What changed in this filing

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Item 1. Financial Statements

2023-05-15 compared with 2023-02-14 · 153 added, 94 removed, 330 unchanged (43% of the section changed)

5 unchanged sentences

Cash and cash equivalents

Accounts receivable, net of allowance for doubtful accounts of $ 72,343 at December 31, 2022 and $ 44,135 at June 30, 2022

Accounts receivable, net of allowance for doubtful accounts of $ 74,593 at March 31, 2023 and $ 44,135 at June 30, 2022

Prepaid expenses

25 unchanged sentences

50,000,000 shares authorized;

issued and outstanding – 5,638,302 shares at December 31, 2022 and June 30, 2022

issued and outstanding – 5,640,995 shares at March 31, 2023 and 5,638,302 June 30, 2022

Additional paid-in capital

9 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND SIX MONTHS ENDED

DECEMBER 31, 2022 AND 2021

Ended December 31,

FOR THE THREE AND NINE MONTHS ENDED

MARCH 31, 2023 AND 2022

Ended March 31,

Cost of goods sold

Research and Development Expenses

Research and development expenses, net

Selling, general and administrative expenses

3 unchanged sentences

( 1,093,423 )

Interest (Expense) Income, net

Other income (expense)

Interest expense

Gain on revaluation of contingent earn-out liability

Net income (loss)

1 unchanged sentence

$ ( 113,899 )

$ ( 1,197,713 )

Income (loss) per share:

Fully Diluted

Basic and fully diluted

Weighted average common shares outstanding:

Fully Diluted

Basic and fully diluted

The accompanying notes are an integral part

3 unchanged sentences

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

FOR THE SIX MONTHS ENDED

FOR THE NINE MONTHS ENDED

31 , 2023 AND 2022

Month Period Ended December 31, 2022

Nine Month Period Ended March 31, 2023

Stockholders’

7 unchanged sentences

( 47,744,450 )

Month Period Ended December 31, 2021

Stock-based compensation

Proceeds from exercise of stock option

Exercise of stock options net of 307 shares withheld

Balance, March 31, 2023

$ ( 48,142,882 )

Nine Month Period Ended March 31, 2022

Stockholders’

2 unchanged sentences

Stock-based compensation

Proceeds from private placement

of common stock subscribed, net of estimated issuance costs of $ 10,000

Proceeds from private placement of common stock subscribed, net of estimated issuance costs of $ 10,000

Balance, September 30, 2021

1 unchanged sentence

Stock-based compensation

Proceeds from private placement

of common stock

Proceeds from private placement of common stock

( 1,030,000 )

Issuance of common stock in business

Proceeds from exercise of stock

Exercise of stock options net of

478 shares withheld

Issuance of common stock for employee

Issuance of common stock in business acquisition

Proceeds from exercise of stock option

Exercise of stock options net of 478 shares withheld

Issuance of common stock for employee services

Balance, December 31, 2021

( 48,249,792 )

Correction of error in valuation of stock issued in business acquisition

Stock-based compensation

Proceeds from exercise of stock options

Exercise of stock options net of 32,018 shares withheld

Balance, March 31, 2022

$ ( 48,363,691 )

The accompanying notes are an integral part

3 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED

FOR THE NINE MONTHS ENDED

31 , 2023 AND 2022

Six Months Ended

Nine Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

Net Income (Loss)

$ ( 1,197,713 )

Adjustments to Reconcile Net Loss to Net Cash Used In Operating Activities -

Gain on revaluation of contingent earn-out liability

Depreciation and amortization

5 unchanged sentences

Inventories, net

Due from related party

Prepaid expenses

12 unchanged sentences

Payment of debt issuance costs

Payment of acquisition earn-out liability

Gross proceeds from private placement of common stock

1 unchanged sentence

Net Cash (Used In) Provided By Financing Activities

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

17 unchanged sentences

prepared by the Company, without audit, and reflect normal recurring adjustments which, in the opinion of management, are necessary for

a fair statement of the results of the second quarter and six months of the Company’s fiscal year 2023.

a fair statement of the results of the third quarter and nine months of the Company’s fiscal year 2023.

These consolidated financial

13 unchanged sentences

on Form 8-K filed with the Securities and Exchange Commission on November 2, 2022.

of the reverse stock split, every three shares of issued and outstanding common stock were automatically combined into one issued and

outstanding share of common stock, without any change in the par value per share or the number of the Company’s authorized shares.

The reverse stock split reduced the number of shares of common stock outstanding from 16,915,089 on November 1, 2022 to approximately

5,638,302 shares, after reduction for the elimination of fractional shares.

As a result of the reverse stock split, every

three shares of issued and outstanding common stock were automatically combined into one issued and outstanding share of common stock,

without any change in the par value per share or the number of the Company’s authorized shares.

The reverse stock split reduced

the number of shares of common stock outstanding from 16,915,089 on November 1, 2022 to approximately 5,638,302 shares, after reduction

for the elimination of fractional shares.

Unless otherwise noted, all prior year share amounts

16 unchanged sentences

plus the number of potentially dilutive securities outstanding during the period such as stock options.

For the three and six months ended

December 31, 2021, the effect of such securities was antidilutive and not included in the fully diluted calculation because of the net

loss generated during those periods.

For the three and nine months

ended March 31, 2023 and 2022, the effect of such securities was antidilutive and not included in the fully diluted calculation because

of the net loss generated during those periods.

The following is the calculation of income (loss) per share for the

three and six months ended December 31, 2022 and 2021:

three and nine months ended March 31, 2023 and 2022:

Schedule of earnings per share

Ended December 31,

Net Income (Loss)

Ended March 31,

Net Income (Loss) - Basic and Diluted

$ ( 398,432 )

$ ( 113,899 )

Basic Weighted Average Shares Outstanding

Fully Diluted Weighted Average Shares Outstanding

$ ( 1,197,713 )

Weighted Average Shares Outstanding

Basic and Fully Diluted

Income (Loss) Per Share

Fully Diluted

Basic and Fully Diluted

The number of shares issuable upon the exercise of outstanding stock

options that were excluded from the computation as their effect was antidilutive was 266,981 for the three and six months ended December

31, 2022, respectively, and 889,900 for the three and six months ended December 31, 2021.

options that were excluded from the computation as their effect was antidilutive was 1,058,630 for the three and nine months ended March

31, 2023, respectively, and 939,166 for the three and nine months ended March 31, 2022.

Income taxes are accounted for under the asset

19 unchanged sentences

Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

No such impairments of goodwill or patents have been estimated by management as of December 31, 2022.

No such impairments of goodwill or patents have been estimated by management as of March 31, 2023.

REVISION OF THE FIRST AND SECOND QUARTER FISCAL YEAR 2023 UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the third quarter of fiscal year 2023,

the Company identified errors in the accrual of certain costs for the fiscal quarters ended September 30, 2022 and December 31, 2022,

which resulted in an understatement of accounts payable and costs of goods sold for those two quarters.

The corrections of these errors

impacted the unaudited condensed consolidated financial statements for the first and second quarters of fiscal year 2023.

assessed the applicable guidance issued by the Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB)

and concluded these misstatements were not material, individually or in the aggregate, to its unaudited condensed consolidated financial

statements for the aforementioned interim periods.

However, because of the significance of these items, and to facilitate comparisons

among periods, the Company decided to revise the previously issued first and second quarter unaudited condensed consolidated financial

information by increasing accounts payable and cost of goods sold by $85,213 and 125,752 in the quarters ended September 30, 2022 and

December 31, 2022, respectively.

These quarterly and year to date financial statements will be revised in subsequent filings with the

Securities and Exchange Commission that include such statements, including when the first and second quarter Form 10-Q’s are filed

for fiscal year 2024.

Accumulated deficit at January 1, 2023 in the

accompanying statement of stockholders’ equity for the quarter ended March 31, 2023 was made larger by $210,965 due to the effects

of the increased expense accruals for the first and second quarters of fiscal year 2023.

The following are selected line items from the

financial statements illustrating the effect of the error corrections for the quarters ended September 30, 2022 and December 31, 2022:

Schedule of error corrections

Quarter Ended September 30, 2022

As Previously Reported

Adjustment(1)

Cost of goods sold

Operating loss

Net loss per share, basic and fully diluted

Quarter Ended December 31, 2022

As Previously Reported

Adjustment(1)

Cost of goods sold

Operating income

Net income per share, basic

Net income per share, fully diluted

The errors in each of the two fiscal quarters resulted from the omission of invoices from a small identifiable group of outside contractors used for certain services relating to research and development activities.

In addition to the above adjustments, trade accounts payable will be increased in future filings by $85,213 and $210,965 as of September 30, 2022 and December 31, 2022, respectively.

BUSINESS ACQUISITION

4 unchanged sentences

The actual results of operations of the Lighthouse division are included in the accompanying

consolidated financial statements as of, and for the three and six months ended, December 31, 2022, and for the three months ended December

consolidated financial statements as of, and for the three and nine months ended, March 31, 2023, and for the six months ended March 31,

The purchase price for Lighthouse Imaging included

3 unchanged sentences

liability associated with that portion was reversed and recognized as other income in the fiscal quarter ended June 30, 2022.

$750,000 portion of the earn-out contingent liability will be paid if the target level of gross profit is earned by the Lighthouse division

for the period from October 1, 2022 through September 30, 2023.

The second $ 750,000 portion of the earn-out contingent

liability was renegotiated in March 2023 and adjusted to $ 600,000 in return for modifications to the target level of gross profit for

the second earnout period.

The $ 150,000 reduction in the contingent earn-out liability was recognized as other income in the fiscal quarter

ended March 31, 2023.

The second portion of the contingent earn-out liability of $ 600,000 will be paid if the adjusted target level of

gross profit is earned by the Lighthouse division for the period from October 1, 2022 through September 30, 2023.

Consolidated unaudited actual and pro forma results

2 unchanged sentences

Schedule of consolidated pro forma results

Ended December 31,

Net income (loss)

Ended March 31,

( 1,140,418 )

Net income (loss) per share:

Fully diluted

Net loss per share:

Basic and fully diluted

Pro forma financial information is not necessarily

16 unchanged sentences

The $ 500,000 line of credit is due on demand and

had no borrowings outstanding at December 31, 2022.

had no borrowings outstanding at March 31, 2023.

Borrowings under the line of credit bear interest payable monthly at the prime lending

rate plus 1.5% per annum, or 9.00 % as of December 31, 2022, and shall not be less than 4.75% per annum.

rate plus 1.5% per annum, or 9.50 % as of March 31, 2023, and shall not be less than 4.75% per annum.

Borrowings under the line of credit

2 unchanged sentences

Long-Term Debt

Long-term debt consists of the following at December

Long-term debt consists of the following at March

Schedule of long-term debt

Term Loan Note payable to Main Street Bank with monthly principal payments of $ 30,952 .38 plus interest at the rate of 9.00 % as of December 31, 2022.

Secured by all assets of the Company, and subject to certain periodic reporting to the bank, an annual minimum EBITDA plus stock based compensation to debt service coverage ratio of 1.20:1 commencing with the fiscal year ending June 30, 2023, and other conditions.

Term Loan Note payable to Main Street Bank with monthly principal payments of $ 30,952 plus interest at the rate of 7.00 % as of March 31, 2023 is secured by all assets of the Company, and subject to certain periodic reporting to the bank, an annual minimum EBITDA plus stock based compensation to debt service coverage ratio of 1.20:1 commencing with the fiscal year ending June 30, 2023, and other conditions.

The Term Loan Note matures on October 15, 2028 .

2 unchanged sentences

Long-term debt, net of current portion of debt issuance costs

At December 31, 2022 principal payments due on the Term Loan Note payable

At March 31, 2023 principal payments due on the Term Loan Note payable

are as follows:

3 unchanged sentences

LEASE OBLIGATIONS

In March 2021 the Company entered into a

five-year financing lease in the amount of $ 161,977

for manufacturing equipment.

In January 2020, the Company entered into a five-year financing lease for $ 47,750

for manufacturing equipment.

The net book value of fixed assets under financing lease obligations as of December 31, 2022 is $ 125,181 .

In March 2021 the Company entered into a five-year

financing lease in the amount of $ 161,977 for manufacturing equipment.

In January 2020, the Company entered into a five-year financing

lease for $ 47,750 for manufacturing equipment.

The net book value of fixed assets under financing lease obligations as of March 31, 2023

is $ 114,695 .

On July 1, 2019 the Company entered into a three-year

1 unchanged sentence

three years through June 2025.

Remaining minimum lease payments at December 31, 2022 total $ 112,885 .

Total rent expense including base

rent and common area expenses was $ 7,986 and $ 15,705 during the three months ended December 31, 2022 and 2021, respectively.

4, 2021 the Company assumed the remaining term of the Windham, Maine lease as part of the Lighthouse acquisition.

The lease expires on

July 31, 2025.

Remaining minimum lease payments at December 31, 2022 total $ 355,797 .

Total rent expense including base rent and common

area expenses was $ 35,017 during the three months ended December 31, 2022.

Included in the accompanying balance sheet at December 31,

2022 is a right-of-use asset of $ 439,074 and current and long-term right-of-use operating lease liabilities of $ 163,984 and $ 275,090 ,

Remaining minimum lease payments at March 31, 2023 total $ 101,928 .

Total rent expense including base rent

and common area expenses was $ 15,973 and $ 15,705 during the three months ended March 31, 2023 and 2022, respectively.

On October 4, 2021 the Company assumed the remaining

term of the Windham, Maine lease as part of the Lighthouse acquisition.

The lease expires on July 31, 2025.

Remaining minimum lease payments

at March 31, 2023 total $ 321,365 .

Total rent expense including base rent and common area expenses was $ 36,495 during the three months

ended March 31, 2023.

Included in the accompanying balance sheet at

March 31, 2023 is a right-of-use asset of $ 399,007 and current and long-term right-of-use operating lease liabilities of $ 166,316 and

$ 232,691 , respectively.

At December 31, 2022 future minimum lease payments

At March 31, 2023 future minimum lease payments

under the financing lease and operating lease obligations are as follows:

1 unchanged sentence

Fiscal Year Ending June 30:

Financing Leases

Operating Lease

6 unchanged sentences

at will basis.

Rent expense on these operating leases was $ 101,156 and $ 101,727 for the six months ended December 31, 2022 and 2021, respectively.

Rent expense on these operating leases was $ 150,862 and $ 152,078 for the nine months ended March 31, 2023 and 2022, respectively.

STOCK-BASED COMPENSATION

1 unchanged sentence

The following table summarizes stock-based compensation

expense for the three and six months ended December 31, 2022 and 2021:

expense for the three and nine months ended March 31, 2023 and 2022:

Schedule of stock-based compensation expense

Ended December 31,

Ended March 31,

Cost of Goods Sold

5 unchanged sentences

The following tables summarize stock option activity

for the six months ended December 31, 2022:

for the nine months ended March 31, 2023:

Schedule of stock option activity

5 unchanged sentences

Outstanding at June 30, 2022

Outstanding at December 31, 2022

Outstanding at March 31, 2023

Information related to the stock options outstanding

as of December 31, 2022 is as follows:

as of March 31, 2023 is as follows:

Schedule of stock options outstanding by exercise price range

4 unchanged sentences

The aggregate intrinsic value of the Company’s

in-the-money outstanding and exercisable options as of December 31, 2022 was $ 1,546,353 and $ 1,537,253 , respectively.

in-the-money outstanding and exercisable options as of March 31, 2023 was $ 2,623,768 and $ 2,515,877 , respectively.

REVENUE RECOGNITION

11 unchanged sentences

Shipping and handling

costs charged to customers are included in revenues.

costs charged to customers are included in revenue.

The Company disaggregates revenues by product

1 unchanged sentence

by economic factors.

Technology rights revenue represent amounts paid by customers for rights to use the Company’s intellectual

Technology rights revenue represents amounts paid by customers for rights to use the Company’s intellectual

property including product designs, patents, and know-how to manufacture and commercialize their products under specified contractual

Revenues are comprised of the following for the three and six months ended December 31, 2022 and 2021:

Revenues are comprised of the following for the three and nine months ended March 31, 2023 and 2022:

Schedule of disaggregation of revenues

Ended December 31,

Ended March 31,

Engineering Design Services

11 unchanged sentences

These costs have been recorded in selling, general and administrative expenses.

As of December 31,

As of March 31,

2023, there were no contract assets recorded in the Company’s Consolidated Balance Sheets.

3 unchanged sentences

The Company generally satisfies performance obligations within one year from the contract inception date.

Contract liabilities, which were recorded as customer

advances in the Company’s Consolidated Balance Sheets, and unearned revenue are comprised of the following:

Contract liabilities, which were recorded as

customer advances in the Company’s Consolidated Balance Sheets, and unearned revenue are comprised of the following:

Schedule of contract liabilities

Ended December 31,

Ended March 31,

Contract Liabilities, Beginning of Period

3 unchanged sentences

( 1,435,082 )

( 1,647,188 )

Contract Liabilities, End of Period

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements