ASSETS
|
December 31, 2015
|
June 30, 2015
|
Current assets
|
||
Cash
|
$ 22,395
|
$ 55,042
|
Trade accounts receivable, net
|
712,253
|
463,852
|
Inventories
|
1,865,965
|
2,382,634
|
Other current assets
|
28,787
|
36,032
|
Deferred income taxes
|
126,000
|
126,000
|
Total current assets
|
2,755,400
|
3,063,560
|
Property, plant & equipment
|
||
Property, plant & equipment at cost
|
3,136,536
|
3,128,577
|
Less accumulated depreciation
|
(2,054,840)
|
(2,016,840)
|
Total property, plant & equipment
|
1,081,696
|
1,111,737
|
Other assets
|
||
Deferred financing costs
|
36,687
|
44,402
|
Deferred long-term income taxes
|
129,000
|
129,000
|
Other asset, non-current
|
8,783
|
8,783
|
Total other assets
|
174,470
|
182,185
|
Total assets
|
$ 4,011,566
|
$ 4,357,482
|
LIABILITIES & STOCKHOLDERS' EQUITY
|
December 31, 2015
|
June 30, 2015
|
Current liabilities
|
||
Trade accounts payable
|
672,667
|
825,288
|
Due to finance company
|
206,333
|
297,188
|
Accrued liabilities
|
785,023
|
594,767
|
Current maturities of long-term debt
|
277,468
|
317,990
|
Deferred revenue
|
153,099
|
293,685
|
Total current liabilities
|
2,094,590
|
2,328,918
|
Long-term liabilities
|
||
Long term debt less current portion
|
1,815,942
|
1,955,328
|
Total Long-term liabilities and non-controlling interest
|
1,815,942
|
1,955,328
|
Total liabilities
|
3,910,532
|
4,284,246
|
Stockholders' equity
|
||
Common Stock
|
143,151
|
143,151
|
Paid-in-capital
|
2,457,975
|
2,457,975
|
Accumulated deficit
|
(2,500,092)
|
(2,527,890)
|
Total stockholders' equity
|
101,034
|
73,236
|
Total liabilities and stockholders' equity
|
$ 4,011,566
|
$ 4,357,482
|
Three Months Ended
|
||
December 31, 2015
|
December 31, 2014
|
|
Net Revenue
|
$ 1,189,461
|
$ 1,436,075
|
Cost of sales
|
955,045
|
1,308,425
|
Gross profit
|
234,416
|
127,650
|
Operating expenses
|
||
Sales & marketing
|
29,773
|
41,205
|
General & Administrative
|
133,921
|
96,278
|
Total operating expenses
|
163,694
|
137,483
|
Operating income (loss)
|
70,722
|
(9,833)
|
Other income (expenses)
|
||
Interest Income
|
918
|
27
|
Interest Expense
|
(34,860)
|
(46,214)
|
Total other expenses
|
(33,942)
|
(46,187)
|
Net income (loss)
|
36,780
|
(56,020)
|
Income tax expense (Benefit)
|
15,000
|
(22,000)
|
Penalties and Interest (Income Taxes)
|
35,500
|
-
|
Net loss
|
(13,720)
|
(34,020)
|
Basic and diluted net loss per share
|
$ (0.01)
|
$ (0.02)
|
Weighted -average common shares used in the computation of EPS
|
||
Basic and diluted
|
1,431,503
|
1,431,503
|
PART I - FINANCIAL INFORMATION FORM 10-Q
Six Months Ended
|
||
December 31, 2015
|
December 31, 2014
|
|
Net Revenue
|
$ 2,596,198
|
$ 2,805,850
|
Cost of sales
|
2,096,004
|
2,469,461
|
Gross profit
|
500,194
|
336,389
|
Operating expenses
|
||
Sales & marketing
|
54,778
|
65,880
|
General & Administrative
|
269,927
|
211,883
|
Total operating expenses
|
324,705
|
277,763
|
Operating income
|
175,489
|
58,626
|
Other income (expenses)
|
||
Interest Income
|
918
|
264
|
Interest Expense
|
(71,109)
|
(90,867)
|
Total other expenses
|
(70,191)
|
(90,603)
|
Net income (loss)
|
105,298
|
(31,977)
|
Income tax expense
|
42,000
|
(13,000)
|
Penalties and Interest (Income Taxes)
|
35,500
|
-
|
Net income (loss)
|
27,798
|
(18,977)
|
Basic and diluted net income (loss) per share
|
$ 0.02
|
$ (0.01)
|
Weighted -average common shares used in the computation of EPS
|
||
Basic and diluted
|
1,431,503
|
1,431,503
|
Six Months Ended
|
||
December 31, 2015
|
December 31, 2014
|
|
Cash flows from operating activities:
|
||
Net income (loss)
|
$ 27,798
|
$ (18,977)
|
Adjustments to reconcile net income (loss) to
|
||
net cash flows from operating activities:
|
||
Depreciation and amortization
|
38,000
|
40,330
|
Deferred income taxes
|
-
|
(33,000)
|
Receivables
|
(248,401)
|
346,112
|
Inventories
|
516,669
|
(39,824)
|
Prepaids & other assets
|
14,960
|
(22,998)
|
Accounts payable and due to finance company
|
(243,476)
|
(84,439)
|
Deferred revenue
|
(140,586)
|
190,052
|
Accrued liabilities
|
190,256
|
38,400
|
Net cash flows from operating activities
|
155,220
|
415,656
|
Cash flows used in investing activities:
|
||
Purchases of property and equipment
|
(7,959)
|
(7,212)
|
Changes in restricted cash
|
-
|
(11)
|
Net cash flows used in investing activities
|
(7,959)
|
(7,223)
|
Cash flows used in financing activities:
|
||
Increase (decrease) in line of credit
|
-
|
(47,197)
|
Principal payments on long-term debt
|
(179,908)
|
(167,112)
|
Net cash flows used in financing activities
|
(179,908)
|
(214,309)
|
Net change in cash
|
(32,647)
|
194,124
|
Cash
|
||
Beginning of year
|
55,042
|
324,291
|
End of period
|
$ 22,395
|
$ 518,415
|
|
Three Months Ended
|
Six Months Ended
|
||
December 31, 2015
|
December 31, 2014
|
December 31, 2015
|
December 31, 2014
|
|
Net income
(
loss)
|
$
(13,720 )
|
$
(34,020 )
|
$
27,798
|
$
(18,977)
|
Weighted -average common shares used in the calculation of EPS
|
||||
Basic and diluted
|
1,431,503
|
1,431,503
|
1,431,503
|
1,431,503
|
Basic and diluted net income (loss) per share
|
$
(0.01)
|
$
(0.02)
|
$
0.02
|
$
(0.01)
|
December 31, 2015
|
June 30, 2015
|
||
Raw Material
|
$
1,141,168
|
$
984,376
|
|
Work in Process
|
724,797
|
1,398,258
|
|
Finished Goods
|
-
|
-
|
|
Inventory
|
$
1,865,965
|
$
2,382,634
|
December 31, 2015
|
June 30, 2015
|
|
Note payable — bank, payable in monthly installments of $
6,672
including interest at
6.0
% with a balloon payment in January 2023. The note is secured by the first mortgage on property owned by the Company, continuing commercial guarantees from both the Company and the chief executive officer/key stockholder and by the assignment of a life insurance policy on the chief executive officer/key stockholder.
|
$
852,648
|
$
859,542
|
Note payable — SBA, payable in monthly installments of $
20,503
including interest at the prime rate (as published by the Wall Street Journal) plus
1
% adjusted every calendar quarter (4.25% at December 31, 2015), maturing in May 2018. The note is secured by the assets of the Company and the unconditional guarantee of the chief executive officer/key stockholder.
|
564,794
|
674,376
|
Note payable — SBA, payable in monthly installments of $
5,107
, including interest and SBA fees for an interest rate of
5.2
%, maturing March 2033. The note is secured by a second mortgage on property owned by the Company and an unconditional guarantee from both the Company and the chief executive officer/key stockholder.
|
675,968
|
691,903
|
Note payable — bank, payable in monthly installments of $
6,091
with interest at
2.75
% over the U.S Bancorp Prime Lending Rate through February 2016. Effective June 2015, the interest rate is
7.25
% due to payment default in accordance with the terms of the note. This note was paid off during fiscal year 2016. The note was secured by the assets of the Company, the unconditional guarantee of the chief executive officer/key stockholder, and by the assignment of a life insurance policy on the chief executive officer/key stockholder.
|
-
|
47,497
|
Total Debt
|
2,093,411
|
2,273,318
|
Less current maturities
|
277,468
|
317,990
|
Long term Debt
|
$
1,815,942
|
$
1,955,328
|
Because of the relatively low levels of inflation experienced this past fiscal year, and as of December 31, 2015, inflation did not have a significant effect on the Company’s results in the first six months of fiscal year 2016.
a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and