Company Quick10K Filing
Scientific Industries
Price4.50 EPS0
Shares2 P/E15
MCap7 P/FCF16
Net Debt-1 EBIT1
TEV6 TEV/EBIT10
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-05-15
10-Q 2019-12-31 Filed 2020-02-13
10-Q 2019-09-30 Filed 2019-11-14
10-K 2019-06-30 Filed 2019-10-04
10-Q 2019-03-31 Filed 2019-05-14
10-Q 2018-12-31 Filed 2019-02-12
10-Q 2018-09-30 Filed 2018-11-13
10-K 2018-06-30 Filed 2018-09-28
10-Q 2018-03-31 Filed 2018-05-15
10-Q 2017-12-31 Filed 2018-02-14
10-Q 2017-09-30 Filed 2017-11-14
10-K 2017-06-30 Filed 2017-09-28
10-Q 2017-03-31 Filed 2017-05-12
10-Q 2016-12-31 Filed 2017-02-10
10-Q 2016-09-30 Filed 2016-11-14
10-K 2016-06-30 Filed 2016-10-11
10-Q 2016-03-31 Filed 2016-05-12
10-Q 2015-12-31 Filed 2016-02-12
10-Q 2015-09-30 Filed 2015-11-12
10-K 2015-06-30 Filed 2015-09-28
10-Q 2015-03-31 Filed 2015-05-14
10-Q 2014-12-31 Filed 2015-02-13
10-Q 2014-09-30 Filed 2014-11-13
10-K 2014-06-30 Filed 2014-09-26
10-Q 2014-03-31 Filed 2014-05-15
10-Q 2013-12-31 Filed 2014-02-13
10-Q 2013-09-30 Filed 2013-11-14
10-K 2013-06-30 Filed 2013-09-27
10-Q 2013-03-31 Filed 2013-05-14
10-Q 2012-12-31 Filed 2013-02-14
10-Q 2012-09-30 Filed 2012-11-14
10-K 2012-06-30 Filed 2012-09-27
10-Q 2012-03-31 Filed 2012-05-15
10-Q 2011-12-31 Filed 2012-02-14
10-Q 2011-09-30 Filed 2011-10-27
10-K 2011-06-30 Filed 2011-09-16
10-Q 2011-03-31 Filed 2011-05-13
10-Q 2010-12-31 Filed 2011-02-11
10-Q 2010-09-30 Filed 2010-11-12
10-K 2010-06-30 Filed 2010-09-27
10-Q 2010-03-31 Filed 2010-05-14
10-Q 2009-12-31 Filed 2010-02-12
8-K 2020-08-10 Amend Bylaw, Exhibits
8-K 2020-07-17 Enter Agreement, Officers, Exhibits
8-K 2020-06-22
8-K 2020-06-18
8-K 2020-04-14
8-K 2020-02-14
8-K 2020-01-29
8-K 2019-12-07
8-K 2019-03-06
8-K 2019-01-23
8-K 2018-09-27
8-K 2018-02-16

SCND 10Q Quarterly Report

Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 4. Controls and Procedures
Part II – Other Information
Item 6. Exhibits and Reports on Form 8 - K
EX-31 exhibit31.htm
EX-32 exhibit32.htm

Scientific Industries Earnings 2020-03-31

Balance SheetIncome StatementCash Flow
10.08.06.04.02.00.02012201420172020
Assets, Equity
4.53.52.61.60.7-0.32012201420172020
Rev, G Profit, Net Income
1.10.60.2-0.3-0.7-1.22012201420172020
Ops, Inv, Fin

10-Q 1 siform10q320.htm QUARTERLY REPORT siform10q320
 
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
 
 
   
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended March 31, 2020
 
 
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________to________
 
 
Commission file number 0-6658
 
SCIENTIFIC INDUSTRIES, INC.
(Exact Name of Registrant in Its Charter)
 
 
 
Delaware
04-2217279
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
 
 
80 Orville Drive, Suite 102, Bohemia, New York
11716
(Address of principal executive offices)
(Zip Code)
 
(631) 567-4700
(Registrant’s telephone number, including area code)
 
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Yes    No           
 
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes    No
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer
Accelerated filer
Non-accelerated filer (Do not check if a smaller reporting company)
Smaller reporting company
 
Emerging Growth
 
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act)
Yes No
 
 
The number of shares outstanding of the registrant’s common stock, par value $.05 per share (“Common Stock”) as of May 7, 2020 is 1,502,773 shares.
 
 
 
 
 
 
 
 
 
 
 
SCIENTIFIC INDUSTRIES, INC.
 
Table of Contents
 
 
 
PART I - Financial Information
 
 
 
 
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 
 
 
 
 
Condensed Consolidated Balance Sheets
1
 
 
 
 
Condensed Consolidated Statements of Operations
2
 
 
 
 
Condensed Consolidated Statements of Comprehensive Income (Loss)
3
 
 
 
 
Condensed Consolidated Statements of Changes in Shareholders' Equity
4
 
 
 
 
Condensed Consolidated Statements of Cash Flows                                                    
6
 
 
 
 
Notes to Unaudited Condensed Consolidated Financial Statements
7
 
 
 
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
17
 
 
 
CONTROLS AND PROCEDURES
20
 
                                      
 
PART II - Other Information
 
 
 
EXHIBITS AND REPORTS ON FORM 8-K
20
 
 
 
 
21
 
 
 
 
 
 
 
 
  PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
 
SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 
ASSETS
 
 
 
March 31, 2020
 
 
June 30, 2019
 
Current assets:
 
(Unaudited)
 
 
 
 
Cash and cash equivalents
 $739,400 
 $1,602,500 
Investment securities
  301,300 
  330,900 
Trade accounts receivable, less allowance for doubtful accounts of $11,600 at March 31, 2020 and $15,000 at June 30, 2019
  2,184,200 
  1,974,200 
Inventories
  3,044,800 
  2,592,300 
Prepaid expenses and other current assets
  80,400 
  91,200 
Total current assets
  6,350,100 
  6,591,100 
 
    
    
Property and equipment, net
  290,500 
  318,800 
 
    
    
Intangible assets, net
  137,400 
  175,000 
 
    
    
Goodwill
  705,300 
  705,300 
 
    
    
Other assets
  56,000 
  54,700 
 
    
    
Deferred taxes
  513,200 
  431,100 
 
    
    
Operating lease right-of-use assets
  867,400 
  - 
 
    
    
Total assets
 $8,919,900 
 $8,276,000 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
Current liabilities:
 
 
 
 
 
 
Accounts payable
 $451,900 
 $569,000 
Accrued expenses and taxes
  710,100 
  608,300 
Contract liabilities
  116,100 
  - 
Contingent consideration, current portion
  360,000 
  268,000 
Bank overdraft
  - 
  140,000 
Operating lease liabilities, current portion
  64,100 
   
Total current liabilities
  1,702,200 
  1,585,300 
 
    
    
Operating lease liabilities, less current portion
  869,200 
  - 
Contingent consideration, less current portion
  318,000 
  350,000 
 
    
    
Total liabilities
  2,889,400 
  1,935,300 
Shareholders’ equity:
    
    
Common stock, $.05 par value; authorized 7,000,000 shares; issued 1,522,575, and 1,513,914 shares, and 1,502,773 and 1,494,112 shares outstanding at March 31, 2020 and June 30, 2019
  76,100 
  75,700 
Additional paid-in capital
  2,649,300 
  2,592,700 
Retained earnings
  3,357,500 
  3,724,700 
 
  6,082,900 
  6,393,100 
Less common stock held in treasury at cost, 19,802 shares
  52,400 
  52,400 
 
    
    
Total shareholders’ equity
  6,030,500 
  6,340,700 
 
    
    
Total liabilities and shareholders’ equity
 $8,919,900 
 $8,276,000 
 
See notes to unaudited condensed consolidated financial statements.
 
 

 
 
 1
 
 
 
SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
 
 
 

 
For the Three Month Period Ended
March 31,
 
 
For the Three Month Period Ended
March 31,
 
 
For the Nine Month Period Ended
March 31,
 
 
For the Nine Month Period Ended
March 31,
 
 
 
2020
 
 
2019
 
 
2020
 
 
2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 $2,378,000 
 $3,053,500 
 $6,654,500 
 $7,255,300 
 
    
    
    
    
Cost of revenues
  1,274,700 
  1,972,400 
  3,479,300 
  4,252,700 
 
    
    
    
    
Gross profit
  1,103,300 
  1,081,100 
  3,175,200 
  3,002,600 
 
    
    
    
    
Operating expenses:
    
    
    
    
General and administrative
  524,800 
  492,400 
  1,545,100 
  1,371,000 
Selling
  433,800 
  282,100 
  1,073,500 
  766,400 
Research and development
  298,900 
  120,900 
  795,500 
  347,600 
Termination costs
  180,700 
   
  180,700 
   
 
    
    
    
    
Total operating expenses
  1,438,200 
  895,400 
  3,594,800 
  2,485,000 
 
    
    
    
    
Income (loss) from operations
  (334,900)
  185,700 
  (419,600)
  517,600 
 
    
    
    
    
Other income (expense):
    
    
    
    
Interest income
  300 
  300 
  10,000 
  3,100 
    Other income, net
  (41,900)
  8,100 
  (39,700)
  600 
    Interest expense
  - 
  (600)
  - 
  (1,400)
 
    
    
    
    
Total other income (expense), net
  (41,600)
  7,800 
  (29,700)
  2,300 
 
    
    
    
    
 
    
    
    
    
Income (loss) before income tax expense (benefit)
  (376,500)
  193,500 
  (449,300)
  519,900 
 
    
    
    
    
Income tax expense (benefit):
    
    
    
    
    Current
  - 
  179,700 
  - 
  233,600 
Deferred
  (61,900)
  (79,800)
  (82,100)
  (67,800)
 
    
    
    
    
Total income tax expense (benefit)
  (61,900)
  99,900 
  (82,100)
  165,800 
 
    
    
    
    
Net income (loss)
 $(314,600)
 $93,600 
 $(367,200)
 $354,100 
 
    
    
    
    
Basic earnings (loss) per common share
 $(.21)
 $.06 
 $(.25)
 $.24 
  
    
    
    
    
Diluted earnings (loss) per common share
 $(.21)
 $.06 
 $(.25)
 $.23 
 
    
    
    
    
Cash dividends declared per common share
 $.00 
 $.00 
 $.00 
 $.05 
 
 
 
See notes to unaudited condensed consolidated financial statements.
 
 2
 
 
 
  
 
SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
  
  
 
 
 
For the Three Month Period Ended
March 31,
 
 
For the Three Month Period Ended
March 31
 
 
For the Nine Month Period Ended
March 31,
 
 
For the Nine Month Period Ended
March 31,
 
 
 
2020
 
 
2019
 
 
2020
 
 
2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
 $(314,600)
 $93,600 
 $(367,200)
 $354,100 
 
    
    
    
    
Other comprehensive income (loss):
    
    
    
    
Unrealized holding gain (loss) arising during period net of tax
  - 
  7,500 
  - 
  (13,500)
 
    
    
    
    
 
    
    
    
    
Comprehensive income (loss)
 $(314,600)
 $101,100 
 $(367,200)
 $340,600 
 
See notes to unaudited condensed consolidated financial statements.
 
 
 
 
  3
 
 
 
  CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
 
 
 
 
 
 
 
 Additional
 
 
 Accumulated
 Other
 
 
 
 
 
 
 
 
 Total
 
 
 
Common Stock
 
 
 Paid-in
 
 
Comprehensive
 
 
 Retained
 
 
Treasury Stock
 
 
Shareholders’
 
Fiscal Year 2020
 
 Shares 
 
 
 Amount 
 
 
 Capital 
 
 
 Gain (Loss) 
 
 
 Earnings 
 
 
 Shares 
 
 
 Amount 
 
 
 Equity 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, July 1, 2019
  1,513,914 
 $75,700 
 $2,592,700 
 $- 
 $3,724,700 
  19,802 
 $52,400 
 $6,340,700 
 
    
    
    
    
    
    
    
    
Net loss
  - 
  - 
  - 
  - 
  (56,200)
  - 
  - 
  (56,200)
 
    
    
    
    
    
    
    
    
Stock options exercised
  2,000 
  100 
  6,900 
  - 
  - 
  - 
  - 
  7,000 
 
    
    
    
    
    
    
    
    
Stock-based compensation
  - 
  - 
  17,700 
  - 
  - 
  - 
  - 
  17,700 
 
    
    
    
    
    
    
    
    
Balance, September 30, 2019
  1,515,914 
  75,800 
  2,617,300 
  - 
  3,668,500 
  19,802 
  52,400 
  6,309,200 
 
    
    
    
    
    
    
    
    
Net income
  - 
  - 
  - 
  - 
  3,600 
  - 
  - 
  3,600 
 
    
    
    
    
    
    
    
    
Stock options exercised
  6,661 
  300 
  (300)
  - 
  - 
  - 
  - 
  - 
 
    
    
    
    
    
    
    
    
Stock-based compensation
  - 
  - 
  17,700 
  - 
  - 
  - 
  - 
  17,700 
 
    
    
    
    
    
    
    
    
Balance, December 31, 2019
  1,522,575 
  76,100 
  2,634,700 
  - 
  3,672,100 
  19,802 
  52,400 
  6,330,500 
 
    
    
    
    
    
    
    
    
Net loss
  - 
  - 
  - 
  - 
  (314,600)
  - 
  - 
  (314,600)
 
    
    
    
    
    
    
    
    
Stock-based compensation
  - 
  - 
  14,600 
  - 
  - 
  - 
  - 
  14,600 
 
    
    
    
    
    
    
    
    
Balance, March 31, 2020
  1,522,575 
 $76,100 
 $2,649,300 
 $- 
 $3,357,500 
  19,802 
 $52,400 
 $6,030,500 
 
  See notes to unaudited condensed consolidated financial statements.
  
 
  4
 
 
 
  CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
  
 
 
 
 
 
 Additional
 
 
 Accumulated
 Other
 
 
 
 
 
 
 
 
 Total
 
 
 
Common Stock
 
 
 Paid-in
 
 
Comprehensive
 
 
 Retained
 
 
Treasury Stock
 
 
Shareholders’
 
Fiscal Year 2019
 
 Shares 
 
 
 Amount 
 
 
 Capital 
 
 
 Gain (Loss) 
 
 
 Earnings 
 
 
 Shares 
 
 
 Amount 
 
 
 Equity 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, July 1, 2018
  1,513,914 
 $75,700 
 $2,545,900 
 $1,200 
 $3,131,800 
  19,802 
 $52,400 
 $5,702,200 
 
    
    
    
    
    
    
    
    
Cumulative effect of the adoption of
  - 
  - 
  - 
  - 
  22,000 
  - 
  - 
  22,000 
ASU 2016-01 – Financial Instruments
    
    
    
    
    
    
    
    
 
    
    
    
    
    
    
    
    
Net income
  - 
  - 
  - 
  - 
  142,000 
  - 
  - 
  142,000 
 
    
    
    
    
    
    
    
    
Cash dividend declared, $.05
  - 
  - 
  - 
  - 
  (74,700)
  - 
  - 
  (74,700)
 
    
    
    
    
    
    
    
    
Unrealized holding loss on investment securities, net of tax
  - 
  - 
  - 
  (18,100)
  - 
  - 
  - 
  (18,100)
 
    
    
    
    
    
    
    
    
Stock-based compensation
  - 
  - 
  8,700 
  - 
  - 
  - 
  - 
  8,700 
 
    
    
    
    
    
    
    
    
Balance, September 30, 2018
  1,513,914 
  75,700 
  2,554,600 
  (16,900)
  3,221,100 
  19,802 
  52,400 
  5,782,100 
 
    
    
    
    
    
    
    
    
Net income
  - 
  - 
  - 
  - 
  118,400 
  - 
  - 
  118,400 
 
    
    
    
    
    
    
    
    
Unrealized holding loss on investment securities, net of tax
  - 
  - 
  - 
  (2,900)
  - 
  - 
  - 
  (2,900)
 
    
    
    
    
    
    
    
    
Stock-based compensation
  - 
  - 
  9,500 
  - 
  - 
  - 
  - 
  9,500 
 
    
    
    
    
    
    
    
    
Balance, December 31, 2018
  1,513,914 
  75,700 
  2,564,100 
  (19,800)
  3,339,500 
  19,802 
  52,400 
  5,907,100 
 
    
    
    
    
    
    
    
    
Net income
  - 
  - 
  - 
  - 
  93,600 
  - 
  - 
  93,600 
 
    
    
    
    
    
    
    
    
Unrealized holding gain on investment securities, net of tax
  - 
  - 
  - 
  7,500 
  - 
  - 
  - 
  7,500 
 
    
    
    
    
    
    
    
    
Stock-based compensation
  - 
  - 
  11,700 
  - 
  - 
  - 
  - 
  11,700 
 
    
    
    
    
    
    
    
    
Balance, March 31, 2019
  1,513,914 
 $75,700 
 $2,575,800 
 $(12,300)
 $3,433,100 
  19,802 
 $52,400 
 $6,019,900 
 
  See notes to unaudited condensed consolidated financial statements.
 
 
 
 
  5
 
 
 
  SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
 
 
For the Nine Month Period Ended
March 31,
 
 
For the Nine Month Period Ended
March 31,
 
 
 
2020
 
 
2019
 
Operating activities:
 
 
 
 
 
 
Net income (loss)
 $(367,200)
 $354,100 
Adjustments to reconcile net income (loss) to net
cash (used in) provided by operating activities:
    
    
           Gain (loss) on sale of investments
  (4,000)
  5,000 
Depreciation and amortization
  123,300 
  218,200 
Deferred income tax expense
  (82,100)
  (70,800)
Unrealized holding (gain) loss on investments
  42,700 
  (4,200)
Gain on sale of fixed assets
  (300)
  - 
Stock-based compensation
  50,000 
  29,900 
Change in fair value of contingent consideration
  60,000 
  567,000 
Changes in operating assets and liabilities:
    
    
Trade accounts receivable
  (210,000)
  (556,300)
Contract assets
  - 
  101,300 
Inventories
  (452,500)
  (403,400)
Prepaid and other current assets
  9,500 
  (32,300)
Right-of-use- assets
  (867,400)
  - 
Accounts payable
  (117,100)
  23,400 
Lease liabilities
  933,300 
  - 
Contract liabilities
  116,100 
  164,000 
Accrued expenses and taxes
  (38,100)
  88,800 
 
    
    
Total adjustments
  (436,600) 
  130,600 
 
    
    
Net cash (used in) provided by operating activities
  (803,800)
  484,700 
 
    
    
Investing activities:
    
    
Proceeds from sale of investment securities
  53,600 
  72,400 
Purchase of investment securities
  (62,800)
  (75,200)
Capital expenditures
  (38,100)
  (129,600)
Purchase of intangible assets
  (20,000)
  (21,400)
Proceeds from sale of fixed assets
  1,000 
  - 
 
    
    
Net cash used in investing activities
  (66,300)
  (153,800)
 
    
    
Financing activities:
    
    
Line of credit proceeds
  - 
  50,000 
Proceeds from exercise of stock options
  7,000 
  - 
Cash dividend declared and paid
  - 
  (74,700 
Principal payments on notes payable
  - 
  (5,100)
 
    
    
Net cash provided by (used in) financing activities
  7,000 
  (29,800)
 
    
    
Net change in cash and cash equivalents
  (863,100)
  301,100 
 
    
    
Cash and cash equivalents, beginning of year
  1,602,500 
  1,053,100 
 
    
    
Cash and cash equivalents, end of period
 $739,400 
 $1,354,200 
 
    
    
Cash paid during the period for:
    
    
Income taxes
 $40,900 
 $59,200 
Interest
  - 
  1,400 
 
See notes to unaudited condensed consolidated financial statements.
 
 
 6
 
 
 
  SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 
General:
The accompanying unaudited interim condensed consolidated financial statements are prepared pursuant to the Securities and Exchange Commission’s rules and regulations for reporting on Form 10-Q. Accordingly, certain information and footnotes required by accounting principles generally accepted in the United States for complete financial statements are not included herein. The Company believes all adjustments necessary for a fair presentation of these interim statements have been included and that they are of a normal and recurring nature. These interim statements should be read in conjunction with the Company’s financial statements and notes thereto, included in its Annual Report on Form 10-K, for the fiscal year ended June 30, 2019. The results for the three months and nine months ended March 31, 2020 are not necessarily an indication of the results for the full fiscal year ending June 30, 2020.
 
 
1. Summary of Significant Accounting Policies
 
Principles of Consolidation
 
The accompanying consolidated financial statements include the accounts of Scientific Industries, Inc., Altamira Instruments, Inc. (“Altamira”), a Delaware corporation and wholly-owned subsidiary, Scientific Bioprocessing, Inc. (“SBI”), a Delaware corporation and wholly-owned subsidiary, and Scientific Packaging Industries, Inc., an inactive wholly-owned subsidiary (all collectively referred to as the “Company”). All material intercompany balances and transactions have been eliminated.
 
Recent Accounting Pronouncements
 
In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework Changes to the Disclosure Requirements for Fair Value Measurement", which is part of the FASB disclosure framework project to improve the effectiveness of disclosures in the notes to the financial statements. The amendments in the new guidance remove, modify, and add certain disclosure requirements related to fair value measurements covered in Topic 820, "Fair Value Measurement". The new standard is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted for either the entire standard or only the requirements that modify or eliminate the disclosure requirements, with certain requirements applied prospectively, and all other requirements applied retrospectively to all periods presented. The Company is currently evaluating the impact of adopting this guidance.
 
In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes, which is designed to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. ASU No. 2019-12 is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years; this ASU allows for early adoption in any interim period after issuance of the update. The Company is currently evaluating the impact of adopting this guidance.
 
Adopted Accounting Pronouncements
 
In February 2016, the FASB issued ASU No. 2016-02, Leases, which replaces previous lease guidance in its entirety with Accounting Standards Codification ("ASC") 842 and requires lessees to recognize lease assets and lease liabilities for those arrangements classified as operating leases under previous guidance, with the exception of leases with a term of twelve months or less. The Company adopted ASU No. 2016-02 on July 1, 2019 using the additional transition method, which allows prior periods to be presented under previous lease accounting guidance. Refer to Note 8, "Leases", for related disclosures.
 
2. Revenue
 
The Company records revenues in accordance with ASC Topic 606 “Revenue from Contracts with Customers, as amended” (“ASC Topic 606”). In accordance with ASC Topic 606, the Company accounts for a customer contract when both parties have approved the contract and are committed to perform their respective obligations, each party’s rights can be identified, payment terms can be identified, the contract has commercial substance, and it is probable that the Company will collect substantially all of the consideration to which it is entitled. Revenue is recognized when, or as, performance obligations are satisfied by transferring control of a promised product or service to a customer.
 
Nature of Products and Services
 
We generate revenues from the following sources: (1) Benchtop Laboratory Equipment, (2) Catalyst Research Instruments and (3) Royalties.
 
The following table summarizes the Company’s disaggregation of revenues for the three and nine months ended March 31, 2020 and 2019.
 
 7
 
 
    
 
Benchtop Laboratory Equipment
 
 
Catalyst Research Instruments
 
 
Bioprocessing
Systems
 
 
Corporate
And Other
 
 
Consolidated
 
Three Months Ended March 31, 2020:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 $1,800,700 
 $241,800 
 $335,500 
 $- 
 $2,378,000 
 
    
    
    
    
    
Foreign Sales
  743,000 
  236,200 
  335,000 
  - 
  1,314,200 
 
    
    
    
    
    
 
  
 
 
Benchtop Laboratory Equipment
 
 
Catalyst Research Instruments
 
 
Bioprocessing
Systems
 
 
Corporate
And Other
 
 
Consolidated
 
Three Months Ended March 31, 2019:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  - 
 
 
 
Revenues
 $1,732,400 
 $508,600 
 $812,500 
 $- 
 $3,053,500 
 
    
    
    
    
    
Foreign Sales
  682,300 
  346,400 
  - 
  - 
  1,028,700 
 
    
    
    
    
    
  
 
 
 
Benchtop Laboratory Equipment
 
 
Catalyst Research Instruments
 
 
Bioprocessing
Systems
 
 
Corporate
And Other
 
 
Consolidated
 
 
 
 
Nine Months Ended March 31, 2020:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 $5,320,300 
 $420,000 
 $914,200 
 $- 
 $6,654,500 
 
    
    
    
    
 
    
Foreign Sales
  1,996,400 
  318,100 
  913,700 
  - 
  3,228,200 
 
    
    
    
    
 
    
 
 
 
 
Benchtop Laboratory Equipment
 
 
Catalyst Research Instruments
 
 
Bioprocessing
Systems
 
 
Corporate
And Other
 
 
Consolidated
 
Nine Months Ended March 31, 2019:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 $5,227,500 
 $953,200 
 $1,074,600 
 $- 
 $7,255,300 
 
    
    
    
    
    
Foreign Sales
  2,061,600 
  711,600 
  - 
  - 
  2,773,200 
 
    
    
    
    
    
 
Benchtop Laboratory Equipment sales are comprised primarily of standard benchtop laboratory equipment from its stock to laboratory equipment distributors, or to end users primarily via e-commerce. The sales cycle from time of receipt of order to shipment is very short varying from a day to a few weeks. Customers either pay by credit card (online sales) or net 30-90, depending on the customer. Once the item is shipped under the FOB terms specified in the order, which is primarily “FOB Factory”, other than a standard warranty, there are no other obligations to the customer. The standard warranty is typically comprised of one to two years of parts and labor and is deemed immaterial.
 
Catalyst Research Instrument sales are comprised primarily of large instruments which begin with a standard model and then are customized to a customer’s specifications. The sales cycle can be quite long, typically ranging from one to three months, from the time an order is received to the time the instrument is shipped to the customer. Payment terms vary from customer to customer and can include advance payments which are recorded as contract liabilities. Some contracts call for training and installation, which is considered ancillary and not a material part of the contract. Due to the size and nature of the instruments, the Company subjects the instruments to an extensive factory acceptance testing process prior to shipment to ensure that they are fully operational once they reach the customer’s site. Normally, the Company warrantees its instruments for a period of twelve months for parts and labor which normally consists of replacement of small components or software support. Catalyst research instruments are never returned for repairs.
 
Royalty revenues pertain to royalties earned by the Company, which are paid on a calendar year basis, under a licensing agreement from a single licensee and its sublicenses. The Company is then obligated to pay 50% of all royalties received to the entity that licenses the intellectual property to the Company. During the year, the Company’s management uses its best judgement to estimate the royalty revenues earned during the period.
 
 8
 
 
 
The Company determines revenue recognition through the following steps:
 
 
 
Identification of the contract, or contracts, with a customer
 
 
 
Identification of the performance obligations in the contract
 
 
 
Determination of the transaction price
 
 
 
Allocation of the transaction price to the performance obligations in the contract
 
 
 
Recognition of revenue when, or as, a performance obligation is satisfied
 
 
The Company has made the following accounting policy elections and elected to use certain practical expedients, as permitted by the FASB, in applying ASC Topic 606: 1) all revenues are recorded net of returns, allowances, customer discounts, and incentives; 2) although sales and other taxes are immaterial, the Company accounts for amounts collected from customers for sales and other taxes, if any, net of related amounts remitted to tax authorities; 3) the Company expenses costs to obtain a contract as they are incurred if the expected period of benefit, and therefore the amortization period, is one year or less; 4) the Company accounts for shipping and handling activities that occur after title transfers to the customer as a fulfillment cost rather than an additional promised service and these fulfillment costs fall within selling expenses; 5) the Company is always considered the principal and never an agent, because it has full control and responsibility until title is transferred to the customer; 6) the Company does not assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer such as is the case with catalyst instruments.
 
3. Segment Information and Concentrations
 
The Company views its operations as three segments: the manufacture and marketing of standard benchtop laboratory equipment for research in university, hospital and industrial laboratories sold primarily through laboratory equipment distributors and laboratory and pharmacy balances and scales (“Benchtop Laboratory Equipment Operations”), the manufacture and marketing of custom-made catalyst research instruments for universities, government laboratories, and chemical and petrochemical companies sold on a direct basis (“Catalyst Research Instruments Operations”) and the design and marketing of bioprocessing systems and products and related royalty income (“Bioprocessing Systems”).
 
Segment information is reported as follows:
 
  
 
Benchtop Laboratory Equipment
 
 
Catalyst Research Instruments
 
 
Bioprocessing
Systems
 
Corporate
And Other
 
Consolidated
 
Three Months Ended March 31, 2020:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 $1,800,700 
 $241,800 
 $335,500 
 $- 
 $2,378,000 
 
    
    
    
    
    
Foreign Sales
  743,000 
  236,200 
  335,000 
  - 
  1,314,200 
 
    
    
    
    
    
Income (Loss) From Operations
  138,800 
  (99,900)
  (193,100)
    (180,700) 
  (334,900)
 
    
    
    
    
    
 
    
    
    
    
    
Assets
  5,229,700 
  1,227,900 
  1,647,800 
  814,500 
  8,919,900 
 
    
    
    
    
    
Long-Lived Asset
Expenditures
  4,900 
  - 
  11,700 
  - 
  16,600 
 
    
    
    
    
    
Depreciation and
Amortization
  29,600 
  300 
  11,000 
  - 
  40,900 
  
  9
 
 
 
 
 
Benchtop Laboratory Equipment
 
 
Catalyst Research Instruments
 
 
Bioprocessing
Systems
 
 
Corporate
And Other
 
 
Consolidated
 
Three Months Ended March 31, 2019:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
Revenues
 $1,732,400 
 $508,600 
 $812,500 
 $- 
 $3,053,500 
 
    
    
    
    
    
Foreign Sales
  682,300 
  346,400 
  - 
  - 
  1,028,700 
 
    
    
    
    
    
Income (Loss) From
Operations
  57,900 
  (35,200)
  163,000 
  - 
  185,700 
 
    
    
    
    
    
Assets
  4,656,600 
  1,583,100 
  1,503,100 
  788,500 
  8,531,300 
 
    
    
    
    
    
Long-Lived Asset
Expenditures
  132,900 
  1,000 
  2,900