Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 31, 2019 | Apr. 30, 2019 | |
Entity Registrant Name | FONAR CORP | |
Entity Central Index Key | 0000355019 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Accelerated Filer | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 | |
emerging growth company | false | |
small business | true | |
Common Shares | ||
Entity Common Stock, Shares Outstanding | 6,357,482 | |
Class B Common Stock | ||
Entity Common Stock, Shares Outstanding | 146 | |
Class C Common Stock | ||
Entity Common Stock, Shares Outstanding | 382,513 | |
Preferred Stock Class A | ||
Entity Common Stock, Shares Outstanding | 313,438 |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 24,780 | $ 19,634 |
Accounts receivable - net | 3,709 | 3,814 |
Accounts receivable - Related party | 30 | |
Medical receivables -net | 15,318 | 13,351 |
Management and other fees receivable -net | 24,979 | 21,863 |
Management and other fees receivable - related medical practices -net | 6,204 | 5,535 |
Inventories | 1,810 | 1,431 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 335 | 87 |
Prepaid expenses and other current assets | 1,647 | 1,350 |
Total Current Assets | 78,812 | 67,065 |
Income taxes receivable | 1,200 | 1,200 |
Deferred income tax asset | 18,989 | 22,689 |
Property and equipment - net | 17,440 | 16,492 |
Goodwill | 3,985 | 3,985 |
Other intangible assets - net | 4,959 | 5,602 |
Other assets | 1,207 | 1,278 |
Total Assets | 126,592 | 118,311 |
Current Liabilities: | ||
Current portion of long-term debt and capital leases | 40 | 39 |
Accounts payable | 1,631 | 1,300 |
Other current liabilities | 4,973 | 8,178 |
Unearned revenue on service contracts | 3,777 | 4,192 |
Unearned revenue on service contracts - related parties | 27 | |
Customer deposits | 834 | 858 |
Total Current Liabilities | 11,282 | 14,567 |
Long-Term Liabilities: | ||
Deferred income tax liability | 239 | 239 |
Due to related medical practices | 93 | 227 |
Long-term debt and capital leases, less current portion | 282 | 306 |
Other liabilities | 755 | 737 |
Total Long-Term Liabilities | 1,369 | 1,509 |
Total Liabilities | 12,651 | 16,076 |
STOCKHOLDERS' EQUITY: | ||
Common Stock | 1 | 1 |
Paid-in capital in excess of par value | 181,086 | 179,132 |
Accumulated deficit | (69,039) | (79,773) |
Notes receivable from employee stockholders | (9) | |
Treasury stock, at cost - 12 shares of common stock at March 31, 2019 and June 30, 2018 | (675) | (675) |
Total Fonar Corporation's Stockholders' Equity | 111,373 | 98,676 |
Noncontrolling interests | 2,568 | 3,559 |
Total Stockholders' Equity | 113,941 | 102,235 |
Total Liabilities and Stockholders' Equity | $ 126,592 | $ 118,311 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2019 | Jun. 30, 2018 |
Class A Non-Voting Preferred | ||
Preferred Stock, Par Value | $ 0.0001 | $ 0.0001 |
Preferred Stock, Authorized | 453,000 | 453,000 |
Preferred Stock, Issued | 313,000 | 313,000 |
Preferred Stock, Outstanding | 313,000 | 313,000 |
Preferred Stock | ||
Preferred Stock, Par Value | $ 0.001 | $ 0.001 |
Preferred Stock, Authorized | 567,000 | 567,000 |
Preferred Stock, Issued | 0 | 0 |
Preferred Stock, Outstanding | 0 | 0 |
Common Shares | ||
Common Stock, Par Value | $ 0.0001 | $ 0.0001 |
Common Stock, Authorized | 8,500,000 | 8,500,000 |
Common Stock, Issued | 6,369,000 | 6,299,000 |
Common Stock, Outstanding | 6,357,000 | 6,288,000 |
Class B Common Stock | ||
Common Stock, Par Value | $ 0.0001 | $ 0.0001 |
Common Stock, Authorized | 227,000 | 227,000 |
Common Stock, Issued | 146 | 146 |
Common Stock, Outstanding | 146 | 146 |
Class C Common Stock | ||
Common Stock, Par Value | $ 0.0001 | $ 0.0001 |
Common Stock, Authorized | 567,000 | 567,000 |
Common Stock, Issued | 383,000 | 383,000 |
Common Stock, Outstanding | 383,000 | 383,000 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
REVENUES | ||||
Patient fee revenue, net of contractual allowances and discounts | $ 6,410 | $ 10,163 | $ 17,856 | $ 28,353 |
Provision for bad debts for patient fee | (4,552) | (12,873) | ||
Patient fee revenue - net | 6,410 | 5,611 | 17,856 | 15,480 |
Product sales - net | 796 | 69 | 1,241 | 508 |
Service and repair fees - net | 1,964 | 2,314 | 6,116 | 6,929 |
Service and repair fees - related parties - net | 28 | 28 | 83 | 83 |
Management and other fees - net | 11,191 | 10,670 | 32,448 | 30,781 |
Management and other fees - related medical practices - net | 2,390 | 2,287 | 6,965 | 6,699 |
Total Revenues - net | 22,779 | 20,979 | 64,709 | 60,480 |
COSTS AND EXPENSES | ||||
Costs related to patient fee revenue | 2,740 | 2,570 | 8,016 | 7,619 |
Costs related to product sales | 216 | 173 | 539 | 562 |
Costs related to service and repair fees | 752 | 775 | 2,242 | 2,309 |
Costs related to service and repair fees - related parties | 10 | 9 | 30 | 27 |
Costs related to management and other fees | 5,834 | 5,733 | 17,493 | 17,116 |
Costs related to management and other fees - related medical practices | 1,634 | 1,281 | 4,421 | 3,692 |
Research and development | 381 | 503 | 1,368 | 1,258 |
Selling, general and administrative | 4,604 | 5,533 | 12,474 | 12,899 |
Total Costs and Expenses | 16,171 | 16,577 | 46,583 | 45,482 |
INCOME | ||||
Income From Operations | 6,608 | 4,402 | 18,126 | 14,998 |
Interest Expense | (27) | (46) | (78) | (138) |
Investment Income | 104 | 74 | 336 | 179 |
Other Expense | (8) | (15) | ||
Income Before Provision for Income Taxes and Noncontrolling Interests | 6,685 | 4,422 | 18,384 | 15,024 |
Provision for Income Taxes | (1,484) | (160) | (3,826) | (920) |
Net Income | 5,201 | 4,262 | 14,558 | 14,104 |
Net Income - Noncontrolling Interests | 1,338 | 781 | 3,824 | 2,715 |
Net Income - Controlling Interests | $ 3,863 | $ 3,481 | $ 10,734 | $ 11,389 |
Basic Net Income Per Common Share | $ 0.61 | $ 0.55 | $ 1.69 | $ 1.81 |
Weighted Average Basic Shares Outstanding - Common Shareholders | 6,357,000 | 6,287,000 | 6,353,000 | 6,287,000 |
Common Shares | ||||
INCOME | ||||
Net Income - Controlling Interests | $ 3,623 | $ 3,263 | $ 10,067 | $ 10,675 |
Basic Net Income Per Common Share | $ 0.57 | $ 0.52 | $ 1.58 | $ 1.7 |
Diluted Net Income Per Common Share | $ 0.56 | $ 0.51 | $ 1.55 | $ 1.66 |
Weighted Average Basic Shares Outstanding - Common Shareholders | 6,357,000 | 6,287,000 | 6,353,000 | 6,287,000 |
Weighted Average Diluted Shares Outstanding - Common Shareholders | 6,485,000 | 6,415,000 | 6,481,000 | 6,415,000 |
Preferred Stock Class A | ||||
INCOME | ||||
Net Income - Controlling Interests | $ 179 | $ 163 | $ 496 | $ 532 |
Class C Common Stock | ||||
INCOME | ||||
Net Income - Controlling Interests | $ 61 | $ 55 | $ 170 | $ 182 |
Basic Net Income Per Common Share | $ 0.16 | $ 0.15 | $ 0.44 | $ 0.48 |
Diluted Net Income Per Common Share | $ 0.16 | $ 0.15 | $ 0.44 | $ 0.48 |
Weighted Average Basic Shares Outstanding - Common Shareholders | 383,000 | 383,000 | 383,000 | 383,000 |
Weighted Average Diluted Shares Outstanding - Common Shareholders | 383,000 | 383,000 | 383,000 | 383,000 |
Weighted Average Basic and Diluted Shares Outstanding - Class C Common | 383,000 | 383,000 | 383,000 | 383,000 |
Shareholders Equity and Compreh
Shareholders Equity and Comprehensive Income - USD ($) $ in Thousands | Common Shares | Paid-in Capital in Excess of Par Value | Accumulated Deficit | Notes Receivable from Employee Stockholders | Treasury Stock | Noncontrolling Interests | Total |
Balance - Beginning, Value at Jun. 30, 2017 | $ 1 | $ 179,131 | $ (101,003) | $ (17) | $ (675) | $ 5,473 | $ 82,910 |
Issuance of stock (value) | |||||||
Net Income - Controlling Interests | 11,389 | 11,389 | |||||
Repayment of notes receivable | 6 | 6 | |||||
Distributions - noncontrolling | (4,456) | (4,456) | |||||
Net Income - Noncontrolling Interests | 2,715 | 2,715 | |||||
Balance - Ending, Value at Mar. 31, 2018 | 1 | 179,131 | (89,614) | (11) | (675) | 3,732 | 92,564 |
Balance - Beginning, Value at Dec. 31, 2017 | 1 | 179,131 | (93,095) | (13) | (675) | 4,646 | 89,995 |
Issuance of stock (value) | |||||||
Net Income - Controlling Interests | 3,481 | 3,481 | |||||
Repayment of notes receivable | 2 | 2 | |||||
Distributions - noncontrolling | (1,695) | (1,695) | |||||
Net Income - Noncontrolling Interests | 781 | 781 | |||||
Balance - Ending, Value at Mar. 31, 2018 | 1 | 179,131 | (89,614) | (11) | (675) | 3,732 | 92,564 |
Balance - Beginning, Value at Jun. 30, 2018 | 1 | 179,132 | (79,773) | (9) | (675) | 3,559 | 102,235 |
Issuance of stock (value) | 1,954 | 1,954 | |||||
Net Income - Controlling Interests | 10,734 | 10,734 | |||||
Repayment of notes receivable | 9 | 9 | |||||
Distributions - noncontrolling | (4,815) | (4,815) | |||||
Net Income - Noncontrolling Interests | 3,824 | 3,824 | |||||
Balance - Ending, Value at Mar. 31, 2019 | 1 | 181,086 | (69,039) | (675) | 2,568 | 113,941 | |
Balance - Beginning, Value at Dec. 31, 2018 | 1 | 181,086 | (72,902) | (9) | (675) | 2,355 | 109,856 |
Issuance of stock (value) | |||||||
Net Income - Controlling Interests | 3,863 | 3,863 | |||||
Repayment of notes receivable | 9 | 9 | |||||
Distributions - noncontrolling | (1,125) | (1,125) | |||||
Net Income - Noncontrolling Interests | 1,338 | 1,338 | |||||
Balance - Ending, Value at Mar. 31, 2019 | $ 1 | $ 181,086 | $ (69,039) | $ (675) | $ 2,568 | $ 113,941 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash Flows from Operating Activities: | ||
Net income | $ 14,558 | $ 14,104 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 2,852 | 2,949 |
Deferred income tax | 3,701 | 575 |
Provision for bad debts | (652) | 122 |
Stock issued for costs and expenses | 1,955 | |
(Increase) decrease in operating assets, net: | ||
Accounts, medical receivable and management fee(s) | (5,025) | (3,005) |
Notes receivable | (13) | |
Costs and estimated earnings in excess of Billings on uncompleted contracts | (248) | 649 |
Inventories | (378) | (13) |
Prepaid expenses and other current assets | (214) | (132) |
Other assets | (883) | |
Increase (decrease) in operating liabilities, net: | ||
Accounts payable | 331 | (164) |
Other current liabilities | (3,593) | (1,681) |
Customer advances | (24) | 79 |
Other liabilities | 18 | 1 |
Due to related medical practices | (135) | |
Net cash provided by operating activities | 13,132 | 12,601 |
Cash Flows from Investing Activities: | ||
Purchases of property and equipment | (3,069) | (2,594) |
Cost of patents | (88) | (75) |
Net cash used in investing activities | (3,157) | (2,669) |
Cash Flows from Financing Activities: | ||
Repayment of borrowings and capital lease obligations | (23) | (150) |
Additional acquisition costs | (58) | |
Distributions to noncontrolling interests | (4,815) | (4,455) |
Repayment of notes receivable from employee stockholders | 9 | 5 |
Net cash used in financing activities | (4,829) | (4,658) |
Net Increase in Cash and Cash Equivalents | 5,146 | 5,274 |
Cash and Cash Equivalents - Beginning of Period | 19,634 | 10,140 |
Cash and Cash Equivalents - End of Period | $ 24,780 | $ 15,414 |
NOTE 1 - DESCRIPTION OF BUSINES
NOTE 1 - DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (USD $) | 9 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
NOTE 1 - DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | FONAR CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2019 and 2018 (Amounts and shares in thousands, except per share amounts) (UNAUDITED) NOTE 1 – DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Description of Business Effective July 1, 2015, the Company restructured the corporate organization of the management of diagnostic imaging centers segment of our business. The reorganization was structured to more completely integrate the operations of Health Management Corporation of America and HDM. Imperial contributed all of its assets (which were utilized in the business of Health Management Corporation of America) to HDM and received a 24.2% interest in HDM. Health Management Corporation of America retained a direct ownership interest of 45.8% in HDM, and the original investors in HDM retained a 30.0% ownership interest in the newly expanded HDM. The entire management of diagnostic imaging centers business segment is now being conducted by HDM, operating under the name “Health Management Company of America”. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended March 31, 2019, are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2019. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K filed on September 21, 2018 for the fiscal year ended June 30, 2018. |
NOTE 2 - SUMMARY OF SIGNIFICANT
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (USD $) | 9 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | FONAR CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2019 and 2018 (Amounts and shares in thousands, except per share amounts) (UNAUDITED) NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of FONAR Corporation, its majority and wholly-owned subsidiaries and partnerships (collectively the “Company”). All significant intercompany accounts and transactions have been eliminated in consolidation. Revenues On July 1, 2018, the Company adopted the new revenue recognition accounting standard issued by the Financial Accounting Standards Board (“FASB”) and codified in the ASC as topic 606 (“ASC 606”). The revenue recognition standard in ASC 606 outlines a single comprehensive model for recognizing revenue as performance obligations, defined in a contract with a customer as goods or services transferred to the customer in exchange for consideration, are satisfied. The standard also requires expanded disclosures regarding the Company’s revenue recognition policies and significant judgments employed in the determination of revenue. The Company applied the modified retrospective approach to all contracts when adopting ASC 606. As a result, at the adoption of ASC 606 the majority of what was previously classified as the provision for bad debts in the statement of operations is now reflected as implicit price concessions (as defined in ASC 606) and therefore included as a reduction to net operating revenues in 2019. For changes in credit issues not assessed at the date of service, the Company will prospectively recognize those amounts in other operating expenses on the statement of operations. For periods prior to the adoption of ASC 606, the provision for bad debts has been presented consistent with the previous revenue recognition standards that required it to be presented separately as a component of net operating revenues. Additionally, upon adoption of ASC 606 the allowance for doubtful accounts of approximately $22.7 million as of July 1, 2018 was reclassified as a component of net patient accounts receivable. Other than these changes in presentation on the condensed consolidated statement of operations and condensed consolidated balance sheet, the adoption of ASC 606 did not have a material impact on the consolidated results of operations for the three months and nine months ended March 31, 2019, and the Company does not expect it to have a material impact on its consolidated results of operations for the remainder of 2019 and on a prospective basis. Our revenues generally relate to net patient fees received from various payers and patients themselves under contracts in which our performance obligations are to provide diagnostic services to the patients. Revenues are recorded during the period our obligations to provide diagnostic services are satisfied. Our performance obligations for diagnostic services are generally satisfied over a period of less than one day. The contractual relationships with patients, in most cases, also involve a third-party payer (Medicare, Medicaid, managed care health plans and commercial insurance companies, including plans offered through the health insurance exchanges) and the transaction prices for the services provided are dependent upon the terms provided by (Medicare and Medicaid) or negotiated with (managed care health plans and commercial insurance companies) the third-party payers. The payment arrangements with third-party payers for the services we provide to the related patients typically specify payments at amounts less than our standard charges and generally provide for payments based upon predetermined rates per diagnostic services or discounted fee-for-service rates. Management continually reviews the contractual estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms resulting from contract renegotiations and renewals. Earnings Per Share Basic earnings per share (“EPS”) is computed based on weighted average number of shares common stock and stock equivalents outstanding, net of common stock. In accordance with ASC topic 260-10, “Participating Securities and the Two-Class method”, the Company used the Two-Class method for calculating basic earnings per share and applied the if converted method in calculating diluted earnings per share for the three and nine months ended March 31, 2019 and 2018. Diluted EPS reflects the potential dilution from the exercise or conversion of all dilutive securities into common stock based on the average market price of common shares outstanding during the period. For the three and nine months ended March 31, 2019 and 2018, diluted EPS for common shareholders includes 128 shares upon conversion of Class C Common. Three months ended Three months ended Basic Total Common Stock Class C Common Stock Total Common Stock Class C Common Stock Numerator: Net income available to common stockholders $ 3,863 $ 3,623 $ 61 $ 3,481 $ 3,263 $ 55 Denominator: Weighted average shares outstanding 6,357 6,357 383 6,287 6,287 383 Basic income per common share $ 0.61 $ 0.57 $ 0.16 $ 0.55 $ 0.52 $ 0.15 Diluted Denominator: Weighted average shares outstanding 6,357 383 6,287 383 Convertible Class C Stock 128 — 128 — Total Denominator for diluted earnings per share 6,485 383 6,415 383 Diluted income per common share $ 0.56 $ 0.16 $ 0.51 $ 0.15 Nine months ended Nine months ended Basic Total Common Stock Class C Common Stock Total Common Stock Class C Common Stock Numerator: Net income available to common stockholders $ 10,733 $ 10,067 $ 170 $ 11,389 $ 10,675 $ 182 Denominator: Weighted average shares outstanding 6,353 6,353 383 6,287 6,287 383 Basic income per common share $ 1.69 $ 1.58 $ 0.44 $ 1.81 $ 1.70 $ 0.48 Diluted Denominator: Weighted average shares outstanding 6,353 383 6,287 383 Convertible Class C Stock 128 — 128 — Total Denominator for diluted earnings per share 6,481 383 6,415 383 Diluted income per common share $ 1.55 $ 0.44 $ 1.66 $ 0.48 Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, (Topic 606). ASU 2014-09 requires an entity to recognize as revenue the amount that reflects the consideration which it expects to be entitled in exchange for goods and services as it transfers control to its customers. It also requires more detailed disclosures to enable users of the financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company earns revenue from the sale of scanners, maintenance contracts, product upgrades, patient services and management fees. Under the new guidance, the reporting for patient services revenue is now reported differently. All other streams of revenue were not impacted by the new guidance. The primary change for healthcare providers under the new guidance relates to revenue generated from patient services, with patient responsibility for payment. Under the new guidance, the Company is required to report an implicit price concession (both initially and for the subsequent changes in estimates) as a reduction of revenues as opposed to bad debt expense as a component of operating expenses. The Company now records any changes in expectation of collection amounts due to patient specific events that suggests that the patient no longer has the ability and intent to pay the amount due through the bad debt expense, as that is more indicative of a change in the customer’s credit worthiness as opposed to change in the transaction price. The new standard supersedes most current revenue guidance, including industry-specific guidance. The guidance became effective for the Company on July 1, 2018 and as part of adopting the standard, the Company identified revenue streams of like contracts to allow for ease of implementation. The Company used primarily a portfolio approach to apply the new model to classes of customers with similar characteristics. The impact of adopting the new standard on our total revenue; and income from operations was not material. While the adoption of ASU 2014-09 did impact the presentation of net operating revenues in our Consolidated Statements of Operations and will impact certain disclosures, it did not materially impact our financial position, results of operations or cash flows. There was no cumulative effect of a change in accounting principle recorded related to the adoption of ASU 2014-09 on July 1, 2018. In January 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-04, Intangibles – Goodwill and Other (Topic 350). The amendments in this update simplify the test for goodwill impairment by eliminating Step 2 from the impairment test, which required the entity to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities following the procedure that would be required in determining fair value of assets acquired and liabilities assumed in a business combination. The amendments in this update are effective for public companies for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company is evaluating the impact of adopting this guidance on our consolidated condensed financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805); Clarifying the Definition of a Business. The amendments in this update clarify the definition of a business to help companies evaluate whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The amendments in this update are effective for public companies for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company has adopted this guidance on our consolidated condensed financial statements and it has no impact on the Company’s financial statements. During February 2016, FAS issued ASU 2016-02, Leases (Topic 842). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based upon the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Lease with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. The new guidance will be effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period and is applied retrospectively. Early adoption is permitted. The Company is currently in the process of assessing the impact the adoption of this guidance will have on the Company’s consolidated condensed financial statements. FASB, the Emerging Issues Task Force and the SEC have issued certain other accounting standards, updates, and regulations as of March 31, 2019 that will become effective in subsequent periods; however, management does not believe that any of those updates would have significantly affected our financial accounting measures or disclosures had they been in effect during 2019 or 2018, and it does not believe that any of those pronouncements will have a significant impact on our condensed consolidated financial statements at the time they become effective. Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. The reclassifcations did not have any effect on reported consolidated net income for any periods presented. |
NOTE 3 - ACCOUNTS RECEIVABLE, M
NOTE 3 - ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLE AND MANAGEMENT AND OTHER FEES RECEIVABLE (USD $) | 9 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
NOTE 3 - ACCOUNTS RECEIVABLE. MEDICAL RECEIVABLES AND MANAGEMENT AND OTHER FEES RECEIVABLE (USD $) | FONAR CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2019 and 2018 (Amounts and shares in thousands, except per share amounts) (UNAUDITED) NOTE 3 – ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLE AND MANAGEMENT AND OTHER FEES RECEIVABLE Receivables, net is comprised of the following at March 31, 2019: Gross Receivable Allowance for doubtful accounts Net Accounts receivable $ 3,899 $ 190 $ 3,709 Accounts receivable - related party $ 30 — $ 30 Medical receivable – net $ 15,318 — $ 15,318 Management and other fees receivable $ 34,479 $ 9,500 $ 24,979 Management and other fees receivable from related medical practices ("PC’s") $ 8,746 $ 2,542 $ 6,204 Receivables, net is comprised of the following at June 30, 2018: Gross Receivable Allowance for doubtful accounts Net Accounts receivable $ 4,004 $ 190 $ 3,814 Accounts receivable - related party $ — — $ — Medical receivable $ 36,079 $ 22,728 $ 13,351 Management and other fees receivable $ 32,846 $ 10,983 $ 21,863 Management and other fees receivable from related medical practices ("PC’s") $ 7,246 $ 1,711 $ 5,535 The Company's customers are concentrated in the healthcare industry. Accounts Receivable Credit risk with respect to the Company’s accounts receivable related to product sales and service and repair fees is limited due to the customer advances received prior to the commencement of work performed and the billing of amounts to customers as sub-assemblies are completed. Service and repair fees are billed on a monthly or quarterly basis and the Company does not continue providing these services if accounts receivable become past due. The Company controls credit risk with respect to accounts receivable from service and repair fees through its credit evaluation process, credit limits, monitoring procedures and reasonably short collection terms. The Company performs ongoing credit authorizations before a product sales contract is entered into or service and repair fees are provided. Medical Receivables Medical receivables are due under fee-for-service contracts from third party payors, such as hospitals, government sponsored healthcare programs, patient’s legal counsel and directly from patients. Substantially all the revenue relates to patients residing in Florida. The carrying amount of the medical receivable is reduced by allowances for contractual adjustments and subsequent changes in credit worthiness based on specific payor class and historical experience at each site. Management and Other Fees Receivable The Company's receivables from the related and non-related professional corporations (PC's) substantially consist of fees outstanding under management agreements. Payment of the outstanding fees is dependent on collection by the PC's of fees from third party medical reimbursement organizations, principally insurance companies and health management organizations. Payment of the management fee receivables from the PC’s may be impaired by the inability of the PC’s to collect in a timely manner their medical fees from the third party payors, particularly insurance carriers covering automobile no-fault and workers compensation claims due to longer payment cycles and rigorous informational requirements and certain other disallowed claims . Net revenues from management and other fees charged to the related PCs accounted for approximately 10.5% and 10.9% of the consolidated net revenues for the three months ended March 31, 2019 and 2018, respectively. Net revenues from management and other fees charged to the related PCs accounted for approximately 10.8% and 11.1% of the consolidated net revenues for the nine months ended March 31, 2019 and 2018, respectively. Tallahassee Magnetic Resonance Imaging, PA, Stand Up MRI of Boca Raton, PA and Stand Up MRI & Diagnostic Center, PA (all related medical practices) entered into a guaranty agreement, pursuant to which they cross guaranteed all management fees which are payable to the Company, which have arisen under each individual management agreement. Additional Company managed entities also operate under a guaranty agreement, pursuant to which management fees are payable to the Company. The Company’s patient fee revenue, net of contractual allowances and discounts less the provision for bad debts for the three and nine months ended March 31, 2019 and 2018 are summarized in the following tables. For the Three Months Ended March 31, 2019 2018 Commercial Insurance/ Managed Care $ 1,345 $ 1,238 Medicare/Medicaid 315 337 Workers' Compensation/Personal Injury 4,569 6,577 Other 181 2,011 Patient Fee Revenue, net of contractual allowances and discounts 6,410 10,163 Provision for Bad Debts and bad debt expense — (4,552 ) Net Patient Fee for Revenue $ 6,410 $ 5,611 For the Nine Months Ended March 31, 2019 2018 Commercial Insurance/ Managed Care $ 3,860 $ 3,452 Medicare/Medicaid 876 903 Workers' Compensation/Personal Injury 12,227 18,685 Other 893 5,313 Patient Fee Revenue, net of contractual allowances and discounts 17,856 28,353 Provision for Bad Debts and bad debt expense — (12,873 ) Net Patient Fee for Revenue $ 17,856 $ 15,480 |
NOTE 4 - INVENTORIES
NOTE 4 - INVENTORIES | 9 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
NOTE 4 - INVENTORIES | FONAR CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2019 and 2018 (Amounts and shares in thousands, except per share amounts) (UNAUDITED) NOTE 4 - INVENTORIES Inventories included in the accompanying condensed consolidated balance sheet consist of the following: March 31, 2019 June 30, 2018 Purchased parts, components and supplies $ 1,686 $ 1,312 Work-in-process 124 119 Total Inventories $ 1,810 $ 1,431 |
NOTE 5 - COSTS AND ESTIMATED EA
NOTE 5 - COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS | 9 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
NOTE 5 - COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS | FONAR CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2019 and 2018 (Amounts and shares in thousands, except per share amounts) (UNAUDITED) NOTE 5 – COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS Information relating to uncompleted contracts is as follows: March 31, 2019 June 30, 2018 Costs incurred on uncompleted contracts $ 449 $ 449 Estimated earnings 742 309 Subtotal 1,191 758 Less: Billings to date 856 671 Total Costs and estimated earnings in excess of billings on uncompleted contracts $ 335 $ 87 |
NOTE 6 - OTHER INTANGIBLE ASSET
NOTE 6 - OTHER INTANGIBLE ASSETS | 9 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
NOTE 6 - OTHER INTANGIBLE ASSETS | FONAR CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2019 and 2018 (Amounts and shares in thousands, except per share amounts) (UNAUDITED) NOTE 6 – OTHER INTANGIBLE ASSETS Other intangible assets, net of accumulated amortization, in the accompanying condensed consolidated balance sheet consist of the following: March 31, June 30, Capitalized software development costs $ 7,005 $ 7,005 Patents and copyrights 4,924 4,836 Non-compete 4,100 4,100 Customer relationships 3,800 3,800 Gross Other intangible assets 19,829 19,741 Less: Accumulated amortization 14,870 14,139 Other Intangible Assets – net $ 4,959 $ 5,602 Amortization of patents and copyrights for the three months ended March 31, 2019 and 2018 amounted to $50 and $50, respectively. Amortization of capitalized software development costs for the three months ended March 31, 2019 and 2018 amounted to $0 and $43, respectively. Amortization of non-compete for the three months ended March 31, 2019 and 2018 amounted to $146 and $146, respectively. Amortization of customer relationships for the three months ended March 31, 2019 and 2018 amounted to $48 and $48, respectively. Amortization of patents and copyrights for the nine months ended March 31, 2019 and 2018 amounted to $149 and $152, respectively. Amortization of capitalized software development costs for the nine months ended March 31, 2019 and 2018 amounted to $0 and $173 respectively. Amortization of non-compete for the nine months ended March 31, 2019 and 2018 amounted to $439 and $439, respectively. Amortization of customer relationships for the nine months ended March 31, 2019 and 2018 amounted to $143 and $143, respectively. |
NOTE 7 - OTHER CURRENT LIABILIT
NOTE 7 - OTHER CURRENT LIABILITIES | 9 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
NOTE 7 - OTHER CURRENT LIABILITIES | FONAR CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2019 and 2018 (Amounts and shares in thousands, except per share amounts) (UNAUDITED) NOTE 7 – OTHER CURRENT LIABILITIES Other current liabilities in the accompanying condensed consolidated balance sheet consist of the following: March 31, 2019 June 30, 2018 Accrued salaries, commissions and payroll taxes $ 1,096 $ 3,438 Litigation accruals 145 145 Sales tax payable 1,695 2,092 Legal and other professional fees 132 119 Accounting fees 90 125 Self-funded health insurance reserve — 79 Accrued interest and penalty 1,253 1,498 Other 562 682 Total Other Current Liabilities $ 4,973 $ 8,178 |
NOTE 8 - STOCKHOLDERS EQUITY
NOTE 8 - STOCKHOLDERS EQUITY | 9 Months Ended |
Mar. 31, 2019 | |
STOCKHOLDERS' EQUITY: | |
NOTE 8 - STOCKHOLDERS EQUITY | FONAR CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2019 and 2018 (Amounts and shares in thousands, except per share amounts) (UNAUDITED) NOTE 8 – STOCKHOLDERS EQUITY Common Stock During the nine months ended March 31, 2019, the Company issued 70 shares of common stock for costs and expenses of $1,955. |
NOTE 9 - SEGMENT AND RELATED IN
NOTE 9 - SEGMENT AND RELATED INFORMATION | 9 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
NOTE 9 - SEGMENT AND RELATED INFORMATION | FONAR CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2019 and 2018 (Amounts and shares in thousands, except per share amounts) (UNAUDITED) NOTE 9 - SEGMENT AND RELATED INFORMATION The Company operates in two industry segments - manufacturing and the servicing of medical equipment and management of diagnostic imaging centers. The accounting policies of the segments are the same as those described in the summary of significant accounting policies as disclosed in the Company’s 10-K as of June 30, 2018. All inter-segment sales are market-based. The Company evaluates performance based on income or loss from operations. Summarized financial information concerning the Company's reportable segments is shown in the following table: Medical Management Totals For the three months ended March 31, 2019 Net revenues from external customers $ 2,788 $ 19,991 $ 22,779 Inter-segment net revenues $ 228 $ — $ 228 (Loss) income from operations $ (27 ) $ 6,635 $ 6,608 Depreciation and amortization $ 92 $ 886 $ 978 Capital expenditures $ 661 $ 213 $ 874 For the three months ended March 31, 2018 Net revenues from external customers $ 2,411 $ 18,568 $ 20,979 Inter-segment net revenues $ 228 $ — $ 228 (Loss) income from operations $ (457 ) $ 4,859 $ 4,402 Depreciation and amortization $ 93 $ 899 $ 992 Capital expenditures $ 80 $ 727 $ 807 For the nine months ended March 31, 2019 Net revenues from external customers $ 7,440 $ 57,269 $ 64,709 Inter-segment net revenues $ 683 $ — $ 683 (Loss) income from operations $ (665 ) $ 18,791 $ 18,126 Depreciation and amortization $ 276 $ 2,576 $ 2,852 Capital expenditures $ 706 $ 2,451 $ 3,157 For the nine months ended March 31, 2018 Net revenues from external customers $ 7,520 $ 52,960 $ 60,480 Inter-segment net revenues $ 674 $ — $ 674 (Loss) income from operations $ (490 ) $ 15,488 $ 14,998 Depreciation and amortization $ 259 $ 2,690 $ 2,949 Capital expenditures $ 259 $ 2,410 $ 2,669 |
NOTE 10 - SUPPLEMENTAL CASH FLO
NOTE 10 - SUPPLEMENTAL CASH FLOW INFORMATION | 9 Months Ended |
Mar. 31, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
NOTE 10 - SUPPLEMENTAL CASH FLOW INFORMATION | FONAR CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2019 and 2018 (Amounts and shares in thousands, except per share amounts) (UNAUDITED) NOTE 10– SUPPLEMENTAL CASH FLOW INFORMATION During the nine months ended March 31, 2019 and March 31, 2018, the Company paid $158 and $37 for interest, respectively. During the nine months ended March 31, 2019 and March 31, 2018, the Company paid $305 and $345 for income taxes, respectively. |
NOTE 11 - COMMITMENTS AND CONTI
NOTE 11 - COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
NOTE 11 - COMMITMENTS AND CONTINGENCIES | FONAR CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2019 and 2018 (Amounts and shares in thousands, except per share amounts) (UNAUDITED) NOTE 11 – COMMITMENTS AND CONTINGENCIES Litigation The Company is subject to legal proceedings and claims arising from the ordinary course of its business, including personal injury, customer contract and employment claims. In the opinion of management, the aggregate liability, if any, with respect to such actions, will not have a material adverse effect on the consolidated financial position or results of operations of the Company. There were no material changes in litigation from that reported in our Form 10-K for the fiscal year ended June 30, 2018 and our form 10-Q for the first and second quarters of fiscal 2019. Other Matters The Company is also delinquent in filing sales tax returns for certain states, for which the Company has transacted business. As of March 31, 2019, the Company has recorded tax obligations of approximately $1,695 plus interest and penalties of approximately $1,207. The Company is in the process of determining the regulatory requirements in order to become compliant. The Company maintains a self-funded health insurance program with a stop-loss umbrella policy with a third party insurer to limit the maximum potential liability for individual claims to $100 per person and for a maximum potential claim liability based on member enrollment. With respect to this program, the Company considers historical and projected medical utilization data when estimating its health insurance program liability and related expense. As of March 31, 2019 and June 30, 2018, the Company had approximately $0 and $79, respectively, in reserve for its self-funded health insurance programs. The reserves are included in “Other current liabilities” in the condensed consolidated balance sheets. The Company regularly analyzes its reserves for incurred but not reported claims, and for reported but not paid claims related to its reinsurance and self-funded insurance programs. The Company believes its reserves are adequate. However, significant judgment is involved in assessing these reserves such as assessing historical paid claims, average lags between the claims’ incurred date, reported dates and paid dates, and the frequency and severity of claims. There may be differences between actual settlement amounts and recorded reserves and any resulting adjustments are included in expense once a probable amount is known. There were no significant adjustments recorded in the periods covered by this report |
NOTE 12 - INCOME TAXES
NOTE 12 - INCOME TAXES | 9 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
NOTE 12 - INCOME TAXES | FONAR CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2019 and 2018 (Amounts and shares in thousands, except per share amounts) (UNAUDITED) NOTE 12 - INCOME TAXES In accordance with ASC 740-270, Income Taxes – Interim Reporting ASC topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a corporate tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. Differences between tax positions taken or expected to be taken in a tax return and the benefit recognized and measured pursuant to the interpretation are referred to as unrecognized benefits. A liability is recognized (or amount of net operating loss carryforward or amount of tax refundable is reduced) for an unrecognized tax benefit because it represents an enterprise’s potential future obligation to the taxing authority for a tax position that was not recognized as a result of applying the provisions of ASC topic 740. The Company believes there are no uncertain tax positions in prior years tax filings and therefore it has not recorded a liability for unrecognized tax benefits. In accordance with ASC topic 740, interest costs related to unrecognized tax benefits are required to be calculated (if applicable) and would be classified as “Interest expense, net”. Penalties if incurred would be recognized as a component of “Selling, general and administrative” expenses. The Company files corporate income tax returns in the United States (federal) and in various state and local jurisdictions. In most instances, the Company is no longer subject to federal, state and local income tax examinations by tax authorities for years prior to 2014. The Company recorded a deferred tax asset of $18,989 and a deferred tax liability of $239 as of March 31, 2019, primarily relating to net operating loss carryforwards of approximately $76,611 available to offset future taxable income through 2030. The net operating losses begin to expire in 2021 for federal tax and state income tax purposes. Future ownership changes as determined under Section 382 of the Internal Revenue code could further limit the utilization of net operating loss carryforwards. As of December 31, 2018, no such changes in ownership have occurred. The ultimate realization of deferred tax assets is dependent on the generation of future taxable income during the periods in which those temporary differences become deductible or when such net operating losses can be utilized. The Company considers projected future taxable income, the regulatory environment of the industry and tax planning strategies in making this assessment. At present, the Company believes that it is more likely than not that the benefits from certain deferred tax asset carryforwards, will not all be fully realized. In recognition of this inherent risk, a valuation allowance was established for the partial value of the deferred tax asset, (principally related to research and development tax credits and allowance for doubtful accounts). A valuation allowance will be maintained until sufficient positive evidence exists to support the reversal of the remainder of the valuation. The Tax Cuts and Jobs Act was signed into law on December 22, 2017 and makes numerous changes to the Internal Revenue Code. Among other changes, the Act reduces the US corporate income tax rate to 21% effective January 1, 2018. Under ASC topic 740, Accounting for Income Taxes, the enactment of the Tax Act also requires companies, to recognize the effects of changes in tax laws and rates on deferred tax assets and liabilities and the retroactive effects of changes in tax laws in the period in which the new legislation is enacted. The Company’s gross deferred tax assets and liabilities were revalued from 35% to 21%. Deferred tax assets of $46.2 million (as of the enactment effective date –the quarter ended December 31, 2017) were revalued to approximately $30.2 million with a corresponding decrease to the Company’s valuation allowance. |
NOTE 13 - SUBSEQUENT EVENTS
NOTE 13 - SUBSEQUENT EVENTS | 9 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
NOTE 13 - SUBSEQUENT EVENTS | FONAR CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2019 and 2018 (Amounts and shares in thousands, except per share amounts) (UNAUDITED) NOTE 13- SUBSEQUENT EVENTS The Company has evaluated events that occurred subsequent to March 31, 2019 and through the date the condensed consolidated financial statements were issued. |
NOTE 2 - SUMMARY OF SIGNIFICA_2
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Mar. 31, 2019 | |
Note 2 - Summary Of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of FONAR Corporation, its majority and wholly-owned subsidiaries and partnerships (collectively the “Company”). All significant intercompany accounts and transactions have been eliminated in consolidation. |
Revenue | Revenues On July 1, 2018, the Company adopted the new revenue recognition accounting standard issued by the Financial Accounting Standards Board (“FASB”) and codified in the ASC as topic 606 (“ASC 606”). The revenue recognition standard in ASC 606 outlines a single comprehensive model for recognizing revenue as performance obligations, defined in a contract with a customer as goods or services transferred to the customer in exchange for consideration, are satisfied. The standard also requires expanded disclosures regarding the Company’s revenue recognition policies and significant judgments employed in the determination of revenue. The Company applied the modified retrospective approach to all contracts when adopting ASC 606. As a result, at the adoption of ASC 606 the majority of what was previously classified as the provision for bad debts in the statement of operations is now reflected as implicit price concessions (as defined in ASC 606) and therefore included as a reduction to net operating revenues in 2019. For changes in credit issues not assessed at the date of service, the Company will prospectively recognize those amounts in other operating expenses on the statement of operations. For periods prior to the adoption of ASC 606, the provision for bad debts has been presented consistent with the previous revenue recognition standards that required it to be presented separately as a component of net operating revenues. Additionally, upon adoption of ASC 606 the allowance for doubtful accounts of approximately $22.7 million as of July 1, 2018 was reclassified as a component of net patient accounts receivable. Other than these changes in presentation on the condensed consolidated statement of operations and condensed consolidated balance sheet, the adoption of ASC 606 did not have a material impact on the consolidated results of operations for the three months and nine months ended March 31, 2019, and the Company does not expect it to have a material impact on its consolidated results of operations for the remainder of 2019 and on a prospective basis. Our revenues generally relate to net patient fees received from various payers and patients themselves under contracts in which our performance obligations are to provide diagnostic services to the patients. Revenues are recorded during the period our obligations to provide diagnostic services are satisfied. Our performance obligations for diagnostic services are generally satisfied over a period of less than one day. The contractual relationships with patients, in most cases, also involve a third-party payer (Medicare, Medicaid, managed care health plans and commercial insurance companies, including plans offered through the health insurance exchanges) and the transaction prices for the services provided are dependent upon the terms provided by (Medicare and Medicaid) or negotiated with (managed care health plans and commercial insurance companies) the third-party payers. The payment arrangements with third-party payers for the services we provide to the related patients typically specify payments at amounts less than our standard charges and generally provide for payments based upon predetermined rates per diagnostic services or discounted fee-for-service rates. Management continually reviews the contractual estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms resulting from contract renegotiations and renewals. |
Earnings Per Share | Earnings Per Share Basic earnings per share (“EPS”) is computed based on weighted average number of shares common stock and stock equivalents outstanding, net of common stock. In accordance with ASC topic 260-10, “Participating Securities and the Two-Class method”, the Company used the Two-Class method for calculating basic earnings per share and applied the if converted method in calculating diluted earnings per share for the three and nine months ended March 31, 2019 and 2018. Diluted EPS reflects the potential dilution from the exercise or conversion of all dilutive securities into common stock based on the average market price of common shares outstanding during the period. For the three and nine months ended March 31, 2019 and 2018, diluted EPS for common shareholders includes 128 shares upon conversion of Class C Common. Three months ended Three months ended Basic Total Common Stock Class C Common Stock Total Common Stock Class C Common Stock Numerator: Net income available to common stockholders $ 3,863 $ 3,623 $ 61 $ 3,481 $ 3,263 $ 55 Denominator: Weighted average shares outstanding 6,357 6,357 383 6,287 6,287 383 Basic income per common share $ 0.61 $ 0.57 $ 0.16 $ 0.55 $ 0.52 $ 0.15 Diluted Denominator: Weighted average shares outstanding 6,357 383 6,287 383 Convertible Class C Stock 128 — 128 — Total Denominator for diluted earnings per share 6,485 383 6,415 383 Diluted income per common share $ 0.56 $ 0.16 $ 0.51 $ 0.15 Nine months ended Nine months ended Basic Total Common Stock Class C Common Stock Total Common Stock Class C Common Stock Numerator: Net income available to common stockholders $ 10,733 $ 10,067 $ 170 $ 11,389 $ 10,675 $ 182 Denominator: Weighted average shares outstanding 6,353 6,353 383 6,287 6,287 383 Basic income per common share $ 1.69 $ 1.58 $ 0.44 $ 1.81 $ 1.70 $ 0.48 Diluted Denominator: Weighted average shares outstanding 6,353 383 6,287 383 Convertible Class C Stock 128 — 128 — Total Denominator for diluted earnings per share 6,481 383 6,415 383 Diluted income per common share $ 1.55 $ 0.44 $ 1.66 $ 0.48 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, (Topic 606). ASU 2014-09 requires an entity to recognize as revenue the amount that reflects the consideration which it expects to be entitled in exchange for goods and services as it transfers control to its customers. It also requires more detailed disclosures to enable users of the financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company earns revenue from the sale of scanners, maintenance contracts, product upgrades, patient services and management fees. Under the new guidance, the reporting for patient services revenue is now reported differently. All other streams of revenue were not impacted by the new guidance. The primary change for healthcare providers under the new guidance relates to revenue generated from patient services, with patient responsibility for payment. Under the new guidance, the Company is required to report an implicit price concession (both initially and for the subsequent changes in estimates) as a reduction of revenues as opposed to bad debt expense as a component of operating expenses. The Company now records any changes in expectation of collection amounts due to patient specific events that suggests that the patient no longer has the ability and intent to pay the amount due through the bad debt expense, as that is more indicative of a change in the customer’s credit worthiness as opposed to change in the transaction price. The new standard supersedes most current revenue guidance, including industry-specific guidance. The guidance became effective for the Company on July 1, 2018 and as part of adopting the standard, the Company identified revenue streams of like contracts to allow for ease of implementation. The Company used primarily a portfolio approach to apply the new model to classes of customers with similar characteristics. The impact of adopting the new standard on our total revenue; and income from operations was not material. While the adoption of ASU 2014-09 did impact the presentation of net operating revenues in our Consolidated Statements of Operations and will impact certain disclosures, it did not materially impact our financial position, results of operations or cash flows. There was no cumulative effect of a change in accounting principle recorded related to the adoption of ASU 2014-09 on July 1, 2018. In January 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-04, Intangibles – Goodwill and Other (Topic 350). The amendments in this update simplify the test for goodwill impairment by eliminating Step 2 from the impairment test, which required the entity to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities following the procedure that would be required in determining fair value of assets acquired and liabilities assumed in a business combination. The amendments in this update are effective for public companies for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company is evaluating the impact of adopting this guidance on our consolidated condensed financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805); Clarifying the Definition of a Business. The amendments in this update clarify the definition of a business to help companies evaluate whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The amendments in this update are effective for public companies for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company has adopted this guidance on our consolidated condensed financial statements and it has no impact on the Company’s financial statements. During February 2016, FAS issued ASU 2016-02, Leases (Topic 842). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based upon the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Lease with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. The new guidance will be effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period and is applied retrospectively. Early adoption is permitted. The Company is currently in the process of assessing the impact the adoption of this guidance will have on the Company’s consolidated condensed financial statements. FASB, the Emerging Issues Task Force and the SEC have issued certain other accounting standards, updates, and regulations as of March 31, 2019 that will become effective in subsequent periods; however, management does not believe that any of those updates would have significantly affected our financial accounting measures or disclosures had they been in effect during 2019 or 2018, and it does not believe that any of those pronouncements will have a significant impact on our condensed consolidated financial statements at the time they become effective. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. The reclassifcations did not have any effect on reported consolidated net income for any periods presented. |
NOTE 2 - SUMMARY OF SIGNIFICA_3
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
Earnings Per Share | Earnings Per Share Three months ended Three months ended Basic Total Common Stock Class C Common Stock Total Common Stock Class C Common Stock Numerator: Net income available to common stockholders $ 3,863 $ 3,623 $ 61 $ 3,481 $ 3,263 $ 55 Denominator: Weighted average shares outstanding 6,357 6,357 383 6,287 6,287 383 Basic income per common share $ 0.61 $ 0.57 $ 0.16 $ 0.55 $ 0.52 $ 0.15 Diluted Denominator: Weighted average shares outstanding 6,357 383 6,287 383 Convertible Class C Stock 128 — 128 — Total Denominator for diluted earnings per share 6,485 383 6,415 383 Diluted income per common share $ 0.56 $ 0.16 $ 0.51 $ 0.15 Nine months ended Nine months ended Basic Total Common Stock Class C Common Stock Total Common Stock Class C Common Stock Numerator: Net income available to common stockholders $ 10,733 $ 10,067 $ 170 $ 11,389 $ 10,675 $ 182 Denominator: Weighted average shares outstanding 6,353 6,353 383 6,287 6,287 383 Basic income per common share $ 1.69 $ 1.58 $ 0.44 $ 1.81 $ 1.70 $ 0.48 Diluted Denominator: Weighted average shares outstanding 6,353 383 6,287 383 Convertible Class C Stock 128 — 128 — Total Denominator for diluted earnings per share 6,481 383 6,415 383 Diluted income per common share $ 1.55 $ 0.44 $ 1.66 $ 0.48 |
NOTE 3 - ACCOUNTS RECEIVABLE,_2
NOTE 3 - ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLE AND MANAGEMENT AND OTHER FEES RECEIVABLE (USD $) (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Receivables - net | Receivables, net at March 31, 2019: Gross Receivable Allowance for doubtful accounts Net Accounts receivable $ 3,899 $ 190 $ 3,709 Accounts receivable - related party $ 30 — $ 30 Medical receivable – net $ 15,318 — $ 15,318 Management and other fees receivable $ 34,479 $ 9,500 $ 24,979 Management and other fees receivable from related medical practices ("PC’s") $ 8,746 $ 2,542 $ 6,204 Receivables, net at June 30, 2018: Gross Receivable Allowance for doubtful accounts Net Accounts receivable $ 4,004 $ 190 $ 3,814 Accounts receivable - related party $ — — $ — Medical receivable $ 36,079 $ 22,728 $ 13,351 Management and other fees receivable $ 32,846 $ 10,983 $ 21,863 Management and other fees receivable from related medical practices ("PC’s") $ 7,246 $ 1,711 $ 5,535 |
Patient fee revenue - net | Patient fee revenue For the Three Months Ended March 31, 2019 2018 Commercial Insurance/ Managed Care $ 1,345 $ 1,238 Medicare/Medicaid 315 337 Workers' Compensation/Personal Injury 4,569 6,577 Other 181 2,011 Patient Fee Revenue, net of contractual allowances and discounts 6,410 10,163 Provision for Bad Debts and bad debt expense — (4,552 ) Net Patient Fee for Revenue $ 6,410 $ 5,611 For the Nine Months Ended March 31, 2019 2018 Commercial Insurance/ Managed Care $ 3,860 $ 3,452 Medicare/Medicaid 876 903 Workers' Compensation/Personal Injury 12,227 18,685 Other 893 5,313 Patient Fee Revenue, net of contractual allowances and discounts 17,856 28,353 Provision for Bad Debts and bad debt expense — (12,873 ) Net Patient Fee for Revenue $ 17,856 $ 15,480 |
NOTE 4 - INVENTORIES (Tables)
NOTE 4 - INVENTORIES (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories March 31, 2019 June 30, 2018 Purchased parts, components and supplies $ 1,686 $ 1,312 Work-in-process 124 119 Total Inventories $ 1,810 $ 1,431 |
NOTE 5 - COSTS AND ESTIMATED _2
NOTE 5 - COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Notes to Financial Statements | |
Information relating to uncompleted contracts | Information relating to uncompleted contracts is as follows: March 31, 2019 June 30, 2018 Costs incurred on uncompleted contracts $ 449 $ 449 Estimated earnings 742 309 Subtotal 1,191 758 Less: Billings to date 856 671 Total Costs and estimated earnings in excess of billings on uncompleted contracts $ 335 $ 87 |
NOTE 6 - OTHER INTANGIBLE ASS_2
NOTE 6 - OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other intangible assets - net | Other intangible assets - net March 31, June 30, Capitalized software development costs $ 7,005 $ 7,005 Patents and copyrights 4,924 4,836 Non-compete 4,100 4,100 Customer relationships 3,800 3,800 Gross Other intangible assets 19,829 19,741 Less: Accumulated amortization 14,870 14,139 Other Intangible Assets – net $ 4,959 $ 5,602 |
NOTE 7 - OTHER CURRENT LIABIL_2
NOTE 7 - OTHER CURRENT LIABILITIES (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Other current liabilities | Other current liabilities March 31, 2019 June 30, 2018 Accrued salaries, commissions and payroll taxes $ 1,096 $ 3,438 Litigation accruals 145 145 Sales tax payable 1,695 2,092 Legal and other professional fees 132 119 Accounting fees 90 125 Self-funded health insurance reserve — 79 Accrued interest and penalty 1,253 1,498 Other 562 682 Total Other Current Liabilities $ 4,973 $ 8,178 |
NOTE 9 - SEGMENT AND RELATED _2
NOTE 9 - SEGMENT AND RELATED INFORMATION (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment information | Summarized segment and related information Medical Management Totals For the three months ended March 31, 2019 Net revenues from external customers $ 2,788 $ 19,991 $ 22,779 Inter-segment net revenues $ 228 $ — $ 228 (Loss) income from operations $ (27 ) $ 6,635 $ 6,608 Depreciation and amortization $ 92 $ 886 $ 978 Capital expenditures $ 661 $ 213 $ 874 For the three months ended March 31, 2018 Net revenues from external customers $ 2,411 $ 18,568 $ 20,979 Inter-segment net revenues $ 228 $ — $ 228 (Loss) income from operations $ (457 ) $ 4,859 $ 4,402 Depreciation and amortization $ 93 $ 899 $ 992 Capital expenditures $ 80 $ 727 $ 807 For the nine months ended March 31, 2019 Net revenues from external customers $ 7,440 $ 57,269 $ 64,709 Inter-segment net revenues $ 683 $ — $ 683 (Loss) income from operations $ (665 ) $ 18,791 $ 18,126 Depreciation and amortization $ 276 $ 2,576 $ 2,852 Capital expenditures $ 706 $ 2,451 $ 3,157 For the nine months ended March 31, 2018 Net revenues from external customers $ 7,520 $ 52,960 $ 60,480 Inter-segment net revenues $ 674 $ — $ 674 (Loss) income from operations $ (490 ) $ 15,488 $ 14,998 Depreciation and amortization $ 259 $ 2,690 $ 2,949 Capital expenditures $ 259 $ 2,410 $ 2,669 |
NOTE 2 - SUMMARY OF SIGNIFICA_4
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Basic Numerator: Net income available to common stockholders | $ 3,863 | $ 3,481 | $ 10,734 | $ 11,389 |
Basic Denominator: Weighted average shares outstanding | 6,357,000 | 6,287,000 | 6,353,000 | 6,287,000 |
Basic income per common share | $ 0.61 | $ 0.55 | $ 1.69 | $ 1.81 |
Common Shares | ||||
Basic Numerator: Net income available to common stockholders | $ 3,623 | $ 3,263 | $ 10,067 | $ 10,675 |
Basic Denominator: Weighted average shares outstanding | 6,357,000 | 6,287,000 | 6,353,000 | 6,287,000 |
Basic income per common share | $ 0.57 | $ 0.52 | $ 1.58 | $ 1.7 |
Shares included upon conversion of Class C Common to calculate a diluted EPS | 128,000 | 128,000 | 128,000 | 128,000 |
Total Denominator for diluted earnings per share | 6,485,000 | 6,415,000 | 6,481,000 | 6,415,000 |
Diluted income per common share | $ 0.56 | $ 0.51 | $ 1.55 | $ 1.66 |
Class C Common Stock | ||||
Basic Numerator: Net income available to common stockholders | $ 61 | $ 55 | $ 170 | $ 182 |
Basic Denominator: Weighted average shares outstanding | 383,000 | 383,000 | 383,000 | 383,000 |
Basic income per common share | $ 0.16 | $ 0.15 | $ 0.44 | $ 0.48 |
Shares included upon conversion of Class C Common to calculate a diluted EPS | ||||
Total Denominator for diluted earnings per share | 383,000 | 383,000 | 383,000 | 383,000 |
Diluted income per common share | $ 0.16 | $ 0.15 | $ 0.44 | $ 0.48 |
NOTE 3 - ACCOUNTS RECEIVABLE,_3
NOTE 3 - ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLE AND MANAGEMENT AND OTHER FEES RECEIVABLE - Receivables, Net - (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 |
Accounts receivable | $ 3,709 | $ 3,814 |
Accounts receivable - Related party | 30 | |
Medical Receivables | 15,318 | 13,351 |
Management and other fees receivable | 24,979 | 21,863 |
Management and other fees receivable from related medical practices ("PC's") | 6,204 | 5,535 |
Gross Receivable | ||
Accounts receivable | 3,899 | 4,004 |
Accounts receivable - Related party | 30 | |
Medical Receivables | 15,318 | 36,079 |
Management and other fees receivable | 34,479 | 32,846 |
Management and other fees receivable from related medical practices ("PC's") | 8,746 | 7,246 |
Allowance for Doubtful Accounts | ||
Accounts receivable | 190 | 190 |
Accounts receivable - Related party | ||
Medical Receivables | 22,728 | |
Management and other fees receivable | 9,500 | 10,983 |
Management and other fees receivable from related medical practices ("PC's") | $ 2,542 | $ 1,711 |
NOTE 3 - ACCOUNTS RECEIVABLE,_4
NOTE 3 - ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLE AND MANAGEMENT AND OTHER FEES RECEIVABLE - Patient Fees Revenue - (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Patient fee revenue, net of contractual allowances and discounts | $ 6,410 | $ 10,163 | $ 17,856 | $ 28,353 |
Provision for bad debts for patient fee and bad debt expense | (4,552) | (12,873) | ||
Net patient fee revenue | 6,410 | 5,611 | 17,856 | 15,480 |
Commercial Insurance / Managed Care | ||||
Patient fee revenue, net of contractual allowances and discounts | 1,345 | 1,238 | 3,860 | 3,452 |
Medicare/Medicaid | ||||
Patient fee revenue, net of contractual allowances and discounts | 315 | 337 | 876 | 903 |
Workers Compensation/Personal Injury | ||||
Patient fee revenue, net of contractual allowances and discounts | 4,569 | 6,577 | 12,227 | 18,685 |
Other | ||||
Patient fee revenue, net of contractual allowances and discounts | $ 181 | $ 2,011 | $ 893 | $ 5,313 |
NOTE 4 - INVENTORIES (Details)
NOTE 4 - INVENTORIES (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 |
Inventory Disclosure [Abstract] | ||
Purchased parts, components and supplies | $ 1,686 | $ 1,312 |
Work-in-process | 124 | 119 |
Total inventories | $ 1,810 | $ 1,431 |
NOTE 5 - COSTS AND ESTIMATED _3
NOTE 5 - COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS - Information relating to uncompleted contracts - (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 |
Notes to Financial Statements | ||
Costs incurred on uncompleted contracts | $ 449 | $ 449 |
Estimated earnings | 742 | 309 |
Costs and estimated earnings on uncompleted contracts | 1,191 | 758 |
Less: Billings to date | 856 | 671 |
Net billings in excess of costs and estimated earnings on uncompleted contracts | $ 335 | $ 87 |
NOTE 6 - OTHER INTANGIBLE ASS_3
NOTE 6 - OTHER INTANGIBLE ASSETS - (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 |
Gross other intangible assets | $ 19,829 | $ 19,741 |
Accumulated amortization | 14,870 | 14,139 |
Other Intangible Assets - net | 4,959 | 5,602 |
Capitalized software development costs | ||
Gross other intangible assets | 7,005 | 7,005 |
Patents and copyrights | ||
Gross other intangible assets | 4,924 | 4,836 |
Non-compete | ||
Gross other intangible assets | 4,100 | 4,100 |
Customer relationships | ||
Gross other intangible assets | $ 3,800 | $ 3,800 |
NOTE 7 - OTHER CURRENT LIABIL_3
NOTE 7 - OTHER CURRENT LIABILITIES - (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 |
Payables and Accruals [Abstract] | ||
Accrued salaries, commissions and payroll taxes | $ 1,096 | $ 3,438 |
Litigation accruals | 145 | 145 |
Sales tax payable | 1,695 | 2,092 |
Legal and other professional fees | 132 | 119 |
Accounting fees | 90 | 125 |
Self-funded health insurance reserve | 0 | 79 |
Accrued interest and penalty - sales tax | 1,253 | 1,498 |
Other | 562 | 682 |
Total other current liabilities | $ 4,973 | $ 8,178 |
NOTE 9 - SEGMENT AND RELATED _3
NOTE 9 - SEGMENT AND RELATED INFORMATION - Segment Information - (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Net revenues from external customers | $ 22,779 | $ 20,979 | $ 64,709 | $ 60,480 |
Inter-segment net revenues | 228 | 228 | 683 | 674 |
Income from operations | 6,608 | 4,402 | 18,126 | 14,998 |
Depreciation and amortization | 978 | 992 | 2,852 | 2,949 |
Capital expenditures | 874 | 807 | 3,157 | 2,669 |
Medical Equipment | ||||
Net revenues from external customers | 2,788 | 2,411 | 7,440 | 7,520 |
Inter-segment net revenues | 228 | 228 | 683 | 674 |
Income from operations | (27) | (457) | (665) | (490) |
Depreciation and amortization | 92 | 93 | 276 | 259 |
Capital expenditures | 661 | 80 | 706 | 259 |
Management Of Diagnostic Imaging Centers | ||||
Net revenues from external customers | 19,991 | 18,568 | 57,269 | 52,960 |
Inter-segment net revenues | ||||
Income from operations | 6,635 | 4,859 | 18,791 | 15,488 |
Depreciation and amortization | 886 | 899 | 2,576 | 2,690 |
Capital expenditures | $ 213 | $ 727 | $ 2,451 | $ 2,410 |
NOTE 1 - DESCRIPTION OF BUSIN_2
NOTE 1 - DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION - (Details Narrative) | Jul. 01, 2015 |
Note 1 - Description Of Business And Basis Of Presentation - | |
The ownership interest of Imperial Management Services after reorganization of newly expanded HDM (percent). | 24.20% |
The ownership interest of Health Management Corporation of America after reorganization of newly expanded HDM (percent). | 45.80% |
The ownership interest of the original investors of HDM after reorganization of newly expanded HDM (percent). | 30.00% |
NOTE 2 - SUMMARY OF SIGNIFICA_5
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Details Narrative) - shares | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Common Shares | ||||
Shares included upon conversion of Class C Common to calculate a diluted EPS | 128,000 | 128,000 | 128,000 | 128,000 |
NOTE 3 - ACCOUNTS RECEIVABLE,_5
NOTE 3 - ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLE AND MANAGEMENT AND OTHER FEES RECEIVABLE - (Details Narrative) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Note 3 - Accounts Receivable Medical Receivable And Management And Other Fees Receivable - | ||||
Net revenues derived from no-fault and personal injury protection claims | 67.00% | 66.00% | 67.00% | 66.00% |
Net revenues from management and other fees charged to related PCs | 10.50% | 10.90% | 10.80% | 11.10% |
NOTE 6 - OTHER INTANGIBLE ASS_4
NOTE 6 - OTHER INTANGIBLE ASSETS - (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Patents and copyrights | ||||
Amortization of intangible assets | $ 50 | $ 50 | $ 149 | $ 152 |
Capitalized software development costs | ||||
Amortization of intangible assets | 0 | 43 | 0 | 173 |
Non-compete | ||||
Amortization of intangible assets | 146 | 146 | 439 | 439 |
Customer relationships | ||||
Amortization of intangible assets | $ 48 | $ 48 | $ 143 | $ 143 |
Note 8 - STOCKHOLDERS EQUITY -
Note 8 - STOCKHOLDERS EQUITY - (Details Narrative) (USD $) $ in Thousands | 9 Months Ended |
Mar. 31, 2019USD ($)shares | |
STOCKHOLDERS' EQUITY: | |
Issuance of stock for goods and services, Value | $ | $ 1,955 |
Issuance of stock for goods and services, Shares | shares | 70,000 |
NOTE 10 - SUPPLEMENTAL CASH F_2
NOTE 10 - SUPPLEMENTAL CASH FLOW INFORMATION ($)- (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Note 10 - Supplemental Cash Flow Information - | ||
Interest paid | $ 158 | $ 37 |
Income taxes paid | $ 305 | $ 345 |
NOTE 11 - COMMITMENTS AND CON_2
NOTE 11 - COMMITMENTS AND CONTINGENCIES - (Details Narrative) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 |
Commitments and Contingencies Disclosure [Abstract] | ||
Recorded tax obligations | $ 1,695 | |
Tax interest and penalties | 1,207 | |
Maximum limit for individual claims under stop-loss umbrella policy for health insurance | 100 | |
Self-funded health insurance reserve | $ 0 | $ 79 |
NOTE 12 - INCOME TAXES - (Detai
NOTE 12 - INCOME TAXES - (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2017 | |
Note 12 - Income Taxes - | |||||
Income tax expense | $ 3,826 | $ 920 | |||
Income tax component - current | 2,901 | ||||
Income tax component - deferred | 925 | ||||
Deferred tax assets | 18,989 | $ 22,689 | |||
Deferred tax liability | 239 | ||||
Net operating loss (NOL) carryforwards available to offset future taxable income | $ 76,611 | ||||
Effective income tax rate continuing operations | 21.00% | ||||
Deferred tax asset before revaluation for Tax Cut and Jobs Act | $ 46,200 | ||||
Revalued deferred tax assets after accounting for Tax Cut and Jobs Act | $ 30,200 |