0000087802-14-000004.txt : 20140515 0000087802-14-000004.hdr.sgml : 20140515 20140515104129 ACCESSION NUMBER: 0000087802-14-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20140331 FILED AS OF DATE: 20140515 DATE AS OF CHANGE: 20140515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SCIENTIFIC INDUSTRIES INC CENTRAL INDEX KEY: 0000087802 STANDARD INDUSTRIAL CLASSIFICATION: LABORATORY ANALYTICAL INSTRUMENTS [3826] IRS NUMBER: 042217279 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-06658 FILM NUMBER: 14844585 BUSINESS ADDRESS: STREET 1: 70 ORVILLE DR STREET 2: AIRPORT INTERNATIONAL PLZ CITY: BOHEMIA STATE: NY ZIP: 11716 BUSINESS PHONE: 6315674700 MAIL ADDRESS: STREET 1: 70 ORVILLE DR CITY: BOHEMIA STATE: NY ZIP: 11716 10-Q 1 qmar314.txt 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For quarterly period ended March 31, 2014 TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ___________ ______________ Commission File Number: 0-6658 ___________________________ SCIENTIFIC INDUSTRIES, INC. ____________________________________________________________________ (Exact name of registrant as specified in its charter) Delaware 04-2217279 ____________________________ _________________________________ (State or other jurisdiction (IRS Employer Identification No.) of incorporation or organization) 70 Orville Drive, Bohemia, New York 11716 ________________________________________ __________ (Address of principal executive offices) (Zip Code) (631)567-4700 ____________________________________________________ (Registrant's telephone number, including area code) Not Applicable _____________________________________________________________________ (Former name, former address and former fiscal year, if changed since last report) Indicate by check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), except for a Report on Form 8-K required to be filed in February 2014 with respect to an acquisition and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ]. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of Alarge accelerated filer, "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. Large accelerated filer Accelerated Filer Non-accelerated filer Smaller reporting company [ X ] (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ X ] No The number of shares outstanding of the issuer's common stock par value, $0.05 per share, as of April 25, 2014 was 1,469,112 shares. TABLE OF CONTENTS PART I - FINANCIAL INFORMATION ITEM 1 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS: Page Condensed Consolidated Balance Sheets 1 Condensed Consolidated Statements of Operations 2 Condensed Consolidated Statements of Comprehensive Income (Loss) 3 Condensed Consolidated Statements of Cash Flows 4 Notes to Unaudited Condensed Consolidated Financial Statements 5 ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS 13 ITEM 4 CONTROLS AND PROCEDURES 16 PART II - OTHER INFORMATION ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K 16 SIGNATURE 17 EXHIBITS 18 PART I-FINANCIAL INFORMATION Item 1. Financial Statements SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS ASSETS March 31, June 30, 2014 2013 (Unaudited) ___________ __________ Current Assets: Cash and cash equivalents $ 343,000 $ 927,300 Investment securities 474,000 908,400 Trade accounts receivable, net 1,135,300 815,900 Inventories 2,249,300 1,705,600 Prepaid expenses and other current assets 125,900 59,000 Deferred taxes 89,000 86,600 __________ __________ Total current assets 4,416,500 4,502,800 Property and equipment at cost, net 272,400 156,500 Intangible assets, net 1,883,000 773,500 Goodwill 705,300 589,900 Other assets 24,100 24,100 Deferred taxes 111,800 106,200 __________ __________ Total assets $7,413,100 $6,153,000 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable $ 234,700 $ 156,800 Customer advances 271,900 15,900 Bank line of credit 80,000 - Notes payable, current 46,500 78,300 Accrued expenses and taxes 427,600 407,700 Contingent consideration payable, current 120,000 19,000 __________ __________ Total current liabilities 1,180,700 677,700 Contingent consideration payable, less current portion 408,700 51,600 Notes payable, less current portion - 26,700 __________ __________ Total liabilities 1,589,400 756,000 __________ __________ Shareholders' equity: Common stock, $.05 par value; authorized 7,000,000 shares; 1,488,914 issued and outstanding at March 31, 2014 and 1,357,465 at June 30, 2013 74,400 67,900 Additional paid-in capital 2,419,700 1,977,100 Accumulated other comprehensive loss ( 6,100) ( 13,600) Retained earnings 3,388,100 3,418,000 __________ __________ 5,876,100 5,449,400 Less common stock held in treasury, at cost, 19,802 shares 52,400 52,400 __________ __________ Total shareholders' equity 5,823,700 5,397,000 Total liabilities and __________ __________ shareholders' equity $7,413,100 $6,153,000 ========== ========== See notes to unaudited condensed consolidated financial statements 1 For the Three Month For the Nine Month Periods Ended Periods Ended March 31, March 31, ______________________ ______________________ 2014 2013 2014 2013 __________ __________ __________ __________ Revenues $1,786,300 $1,626,100 $4,970,200 $4,854,700 Cost of sales 1,088,900 810,700 2,860,500 2,744,700 __________ __________ __________ __________ Gross profit 697,400 815,400 2,109,700 2,110,000 __________ __________ __________ __________ Operating Expenses: General & administrative 461,800 320,800 1,108,100 910,000 Selling 198,000 188,600 602,800 536,000 Research & development 113,800 100,800 301,900 356,000 __________ __________ __________ __________ Total operating expenses 773,600 610,200 2,012,800 1,802,000 __________ __________ __________ __________ Income (loss) from operations ( 76,200) 205,200 96,900 308,000 __________ __________ __________ __________ Other income (expense): Investment income 1,000 5,700 19,500 11,600 Other ( 3,700) 600 ( 7,700) 1,500 Interest expense ( 900) ( 1,100) ( 2,400) ( 3,800) __________ __________ __________ __________ Total other income (expense), net ( 3,600) 5,200 9,400 9,300 __________ __________ __________ __________ Income (loss) before income taxes (benefit) ( 79,800) 210,400 106,300 317,300 __________ __________ __________ __________ Income tax expense (benefit): Current ( 1,400) 53,600 40,200 74,800 Deferred ( 18,700) 6,700 ( 11,400) 16,200 __________ __________ __________ __________ Total income (loss) tax expense (benefit) ( 20,100) 60,300 28,800 91,000 __________ __________ __________ __________ Net income (loss) ($ 59,700) $ 150,100 $ 77,500 $ 226,300 ========== ========== ========== ========== Basic earnings (loss) per common share ($ .04) $ .11 $ .06 $ .17 Diluted earnings (loss) per common share ($ .04) $ .11 $ .06 $ .17 Cash dividends declared per common share $ .00 $ .00 $ .08 $ .03 See notes to unaudited condensed consolidated financial statements 2 SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)(UNAUDITED) For the Three Month For the Nine Month Periods Ended Periods Ended March 31, March 31, ___________________ ____________________ 2014 2013 2014 2013 ___________________ ____________________ Net income (loss) ($ 59,700) $150,100 $ 77,500 $ 226,300 Other comprehensive income: Unrealized holding gain arising during period, net of tax 10,100 3,900 7,500 16,800 _________ ________ _________ _________ Comprehensive income (loss) ($ 49,600) $154,000 $ 85,000 $ 243,100 ========= ======== ========= ========= See notes to unaudited condensed consolidated financial statements 3 SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) For the Nine Month Periods Ended March 31, 2014 March 31, 2013 ______________ ______________ Operating activities: Net income $ 77,500 $ 226,300 _________ __________ Adjustments to reconcile net income to net cash provided by (used in) operating activities: Loss on sale of investments 17,300 7,400 Depreciation and amortization 154,000 132,400 Deferred income tax (benefit) ( 11,400) 16,200 Stock-based compensation 14,900 7,600 Changes in operating assets and liabilities, net of effect of acquisition: Accounts receivable ( 319,400) ( 108,200) Inventories ( 399,700) ( 631,500) Prepaid expenses and other current assets ( 66,900) 104,200 Accounts payable 77,900 24,800 Customer advances 256,000 404,700 Accrued expenses and taxes 19,900 143,700 Other assets - 1,600 ___________ ___________ Total adjustments ( 257,400) 102,900 ___________ ___________ Net cash provided by (used in) operating activities ( 179,900) 329,200 ___________ ___________ Investing activities: Cash paid for asset acquisition ( 700,000) - Redemption of investment securities, available-for-sale 450,900 717,600 Purchase of investment securities, available-for-sale ( 25,000) ( 716,900) Capital expenditures ( 47,100) ( 28,100) Purchase of other intangible assets ( 2,900) ( 2,100) ___________ ___________ Net cash used in investing activities ( 324,100) ( 29,500) ___________ ___________ Financing activities: Line of credit proceeds 150,000 - Line of credit repayments ( 70,000) - Payments of contingent consideration ( 1,100) ( 25,900) Proceeds from exercise of stock options 6,700 - Cash dividend declared and paid ( 107,400) ( 40,100) Principal payments on note payable ( 58,500) ( 56,600) ___________ ___________ Net cash used in financing activities ( 80,300) ( 122,600) ____________ ___________ Net increase (decrease) in cash and cash equivalents ( 584,300) 177,100 Cash and cash equivalents, beginning of year 927,300 769,300 ____________ ___________ Cash and cash equivalents, end of period $ 343,000 $ 946,400 ============ =========== Supplemental disclosures: Cash paid during the period for: Income taxes $ 152,100 $ - Interest 2,400 3,800 See Note 2 for non-cash investing and financing activities in connection with an asset acquisition. See notes to unaudited condensed consolidated financial statements 4 SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS General: The accompanying unaudited interim condensed consolidated financial statements are prepared pursuant to the Securities and Exchange Commission's rules and regulations for reporting on Form 10-Q. Accordingly, certain information and footnotes required by accounting principles generally accepted in the United States for complete financial statements are not included herein. The Company believes all adjustments necessary for a fair presentation of these interim statements have been included and that they are of a normal and recurring nature. These interim statements should be read in conjunction with the Company's financial statements and notes thereto, included in its Annual Report on Form 10-K, for the fiscal year ended June 30, 2013. The results for the three and nine months ended March 31, 2014, are not necessarily an indication of the results for the full fiscal year ending June 30, 2014. 1. Summary of significant accounting policies: Principles of consolidation: The accompanying consolidated financial statements include the accounts of Scientific Industries, Inc. ("Scientific", a Delaware corporation), and its wholly-owned subsidiaries, Altamira Instruments, Inc.("Altamira", a Delaware corporation), Scientific Packaging Industries, Inc. (an inactive New York corporation) and Scientific Bioprocessing, Inc., ("SBI", a Delaware corporation). All are collectively referred to as the "Company". All material intercompany balances and transactions have been eliminated. 2. New Accounting Pronouncements: In July 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740), which clarifies the presentation requirements of unrecognized tax benefits when a net operating loss carries forward, a similar tax loss, or a tax credit carry forward exists at the reporting date. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013 and should be applied prospectively. The adoption of this ASU did not have a material impact to the Company's consolidated financial statements. 3. Acquisition: On February 26, 2014, the Company acquired substantially all the assets of a privately held company (the "Seller") engaged in the production and sale of a variety of laboratory and pharmacy balances and scales from its facility in Clifton, New Jersey. The acquisition was pursuant to an asset purchase agreement (the "Agreement") between the Company and the Seller and the principal stockholders of the Seller whereby the Company paid the Seller $700,000 in cash, 126,449 shares of Common Stock valued at $427,500 (of which 31,612 are held in escrow for one year) and agreed to make additional cash payments based on a percentage of net sales of the business acquired equal to 8% for the period ending June 30, 2014 annualized, 9% for the year ending June 30, 2015, 10% for the year ending June 30, 2016, and 11% for the year ending June 30, 2017, estimated at a present value of $460,000 on the date of acquisition. 5 The products which are similar to the Company's other Benchtop Laboratory Equipment, and in many cases used by the same customers, are marketed under the Torbal(R) brand. The principal customers are pharmacies, pharmacy schools, universities, government laboratories, and industries utilizing a precision scale. The products are sold primarily on a direct basis, including through the Company's e-commerce site. Management of the Company allocated the purchase price based on its valuation of the assets acquired, as follows: Current Assets $ 144,000 Property and Equipment 118,100 Goodwill* 115,400 Other Intangible Assets 1,210,000 ___________ Net Assets Acquired $ 1,587,500 =========== *See Note 8, "Goodwill and Other Intangible Assets". Of the $1,210,000 of the acquired other intangible assets, $570,000 was assigned to technology and websites with a useful life of 5 years, $120,000 was assigned to customer relationships with a estimated useful life of 9 years, $140,000 was assigned to the trade name with a useful life of 5 years, $110,000 was assigned to the IPR&D (intellectual property, and research and development) with a useful life of 3 years, and $270,000 was assigned to non-compete agreements with a useful life of 5 years. In connection with the acquisition, the Company entered into a three-year employment agreement with the Chief Operating Officer of the Seller as President of the Company's new Torbal Scales Division and Director of Marketing for the Company. The agreement may be extended by mutual consent for an additional two years. Pro forma results The unaudited pro forma condensed consolidated financial information in the table below summarizes the consolidated results of operations of the Company and its new Torbal Scales Division, as though the companies had been combined as of the beginning of each of the periods presented. The Company's results of operations for the three and nine months ended March 31, 2014 include the results of the Torbal Scales Division since February 26, 2014, the date of acquisition. The unaudited pro forma financial information presented below is for informational purposes only and is not intended to represent or be indicative of the consolidated results of the operations that would have been achieved if the acquisition had been completed as of the commencement of the periods presented. In addition, the Company was unable to obtain audited historical financial statements and, therefore, information presented is based on management's best judgment using the unaudited financial information provided and management's expectations. 6 For the Three Month For the Nine Month Periods Ended Periods Ended March 31, March 31, ______________________ ______________________ 2014 2013 2014 2013 ______________________ ______________________ Net Sales $2,006,300 $1,956,100 $5,900,200 $5,934,700 Net Income (loss) ($ 73,100) $ 136,200 $ 59,600 $ 213,100 Net income (loss per share - basic ($ .05) $ .09 $ .04 $ .15 Net income (loss) per share - diluted ($ .05) $ .09 $ .04 $ .15 4. Segment Information and Concentrations: The Company views its operations as three segments: the manufacture and marketing of standard benchtop laboratory equipment including the balances and scales by its Torbal Scales Division for research in university, hospital and industrial laboratories sold primarily through laboratory equipment distributors and on a direct basis ("Benchtop Laboratory Equipment"), the manufacture and marketing of custom-made catalyst research instruments for universities, government laboratories, and chemical and petrochemical companies sold on a direct basis ("Catalyst Research Instruments") and the marketing and production of bioprocessing systems for laboratory research in the biotechnology industry sold directly to customers and through distributors ("Bioprocessing Systems"). Segment information is reported as follows: Benchtop Catalyst Bio- Corporate Laboratory Research processing and Conso- Equipment Instruments Systems Other lidated __________ ___________ __________ _________ ___________ Three months ended March 31, 2014: Revenues $1,177,400 $ 603,900 $ 5,000 $ - $1,786,300 Foreign Sales 604,900 198,800 - - 803,700 Income(Loss)from Operations 61,400 ( 10,600) ( 58,000) ( 69,000) ( 76,200) Assets 4,017,100 1,847,900 873,300 674,800 7,413,100 Long-Lived Asset Expenditures 1,454,700 11,300 1,000 - 1,467,000 Depreciation and Amortization 32,700 8,500 24,300 - 65,500 7 Benchtop Catalyst Bio- Corporate Laboratory Research processing and Conso- Equipment Instruments Systems Other lidated __________ ___________ __________ _________ ___________ Three months ended March 31, 2013: Revenues $1,229,800 $ 360,600 $ 35,700 $ - $1,626,100 Foreign Sales 645,300 107,300 - - 752,600 Income(Loss)from Operations 243,300 3,600 ( 41,700) - 205,200 Assets 2,719,500 1,932,600 904,600 916,800 6,473,500 Long-Lived Asset Expenditures 1,700 1,200 - - 2,900 Depreciation and Amortization 10,700 8,700 24,000 - 43,400 Approximately 57% and 71% of net sales of benchtop laboratory equipment for the three month periods ended March 31, 2014 and 2013, respectively, were derived from the Company's main product, the Vortex-Genie 2 mixer, excluding accessories. Approximately 13% of total benchtop laboratory equipment sales were derived from the new Torbal Scales Division for the three months ended March 31, 2014. Two benchtop laboratory equipment customers accounted for approximately 22% and 27% of the segment's net sales for the three month periods ended March 31, 2014 and 2013 (15% and 20% of total net sales, respectively, for the periods). Sales of catalyst research instruments are generally pursuant to large orders averaging more than $100,000 per order to a limited numbers of customers. Sales to two customers in the three months ended March 31, 2014 and three different customers in the three months ended March 31, 2013, accounted respectively for 94% and 92% of the segment's net sales for each of the periods (32% and 20% of total net sales for the respective periods). Benchtop Catalyst Bio- Corporate Laboratory Research processing and Conso- Equipment Instruments Systems Other lidated __________ ___________ __________ _________ ___________ Nine months ended March 31, 2014: Revenues $3,401,200 $1,406,900 $ 162,100 $ - $4,970,200 Foreign Sales 2,049,100 367,100 2,000 - 2,418,200 Income(Loss)from Operations 299,100 ( 112,500) ( 10,200) ( 79,500) 96,900 Assets 4,017,100 1,847,900 873,300 674,800 7,413,100 Long-Lived Asset Expenditures 1,474,700 11,300 7,500 - 1,493,500 Depreciation and Amortization 55,300 26,100 72,600 - 154,000 8 Benchtop Catalyst Bio- Corporate Laboratory Research processing and Conso- Equipment Instruments Systems Other lidated __________ ___________ __________ _________ ___________ Nine months ended March 31, 2013: Revenues $3,459,500 $1,309,700 $ 85,500 $ - $4,854,700 Foreign Sales 2,014,900 626,400 - - 2,641,300 Income(Loss)from Operations 518,100 ( 62,500) ( 147,600) - 308,000 Assets 2,719,500 1,932,600 904,600 916,800 6,473,500 Long-Lived Asset Expenditures 10,900 19,300 - - 30,200 Depreciation and Amortization 33,300 27,200 71,900 - 132,400 Approximately 63% and 69% of net sales of benchtop laboratory equipment for the nine month periods ended March 31, 2014 and 2013, respectively, were derived from sales of the Company's main product, the Vortex-Genie 2 mixer, excluding accessories. Approximately 4% of total benchtop laboratory equipment sales for the nine months ended March 31, 2014 were derived from sales since acquisition in February 2014 of the new Torbal Scales Division. Two benchtop laboratory equipment customers, accounted for approximately 21% and 24% of the segment's net sales (14% and 17% of total net sales) for the nine month periods ended March 31, 2014 and 2013, respectively. Sales of catalyst research instruments to three customers in the nine months ended March 31, 2014 and to three other customers in the nine months ended March 31, 2013 accounted for approximately 59% and 49% of that segment's net sales (17% and 13% of total net sales) for the respective nine month periods. The Company's foreign sales are principally made to customers in Europe and Asia. The Company also has an arrangement with a supplier for annual minimum purchase commitments through February 2020 which the Company has already met for the current year. 5. Fair Value of Financial Instruments: The FASB defines the fair value of financial instruments as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements do not include transaction costs. The accounting guidance also expands the disclosure requirements concerning fair value and establishes a fair value hierarchy of valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels, which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are described below: Level 1 Inputs that are based upon unadjusted quoted prices for identical instruments traded in active markets. Level 2 Quoted prices in markets that are not considered to be active or financial instruments for which all significant inputs are observable, either directly or indirectly. Level 3 Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. 9 The following tables set forth by level within the fair value hierarchy the Company's financial assets and liabilities that were accounted for at fair value on a recurring basis at March 31, 2014 and June 30, 2013 according to the valuation techniques the Company used to determine their fair values: Fair Value Measurements Using Inputs Considered as Assets: Fair Value at March 31, 2014 Level 1 Level 2 Level 3 ______________ __________ ________ _________ Cash and cash equivalents $ 343,000 $ 343,000 $ - $ - Available for sale securities 474,000 474,000 - - __________ __________ ________ _________ Total $ 817,000 $ 817,000 $ - $ - Liabilities: Contingent consideration $ 528,700 $ - $ - $528,700 ========== ========== ======== ========= Fair Value Measurements Using Inputs Considered as Assets: Fair Value at March 31, 2014 Level 1 Level 2 Level 3 ______________ __________ ________ _________ Cash and cash equivalents $ 927,300 $ 927,300 $ - $ - Available for sale securities 908,400 908,400 - - __________ __________ ________ _________ Total $1,835,700 $1,835,700 $ - $ - ========== ========== ======== ========= Liabilities: Contingent consideration $ 70,600 $ - $ - $ 70,600 ========== ========== ======== ========= Investments in marketable securities classified as available-for-sale by security type at March 31, 2014 and June 30, 2013 consisted of the following: Unrealized Fair Holding Gain Cost Value (Loss) ____________ _________ ____________ At March 31, 2014: Available for sale: Equity securities $ 29,300 $ 37,400 $ 8,100 Mutual funds 450,800 436,600 ( 14,200) _________ _________ ___________ $ 480,100 $ 474,000 ($ 6,100) ========= ========= =========== Unrealized Fair Holding Gain Cost Value (Loss) ____________ _________ ____________ At June 30, 2013: Available for sale: Equity securities $ 29,300 $ 33,200 $ 3,900 Mutual funds 892,700 875,200 (17,500) _________ _________ ___________ $ 922,000 $ 908,400 $ (13,600) ========= ========= =========== 10 6. Inventories: At interim reporting periods, inventories for financial statement purposes are based on perpetual inventory records. Components of inventory are as follows: March 31, June 30, 2014 2013 __________ __________ Raw Materials $1,507,700 $1,336,800 Work in process 504,600 254,000 Finished Goods 237,000 114,800 __________ __________ $2,249,300 $1,705,600 ========== ========== 7. Earnings (Loss) per common share: Basic earnings (loss) per common share are computed by dividing net income (loss) by the weighted-average number of shares outstanding. Diluted earnings (loss) per common share include the dilutive effect of stock options, if any. Earnings (Loss) per common share was computed as follows: For the Three Month For the Nine Month Periods Ended Periods Ended March 31, March 31, ______________________ ______________________ 2014 2013 2014 2013 ___________ __________ __________ ___________ Net income (loss) ($ 59,700) $ 150,100 $ 77,500 $ 226,300 ___________ __________ __________ ___________ Weighted average common shares outstanding 1,390,433 1,337,663 1,382,519 1,336,844 Effect of dilutive securities - 4,701 9,741 4,543 ___________ __________ __________ ___________ Weighted average dilutive common shares outstanding 1,390,433 1,342,364 1,392,260 1,341,387 =========== ========== ========== =========== Basic earnings (loss) per common share ($ .04) $ .11 $ .06 $ .17 ========= ======= ======= ======== Diluted earnings (loss) per common share ($ .04) $ .11 $ .06 $ .17 ========= ======= ======= ======== Approximately 61,000 shares of the Company's common stock issuable upon the exercise of outstanding options were excluded from the calculation of diluted loss per common share, for the three month period ended March 31, 2014, because the effect would be anti-dilutive due to the loss for the period. Approximately 40,000 shares of the Company's common stock issuable upon the exercise of outstanding options were excluded from the calculation of diluted earnings per common share for each of the three and nine month periods ended March 31, 2013, because the effect would be anti-dilutive. 8. Goodwill and Other Intangible Assets: Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in connection with the Company's acquisitions. Goodwill amounted to $705,300 and $589,900 as of March 31, 2014 and June 30, 2013, respectively, all of which is deductible for tax purposes. 11 The components of other intangible assets are as follows: Useful Accumulated Lives Cost Amortization Net __________ _________ ____________ _________ At March 31, 2014: Technology, trademarks 5/10 yrs. $1,226,800 $ 455,300 $ 771,500 Trade names 6 yrs. 140,000 1,900 138,100 Websites 5 yrs. 210,000 3,500 206,500 Customer relationships 9/10 yrs. 357,000 210,700 146,300 Sublicense agreements 10 yrs. 294,000 69,800 224,200 Non-compete agreements 5 yrs. 384,000 112,200 271,800 IPR&D 3 yrs. 110,000 3,100 106,900 Other intangible assets 5 yrs. 157,400 139,700 17,700 __________ ___________ __________ $2,879,200 $ 996,200 $1,883,000 ========== =========== ========== Useful Accumulated Lives Cost Amortization Net __________ _________ ____________ _________ At June 30, 2013: Technology, trademarks 5/10 yrs. $ 865,400 $ 402,100 $ 463,300 Customer relationships 10 yrs. 237,000 203,200 33,800 Sublicense agreements 10 yrs. 294,000 47,800 246,200 Non-compete agreements 5 yrs. 114,000 105,900 8,100 Other intangible assets 5 yrs. 156,000 133,900 22,100 __________ __________ _________ $1,666,400 $ 892,900 $ 773,500 ========== ========== ========= Total amortization expense was $47,500 and $27,900 for the three months ended March 31, 2014 and 2013, respectively and $103,400 and $85,200 for the nine months ended March 31, 2014 and 2013, respectively. As of March 31, 2014, estimated future amortization expense related to intangible assets is $87,500 for the remainder of the fiscal year ending June 30, 2014, $347,600 for fiscal 2015, $351,800 for fiscal 2016, $336,600 for fiscal 2017, $322,100 for fiscal 2018, and $437,400 thereafter. 12 SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES Item 2. Management's Discussion and Analysis or Plan of Operations Certain statements contained in this report are not based on historical facts, but are forward-looking statements that are based upon various assumptions about future conditions. Actual events in the future could differ materially from those described in the forward-looking information. Numerous unknown factors and future events could cause such differences, including but not limited to, product demand, market acceptance, impact of competition, the ability to reach final agreements, the ability to finance and produce catalyst research instruments to customers' satisfaction, adverse economic conditions, and other factors affecting the Company's business that are beyond the Company's control. Consequently, no forward-looking statement can be guaranteed. We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. Liquidity and Capital Resources Cash and cash equivalents decreased $584,300 to $343,000 as of March 31, 2014 from $927,300 as of June 30, 2013. Operating activities used cash of $179,900 for the nine month period ended March 31, 2014 as compared to the $329,200 of cash provided for the nine month period ended March 31, 2013, due mainly to lower income in the 2014 period, higher balances of accounts receivable and inventories and decreases in customer advances. The increase in cash used in investing activities to $324,100 for the nine month period ended March 31, 2014 compared to $29,500 for the nine month period ended March 31, 2013 was primarily due to the acquisition. Cash used in financing activities was $80,300 for the nine month period ended March 31, 2014 compared to $122,600 for the nine month period ended March 31, 2013, due primarily to the line of credit proceeds partially offset by an increased dividend payment. On September 20, 2013, the Board of Directors of the Company declared a cash dividend of $.08 per share of Common Stock which was paid on November 4, 2013 to holders of record as of the close of business on October 11, 2013. The Company's working capital decreased by $589,300 to $3,235,800 as of March 31, 2014 from $3,825,100 at June 30, 2013 mainly due to the assets purchased of the new Torbal Scales Division. The Company has a line of credit with its bank, JPMorgan Chase Bank, N.A. which provides for maximum borrowings of up to $700,000, bearing interest at 3.05 percentage points above a defined LIBOR Index. The interest rate as of March 31, 2014 was approximately 3.20% and any borrowing is to be secured by a pledge of collateral consisting of the inventory, accounts, chattel paper, equipment and general intangibles of the Company. Outstanding amounts are due and payable by June 14, 2014, the expiration date of the line. As of March 31, 2014, $80,000 was outstanding under the line. There were no borrowings at June 30, 2013. The Company is currently negotiating line of credit terms with several financial institutions, since the Company anticipates that the line will not be renewed. 13 Management believes that the Company will be able to meet its cash flow needs for the 12 months ended March 31, 2015 from its available financial resources, including its cash and cash equivalents, the line of credit and investment securities. Results of Operations Financial Overview The Company recorded a loss before income taxes of $79,800 for the three month period ended March 31, 2014, compared to income before income taxes of $210,400 for the comparative period last year, primarily as a result of reduced sales of benchtop laboratory equipment, expenses related to the asset acquisition discussed in Note 2 and the related amortization expense. For the comparative nine month period ended March 31, 2014, the Company reflected income before income taxes of $106,300 compared to $317,300 for the comparable 2013 period, the lower income principally the result of reduced sales of benchtop laboratory equipment and catalyst research instruments, and the expenses related to the asset acquisition, partially offset by the profit derived from an order for bioprocessing product prototypes during the period that had minimal costs associated with the order, since the costs had been previously expensed as product development costs. The Three Months Ended March 31, 2014 Compared With the Three Months Ended March 31, 2013 Net sales for the three months ended March 31, 2014 increased by $160,200 (9.9%) to $1,786,300 from $1,626,100 for the three months ended March 31, 2013 as a result of a $243,300 increase in catalyst research instrument sales, partially offset by decreases of $52,400 and $30,700 in laboratory equipment sales and bioprocessing systems revenues, respectively. The results for the three months ended March 31, 2014 included one month of laboratory balance sales. Sales of benchtop laboratory equipment products generally comprise many small orders from distributors, while catalyst research instruments are sold pursuant to a small number of larger orders, typically averaging over $100,000 each, resulting in significant swings in revenues. The backlog of orders for catalyst research instruments was $505,200 as of March 31, 2014, most of which is expected to be delivered by fiscal year end, as compared to the backlog of $1,340,000 as of March 31, 2013, all of which was delivered by June 30, 2013. The gross profit for the three months ended March 31, 2014 was 39.0% compared to 50.1% for the three months ended March 31, 2013, the reduction primarily the result of lower sales and higher overhead expenses of the Benchtop Laboratory Equipment Operations. General and administrative expenses for the three months ended March 31, 2014 increased $141,000 (44.0%) to $461,800 compared to $320,800 for the three months ended March 31, 2013, primarily due to the costs related to the asset acquisition. Selling expenses for the three months ended March 31, 2014 increased $9,400 (5.0%) to $198,000 from $188,600 for the three months ended March 31, 2013, primarily the result of increased dealer-related activities for the Benchtop Laboratory Equipment Operations. 14 Research and development expenses for the three months ended March 31, 2014 increased to $113,800 from $100,800 for the three months ended March 31, 2013, primarily the result of increased new product development activity by the Benchtop Laboratory Equipment Operations. Total other income (expense) amounted to expense of $3,600 for the three months ended March 31, 2014 compared to income of $5,200 for the prior year period. The Company recorded an income tax benefit of $20,100 for the three months ended March 31, 2014 compared to an income tax expense of $60,300 for the three months ended March 31, 2013 due to the losses in the current year period. As a result of the foregoing, the net loss was $59,700 for the three months ended March 31, 2014, compared to net income of $150,100 for the three months ended March 31, 2013. Nine Months Ended March 31, 2014 Compared With the Nine Months Ended March 31, 2013 Net sales increased by $115,500 (2.4%) to $4,970,200 for the nine months ended March 31, 2014 compared to $4,854,700 for the nine months ended March 31, 2013, due to increases of $97,200 in catalyst research instrument sales and $76,600 in bioprocessing systems revenues; partially offset by a decrease of $58,300 in benchtop laboratory equipment sales despite the addition of one month of sales of laboratory balance products. The revenues generated by the Bioprocessing Systems Operations benefitted from a one-time order for prototype bioprocessing products of approximately $100,000, with the remaining revenues being derived from royalties. The products related to the order are still under development. Sales of benchtop laboratory equipment products generally are comprised of many small purchase orders from distributors, while sales of catalyst research instruments are comprised of a small number of large orders, typically averaging over $100,000 each, resulting in significant swings in revenues. The gross profit percentage for the nine months ended March 31, 2014 was 42.5%, compared to 43.5% for the prior year nine month period due to lower margins for the Catalyst Research Instruments Operations. General and administrative expenses increased by $198,100 (21.8%) to $1,108,100 for the nine months ended March 31, 2014 from $910,000 for the comparable period last year, mostly as a result of costs related to the asset acquisition. Selling expenses for the nine months ended March 31, 2014 increased by $66,800 (12.5%) to $602,800 compared to $536,000 for the nine months ended March 31, 2013, primarily the result of increased dealer-related activities for the Benchtop Laboratory Equipment Operations, and commissions and exhibitions expense for the Catalyst Research Instruments Operations. Research and development expenses for the nine months ended March 31, 2014 decreased by $54,100 (15.2%) to $301,900 from $356,000 for the nine months ended March 31, 2013, primarily the result of a reduction in product development expenses by the Company's Bioprocessing Systems Operations due to the use of lower-cost consultants. 15 Total other income was approximately $9,400 and $9,300, respectively, for the nine month comparative periods ended March 31, 2014 and 2013. Income tax expense for the nine months ended March 31, 2014 was $28,800 compared to income tax expense of $91,000 for the nine months ended March 31, 2013 due to the reduction in profits generated for the period. As a result of the foregoing, net income for the nine months ended March 31, 2014 was $77,500 compared to a $226,300 for the nine months ended March 31, 2013. Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures. As of the end of the period covered by this report, based on an evaluation 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), the Chief Executive and Chief Financial Officer of the Company has concluded that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in its Exchange Act reports is recorded, processed, summarized and reported within the applicable time periods specified by the SEC's rules and forms. The Company also concluded that information required to be disclosed in such reports is accumulated and communicated to the Company's management, including its principal executive and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Changes in Internal Control Over Financial Reporting. There was no change in the Company's internal controls over financial reporting that occurred during the most recently completed fiscal quarter that materially affected or is reasonably likely to materially affect the Company's internal controls over financial reporting. Part II B OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibit Number: Description 31.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (b) Reports on Form 8-K: Filed on February 28, 2014 reporting under Items 1.01 and 2.01. 16 SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES SIGNATURE In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Scientific Industries, Inc. Registrant /s/ Helena R. Santos ____________________________ Helena R. Santos President, Chief Executive Officer and Treasurer Principal Executive, Financial and Accounting Officer Date: May 15, 2014 EX-31 2 ex3120314.txt CERTIFICATION Exhibit 31.1 CERTIFICATION I, Helena R. Santos, certify that: 1. I have reviewed this report on Form 10-Q for the quarter ended March 31, 2014 of Scientific Industries, Inc., a smaller reporting company (the "Registrant"); 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. I am 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 internal disclosure and procedures, or caused such controls and procedures to be designed under my supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to me 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 my 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 my 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 that has materially affected, or is reasonably likely to affect, the Registrant's internal control over financial reporting; and 5. I have disclosed, based on my most recent evaluation of internal controls 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 controls 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 controls over financial reporting. May 15, 2014 /s/ Helena R. Santos _________________________ Helena R. Santos Chief Executive Officer and Chief Financial Officer EX-32 3 ex3220314.txt CERTIFICATION Exhibit 32.1 CERTIFICATION The undersigned as Chief Executive Officer and Chief Financial Officer of the Company, does hereby certify that the foregoing Quarterly Report of SCIENTIFIC INDUSTRIES, INC. (the "Company"), on Form 10-Q for the period ended March 31, 2014: (1) Fully complies with the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934; and (2) Fairly presents, in all material respects, the financial condition and results of operations of the Company. May 15, 2014 /s/ Helena R. Santos __________________________ Helena R. Santos Chief Executive Officer and Chief Financial Officer A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. 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4. Segment Information and Concentrations (Details Narrative)
3 Months Ended 9 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Mar. 31, 2014
Mar. 31, 2013
Benchtop Laboratory Equipment [Member]
       
Net sales 57.00% 71.00% 63.00% 69.00%
Consolidated sales 37.00% 54.00% 43.00% 49.00%
TwoCustomers [Member] | Benchtop Laboratory Equipment [Member]
       
Net sales 22.00% 27.00% 21.00% 24.00%
Consolidated sales 15.00% 20.00% 14.00% 17.00%
CustomerTwoMember | Catalyst Research Instruments [Member]
       
Net sales 94.00%      
Consolidated sales 32.00%      
Three Different Customers [Member] | Catalyst Research Instruments [Member]
       
Net sales   92.00%   49.00%
Consolidated sales   20.00%   13.00%
Three Customers [Member] | Catalyst Research Instruments [Member]
       
Net sales     59.00%  
Consolidated sales     17.00%  
XML 13 R9.htm IDEA: XBRL DOCUMENT v2.4.0.8
3. Acquisition
9 Months Ended
Mar. 31, 2014
Text Block [Abstract]  
Acquisition

3. Acquisition:

 

On February 26, 2014, the Company acquired substantially all the assets of a privately held company (the “Seller”) engaged in the production and sale of a variety of laboratory and pharmacy balances and scales from its facility in Clifton, New Jersey. The acquisition was pursuant to an asset purchase agreement (the "Agreement") between the Company and the Seller and the principal stockholders of the Seller whereby the Company paid the Seller $700,000 in cash, 126,449 shares of Common Stock valued at $427,500 (of which 31,612 are held in escrow for one year) and agreed to make additional cash payments based on a percentage of net sales of the business acquired equal to 8% for the period ending June 30, 2014 annualized, 9% for the year ending June 30, 2015, 10% for the year ending June 30, 2016, and 11% for the year ending June 30, 2017, estimated at a present value of $460,000 on the date of acquisition.

 

The products which are similar to the Company’s other Benchtop Laboratory Equipment, and in many cases used by the same customers, are marketed under the Torbal® brand. The principal customers are pharmacies, pharmacy schools, universities, government laboratories, and industries utilizing a precision scale. The products are sold primarily on a direct basis, including through the Company’s e-commerce site.

 

Management of the Company allocated the purchase price based on its valuation of the assets acquired, as follows:

 

 Current Assets   $ 144,000
 Property and Equipment    118,100
 Goodwill*    115,400
 Other Intangible Assets    1,210,000
 Net Assets Acquired   $ 1,587,500

 

*See Note 8, “Goodwill and Other Intangible Assets”.

 

Of the $1,210,000 of the acquired other intangible assets, $570,000 was assigned to technology and websites with a useful life of 5 years, $120,000 was assigned to customer relationships with a estimated useful life of 9 years, $140,000 was assigned to the trade name with a useful life of 5 years, $110,000 was assigned to the IPR&D (intellectual property, and research and development) with a useful life of 3 years, and $270,000 was assigned to non- compete agreements with a useful life of 5 years.

 

In connection with the acquisition, the Company entered into a three-year employment agreement with the Chief Operating Officer of the seller as President of the Company’s new Torbal Scales Division and Director of Marketing for the Company. The agreement may be extended by mutual consent for an additional two years.

 

Pro forma results

 

The unaudited pro forma condensed consolidated financial information in the table below summarizes the consolidated results of operations of the Company and its new Torbal Scales Division, as though the companies had been combined as of the beginning of each of the periods presented. The Company’s results of operations for the three and nine months ended March 31, 2014 include the results of the Torbal Scales Division since February 26, 2014, the date of acquisition. The unaudited pro forma financial information presented below is for informational purposes only and is not intended to represent or be indicative of the consolidated results of the operations that would have been achieved if the acquisition had been completed as of the commencement of the periods presented. In addition, the Company was unable to obtain audited historical financial statements and, therefore, information presented is based on management’s best judgment using the unaudited financial information provided and management’s expectations.

 

 

 

  For the Three Month For the Nine Month
  Periods Ended Periods Ended
  March 31, March 31,
  2014 2013 2014 2013
 Net Sales $2,006,300 $1,956,100 $5,900,200 $5,934,700
 Net Income (loss) ($ 73,100) $ 136,200 $ 59,600 $ 213,100
         
Net income (loss per share - basic ($ .05) $ .09 $ .04 $ .15
         
Net income (loss) per share - diluted ($ .05) $ .09 $ .04 $ .15
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7. Earnings (Loss) per common share (Details) (USD $)
3 Months Ended 9 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Mar. 31, 2014
Mar. 31, 2013
Earnings Loss Per Common Share Details        
Net income (loss) $ (59,700) $ 150,100 $ 77,500 $ 226,300
Weighted average common shares outstanding 1,390,433 1,337,663 1,382,519 1,336,844
Effect of dilutive securities    4,701 9,741 4,543
Weighted average dilutive common shares outstanding 1,390,433 1,342,364 1,392,260 1,341,387
Basic earnings/(loss) per common share $ (0.04) $ 0.11 $ 0.06 $ 0.17
Diluted earnings/(loss) per common share $ (0.04) $ 0.11 $ 0.06 $ 0.17
XML 16 R28.htm IDEA: XBRL DOCUMENT v2.4.0.8
6. Inventories (Details) (USD $)
Mar. 31, 2014
Jun. 30, 2013
Inventories Details    
Raw materials $ 1,507,700 $ 1,336,800
Work-in-process 504,600 254,000
Finished goods 237,000 114,800
Inventory $ 2,249,300 $ 1,705,600
XML 17 R30.htm IDEA: XBRL DOCUMENT v2.4.0.8
7. Earnings (Loss) per common share (Details Narrative)
3 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Equity [Abstract]    
Common stock issuable upon the exercise of outstanding options 61,000 40,000
XML 18 R31.htm IDEA: XBRL DOCUMENT v2.4.0.8
8. Goodwill and Other Intangible Assets (Details) (USD $)
Mar. 31, 2014
Jun. 30, 2013
Mar. 31, 2014
Technology, trademarks
Mar. 31, 2013
Technology, trademarks
Mar. 31, 2014
Trade names [Member]
Mar. 31, 2014
Websites [Member]
Mar. 31, 2014
Customer relationships
Mar. 31, 2013
Customer relationships
Mar. 31, 2014
Sublicense agreements
Mar. 31, 2013
Sublicense agreements
Mar. 31, 2014
Non-compete agreements
Mar. 31, 2013
Non-compete agreements
Mar. 31, 2014
IPR&amp;D [Member]
Mar. 31, 2014
Other intangible assets
Mar. 31, 2013
Other intangible assets
Useful Lives Minimum     5 years 5 years 6 years 5 years 9 years 10 years 10 years 10 years 5 years 5 years 3 years 5 years 5 years
Useful Lives Maximum     10 years 10 years     10 years                
Cost $ 2,879,200 $ 1,666,400 $ 1,226,800 $ 865,400 $ 140,000 $ 210,000 $ 357,000 $ 237,000 $ 294,000 $ 294,000 $ 384,000 $ 114,000 $ 110,000 $ 157,400 $ 156,000
Accumulated Amortization 996,200 892,900 455,300 402,100 1,900 3,500 210,700 203,200 69,800 47,800 112,200 105,900 3,100 139,700 133,900
Net $ 1,883,000 $ 773,500 $ 771,500 $ 463,300 $ 138,100 $ 206,500 $ 146,300 $ 33,800 $ 224,200 $ 246,200 $ 271,800 $ 8,100 $ 106,900 $ 17,700 $ 22,100
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2. New Accounting Pronouncements
9 Months Ended
Mar. 31, 2014
Notes to Financial Statements  
New Accounting Pronouncements

2. New Accounting Pronouncements:

 

In July 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740), which clarifies the presentation requirements of unrecognized tax benefits when a net operating loss carries forward, a similar tax loss, or a tax credit carry forward exists at the reporting date. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013 and should be applied prospectively. The adoption of this ASU did not have a material impact to the Company’s consolidated financial statements.

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8. Goodwill and Other Intangible Assets (Details Narrative) (USD $)
3 Months Ended 9 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Mar. 31, 2014
Mar. 31, 2013
Jun. 30, 2013
Goodwill And Other Intangible Assets Details Narrative          
Estimated future amortization expense 2014 $ 87,500   $ 87,500    
Estimated future amortization expense 2015 347,600   347,600    
Estimated future amortization expense 2016 351,800   351,800    
Estimated future amortization expense 2017 336,600   336,600    
Estimated future amortization expense 2018 322,100   322,100    
Estimated future amortization expense 2019 437,400   437,400    
Total amortization expense 47,500 27,900 103,400 85,200  
Goodwill $ 705,300   $ 705,300   $ 589,900
XML 21 R2.htm IDEA: XBRL DOCUMENT v2.4.0.8
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
Mar. 31, 2014
Jun. 30, 2013
Current Assets:    
Cash and cash equivalents $ 343,000 $ 927,300
Investment securities 474,000 908,400
Trade accounts receivable, net 1,135,300 815,900
Inventories 2,249,300 1,705,600
Prepaid expenses and other current assets 125,900 59,000
Deferred taxes 89,000 86,600
Total current assets 4,416,500 4,502,800
Property and equipment, net 272,400 156,500
Intangible assets, net 1,883,000 773,500
Goodwill 705,300 589,900
Other assets 24,100 24,100
Deferred taxes 111,800 106,200
Total assets 7,413,100 6,153,000
Current Liabilities:    
Accounts payable 234,700 156,800
Customer advances 271,900 15,900
Bank line of credit 80,000   
Notes payable, current 46,500 78,300
Accrued expenses and taxes 427,600 407,700
Contingent consideration payable, current portion 120,000 19,000
Total current liabilities 1,180,700 677,700
Contingent consideration payable, less current portion 408,700 51,600
Notes payable, less current portion    26,700
Total liabilities 1,589,400 756,000
Shareholders' equity:    
Common stock, $.05 par value; authorized 7,000,000 shares; 1,488,914 issued and outstanding at March 31, 2014 and 1,357,465 at June 30, 2013 74,400 67,900
Additional paid-in capital 2,419,700 1,977,100
Accumulated other comprehensive loss (6,100) (13,600)
Retained earnings 3,388,100 3,418,000
Total 5,876,100 5,449,400
Less common stock held in treasury, at cost, 19,802 shares 52,400 52,400
Total shareholders' equity 5,823,700 5,397,000
Total liabilities and shareholders' equity $ 7,413,100 $ 6,153,000
XML 22 R6.htm IDEA: XBRL DOCUMENT v2.4.0.8
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
9 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Operating activities:    
Net income $ 77,500 $ 226,300
Adjustments to reconcile net income to net cash provided by (used in) operating activities:    
Loss on sale of investments 17,300 7,400
Depreciation and amortization 154,000 132,400
Deferred income tax (benefit) (11,400) 16,200
Stock-based compensation 14,900 7,600
Changes in operating assets and liabilities, net of effect of acquisition:    
Accounts receivable (319,400) (108,200)
Inventories (399,700) (631,500)
Prepaid expenses and other current assets (66,900) 104,200
Accounts payable 77,900 24,800
Customer advances 256,000 404,700
Accrued expenses and taxes 19,900 143,700
Other assets    1,600
Total adjustments (257,400) 102,900
Net cash provided by (used in) operating activities (179,900) 329,200
Investing activities:    
Cash paid for asset acquisition (700,000)   
Redemption of investment securities, available-for-sale 450,900 717,600
Purchase of investment securities, available for sale (25,000) (716,900)
Capital expenditures (47,100) (28,100)
Purchase of other intangible assets (2,900) (2,100)
Net cash used in investing activities (324,100) (29,500)
Financing activities:    
Line of credit proceeds 150,000   
Line of credit repayments (70,000)   
Payments of contingent consideration (1,100) (25,900)
Proceeds from exercise of stock options 6,700   
Cash dividend declared and paid (107,400) (40,100)
Principal payments on note payable (58,500) (56,600)
Net cash used in financing activities (80,300) (122,600)
Net increase (decrease) in cash and cash equivalents (584,300) 177,100
Cash and cash equivalents, beginning of year 927,300 769,300
Cash and cash equivalents, end of period 343,000 946,400
Cash paid during the period for:    
Income Taxes 152,100   
Interest $ 2,400 $ 3,800
XML 23 R22.htm IDEA: XBRL DOCUMENT v2.4.0.8
3. Acquisition (Details) (USD $)
Mar. 31, 2014
Acquisition Details  
Current Assets $ 144,000
Property and Equipment 118,100
Goodwill 115,400
Other Intangible Assets 1,210,000
Net Assets Acquired $ 1,587,500
XML 24 R24.htm IDEA: XBRL DOCUMENT v2.4.0.8
4. Segment Information and Concentrations (Details) (USD $)
3 Months Ended 9 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Mar. 31, 2014
Mar. 31, 2013
Depreciation and Amortization     $ 154,000 $ 132,400
Benchtop Laboratory Equipment [Member]
       
Revenues 1,177,400 1,229,800 3,401,200 3,459,500
Foreign Sales 604,900 645,300 2,049,100 2,014,900
Income (Loss) from Operations 61,400 243,300 299,100 518,100
Assets 4,017,100 2,719,500 4,017,100 2,719,500
Long-lived Asset Expenditures 1,454,700 1,700 1,474,700 10,900
Depreciation and Amortization 32,700 10,700 55,300 33,300
Catalyst Research Instruments [Member]
       
Revenues 603,900 360,600 1,406,900 1,309,700
Foreign Sales 198,800 107,300 367,100 626,400
Income (Loss) from Operations (10,600) 3,600 (112,500) (62,500)
Assets 1,847,900 1,932,600 1,847,900 1,932,600
Long-lived Asset Expenditures 11,300 1,200 11,300 19,300
Depreciation and Amortization 8,500 8,700 26,100 27,200
Bioprocessing Systems [Member]
       
Revenues 5,000 35,700 162,100 85,500
Foreign Sales       2,000   
Income (Loss) from Operations (58,000) (41,700) (10,200) (147,600)
Assets 873,300 904,600 873,300 904,600
Long-lived Asset Expenditures 1,000    7,500   
Depreciation and Amortization 24,300 24,000 72,600 71,900
Corporate and Other [Member]
       
Revenues            
Foreign Sales            
Income (Loss) from Operations (69,000)    (79,500)   
Assets 674,800 916,800 674,800 916,800
Long-lived Asset Expenditures            
Depreciation and Amortization            
Consolidated [Member]
       
Revenues 1,786,300 1,626,100 4,970,200 4,854,700
Foreign Sales 803,700 752,600 2,418,200 2,641,300
Income (Loss) from Operations (76,200) 205,200 96,900 308,000
Assets 7,413,100 6,473,500 7,413,100 6,473,500
Long-lived Asset Expenditures 1,467,000 2,900 1,493,500 30,200
Depreciation and Amortization $ 65,500 $ 43,400 $ 154,000 $ 132,400
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1. Summary of significant accounting policies
9 Months Ended
Mar. 31, 2014
Notes to Financial Statements  
Summary of significant accounting policies

1. Summary of significant accounting policies:

 

Principles of consolidation:

 

The accompanying consolidated financial statements include the accounts of Scientific Industries, Inc. (“Scientific”, a Delaware corporation), and its wholly-owned subsidiaries, Altamira Instruments, Inc.(“Altamira”, a Delaware corporation), Scientific Packaging Industries, Inc. (an inactive New York corporation) and Scientific Bioprocessing, Inc., (“SBI”, a Delaware corporation). All are collectively referred to as the “Company”. All material intercompany balances and transactions have been eliminated.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
Mar. 31, 2014
Jun. 30, 2013
Shareholders' equity:    
Common stock,par value $ 0.05 $ 0.05
Common stock, authorized shares 7,000,000 7,000,000
Common stock, issued shares 1,488,914 1,357,465
Common stock, outstanding shares 1,488,914 1,357,465
Stock held in treasury, shares 19,802 19,802
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4. Segment Information and Concentrations (Tables)
9 Months Ended
Mar. 31, 2014
Segment Reporting [Abstract]  
Segment Information

 

  Benchtop Catalyst   Corporate  
  Laboratory Research Bioprocessing and  
  Equipment Instruments Systems Other Consolidated
Three months ended March 31, 2014:          
 Revenues $1,177,400 $ 603,900 $ 5,000 $ - $1,786,300
 Foreign Sales 604,900 198,800 - - 803,700
Income(Loss)from Operations 61,400 (10,600) (58,000) (69,000) ( 76,200)
 Assets 4,017,100 1,847,900 873,300 674,800 7,413,100
Long-Lived Asset Expenditures 1,454,700 11,300 1,000 - 1,467,000
Depreciation and Amortization 32,700 8,500 24,300 - 65,500

 

Three months ended March 31, 2013:

  Benchtop Catalyst   Corporate  
  Laboratory Research Bioprocessing and  
  Equipment Instruments Systems Other Consolidated
Three months ended March 31, 2013:          
 Revenues $1,229,800 $ 360,600 $ 35,700 $ - $1,626,100
 Foreign Sales 645,300 107,300 - - 752,600
 Income(Loss) from Operations 243,300 3,600 (41,700) - 205,200
 Assets 2,719,500 1,932,600 904,600 916,800 6,473,500
 Long-Lived Asset Expenditures 1,700 1,200 - - 2,900
Depreciation and Amortization 10,700 8,700 24,000 - 43,400

 

 

  Benchtop Catalyst   Corporate  
  Laboratory Research Bioprocessing and  
  Equipment Instruments Systems Other Consolidated
Nine months ended March 31, 2014:          
 Revenues $3,401,200 $1,406,900 $ 162,100 $ - $4,970,200
 Foreign Sales 2,049,100 367,100 2,000 - 2,418,200
Income(Loss) from Operations 299,100 (112,500) (10,200) (79,500) 96,900
 Assets 4,017,100 1,847,900 873,300 674,800 7,413,100
Long-Lived Asset Expenditures 1,474,700 11,300 7,500 - 1,493,500
Depreciation and Amortization 55,300 26,100 72,600 - 154,000

 

  Benchtop Catalyst   Corporate  
  Laboratory Research Bioprocessing and  
  Equipment Instruments Systems Other Consolidated
Nine months ended March 31, 2013:          
 Revenues $3,459,500 $1,309,700 $ 85,500 $ - $4,854,700
 Foreign Sales 2,014,900 626,400 - - 2,641,300
Income(Loss) from Operations 518,100 (62,500) (147,600) - 308,000
 Assets 2,719,500 1,932,600 904,600 916,800 6,473,500
Long-Lived Asset Expenditures 10,900 19,300 - - 30,200
Depreciation and Amortization 33,300 27,200 71,900 - 132,400

XML 29 R1.htm IDEA: XBRL DOCUMENT v2.4.0.8
Document and Entity Information
9 Months Ended
Mar. 31, 2014
Apr. 25, 2014
Document And Entity Information    
Entity Registrant Name SCIENTIFIC INDUSTRIES INC  
Entity Central Index Key 0000087802  
Document Type 10-Q  
Document Period End Date Mar. 31, 2014  
Amendment Flag false  
Current Fiscal Year End Date --06-30  
Is Entity a Well-known Seasoned Issuer? No  
Is Entity a Voluntary Filer? No  
Is Entity's Reporting Status Current? Yes  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   1,469,112
Document Fiscal Period Focus Q3  
Document Fiscal Year Focus 2014  
XML 30 R18.htm IDEA: XBRL DOCUMENT v2.4.0.8
5. Fair Value of Financial Instruments (Tables)
9 Months Ended
Mar. 31, 2014
Investments, All Other Investments [Abstract]  
Fair Value Inputs

Fair Value Measurements Using Inputs Considered as Assets:

 

  Fair Value at      
  March 31, 2014  Level 1 Level 2 Level 3
Cash and cash equivalents $ 343,000 $ 343,000 $ - $ -
Available for sale securities 474,000 474,000 - -
Total $ 817,000 $ 817,000 $ - $ -

 

Liabilities:

 

Contingent consideration  $ 528,700  $ -  $ -  $528,700

 

  Fair Value at      
  June 30, 2013 Level 1 Level 2 Level 3
Cash and cash equivalents $ 927,300 $ 927,300 $ - $ -
Available for sale securities 908,400 908,400 - -
Total $1,835,700 $1,835,700 $ - $ -

 

Liabilities:

 

Contingent consideration  $ 70,600  $ -  $ -  $ 70,600
Investments in Marketable Securitites

Investments in marketable securities classified as available-for-sale by security type at March 31, 2014 and June 30, 2013 consisted of the following:

 

      Unrealized
    Fair Holding Gain
  Cost Value (Loss)
At March 31, 2014:      
 Available for sale:      
 Equity securities $ 29,300 $ 37,400 $ 8,100
 Mutual funds 450,800 436,600 ( 14,200)
  $ 480,100 $ 474,000 ($ 6,100)

 

 

 

      Unrealized
    Fair Holding Gain
  Cost Value (Loss)
At June 30, 2013:      
 Available for sale:      
 Equity securities $ 29,300 $ 33,200 $ 3,900
 Mutual funds 892,700 875,200 (17,500)
  $ 922,000 $ 908,400 $ (13,600)
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
3 Months Ended 9 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Mar. 31, 2014
Mar. 31, 2013
Income Statement [Abstract]        
Revenues $ 1,786,300 $ 1,626,100 $ 4,970,200 $ 4,854,700
Cost of sales 1,088,900 810,700 2,860,500 2,744,700
Gross profit 697,400 815,400 2,109,700 2,110,000
Operating expenses:        
General & administrative 461,800 320,800 1,108,100 910,000
Selling 198,000 188,600 602,800 536,000
Research & development 113,800 100,800 301,900 356,000
Total operating expenses 773,600 610,200 2,012,800 1,802,000
Income (loss) from operations (76,200) 205,200 96,900 308,000
Other income (expense):        
Investment income 1,000 5,700 19,500 11,600
Other (3,700) 600 (7,700) 1,500
Interest expense (900) (1,100) (2,400) (3,800)
Total other income, (expense) net (3,600) 5,200 9,400 9,300
Income (loss) before income taxes (benefit) (79,800) 210,400 106,300 317,300
Income tax expense (benefit): Current (1,400) 53,600 40,200 74,800
Income tax expense (benefit): Deferred (18,700) 6,700 (11,400) 16,200
Total income (loss) tax expense (benefit) (20,100) 60,300 28,800 91,000
Net income (loss) $ (59,700) $ 150,100 $ 77,500 $ 226,300
Basic earnings (loss) per common share $ (0.04) $ 0.11 $ 0.06 $ 0.17
Diluted earnings (loss) per common share $ (0.04) $ 0.11 $ 0.06 $ 0.17
Cash dividends declared per common share $ 0.00 $ 0.00 $ 0.08 $ 0.03

XML 33 R12.htm IDEA: XBRL DOCUMENT v2.4.0.8
6. Inventories
9 Months Ended
Mar. 31, 2014
Inventory Disclosure [Abstract]  
Inventories

6. Inventories:

 

At interim reporting periods, inventories for financial statement purposes are based on perpetual inventory records. Components of inventory are as follows:

 

  March 31, June 30,
  2014 2013
Raw Materials $1,507,700 $1,336,800
Work in process 504,600 254,000
Finished Goods 237,000 114,800
$2,249,300  $1,705,600
XML 34 R11.htm IDEA: XBRL DOCUMENT v2.4.0.8
5. Fair Value of Financial Instruments
9 Months Ended
Mar. 31, 2014
Investments, All Other Investments [Abstract]  
Fair Value of Financial Instruments

5. Fair Value of Financial Instruments:

 

The FASB defines the fair value of financial instruments as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements do not include transaction costs.

 

The accounting guidance also expands the disclosure requirements concerning fair value and establishes a fair value hierarchy of valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels, which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are described below:

 

Level 1 Inputs that are based upon unadjusted quoted prices for identical instruments traded in active markets.

 

Level 2 Quoted prices in markets that are not considered to be active or financial instruments for which all significant inputs are observable, either directly or indirectly.

 

Level 3 Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

 

The following tables set forth by level within the fair value hierarchy the Company=s financial assets and liabilities that were accounted for at fair value on a recurring basis at March 31, 2014 and June 30, 2013 according to the valuation techniques the Company used to determine their fair values:

 

Fair Value Measurements Using Inputs

Considered as

Assets:

 

  Fair Value at      
  March 31, 2014  Level 1 Level 2 Level 3
Cash and cash equivalents $ 343,000 $ 343,000 $ - $ -
Available for sale securities 474,000 474,000 - -
Total $ 817,000 $ 817,000 $ - $ -

 

Liabilities:

 

Contingent consideration  $ 528,700  $ -  $ -  $528,700

 

Fair Value Measurements Using Inputs

Considered as

Assets:

  Fair Value at      
  June 30, 2013 Level 1 Level 2 Level 3
Cash and cash equivalents $ 927,300 $ 927,300 $ - $ -
Available for sale securities 908,400 908,400 - -
Total $1,835,700 $1,835,700 $ - $ -

 

Liabilities:

 

Contingent consideration  $ 70,600  $ -  $ -  $ 70,600

 

 

Investments in marketable securities classified as available-for-sale by security type at March 31, 2014 and June 30, 2013 consisted of the following:

 

      Unrealized
    Fair Holding Gain
  Cost Value (Loss)
At March 31, 2014:      
 Available for sale:      
 Equity securities $ 29,300 $ 37,400 $ 8,100
 Mutual funds 450,800 436,600 ( 14,200)
  $ 480,100 $ 474,000 ($ 6,100)

 

 

 

      Unrealized
    Fair Holding Gain
  Cost Value (Loss)
At June 30, 2013:      
 Available for sale:      
 Equity securities $ 29,300 $ 33,200 $ 3,900
 Mutual funds 892,700 875,200 (17,500)
  $ 922,000 $ 908,400 $ (13,600)
XML 35 R23.htm IDEA: XBRL DOCUMENT v2.4.0.8
3. Acquisition (Details 1) (USD $)
3 Months Ended 9 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Mar. 31, 2014
Mar. 31, 2013
Text Block [Abstract]        
Net Sales $ 2,006,300 $ 1,956,100 $ 5,900,200 $ 5,934,700
Net Income (loss) $ (73,100) $ 136,200 $ 59,600 $ 213,100
Net income (loss per share - basic $ (0.05) $ 0.09 $ 0.04 $ 0.15
Net income (loss per share - diluted $ (0.05) $ 0.09 $ 0.04 $ 0.15
XML 36 R19.htm IDEA: XBRL DOCUMENT v2.4.0.8
6. Inventories (Tables)
9 Months Ended
Mar. 31, 2014
Inventory Disclosure [Abstract]  
Inventories

At interim reporting periods, inventories for financial statement purposes are based on perpetual inventory records. Components of inventory are as follows:

 

  March 31, June 30,
  2014 2013
Raw Materials $1,507,700 $1,336,800
Work in process 504,600 254,000
Finished Goods 237,000 114,800
$2,249,300 $1,705,600
XML 37 R15.htm IDEA: XBRL DOCUMENT v2.4.0.8
1. Summary of significant accounting policies (Policies)
9 Months Ended
Mar. 31, 2014
Notes to Financial Statements  
Principles of consolidation

The accompanying consolidated financial statements include the accounts of Scientific Industries, Inc. (“Scientific”, a Delaware corporation), and its wholly-owned subsidiaries, Altamira Instruments, Inc.(“Altamira”, a Delaware corporation), Scientific Packaging Industries, Inc. (an inactive New York corporation) and Scientific Bioprocessing, Inc., (“SBI”, a Delaware corporation). All are collectively referred to as the “Company”. All material intercompany balances and transactions have been eliminated.

New Accounting Pronouncements

 In July 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740), which clarifies the presentation requirements of unrecognized tax benefits when a net operating loss carries forward, a similar tax loss, or a tax credit carry forward exists at the reporting date. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013 and should be applied prospectively. The adoption of this ASU did not have a material impact to the Company’s consolidated financial statements.

XML 38 R13.htm IDEA: XBRL DOCUMENT v2.4.0.8
7. Earnings (Loss) per common share
9 Months Ended
Mar. 31, 2014
Equity [Abstract]  
Earnings (Loss) per common share

7. Earnings (Loss) per common share:

 

Basic earnings (loss) per common share are computed by dividing net income (loss) by the weighted-average number of shares outstanding. Diluted earnings (loss) per common share include the dilutive effect of stock options, if any.

 

Earnings (Loss) per common share was computed as follows:

 

 

  For the Three Month For the Nine Month
  Periods Ended Periods Ended
  March 31, March 31,
  2014 2013 2014 2013
Net income (loss) ($ 59,700) $ 150,100 $ 77,500 $ 226,300
         
Weighted average common        
 shares outstanding 1,390,433 1,337,663 1,382,519 1,336,844
Effect of dilutive        
 securities - 4,701 9,741 4,543
         
Weighted average dilutive        
common shares outstanding 1,390,433 1,342,364 1,392,260 1,341,387
         
Basic earnings (loss) per        
common share ($ .04) $ .11 $ .06 $ .17
         
Diluted earnings (loss) per        
common share ($ .04) $ .11 $ .06 $ .17

 

Approximately 61,000 shares of the Company’s common stock issuable upon the exercise of outstanding options were excluded from the calculation of diluted loss per common share, for the three month period ended March 31, 2014, because the effect would be anti-dilutive due to the loss for the period.

 

Approximately 40,000 shares of the Company's common stock issuable upon the exercise of outstanding options were excluded from the calculation of diluted earnings per common share for each of the three and nine month periods ended March 31, 2013, because the effect would be anti-dilutive.

XML 39 R14.htm IDEA: XBRL DOCUMENT v2.4.0.8
8. Goodwill and Other Intangible Assets
9 Months Ended
Mar. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets

8. Goodwill and Other Intangible Assets:

 

Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in connection with the Company's acquisitions. Goodwill amounted to $705,300 and $589,900 as of March 31, 2014 and June 30, 2013, respectively, all of which is deductible for tax purposes.

 

The components of other intangible assets are as follows:

 

 

  Useful   Accumulated  
  Lives Cost Amortization Net
At March 31, 2014:        
 Technology, trademarks 5/10 yrs. $1,226,800 $ 455,300 $ 771,500
 Trade names 6 yrs. 140,000 1,900 138,100
 Websites 5 yrs. 210,000 3,500 206,500
 Customer relationships 9/10 yrs. 357,000 210,700 146,300
 Sublicense agreements 10 yrs. 294,000 69,800 224,200
 Non-compete agreements 5 yrs. 384,000 112,200 271,800
 IPR&D 3 yrs. 110,000 3,100 106,900
 Other intangible assets 5 yrs. 157,400 139,700 17,700
         
    $2,879,200 $ 996,200 $1,883,000

 

 

  Useful   Accumulated  
  Lives Cost Amortization Net
At June 30, 2013:        
 Technology, trademarks 5/10 yrs. $ 865,400 $ 402,100 $ 463,300
 Customer relationships 10 yrs. 237,000 203,200 33,800
 Sublicense agreements 10 yrs. 294,000 47,800 246,200
 Non-compete agreements 5 yrs . 114,000 105,900 8,100
 Other intangible assets 5 yrs. 156,000 133,900 22,100
         
    $1,666,400 $ 892,900 $ 773,500

 

Total amortization expense was $47,500 and $27,900 for the three months ended March 31, 2014 and 2013, respectively and $103,400 and $85,200 for the nine months ended March 31, 2014 and 2013, respectively. As of March 31, 2014, estimated future amortization expense related to intangible assets is $87,500 for the remainder of the fiscal year ending June 30, 2014, $347,600 for fiscal 2015, $351,800 for fiscal 2016, $336,600 for fiscal 2017, $322,100 for fiscal 2018, and $437,400 thereafter.

XML 40 R16.htm IDEA: XBRL DOCUMENT v2.4.0.8
3. Acquisition (Tables)
9 Months Ended
Mar. 31, 2014
Text Block [Abstract]  
Purchase Price Allocation

Management of the Company allocated the purchase price based on its valuation of the assets acquired, as follows:

 

 Current Assets   $ 144,000
 Property and Equipment    118,100
 Goodwill*    115,400
 Other Intangible Assets    1,210,000
 Net Assets Acquired   $ 1,587,500
Pro Forma Results

 

  For the Three Month For the Nine Month
  Periods Ended Periods Ended
  March 31, March 31,
  2014 2013 2014 2013
 Net Sales $2,006,300 $1,956,100 $5,900,200 $5,934,700
 Net Income (loss) ($ 73,100) $ 136,200 $ 59,600 $ 213,100
         
Net income (loss per share - basic ($ .05) $ .09 $ .04 $ .15
         
Net income (loss) per share - diluted ($ .05) $ .09 $ .04 $ .15
XML 41 R21.htm IDEA: XBRL DOCUMENT v2.4.0.8
8. Goodwill and Other Intangible Assets (Tables)
9 Months Ended
Mar. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets

 

  Useful   Accumulated  
  Lives Cost Amortization Net
At March 31, 2014:        
 Technology, trademarks 5/10 yrs. $1,226,800 $ 455,300 $ 771,500
 Trade names 6 yrs. 140,000 1,900 138,100
 Websites 5 yrs. 210,000 3,500 206,500
 Customer relationships 9/10 yrs. 357,000 210,700 146,300
 Sublicense agreements 10 yrs. 294,000 69,800 224,200
 Non-compete agreements 5 yrs. 384,000 112,200 271,800
 IPR&D 3 yrs. 110,000 3,100 106,900
 Other intangible assets 5 yrs. 157,400 139,700 17,700
         
    $2,879,200 $ 996,200 $1,883,000

 

 

  Useful   Accumulated  
  Lives Cost Amortization Net
At June 30, 2013:        
 Technology, trademarks 5/10 yrs. $ 865,400 $ 402,100 $ 463,300
 Customer relationships 10 yrs. 237,000 203,200 33,800
 Sublicense agreements 10 yrs. 294,000 47,800 246,200
 Non-compete agreements 5 yrs . 114,000 105,900 8,100
 Other intangible assets 5 yrs. 156,000 133,900 22,100
         
    $1,666,400 $ 892,900 $ 773,500

 

XML 42 R26.htm IDEA: XBRL DOCUMENT v2.4.0.8
5. Fair Value of Financial Instruments (Details) (USD $)
Mar. 31, 2014
Jun. 30, 2013
Mar. 31, 2013
Jun. 30, 2012
Cash and cash equivalents $ 343,000 $ 927,300 $ 946,400 $ 769,300
Available for sale securities 474,000 908,400    
Total 817,000 1,835,700    
Liabilities:        
Contingent consideration 528,700 70,600    
Level 1
       
Cash and cash equivalents 343,000 927,300    
Available for sale securities 474,000 908,400    
Total 817,000 1,835,700    
Liabilities:        
Contingent consideration          
Level 2
       
Cash and cash equivalents          
Available for sale securities          
Total          
Liabilities:        
Contingent consideration          
Level 3
       
Cash and cash equivalents          
Available for sale securities          
Total          
Liabilities:        
Contingent consideration $ 528,700 $ 70,600    
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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $)
3 Months Ended 9 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Mar. 31, 2014
Mar. 31, 2013
Condensed Consolidated Statements Of Comprehensive Income Loss        
Net income (loss) $ (59,700) $ 150,100 $ 77,500 $ 226,300
Other comprehensive income (loss):        
Unrealized holding gain arising during period, net of tax 10,100 3,900 7,500 16,800
Comprehensive income (loss) $ (49,600) $ 154,000 $ 85,000 $ 243,100
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4. Segment Information and Concentrations
9 Months Ended
Mar. 31, 2014
Segment Reporting [Abstract]  
Segment Information and Concentrations

4. Segment Information and Concentrations:

 

The Company views its operations as three segments: the manufacture and marketing of standard benchtop laboratory equipment including the balances and scales by its Torbal Scales Division for research in university, hospital and industrial laboratories sold primarily through laboratory equipment distributors and on a direct basis (ABenchtop Laboratory Equipment@), the manufacture and marketing of custom-made catalyst research instruments for universities, government laboratories, and chemical and petrochemical companies sold on a direct basis (ACatalyst Research Instruments@) and the marketing and production of bioprocessing systems for laboratory research in the biotechnology industry sold directly to customers and through distributors (“Bioprocessing Systems”).

 

Segment information is reported as follows:

 

  Benchtop Catalyst   Corporate  
  Laboratory Research Bioprocessing and  
  Equipment Instruments Systems Other Consolidated
Three months ended March 31, 2014:          
 Revenues $1,177,400 $ 603,900 $ 5,000 $ - $1,786,300
 Foreign Sales 604,900 198,800 - - 803,700
Income(Loss)from Operations 61,400 (10,600) (58,000) (69,000) ( 76,200)
 Assets 4,017,100 1,847,900 873,300 674,800 7,413,100
Long-Lived Asset Expenditures 1,454,700 11,300 1,000 - 1,467,000
Depreciation and Amortization 32,700 8,500 24,300 - 65,500

 

Three months ended March 31, 2013:

  Benchtop Catalyst   Corporate  
  Laboratory Research Bioprocessing and  
  Equipment Instruments Systems Other Consolidated
Three months ended March 31, 2013:          
 Revenues $1,229,800 $ 360,600 $ 35,700 $ - $1,626,100
 Foreign Sales 645,300 107,300 - - 752,600
 Income(Loss) from Operations 243,300 3,600 (41,700) - 205,200
 Assets 2,719,500 1,932,600 904,600 916,800 6,473,500
 Long-Lived Asset Expenditures 1,700 1,200 - - 2,900
Depreciation and Amortization 10,700 8,700 24,000 - 43,400

 

 

Approximately 57% and 71% of net sales of benchtop laboratory equipment for the three month periods ended March 31, 2014 and 2013, respectively, were derived from the Company=s main product, the Vortex-Genie 2 mixer, excluding accessories.

 

Approximately 13% of total benchtop laboratory equipment sales were derived from the new Torbal Scales Division for the three months ended March 31, 2014.

 

Two benchtop laboratory equipment customers accounted for approximately 22% and 27% of the segment=s net sales for the three month periods ended March 31, 2014 and 2013 (15% and 20% of total net sales, respectively, for the periods).

 

Sales of catalyst research instruments are generally pursuant to large orders averaging more than $100,000 per order to a limited numbers of customers. Sales to two customers in the three months ended March 31, 2014 and three different customers in the three months ended March 31, 2013, accounted respectively for 94% and 92% of the segment=s net sales for each of the periods (32% and 20% of total net sales for the respective periods).

 

  Benchtop Catalyst   Corporate  
  Laboratory Research Bioprocessing and  
  Equipment Instruments Systems Other Consolidated
Nine months ended March 31, 2014:          
 Revenues $3,401,200 $1,406,900 $ 162,100 $ - $4,970,200
 Foreign Sales 2,049,100 367,100 2,000 - 2,418,200
Income(Loss) from Operations 299,100 (112,500) (10,200) (79,500) 96,900
 Assets 4,017,100 1,847,900 873,300 674,800 7,413,100
Long-Lived Asset Expenditures 1,474,700 11,300 7,500 - 1,493,500
Depreciation and Amortization 55,300 26,100 72,600 - 154,000

 

  Benchtop Catalyst   Corporate  
  Laboratory Research Bioprocessing and  
  Equipment Instruments Systems Other Consolidated
Nine months ended March 31, 2013:          
 Revenues $3,459,500 $1,309,700 $ 85,500 $ - $4,854,700
 Foreign Sales 2,014,900 626,400 - - 2,641,300
Income(Loss) from Operations 518,100 (62,500) (147,600) - 308,000
 Assets 2,719,500 1,932,600 904,600 916,800 6,473,500
Long-Lived Asset Expenditures 10,900 19,300 - - 30,200
Depreciation and Amortization 33,300 27,200 71,900 - 132,400

 

Approximately 63% and 69% of net sales of benchtop laboratory equipment for the nine month periods ended March 31, 2014 and 2013, respectively, were derived from sales by the Company=s main product, the Vortex-Genie 2 mixer, excluding accessories.

 

Approximately 4% of total benchtop laboratory equipment sales for the nine months ended March 31, 2014 were derived from sales since acquisition in February 2014 of the new Torbal Scales Division.

 

Two benchtop laboratory equipment customers, accounted for approximately 21% and 24% of the segment=s net sales (14% and 17% of total net sales) for the nine month periods ended March 31, 2014 and 2013, respectively.

 

Sales of catalyst research instruments to three customers in the nine months ended March 31, 2014 and to three other customers in the nine months ended March 31, 2013 accounted for approximately 59% and 49% of that segment=s net sales (17% and 13% of total net sales) for the respective nine month periods.

 

The Company=s foreign sales are principally made to customers in Europe and Asia. The Company also has an arrangement with a supplier for annual minimum purchase commitments through February 2020 which the Company has already met for the current year.

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5. Fair Value of Financial Instruments (Details 1) (USD $)
Mar. 31, 2014
Jun. 30, 2013
Cost $ 480,100 $ 922,000
Fair Value 474,000 908,400
Unrealized Holding Gain (Loss) (6,100) (13,600)
Equity Securities
   
Cost 29,300 29,300
Fair Value 37,400 33,200
Unrealized Holding Gain (Loss) 8,100 3,900
Mutual Funds
   
Cost 450,800 892,700
Fair Value 436,600 875,200
Unrealized Holding Gain (Loss) $ (14,200) $ (17,500)
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7. Earnings (Loss) per common share (Tables)
9 Months Ended
Mar. 31, 2014
Equity [Abstract]  
Earnings per common share

Earnings (Loss) per common share was computed as follows:

 

 

  For the Three Month For the Nine Month
  Periods Ended Periods Ended
  March 31, March 31,
  2014 2013 2014 2013
Net income (loss) ($ 59,700) $ 150,100 $ 77,500 $ 226,300
         
Weighted average common        
 shares outstanding 1,390,433 1,337,663 1,382,519 1,336,844
Effect of dilutive        
 securities - 4,701 9,741 4,543
         
Weighted average dilutive        
common shares outstanding 1,390,433 1,342,364 1,392,260 1,341,387
         
Basic earnings (loss) per        
common share ($ .04) $ .11 $ .06 $ .17
         
Diluted earnings (loss) per        
common share ($ .04) $ .11 $ .06 $ .17