Interim Financial Reporting (Policies)

6 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Use of estimates

Use of estimates: Management uses estimates and assumptions in preparing the condensed financial statements in accordance with U.S. GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used. The Company believes the critical accounting policies that require the most significant assumptions and judgments in the preparation of its condensed financial statements include revenue recognition and the related estimation of variable consideration, allowance for doubtful accounts, inventory obsolescence, share-based compensation and its warranty liability.

Net income per common share

Net income per common share: Net income is presented on a per share basis for both basic and diluted common shares. Basic net income per common share is computed using the weighted average number of common shares outstanding during the period, excluding any restricted stock awards which have not vested. The diluted net income per common share calculation includes outstanding restricted stock grants and assumes that all stock options were exercised and converted into common stock at the beginning of the period, unless their effect would be anti-dilutive. Common stock equivalents excluded from the calculation of diluted earnings per share because their impact was anti-dilutive was 136,000 and 356,084 for the three months ended December 31, 2019 and 2018, respectively, and were 316,000 and 177,750 for the six months ended December 31, 2019 and 2018, respectively.  

New Accounting Pronouncements

New accounting pronouncements:  In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842)” (“ASU 2016-02”).   This standard requires the recognition of all lease transactions on the balance sheet as a lease liability and a right-of-use asset (as defined in ASU 2016-02). ASU 2016-02 to Topic 842 – Leases (“ASC 842”) became effective for the Company on July 1, 2019 and was applied retrospectively to all periods presented.  The Company applied the practical expedient to calculate the present value of the fixed payments without having to perform an allocation to lease and non-lease components.  Additional information and required disclosures are included in Note 9. 

Impact on Previously Reported Results:

The following table presents a recast of selected unaudited statement of operations line items after giving effect to the adoption of ASC 842:

	For the three months ended December 31, 2018
	As Previously Reported		Effect of Adoption			As Adjusted
Net Revenues	$	8,012,487	$	-		$	8,012,487
Cost of Revenues		1,950,040		-			1,950,040
Gross Profit		6,062,447		-			6,062,447
Operating Expenses
Selling, general and administrative		5,152,394		(2,781	)		5,149,613
Research and development		237,838		-			237,838
Total operating expenses		5,390,232		(2,781	)		5,387,451
Operating Income		672,215		2,781			674,996
Interest income (expense), net		16,521		-			16,521
Net income before income taxes		688,736		2,781			691,517
Income tax expense		311,000		-			311,000
Net Income	$	377,736	$	2,781		$	380,517
Income per share:
Basic	$	0.05	$	0.00		$	0.05
Diluted	$	0.04	$	0.00		$	0.04

	For the six months ended December 31, 2018
	As Previously Reported		Effect of Adoption			As Adjusted
Net Revenues	$	15,288,370	$	-		$	15,288,370
Cost of Revenues		3,683,039		-			3,683,039
Gross Profit		11,605,331		-			11,605,331
Operating Expenses
Selling, general and administrative		10,428,148		(5,550	)		10,422,598
Research and development		306,028		-			306,028
Total operating expenses		10,734,176		(5,550	)		10,728,626
Operating Income		871,155		5,550			876,705
Interest income (expense), net		29,974		-			29,974
Net income before income taxes		901,129		5,550			906,679
Income tax expense		369,000		-			369,000
Net Income	$	532,129	$	5,550		$	537,679
Income per share:
Basic	$	0.06	$	0.00		$	0.06
Diluted	$	0.06	$	0.00		$	0.06

The following table presents a recast of selected unaudited balance sheet line items after giving effect to the adoption of ASC 842:

	June 30, 2019
	As Previously Reported		Effect of Adoption			As Adjusted
Assets
Other Assets		-		45,044			45,044
Liabilities and Shareholder’s Equity
Current maturities of other long-term liabilities				30,320			30,320
Other long-term liabilities		-		14,737			14,737
Retained Earnings		9,522,076		(12	)		9,522,064

The following table presents a recast of selected unaudited statement of cash flow line items after giving effect to the adoption of ASC 842:

	For the six months ended December 31, 2018
	As Previously Reported			Effect of Adoption			As Adjusted
Cash Flow from Operating Activities
Net income	$	532,129		$	5,550		$	537,679
Changes in operating assets and liabilities:
Prepaid expenses and other assets		421,864			91,838			513,702
Accounts payable and accrued liabilities		(233,780	)		(97,388	)		(331,168	)