, Current	$ 651,978	$ 901,996

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Line of credit (Details) - USD ($)		12 Months Ended
	Apr. 29, 2023	Jun. 30, 2023	Jun. 30, 2021	Mar. 31, 2023	Jun. 29, 2018
Line of Credit Facility [Line Items]
Notes Payable				$ 168,313
Line of Credit [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Fair Value of Amount Outstanding		$ 201,575
Debt Instrument, Term		5 years
Line of Credit Facility, Periodic Payment, Principal	$ 4,247
Line of Credit Facility, Interest Rate at Period End				9.49%
Notes Payable to Banks [Member]
Line of Credit Facility [Line Items]
Notes Payable to Bank					$ 250,000
Debt Instrument, Interest Rate, Stated Percentage					5.00%
Debt Instrument, Basis Spread on Variable Rate		74.00%
Debt Instrument, Interest Rate During Period			5.74%
Line of Credit Facility, Collateral Fees, Amount		$ 250,000
Long-Term Debt, Maturity, Year One		34,057
Long-Term Debt, Maturity, Year Two		37,434
Long-Term Debt, Maturity, Year Three		41,145
Long-Term Debt, Maturity, Year Four		45,224
Long-Term Debt, Maturity, Year Five		35,708
Long-Term Debt, Gross		$ 193,568

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Long-term Debt (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Debt Instrument [Line Items]
Other Notes Payable, Current		$ 500,000
EIDL Loan
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 150,000
Debt Instrument, Interest Rate, Stated Percentage	3.75%
Debt Instrument, Term	30 years
Debt Instrument, Periodic Payment	$ 731
Secured Debt [Member]
Debt Instrument [Line Items]
Long-Term Debt, Maturity, Year One	3,105
Long-Term Debt, Maturity, Year Two	3,202
Long-Term Debt, Maturity, Year Three	3,324
Long-Term Debt, Maturity, Year Four	3,744
Long-Term Debt, Maturity, Year Five	3,594
Long-Term Debt, Maturity, after Year Five	132,571
Long-term Debt	$ 149,540

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Capital Stock Transactions (Stock Option Plans) (Narrative) (Details)	12 Months Ended
	Jun. 30, 2023 $ / shares shares	Jun. 30, 2022 $ / shares shares	Jun. 30, 2021 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ / shares	$ 1.47	$ 1.47	$ 1.47
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | shares	157,000	157,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | shares	157,000	157,000	157,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ / shares	$ 1.47	$ 1.47
Share-based Payment Arrangement, Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Plans	2
Exercise period	10 years
Exercise Price, Range Three [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ / shares	$ 1.57
Share-based Payment Arrangement, Option, Exercise Price Range, Shares Exercisable | shares	136,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | shares	136,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ / shares	$ 1.57
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	9 months 29 days
Exercise Price, Range One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ / shares	$ 0.79
Share-based Payment Arrangement, Option, Exercise Price Range, Shares Exercisable | shares	21,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | shares	21,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ / shares	$ 0.79
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	2 years 9 months 29 days
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	1 year
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	5 years

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Capital Stock Transactions (Stock Option Activity) (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	157,000	157,000	157,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 1.47	$ 1.47	$ 1.47
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	157,000	157,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price	$ 1.47	$ 1.47
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	0	0
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price	$ 0	$ 0
APIC, Share-based Payment Arrangement, Recognition and Exercise	$ 0	$ 0
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price	$ 0	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period	0	0
Share-based Compensation Arrangements by Share-based Payment Award, Options, Forfeitures in Period, Weighted Average Exercise Price	$ 0	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 0	$ 0
Exercise Price, Range Three [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	136,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	9 months 29 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 1.57
Share-based Payment Arrangement, Option, Exercise Price Range, Shares Exercisable	136,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price	$ 1.57
Exercise Price, Range One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	21,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	2 years 9 months 29 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 0.79
Share-based Payment Arrangement, Option, Exercise Price Range, Shares Exercisable	21,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price	$ 0.79

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Income Taxes (Provision for Income Taxes) (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Income Tax Disclosure [Abstract]
Deferred Federal Income Tax Expense (Benefit)	$ 64,399	$ (82,615)
Deferred State and Local Income Tax Expense (Benefit)	30,666	(23,605)
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount	$ (95,065)	$ (106,220)

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Income Taxes (Effective Income Tax Rate) (Details)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Income Tax Disclosure [Abstract]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%	21.00%
Effective Income Tax Rate Reconciliation, Deduction, Percent	0.00%	0.00%
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent	(21.00%)	(21.00%)
Effective Income Tax Rate Reconciliation, Percent	0.00%	0.00%

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Income Taxes (Components of Net Deferred Income Tax Assets and Liabilities) (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Income Tax Disclosure [Abstract]
Deferred Tax Assets, Operating Loss Carryforwards	$ 7,028,242	$ 7,430,299
Deferred Tax Expense from Stock Options Exercised	33,877	0
Deferred Tax Assets, Regulatory Assets and Liabilities	155,111	0
Deferred income tax liabilities:
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Allowance for Doubtful Accounts	47,391	49,633
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits, Employee Benefits	70,084	48,969
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Reserves	107,914	73,583
Deferred Tax Assets, Property, Plant and Equipment	290,921	57,628
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Warranty Reserves	9,879	6,736
Deferred Tax Assets, Gross	7,743,419	7,666,848
Deferred Tax Assets, Valuation Allowance	(7,554,406)	(7,649,471)
Deferred Tax Assets, Net of Valuation Allowance	189,013	17,377
Deferred Tax Liabilities, Property, Plant and Equipment	(21,554)	(17,377)
Deferred Tax Liabilities, Leasing Arrangements	(167,459)	0
Deferred Tax Liabilities, Gross	(189,013)	(17,377)
Deferred Tax Assets, Net	0	0
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount	$ (95,065)	$ (106,220)

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Income Taxes Operation loss carry forward (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Operating Loss Carryforwards [Line Items]
Deferred Tax Assets, Valuation Allowance	$ 7,554,406	$ 7,649,471
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount	95,065	$ 106,220
Internal Revenue Service (IRS) [Member]
Operating Loss Carryforwards [Line Items]
Operating Loss Carryforwards	32,814,000
Deferred Tax Assets, Operating Loss Carryforwards, Not Subject to Expiration	2,229,000
State and Local Jurisdiction [Member]
Operating Loss Carryforwards [Line Items]
Operating Loss Carryforwards	2,427,000
Deferred Tax Assets, Operating Loss Carryforwards, Not Subject to Expiration	$ 0
Expiration Period, One [Member]
Operating Loss Carryforwards [Line Items]
Net Operating Loss, Expiration Period	10 years
Expiration Period, One [Member] | Internal Revenue Service (IRS) [Member]
Operating Loss Carryforwards [Line Items]
Tax Credit Carryforward, Valuation Allowance	$ 25,376,000
Expiration Period, One [Member] | State and Local Jurisdiction [Member]
Operating Loss Carryforwards [Line Items]
Tax Credit Carryforward, Valuation Allowance	2,029,000
Expiration Period, Two [Member] | Internal Revenue Service (IRS) [Member]
Operating Loss Carryforwards [Line Items]
Tax Credit Carryforward, Valuation Allowance	5,209,000
Expiration Period, Two [Member] | State and Local Jurisdiction [Member]
Operating Loss Carryforwards [Line Items]
Tax Credit Carryforward, Valuation Allowance	$ 398,000
Minimum [Member] | Expiration Period, Two [Member]
Operating Loss Carryforwards [Line Items]
Net Operating Loss, Expiration Period	11 years
Maximum [Member] | Expiration Period, Two [Member]
Operating Loss Carryforwards [Line Items]
Net Operating Loss, Expiration Period	20 years

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Retirement and post retirement plans (Details) - USD ($)	12 Months Ended	81 Months Ended
	Jun. 30, 2022	Oct. 03, 2019	Jun. 30, 2021
Retirement Benefits [Abstract]
Supplemental retirement benefits, monthly payment		$ 8,491
Accrued retirement benefits			$ 792,000
Gain on termination of retirement benefit obligation	$ 758,000

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Retirement and post retirement plans - liability rollforward (Details) - USD ($)	12 Months Ended	81 Months Ended
	Jun. 30, 2022	Oct. 03, 2019
Retirement Benefit Obligation [Roll Forward]
Balance July 1,	$ 792,000
Actuarial adjustment	$ (758,000)
Payment of benefits		$ (8,491)

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Related Party Transactions (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2021
Related Party Transaction [Line Items]
Related Party Transaction, Amounts of Transaction	$ 645,000
Common Stock, Voting Rights	77.81
Convertible Preferred Stock, Shares Issued upon Conversion	2.15
Common Stock, Conversion Basis	4,300,000
Convertible Preferred Stock, Percentage Of Outstanding Shares Of Common Stock Upon Conversion	36.70%
Dividends Payable, Amount Per Share	$ 0.1387	$ 0.1129	$ 0.0258
Dividends Payable, Date to be Paid	$ 277,331	$ 225,731
Interest Payable, Current	$ 112,389	$ 112,389

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Concentration of credit risk (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Concentration Risk [Line Items]
Concentration Risk, Supplier		two
Net income	$ 456,826	$ 18,081
Accumulated Deficit [Member]
Concentration Risk [Line Items]
Net income	$ 456,826	$ 18,081
Customer Concentration Risk [Member] | Customer One [Member]
Concentration Risk [Line Items]
Concentration Risk, Customer	One	One
Geographic Concentration Risk [Member]
Concentration Risk [Line Items]
Revenues	$ 12,180,000	$ 10,703,000
Accounts Receivable
Concentration Risk [Line Items]
Concentration Risk, Customer	one	one
Accounts Receivable | Customer Concentration Risk [Member] | Customer One [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	24.00%	13.00%
Revenue Benchmark | Supplier Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration Risk, Supplier	two
Revenue Benchmark | Customer Concentration Risk [Member] | Customer One [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	11.00%	11.00%
Revenue Benchmark | Geographic Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	100.00%	100.00%
Accounts Payable | Supplier Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration Risk, Supplier	two	one
Domestic [Member] | Geographic Concentration Risk [Member]
Concentration Risk [Line Items]
Revenues	$ 7,044,000	$ 5,720,000
Domestic [Member] | Revenue Benchmark | Geographic Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	57.80%	53.40%
International [Member] | Geographic Concentration Risk [Member]
Concentration Risk [Line Items]
Revenues	$ 5,136,000	$ 4,983,000
International [Member] | Revenue Benchmark | Geographic Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	42.20%	46.60%
Supplier one [Member] | Accounts Payable Benchmark [Member] | Supplier Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	36.00%	36.00%
Supplier one [Member] | Revenue Benchmark | Supplier Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	42.00%	39.00%
Supplier two [Member] [Member] | Accounts Payable Benchmark [Member] | Supplier Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	11.00%
Supplier two [Member] [Member] | Revenue Benchmark | Supplier Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	11.00%	12.00%

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Leases (Details) - USD ($)	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Leases 842 [Abstract]
Short-term Lease Payments	$ 343,241	$ 334,912
Net present value of new lease future payments	$ 543,741
Operating Lease, Weighted Average Remaining Lease Term	1 year 8 months 1 day	3 years 4 months 6 days
Operating Leases, Future Minimum Payments Receivable, Remainder of Fiscal Year	$ 351,042
Finance Lease, Liability, to be Paid, Year Two	212,415
Operating Lease, Right-of-Use Asset	503,647	$ 788,257
Finance Lease, Liability, to be Paid, Year Three	3,928
Finance Lease, Liability, to be Paid, Year Four	1,200
Finance Lease, Liability, to be Paid, Year Five	1,200
Operating Leases, Future Minimum Payments, Due Thereafter	600
Operating Leases, Future Minimum Payments Due	570,385
Interest portion in the future lease payments	$ 26,644
Operating Lease, Weighted Average Discount Rate, Percent	5.69%	5.65%
Operating Lease, Liability, Current	$ 329,638	$ 304,737
Operating Lease, Liability, Noncurrent	214,103	538,794
Operating Lease, Expense	$ 341,136	$ 337,774