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, 2011
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 [ ] No [ X ]
The number of shares outstanding of the issuer's common stock par
value, $0.05 per share, as of October 14, 2011 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,
_____________ __________
2011 2011
_____________ __________
(Unaudited)
Current Assets:
Cash and cash equivalents $ 783,100 $ 907,800
Investment securities 695,400 693,400
Trade accounts receivable, net 852,600 620,000
Inventories 1,592,600 1,639,800
Prepaid expenses and other current assets 148,900 197,700
Deferred taxes 77,700 77,700
__________ __________
Total current assets 4,150,300 4,136,400
Property and equipment, net 211,200 175,100
Intangible assets, net 85,300 112,300
Goodwill 447,900 447,900
Other assets 25,700 25,700
Deferred taxes 112,400 115,800
__________ __________
Total assets $5,032,800 $5,013,200
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 106,800 $ 128,100
Accrued expenses and taxes 266,100 284,300
Dividends payable 59,800 -
__________ __________
Total current liabilities 432,700 412,400
__________ __________
Shareholders' Equity:
Common stock, $.05 par value; authorized 7,000,000 shares;
1,216,379 issued and outstanding 60,800 60,800
Additional paid-in capital 1,559,100 1,558,500
Accumulated other comprehensive loss ( 22,400) ( 21,500)
Retained earnings 3,055,000 3,055,400
___________ ___________
4,652,500 4,653,200
Less common stock held in treasury, at cost
19,802 shares 52,400 52,400
___________ ___________
Total shareholders' equity 4,600,100 4,600,800
___________ ___________
Total liabilities and
shareholders' equity $5,032,800 $5,013,200
========== ===========
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,
__________________________
2011 2010
__________ __________
Net sales $1,541,000 $1,255,500
Cost of goods sold 937,000 746,800
__________ __________
Gross profit 604,000 508,700
__________ __________
Operating Expenses:
General & administrative 290,900 286,800
Selling 189,000 140,400
Research & development 46,900 87,500
__________ __________
Total operating expenses 526,800 514,700
__________ __________
Income (loss) from operations 77,200 ( 6,000)
Interest & other income, net 6,800 9,200
__________ __________
Income before income taxes 84,000 3,200
__________ __________
Income tax expense (benefit):
Current 21,200 6,600
Deferred 3,400 ( 5,600)
__________ __________
24,600 1,000
__________ ___________
Net income $ 59,400 $ 2,200
========== ===========
Basic earnings per common
share $ .05 $ -
Diluted earnings per common
share $ .05 $ -
Cash dividends declared
per common share $ .05 $ .09
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, 2011 Sept. 30, 2010
______________ ______________
Operating activities:
Net income $ 59,400 $ 2,200
_________ _________
Adjustments to reconcile net income
to net cash provided by (used in) operating activities:
Depreciation and amortization 47,100 47,400
Deferred income taxes 3,400 ( 5,600)
Stock-based compensation 600 3,100
Changes in operating assets and liabilities:
Accounts receivable ( 232,600) 729,800
Inventories 47,200 ( 294,700)
Prepaid expenses and other
current assets 48,800 ( 22,000)
Accounts payable ( 21,300) ( 157,200)
Customer advances - 128,500
Accrued expenses and taxes ( 18,200) ( 72,500)
__________ __________
Total adjustments ( 125,000) 356,800
__________ __________
Net cash provided by (used in)
operating activities ( 65,600) 359,000
__________ __________
Investing activities:
Additional consideration for acquisition
of Altamira Instruments, Inc. - ( 139,900)
Purchase of investment securities,
available-for-sale ( 2,900) ( 3,400)
Capital expenditures ( 54,900) ( 5,200)
Purchases of intangible assets ( 1,300) ( 3,300)
__________ ___________
Net cash used in
investing activities ( 59,100) ( 151,800)
__________ ___________
Net increase (decrease) in cash and
cash equivalents ( 124,700) 207,200
Cash and cash equivalents,
beginning of period 907,800 632,700
__________ __________
Cash and cash equivalents, end of period $ 783,100 $ 839,900
========== ==========
Supplemental disclosures:
Cash paid during the period for:
Income Taxes $ 1,500 $ 94,000
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, 2011.
The results for the three months ended September 30, 2011, are not
necessarily an indication of the results for the full fiscal
year ending June 30, 2012.
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. New Accounting Pronouncements:
In June 2011, the Financial Accounting Standards Board ("FASB")
issued Accounting Standards Update ("ASU") No. 2011-05,
"Comprehensive Income (ASC Topic 220): Presentation of Comprehensive
Income," ("ASU No. 2011-05") which amends current comprehensive
income guidance. This accounting update eliminates the option to
present the components of other comprehensive income as part of the
statement of stockholders' equity. Instead, the Company must report
comprehensive income in either a single continuous statement of
comprehensive income which contains two sections, net income and
other comprehensive income, or in two separate but consecutive
statements. ASU 2011-05 will be effective for public companies
during the interim and annual periods beginning after December 15,
2011 with early adoption permitted. The Company has not adopted
this standard yet and does not expect that the adoption of ASU
2011-05 will have an impact on its consolidated results of
operations, financial condition or cash flows as it only
requires a change in the format of our current presentation.
4
In December 2010, the FASB issued ASU No. 2010-29, "Disclosure of
Supplementary Pro Forma Information for Business Combinations." This
standard requires an entity to disclose revenue and earnings of the
combined entity as though the business combination(s) that occurred
during the current year had occurred as of the beginning of the
comparable prior annual reporting period. ASU No. 2010-29 is effective
prospectively for business combinations that occur on or after the
beginning of the first annual reporting period beginning after
December 15, 2010. The Company does not expect that the adoption of
ASU No. 2010-29 will have an impact on its consolidated results of
operations, financial condition or cash flows.
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, 2011:
Net Sales $1,075,200 $ 465,800 $ - $1,541,000
Foreign Sales 608,700 112,600 - 721,300
Segment Profit (Loss) 135,800 ( 58,600) - 77,200
Segment Assets 2,621,100 1,078,300 1,333,400 5,032,800
Long-Lived Asset
Expenditures 8,200 46,700 - 54,900
Depreciation and
Amortization 11,800 35,300 - 47,100
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
Approximately 63% and 66% of net sales of benchtop laboratory equipment
for the three month periods ended September 30, 2011 and 2010, respectively,
were derived from the Company's main product, the Vortex-Genie 2(R) mixer,
excluding accessories.
Two customers accounted in the aggregate for approximately 20% of the net
sales of the Benchtop Laboratory Equipment Operations and 14% of total
sales for the three months ended September 30, 2011, and 27% of net sales
of the segment and 22% of total sales for the three months ended
September 30, 2010. 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 three
customers represented approximately 91% of the Catalyst Research Instrument
Operations' net sales and 28% of total sales for the three months ended
September 30, 2011. Sales to two different customers represented 75% of the
segment's net sales and 14% 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.
Level 3 Prices or valuation that require inputs that are both
significant to the fair value measurement and unobservable.
6
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, 2011 and June 30, 2011 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,
2011 Level 1 Level 2 Level 3
_____________ __________ _______ ________
Cash and cash equivalents $ 783,100 $ 783,100 $ - $ -
Available for sale securities 695,400 695,400 - -
__________ __________ ______ _______
Total $1,478,500 $1,478,500 $ - $ -
========== ========== ====== =======
Fair Value Measurements Using Inputs
Considered as
Fair Value at
June 30, 2011 Level 1 Level 2 Level 3
_____________ __________ _______ ________
Cash and cash equivalents $ 907,800 $ 907,800 $ - $ -
Available for sale securities 693,400 693,400 - -
__________ __________ _______ ________
Total $1,601,200 $1,601,200 $ - $ -
========== ========== ======= ========
Investments in marketable securities classified as available-for-sale by
security type at September 30, 2011 and June 30, 2011 consisted of the
following:
Unrealized
Fair Holding Gain
Cost Value (Loss)
_____________ ________ ____________
At September 30, 2011:
Available for sale:
Equity securities $ 7,800 $ 13,000 $ 5,200
Mutual funds 710,000 682,400 (27,600)
__________ _________ __________
$ 717,800 $695,400 $ (22,400)
========== ========= ==========
Unrealized
Fair Holding Gain
Cost Value (Loss)
__________ _________ ____________
At June 30, 2011:
Available for sale:
Equity securities $ 7,800 $ 13,300 $ 5,500
Mutual funds 707,100 680,100 (27,000)
__________ _________ __________
$ 714,900 $ 693,400 $ (21,500)
========== ========= ==========
7
5. Inventories:
Inventories for financial statement purposes are based on perpetual
inventory records at September 30, 2011 and June 30, 2011. Components
of inventory are as follows:
September 30, June 30,
2011 2011
__________ __________
Raw Materials $1,114,800 $1,051,300
Work in process 279,000 408,200
Finished Goods 198,800 180,300
__________ __________
$1,592,600 $1,639,800
========== ==========
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,
_______________________
2011 2010
_______________________
Net income $ 59,400 $ 2,200
========== ==========
Weighted average common
shares outstanding 1,196,577 1,196,577
Dilutive securities 14,924 15,413
__________ __________
Weighted average dilutive
common shares outstanding 1,211,501 1,211,990
========= =========
Basic earnings per
common share $ .05 $ -
======== ========
Diluted earnings per
common share $ .05 $ -
======== ========
Approximately 2,000 shares of the Company's Common Stock issuable
upon the exercise of outstanding stock options were excluded from the
calculation of diluted earnings per common share for the three months
ended September 30, 2011, 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,
______________________
2011 2010
______________________
Net income $ 59,400 $ 2,200
Other comprehensive income (loss):
Unrealized holding gain (loss)
arising during period ( 900) 10,400
___________ _________
Comprehensive income $ 58,500 $ 12,600
=========== =========
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
$447,900 as of September 30, 2011 and June 30, 2011, all of which was
deductible for tax purposes. The agreement provided for
contingent payments to the former shareholders based on net sales of
the Catalyst Research Instrument Operations subject to certain limits,
which were earned and paid.
The components of other intangible assets are as follows:
Useful Accumulated
Lives Cost Amortization Net
_______ ________ ____________ _________
At September 30, 2011:
Technology 5 yrs. $300,000 $290,000 $ 10,000
Customer relationships 10 yrs. 237,000 183,200 53,800
Non-compete agreement 5 yrs. 102,000 98,600 3,400
Other intangible assets 5 yrs. 140,300 122,200 18,100
________ ________ _________
$779,300 $694,000 $ 85,300
________ ________ _________
Useful Accumulated
Lives Cost Amortization Net
_______ ________ ____________ _________
At June 30, 2011:
Technology 5 yrs. $300,000 $275,000 $ 25,000
Customer relationships 10 yrs. 237,000 177,200 59,800
Non-compete agreement 5 yrs. 102,000 93,500 8,500
Other intangible assets 5 yrs. 139,000 120,000 19,000
________ ________ ________
$778,000 $665,700 $112,300
________ ________ ________
Total amortization expense was $28,300 and $29,400 for the three months
ended September 30, 2011 and 2010, respectively. As of September 30, 2011,
estimated future amortization expense related to intangible assets is
$32,500 for the remainder of the fiscal year ending June 30, 2012, $15,800
for fiscal 2013, $12,000 for fiscal 2014, $8,400 for fiscal 2015, $13,100
for fiscal 2016, and $3,500 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 decreased by $124,700 to $783,100 as of
September 30, 2011 from $907,800 as of June 30, 2011.
Net cash used in operating activities was $65,600 for the three months
ended September 30, 2011 as compared to cash provided of $359,000 for
the comparable three month period in 2010, due mainly to the higher
accounts receivable balances originating in the current period compared
to the prior period. Cash used in investing activities was $59,100
for the three month period ended September 30, 2011 compared to
$151,800 for the three month period ended September 30, 2010 due
primarily to the consideration paid in the prior year relating to
the acquisition of Altamira Instruments, Inc.
On September 13, 2011, the Board of Directors of the Company declared a
cash dividend of $.05 per share of Common Stock payable on November 18, 2011
to holders of record as of the close of business on September 26, 2011.
The Company's working capital decreased slightly by $6,400 to $3,717,600
at September 30, 2011 from $3,724,000 at June 30, 2011.
The Company has a line of credit with its bank, JPMorgan Chase Bank, N.A.
which provides for maximum borrowings of up to $700,000, to bear interest
at 3.08 percentage points above the defined LIBOR Index. The interest
rate as of September 30, 2011 was approximately 3.33% and is to be
secured by a pledge of collateral consisting of the inventory, accounts,
chattel paper, equipment and general intangibles of the Company.
Outstanding amounts are due and payable by June 13, 2013 with a
requirement that the Company is to reduce the outstanding principal
balance to zero during the 30 day period ending on the anniversary date
of the promissory note. As of September 30, 2011 and June 30, 2011, no
borrowings under the line have been made.
Management believes that the Company will be able to meet its cash flow
needs during the next 12 months, including payments anticipated to be
made upon consummation of a previously reported proposed acquisition of
assets, primarily a license and sublicenses related to the research,
design and development, and sale of bioprocessing products and systems,
from its available financial resources which include its cash and
investment securities.
10
Results of Operations
Financial Overview
The increase in the Company's income before income taxes of $80,800 to
$84,000 for the three month period ended September 30, 2011 compared to
$3,200 for the three month period ended September 30, 2010 was principally
due to a $10,800 increase in segment profit of the Benchtop Laboratory
Equipment Operations and a $72,400 reduction to $58,600 in the segment
loss of the Catalyst Research Instrument Operations resulting from
increased sales within that segment.
The Three Months Ended September 30, 2011 Compared With the Three Months
Ended September 30, 2010
Net sales for the three months ended September 30, 2011 increased by
$285,500 (22.7%) to $1,541,000 from $1,255,500 for the three months
ended September 30, 2010, substantially due to a $232,400 increase in
sales of catalyst research instruments. Sales of these products 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 $268,000 as
of September 30, 2011, all of which are anticipated to be delivered by
fiscal year end; the backlog as of September 30, 2010 was $692,000.
The gross profit percentage for the three months ended September 30, 2011
decreased to 39.2% compared to 40.5% for the three months ended
September 30, 2010, mainly as a result of higher material costs and
product engineering costs incurred to improve certain benchtop laboratory
products.
General and administrative expenses for the three months ended September
30, 2011 increased by $4,100 (1.4%) to $290,900 from $286,800 for the
comparable period of the prior year, mainly due to expenses incurred in
the investigation of other business opportunities.
Selling expenses increased $48,600 (34.6%) to $189,000 for the three month
period ended September 30, 2011 compared to $140,400 for the prior year
period, due to an increase in sales commissions paid to independent sales
representatives, travel expenses incurred by the Catalyst Research
Instruments Operations, costs related to the hiring of a new customer
service representative and a sales consultant for the Benchtop Laboratory
Equipment Operations.
Research and development expenses for the three months ended September
30, 2011 decreased $40,600 (46.4%) to $46,900 from $87,500 for the three
months ended September 30, 2010, primarily the result of a reduction in
new product development activity by the Company.
Interest and other income decreased for the comparative three month
periods by $2,400 (26.1%) to $6,800 from $9,200 mainly as a result of
lower cash balances and lower interest rates.
11
The Company reflected income tax expense for the three months ended
September 30, 2011 of $24,600 on income before income taxes of $84,000
compared to $1,000 on income before income taxes of $3,200 for the three
months ended September 30, 2010.
As a result of the foregoing, the net income for the three months ended
September 30, 2011 was $59,400 compared to $2,200 for the three months
ended September 30, 2010.
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:
Report dated August 9, 2011, related to the death of a member
of the Board of Directors.
Reported dated September 14, 2011, related to cash dividend
declaration.
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: October 27, 2011
14