BASIS OF PRESENTATION

3 Months Ended

Sep. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information and with instructions to Form 10-Q and, accordingly, do not include all information and footnotes required under generally accepted accounting principles in the United States of America ("GAAP") for complete financial statements. Additionally, the preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts. In the opinion of management, these interim condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the consolidated financial position of the Company as of September 30, 2021, the results of its operations for the three months ended September 30, 2021 and 2020, cash flows for the three months ended September 30, 2021 and 2020, and stockholders’ equity for the three months ended September 30, 2021 and 2020. The results of operations for the three months ended September 30, 2021 are not necessarily indicative of the results to be expected for the entire fiscal year ending June 30, 2022. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended June 30, 2021.

Restatement/Revision of Previously Reported Condensed Consolidated Financial Statements

Subsequent to the issuance of the condensed consolidated financial statements as of and for the period ended September 30, 2021, the Company identified errors in the accounting for freight costs associated with immunization related mailbacks returned for treatment. The Company's management and the Audit Committee of the Company's Board of Directors concluded that it is appropriate to restate the unaudited condensed consolidated financial statements for the quarterly periods ended September 30, 2021 and December 31, 2021.

The following tables reflect the restatement adjustments recorded in connection with the Company's restatement of its condensed consolidated financial statements.

Condensed Consolidated Balance Sheet as of September 30, 2021




	As Previously Reported		Restatement Adjustment		As Restated
ASSETS
CURRENT ASSETS
Cash	$	41,162	$	—	$	41,162
Accounts receivable, net	9,847		—		9,847
Inventory	7,272		—		7,272
Contract asset	27		—		27
Prepaid and other current assets	1,756		—		1,756
TOTAL CURRENT ASSETS	60,064		—		60,064
PROPERTY, PLANT AND EQUIPMENT, net	10,508		—		10,508
OPERATING LEASE RIGHT OF USE ASSET	7,919		—		7,919
FINANCING LEASE RIGHT OF USE ASSET, net	934		—		934
INVENTORY, net of current portion	982		—		982
OTHER ASSETS	118		—		118
GOODWILL	6,735		—		6,735
INTANGIBLE ASSETS, net	2,109		—		2,109
DEFERRED TAX ASSET, net	413		171		584
TOTAL ASSETS	$	89,782	$	171	$	89,953
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	2,972	$	—	$	2,972
Accrued liabilities	3,750		722		4,472
Operating lease liability	2,240		—		2,240
Financing lease liability	174		—		174
Current maturities of long-term debt	622		—		622
Contract liability	5,965		—		5,965
TOTAL CURRENT LIABILITIES	15,723		722		16,445
CONTRACT LIABILITY, net of current portion	1,352		—		1,352
OPERATING LEASE LIABILITY, net of current portion	5,810		—		5,810
FINANCING LEASE LIABILITY, net of current portion	772		—		772
OTHER LIABILITIES	44		—		44

LONG-TERM DEBT, net of current portion	3,236		—		3,236
TOTAL LIABILITIES	26,937		722		27,659
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common Stock, $0.01 par value	197		—		197
Treasury stock, at cost, 295,615 shares repurchased	(1,554)		—		(1,554)
Additional paid-in capital	51,363		—		51,363
Retained earnings	12,839		(551)		12,288
TOTAL STOCKHOLDERS' EQUITY	62,845		(551)		62,294
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	89,782	$	171	$	89,953

Condensed Consolidated Statements of Operations for Three Months Ended September 30, 2021




	As Previously Reported		Restatement Adjustments		As Restated
REVENUES	$	13,915	$	—	$	13,915
Cost of revenues	10,494		722		11,216
GROSS PROFIT	3,421		(722)		2,699
Selling, general and administrative	4,200		—		4,200
Depreciation and amortization	218		—		218
OPERATING LOSS	(997)		(722)		(1,719)
OTHER INCOME (EXPENSE)

Interest expense	(56)		—		(56)
Income associated with derivative instrument	7		—		7
TOTAL OTHER EXPENSE	(49)		—		(49)
LOSS BEFORE INCOME TAXES	(1,046)		(722)		(1,768)


INCOME TAX BENEFIT - Deferred	(256)		(171)		(427)

NET LOSS	$	(790)	$	(551)	$	(1,341)

NET LOSS PER COMMON SHARE - Basic and Diluted	$	(0.04)	$	(0.04)	$	(0.08)

WEIGHTED AVERAGE SHARES USED IN COMPUTING NET LOSS PER COMMON SHARE:
Basic and Diluted	17,879		—		17,879

Condensed Consolidated Statement of Cash Flows for the Three Months Ended September 30, 2021




	As Previously Reported		Restatement Adjustments		As Restated
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(790)	$	(551)	$	(1,341)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	582		—		582
Bad debt expense	25		—		25
Inventory write-off	—		—		—
Loss on disposal of property, plant and equipment	—		—		—
Stock-based compensation expense	280		—		280
Income associated with derivative instrument	(7)		—		(7)
Deferred tax benefit	(256)		(171)		(427)
Changes in operating assets and liabilities:			—
Accounts receivable	(134)		—		(134)
Inventory	(1,151)		—		(1,151)
Prepaid and other assets	(305)		—		(305)
Accounts payable and accrued liabilities	(116)		722		606
Contract asset and contract liability	(1,179)		—		(1,179)
NET CASH USED IN OPERATING ACTIVITIES	(3,051)		—		(3,051)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment	(47)		—		(47)

Additions to intangible assets	(18)		—		(18)
NET CASH USED IN INVESTING ACTIVITIES	(65)		—		(65)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of stock options	—		—		—
Proceeds from issuance of common stock, net	16,771		—		16,771
Proceeds from long-term debt	—		—		—
Repayments of long-term debt	(206)		—		(206)
Payments on financing lease liabilities	(54)		—		(54)

NET CASH PROVIDED BY FINANCING ACTIVITIES	16,511		—		16,511
NET INCREASE IN CASH	13,395		—		13,395
CASH, beginning of period	27,767		—		27,767
CASH, end of period	$	41,162	—		$	41,162
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Income taxes paid, net of refunds	$	170	—		$	170
Interest paid on long-term debt	$	58	—		$	58
NON-CASH INVESTING AND FINANCING ACTIVITIES:




Property, plant and equipment financed through accounts payable	$	20	—		$	20

Previously reported amounts for revenue, total cash flows from operating activities, and net changes in cash and cash equivalents are not affected by the adjustments described above. In addition, the condensed consolidated statements of stockholders' equity for the three-months ended September 30, 2021 and impacted disclosures have been restated to give effect to the correction.

In connection with the restatement described above, the Company also identified an immaterial error in Note 9 relating to the disclosure of the number of stock options excluded from the computation of diluted income (loss) per share because their effect would be anti-dilutive. The number of stock options excluded from the computation was originally reported as 0 and 25,000 for the three months ended September 30, 2021 and 2020, respectively, and should have been 685,000 and 1,112,000, respectively. The amount for the three months ended September 30, 2021 has been corrected in connection with the restatement described above, and the amount for the three months ended September 30, 2020 has been revised for comparability purposes.

Effects of COVID-19

A novel strain of coronavirus ("COVID-19") was first identified in December 2019, and subsequently declared a global pandemic by the World Health Organization on March 11, 2020. As a result of the outbreak, many companies have experienced disruptions in their operations and in servicing customers. The Company has implemented some and may take additional precautionary measures intended to help ensure the well-being of its employees, facilitate continued uninterrupted servicing of customers and minimize business disruptions. The full extent of the future impacts of COVID-19 on the Company's operations is uncertain. A prolonged outbreak could have a material adverse impact on the financial results and business operations of the Company. To date, the Company has not identified any material adverse impact of COVID-19 on its financial position and results of operations.