Cover
Cover - USD ($) | 12 Months Ended | ||
Jun. 30, 2021 | Aug. 20, 2021 | Dec. 31, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | Electromed, Inc. | ||
Entity Central Index Key | 0001488917 | ||
Document Type | 10-K | ||
Document Period End Date | Jun. 30, 2021 | ||
Amendment Flag | false | ||
Entity File Number | 001-34839 | ||
Entity Incorporation, State Code | MN | ||
Entity Reporting Status Current | Yes | ||
Entity Interactive Data Current | Yes | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Smaller Reporting Company | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 70,780,000 | ||
Entity Common Stock, Shares Outstanding | 8,588,590 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 |
Balance Sheets
Balance Sheets - USD ($) | Jun. 30, 2021 | Jun. 30, 2020 |
Current Assets | ||
Cash and cash equivalents | $ 11,889,000 | $ 10,479,000 |
Accounts receivable (net of allowances for doubtful accounts of $45,000) | 17,032,000 | 12,941,000 |
Contract assets | 393,000 | 903,000 |
Inventories | 2,114,000 | 3,085,000 |
Prepaid expenses and other current assets | 276,000 | 353,000 |
Income tax receivable | 262,000 | |
Total current assets | 31,704,000 | 28,023,000 |
Property and equipment, net | 3,605,000 | 3,788,000 |
Finite-life intangible assets, net | 663,000 | 598,000 |
Other assets | 88,000 | 81,000 |
Deferred income taxes | 1,049,000 | 755,000 |
Total assets | 37,109,000 | 33,245,000 |
Current Liabilities | ||
Current maturities of other long-term liabilities | 33,000 | 72,000 |
Accounts payable | 685,000 | 556,000 |
Accrued compensation | 2,474,000 | 1,404,000 |
Income tax payable | 288,000 | |
Warranty reserve | 940,000 | 740,000 |
Other accrued liabilities | 219,000 | 214,000 |
Total current liabilities | 4,639,000 | 2,986,000 |
Other long-term liabilities | 54,000 | 9,000 |
Total liabilities | 4,693,000 | 2,995,000 |
Commitments and Contingencies | ||
Shareholders' Equity | ||
Common stock, $0.01 par value, 13,000,000 shares authorized; 8,533,209 and 8,567,834 issued and outstanding, as of June 30, 2021 and June 30, 2020, respectively | 85,000 | 86,000 |
Additional paid-in capital | 17,409,000 | 16,480,000 |
Retained earnings | 14,922,000 | 13,684,000 |
Total shareholders' equity | 32,416,000 | 30,250,000 |
Total liabilities and shareholders' equity | $ 37,109,000 | $ 33,245,000 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2021 | Jun. 30, 2020 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 45,000 | $ 45,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized | 13,000,000 | 13,000,000 |
Common stock, issued | 8,533,209 | 8,567,834 |
Common stock, outstanding | 8,533,209 | 8,567,834 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Income Statement [Abstract] | ||
Net revenues | $ 35,756,000 | $ 32,471,000 |
Cost of revenues | 8,451,000 | 7,271,000 |
Gross profit | 27,305,000 | 25,200,000 |
Operating expenses (income) | ||
Selling, general and administrative | 22,443,000 | 19,945,000 |
Research and development | 1,722,000 | 1,050,000 |
Government stimulus income | (913,000) | |
Total operating expenses | 24,165,000 | 20,082,000 |
Operating income | 3,140,000 | 5,118,000 |
Interest income, net | 39,000 | 121,000 |
Other expense, net | (12,000) | 0 |
Net income before income taxes | 3,167,000 | 5,239,000 |
Income tax expense | 805,000 | 1,078,000 |
Net income | $ 2,362,000 | $ 4,161,000 |
Income per share: | ||
Basic (in dollars per share) | $ 0.28 | $ 0.5 |
Diluted (in dollars per share) | $ 0.27 | $ 0.47 |
Weighted-average common shares outstanding: | ||
Basic (in shares) | 8,566,224 | 8,403,220 |
Diluted (in shares) | 8,911,842 | 8,826,418 |
Statements of Shareholders' Equ
Statements of Shareholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balance at beginning at Jun. 30, 2019 | $ 84,000 | $ 16,128,000 | $ 9,523,000 | $ 25,735,000 |
Balance at beginning (in shares) at Jun. 30, 2019 | 8,408,351 | |||
Increase (Decrease) in Stockholders' Equity | ||||
Net income | 4,161,000 | 4,161,000 | ||
Issuance of restricted stock | $ 1,000 | (1,000) | ||
Issuance of restricted stock (in shares) | 50,000 | |||
Issuance of common stock upon exercise of options | $ 1,000 | 79,000 | 80,000 | |
Issuance of common stock upon exercise of options (in shares) | 109,483 | |||
Taxes paid on stock option exercised on a net basis | (628,000) | (628,000) | ||
Share-based compensation expense | 902,000 | 902,000 | ||
Balance at ending at Jun. 30, 2020 | $ 86,000 | 16,480,000 | 13,684,000 | $ 30,250,000 |
Balance at ending (in shares) at Jun. 30, 2020 | 8,567,834 | 8,567,834 | ||
Increase (Decrease) in Stockholders' Equity | ||||
Net income | 2,362,000 | $ 2,362,000 | ||
Issuance of restricted stock (in shares) | 37,090 | |||
Issuance of common stock upon exercise of options | 46,000 | 46,000 | ||
Issuance of common stock upon exercise of options (in shares) | 32,496 | |||
Taxes paid on stock option exercised on a net basis | (141,000) | (141,000) | ||
Share-based compensation expense | 1,024,000 | 1,024,000 | ||
Repurchase of common stock | $ (1,000) | (1,123,000) | $ (1,124,000) | |
Repurchase of common stock (in shares) | (104,211) | (104,211) | ||
Balance at ending at Jun. 30, 2021 | $ 85,000 | $ 17,409,000 | $ 14,922,000 | $ 32,416,000 |
Balance at ending (in shares) at Jun. 30, 2021 | 8,533,209 | 8,533,209 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash Flows From Operating Activities | ||
Net income | $ 2,362,000 | $ 4,161,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 477,000 | 619,000 |
Amortization of finite-life intangible assets | 133,000 | 122,000 |
Share-based compensation expense | 1,024,000 | 902,000 |
Deferred income taxes | (294,000) | (126,000) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (4,091,000) | (181,000) |
Contract assets | 510,000 | 93,000 |
Inventories | 971,000 | (449,000) |
Prepaid expenses and other assets | 151,000 | 78,000 |
Income tax receivable | 262,000 | (262,000) |
Income tax payable | 288,000 | (289,000) |
Accounts payable and accrued liabilities | 1,284,000 | (472,000) |
Net cash provided by operating activities | 3,077,000 | 4,196,000 |
Cash Flows From Investing Activities | ||
Expenditures for property and equipment | (287,000) | (844,000) |
Expenditures for finite-life intangible assets | (161,000) | (133,000) |
Net cash used in investing activities | (448,000) | (977,000) |
Cash Flows From Financing Activities | ||
Taxes paid on stock options exercised on a net basis | (141,000) | (628,000) |
Issuance of common stock upon exercise of options | 46,000 | 80,000 |
Repurchase of common stock | (1,124,000) | |
Net cash used in financing activities | (1,219,000) | (548,000) |
Net increase in cash | 1,410,000 | 2,671,000 |
Cash and cash equivalents | ||
Beginning of period | 10,479,000 | 7,808,000 |
End of period | 11,889,000 | 10,479,000 |
Supplemental Disclosures of Cash Flow Information | ||
Cash paid for income taxes | 534,000 | 1,755,000 |
Supplemental Disclosures of Noncash Investing and Financing Activities | ||
Property and equipment acquisitions in accounts payable | 10,000 | 1,000 |
Intangible asset acquisitions in accounts payable | 42,000 | 6,000 |
Lease assets obtained in exchange for new operating lease liabilities | $ 91,000 | $ 120,000 |
Nature of Business and Summary
Nature of Business and Summary of Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Nature of Business and Summary of Significant Accounting Policies | Note 1. Nature of Business and Summary of Significant Accounting Policies Nature of business: A summary of the Company’s significant accounting policies follows: Use of estimates: COVID-19 Pandemic and CARES Act Funding The Company did not receive any direct financial assistance from any government program during fiscal 2021. The Company received a one-time $913,000 payment under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) in the fourth quarter of fiscal 2020, which partially offset lower profitability related to the revenue decline caused by the COVID-19 pandemic during the period. The amount received from the CARES Act is subject to compliance with certain terms and conditions and reporting requirements, and such report may be audited by a federal agency for compliance with the program’s terms and conditions. In response to the COVID-19 pandemic and the U.S. federal government’s declaration of a public health emergency, the Centers for Medicare and Medicaid Services implemented a number of temporary rule changes and waivers to allow prescribers to best treat patients during the period of the public health emergency. These waivers were made retroactively effective to March 1, 2020 and were in place for the duration of fiscal 2021. Clinical indications and documentation typically required were not enforced for respiratory related products including the Company’s SmartVest® Airway Clearance System (“SmartVest System”) (solely with respect to direct Medicare covered patients) applicable for the Company’s home care prescriptions. The minimum documentation now requires a valid order and documentation of a respiratory related diagnosis. Face-to-face and in-person requirements for replacement respiratory devices are being waived during such period, both of which are currently scheduled to expire in October 2021. A temporary suspension of a 2% tax on Medicare payments was also initiated in May 2020 and has been extended through December 2021. The impact of the COVID-19 pandemic on the Company’s business remains uncertain and its effects on operational and financial performance will depend in part on future developments, which cannot be reasonably estimated at this time. Such future developments include, but are not limited to, the duration, scope and severity of the COVID-19 pandemic in geographic areas in which the Company operates or in which its patients live, actions taken to contain or mitigate its impact, the impact on governmental healthcare programs and budgets, the deployment of treatments or vaccines, and the resumption of widespread economic activity. Due to the inherent uncertainty of the unprecedented and evolving situation, the Company is unable to predict with confidence the likely impact of the COVID-19 pandemic on its future operations. Revenue recognition: Shipping and handling expense: Cash and cash equivalents: Accounts receivable: Contract assets: Inventories: Property and equipment: Finite-life intangible assets: Long-lived assets: If the Company believes the carrying value is unrecoverable, then it recognizes an impairment charge necessary to reduce the unamortized balance to the estimated fair value of the asset or asset group. The amount of such impairment is charged to operations in the current period. Warranty liability: Changes in the Company’s warranty liability were approximately as follows: Years Ended June 30, 2021 2020 Beginning warranty reserve $ 740,000 $ 810,000 Accrual for products sold 354,000 79,000 Expenditures and costs incurred for warranty claims (154,000 ) (149,000 ) Ending warranty reserve $ 940,000 $ 740,000 Income taxes: The Company recognizes tax liabilities when the Company believes that certain positions may not be fully sustained upon review by tax authorities. Benefits from tax positions are measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences impact income tax expense in the period in which such determination is made. Interest and penalties, if any, related to accrued liabilities for potential tax assessments are included in income tax expense. Research and development: Advertising costs: Share-based payments: Fair value of financial instruments: Basic and diluted earnings per share: |
Revenues
Revenues | 12 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Note 2. Revenues Revenue is measured based on consideration specified in the contract with a customer, adjusted for any applicable estimates of variable consideration and other factors affecting the transaction price, including non-cash consideration, consideration paid or payable to customers and significant financing components. Revenue from all customers is recognized when a performance obligation is satisfied by transferring control of a distinct good or service to a customer, as further described below under Performance obligations and transaction price Individual promised goods and services in a contract are considered a performance obligation and accounted for separately if the individual good or service is distinct (i.e., the customer can benefit from the good or service on its own or with other resources that are readily available to the customer and the good or service is separately identifiable from other promises in the arrangement). If an arrangement includes multiple performance obligations, the consideration is allocated between the performance obligations in proportion to their estimated standalone selling price, unless discounts or variable consideration is attributable to one or more but not all the performance obligations. Costs related to products delivered are recognized in the period incurred, unless criteria for capitalization of costs under Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 340-40, “Other Assets and Deferred Costs” (“ASC 340”), or other applicable guidance are met. The Company includes shipping and handling fees in net revenues. Shipping and handling costs associated with the shipment of the SmartVest System after control has transferred to a customer are accounted for as a fulfillment cost and are included in cost of revenues. The timing of revenue recognition, billings and cash collections results in accounts receivable on the balance sheets as further described below under Accounts receivable Contract assets Disaggregation of revenues. Fiscal Year Ended June 30, 2021 2020 Home Care $ 32,986,000 $ 29,323,000 Institutional 1,549,000 2,000,000 Home Care Distributor 563,000 430,000 International 658,000 718,000 Total $ 35,756,000 $ 32,471,000 In the following table, home care revenue is disaggregated by payer type: Fiscal Year Ended June 30, 2021 2020 Commercial $ 12,530,000 $ 11,728,000 Medicare 19,044,000 14,863,000 Medicaid 846,000 1,696,000 Other 566,000 1,036,000 Total $ 32,986,000 $ 29,323,000 Revenues in the Company’s home care, home care distributor and international markets are recognized at a point in time when control passes to the customer upon product shipment or delivery. Revenues in the Company’s institutional market include sales recognized at a point in time upon shipment or delivery as well as revenues recognized over time under operating leases. Performance obligations and transaction price. Home care market The Company makes available to its home care patients limited post-sale services that are not material in the context of the contracts, either individually or taken together, and therefore does not consider them to be performance obligations. The costs associated with the services are accrued and expensed when the related revenues are recognized. As such, transactions in the home care market consist of a single performance obligation: the SmartVest System. Home care patients generally will rely on third-party payers, including commercial payers and governmental payers such as Medicare, Medicaid and the U.S. Department of Veterans Affairs to cover and reimburse all or part of the cost of the SmartVest System. The third-party payers’ reimbursement programs fall into three types, distinguished by the differences in the timing of payments from the payer, consisting of either (i) outright sale, in which payment is received from the payer based on standard terms, (ii) capped installment sale, under which the SmartVest System is sold for a series of payments that are capped not to exceed a prescribed or negotiated amount over a period of time or (iii) installment sale, under which the SmartVest System is paid for over a period of several months as long as the patient continues to use the SmartVest System. Regardless of the type of transaction, provided criteria for an enforceable contract are met, it is the Company’s long-standing business practice to regard all home care agreements as transferring control to the patient upon shipment or delivery, in spite of possible payment cancellation under government or commercial programs where the payer is controlling the payment over specified time periods. For home care sales that feature installment payments, the ultimate amount of consideration received from Medicare, Medicaid or commercial payers can be significantly less than expected if the contract is terminated due to changes in the patient’s status, including insurance coverage, hospitalization, death or otherwise becoming unable to use the SmartVest System. However, once delivered to a patient who needs the SmartVest System, the patient is under no obligation to return the SmartVest System should payments be terminated as a result of the described contingencies. As a result, the Company’s product sales qualify for point in time revenue recognition. Control transfers to the patient, and revenue is recognized, upon shipment of the SmartVest System. At this point, physical possession and the significant risks and rewards of ownership are transferred to the patient and either a current or future right to payment is triggered, as further discussed under Accounts receivable Contract assets The Company’s contractually stated transaction prices in the home care market are generally set by the terms of the contracts negotiated with insurance companies or by government programs. The transaction price for the Company’s products may be further impacted by variable consideration. ASC 606 requires the Company to adjust the transaction price at contract inception and throughout the contract duration for the estimated value of payments to be received from insurance payers based on historical experience and other available information, subject to the constraint on estimates of variable consideration. Transactions requiring estimates of variable consideration primarily include (i) capped installment payments, which are subject to the third-party payer’s termination due to changes in insurance coverage, death or the patient’s discontinued use of the SmartVest System, (ii) contracts under appeal and (iii) patient responsibility amounts for deductibles, coinsurance, copays and other similar payments. Although estimates may be made on a contract-by-contract basis, whenever possible, the Company uses all available information including historical collection patterns to estimate variable consideration for portfolios of contracts. The Company’s estimates of variable consideration consist of amounts it may receive from insurance providers in excess of its initial revenue estimate due to patients meeting deductibles or coinsurance during the payment duration, changes to a patient’s insurance status, changes in an insurance allowable, claims in appeals with Medicare and amounts received directly from patients for their allowable or coinsurance. The Company believes it has representative historical information to estimate the amount of variable consideration in relevant portfolios considering the significant experience it has with each portfolio and the similarity of patient accounts within a portfolio. The analysis includes steps to ensure that revenue recognized on a portfolio basis does not result in a material difference when compared with an individual contract approach. The Company also leverages its historical experience and all available relevant information for each portfolio of contracts to minimize the risk its estimates used to arrive at the transaction price will result in a significant reversal in the amount of cumulative revenue recognized when the uncertainty associated with the variable consideration is subsequently resolved. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. For example, for contracts in which the Company believes the criteria for reimbursement under government or commercial payer contracts have been met but for which coverage is unconfirmed or payments are under appeal, the Company has significant observable evidence of relatively consistent claims recovery experience over the prior three to five years. The Company believes the low volatility in historical claims approval rates for populations of patients whose demographics are similar to those of current patients provides reliable predictive value in arriving at estimates of variable consideration in such contracts. Similarly, historical payment trends for recovery of claims subject to payer installments and payments from patients have remained relatively consistent over the past five years. No significant changes in patient demographics or other relevant factors have occurred that would limit the predictive value of such payment trends in estimating variable consideration for current contracts. As a result, the Company believes its estimates of variable consideration are generally not subject to the risk of significant revenue reversal. For each type of variable consideration discussed above, there are a large number of contracts with similar characteristics with a wide range of possible transaction prices. For that reason, the Company uses the probability-weighted expected value method provided under ASC 606 to estimate variable consideration. The Company often receives payment from third-party payers for the SmartVest System sales over a period of time that may exceed one year. Despite these extended payment terms, no significant financing component is deemed to exist because the purpose of such terms is not to provide financing to the patient, the payer or the Company. Rather, the extended payment terms are mandated by the government or commercial insurance programs, the fundamental purpose of which is to avoid paying the full purchase price of equipment that may potentially be used by the patient for only a short period of time. Home Care Distributors. Institutional market. ● Outright sale – Under these transactions, the Company sells its products for a prescribed or negotiated price. Transfer of control of the product, and associated revenue recognition, occurs at the time of shipment and payment is made within normal credit terms, usually within 30 days. ● Rentals – Under these transactions, the customer obtains a right to use the product for a period of time in exchange for consideration as usage occurs. These transactions are treated as operating leases and revenue is recognized ratably over the applicable rental period. Lease revenue recognized during fiscal 2021 and 2020 was approximately $1,000 and $6,000, respectively. International market. Product Warranty. Accounts receivable. Contract assets. Incremental costs to obtain a contract. . Contract balances. June 30, 2021 June 30, 2020 Receivables, included in “Accounts receivable, net of allowance for doubtful accounts” $ 17,032,000 $ 12,941,000 Contract assets $ 393,000 $ 903,000 Significant changes in contract assets during the period are as follows: Fiscal Year Ended Fiscal Year Ended June 30, 2021 June 30, 2020 Increase (decrease) Increase (decrease) Contract assets, beginning $ 903,000 $ 996,000 Reclassification of contract assets to accounts receivable (1,551,000 ) (1,858,000 ) Contract assets recognized 1,060,000 1,734,000 Increase (decrease) as a result of changes in the estimate of amounts to be realized from payers, excluding amounts transferred to receivables during the period (19,000 ) 31,000 Contract assets, ending $ 393,000 $ 903,000 |
Inventories
Inventories | 12 Months Ended |
Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 3. Inventories The components of inventories as of June 30, 2021 and 2020 were approximately as follows: June 30, 2021 2020 Parts inventory $ 1,779,000 $ 2,271,000 Work in process 23,000 127,000 Finished goods 445,000 827,000 Estimated inventory to be returned 167,000 150,000 Less: Reserve for obsolescence (300,000 ) (290,000 ) Total $ 2,114,000 $ 3,085,000 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 4. Property and Equipment Property and equipment were approximately as follows: Estimated Useful June 30, Lives (Years) 2021 2020 Building and building improvements 15-39 $ 3,446,000 $ 3,437,000 Land N/A 200,000 200,000 Land improvements 15 166,000 166,000 Equipment 3-7 3,467,000 3,311,000 Demonstration and rental equipment 3 1,060,000 1,075,000 Construction in progress N/A 26,000 16,000 8,365,000 8,205,000 Less: Accumulated depreciation (4,760,000 ) (4,417,000 ) Net property and equipment $ 3,605,000 $ 3,788,000 |
Finite-life Intangible Assets
Finite-life Intangible Assets | 12 Months Ended |
Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Finite-life Intangible Assets | Note 5. Finite-life Intangible Assets The carrying value of patents and trademarks includes the original cost of obtaining the patents, periodic renewal fees, and other costs associated with maintaining and defending patent and trademark rights. Patents and trademarks are amortized over their estimated useful lives, generally 15 and 12 years, respectively. Accumulated amortization was approximately $1,248,000 and $1,119,000 as of June 30, 2021 and 2020, respectively. The activity and net balances of finite-life intangible assets were approximately as follows: Years Ended June 30, 2021 2020 Balance, beginning $ 598,000 $ 581,000 Additions 198,000 139,000 Amortization expense (133,000 ) (122,000 ) Balance, ending $ 663,000 $ 598,000 Based on the carrying value as of June 30, 2021, future amortization is expected to be approximately as follows: Fiscal years ending June 30: 2022 $ 102,000 2023 41,000 2024 36,000 2025 34,000 2026 34,000 Thereafter 416,000 Total $ 663,000 |
Financing Arrangements
Financing Arrangements | 12 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Financing Arrangements | Note 6. Financing Arrangements The Company has a credit facility that provides for a revolving line of credit and a term loan. Effective December 16, 2020, the Company renewed its $2,500,000 revolving line of credit. There was no outstanding principal balance on the line of credit as of June 30, 2021 or June 30, 2020. Interest on borrowings under the line of credit, if any, accrues at the prime rate (3.25% as of June 30, 2021) less 1.00% and is payable monthly. The amount eligible for borrowing on the line of credit is limited to the lesser of $2,500,000 or 57.00% of eligible accounts receivable and the line of credit expires on December 18, 2021, if not renewed. As of June 30, 2021, the maximum $2,500,000 was eligible for borrowing. The line of credit is secured by a security interest in substantially all the tangible and intangible assets of the Company. The documents governing the line of credit contain certain financial and nonfinancial covenants that include a minimum tangible net worth covenant of not less than $10,125,000 and restrictions on the Company’s ability to incur certain additional indebtedness or pay dividends. |
Common Stock
Common Stock | 12 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Common Stock | Note 7. Common Stock Authorized shares: On May 26, 2021 the Company’s Board of Directors (the “Board”) approved a stock repurchase authorization. Under the authorization, the Company may repurchase up to $3.0 million of shares of common stock through May 26, 2022. As of June 30, 2021, a total of 104,211 shares have been repurchased and retired under this authorization for a total cost of $1,124,000, or $10.79 per share. As of June 30, 2021, there were an additional $1,876,000 of shares of common stock available to be repurchased by the Company under the authorization. Repurchased shares have been retired and constitute authorized but unissued shares. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Note 8. Share-Based Payments Share-based compensation expense for fiscal 2021 and 2020 was approximately $1,024,000 and $902,000, respectively, related to employee stock options and restricted stock awards. As of June 30, 2021, the Company had approximately $553,000 of unrecognized compensation expense related to non-vested equity awards, which is expected to be recognized over a weighted-average period of 0.9 years. Employee options: The Company recognizes compensation expense related to share-based payment transactions in the financial statements based on the estimated fair value of the award issued. The fair value of each option is estimated using the Black-Scholes pricing model at the time of award grant. The Company estimates the expected life of options based on the expected holding period by the option holder. The risk-free interest rate is based upon observed U.S. Treasury interest rates for the expected term of the options. The Company makes assumptions with respect to expected stock price volatility based upon the historical volatility of its stock price. Forfeitures are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from initial estimates. Forfeitures are estimated based on the percentage of awards expected to vest, taking into consideration the seniority level of the award recipient. The following assumptions were used to estimate the fair value of options granted: Years Ended June 30, 2021 2020 Risk-free interest rate 0.31-0.59 % 1.85 % Expected term (years) 6 6 Expected volatility 283-335 % 190 % The following table presents employee stock option activity for fiscal 2021 and 2020: Number of Shares Weighted- Average Grant Date Fair Value Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (in Years) Options outstanding as of June 30, 2019 683,000 $ 3.35 $ 3.84 6.96 Granted 149,300 $ 5.19 $ 5.29 — Exercised (194,670 ) $ 2.47 $ 3.08 — Canceled or Forfeited (46,850 ) $ 5.16 $ 5.34 — Options outstanding as of June 30, 2020 590,780 $ 3.96 $ 4.34 6.87 Granted 61,017 $ 14.13 $ 14.14 — Exercised (71,150 ) $ 4.78 $ 5.09 — Canceled or Forfeited (112,598 ) $ 6.24 $ 6.50 — Options outstanding as of June 30, 2021 468,049 $ 4.61 $ 4.98 5.82 Options exercisable as of June 30, 2021 442,437 $ 4.16 $ 4.54 5.64 The intrinsic value of a stock option is the amount by which the fair value of the underlying stock exceeds its exercise price. As of June 30, 2021, the weighted average remaining contractual term for all outstanding stock options was 5.8 years and their aggregate intrinsic value was $3,094,000. Outstanding as of June 30, 2021 were 468,049 stock options issued to employees, of which 442,437 were vested and exercisable and had an aggregate intrinsic value of $3,074,000. Restricted stock: The Company issued restricted stock awards to employees totaling 30,756 and 35,000 during fiscal 2021 and 2020, respectively, with a vesting term of one to three years and a fair value of $14.68 and $5.84 per share, respectively. During fiscal 2021 and 2020, the Company issued restricted stock awards to directors totaling 18,000 each year, with a vesting term of six months and a fair value of $9.94 and $9.74 per share, respectively. Restricted stock transactions during the years ended June 30, 2021 and 2020 are summarized as follows: Shares of Restricted Stock Weighted-Average Grant Date Fair Value per Share Outstanding as of June 30, 2019 29,998 $ 5.46 Granted 53,000 $ 7.17 Vested (45,833 ) $ 6.83 Forfeited (14,666 ) $ 6.23 Outstanding as of June 30, 2020 22,499 $ 6.19 Granted 48,756 $ 12.93 Vested (40,752 ) $ 9.47 Outstanding as of June 30, 2021 30,503 $ 12.57 |
Income Taxes
Income Taxes | 12 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 9. Income Taxes Components of the provision for income taxes for fiscal 2021 and 2020 were as follows: Years Ended June 30, 2021 2020 Current: Current Federal $ 861,000 $ 922,000 Current State 238,000 282,000 Total Current 1,099,000 1,204,000 Deferred: Deferred Federal (204,000 ) (70,000 ) Deferred State (90,000 ) (56,000 ) Total Deferred (294,000 ) (126,000 ) Total Income Tax Expense $ 805,000 $ 1,078,000 The total income tax expense differed from the expected tax expense, computed by applying the federal statutory rate to the Company’s pretax income, as follows: Years Ended June 30, 2021 2020 Tax expense at statutory federal rate $ 665,000 $ 1,100,000 State income tax expense, net of federal tax effect 110,000 151,000 Change in valuation allowance on deferred tax assets 34,000 91,000 Other permanent items (4,000 ) (264,000 ) Income tax expense $ 805,000 $ 1,078,000 The effective tax rates for fiscal 2021 and 2020 were 25.4% and 20.6%, respectively. The significant components of deferred income taxes were as follows: June 30, 2021 2020 Deferred tax assets (liabilities): Revenue recognition and accounts receivable reserves $ 655,000 $ 468,000 Accrued liabilities 297,000 253,000 Property and equipment (218,000 ) (202,000 ) Finite-life intangible assets (15,000 ) (6,000 ) Stock options 414,000 458,000 Tax credits 125,000 92,000 Accounting method change (140,000 ) (282,000 ) Valuation allowance on deferred taxes (125,000 ) (91,000 ) Other 56,000 65,000 Net deferred tax assets $ 1,049,000 $ 755,000 The Company has state tax credits of $125,000, net of federal taxes, which if unused, will begin to expire in calendar years 2026 and 2034. The Company has taken a full valuation allowance against these credits which relate to research and development tax credits in Minnesota, a state in which the Company has a low state apportionment factor. The Company applies the accounting standard for uncertain tax positions pursuant to which a more-likely-than-not threshold is utilized to determine the recognition and derecognition of uncertain tax positions. Once the more-likely-than-not threshold is met, the amount of benefit to be recognized is the largest amount of tax benefit that is greater than 50 percent likely of being ultimately realized upon settlement. It further requires that a change in judgment related to the expected ultimate resolution of uncertain tax positions be recognized in earnings in the period of such a change. The Company does not have any uncertain tax positions as of June 30, 2021 and June 30, 2020. The Company is subject to U.S. federal income tax as well as income tax of multiple state jurisdictions. With limited exceptions, tax years prior to the Company’s fiscal year ended June 30, 2018 are no longer open to federal, state and local examination by taxing authorities. |
Leases
Leases | 12 Months Ended |
Jun. 30, 2021 | |
Leases [Abstract] | |
Leases | Note 10. Leases The Company has six leases for office and warehouse space that require monthly payments. These leases have escalating payments ranging from approximately $200 to $4,400 per month which expire through January 2026 and are recognized on a straight-line basis over the life of the lease. The Company has a lease for office equipment that requires payments of approximately $1,600 per month through August 2022. All leases are classified as operating leases which do not include renewal options. The Company currently does not have any short-term or variable lease costs. The Company applied the practical expedient to calculate the present value of the fixed payments without having to perform an allocation to lease and non-lease components. The Company has recognized right of use assets associated with its operating leases of approximately $88,000 and $81,000 as of June 30, 2021 and June 30, 2020, respectively, which is included in other assets on the Company’s balance sheet. Operating lease liabilities were $87,000 and $81,000 as of June 30, 2021 and June 30, 2020, respectively, which are included in current maturities of long-term liabilities and other long-term liabilities on the Company’s balance sheet. As of June 30, 2021, the Company has a weighted-average lease term of 2.8 years for its operating leases, which have a weighted-average discount rate of 4.0%. Operating lease payments of $74,000 are included in operating cash flows in fiscal 2021. Maturities of lease liabilities, which are included in current maturities of long-term liabilities and other long-term liabilities on the Company’s balance sheet, are as follows: Fiscal years ending June 30: 2022 $ 29,000 2023 18,000 2024 17,000 2025 17,000 2026 8,000 Total lease payments 89,000 Less: Interest (2,000 ) Present value of lease liabilities $ 87,000 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 11. Commitments and Contingencies Litigation: 401(k) Profit Sharing Plan: Employment Agreements: |
Nature of Business and Summar_2
Nature of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Use of estimates | Use of estimates: |
COVID-19 Pandemic and CARES Act Funding | COVID-19 Pandemic and CARES Act Funding The Company did not receive any direct financial assistance from any government program during fiscal 2021. The Company received a one-time $913,000 payment under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) in the fourth quarter of fiscal 2020, which partially offset lower profitability related to the revenue decline caused by the COVID-19 pandemic during the period. The amount received from the CARES Act is subject to compliance with certain terms and conditions and reporting requirements, and such report may be audited by a federal agency for compliance with the program’s terms and conditions. In response to the COVID-19 pandemic and the U.S. federal government’s declaration of a public health emergency, the Centers for Medicare and Medicaid Services implemented a number of temporary rule changes and waivers to allow prescribers to best treat patients during the period of the public health emergency. These waivers were made retroactively effective to March 1, 2020 and were in place for the duration of fiscal 2021. Clinical indications and documentation typically required were not enforced for respiratory related products including the Company’s SmartVest® Airway Clearance System (“SmartVest System”) (solely with respect to direct Medicare covered patients) applicable for the Company’s home care prescriptions. The minimum documentation now requires a valid order and documentation of a respiratory related diagnosis. Face-to-face and in-person requirements for replacement respiratory devices are being waived during such period, both of which are currently scheduled to expire in October 2021. A temporary suspension of a 2% tax on Medicare payments was also initiated in May 2020 and has been extended through December 2021. The impact of the COVID-19 pandemic on the Company’s business remains uncertain and its effects on operational and financial performance will depend in part on future developments, which cannot be reasonably estimated at this time. Such future developments include, but are not limited to, the duration, scope and severity of the COVID-19 pandemic in geographic areas in which the Company operates or in which its patients live, actions taken to contain or mitigate its impact, the impact on governmental healthcare programs and budgets, the deployment of treatments or vaccines, and the resumption of widespread economic activity. Due to the inherent uncertainty of the unprecedented and evolving situation, the Company is unable to predict with confidence the likely impact of the COVID-19 pandemic on its future operations. |
Revenue recognition | Revenue recognition: |
Shipping and handling expense | Shipping and handling expense: |
Cash and cash equivalents | Cash and cash equivalents: |
Accounts receivable | Accounts receivable: |
Contract assets | Contract assets: |
Inventories | Inventories: |
Property and equipment | Property and equipment: |
Finite-life intangible assets | Finite-life intangible assets: |
Long-lived assets | Long-lived assets: If the Company believes the carrying value is unrecoverable, then it recognizes an impairment charge necessary to reduce the unamortized balance to the estimated fair value of the asset or asset group. The amount of such impairment is charged to operations in the current period. |
Warranty liability | Warranty liability: Changes in the Company’s warranty liability were approximately as follows: Years Ended June 30, 2021 2020 Beginning warranty reserve $ 740,000 $ 810,000 Accrual for products sold 354,000 79,000 Expenditures and costs incurred for warranty claims (154,000 ) (149,000 ) Ending warranty reserve $ 940,000 $ 740,000 |
Income taxes | Income taxes: The Company recognizes tax liabilities when the Company believes that certain positions may not be fully sustained upon review by tax authorities. Benefits from tax positions are measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences impact income tax expense in the period in which such determination is made. Interest and penalties, if any, related to accrued liabilities for potential tax assessments are included in income tax expense. |
Research and development | Research and development: |
Advertising costs | Advertising costs: |
Share-based payments | Share-based payments: |
Fair value of financial instruments | Fair value of financial instruments: |
Basic and diluted earnings per share | Basic and diluted earnings per share: |
Nature of Business and Summar_3
Nature of Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of changes in warranty liability | Changes in the Company’s warranty liability were approximately as follows: Years Ended June 30, 2021 2020 Beginning warranty reserve $ 740,000 $ 810,000 Accrual for products sold 354,000 79,000 Expenditures and costs incurred for warranty claims (154,000 ) (149,000 ) Ending warranty reserve $ 940,000 $ 740,000 |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregated revenue | Fiscal Year Ended June 30, 2021 2020 Home Care $ 32,986,000 $ 29,323,000 Institutional 1,549,000 2,000,000 Home Care Distributor 563,000 430,000 International 658,000 718,000 Total $ 35,756,000 $ 32,471,000 In the following table, home care revenue is disaggregated by payer type: Fiscal Year Ended June 30, 2021 2020 Commercial $ 12,530,000 $ 11,728,000 Medicare 19,044,000 14,863,000 Medicaid 846,000 1,696,000 Other 566,000 1,036,000 Total $ 32,986,000 $ 29,323,000 |
Schedule of contract assets | The following table provides information about accounts receivable and contracts assets from contracts with customers: June 30, 2021 June 30, 2020 Receivables, included in “Accounts receivable, net of allowance for doubtful accounts” $ 17,032,000 $ 12,941,000 Contract assets $ 393,000 $ 903,000 Significant changes in contract assets during the period are as follows: Fiscal Year Ended Fiscal Year Ended June 30, 2021 June 30, 2020 Increase (decrease) Increase (decrease) Contract assets, beginning $ 903,000 $ 996,000 Reclassification of contract assets to accounts receivable (1,551,000 ) (1,858,000 ) Contract assets recognized 1,060,000 1,734,000 Increase (decrease) as a result of changes in the estimate of amounts to be realized from payers, excluding amounts transferred to receivables during the period (19,000 ) 31,000 Contract assets, ending $ 393,000 $ 903,000 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of components of inventories | The components of inventories as of June 30, 2021 and 2020 were approximately as follows: June 30, 2021 2020 Parts inventory $ 1,779,000 $ 2,271,000 Work in process 23,000 127,000 Finished goods 445,000 827,000 Estimated inventory to be returned 167,000 150,000 Less: Reserve for obsolescence (300,000 ) (290,000 ) Total $ 2,114,000 $ 3,085,000 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment, including assets under capital leases | Property and equipment were approximately as follows: Estimated Useful June 30, Lives (Years) 2021 2020 Building and building improvements 15-39 $ 3,446,000 $ 3,437,000 Land N/A 200,000 200,000 Land improvements 15 166,000 166,000 Equipment 3-7 3,467,000 3,311,000 Demonstration and rental equipment 3 1,060,000 1,075,000 Construction in progress N/A 26,000 16,000 8,365,000 8,205,000 Less: Accumulated depreciation (4,760,000 ) (4,417,000 ) Net property and equipment $ 3,605,000 $ 3,788,000 |
Finite-life Intangible Assets (
Finite-life Intangible Assets (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of activity and balances of finite-life intangible assets | The activity and net balances of finite-life intangible assets were approximately as follows: Years Ended June 30, 2021 2020 Balance, beginning $ 598,000 $ 581,000 Additions 198,000 139,000 Amortization expense (133,000 ) (122,000 ) Balance, ending $ 663,000 $ 598,000 |
Schedule of future amortization of finite-life intangible assets | Based on the carrying value as of June 30, 2021, future amortization is expected to be approximately as follows: Fiscal years ending June 30: 2022 $ 102,000 2023 41,000 2024 36,000 2025 34,000 2026 34,000 Thereafter 416,000 Total $ 663,000 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of assumptions used to estimate fair value of options granted | The following assumptions were used to estimate the fair value of options granted: Years Ended June 30, 2021 2020 Risk-free interest rate 0.31-0.59 % 1.85 % Expected term (years) 6 6 Expected volatility 283-335 % 190 % |
Schedule of stock option transactions | The following table presents employee stock option activity for fiscal 2021 and 2020: Number of Shares Weighted- Average Grant Date Fair Value Weighted- Average Exercise Price Weighted- Average Remaining Contractual Life (in Years) Options outstanding as of June 30, 2019 683,000 $ 3.35 $ 3.84 6.96 Granted 149,300 $ 5.19 $ 5.29 — Exercised (194,670 ) $ 2.47 $ 3.08 — Canceled or Forfeited (46,850 ) $ 5.16 $ 5.34 — Options outstanding as of June 30, 2020 590,780 $ 3.96 $ 4.34 6.87 Granted 61,017 $ 14.13 $ 14.14 — Exercised (71,150 ) $ 4.78 $ 5.09 — Canceled or Forfeited (112,598 ) $ 6.24 $ 6.50 — Options outstanding as of June 30, 2021 468,049 $ 4.61 $ 4.98 5.82 Options exercisable as of June 30, 2021 442,437 $ 4.16 $ 4.54 5.64 |
Schedule of restricted stock transactions | Restricted stock transactions during the years ended June 30, 2021 and 2020 are summarized as follows: Shares of Restricted Stock Weighted-Average Grant Date Fair Value per Share Outstanding as of June 30, 2019 29,998 $ 5.46 Granted 53,000 $ 7.17 Vested (45,833 ) $ 6.83 Forfeited (14,666 ) $ 6.23 Outstanding as of June 30, 2020 22,499 $ 6.19 Granted 48,756 $ 12.93 Vested (40,752 ) $ 9.47 Outstanding as of June 30, 2021 30,503 $ 12.57 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of the provision for income taxes | Components of the provision for income taxes for fiscal 2021 and 2020 were as follows: Years Ended June 30, 2021 2020 Current: Current Federal $ 861,000 $ 922,000 Current State 238,000 282,000 Total Current 1,099,000 1,204,000 Deferred: Deferred Federal (204,000 ) (70,000 ) Deferred State (90,000 ) (56,000 ) Total Deferred (294,000 ) (126,000 ) Total Income Tax Expense $ 805,000 $ 1,078,000 |
Schedule of effective income tax reconciliation | The total income tax expense differed from the expected tax expense, computed by applying the federal statutory rate to the Company’s pretax income, as follows: Years Ended June 30, 2021 2020 Tax expense at statutory federal rate $ 665,000 $ 1,100,000 State income tax expense, net of federal tax effect 110,000 151,000 Change in valuation allowance on deferred tax assets 34,000 91,000 Other permanent items (4,000 ) (264,000 ) Income tax expense $ 805,000 $ 1,078,000 |
Schedule of significant components of deferred income taxes | The significant components of deferred income taxes were as follows: June 30, 2021 2020 Deferred tax assets (liabilities): Revenue recognition and accounts receivable reserves $ 655,000 $ 468,000 Accrued liabilities 297,000 253,000 Property and equipment (218,000 ) (202,000 ) Finite-life intangible assets (15,000 ) (6,000 ) Stock options 414,000 458,000 Tax credits 125,000 92,000 Accounting method change (140,000 ) (282,000 ) Valuation allowance on deferred taxes (125,000 ) (91,000 ) Other 56,000 65,000 Net deferred tax assets $ 1,049,000 $ 755,000 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Leases [Abstract] | |
Schedule of maturities of lease liabilities | Maturities of lease liabilities, which are included in current maturities of long-term liabilities and other long-term liabilities on the Company’s balance sheet, are as follows: Fiscal years ending June 30: 2022 $ 29,000 2023 18,000 2024 17,000 2025 17,000 2026 8,000 Total lease payments 89,000 Less: Interest (2,000 ) Present value of lease liabilities $ 87,000 |
Nature of Business and Summar_4
Nature of Business and Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Accounting Policies [Abstract] | ||
Beginning warranty reserve | $ 740,000 | $ 810,000 |
Accrual for products sold | 354,000 | 79,000 |
Expenditures and costs incurred for warranty claims | (154,000) | (149,000) |
Ending warranty reserve | $ 940,000 | $ 740,000 |
Nature of Business and Summar_5
Nature of Business and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Sales | $ 35,756,000 | $ 32,471,000 |
Common stock equivalents excluded from calculation of diluted earnings per share | 48,617 | 0 |
Cost of revenue | $ 8,451,000 | $ 7,271,000 |
Advertising, marketing and trade show costs | 1,062,000 | 781,000 |
Accounts receivable, allowance for doubtful accounts | 45,000 | 45,000 |
International [Member] | ||
Sales | 658,000 | 718,000 |
Shipping and Handling [Member] | ||
Cost of revenue | $ 530,000 | $ 515,000 |
Revenues (Details)
Revenues (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Revenue | $ 35,756,000 | $ 32,471,000 |
Home Care [Member] | ||
Revenue | 32,986,000 | 29,323,000 |
Home Care [Member] | Commercial [Member] | ||
Revenue | 12,530,000 | 11,728,000 |
Home Care [Member] | Medicare [Member] | ||
Revenue | 19,044,000 | 14,863,000 |
Home Care [Member] | Medicaid [Member] | ||
Revenue | 846,000 | 1,696,000 |
Home Care [Member] | Other [Member] | ||
Revenue | 566,000 | 1,036,000 |
Institutional [Member] | ||
Revenue | 1,549,000 | 2,000,000 |
Home Care Distributor [Member] | ||
Revenue | 563,000 | 430,000 |
International [Member] | ||
Revenue | $ 658,000 | $ 718,000 |
Revenues (Details 1)
Revenues (Details 1) - USD ($) | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | ||
Receivables, included in "Accounts receivable, net of allowance for doubtful accounts" | $ 17,032,000 | $ 12,941,000 |
Contract assets | 393,000 | 903,000 |
Contract assets, beginning | 903,000 | 996,000 |
Reclassification contract assets to accounts receivable | (1,551,000) | (1,858,000) |
Contract assets recognized | 1,060,000 | 1,734,000 |
Increase (decrease) as a result of changes in the estimate of amounts to be realized from payers, excluding amounts transferred to receivables during the period | (19,000) | 31,000 |
Contract assets, ending | $ 393,000 | $ 903,000 |
Revenues (Details Narrative)
Revenues (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | ||
Operating lease revenue | $ 1,000 | $ 6,000 |
Inventories (Details)
Inventories (Details) - USD ($) | Jun. 30, 2021 | Jun. 30, 2020 |
Inventory Disclosure [Abstract] | ||
Parts inventory | $ 1,779,000 | $ 2,271,000 |
Work in process | 23,000 | 127,000 |
Finished goods | 445,000 | 827,000 |
Estimated Inventory to be returned | 167,000 | 150,000 |
Less: Reserve for obsolescence | (300,000) | (290,000) |
Total | $ 2,114,000 | $ 3,085,000 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Property and equipment, gross | $ 8,365,000 | $ 8,205,000 |
Less: Accumulated depreciation | (4,760,000) | (4,417,000) |
Net property and equipment | 3,605,000 | 3,788,000 |
Building and Building Improvements [Member] | ||
Property and equipment, gross | $ 3,446,000 | 3,437,000 |
Building and Building Improvements [Member] | Minimum [Member] | ||
Estimated useful life | 15 years | |
Building and Building Improvements [Member] | Maximum [Member] | ||
Estimated useful life | 39 years | |
Land Improvements [Member] | ||
Property and equipment, gross | $ 166,000 | 166,000 |
Estimated useful life | 15 years | |
Equipment [Member] | ||
Property and equipment, gross | $ 3,467,000 | 3,311,000 |
Equipment [Member] | Minimum [Member] | ||
Estimated useful life | 3 years | |
Equipment [Member] | Maximum [Member] | ||
Estimated useful life | 7 years | |
Demonstration and Rental Equipment [Member] | ||
Property and equipment, gross | $ 1,060,000 | 1,075,000 |
Estimated useful life | 3 years | |
Land [Member] | ||
Property and equipment, gross | $ 200,000 | 200,000 |
Construction in Progress [Member] | ||
Property and equipment, gross | $ 26,000 | $ 16,000 |
Finite-life Intangible Assets_2
Finite-life Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Balance, beginning | $ 598,000 | $ 581,000 |
Additions | 198,000 | 139,000 |
Amortization expense | (133,000) | (122,000) |
Balance, ending | $ 663,000 | $ 598,000 |
Finite-life Intangible Assets_3
Finite-life Intangible Assets (Details 1) - USD ($) | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 |
Fiscal years ending June 30: | |||
2022 | $ 102,000 | ||
2023 | 41,000 | ||
2024 | 36,000 | ||
2025 | 34,000 | ||
2026 | 34,000 | ||
Thereafter | 416,000 | ||
Total | $ 663,000 | $ 598,000 | $ 581,000 |
Finite-life Intangible Assets_4
Finite-life Intangible Assets (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Accumulated amortization | $ 1,248,000 | $ 1,119,000 |
Patents [Member] | ||
Estimated useful life | 15 years | |
Trademarks [Member] | ||
Estimated useful life | 12 years |
Financing Arrangements (Details
Financing Arrangements (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Minimum tangible net worth to be maintained | $ 10,125,000 | |
Credit Facility [Member] | ||
Maximum borrowing capacity | 2,500,000 | |
Line of credit balance | $ 0 | $ 0 |
Credit facility effective date | Dec. 16, 2020 | |
Credit facility expiration date | Dec. 16, 2021 | |
Basis spread on rate | 1.00% | |
Borrowing capacity of eligible accounts receivable | $ 2,500,000 | |
Borrowing capacity of eligible accounts receivable (percent) | 57.00% | |
Available borrowing capacity | $ 2,500,000 | |
Credit Facility [Member] | Prime Rate [Member] | ||
Interest rate | 3.25% |
Common Stock (Details Narrative
Common Stock (Details Narrative) - USD ($) | 12 Months Ended | ||
Jun. 30, 2021 | May 26, 2021 | Jun. 30, 2020 | |
Common stock, shares authorized | 13,000,000 | 13,000,000 | |
Common stock, par value | $ 0.01 | $ 0.01 | |
Vaue of repurchased | $ (1,124,000) | ||
Number of share repurchased | (104,211) | ||
Share price | $ 10.79 | ||
Board of Directors [Member] | |||
Common stock, shares authorized | 3,000,000 | ||
Undesignated Stock [Member] | |||
Common stock, shares authorized | 2,000,000 | ||
Common Stock [Member] | |||
Common stock, shares authorized | 13,000,000 | ||
Common stock, par value | $ 0.01 | ||
Number of share repurchased | (1,876,000) | ||
Capital Stock [Member] | |||
Common stock, shares authorized | 15,000,000 |
Share-Based Payments (Details)
Share-Based Payments (Details) - Stock Options [Member] | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Risk free interest rate - minimum | 0.31% | |
Risk free interest rate - maximum | 0.59% | |
Risk free interest rate | 1.85% | |
Expected term (year) | 6 years | 6 years |
Expected volatility | 190.00% | |
Expected volatility - minimum | 283.00% | |
Expected volatility - maximum | 335.00% |
Share-Based Payments (Details 1
Share-Based Payments (Details 1) - $ / shares | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Number of Shares | ||
Options outstanding, ending | 442,437 | |
Options exercisable, ending | 468,049 | |
Stock Options [Member] | ||
Number of Shares | ||
Options outstanding, beginning | 590,780 | 683,000 |
Granted | 61,017 | 149,300 |
Exercised | (71,150) | (194,670) |
Cancelled or Forfeited | (112,598) | (46,850) |
Options outstanding, ending | 468,049 | 590,780 |
Options exercisable, ending | 442,437 | |
Weighted Average Grant Date Fair Value | ||
Options outstanding, beginning | $ 3.96 | $ 3.35 |
Granted | 14.13 | 5.19 |
Exercised | 4.78 | 2.47 |
Cancelled or Forfeited | 6.24 | 5.16 |
Options outstanding, ending | 4.61 | 3.96 |
Options exercisable, ending | 4.16 | |
Weighted Average Exercise Price | ||
Options outstanding, beginning | 4.34 | 3.84 |
Granted | 14.14 | 5.29 |
Exercised | 5.09 | 3.08 |
Cancelled or Forfeited | 6.50 | 5.34 |
Options outstanding, ending | 4.98 | $ 4.34 |
Options exercisable, ending | $ 4.54 | |
Weighted-Average Remaining Contractual Life | ||
Options outstanding at beginning | 6 years 10 months 14 days | 6 years 11 months 15 days |
Option outstanding at ending | 5 years 9 months 25 days | 6 years 10 months 14 days |
Options exercisable | 5 years 7 months 21 days |
Share-Based Payments (Details 2
Share-Based Payments (Details 2) - Restricted Stock [Member] - $ / shares | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Number of Shares | ||
Outstanding, beginning | 22,499 | 29,998 |
Granted | 48,756 | 53,000 |
Vested | (40,752) | (45,833) |
Forfeited | (14,666) | |
Outstanding, ending | 30,503 | 22,499 |
Weighted Average Grant Date Fair Value | ||
Outstanding, beginning | $ 6.19 | $ 5.46 |
Granted | 12.93 | 7.17 |
Vested | 9.47 | 6.83 |
Forfeited | 6.23 | |
Outstanding, ending | $ 12.57 | $ 6.19 |
Share-Based Payments (Details N
Share-Based Payments (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Share-based compensation expense | $ 1,024,000 | $ 902,000 |
Unrecognized compensation expense | $ 553,000 | |
Unrecognized compensation expense, period for recognition | 10 months 25 days | |
Options outstanding, intrinsic value | $ 3,094,000 | |
Options exercisable, intrinsic value | $ 3,074,000 | |
Outstanding exercisable | 468,049 | |
Options outstanding | 442,437 | |
Restricted Stock [Member] | ||
Restricted stock awards issued | 48,756 | 53,000 |
Fair value on grant date | $ 12.93 | $ 7.17 |
Restricted Stock [Member] | Director [Member] | ||
Restricted stock awards issued | 18,000 | 10,000 |
Vesting term of awards | 6 months | 6 months |
Fair value on grant date | $ 9.94 | $ 9.74 |
2017 Plan [Member] | ||
Shares available for issuance | 900,000 | |
Available for grant, shares | 476,224 | |
Options outstanding (shares) | 209,549 | |
2014 Plan [Member] | ||
Available for grant, shares | 258,500 | |
Employees [Member] | Restricted Stock [Member] | ||
Restricted stock awards issued | 30,756 | 35,000 |
Fair value on grant date | $ 14.68 | $ 5.84 |
Employees [Member] | Restricted Stock [Member] | Minimum [Member] | ||
Vesting term of awards | 1 year | |
Options expire | 5 years | |
Employees [Member] | Restricted Stock [Member] | Maximum [Member] | ||
Vesting term of awards | 3 years | |
Options expire | 10 years |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Current: | ||
Current Federal | $ 861,000 | $ 922,000 |
Current State | 238,000 | 282,000 |
Total Current | 1,099,000 | 1,204,000 |
Deferred: | ||
Deferred Federal | (204,000) | (70,000) |
Deferred State | (90,000) | (56,000) |
Total Deferred | (294,000) | (126,000) |
Total Income Tax Expense | $ 805,000 | $ 1,078,000 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||
Tax expense at statutory federal rate | $ 665,000 | $ 1,100,000 |
State income tax expense, net of federal tax effect | 110,000 | 151,000 |
Change in valuation allowance on deferred tax assets | 34,000 | 91,000 |
Other permanent items | (4,000) | (264,000) |
Income tax expense | $ 805,000 | $ 1,078,000 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Jun. 30, 2021 | Jun. 30, 2020 |
Deferred tax assets (liabilities): | ||
Revenue recognition and accounts receivable reserves | $ 655,000 | $ 468,000 |
Accrued liabilities | 297,000 | 253,000 |
Property and equipment | (218,000) | (202,000) |
Finite-life intangible assets | (15,000) | (6,000) |
Stock options | 414,000 | 458,000 |
Tax credits | 125,000 | 92,000 |
Accounting method change | (140,000) | (282,000) |
Valuation allowance on deferred taxes | (125,000) | (91,000) |
Other | 56,000 | 65,000 |
Net deferred tax assets | $ 1,049,000 | $ 755,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Income tax expense | $ 805,000 | $ 1,078,000 |
Effective tax rate | 25.40% | 20.60% |
State Jurisdiction [Member] | ||
Tax credit carryforwards | $ 125,000 |
Leases (Details)
Leases (Details) | Jun. 30, 2021USD ($) |
Fiscal years ending June 30: | |
2022 | $ 29,000 |
2023 | 18,000 |
2024 | 17,000 |
2025 | 17,000 |
2026 | 8,000 |
Total lease payments | 89,000 |
Less: Interest | (2,000) |
Present value of lease liabilities | $ 87,000 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Operating lease payment | $ 74,000 | |
Operating lease right of use asset | 88,000 | $ 81,000 |
Operating lease liability | $ 87,000 | |
Weighted-average lease term | 2 years 9 months 18 days | |
Weighted-average discount rate | 4.00% | |
Other Liabilities [Member] | ||
Operating lease liability | $ 87,000 | $ 81,000 |
Office and Warehouse Space [Member] | ||
Lease expiration date | Jan. 31, 2026 | |
Office and Warehouse Space [Member] | Minimum [Member] | ||
Operating lease payment | $ 200 | |
Office and Warehouse Space [Member] | Maximum [Member] | ||
Operating lease payment | 4,400 | |
Office Equipment [Member] | ||
Operating lease payment | $ 1,600 | |
Lease expiration date | Aug. 31, 2022 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 12 Months Ended | |
Jun. 30, 2021USD ($)Number | Jun. 30, 2020USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||
Employee benefit plan, minimum age requirement | 21 years | |
Employee benefit plan, requisite service hours | Number | 1,000 | |
Employee benefit plan, employer contribution | $ | $ 399,000 | $ 329,000 |