Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For quarterly period ended September 30, 2010
TRANSITION REPORT UNDER 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 as specified in its charter)
Delaware 04-2217279
____________________________ __________________________________
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or
organization)
70 Orville Drive, 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 whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act 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 X No
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a small
reporting company. See the definitions of "large accelerated filer,"
"accelerated filer" and "small reporting company" in Rule 12b-2 of the
Exchange Act.
Large accelerated filer Accelerated Filer
______ _______
Non-accelerated filer Smaller reporting company X
_______ _______
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).
Yes X No
The number of shares outstanding of the issuer's common stock par
value, $0.05 per share, as of October 29, 2010 was 1,196,577 shares.
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
ITEM 1 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED):
Page
Condensed Consolidated Balance Sheets 1
Condensed Consolidated Statements of Income 2
Condensed Consolidated Statements of Cash Flows 3
Notes to Condensed Consolidated Financial Statements 4
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS 10
ITEM 4 CONTROLS AND PROCEDURES
12
PART II OTHER INFORMATION
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K 13
SIGNATURE 14
EXHIBITS 15
PART I-FINANCIAL INFORMATION
Item 1. Financial Statements
SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
September 30, June 30,
_____________ __________
2010 2010
_____________ __________
Current Assets: (Unaudited)
Cash and cash equivalents $ 839,900 $ 632,700
Investment securities 684,100 665,600
Trade accounts receivable, net 764,700 1,494,500
Inventories 1,567,300 1,272,600
Prepaid expenses and other current assets 109,200 87,200
Deferred taxes 69,500 73,800
__________ __________
Total current assets 4,034,700 4,226,400
Property and equipment, net 180,600 193,400
Intangible assets, net 188,100 214,200
Goodwill 416,900 405,200
Other assets 25,700 25,700
Deferred taxes 105,300 100,100
__________ __________
Total assets $4,951,300 $5,165,000
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 70,500 $ 227,700
Customer advances 128,500 -
Accrued expenses and taxes 285,300 486,000
Dividends payable 107,700 -
__________ __________
Total current liabilities 592,000 713,700
__________ __________
Shareholders' Equity:
Common stock, $.05 par value; authorized
7,000,000 shares; 1,216,379 issued and
outstanding at September 30, 2010 and
June 30, 2010 60,800 60,800
Additional paid-in capital 1,540,300 1,537,200
Accumulated other comprehensive loss ( 19,400) ( 29,800)
Retained earnings 2,830,000 2,935,500
___________ __________
4,411,700 4,503,700
Less common stock held in treasury, at cost,
19,802 shares 52,400 52,400
___________ __________
Total shareholders' equity 4,359,300 4,451,300
___________ __________
Total liabilities and
shareholders' equity $ 4,951,300 $5,165,000
============ ==========
See notes to unaudited condensed consolidated financial statements
1
SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the Three Month
Periods Ended
September 30,
__________________________
2010 2009
__________________________
Net sales $1,255,500 $1,244,000
Cost of goods sold 746,800 708,200
__________ __________
Gross profit 508,700 535,800
__________ __________
Operating Expenses:
General & administrative 286,800 229,600
Selling 140,400 142,200
Research & development 87,500 108,500
__________ __________
Total operating expenses 514,700 480,300
__________ __________
Income (loss) from operations ( 6,000) 55,500
Interest & other income, net 9,200 4,100
__________ __________
Income before income taxes 3,200 59,600
__________ __________
Income tax expense (benefit):
Current 6,600 24,500
Deferred ( 5,600) ( 8,400)
__________ __________
1,000 16,100
__________ __________
Net income $ 2,200 $ 43,500
========== ==========
Basic earnings per common share $ - $ .04
Diluted earnings per common share $ - $ .04
Cash dividends declared per common
share $ .09 $ .06
See notes to unaudited condensed consolidated financial statements
2
SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Three Month Periods Ended
Sept. 30, 2010 Sept. 30, 2009
______________ ______________
Operating activities:
Net income $ 2,200 $ 43,500
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 47,400 51,700
Deferred income taxes ( 5,600) ( 8,400)
Income tax benefit of stock options
exercised - 400
Stock-based compensation 3,100 400
Changes in operating assets and liabilities:
Accounts receivable 729,800 185,600
Inventories ( 294,700) ( 376,100)
Prepaid expenses and other
current assets ( 22,000) 41,300
Accounts payable ( 157,200) ( 5,900)
Customer advances 128,500 182,100
Accrued expenses and taxes ( 72,500) ( 84,900)
__________ ___________
Total adjustments 356,800 ( 13,800)
__________ ___________
Net cash provided by
operating activities 359,000 29,700
__________ ___________
Investing activities:
Additional consideration for acquisition
of Altamira Instruments, Inc. ( 139,900) ( 107,000)
Purchase of investment securities,
available-for-sale ( 3,400) ( 3,800)
Capital expenditures ( 5,200) ( 6,600)
Purchases of intangible assets ( 3,300) ( 1,500)
__________ ___________
Net cash used in
investing activities ( 151,800) ( 118,900)
__________ ___________
Financing activities,
proceeds from exercise of stock options - 5,300
__________ ___________
Net increase (decrease) in cash and
cash equivalents 207,200 ( 83,900)
Cash and cash equivalents,
beginning of period 632,700 738,400
__________ ___________
Cash and cash equivalents, end of period $ 839,900 $ 654,500
========== ===========
Supplemental disclosures:
Cash paid during the period for:
Income Taxes $ 94,000 $ 116,800
See notes to unaudited condensed consolidated financial statements
3
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, 2010. The results for
the three months ended September 30, 2010, are not
necessarily an indication of the results for the full
fiscal year ending June 30, 2011.
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,
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.
2. Acquisition of Altamira Instruments, Inc.:
On November 30, 2006, the Company acquired all of the outstanding
capital stock of Altamira. The acquisition was pursuant to a
Stock Purchase Agreement (the "Agreement") whereby the Company
paid or issued to the sellers $400,000 in cash, and issued to them
125,000 shares of the Company's Common Stock and agreed to make
additional cash payments equal to 5%, subject to adjustment, of
the net sales of Altamira for each of five periods December 1,
2006 to June 30, 2007, each of the fiscal years ending June 30,
2008, 2009, and 2010, and July 1, 2010 to November 30, 2010.
Altamira's principal customers are universities, government
laboratories, and chemical and petrochemical companies. The
instruments are customizable to the customer's specifications, and
are sold on a direct basis.
In conjunction with the acquisition of Altamira, management of the
Company valued the tangible and intangible assets acquired,
including goodwill, customer relationships, non-compete
agreements, and certain technology, trade names and trademarks.
The carrying amounts of goodwill and other intangible assets are
presented in Note 8, "Goodwill and Other Intangible Assets" which
represent the valuations determined in conjunction with the
acquisition. In addition, other fair market value adjustments
were made in conjunction with the acquisition, primarily
adjustments to property and equipment, and inventory.
4
As of September 30, 2010, the adjusted aggregate purchase price,
was allocated to assets acquired and liabilities assumed as
follows:
Current assets $ 734,000
Property and equipment 140,300
Non-current assets 25,100
Goodwill 416,900
Other intangible assets 639,000*
Current liabilities ( 561,900)
___________
Net purchase price $1,393,400
===========
*Of the $639,000 of other intangible assets, $237,000 was
allocated to customer relationships with an estimated useful life
of 10 years, $300,000 was allocated to technology including trade
names and trademarks with a useful life of 5 years, and $102,000
was allocated to a non-compete agreement with a useful life of 5
years. The amount allocated to the customer relationships is
being amortized on an accelerated (declining balance) method and
the other intangibles are being amortized on a straight-line
basis.
3. Segment Information and Concentrations:
The Company views its operations as two segments: the manufacture
and marketing of standard benchtop laboratory equipment for
research in university, hospital and industrial laboratories sold
primarily through laboratory equipment distributors ("Benchtop
Laboratory Equipment Operations"), and 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").
Segment information is reported as follows:
Benchtop Catalyst Corporate
Laboratory Research and
Equipment Instruments Other Consolidated
__________ ___________ __________ ____________
Three months ended September 30, 2010:
Net Sales $1,022,100 $ 233,400 $ - $1,255,500
Foreign Sales 520,200 26,000 - 546,200
Segment Profit (Loss) 125,000 ( 131,000) - ( 6,000)
Segment Assets 2,182,500 1,467,300 1,301,500 4,951,300
Long-Lived Asset
Expenditures 3,400 1,800 - 5,200
Depreciation and
Amortization 13,900 33,500 - 47,400
5
Segment information is reported as follows:
Benchtop Catalyst Corporate
Laboratory Research and
Equipment Instruments Other Consolidated
__________ ___________ __________ ____________
Three months ended September 30, 2009:
Net Sales $ 1,011,600 $ 232,400 $ - $1,244,000
Foreign Sales 510,900 145,500 - 656,400
Segment Profit (Loss) 121,500 ( 61,900) - 59,600
Segment Assets 2,161,100 1,693,000 1,058,500 4,912,500
Long-Lived Asset
Expenditures 6,600 - - 6,600
Depreciation and
Amortization 15,900 35,800 - 51,700
Approximately 66% and 65% of net sales of benchtop laboratory
equipment for the three month periods ended September 30, 2010 and
2009, respectively, were derived from the Company's main product,
the Vortex-Genie 2 mixer, excluding accessories.
Two customers accounted in the aggregate for approximately 27% of
the net sales of the Benchtop Laboratory Equipment Operations and
22% of total sales for the three months ended September 30, 2010,
and 34% of net sales of the segment and 28% of total sales for the
three months ended September 30, 2009. Sales of catalyst research
instruments generally comprise a few very large orders averaging
$100,000 per order to a limited number of customers, who differ
from order to order. Sales to two customers represented
approximately 75% of the Catalyst Research Instrument Operations'
net sales and 14% of total sales for the three months ended
September 30, 2010. Sales to two different customers represented
91% of the segment's net sales and 17% of total sales for the year
earlier comparable period.
The Company's foreign sales are principally to customers in Europe
and Asia.
4. Fair Value of Financial Instruments:
The FASB defines the fair value of financial instruments as the
amount that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants
at the measurement date. Fair value measurements do not include
transaction costs.
The accounting guidance also expands the disclosure requirements
around fair value and establishes a fair value hierarchy of
valuation inputs. The hierarchy prioritizes the inputs into three
levels based on the extent to which inputs used in measuring fair
value are observable in the market. Each fair value measurement
is reported in one of the three levels, which is determined by the
lowest level input that is significant to the fair value
measurement in its entirety. These levels are described below:
Level 1 Inputs that are based upon unadjusted quoted prices for
identical instruments traded in active markets.
Level 2 Quoted prices in markets that are not considered to be
active or financial instruments for which all
significant inputs are observable, either directly or
indirectly.
6
Level 3 Prices or valuation that require inputs that are both
significant to the fair value measurement and
unobservable.
The following tables set forth by level within the fair value hierarchy
the Company's financial assets that were accounted for at fair value on
a recurring basis at September 30, 2010 and June 30, 2010 according to
the valuation techniques the Company used to determine their fair
values:
Fair Value Measurements Using Inputs
Considered as
Fair Value at
September 30, 2010 Level 1 Level 2 Level 3
__________________ __________ _______ _______
Cash and cash equivalents $ 839,900 $ 839,900 $ - $ -
Available for sale securities 684,100 684,100 - -
__________ __________ _______ _______
Total $1,524,000 $1,524,000 $ - $ -
========== ========== ======= =======
Fair Value at
September 30, 2010 Level 1 Level 2 Level 3
__________________ __________ _______ _______
Cash and cash equivalents $ 632,700 $ 632,700 $ - $ -
Available for sale securities 665,600 665,600 - -
__________ __________ _______ _______
Total $1,298,500 $1,298,300 $ - $ -
========== ========== ======= =======
Investments in marketable securities classified as available-for-sale by
security type at September 30, 2010 and June 30, 2010 consisted of the
following:
Unrealized
Fair Holding Gain
Cost Value (Loss)
_________ _________ ____________
At September 30, 2010:
Available for sale:
Equity securities $ 7,800 $ 11,600 $ 3,800
Mutual funds 695,700 672,500 (23,200)
_________ _________ ___________
$ 703,500 $ 684,100 $ (19,400)
========= ========= ===========
Unrealized
Fair Holding Gain
Cost Value (Loss)
_________ _________ ____________
At June 30, 2010:
Available for sale:
Equity securities $ 7,800 $ 9,600 $ 1,800
Mutual funds 687,600 656,000 (31,600)
_________ _________ ___________
$ 695,400 $ 665,600 $ (29,800)
========= ========= ===========
7
5. Inventories:
Inventories for financial statement purposes are based on perpetual
inventory records at September 30, 2010 and June 30, 2010. Components
of inventory are as follows:
September 30, June 30,
2010 2010
____________ ___________
Raw Materials $ 987,000 $ 896,400
Work in process 379,300 201,400
Finished Goods 201,000 174,800
__________ ___________
$1,567,300 $ 1,272,600
========== ===========
6. Earnings per common share:
Basic earnings per common share are computed by dividing net income by
the weighted-average number of shares outstanding. Diluted earnings per
common share include the dilutive effect of stock options, if any.
Earnings per common share was computed as follows:
For the Three Month
Periods Ended
September 30,
_______________________
2010 2009
_______________________
Net income $ 2,200 $ 43,500
========== ===========
Weighted average common
shares outstanding 1,196,577 1,194,534
Dilutive securities 15,413 9,895
__________ ___________
Weighted average dilutive
common shares outstanding 1,211,990 1,204,429
========== ===========
Basic earnings per
common share $ - $ .04
========== ===========
Diluted earnings per
common share $ - $ .04
========== ===========
Approximately 22,500 shares of the Company's common stock issuable
upon the exercise of outstanding options were excluded from the
calculation of diluted earnings per common share for the three months
ended September 30, 2009 because the effect would be anti-dilutive.
7. Comprehensive Income:
The FASB establishes standards for disclosure of comprehensive income or
loss, which includes net income or loss and any changes in equity from
non-owner sources that are not recorded in the income statement (such as
changes in the net unrealized gains or losses on securities.) The
Company's only source of comprehensive income or loss other than net
income is the net unrealized gain or loss on securities. The components
of comprehensive income were as follows:
8
For the Three Month
Periods Ended
September 30,
______________________
2010 2009
______________________
Net income $ 2,200 $ 43,500
Other comprehensive income
Unrealized holding gain
arising during period 10,400 36,100
_________ __________
Comprehensive income $ 12,600 $ 79,600
========= ==========
8. Goodwill and Other Intangible Assets:
In conjunction with the acquisition of Altamira, management of the
Company valued the tangible and intangible assets acquired, including
customer relationships, non-compete agreements and technology which
encompasses trade names, trademarks and licenses. The valuation resulted
in an initial negative goodwill of approximately $91,500 on the date of
acquisition which was subsequently adjusted to positive goodwill of
$416,900 and $405,200 at September 30, 2010 and June 30, 2010,
respectively, all of which is deductible for tax purposes. The related
agreement provides for contingent payments to the former shareholders
based on net sales of the Catalyst Research Instrument Operations subject
to certain limits, which are expected to be earned and paid. Additional
consideration amounted to $11,700 and $11,600 for the three month periods
ended September 30, 2010 and 2009, respectively.
The components of other intangible assets are as follows:
Useful Accumulated
Lives Cost Amortization Net
______ ________ ____________ ________
At September 30, 2010:
Technology 5 yrs. $300,000 $230,000 $ 70,000
Customer relationships 10 yrs. 237,000 163,100 73,900
Non-compete agreement 5 yrs. 102,000 78,200 23,800
Other intangible assets 5 yrs. 132,800 112,400 20,400
________ ________ ________
$771,800 $583,700 $188,100
======== ======== ========
Useful Accumulated
Lives Cost Amortization Net
______ ________ ____________ ________
At June 30, 2010:
Technology 5 yrs. $300,000 $215,000 $ 85,000
Customer relationships 10 yrs. 237,000 157,000 80,000
Non-compete agreement 5 yrs. 102,000 73,100 28,900
Other intangible assets 5 yrs. 129,500 109,200 20,300
________ ________ ________
$768,500 $554,300 $214,200
======== ======== ========
Total amortization expense was $29,400 and $30,700 for the three months
ended September 30, 2010 and 2009, respectively. As of September 30,
2010, estimated future amortization expense related to intangible assets
is $84,400 for the remainder of the fiscal year ending June 30, 2011,
$51,800 for fiscal 2012, $13,500 for fiscal 2013, $9,800 for fiscal
2014, $6,500 for fiscal 2015, and $22,100 thereafter.
9
SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis or Plan of Operations
Certain statements contained in this report are not based on historical
facts, but are forward-looking statements that are based upon various
assumptions about future conditions. Actual events in the future could
differ materially from those described in the forward-looking information.
Numerous unknown factors and future events could cause such differences,
including but not limited to, product demand, market acceptance, impact of
competition, the ability to reach final agreements, the ability to finance
and produce to customers' specifications catalyst research instruments,
adverse economic conditions, and other factors affecting the Company's
business that are beyond the Company's control. Consequently, no
forward-looking statement can be guaranteed.
We undertake no obligation to publicly update forward-looking
statements, whether as a result of new information, future events or
otherwise.
Liquidity and Capital Resources
_______________________________
Cash and cash equivalents increased by $207,200 to $839,900 as of September
30, 2010 from $632,700 as of June 30, 2010.
Net cash provided by operating activities was $359,000 for the three months
ended September 30, 2010 as compared to $29,700 for the comparable three
month period in 2009, due mainly to the collections of accounts receivable
balances partially offset by an increase in inventory. Cash used in
investing activities was $151,800 for the three month period ended September
30, 2010 compared to $118,900 for the three month period ended September 30,
2009 due primarily to a higher amount by $32,900 of additional consideration
paid for the acquisition of Altamira Instruments, Inc.
On September 21, 2010, the Board of Directors of the Company declared a cash
dividend of $.09 per share of Common Stock payable on December 15, 2010 to
holders of record as of the close of business on October 18, 2010.
The Company's working capital decreased $70,000 to $3,442,700 at September
30, 2010 from $3,512,700 at June 30, 2010 mainly as a result of the recording
of the dividend to be paid.
Pursuant to a promissory note with Capital One Bank, N.A., which was restated
in January 2010 and extended from November 1, 2009 to January 3, 2011, at the
request of the Company, the Bank at its sole discretion may extend the
Company advances not to exceed an aggregate of $500,000. The advances are to
be secured by the Company's assets and bear interest at the Bank's prime
rate. Management believes that the Company will be able to meet, absent a
material capital expenditure, its cash flow needs during the 12 months ending
September 30, 2011 from its available financial resources including its cash
and investment securities, and operations.
10
Results of Operations
_____________________
Financial Overview
__________________
The reduction in the Company's income before income taxes to $3,200 for the
three months ended September 30, 2010 from $59,600 for the three months ended
September 30, 2009, was principally due to the $69,100 increase to $131,000
in the segment loss incurred by the Catalyst Research Instruments Operations,
which was primarily due to a reduction in the gross margins for the segment.
For the comparative three month periods, the segment profit of the Benchtop
Laboratory Equipment Operations increased slightly to $125,000 from $121,500.
The Three Months Ended September 30, 2010 Compared With the Three Months
Ended September 30, 2009
Net sales for the three months ended September 30, 2010 increased by $11,500
(.09%) to $1,255,500 from $1,244,000 for the three months ended September 30,
2009, substantially due to a $10,500 increase in sales of benchtop laboratory
equipment products. Sales of catalyst research instruments, which were
approximately the same for both periods, are comprised of a small number of
large orders, typically averaging over $100,000 each, while benchtop
laboratory equipment sales consist of a large number of small orders usually
shipped from stock. The backlog of orders for catalyst research instruments
products was $692,000 as of September 30, 2010, all of which are anticipated
to be delivered by fiscal year end.
The gross profit percentage for the three months ended September 30, 2010
decreased to 40.5% compared to 43.1% for the three months ended September 30,
2009, mainly as a result of the reduction in the gross margins of the
Catalyst Research Instruments Operations.
General and administrative expenses for the three months ended September 30,
2010 increased by $57,200 (24.9%) to $286,800 from $229,600 for the
comparable period of the prior year, mainly due to an increase in office-
related expenses incurred by the Catalyst Research Instruments Operations,
and expenses in the investigation of possible business opportunities.
There was an immaterial reduction in selling expenses ($1,800) to $140,400
from $142,200 for the comparative three month periods.
Research and development expenses for the three months ended September 30,
2010 decreased $21,000 (19.4%) to $87,500 from $108,500 for the three months
ended September 30, 2009, primarily the result of a reduction in new product
development activity by the Catalyst Research Instruments Operations.
Interest and other income increased for the comparative three month periods
by $5,100 (124.4%) from $4,100 to $9,200 mainly as a result of higher cash
and investment balances.
The Company reflected income tax expense for the three months ended September
30, 2010 of $1,000 on income before income taxes of $3,200 compared to
$16,100 on income of $59,600 for the three months ended September 30, 2009.
As a result of the foregoing, the net income for the three months ended
September 30, 2010 was $2,200 compared to $43,500 for the three months ended
September 30, 2009.
11
Item 4. Controls and Procedures
________________________________
Evaluation of Disclosure Controls and Procedures. As of the end of the
period covered by this report, based on an evaluation of the Company's
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-
15(e) under the Securities Exchange Act of 1934), the Chief Executive and
Chief Financial Officer of the Company has concluded that the Company's
disclosure controls and procedures are effective to ensure that information
required to be disclosed by the Company in its Exchange Act reports is
recorded, processed, summarized and reported within the applicable time
periods specified by the SEC's rules and forms. The Company also concluded
that information required to be disclosed in such reports is accumulated and
communicated to the Company's management, including its principal executive
and principal financial officer, as appropriate to allow timely decisions
regarding required disclosure.
Changes in Internal Control Over Financial Reporting. There was no change in
the Company's internal controls over financial reporting that occurred during
the most recently completed fiscal quarter that materially affected or is
reasonably likely to materially affect the Company's internal controls over
financial reporting.
12
Part II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit Number: Description
31.1 Certification of Chief Executive Officer and Chief
Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
32.1 Certification of Chief Executive Officer and Chief
Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K:
On September 23, 2010 Registrant filed a Report on Form
8-K, reporting under Item 8.01.
13
SCIENTIFIC INDUSTRIES, INC. AND SUBSIDIARIES
SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Scientific Industries, Inc.
Registrant
/s/ Helena R. Santos
__________________________________
Helena R. Santos
President, Chief Executive Officer
and Treasurer
Principal Executive, Financial and
Accounting Officer
Date: November 12, 2010
14
