Temporary working capital

ELECTROMED, ​​INC. – 10-K – Management report and analysis of the financial situation and operating results. – InsuranceNewsNet

The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our financial statements and the
accompanying notes included elsewhere in this Annual Report on Form 10-K. The
forward-looking statements include statements that reflect management's good
faith beliefs, plans, objectives, goals, expectations, anticipations and
intentions with respect to our future development plans, capital resources and
requirements, results of operations, and future business performance. Our actual
results could differ materially from those anticipated in the forward-looking
statements included in this discussion as a result of certain factors,
including, but not limited to, those discussed in the section entitled
"Information Regarding Forward-Looking Statements" immediately preceding Part I
of this Annual Report on Form 10-K.



Overview


Electromed develops and supplies innovative airway clearance products applying
HFCWO technologies in lung care for patients of all ages.

We manufacture, market and sell products that provide HFCWO, including the
SmartVest System that includes our newest generation SmartVest SQL® and previous
generation SV2100 and related products, to patients with compromised pulmonary
function. The SmartVest SQL is smaller, quieter and lighter than our previous
product with enhanced programmability, ease of use. Our products are sold in
both the home health care market and the institutional market for use by
patients in hospitals, which we refer to as "institutional sales." The SmartVest
SQL has been sold in the domestic home care market since 2014. In 2015, we
launched the SmartVest SQL into institutional and certain international markets.
In June 2017, we announced the launch of the SmartVest SQL with SmartVest
Connect™ wireless technology, which allows data connection between physicians
and patients to track therapy performance and collaborate in treatment
decisions. SmartVest Connect is currently available to pediatric and cystic
fibrosis patients and was made available to certain targeted adult pulmonary
clinics starting in November 2017. Since 2000, we have marketed the SmartVest
System and its predecessor products to patients suffering from cystic fibrosis,
bronchiectasis and repeated episodes of pneumonia. Additionally, we offer our
products to a patient population that includes neuromuscular disorders such as
cerebral palsy, muscular dystrophies, ALS, the combination of emphysema and
chronic bronchitis commonly known as COPD, and patients with post-surgical
complications or who are ventilator dependent or have other conditions involving
excess secretion and impaired mucus transport.



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The SmartVest System is often eligible for reimbursement from major private
insurance providers, health maintenance organizations ("HMOs"), state Medicaid
systems, and the federal Medicare system, which we believe is an important
consideration for patients considering an HFCWO course of therapy. For domestic
sales, the SmartVest System may be reimbursed under the Medicare-assigned
billing code (E0483) for HFCWO devices if the patient has cystic fibrosis,
bronchiectasis (including chronic bronchitis or COPD that has resulted in a
diagnosis of bronchiectasis), or any one of certain enumerated neuromuscular
diseases, and can demonstrate that another less expensive physical or mechanical
treatment did not adequately mobilize retained secretions. Private payers
consider a variety of sources, including Medicare, as guidelines in setting
their coverage policies and payment amounts.



We employ a direct-to-patient and provider model, through which we obtain
patient referrals from clinicians, manage insurance claims on behalf of our
patients and their clinicians, deliver our solutions to patients and train them
on proper use in their homes. This model allows us to directly approach patients
and clinicians, whereby we disintermediate the traditional durable medical
equipment channel and capture both the manufacturer and distributor margins. We
have engaged a limited number of regional durable medical equipment distributors
focused on respiratory therapies as an alternate sales channel. Revenue through
this channel was 4% of our total revenues in fiscal 2022.



Our key growth strategies for fiscal 2023 are to: accelerate our revenue growth
by taking market share and expanding the addressable population for the largest
and fastest growing segments of the market: adult pulmonology/bronchiectasis.
Actions to support accelerating our growth include the following:



? Develop our sales force in targeted high-potential geographic areas, by adding a

five additional territories and direct sales representatives;

? Increase awareness of the Electromed brand by reaching out directly to consumers and physicians

marketing and peer education;

? Provide top notch customer service and support;

? Develop and disseminate the body of clinical evidence for bronchiectasis to increase

adoption by physicians of the SmartVest system for patients; and

? Introducing our innovative next-generation device that appeals to patients.

Critical accounting estimates

During the preparation of our financial statements, we are required to make
estimates, assumptions and judgment that affect reported amounts. Those
estimates and assumptions affect our reported amounts of assets and liabilities,
our disclosure of contingent assets and liabilities, and our reported revenues
and expenses. We update these estimates, assumptions, and judgment as
appropriate. Some of our accounting policies and estimates require us to
exercise significant judgment in selecting the appropriate assumptions for
calculating financial statements. Such judgments are subject to an inherent
degree of uncertainty. Among other factors, these judgments are based upon our
historical experience, known trends in our industry, terms of existing contracts
and other information from outside sources, as appropriate. The following is a
summary of our primary critical accounting policies and estimates. See also Note
1 to the Financial Statements, included in Part II, Item 8, of this Annual
Report on Form 10-K.



Impacts of COVID-19 on our business and operations


In March 2020, the World Health Organization designated COVID-19 as a global
pandemic, and the U.S. Department of Health and Human Services designated
COVID-19 as a public health emergency. The impact of the COVID-19 pandemic on
our business remains uncertain, and its effects on our operational and financial
performance will depend in part on future developments, which cannot be
reasonably estimated at this time. Such future developments include, but are not
limited to, the duration, scope and severity of the COVID-19 pandemic in
geographic areas in which we operate or in which our patients live, actions
taken to contain or mitigate its impact, the impact on governmental healthcare
programs and budgets, the development and distribution of treatments or
vaccines, and the resumption of widespread economic activity. Due to the
inherent uncertainty of the unprecedented and evolving situation, we are unable
to predict with confidence the likely impact of the COVID-19 pandemic on our
future operations.



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During fiscal 2022, we experienced a reduction in the number of clinics allowing
face-to-face access by our sales team although not to the extent experienced in
fiscal 2021 as the number of infections relating to the Omicron variant and
related subvariants of COVID-19 increased throughout most regions of the United
States, and hospitals implemented additional safety protocols. Our sales team
continued to utilize a hybrid sales process of virtual and face-to-face
clinician interaction with strict adherence to specific clinic and healthcare
system safety protocols, which we believe allowed them to drive stronger
referral growth compared to fiscal 2021. During the second half of fiscal 2022,
we observed an improvement in clinic access and patient flow compared to earlier
in the fiscal year, which we believe is likely a result of Omicron-related case
reductions throughout most of the United States, contributing to a record high
number of monthly referrals for our company.



We believe that the impact of the COVID-19 pandemic on our home care and
institutional business will continue during at least the beginning of fiscal
2023. Our home care revenue for fiscal 2022 has increased as compared to fiscal
2021; however, if COVID-19 infection rates increase and federal, state and local
restrictions on commerce, stay-at-home orders or other restrictions on
businesses are reinstated, we believe that such measures could have a material
adverse effect on our business.



We observed increased changes to our supply chain timelines and increased
material and shipping costs during the second half of fiscal 2022, but we did
not experience any disruptions that materially impacted product availability for
our customers. We anticipate that increased material and shipping costs will
continue during fiscal 2023 relating to supply chain availability and
inflationary trends in electronic components but may extend to other components
as well. In certain instances, we have purchased key electronic materials in
advance to ensure adequate future supply and mitigate the risk of supply chain
disruption. It is possible that the COVID-19 pandemic could have a greater
adverse impact on our supply chain in the future, including impacts associated
with preventative and precautionary measures taken by other businesses and
applicable governments. A reduction or interruption in any of our manufacturing
processes could have a material adverse effect on our business. Any significant
increases to our raw material or shipping costs could reduce our gross margins.



We have also taken measures to ensure the safety of our employees and to comply
with applicable governmental orders. We consider our business to be essential
under applicable governmental orders, primarily due to our role in manufacturing
and supplying needed medical devices to patients with respiratory-related issues
and have therefore continued to operate during the government restrictions put
in place in response to the pandemic.



In response to the COVID-19 pandemic and the U.S. federal government's
declaration of a public health emergency, the CMS implemented a number of
temporary rule changes and waivers to allow prescribers to best treat patients
during the period of the public health emergency. These waivers became effective
on March 1, 2020. Clinical indications and documentation typically required will
not be enforced for respiratory-related products including the SmartVest System
(solely with respect to Medicare patients). The minimum documentation now
requires a valid order and documentation of a respiratory-related diagnosis.
Face-to-face and in-person requirements for respiratory devices are being waived
while the waiver is in place. The CMS waiver was recently extended in
conjunction with the extension of the federal public health emergency for an
additional 90-day period beginning July 15, 2022.



We have not received any direct financial assistance from any government program
in fiscal 2021 or fiscal 2022 as part of the COVID-19 relief measures.


Revenue Recognition



Revenue is measured based on consideration specified in the contract with a
customer, adjusted for any applicable estimates of variable consideration and
other factors affecting the transaction price, including consideration paid or
payable to customers and significant financing components. Revenue from all
customers is recognized when a performance obligation is satisfied by
transferring control of a distinct good or service to a customer.



Individual promised goods and services in a contract are considered a
performance obligation and accounted for separately if the individual good or
service is distinct (i.e., the customer can benefit from the good or service on
its own or with other resources that are readily available to the customer and
the good or service is separately identifiable from other promises in the
arrangement). If an arrangement includes multiple performance obligations, the
consideration is allocated between the performance obligations in proportion to
their estimated standalone selling price, unless discounts or variable
consideration is attributable to one or more but not all the performance
obligations. Costs related to products delivered are recognized in the period
incurred, unless criteria for capitalization of costs under Accounting Standards
Codification ("ASC") 340-40, "Other Assets and Deferred Costs," or the
requirements under other applicable accounting guidance are met.



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The Company includes shipping and handling fees in net revenues. Shipping and
handling costs associated with the shipment of the Company's SmartVest System
after control has transferred to a customer are accounted for as a fulfillment
cost and are included in cost of revenues.



We request that customers return previously sold units that are no longer in use
to us in order to limit the possibility that such units would be resold by
unauthorized parties or used by individuals without a prescription. The customer
is under no obligation to return the product; however, we do reclaim the
majority of previously sold units upon the discontinuance of patient usage. We
are certified to recondition and resell returned SmartVest System units.
Returned units are typically reconditioned and resold and continue to be used
for demonstration equipment and warranty replacement parts.



Inventory Valuation


Inventories are stated at the lower of cost (first-in, first-out method) or net
realizable value. Work in process and finished goods are carried at standard
cost, which approximates actual cost, and includes materials, labor and
allocated overhead. The reserve for obsolescence is determined by analyzing the
inventory on hand and comparing it to expected future sales. Estimated inventory
to be returned is based on how many devices that have shipped that are expected
to be returned prior to completion of the insurance reimbursement process.
Warranty Reserve


The Company provides a lifetime warranty on its products to the prescribed
patient for sales within the U.S. and a three-year warranty for all
institutional sales and sales to individuals outside the U.S. The Company
estimates the costs that may be incurred under its warranty and records a
liability in the amount of such costs at the time the product is shipped.
Factors that affect the Company's warranty reserve include the number of units
shipped, historical and anticipated rates of warranty claims, the product's
useful life and cost per claim. The Company periodically assesses the adequacy
of its recorded warranty reserve and adjusts the amounts as necessary.



Share-Based Compensation



Share-based payment awards consist of options to purchase shares of our common
stock issued to employees. Expense for share-based payment awards consist of
options to purchase shares of our common stock issued to employees for services.
Expense for options is estimated using the Black-Scholes pricing model at the
date of grant and expense for restricted stock is determined by the closing
price on the day the grant is made. Expense is recognized on a straight-line
basis over the requisite service or vesting period of the award, or at the time
services are provided for non-employee awards. In determining the fair value of
options, we make various assumptions using the Black-Scholes pricing model,
including expected risk-free interest rate, stock price volatility, and life.
See Note 8 to the Financial Statements included in Part II, Item 8, of this
Annual Report on Form 10-K for a description of these assumptions.



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Results of Operations


Year closed June 30, 2022 Compared to the year ended June 30, 2021

Revenues


Turnover for the financial years ended June 30, 2022 and 2021 are summarized in the
table below (amounts in thousands of dollars).

                                     Fiscal Years Ended June 30,
                                        2022               2021             Increase (Decrease)
Home Care Revenue                  $    38,004,000     $ 32,986,000     $  5,018,000            15.2 %
Institutional Revenue                    1,660,000        1,549,000          111,000             7.2 %
Home Care Distributor Revenue            1,474,000          563,000          911,000           161.8 %
International Revenue                      521,000          658,000        
(137,000 )         (20.8 %)
Total Revenue                      $    41,659,000     $ 35,756,000     $  5,903,000            16.5 %



Home Care Revenue. Home care revenue increased by $5,018,000, or 15.2%, in
fiscal 2022 compared to fiscal 2021. The revenue increase compared to fiscal
2021 was primarily due to increases in referrals and approvals. The increase in
referrals was primarily due to an increase in direct sales representatives,
increased sales representative productivity driven by increased clinic access
and patient flow, our sales team refining their selling process and clinic
targeting methodology, and benefits of the CMS waiver on the non-commercial
Medicare portion of our home care revenue. Additionally, we also benefitted from
a Medicare allowable rate increase that took effect on January 1, 2022. Annual
Medicare rate increases for our device are linked closely to changes in the
Urban Consumer Price Index.



The CMS waiver benefited the non-commercial Medicare portion of our home care
revenue by increasing the number of referrals and the approval percentage for
previously non-covered diagnoses. We believe that our ongoing sales team
execution, along with the expected return to pre-COVID-19 levels of patient
face-to-face engagement with physicians and clinic access for our sales team,
has the potential to mitigate the impact of a CMS waiver expiration, which is
currently effective until October 2022.



Institutional Revenue. Institutional revenue increased by $111,000, or 7.2%, in
fiscal 2022 compared to fiscal 2021. Institutional revenue includes sales to
group purchasing organizations, rental companies and other institutions. The
revenue increase was due to increased capital purchases and stronger consumable
volumes compared to fiscal 2021, as hospitals resumed utilization of HFCWO
protocols after reducing utilization early in the COVID-19 pandemic.



Home Care Distributor Revenue. Home care distributor revenue increased by
$911,000, or 161.8%, in fiscal 2022 compared to fiscal 2021. The revenue
increase in fiscal 2022 was due to increased demand from one of our primary home
care distribution partners. We began selling to a limited number of home medical
equipment distributors during our fiscal year ended June 30, 2020, who in turn
sell our SmartVest System in the U.S. home care market.



International Revenue. International revenue decreased by $137,000, or 20.8%, in
fiscal 2022 compared to fiscal 2021. International revenue growth is not
currently a primary focus for us, and our corporate resources are focused on
supporting and maintaining our current distributors. International sales are
affected by the timing of international distributor purchases that can cause
significant fluctuations in reported revenue on a quarterly basis.



Gross Profit



Gross profit increased to $31,442,000 in fiscal 2022, or 75.5% of net revenues,
from $27,305,000, or 76.4% of net revenues, in fiscal 2021. The increase in
gross profit was primarily related to increases in domestic home care revenue
including the Medicare allowable rate increase that took effect in January 2022.
The decrease in gross profit as a percentage of net revenue was driven by higher
raw material and shipping costs as well as patient training related expenses due
to increase in face-to-face trainings.



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We believe as we continue to grow revenue, we will be able to leverage
manufacturing costs, although there may be fluctuations on a short-term basis
related to increased material and shipping costs as well as average
reimbursement based on the mix of referrals during any given period. Factors
such as diagnoses that are not assured of reimbursement, insurance programs with
lower allowable reimbursement amounts (for example, state Medicaid programs),
whether an individual patient meets prerequisite medical criteria for
reimbursement, and continuation of the Medicare waiver currently in place may
have an effect on average reimbursement received on a short-term basis. We have
a goal of improving our gross margin percentage over time due to lower product
costs associated with our next generation product, supplier optimization, and
gaining operating leverage on higher volumes.



Operating Expenses


Selling, general and administrative expenses. Sales, general and
administrative costs (“SG&A”) have been $27,114,000 in fiscal year 2022, representing
an augmentation of $4,671,000 or 20.8% of $22,443,000 during fiscal year 2021.

SG&A payroll and compensation-related expenses increased by $2,206,000, or
15.3%, to $16,640,000 in fiscal 2022, compared to $14,434,000 in fiscal 2021.
The increase in the current year was primarily due to a higher average number of
sales, sales support and marketing personnel, increased reimbursement personnel
to process higher patient referrals, increased temporary resources to assist
with systems infrastructure investments and increased incentive payments on
higher home care revenue. We have also continued to provide regular merit-based
increases for our employees and are regularly benchmarking our compensation
ranges for new and existing employees to ensure we can hire and retain the
talent needed to drive growth in our business. Field sales employees totaled 52,
of which 43 were direct sales, as of June 30, 2022, compared to 46 as of June
30, 2021, of which 37 were direct sales.



Professional and legal fees increased by $875,000, or 36.0%, to $3,308,000 in
fiscal 2022, compared to $2,433,000 in fiscal 2021. Professional fees include
services related to legal costs, shareowner services and reporting requirements,
information technology technical support and consulting fees. The increase in
the current year was primarily due to a shareholder activism matter, increased
investment in our system infrastructure and increased clinical study costs. Our
shareholder activism matter concluded with a cooperation agreement in September
2021. We continue to make key investments in systems infrastructure including
implementing a new enterprise resource planning ("ERP") system, enhancing our
customer relationship management system and further optimizing of the revenue
cycle management system that was implemented in June 2021. We expect these
system infrastructure investments will result in more efficient and scalable
operational processes and provide enhanced analytics to drive business
performance. We also expect to continue investing in our on-going clinical
studies in order to continue building the body of evidence around positive
outcomes from bronchiectasis patients using HFCWO and SmartVest therapy.



Total discretionary marketing spend decreased by $238,000i.e. 22.4% to
$824,000 in fiscal 2022, compared to $1,062,000 in fiscal year 2021. The decrease
the current year was mainly due to a transition towards
direct-to-consumer marketing investments.


Travel, meals and entertainment expenses increased $734,000, or 41.2%, to
$2,514,000 for fiscal 2022 compared to $1,780,000 in fiscal 2021. The increase
in the current year period was primarily due to our sales team resuming
closer-to-normal levels of travel compared to the COVID-19 driven travel
restrictions in the prior year and an increase in regional sales meetings that
were cancelled in the prior year due to COVID-19. The Company also held an
in-person national sales meeting in August 2021 whereas the national sales
meeting was held virtually in fiscal 2021 due to COVID-19.



Recruitment costs increased by $362,000 i.e. 134.6% at $631,000 for fiscal year 2022
compared to $269,000 for the 2021 financial year. The increase in recruitment costs is
mainly due to increased recruitment for senior management and direct sales
representative positions.

Insurance expenses increased by $229,000 or 20.6% to $1,339,000 for fiscal 2022
compared to $1,110,000 in fiscal 2021. The increase in the current year is
primarily due to higher health insurance, director and officer insurance costs
and cyber insurance costs.



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Research and development costs

R&D expenses decreased by $366,000, or 21.3%, to $1,356,000 in fiscal 2022
compared to $1,722,000 in fiscal 2021. The decrease in the current year was
primarily due to reduced professional consulting costs associated with our next
generation platform development activities. R&D expenses were 3.3% of revenue in
fiscal 2022 compared to 4.8% of revenue in fiscal 2021. We expect R&D spending
to be between 2.0% and 3.0% of revenue during fiscal 2023, as we look to
finalize our development and product testing work in preparation for an
anticipated fiscal year 2023 next generation product launch.



Interest Income, net



Net interest income was approximately $25,000 in fiscal 2022 compared to net
interest income of $39,000 in fiscal 2021. The decrease in the current year was
primarily due to lower rates earned on our cash deposits and lower cash deposits
in the bank compared to prior fiscal periods.



Income Tax Expense


Income tax expense in fiscal 2022 was 692,000, which includes a current tax
expense of $1,181,000 and a deferred benefit of $489,000. Estimated income tax
expenses include a discrete current tax benefit of approximately $37,000 related
to exercised fully vested stock options and a discrete current benefit of
approximately $21,000 related to the excess tax benefit of non-qualified stock
options that were exercised during the period.



Income tax expense in fiscal 2021 was $805,000, which included a current tax
expense of $1,099,000 and a deferred benefit of $294,000. Estimated income tax
expense included a discrete deferred tax expense of approximately $81,000
related to unexercised fully vested stock options that expired and a discrete
current tax benefit of approximately $33,000 related to the excess tax benefit
of non-qualified stock options that were exercised during the period.



The effective tax rates were 23.1% and 25.4% for fiscal 2022 and 2021,
respectively. The effective tax rates differ from the statutory federal rate due
to the effect of state income taxes, R&D tax credits, and other permanent items
that are non-deductible for tax purposes relative to the amount of taxable
income.



Net Income



Net income for fiscal 2022 was $2,305,000, compared to net income of $2,362,000
in fiscal 2021. The decrease in current year net income was primarily due to
increased strategic investments in SG&A, shareholder activism costs and higher
product costs partially offset by stronger home care and distributor revenue
growth.


Cash and capital resources

Cash flow and sources of liquidity

Cash flow from operating activities


Net cash used in operating activities in fiscal 2022 was $686,000. Cash flows
from operating activities consisted of net income of $2,305,000, non-cash
expenses of approximately $1,115,000, a $2,170,000 increase in accounts payable
and accrued liabilities and a decrease in contract assets of $107,000. These
cash flows from operating activities were offset by a $4,020,000 increase in
accounts receivable, an increase in inventory of $1,072,000, and a $1,322,000
increase in prepaid expenses. The increase in accounts receivable was primarily
due to an increase in the Medicare portion of our home care business, which has
a 13-month payment cycle. Three distinct items have negatively impacted our
operating cash flow in fiscal 2022, including tax payments on
higher-than-expected fiscal 2021 net income, increased payments to secure
adequate supply of key raw material components, and a one-time payout of accrued
vacation balances as part of an enhancement to our paid time off policy. Our
cash receipt collection remains strong, with the three months ended June 30,
2022 period having the highest cash receipt collections in our company's
history, building upon the prior record that was set in the previous quarter.



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Cash flow from investing activities


Net cash used in investing activities in fiscal 2022 was approximately
$1,525,000. Cash used in investing activities consisted of approximately
$1,425,000 in expenditures for property and equipment, approximately $943,000
for software and $482,000 for equipment, and $100,000 in payments for patent and
trademark costs.


Cash flow from financing activities

Net cash used in financing activities in fiscal 2022 was approximately
$1,525,000made up of $1,448,000 used for our share buyback program and
$77,000 for taxes paid on net stock settlements of stock option exercises.

Adequacy of capital resources

Our primary working capital requirements relate to adding employees to our sales
force and support functions, continuing infrastructure investments, and
supporting general corporate needs, including financing equipment purchases and
other capital expenditures incurred in the ordinary course of business. Based on
our current operational performance, we believe our working capital of
approximately $27,389,000 and available borrowings under our existing credit
facility will provide adequate liquidity for fiscal 2023.



Effective December 17, 2021, we renewed our credit facility, which provides us
with a revolving line of credit. Interest on borrowings on the line of credit
accrues at the prime rate (4.75% as of June 30, 2022) less 1.0% and is payable
monthly. There was no outstanding principal balance on the line of credit as of
June 30, 2022 or June 30, 2021. The amount eligible for borrowing on the line of
credit is limited to the lesser of $2,500,000 or 57.0% of eligible accounts
receivable, and the line of credit expires on December 18, 2023, if not renewed.
As of June 30, 2022, the maximum $2,500,000 was available under the line of
credit. Payment obligations under the line of credit are secured by a security
interest in substantially all of our tangible and intangible assets.



The documents governing our line of credit contain certain financial and
nonfinancial covenants that include a minimum tangible net worth of not less
than $10,125,000 and restrictions on our ability to incur certain additional
indebtedness or pay dividends.



Any failure to comply with these covenants in the future may result in an event
of default, which if not cured or waived, could result in the lender
accelerating the maturity of our indebtedness, preventing access to additional
funds under the line of credit, requiring prepayment of outstanding
indebtedness, or refusing to renew the line of credit. If the maturity of the
indebtedness is accelerated or the line of credit is not renewed, sufficient
cash resources to satisfy the debt obligations may not be available and we may
not be able to continue operations as planned. If we are unable to repay such
indebtedness, the lender could foreclose on these assets.



During fiscal 2022 and 2021, we spent approximately $1,425,000 and $287,000,
respectively, on property and equipment. We currently expect to finance planned
equipment purchases with cash flows from operations or borrowings under our
credit facility. We may need to incur additional debt if we have an unforeseen
need for additional capital equipment or if our operating performance does
not
generate adequate cash flows.



While the impact of the COVID-19 pandemic and other factors such as inflation
are difficult to predict, we believe our cash, cash equivalents and cash flows
from operations will be sufficient to meet our working capital, capital
expenditure, operational cash requirements for fiscal 2023.



Accounting standards recently issued but not yet adopted by the company


See Note 1 of the Notes to our Financial Statements in this Annual Report on
Form 10-K for information on new accounting standards adopted in fiscal 2022 or
pending adoption.



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