Dynatronics(DYNT) - 2026 Q1 - Quarterly Report

Financial Performance - Net sales for the three months ended September 30, 2025, were $7,024,027, a decrease of 7.57% compared to $7,602,249 for the same period in 2024[13] - Gross profit for the same period was $1,731,629, down from $1,980,807, reflecting a decrease of 12.54%[13] - The operating loss narrowed to $(88,463) for the three months ended September 30, 2025, compared to $(250,996) for the same period in 2024, indicating improved operational efficiency[13] - Net loss attributable to common stockholders was $(385,407) for the three months ended September 30, 2025, compared to $(534,386) in the prior year, a reduction of 28%[13] - Net loss for the quarter ended September 30, 2025, was $202,000 compared to a net loss of $367,000 for the same quarter in 2024, a decrease of $165,000[73] - Net loss attributable to common stockholders decreased by $149,000 to $385,000 for the quarter ended September 30, 2025[74] Cash and Liquidity - Cash and cash equivalents increased to $761,748 as of September 30, 2025, from $326,344 at June 30, 2025, representing a growth of 133.33%[10] - As of September 30, 2025, the company had $762,000 in cash and cash equivalents, an increase from $326,000 as of June 30, 2025[75] - Cash and cash equivalents increased by $435,000 to $812,000 as of September 30, 2025, compared to $377,000 as of June 30, 2025, with $607,000 provided from the line of credit[86] - Net working capital decreased from $718,110 as of June 30, 2025, to $592,564 as of September 30, 2025, reflecting ongoing liquidity challenges[30] - Working capital was $593,000 as of September 30, 2025, compared to $718,000 as of June 30, 2025[76] Assets and Liabilities - Total current assets rose to $9,018,155 as of September 30, 2025, compared to $8,954,185 at June 30, 2025, an increase of 0.71%[10] - Total liabilities decreased to $11,943,554 as of September 30, 2025, down from $12,176,738 at June 30, 2025, a reduction of 1.92%[10] - Trade accounts receivable decreased by approximately $80,000 or 2.9%, to $2,721,000 as of September 30, 2025, driven by reduced overall revenue and timing of collections[87] - Inventories decreased by $250,000 or 4.9%, to $4,824,000 as of September 30, 2025, due to adjustments in inventory management in response to the uncertain operating environment[88] - Accounts payable decreased by approximately $236,000 or 6.9%, to $3,168,000 as of September 30, 2025, primarily due to timing of payments[89] - The outstanding balance of the line of credit was $2,604,000 as of September 30, 2025, compared to $1,997,000 as of June 30, 2025[90] - Finance lease liability totaled approximately $1,350,000 as of September 30, 2025, with lease payments currently around $33,000 per month[91] - Operating lease liability decreased to approximately $2,948,000 as of September 30, 2025, from $3,205,000 as of June 30, 2025[92] Operational Changes and Strategies - The Company is transitioning production from a contract manufacturer to internal operations to reduce costs and improve quality control[31] - The Company is actively working to mitigate potential tariff-related costs by stocking adequate inventory of key products[33] - The Company is evaluating strategic actions to improve performance, including cost reduction initiatives and pursuing new revenue streams through product diversification[31] - The company is implementing a comprehensive plan to address challenges, including cost reduction initiatives and transitioning production in-house[77] - The company believes that successful implementation of strategic actions may mitigate substantial doubt regarding its ability to continue as a going concern[77] Dividends and Stock - Preferred stock dividends issued or to be issued amounted to $183,550 for the three months ended September 30, 2025, compared to $167,738 in the prior year, reflecting an increase of 9.99%[18] - The Company paid $183,550 in preferred stock dividends by issuing 2,557,952 shares of common stock during the three months ended September 30, 2025[45] - The Company has a stock repurchase plan with approximately $449,000 remaining as of September 30, 2025, with no purchases made since September 2011[95] Tax and Valuation - The Company recorded a full valuation allowance against its net deferred income tax assets as of September 30, 2025, indicating uncertainty in realizability[94]