Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 31, 2020 | Feb. 05, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | DYNATRONICS CORP | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2020 | |
Amendment Flag | false | |
Entity Central Index Key | 0000720875 | |
Current Fiscal Year End Date | --06-30 | |
Entity Common Stock, Shares Outstanding | 14,974,508 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | UT | |
Entity File Number | 0-12697 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 3,509,240 | $ 2,215,665 |
Restricted cash | 100,636 | 100,636 |
Trade accounts receivable, less allowance for doubtful accounts of $180,418 and $184,713 as of December 31, 2020 and June 30, 2020, respectively | 5,068,041 | 4,893,861 |
Other receivables | 1,142,034 | 2,080 |
Inventories, net | 6,141,106 | 8,371,842 |
Assets held for sale, net | 845,858 | 0 |
Prepaid expenses | 1,308,684 | 490,624 |
Total current assets | 18,115,599 | 16,074,708 |
Property and equipment, net | 3,687,518 | 4,941,517 |
Operating lease assets | 2,903,623 | 3,347,378 |
Intangible assets, net | 5,320,799 | 5,682,991 |
Goodwill | 7,116,614 | 7,116,614 |
Other assets | 413,156 | 433,109 |
Total assets | 37,557,309 | 37,596,317 |
Current liabilities: | ||
Accounts payable | 4,827,363 | 3,013,949 |
Accrued payroll and benefits expense | 1,475,542 | 1,204,964 |
Accrued expenses | 1,372,055 | 768,117 |
Warranty reserve | 221,854 | 221,854 |
Line of credit | 0 | 1,012,934 |
Current portion of long-term debt | 1,749,446 | 108,713 |
Current portion of finance lease liability | 333,433 | 316,103 |
Current portion of deferred gain | 150,448 | 150,448 |
Current portion of operating lease liability | 857,993 | 852,419 |
Income tax payable | 32,145 | 29,196 |
Total current liabilities | 11,020,279 | 7,678,697 |
Long-term debt, net of current portion | 1,766,977 | 3,496,222 |
Finance lease liability, net of current portion | 2,415,186 | 2,597,525 |
Deferred gain, net of current portion | 1,153,434 | 1,228,658 |
Operating lease liability, net of current portion | 2,058,231 | 2,505,232 |
Other liabilities | 199,606 | 194,102 |
Total liabilities | 18,613,713 | 17,700,436 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, no par value: authorized 50,000,000 shares; 3,351,000 shares and 3,681,000 shares issued and outstanding as of December 31, 2020 and June 30, 2020, respectively | 7,980,788 | 8,770,798 |
Common stock, no par value: authorized 100,000,000 shares; 14,719,711 shares and 13,803,855 shares issued and outstanding as of December 31, 2020 and June 30, 2020, respectively | 28,738,983 | 27,474,411 |
Accumulated deficit | (17,776,175) | (16,349,328) |
Total stockholders' equity | 18,943,596 | 19,895,881 |
Total liabilities and stockholders' equity | $ 37,557,309 | $ 37,596,317 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 180,418 | $ 184,713 |
Preferred stock, par value | $ .00 | $ .00 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 3,351,000 | 3,681,000 |
Preferred stock, shares outstanding | 3,351,000 | 3,681,000 |
Common stock, par value | $ .00 | $ .00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 14,719,711 | 13,803,855 |
Common stock, shares outstanding | 14,719,711 | 13,803,855 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||||
Net sales | $ 11,967,901 | $ 15,196,991 | $ 24,100,669 | $ 31,586,540 |
Cost of sales | 8,626,927 | 10,611,135 | 16,857,742 | 21,846,677 |
Gross profit | 3,340,974 | 4,585,856 | 7,242,927 | 9,739,863 |
Selling, general, and administrative expenses | 3,937,839 | 4,618,100 | 8,183,465 | 9,542,792 |
Operating (loss) income | (596,865) | (32,244) | (940,538) | 197,071 |
Other expense: | ||||
Interest expense, net | (63,630) | (110,289) | (103,573) | (241,281) |
Other income, net | (2,516) | 4,870 | 3,396 | 5,385 |
Net other expense | (66,146) | (105,419) | (100,177) | (235,896) |
Loss before income taxes | (663,011) | (137,663) | (1,040,715) | (38,825) |
Income tax (provision) benefit | (9,821) | 0 | (9,821) | 0 |
Net loss | (672,832) | (137,663) | (1,050,536) | (38,825) |
Deemed dividend on convertible preferred stock and accretion of discount | (51,352) | (108,539) | (51,352) | (108,539) |
Preferred stock dividend, in common stock, issued or to be issued | (182,085) | (202,249) | (376,311) | (369,153) |
Net loss attributable to common stockholders | $ (906,269) | $ (448,451) | $ (1,478,199) | $ (516,517) |
Net loss per common share: | ||||
Basic and diluted | $ (0.06) | $ (0.05) | $ (0.10) | $ (0.06) |
Weighted-average common shares outstanding: | ||||
Basic and diluted | 14,601,186 | 9,023,406 | 14,340,774 | 8,800,184 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Common Stock | Preferred Stock | Accumulated Deficit | Total |
Beginning balance, shares at Jun. 30, 2019 | 8,417,793 | 4,899,000 | ||
Beginning balance at Jun. 30, 2019 | $ 21,320,106 | $ 11,641,816 | $ (12,206,213) | $ 20,755,709 |
Stock-based compensation, shares | 135,244 | |||
Stock-based compensation | $ 129,793 | 129,793 | ||
Preferred stock dividend, in common stock, issued or to be issued, shares | 126,194 | |||
Preferred stock dividend, in common stock, issued or to be issued | $ 166,904 | (166,904) | 0 | |
Net income (loss) | 98,838 | 98,838 | ||
Ending balance, shares at Sep. 30, 2019 | 8,679,231 | 4,899,000 | ||
Ending balance at Sep. 30, 2019 | $ 21,616,803 | $ 11,641,816 | (12,274,279) | 20,984,340 |
Beginning balance, shares at Jun. 30, 2019 | 8,417,793 | 4,899,000 | ||
Beginning balance at Jun. 30, 2019 | $ 21,320,106 | $ 11,641,816 | (12,206,213) | 20,755,709 |
Stock-based compensation | 188,031 | |||
Net income (loss) | (38,825) | |||
Ending balance, shares at Dec. 31, 2019 | 9,609,928 | 4,139,000 | ||
Ending balance at Dec. 31, 2019 | $ 23,668,610 | $ 9,850,496 | (12,614,191) | 20,904,915 |
Beginning balance, shares at Sep. 30, 2019 | 8,679,231 | 4,899,000 | ||
Beginning balance at Sep. 30, 2019 | $ 21,616,803 | $ 11,641,816 | (12,274,279) | 20,984,340 |
Stock-based compensation, shares | 5,446 | |||
Stock-based compensation | $ 58,238 | 58,238 | ||
Preferred stock dividend, in common stock, issued or to be issued, shares | 165,251 | |||
Preferred stock dividend, in common stock, issued or to be issued | $ 202,249 | (202,249) | 0 | |
Preferred stock converted to common stock, shares | 760,000 | (760,000) | ||
Preferred stock converted to common stock | $ 1,791,320 | $ (1,791,320) | 0 | |
Preferred stock beneficial conversion and accretion of discount | 108,539 | 108,539 | ||
Dividend of beneficial conversion and accretion of discount | (108,539) | (108,539) | ||
Net income (loss) | (137,663) | (137,663) | ||
Ending balance, shares at Dec. 31, 2019 | 9,609,928 | 4,139,000 | ||
Ending balance at Dec. 31, 2019 | $ 23,668,610 | $ 9,850,496 | (12,614,191) | 20,904,915 |
Stock-based compensation, shares | 96,195 | |||
Stock-based compensation | $ 45,343 | 45,343 | ||
Preferred stock dividend, in common stock, issued or to be issued, shares | 243,652 | |||
Preferred stock dividend, in common stock, issued or to be issued | $ 168,356 | (168,356) | 0 | |
Preferred stock converted to common stock, shares | 458,000 | (458,000) | ||
Preferred stock converted to common stock | $ 1,079,698 | $ (1,079,698) | 0 | |
Preferred stock beneficial conversion and accretion of discount | 65,219 | 65,219 | ||
Dividend of beneficial conversion and accretion of discount | (65,219) | (65,219) | ||
Net income (loss) | (1,091,202) | (1,091,202) | ||
Ending balance, shares at Mar. 31, 2020 | 10,407,775 | 3,681,000 | ||
Ending balance at Mar. 31, 2020 | $ 24,962,007 | $ 8,770,798 | (13,873,749) | 19,859,056 |
Stock-based compensation | $ 45,342 | 45,342 | ||
Preferred stock dividend, in common stock, issued or to be issued, shares | 195,495 | |||
Preferred stock dividend, in common stock, issued or to be issued | $ 180,123 | $ (180,123) | 0 | |
Issuance of common stock, net of issuance costs, shares | 3,200,585 | |||
Issuance of common stock, net of issuance costs | $ 2,286,939 | $ 2,286,939 | ||
Reduction in equity retained for aquisition holdback | (2,295,456) | (2,295,456) | ||
Ending balance, shares at Jun. 30, 2020 | 13,803,855 | 3,681,000 | ||
Ending balance at Jun. 30, 2020 | $ 27,474,411 | $ 8,770,798 | $ (16,349,328) | $ 19,895,881 |
Stock-based compensation, shares | 84,661 | |||
Stock-based compensation | $ 47,470 | 47,470 | ||
Preferred stock dividend, in common stock, issued or to be issued, shares | 207,736 | |||
Preferred stock dividend, in common stock, issued or to be issued | $ 194,226 | (194,226) | 0 | |
Net income (loss) | (377,704) | (377,704) | ||
Ending balance, shares at Sep. 30, 2020 | 14,096,252 | 3,681,000 | ||
Ending balance at Sep. 30, 2020 | $ 27,716,107 | $ 8,770,798 | (16,921,258) | 19,565,647 |
Beginning balance, shares at Jun. 30, 2020 | 13,803,855 | 3,681,000 | ||
Beginning balance at Jun. 30, 2020 | $ 27,474,411 | $ 8,770,798 | (16,349,328) | 19,895,881 |
Stock-based compensation | 98,251 | |||
Net income (loss) | (1,050,536) | |||
Ending balance, shares at Dec. 31, 2020 | 14,719,711 | 3,351,000 | ||
Ending balance at Dec. 31, 2020 | $ 28,738,983 | $ 7,980,788 | (17,776,175) | 18,943,596 |
Beginning balance, shares at Sep. 30, 2020 | 14,096,252 | 3,681,000 | ||
Beginning balance at Sep. 30, 2020 | $ 27,716,107 | $ 8,770,798 | (16,921,258) | 19,565,647 |
Stock-based compensation, shares | 16,940 | |||
Stock-based compensation | $ 50,781 | 50,781 | ||
Preferred stock dividend, in common stock, issued or to be issued, shares | 276,519 | |||
Preferred stock dividend, in common stock, issued or to be issued | $ 182,085 | (182,085) | 0 | |
Preferred stock converted to common stock, shares | 330,000 | (330,000) | ||
Preferred stock converted to common stock | $ 790,010 | $ (790,010) | 0 | |
Preferred stock beneficial conversion and accretion of discount | 51,352 | 51,352 | ||
Dividend of beneficial conversion and accretion of discount | (51,352) | (51,352) | ||
Net income (loss) | (672,832) | (672,832) | ||
Ending balance, shares at Dec. 31, 2020 | 14,719,711 | 3,351,000 | ||
Ending balance at Dec. 31, 2020 | $ 28,738,983 | $ 7,980,788 | $ (17,776,175) | $ 18,943,596 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (1,050,536) | $ (38,825) |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation and amortization of property and equipment | 438,354 | 495,000 |
Amortization of intangible assets | 362,192 | 362,191 |
Amortization of other assets | 11,949 | 20,064 |
Loss on sale of property and equipment | 18,760 | 0 |
Stock-based compensation | 98,251 | 188,031 |
Change in allowance for doubtful accounts receivable | (4,295) | 0 |
Change in allowance for inventory obsolescence | (208,344) | (13,532) |
Amortization deferred gain on sale/leaseback | (75,224) | (75,223) |
Change in operating assets and liabilities: | ||
Trade accounts receivable and other receivables | (169,885) | 506,759 |
Inventories | 1,194,758 | 157,085 |
Prepaid expenses and other receivables | (688,692) | (109,644) |
Other assets | 8,005 | (8,725) |
Income tax payable | 2,949 | (14,350) |
Accounts payable, accrued expenses, and other current liabilities | 2,693,434 | 1,447,408 |
Net cash provided by operating activities | 2,631,676 | 2,916,239 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (71,646) | (183,731) |
Net cash used in investing activities | (71,646) | (183,731) |
Cash flows from financing activities: | ||
Principal payments on long-term debt | (88,512) | (89,231) |
Principal payments on finance lease liability | (165,009) | (145,779) |
Payment of acquisition earn-out liability and holdbacks | 0 | (500,000) |
Net change in line of credit | (1,012,934) | (1,721,533) |
Net cash used in financing activities | (1,266,455) | (2,456,543) |
Net change in cash and cash equivalents and restricted cash | 1,293,575 | 275,965 |
Cash and cash equivalents and restricted cash at beginning of the period | 2,316,301 | 256,030 |
Cash and cash equivalents and restricted cash at end of the period | 3,609,876 | 531,995 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 85,560 | 256,262 |
Supplemental disclosure of non-cash investing and financing activity: | ||
Deemed dividend on convertible preferred stock and accretion of discount | 51,352 | 108,539 |
Preferred stock dividend, in common stock, issued or to be issued | 376,311 | 369,153 |
Conversion of preferred stock to common stock | 790,010 | 1,791,320 |
Finance lease obligations incurred to obtain ROU assets | 0 | 3,086 |
Operating lease obligations incurred to obtain ROU assets | $ 0 | $ 3,749,809 |
Note 1. Presentation and Summar
Note 1. Presentation and Summary of Significant Accounting Policies | 6 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Presentation and Summary of Significant Accounting Policies | Business Dynatronics Corporation (“Company,” “Dynatronics”) is a leading medical device company committed to providing high-quality restorative products designed to accelerate optimal health. The Company designs, manufactures, and sells a broad range of restorative products for clinical use in physical therapy, rehabilitation, orthopedics, pain management, and athletic training. Through its distribution channels, Dynatronics markets and sells to orthopedists, physical therapists, chiropractors, athletic trainers, sports medicine practitioners, clinics, hospitals, and consumers. Basis of Presentation The accompanying unaudited condensed consolidated financial statements (the “Condensed Consolidated Financial Statements”) have been prepared by the Company in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. As such, these Condensed Consolidated Financial Statements should be read in conjunction with the Company’s audited financial statements and accompanying notes included in its Annual Report on Form 10-K for the fiscal year ended June 30, 2020 (the “Annual Report”) filed with the SEC on September 24, 2020. The Condensed Consolidated Balance Sheet at June 30, 2020, has been derived from the Annual Report. The accounting policies followed by the Company are set forth in Part II, Item 8, Note 1, Basis of Presentation and Summary of Accounting Policies, of the Notes to Financial Statements included in the Company’s Annual Report. In the opinion of management, the Condensed Consolidated Financial Statements contain all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Company’s financial position as of December 31, 2020 and its results of operations and its cash flows for the periods presented. The results of operations for the first six months of the fiscal year are not necessarily indicative of results for the full year or any future periods. The Company’s fiscal year begins on July 1 and ends on June 30 and references made to “fiscal year 2021” and “fiscal year 2020” refer to the Company’s fiscal year ending June 30, 2021 and the fiscal year ended June 30, 2020, respectively. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods presented. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ materially from those estimates and assumptions. Assets Held for Sale Assets held for sale include our Tennessee building and land that have met the criteria of “held for sale” accounting, as specified by Accounting Standards Codification 360, “Property, Plant, and Equipment." No gain or loss occurred as a result. The carrying amount of the land and building is $30,287 and $815,571, respectively. The effect of suspending depreciation on the assets held for sale is immaterial to the results of operations. The assets held for sale are being marketed for sale and it is the Company’s intention to complete the sales of these assets within the upcoming year. Recent Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes Simplifying the Accounting for Income Taxes In August 2020, the FASB issued ASU 2020-06, Debt— Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity |
Note 2. Net Loss per Common Sha
Note 2. Net Loss per Common Share | 6 Months Ended |
Dec. 31, 2020 | |
Net loss per common share: | |
Net Loss per Common Share | Net loss per common share is computed based on the weighted-average number of common shares outstanding and, when appropriate, dilutive potential common stock outstanding during the period. Stock options, convertible preferred stock and warrants are considered to be potential common stock. The computation of diluted net loss per common share does not assume exercise or conversion of securities that would have an anti-dilutive effect. Basic net loss per common share is the amount of net income for the period available to each weighted-average share of common stock outstanding during the reporting period. Diluted net loss per common share is the amount of net loss for the period available to each weighted-average share of common stock outstanding during the reporting period and to each share of potential common stock outstanding during the period, unless inclusion of potential common stock would have an anti-dilutive effect. All outstanding options, warrants and convertible preferred stock for common shares are not included in the computation of diluted net loss per common share because they are anti-dilutive. For the three months ended December 31, 2020, and 2019, shares underlying such options, warrants, and convertible preferred stock totaled 10,355,870 and 11,607,954, respectively, and for the six months ended December 31, 2020, and 2019, totaled 10,461,107 and 11,685,597, respectively. |
Note 3. Convertible Preferred S
Note 3. Convertible Preferred Stock and Common Stock Warrants | 6 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Convertible Preferred Stock | As of December 31, 2020, the Company had issued and outstanding a total of 1,992,000 shares of Series A 8% Convertible Preferred Stock (“Series A Preferred”) and 1,359,000 shares of Series B Convertible Preferred Stock ("Series B Preferred"). The Series A Preferred and Series B Preferred are convertible into a total of 3,351,000 shares of common stock. Dividends payable on these preferred shares accrue at the rate of 8% per year and are payable quarterly in stock or cash at the option of the Company. The Company generally pays the dividends on the preferred stock by issuing shares of its common stock. The formula for paying these dividends using common stock in lieu of cash can change the effective yield on the dividend to more or less than 8% depending on the market price of the common stock at the time of issuance. In November 2020, the Company issued 330,000 shares of common stock upon conversion of 230,000 shares of Series C Non-Voting Convertible Preferred Stock and 100,000 shares of Series B Preferred. In January 2021, the Company paid approximately $182,000 of preferred stock dividends with respect to the Series A Preferred and Series B Preferred that accrued during the three months ended December 31, 2020, by issuing 224,797 shares of common stock. |
Note 4. Comprehensive Income
Note 4. Comprehensive Income | 6 Months Ended |
Dec. 31, 2020 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Comprehensive Income | For the three and six months ended December 31, 2020 and 2019, comprehensive income was equal to the net income as presented in the accompanying condensed consolidated statements of operations. |
Note 5. Inventories
Note 5. Inventories | 6 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories consisted of the following: December 31, 2020 June 30, 2020 Raw materials $ 3,518,495 $ 4,798,489 Work in process 536,144 427,744 Finished goods 2,446,206 3,713,692 Inventory obsolescence reserve (359,739 ) (568,083 ) $ 6,141,106 $ 8,371,842 |
Note 6. Related-Party Transacti
Note 6. Related-Party Transactions | 6 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | The Company leases office, manufacturing and warehouse facilities in Northvale, New Jersey, and Eagan, Minnesota from employees, shareholders, and entities controlled by shareholders, who were previously principals of businesses acquired by the Company. The combined expenses associated with these related-party transactions totaled $264,702 and $261,666 for the three months ended December 31, 2020 and 2019, respectively, and $529,405 and $523,332 for the six months ended December 31, 2020 and 2019, respectively. |
Note 7. Line of Credit
Note 7. Line of Credit | 6 Months Ended |
Dec. 31, 2020 | |
Line of Credit Facility [Abstract] | |
Line of Credit | Borrowings on the Line of Credit were $0 and $1,012,934 as of December 31, 2020 and June 30, 2020, respectively. As of December 31, 2020, there was approximately $5,367,000 available to borrow. |
Note 8. Revenue
Note 8. Revenue | 6 Months Ended |
Dec. 31, 2020 | |
Disaggregation of Revenue [Abstract] | |
Revenue | As of December 31, 2020 and June 30, 2020, the rebate liability was $305,359 and $247,388, respectively. The rebate liability is included in accrued expenses in the accompanying condensed consolidated balance sheets. As of December 31, 2020 and June 30, 2020, the allowance for sales discounts was $14,500 and $8,000, respectively. The allowance for sales discounts is included in trade accounts receivable, less allowance for doubtful accounts in the accompanying condensed consolidated balance sheets. The following table disaggregates revenue by major product category for the three and six months ended December 31: Three Months Ended December 31 Six Months Ended December 31 2020 2019 2020 2019 Orthopedic Soft Bracing Products $ 5,082,484 $ 5,833,972 $ 10,642,401 $ 12,112,998 Physical Therapy and Rehabilitation Products 6,824,049 9,283,017 13,321,279 19,320,737 Other 61,368 80,002 136,989 152,805 $ 11,967,901 $ 15,196,991 $ 24,100,669 $ 31,586,540 |
Note 9. Common Stock
Note 9. Common Stock | 6 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Common Stock | The Company maintains an equity incentive plan for the benefit of employees. Incentive and nonqualified stock options, restricted common stock, stock appreciation rights, and other share-based awards may be granted under the plans including performance-based awards. On December 10, 2020, shareholders approved a new 2020 equity incentive plan (“2020 Equity Plan”), setting aside 1,000,000 shares of common stock. The Company can grant awards under the 2020 Plan or under the Dynatronics 2018 Equity Incentive Award Plan (the “2018 Plan”) until the shares of common stock available for awards and issuance under the 2018 Plan have been exhausted. |
Note 1. Presentation and Summ_2
Note 1. Presentation and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements (the “Condensed Consolidated Financial Statements”) have been prepared by the Company in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. As such, these Condensed Consolidated Financial Statements should be read in conjunction with the Company’s audited financial statements and accompanying notes included in its Annual Report on Form 10-K for the fiscal year ended June 30, 2020 (the “Annual Report”) filed with the SEC on September 24, 2020. The Condensed Consolidated Balance Sheet at June 30, 2020, has been derived from the Annual Report. The accounting policies followed by the Company are set forth in Part II, Item 8, Note 1, Basis of Presentation and Summary of Accounting Policies, of the Notes to Financial Statements included in the Company’s Annual Report. In the opinion of management, the Condensed Consolidated Financial Statements contain all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Company’s financial position as of December 31, 2020 and its results of operations and its cash flows for the periods presented. The results of operations for the first six months of the fiscal year are not necessarily indicative of results for the full year or any future periods. The Company’s fiscal year begins on July 1 and ends on June 30 and references made to “fiscal year 2021” and “fiscal year 2020” refer to the Company’s fiscal year ending June 30, 2021 and the fiscal year ended June 30, 2020, respectively. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods presented. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ materially from those estimates and assumptions. |
Assets Held for Sale | Assets held for sale include our Tennessee building and land that have met the criteria of “held for sale” accounting, as specified by Accounting Standards Codification 360, “Property, Plant, and Equipment." No gain or loss occurred as a result. The carrying amount of the land and building is $30,287 and $815,571, respectively. The effect of suspending depreciation on the assets held for sale is immaterial to the results of operations. The assets held for sale are being marketed for sale and it is the Company’s intention to complete the sales of these assets within the upcoming year. |
Recent Accounting Pronouncements | In December 2019, the FASB issued ASU 2019-12, Income Taxes Simplifying the Accounting for Income Taxes In August 2020, the FASB issued ASU 2020-06, Debt— Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity |
Note 5. Inventories (Tables)
Note 5. Inventories (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory | December 31, 2020 June 30, 2020 Raw materials $ 3,518,495 $ 4,798,489 Work in process 536,144 427,744 Finished goods 2,446,206 3,713,692 Inventory obsolescence reserve (359,739 ) (568,083 ) $ 6,141,106 $ 8,371,842 |
Note 8. Revenue (Tables)
Note 8. Revenue (Tables) | 6 Months Ended |
Dec. 31, 2020 | |
Disaggregation of Revenue [Abstract] | |
Disaggregation of revenue | Three Months Ended December 31 Six Months Ended December 31 2020 2019 2020 2019 Orthopedic Soft Bracing Products $ 5,082,484 $ 5,833,972 $ 10,642,401 $ 12,112,998 Physical Therapy and Rehabilitation Products 6,824,049 9,283,017 13,321,279 19,320,737 Other 61,368 80,002 136,989 152,805 $ 11,967,901 $ 15,196,991 $ 24,100,669 $ 31,586,540 |
Note 2. Net Loss per Common S_2
Note 2. Net Loss per Common Share (Details Narrative) - shares | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net loss per common share: | ||||
Antidilutive securities excluded from computation of earnings per share | 10,355,870 | 11,607,954 | 10,461,107 | 11,685,597 |
Note 5. Inventories (Details)
Note 5. Inventories (Details) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 3,518,495 | $ 4,798,489 |
Work in process | 536,144 | 427,744 |
Finished goods | 2,446,206 | 3,713,692 |
Inventory obsolescence reserve | (359,739) | (568,083) |
Inventories, net | $ 6,141,106 | $ 8,371,842 |
Note 6. Related-Party Transac_2
Note 6. Related-Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Related Party Transactions [Abstract] | ||||
Related-party transaction expenses | $ 264,702 | $ 261,666 | $ 529,405 | $ 523,332 |
Note 7. Line of Credit (Details
Note 7. Line of Credit (Details Narrative) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Line of Credit Facility [Abstract] | ||
Line of credit | $ 0 | $ 1,012,934 |
Line of credit facility, current borrowing capacity | $ 5,367,000 |
Note 8. Revenue (Details)
Note 8. Revenue (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net sales | $ 11,967,901 | $ 15,196,991 | $ 24,100,669 | $ 31,586,540 |
Orthopedic Soft Bracing Products | ||||
Net sales | 5,082,484 | 5,833,972 | 10,642,401 | 12,112,998 |
Physical Therapy and Rehabilitation Products | ||||
Net sales | 6,824,049 | 9,283,017 | 13,321,279 | 19,320,737 |
Other | ||||
Net sales | $ 61,368 | $ 80,002 | $ 136,989 | $ 152,805 |
Note 8. Revenue (Details Narrat
Note 8. Revenue (Details Narrative) - USD ($) | Dec. 31, 2020 | Jun. 30, 2020 |
Disaggregation of Revenue [Abstract] | ||
Rebate liability | $ 305,359 | $ 247,388 |
Allowance for sales discounts | $ 14,500 | $ 8,000 |