ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware
|
74-2657168
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
9220 Kirby Drive, Suite 500, Houston, Texas
|
77054
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of Each Class
|
Name of Each Exchange on Which Registered
|
Common Shares, $0.01 Par Value
|
The NASDAQ Capital Market
|
Large accelerated filer
☐
|
Accelerated filer
☐
|
Non-accelerated filer
☐
|
Smaller reporting company
ý
|
(1)
|
Portions of the Registrant’s Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A for the Annual Meeting of Shareholders to be held on November 19, 2015 are incorporated by reference into Part III.
|
PART I
|
||
Item 1
|
4
|
|
Item 1A
|
12
|
|
Item 1B
|
16
|
|
Item 2
|
16
|
|
Item 3
|
16
|
|
Item 4
|
16
|
|
PART II
|
||
Item 5
|
16
|
|
Item 6
|
18
|
|
Item 7
|
19
|
|
Item 7A
|
27
|
|
Item 8
|
27
|
|
Item 9
|
27
|
|
Item 9A
|
27
|
|
Item 9B
|
28
|
|
PART III
|
||
Item 10
|
28
|
|
Item 11
|
29
|
|
Item 12
|
29
|
|
Item 13
|
29
|
|
Item 14
|
29
|
|
PART IV
|
||
Item 15
|
30
|
|
33
|
||
*This Table of Contents is inserted for convenience of reference only and is not a part of this Report as filed.
|
· | A large professional market that consists of dentists, veterinarians, clinics, private practice physicians, urgent care facilities, ambulatory surgical centers and others such as acupuncture and tattoo services. This regulated market consists of small to medium quantity generators of medical, pharmaceutical and hazardous waste where we can offer a lower cost to service with solutions to match individual facility needs. The Company addresses this market from two directions: (i) field sales which focuses on larger-dollar and nationwide opportunities where we can integrate the route-based pickup service along with our mailback solutions to create a comprehensive medical waste management offering and (ii) inside and online sales which focus on the individual or small group professional offices. |
· | The shift of healthcare from traditional settings to the retail pharmacy and clinic markets, where the Company focuses on driving increased promotion of the Sharps Recovery System. The number of U.S. retail clinics is projected to increase significantly, as much as 20%-25% per year, driven by the increasing demand of newly insured patients under healthcare reform, as well as patients looking for more convenient care and retail pharmacies increasing the variety and volume of healthcare services they provide. According to the Centers for Disease Control ("CDC"), 25% of flu shots for adults were administered in a retail clinic with the trend expected to increase. In addition to the continued growth in the flu shot business, there are also growth opportunities for more primary care in the retail or alternative site setting and correspondingly growth opportunities for the Company based on its significant presence in the retail market. A recent study shows that Americans visit retail clinics 10 million times a year, which represents only 2% of "all primary care patient encounters." |
· | The passage of new regulations for ultimate user medication disposal allows the Company to offer new solutions (MedSafe and TakeAway Medication Recovery System envelopes) that meet the regulations for ultimate user controlled substances disposal (Schedules II-V) to retail pharmacies. Additionally, with the new regulations, the Company is able to provide the MedSafe and TakeAway Medication Recovery Systems to assisted living and hospice to address a long standing issue within long-term care. |
· | The changing demographics of the U.S. population - one out of five Americans will be 65 years or older by 2030, which will increase the need for cost-effective medical waste management solutions, especially in the long-term care and home healthcare markets. With multiple solutions for managing regulated healthcare-related waste, the Company delivers value as a single-source provider with blended mailback and route-based pickup services matched to on the waste volumes of each facility. |
· | Local, state and federal agencies have growing needs for solutions to manage medical and pharmaceutical waste — the Company's Sharps Recovery System is ideal for as-needed disposal of sharps and other small quantities of medical waste generated within government buildings, schools and communities. The Company also provides TakeAway Medication Recovery System envelopes and MedSafe solutions to government agencies in need of proper and regulatory compliant medication disposal. |
· | With an increased number of self-injectable medication treatments and local regulations, the Company believes its flagship product, the Sharps Recovery System, continues to offer the best option for proper sharps disposal at an affordable price. The Company delivers premium services to pharmaceutical manufacturers that sell high-dollar, self-injectable medications, which include data management, compliance reporting, fulfillment, proper containment with disposal, branding and conformity with applicable regulations. In addition, the Company provides self-injectors with online and retail purchase options of sharps mailback systems, such as the Sharp Recovery System and Complete Needle Collection & Disposal System, respectively. |
· | A heightened interest by many commercial companies who are looking to improve workplace safety with proper sharps disposal and unused medication disposal solutions — the Company offers a variety of services to meet these needs, including the Sharps Secure Needle Disposal System, Sharps Recovery System, Biohazard Spill Kits and TakeAway Medication Recovery System envelopes. |
· | In July 2015, the Company augmented its network of medical and hazardous waste service providers with an acquisition of a route-based pickup service in the northeast serving Pennsylvania, Maryland and parts of Ohio. Additionally, the Company has begun to service parts of Texas and Louisiana with route-based pickup service. With the addition of these route-based pickup regions and the network of medical and hazardous waste service providers servicing the entire U.S., the Company offers customers a blended product portfolio to effectively manage multi-site and multi-sized locations, including those that generate larger quantities of waste. The network has had a significant positive impact on our pipeline of sales opportunities — over 60% of this pipeline is attributable to opportunities providing comprehensive waste management service offerings where both the mailback and pickup service are integrated into the offering. |
· | The Company has new solution offerings that include ultimate user medication disposal (MedSafe and TakeAway Medication Recovery System) and mailback services for DEA registrant expired inventory of controlled substances (TakeAway Medication Recovery System DEA Reverse Distribution for Registrants). |
· | The Company's strong financial position with a cash balance of $15.2 million and no debt as of June 30, 2015. |
Year Ended June 30,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
BILLINGS BY MARKET:
|
||||||||||||
Retail
|
28
|
%
|
24
|
%
|
24
|
%
|
||||||
Home Health Care
|
22
|
%
|
27
|
%
|
32
|
%
|
||||||
Professional
|
20
|
%
|
20
|
%
|
18
|
%
|
||||||
Pharmaceutical Manufacturer
|
15
|
%
|
14
|
%
|
11
|
%
|
||||||
Assisted Living
|
6
|
%
|
6
|
%
|
7
|
%
|
||||||
Government
|
5
|
%
|
2
|
%
|
3
|
%
|
||||||
Environmental
|
1
|
%
|
3
|
%
|
1
|
%
|
||||||
Other
|
3
|
%
|
4
|
%
|
4
|
%
|
||||||
100
|
%
|
100
|
%
|
100
|
%
|
ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES |
Common Stock
|
||||||||
High
|
Low
|
|||||||
Fiscal Year Ending June 30, 2014
|
||||||||
First Quarter
|
$
|
3.07
|
$
|
2.57
|
||||
Second Quarter
|
$
|
5.10
|
$
|
2.99
|
||||
Third Quarter
|
$
|
5.36
|
$
|
4.19
|
||||
Fourth Quarter
|
$
|
4.70
|
$
|
3.89
|
||||
Fiscal Year Ending June 30, 2015
|
||||||||
First Quarter
|
$
|
4.78
|
$
|
4.31
|
||||
Second Quarter
|
$
|
5.55
|
$
|
4.16
|
||||
Third Quarter
|
$
|
6.35
|
$
|
4.25
|
||||
Fourth Quarter
|
$
|
6.95
|
$
|
5.51
|
||||
Fiscal Year Ending June 30, 2016
|
||||||||
First Quarter (August 24, 2015)
|
$
|
6.99
|
$
|
6.10
|
Plan Category
|
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
|
Weighted average
exercise price of
outstanding
options, warrants
and rights
|
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a)
|
|||||||||
(a)
|
(b)
|
(c)
|
||||||||||
|
|
|
||||||||||
2010 Stock Plan as approved by shareholders (1) (2)
|
1,085,245
|
$
|
4.20
|
1,597,030
|
(1) Represents stock options issued under the Sharps Compliance Corp. 2010 Stock Plan.
The 2010 Stock Plan replaced the 1993 Stock Plan in November 2010. There are 302,558 stock options issued under the 1993 Stock Plan (with a weighted average exercise price of $5.31) which remain outstanding subsequent to the replacement of the 1993 Stock Plan.
|
(2) Number of securities to be issued and weighted average exercise price include the effect of 13,248 shares of restricted stock issued to the Board of Directors.
|
|
For the Year Ended June 30,
|
|||||||||||||||||||
|
2015
|
2014
|
2013
|
2012
|
2011
|
|||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Revenues
|
$
|
30,902
|
$
|
26,570
|
$
|
21,530
|
$
|
21,787
|
$
|
19,395
|
||||||||||
Operating Income (Loss)
|
$
|
1,236
|
$
|
965
|
$
|
(2,709
|
)
|
$
|
(2,521
|
)
|
$
|
(4,536
|
)
|
|||||||
Net Income (Loss)
|
$
|
1,160
|
$
|
956
|
$
|
(2,712
|
)
|
$
|
(3,621
|
)
|
$
|
(2,975
|
)
|
|||||||
|
||||||||||||||||||||
Net Income (Loss) per share:
|
||||||||||||||||||||
Basic
|
$
|
0.08
|
$
|
0.06
|
$
|
(0.18
|
)
|
$
|
(0.24
|
)
|
$
|
(0.20
|
)
|
|||||||
Diluted
|
$
|
0.07
|
$
|
0.06
|
$
|
(0.18
|
)
|
$
|
(0.24
|
)
|
$
|
(0.20
|
)
|
|||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Total Assets
|
$
|
29,751
|
$
|
26,461
|
$
|
25,532
|
$
|
27,638
|
$
|
30,598
|
||||||||||
Total Debt
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||
Cash and Cash Equivalents
|
$
|
15,157
|
$
|
13,717
|
$
|
15,503
|
$
|
17,498
|
$
|
18,280
|
||||||||||
Working Capital
|
$
|
19,711
|
$
|
17,888
|
$
|
16,643
|
$
|
18,607
|
$
|
20,226
|
||||||||||
Total Stockholders' Equity
|
$
|
23,586
|
$
|
21,904
|
$
|
21,070
|
$
|
23,180
|
$
|
25,865
|
Year Ended June 30,
|
||||||||||||||||||||||||
2015
|
%
|
2014
|
%
|
2013
|
%
|
|||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Revenues
|
$
|
30,902
|
100.0
|
%
|
$
|
26,570
|
100.0
|
%
|
$
|
21,530
|
100.0
|
%
|
||||||||||||
Cost of revenues
|
19,907
|
64.4
|
%
|
17,581
|
66.2
|
%
|
15,183
|
70.5
|
%
|
|||||||||||||||
Gross profit
|
10,995
|
35.6
|
%
|
8,989
|
33.8
|
%
|
6,347
|
29.5
|
%
|
|||||||||||||||
SG&A expense
|
9,496
|
30.7
|
%
|
9,100
|
34.2
|
%
|
8,619
|
40.0
|
%
|
|||||||||||||||
Legal settlement
|
-
|
0.0
|
%
|
(1,538
|
)
|
(5.8
|
%)
|
-
|
0.0
|
%
|
||||||||||||||
Depreciation and amortization
|
263
|
0.9
|
%
|
462
|
1.7
|
%
|
437
|
2.0
|
%
|
|||||||||||||||
Operating income (loss)
|
1,236
|
4.0
|
%
|
965
|
3.6
|
%
|
(2,709
|
)
|
(12.6
|
%)
|
||||||||||||||
Other income
|
36
|
0.1
|
%
|
24
|
0.1
|
%
|
12
|
0.1
|
%
|
|||||||||||||||
Income (loss) before income taxes
|
1,272
|
989
|
(2,697
|
)
|
||||||||||||||||||||
Income tax expense
|
112
|
0.4
|
%
|
33
|
0.1
|
%
|
15
|
0.1
|
%
|
|||||||||||||||
Net income (loss)
|
$
|
1,160
|
3.8
|
% |
$
|
956
|
3.6
|
% |
$
|
(2,712
|
)
|
(12.6
|
%) |
Year Ended June 30,
|
||||||||||||
2015
|
2014
|
Variance
|
||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
BILLINGS BY MARKET:
|
|
|
|
|||||||||
Retail
|
$
|
8,726
|
$
|
6,406
|
$
|
2,320
|
||||||
Home Health Care
|
6,802
|
7,251
|
(449
|
)
|
||||||||
Professional
|
6,225
|
5,311
|
914
|
|||||||||
Pharmaceutical Manufacturer
|
4,855
|
3,735
|
1,120
|
|||||||||
Assisted Living
|
1,879
|
1,713
|
166
|
|||||||||
Government
|
1,756
|
495
|
1,261
|
|||||||||
Environmental
|
368
|
755
|
(387
|
)
|
||||||||
Other
|
891
|
941
|
(50
|
)
|
||||||||
Subtotal
|
31,502
|
26,607
|
4,895
|
|||||||||
GAAP Adjustment *
|
(600
|
)
|
(37
|
)
|
(563
|
)
|
||||||
Revenue Reported
|
$
|
30,902
|
$
|
26,570
|
$
|
4,332
|
Year Ended June 30,
|
||||||||||||
2014
|
2013
|
Variance
|
||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
BILLINGS BY MARKET:
|
|
|
|
|||||||||
Home Health Care
|
$
|
7,251
|
$
|
6,721
|
$
|
530
|
||||||
Retail
|
6,406
|
5,041
|
1,365
|
|||||||||
Professional
|
5,311
|
3,863
|
1,448
|
|||||||||
Pharmaceutical Manufacturer
|
3,735
|
2,413
|
1,322
|
|||||||||
Assisted Living
|
1,713
|
1,576
|
137
|
|||||||||
Environmental
|
755
|
182
|
573
|
|||||||||
Government
|
495
|
732
|
(237
|
)
|
||||||||
Other
|
941
|
755
|
186
|
|||||||||
Subtotal
|
26,607
|
21,283
|
5,324
|
|||||||||
GAAP Adjustment *
|
(37
|
)
|
247
|
(284
|
)
|
|||||||
Revenue Reported
|
$
|
26,570
|
$
|
21,530
|
$
|
5,040
|
· | A large professional market that consists of dentists, veterinarians, clinics, private practice physicians, urgent care facilities, ambulatory surgical centers and others such as acupuncture and tattoo services. This regulated market consists of small to medium quantity generators of medical, pharmaceutical and hazardous waste where we can offer a lower cost to service with solutions to match individual facility needs. The Company addresses this market from two directions: (i) field sales which focuses on larger-dollar and nationwide opportunities where we can integrate the route-based pickup service along with our mailback solutions to create a comprehensive medical waste management offering and (ii) inside and online sales which focus on the individual or small group professional offices. |
· | The shift of healthcare from traditional settings to the retail pharmacy and clinic markets, where the Company focuses on driving increased promotion of the Sharps Recovery System. The number of U.S. retail clinics is projected to increase significantly, as much as 20%-25% per year, driven by the increasing demand of newly insured patients under healthcare reform, as well as patients looking for more convenient care and retail pharmacies increasing the variety and volume of healthcare services they provide. According to the Centers for Disease Control ("CDC"), 25% of flu shots for adults were administered in a retail clinic with the trend expected to increase. In addition to the continued growth in the flu shot business, there are also growth opportunities for more primary care in the retail or alternative site setting and correspondingly growth opportunities for the Company based on its significant presence in the retail market. A recent study shows that Americans visit retail clinics 10 million times a year, which represents only 2% of "all primary care patient encounters." |
· | The passage of new regulations for ultimate user medication disposal allows the Company to offer new solutions (MedSafe and TakeAway Medication Recovery System envelopes) that meet the regulations for ultimate user controlled substances disposal (Schedules II-V) to retail pharmacies. Additionally, with the new regulations, the Company is able to provide the MedSafe and TakeAway Medication Recovery Systems to assisted living and hospice to address a long standing issue within long-term care. |
· | The changing demographics of the U.S. population - one out of five Americans will be 65 years or older by 2030, which will increase the need for cost-effective medical waste management solutions, especially in the long-term care and home healthcare markets. With multiple solutions for managing regulated healthcare-related waste, the Company delivers value as a single-source provider with blended mailback and route-based pickup services matched to on the waste volumes of each facility. |
· | Local, state and federal agencies have growing needs for solutions to manage medical and pharmaceutical waste — the Company's Sharps Recovery System is ideal for as-needed disposal of sharps and other small quantities of medical waste generated within government buildings, schools and communities. The Company also provides TakeAway Medication Recovery System envelopes and MedSafe solutions to government agencies in need of proper and regulatory compliant medication disposal. |
· | With an increased number of self-injectable medication treatments and local regulations, the Company believes its flagship product, the Sharps Recovery System, continues to offer the best option for proper sharps disposal at an affordable price. The Company delivers premium services to pharmaceutical manufacturers that sell high-dollar, self-injectable medications, which include data management, compliance reporting, fulfillment, proper containment with disposal, branding and conformity with applicable regulations. In addition, the Company provides self-injectors with online and retail purchase options of sharps mailback systems, such as the Sharp Recovery System and Complete Needle Collection & Disposal System, respectively. |
· | A heightened interest by many commercial companies who are looking to improve workplace safety with proper sharps disposal and unused medication disposal solutions — the Company offers a variety of services to meet these needs, including the Sharps Secure Needle Disposal System, Sharps Recovery System, Biohazard Spill Kits and TakeAway Medication Recovery System envelopes. |
· | In July 2015, the Company augmented its network of medical and hazardous waste service providers with an acquisition of a route-based pickup service in the northeast serving Pennsylvania, Maryland and parts of Ohio. Additionally, the Company has begun to service parts of Texas and Louisiana with route-based pickup service. With the addition of these route-based pickup regions and the network of medical and hazardous waste service providers servicing the entire U.S., the Company offers customers a blended product portfolio to effectively manage multi-site and multi-sized locations, including those that generate larger quantities of waste. The network has had a significant positive impact on our pipeline of sales opportunities — over 60% of this pipeline is attributable to opportunities providing comprehensive waste management service offerings where both the mailback and pickup service are integrated into the offering. |
· | The Company has new solution offerings that include ultimate user medication disposal (MedSafe and TakeAway Medication Recovery System) and mailback services for DEA registrant expired inventory of controlled substances (TakeAway Medication Recovery System DEA Reverse Distribution for Registrants). |
· | The Company’s strong financial position with a cash balance of $15.2 million and no debt as of June 30, 2015. |
Year Ended June 30,
|
||||||||||||||||||||||||
2016
|
2017
|
2018
|
2019
|
2020
|
Thereafter
|
|||||||||||||||||||
Operating lease obligations
|
$
|
743
|
$
|
846
|
$
|
852
|
$
|
867
|
$
|
814
|
$
|
113
|
DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE |
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
Exhibit
Number
|
Description of Exhibit
|
2.1
|
Agreement and Plan of Reorganization between U.S. Medical Systems, Inc., Sharps Compliance, Inc. and its Stockholders, dated February 27, 1998 (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K, filed March 5, 1998).
|
3.1
|
Bylaws of Company (incorporated by reference from Exhibit 3.4 to Form 10-KSB, dated June 30, 1994).
|
3.2
|
Amended and Restated Certificate of Incorporation of U.S. Medical Systems, Inc. (incorporated by reference from Exhibit 3.5 to the Registrant’s Transition Report on Form 10KSB40 filed on September 29, 1998).
|
3.3
|
Certificate of Elimination of the Series A 10% Voting Convertible Preferred Stock of Sharps Compliance Corp. (incorporated by reference from Exhibit 3.6 to Form 10-KSB, filed September 29, 1998).
|
3.4
|
Bylaws of Sharps Compliance Inc. (herein referred to as the Corporation) dated May 23, 1994 (incorporated by reference from Exhibit 3.1 to Form 8-K, filed May 10, 2010).
|
3.5
|
Bylaws of Sharps Compliance Corp (incorporated by reference from Exhibit 3.2 to Form 8-K, filed May 10, 2010).
|
3.6
|
Amended and Restated Bylaws of Sharps Compliance Corp dated May 23, 1994 (incorporated by reference to Exhibit 3.2 to Form 8-K, filed November 19, 2011).
|
4.1
|
Specimen Stock Certificate (incorporated by reference from Exhibit 4.4 to Form-10-KSB, filed September 29, 1998).
|
4.2
|
See Exhibits 3.1, 3.2 and 3.3 for provisions of the Bylaws of the Company, the Articles of Incorporation of the Company and the Certificate of Elimination defining the rights of holders of common shares.
|
10.1
|
Lease Agreement dated as of July 13, 2006, between Sharps Compliance, Inc. and Warehouse Associates Corporate Centre Kirby II, Ltd. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed July 14, 2006).
|
10.2
|
Lease Termination Agreement dated as of July 13, 2006, between Sharps Compliance, Inc., Warehouse Associates Corporate Centre Kirby, Ltd. and Warehouse Associates Corporate Centre Kirby II, Ltd. (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, filed July 14, 2006).
|
10.3
|
Letter Agreement by and between Sharps Compliance Corp. and Claude A. Dance dated December 26, 2007 (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, filed December 26, 2007).*
|
10.4
|
Letter Agreement by and between Sharps Compliance Corp. and Al Aladwani dated March 24, 2008 (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, filed March 12, 2008).*
|
10.5
|
Form of Restricted Stock Award Agreement dated June 9, 2008 (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, filed June 9, 2008).
|
10.6
|
Lease Agreement dated as of January 30, 2009, between Sharps Compliance, Inc. and Park 288 Industrial, LLC (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, filed February 3, 2009).
|
10.7
|
Amended Lease Agreement dated as of May 27, 2009, between Sharps Compliance, Inc. and Park 288 Industrial, LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed June 2, 2009).
|
10.8
|
Sharps Compliance Corp. 1993 Stock Plan, as amended (incorporated by reference from Annex A of the Registrant’s Proxy Statement on Schedule 14A, filed October 21, 2008)
|
10.9
|
Second Amendment to Lease Agreement between Sharps Compliance, Inc. and Warehouse Associates Corporate Centre Kirby II, ltd. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed March 9, 2010).
|
10.10
|
Employment Agreement by and between Sharps Compliance Corp. and David P. Tusa dated June 14, 2010 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed June 14, 2010).*
|
10.11
|
Employment Agreement by and between Sharps Compliance Corp. and Diana P. Diaz dated June 14, 2010 (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K, filed June 14, 2010).*
|
10.12
|
Contract No. V797P-DSNS-9005 dated January 29, 2009 by and between the Department of Veterans Affairs and Sharps Compliance Corp. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed June 25, 2010). **
|
10.13
|
Sharps Compliance Corp. 2010 Stock Plan dated November 22, 2010 (incorporated by reference to the Registrant’s Form S-8, filed on November 22, 2010).
|
10.14
|
Employment Agreement by and between Sharps Compliance, Inc. and Gregory C. Davis dated May 18, 2011 (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, filed May 18, 2011).
|
10.15
|
Executive Employment Agreement Amendment between Sharps Compliance, Inc. and David P. Tusa dated March 6, 2012 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed March 7, 2012).*
|
10.16
|
Executive Employment Agreement Amendment between Sharps Compliance, Inc. and Claude A. Dance dated March 6, 2012 (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, filed March 7, 2012).*
|
10.17
|
Executive Employment Agreement Amendment between Sharps Compliance, Inc. and Diana P. Diaz dated March 6, 2012 (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K, filed March 7, 2012).*
|
10.18
|
Employment Agreement by and between Sharps Compliance, Inc. and Berkley C. Nelson dated February 28, 2013 (incorporated by reference to Exhibit 10.1 and Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, filed February 19, 2013).
|
10.19
|
Restated Credit Agreement effective April 30, 2013, by and between Sharps Compliance, Inc. and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed on May 6, 2013).
|
10.20
|
Revolving Line of Credit effective April 30, 2013, by and between Sharps Compliance, Inc. and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, filed on May 6, 2013).
|
10.21
|
Security Agreement effective April 30, 2013, by and between Sharps Compliance, Inc. and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K, filed on May 6, 2013).
|
10.22
|
Letter Agreement between Sharps Compliance, Inc. and Brandon Beaver dated October 21, 2013 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed October 23, 2013).*
|
10.23
|
Letter Loan Agreement dated January 28, 2014, by and between Sharps Compliance, Inc. and a commercial bank (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed on January 30, 2014).
|
10.24
|
Revolving Line of Credit Promissory Note dated January 28, 2014, by and between Sharps Compliance, Inc. and a commercial bank (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, filed on January 30, 2014).
|
10.25
|
Security Agreement dated January 28, 2014, by and between Sharps Compliance, Inc. and a commercial bank. (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K, filed on January 30, 2014).
|
10.26
|
Fourth Amendment to Lease Agreement dated June 24, 2014, between Sharps Compliance, Inc. and Park 288 Industrial, LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed on June 24, 2014).
|
10.27
|
Third Amendment to Lease Agreement dated February 13, 2015, between Sharps Compliance, Inc. and Warehouse Associates Corporate Centre Kirby II, Ltd. (incorporated by reference to 10.1 to the Registrant’s Current Report on Form 8-K, filed on February 17, 2015).
|
10.28
|
Loan Agreement dated April 9, 2015, by and between Sharps Compliance, Inc. and a commercial bank (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed on April 13, 2015).
|
10.29 |
Fourth Amendment to Lease Agreement dated August 5, 2015, between Sharps Compliance Inc. and Warehouse Associates Corporate Centre Kirby IV, Ltd. (filed herewith).
|
14.10
|
Sharps Compliance Corp. Code of Ethics (incorporated by reference to Exhibit 14.1 to the Registrant’s Current Report on Form 10-KSB, filed on September 20, 2004).
|
Subsidiaries of Sharps Compliance Corp. (filed herewith).
|
|
Consent of BDO USA, LLP (filed herewith).
|
|
Consent of UHY LLP (filed herewith).
|
|
Certification of Chief Executive Officer in accordance with Section 302 of the Sarbanes-Oxley Act (filed herewith).
|
|
Certification of Chief Financial Officer in accordance with Section 302 of the Sarbanes-Oxley Act (filed herewith).
|
|
Certification of Chief Executive Officer in accordance with Section 906 of the Sarbanes-Oxley Act (filed herewith).
|
|
Certification of Chief Financial Officer in accordance with Section 906 of the Sarbanes-Oxley Act (filed herewith).
|
|
101.INS
|
XBRL Instance Document (filed herewith)
|
101.SCH
|
XBRL Taxonomy Extension Schema Document (filed herewith)
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith)
|
101.DEF
|
XBRL Taxonomy Extension Linkbase Document (filed herewith)
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document (filed herewith)
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith)
|
* | This exhibit is a management contract or a compensatory plan or arrangement. |
** | Portions of this exhibit have been omitted pursuant to a request for confidential treatment. |
SHARPS COMPLIANCE CORP.
|
|
Dated: August 26, 2015
|
By: /s/ DAVID P. TUSA
|
David P. Tusa
|
|
Chief Executive Officer and President
|
|
(Principal Executive Officer)
|
Dated: August 26, 2015
|
By: /s/ DAVID P. TUSA
|
David P. Tusa
|
|
Chief Executive Officer and President
|
|
(Principal Executive Officer)
|
|
Dated: August 26, 2015
|
By: /s/ DIANA P. DIAZ
|
Diana P. Diaz
|
|
Vice President
|
|
Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|
|
Dated: August 26, 2015
|
By: /s/ F. GARDNER PARKER
|
F. Gardner Parker
|
|
Chairman of the Board Of Directors
|
|
Dated: August 26, 2015
|
By: /s/ JOHN W. DALTON
|
John W. Dalton
|
|
Director
|
|
Dated: August 26, 2015
|
By: /s/ PARRIS H. HOLMES
|
Parris H. Holmes
|
|
Director
|
|
Dated: August 26, 2015
|
By: /s/ PHILIP C. ZERRILLO
|
Philip C. Zerrillo
|
|
Director
|
CONSOLIDATED FINANCIAL STATEMENTS
|
PAGE
|
Reports of Independent Registered Public Accounting Firms
|
F-2
|
Consolidated Balance Sheets as of June 30, 2015 and 2014
|
F-4
|
Consolidated Statements of Operations for the Years Ended June 30, 2015, 2014 and 2013
|
F-5
|
Consolidated Statements of Stockholders’ Equity for the Years Ended June 30, 2015, 2014 and 2013
|
F-6
|
Consolidated Statements of Cash Flows for the Years Ended June 30, 2015, 2014 and 2013
|
F-7
|
Notes to Consolidated Financial Statements
|
F-8
|
/s/ BDO USA, LLP
|
|
Houston, Texas
|
|
August 26, 2015
|
/s/ UHY LLP
|
|
Houston, Texas
|
|
August 27, 2014
|
Year Ended June 30,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
|
|
|||||||||||
|
|
|
||||||||||
REVENUES
|
$
|
30,902
|
$
|
26,570
|
$
|
21,530
|
||||||
Cost of revenues
|
19,907
|
17,581
|
15,183
|
|||||||||
GROSS PROFIT
|
10,995
|
8,989
|
6,347
|
|||||||||
Selling, general and administrative
|
9,496
|
9,100
|
8,619
|
|||||||||
Legal settlement
|
-
|
(1,538
|
)
|
-
|
||||||||
Depreciation and amortization
|
263
|
462
|
437
|
|||||||||
OPERATING INCOME (LOSS)
|
1,236
|
965
|
(2,709
|
)
|
||||||||
OTHER INCOME (EXPENSE)
|
||||||||||||
Interest income
|
36
|
24
|
27
|
|||||||||
Other expense
|
-
|
-
|
(15
|
)
|
||||||||
TOTAL OTHER INCOME
|
36
|
24
|
12
|
|||||||||
INCOME (LOSS) BEFORE INCOME TAXES
|
1,272
|
989
|
(2,697
|
)
|
||||||||
INCOME TAX EXPENSE
|
||||||||||||
Current
|
112
|
33
|
15
|
|||||||||
TOTAL INCOME TAX EXPENSE
|
112
|
33
|
15
|
|||||||||
NET INCOME (LOSS)
|
$
|
1,160
|
$
|
956
|
$
|
(2,712
|
)
|
|||||
NET INCOME (LOSS) PER COMMON SHARE
|
||||||||||||
Basic
|
$
|
0.08
|
$
|
0.06
|
$
|
(0.18
|
)
|
|||||
Diluted
|
$
|
0.07
|
$
|
0.06
|
$
|
(0.18
|
)
|
|||||
WEIGHTED AVERAGE SHARES USED IN COMPUTING NET INCOME (LOSS) PER COMMON SHARE:
|
||||||||||||
Basic
|
15,327
|
15,289
|
15,255
|
|||||||||
Diluted
|
15,564
|
15,401
|
15,255
|
|
Common Stock
|
Treasury Stock
|
|
Retained Earnings
|
|
|||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Additional Paid-in
Capital
|
(Accumulated
Deficit)
|
Total Stockholders'
Equity
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balances, June 30, 2012
|
15,206,127
|
$
|
152
|
-
|
$
|
-
|
$
|
22,537
|
$
|
491
|
$
|
23,180
|
||||||||||||||||
Exercise of stock options
|
100,445
|
1
|
-
|
-
|
161
|
-
|
162
|
|||||||||||||||||||||
Stock-based compensation
|
-
|
-
|
-
|
-
|
514
|
-
|
514
|
|||||||||||||||||||||
Issuance of restricted stock
|
63,748
|
1
|
-
|
-
|
(1
|
)
|
-
|
-
|
||||||||||||||||||||
Shares repurchased
|
-
|
-
|
(25,360
|
)
|
(74
|
)
|
-
|
-
|
(74
|
)
|
||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
(2,712
|
)
|
(2,712
|
)
|
|||||||||||||||||||
Balances, June 30, 2013
|
15,370,320
|
154
|
(25,360
|
)
|
(74
|
)
|
23,211
|
(2,221
|
)
|
21,070
|
||||||||||||||||||
Exercise of stock options
|
13,125
|
-
|
-
|
-
|
47
|
-
|
47
|
|||||||||||||||||||||
Stock-based compensation
|
-
|
-
|
-
|
-
|
438
|
-
|
438
|
|||||||||||||||||||||
Issuance of restricted stock
|
77,495
|
1
|
-
|
-
|
(1
|
)
|
-
|
-
|
||||||||||||||||||||
Shares repurchased
|
-
|
-
|
(136,441
|
)
|
(607
|
)
|
-
|
-
|
(607
|
)
|
||||||||||||||||||
Net income
|
-
|
-
|
-
|
-
|
-
|
956
|
956
|
|||||||||||||||||||||
Balances, June 30, 2014
|
15,460,940
|
155
|
(161,801
|
)
|
(681
|
)
|
23,695
|
(1,265
|
)
|
21,904
|
||||||||||||||||||
Exercise of stock options
|
61,109
|
-
|
-
|
-
|
139
|
-
|
139
|
|||||||||||||||||||||
Stock-based compensation
|
-
|
-
|
-
|
-
|
511
|
-
|
511
|
|||||||||||||||||||||
Issuance of restricted stock
|
52,992
|
1
|
-
|
-
|
(1
|
)
|
-
|
-
|
||||||||||||||||||||
Shares repurchased
|
-
|
-
|
(29,449
|
)
|
(128
|
)
|
-
|
-
|
(128
|
)
|
||||||||||||||||||
Net income
|
-
|
-
|
-
|
-
|
-
|
1,160
|
1,160
|
|||||||||||||||||||||
Balances, June 30, 2015
|
15,575,041
|
$
|
156
|
(191,250
|
)
|
$
|
(809
|
)
|
$
|
24,344
|
$
|
(105
|
)
|
$
|
23,586
|
|
Year Ended June 30,
|
|||||||||||
|
2015
|
2014
|
2013
|
|||||||||
|
|
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|||||||||
Net income (loss)
|
$
|
1,160
|
$
|
956
|
$
|
(2,712
|
)
|
|||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
||||||||||||
Depreciation and amortization
|
830
|
1,105
|
1,103
|
|||||||||
Loss on disposal of property, plant and equipment
|
-
|
-
|
16
|
|||||||||
Loss on inventory write-down
|
-
|
156
|
-
|
|||||||||
Stock-based compensation expense
|
511
|
438
|
514
|
|||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Restricted cash
|
111
|
-
|
(111
|
)
|
||||||||
Accounts receivable
|
(1,919
|
)
|
(2,133
|
)
|
(380
|
)
|
||||||
Legal settlement receivable
|
1,538
|
(1,538
|
)
|
-
|
||||||||
Inventory
|
(1,418
|
)
|
156
|
587
|
||||||||
Prepaid and other current assets
|
(259
|
)
|
109
|
27
|
||||||||
Accounts payable and accrued liabilities
|
1,109
|
164
|
313
|
|||||||||
Deferred revenue
|
499
|
(69
|
)
|
(309
|
)
|
|||||||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
|
2,162
|
(656
|
)
|
(952
|
)
|
|||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||||||
Purchase of property, plant and equipment
|
(727
|
)
|
(468
|
)
|
(909
|
)
|
||||||
Additions to intangible assets
|
(6
|
)
|
(102
|
)
|
(222
|
)
|
||||||
NET CASH USED IN INVESTING ACTIVITIES
|
(733
|
)
|
(570
|
)
|
(1,131
|
)
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
Proceeds from exercise of stock options
|
139
|
47
|
162
|
|||||||||
Shares repurchased
|
(128
|
)
|
(607
|
)
|
(74
|
)
|
||||||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
|
11
|
(560
|
)
|
88
|
||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
1,440
|
(1,786
|
)
|
(1,995
|
)
|
|||||||
CASH AND CASH EQUIVALENTS, beginning of year
|
13,717
|
15,503
|
17,498
|
|||||||||
CASH AND CASH EQUIVALENTS, end of year
|
$
|
15,157
|
$
|
13,717
|
$
|
15,503
|
||||||
SUPPLEMENTAL CASH FLOW DISCLOSURES:
|
||||||||||||
Income taxes paid, net of refunds
|
$
|
58
|
$
|
22
|
$
|
18
|
|
Year Ended
|
|||||||||||
|
June 30,
|
|||||||||||
|
2015
|
2014
|
2013
|
|||||||||
Stock-based compensation expense included in:
|
|
|
|
|||||||||
|
|
|
||||||||||
Cost of revenue
|
$
|
22
|
$
|
18
|
$
|
21
|
||||||
Selling, general and administrative
|
489
|
420
|
493
|
|||||||||
Total
|
$
|
511
|
$
|
438
|
$
|
514
|
|
Year Ended June 30,
|
|||||||||||
|
2015
|
2014
|
2013
|
|||||||||
|
|
|
|
|||||||||
Weighted average risk-free interest rate
|
0.4
|
%
|
0.6
|
%
|
0.5
|
%
|
||||||
Weighted average expected volatility
|
45
|
%
|
52
|
%
|
58
|
%
|
||||||
Weighted average expected life (in years)
|
3.49
|
4.04
|
4.61
|
|||||||||
Dividend yield
|
-
|
-
|
-
|
Year Ending June 30,
|
|
|||
2016
|
$
|
56
|
||
2017
|
55
|
|||
2018
|
53
|
|||
2019
|
53
|
|||
2020
|
53
|
|||
Thereafter
|
396
|
|||
|
$
|
666
|
|
|
June 30,
|
|||||||
Useful Life
|
2015
|
2014
|
|||||||
Furniture and fixtures
|
3 to 5 years
|
$
|
192
|
$
|
192
|
||||
Plant and equipment
|
3 to 17 years
|
6,410
|
6,153
|
||||||
Manufacturing
|
15 years
|
220
|
252
|
||||||
Computers and software
|
3 to 5 years
|
1,832
|
1,657
|
||||||
Leasehold improvements
|
3 to 15 years
|
897
|
897
|
||||||
Land
|
|
19
|
19
|
||||||
Construction-in-progress
|
|
276
|
7
|
||||||
|
9,846
|
9,177
|
|||||||
Less: accumulated depreciation
|
|
6,036
|
5,319
|
||||||
|
|||||||||
Net property, plant and equipment
|
|
$
|
3,810
|
$
|
3,858
|
|
Year ended June 30,
|
|||||||||||
|
2015
|
2014
|
2013
|
|||||||||
|
|
|
|
|||||||||
Current
|
|
|
|
|||||||||
Federal
|
$
|
29
|
$
|
13
|
$
|
-
|
||||||
State
|
83
|
20
|
15
|
|||||||||
$
|
112
|
$
|
33
|
$
|
15
|
|
Year Ended June 30,
|
|||||||||||
|
2015
|
2014
|
2013
|
|||||||||
|
|
|
|
|||||||||
Statutory rate
|
34.0
|
%
|
34.0
|
%
|
34.0
|
%
|
||||||
State income taxes, net
|
5.3
|
%
|
(6.9
|
%)
|
(0.4
|
%)
|
||||||
Meals and entertainment
|
1.2
|
%
|
1.2
|
%
|
(0.5
|
%)
|
||||||
Prior year adjustments and other
|
0.0
|
%
|
(4.0
|
%)
|
0.5
|
%
|
||||||
Effective rate before valuation allowance
|
40.5
|
%
|
24.3
|
%
|
33.6
|
%
|
||||||
Change in valuation allowance
|
(31.7
|
%)
|
(21.0
|
%)
|
(34.2
|
%)
|
||||||
Effective tax rate
|
8.8
|
%
|
3.3
|
%
|
(0.6
|
%)
|
|
June 30,
|
|||||||
|
2015
|
2014
|
||||||
Deferred tax assets relating to:
|
|
|||||||
Stock compensation
|
$
|
892
|
$
|
834
|
||||
AMT and research and development credits
|
455
|
410
|
||||||
Deferred rent
|
44
|
23
|
||||||
Inventory
|
92
|
58
|
||||||
Professional fees
|
163
|
51
|
||||||
Accrued vacation
|
23
|
23
|
||||||
Accounts receivable allowance
|
13
|
8
|
||||||
Contribution carryovers
|
31
|
14
|
||||||
Net operating loss carryforwards
|
1,124
|
1,751
|
||||||
Total deferred tax assets
|
2,837
|
3,172
|
||||||
Deferred tax liablities related to depreciation differences
|
(555
|
)
|
(487
|
)
|
||||
Net deferred tax assets before valuation allowance
|
2,282
|
2,685
|
||||||
Valuation allowance
|
(2,282
|
)
|
(2,685
|
)
|
||||
Net deferred tax assets
|
$
|
-
|
$
|
-
|
|
Year Ended June 30,
|
|||||||||||
|
2015
|
2014
|
2013
|
|||||||||
|
|
|
|
|||||||||
Options Exercised
|
61,109
|
13,125
|
100,445
|
|||||||||
Proceeds (in thousands)
|
$
|
139
|
$
|
47
|
$
|
162
|
||||||
Average exercise price per share
|
$
|
2.30
|
$
|
3.53
|
$
|
1.62
|
Year Ended June 30,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
|
|
|
||||||||||
Shares repurchased
|
29,449
|
136,441
|
25,360
|
|||||||||
Cash paid for shares repurchased (in thousands)
|
$
|
128
|
$
|
607
|
$
|
74
|
||||||
Average price paid per share
|
$
|
4.35
|
$
|
4.45
|
$
|
2.93
|
June 30,
|
2010 Stock
Plan
|
|||
|
|
|||
2015
|
1,597,030
|
|||
2014
|
139,267
|
|||
2013
|
296,308
|
|
Options
Outstanding
|
Weighted
Average
Exercise
Price
|
||||||
Balance at June 30, 2012
|
1,078
|
$
|
4.60
|
|||||
Granted
|
178
|
$
|
2.90
|
|||||
Exercised
|
(100
|
)
|
$
|
1.62
|
||||
Forfeited or canceled
|
(280
|
)
|
$
|
5.82
|
||||
Balance at June 30, 2013
|
876
|
$
|
4.21
|
|||||
Granted
|
244
|
$
|
3.95
|
|||||
Exercised
|
(13
|
)
|
$
|
3.53
|
||||
Forfeited or canceled
|
(157
|
)
|
$
|
3.50
|
||||
Balance at June 30, 2014
|
950
|
$
|
4.27
|
|||||
Granted
|
516
|
$
|
4.63
|
|||||
Exercised
|
(61
|
)
|
$
|
2.30
|
||||
Forfeited or canceled
|
(30
|
)
|
$
|
4.68
|
||||
Balance at June 30, 2015
|
1,375
|
$
|
4.49
|
|||||
Exercisable at June 30, 2015
|
625
|
$
|
4.63
|
|
Year Ended June 30,
|
|||||||||||
|
2015
|
2014
|
2013
|
|||||||||
|
||||||||||||
Unvested at beginning of the year
|
15
|
15
|
17
|
|||||||||
Granted
|
53
|
62
|
62
|
|||||||||
Vested
|
(55
|
)
|
(62
|
)
|
(64
|
)
|
||||||
Unvested at end of the year
|
13
|
15
|
15
|
Options Outstanding
|
|||||||||||||
Range of
Exercise Price
|
Outstanding
as of
June 30, 2015
|
Weighted
Average
Remaining
Life
(in Years)
|
Weighted
Average
Exercise
Price
|
||||||||||
|
|
|
|
||||||||||
$ |
0.00 - $2.50
|
56
|
0.35
|
$
|
2.10
|
||||||||
$ |
2.51 - $3.50
|
173
|
4.99
|
$
|
2.97
|
||||||||
$ |
3.51 - $5.50
|
939
|
4.60
|
$
|
4.34
|
||||||||
$ |
5.51 - $7.50
|
110
|
6.73
|
$
|
5.79
|
||||||||
$ |
7.51- $9.50
|
97
|
1.12
|
$
|
8.50
|
||||||||
|
1,375
|
$
|
4.49
|
Options Exercisable
|
|||||||||||||
Range of
Exercise Price
|
Exercisable
as of
June 30, 2015
|
Weighted
Average
Remaining
Life
(in Years)
|
Weighted
Average
Exercise
Price
|
||||||||||
|
|
|
|
||||||||||
$ |
0.00 - $2.50
|
56
|
0.35
|
$
|
2.10
|
||||||||
$ |
2.51 - $3.50
|
59
|
4.85
|
$
|
2.96
|
||||||||
$ |
3.51 - $5.50
|
414
|
2.84
|
$
|
4.31
|
||||||||
$ |
5.51 - $7.50
|
-
|
-
|
$
|
-
|
||||||||
$ |
7.51- $9.50
|
96
|
1.12
|
$
|
8.50
|
||||||||
|
625
|
$
|
4.63
|
|
Year Ended June 30,
|
|||||||||||||||||||||||
|
2016
|
2017
|
2018
|
2019
|
2020
|
Thereafter
|
||||||||||||||||||
Operating lease obligations
|
$
|
743
|
$
|
846
|
$
|
852
|
$
|
867
|
$
|
814
|
$
|
113
|
|
Year Ended June 30,
|
|||||||||||
|
2015
|
2014
|
2013
|
|||||||||
|
|
|
||||||||||
Net income (loss), as reported
|
$
|
1,160
|
$
|
956
|
$
|
(2,712
|
)
|
|||||
Weighted average common shares outstanding
|
15,327
|
15,289
|
15,255
|
|||||||||
Effect of dilutive stock options
|
237
|
112
|
-
|
|||||||||
Weighted average diluted common shares outstanding
|
15,564
|
15,401
|
15,255
|
|||||||||
Net income (loss) per common share
|
||||||||||||
Basic
|
$
|
0.08
|
$
|
0.06
|
$
|
(0.18
|
)
|
|||||
Diluted
|
$
|
0.07
|
$
|
0.06
|
$
|
(0.18
|
)
|
|||||
Employee stock options excluded from computation of diluted income per share amounts because their effect would be anti-dilutive
|
210
|
655
|
728
|
Quarter Ended
|
||||||||||||||||
September 30,
2014
|
December 31,
2014
|
March 31,
2015
|
June 30,
2015
|
|||||||||||||
Total revenues
|
$
|
7,047
|
$
|
8,693
|
$
|
6,171
|
$
|
8,991
|
||||||||
Cost of revenues
|
$
|
4,713
|
$
|
5,465
|
$
|
4,511
|
$
|
5,218
|
||||||||
Operating income (loss)
|
$
|
(74
|
)
|
$
|
744
|
$
|
(808
|
)
|
$
|
1,374
|
||||||
Net income (loss)
|
$
|
(74
|
)
|
$
|
749
|
$
|
(812
|
)
|
$
|
1,297
|
||||||
Net income (loss) per share - diluted
|
$
|
(0.00
|
)
|
$
|
0.05
|
$
|
(0.05
|
)
|
$
|
0.08
|
||||||
Weighted average shares-diluted
|
15,288
|
15,423
|
15,360
|
15,804
|
||||||||||||
Quarter Ended
|
||||||||||||||||
September 30,
2013
|
December 31,
2013
|
March 31,
2014
|
June 30,
2014
|
|||||||||||||
Total revenues
|
$
|
6,272
|
$
|
7,649
|
$
|
5,553
|
$
|
7,096
|
||||||||
Cost of revenues
|
$
|
3,948
|
$
|
4,960
|
$
|
4,144
|
$
|
4,529
|
||||||||
Operating income (loss)
|
$
|
130
|
$
|
120
|
$
|
(935
|
)
|
$
|
1,650
|
|||||||
Net income (loss)
|
$
|
122
|
$
|
120
|
$
|
(935
|
)
|
$
|
1,649
|
|||||||
Net income (loss) per share - diluted
|
$
|
0.01
|
$
|
0.01
|
$
|
(0.06
|
)
|
$
|
0.11
|
|||||||
Weighted average shares-diluted
|
15,366
|
15,438
|
15,248
|
15,381
|
A. | Tenant will lease an additional 9,368 rentable square feet at 9310 Kirby Drive in Warehouse Associates Corporate Centre Kirby IV. See attached Exhibit “A”. Tenant will be allowed to move into lease space on the established Effective Date as defined below. |
B. | The lease term shall be sixty-three (63) months. The Lease Commencement date and rent commencement date shall be ninety (90) days from the Effective date. |
C. | The Net Monthly Base Rent for this lease space will be: Months 1 – 3 will be $0; Months 4 - 63 will be $1.40 per square foot $13,115.20 per month. In addition to base rent, Tenant shall also pay $0.39 per square foot $3,653.52 per month for estimated operating expenses. |
D. | The lease expiration for the 9,368 square foot space shall be sixty-three (63) months from the Lease Commencement date. |
E. | Landlord will provide a Tenant allowance $44.20 per square foot ($414,065.60) to be used for construction as outlined in the attached bid dated July 28, 2015 from Horizon Builders (see attached Exhibit “B”) in the amount of $441,685. Tenant shall be responsible for the cost difference in this bid of $27,620 above the Tenant allowance. Tenants construction plan is outlined in Exhibit “C” |
F. | Tenant shall have the right to terminate the lease on the 9,368 square foot space at the point at which Tennant enters into a new lease for approximately 21,307 square feet at 9220 Kirby Drive, Suite 100 (currently occupied by Harris County Public Library). The base rental rate for this space will be $1.25 per square foot plus operating expenses. There will not be a gap in rent payments from the 9,368 sf space to the 21,307 sf space. This space will be available as early as December 31, 2016 and as late as July 1, 2017. |
G. | In the event that Tenant leases the 21,307 sf space, the rent will commence immediately on the day after either expiration date for the Harris County Public Library as listed in paragraph “F” above, or the date at which they vacate the premises and the premises are in acceptable condition for occupancy by Tenant. The 21,307 sf space will be leased in “AS-IS” condition. |
LANDLORD:
|
Warehouse Associates Corporate Centre Kirby II, Ltd
|
Warehouse Associates Corporate Centre Kirby IV, Ltd
|
By:
|
/s/ David R. David
|
|
Name:
|
David R. David
|
|
Its:
|
Authorized Agent
|
|
TENANT: Sharps Compliance, Inc
|
||
By:
|
/s/ Diana P. Diaz
|
|
Name:
|
Diana P. Diaz
|
|
Its:
|
Vice President and Chief Financial Officer
|
Name
|
Jurisdiction of Incorporation
|
Sharps Compliance, Inc. of Texas (dba Sharps Compliance, Inc.)
|
Texas
|
Sharps e-Tools.com, Inc.
|
Delaware
|
Sharps Safety, Inc.
|
Texas
|
Sharps Manufacturing, Inc.
|
Delaware
|
Sharps Environmental Services, Inc. (dba Sharps Environmental Services of Texas, Inc.)
|
Delaware
|
Alpha Bio/Med Services LLC*
|
Pennsylvania
|
1. | I have reviewed this annual report on Form 10-K of Sharps Compliance Corp; |
2. | Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 26, 2015
|
By:
/s/ DAVID P. TUSA
|
David P. Tusa
|
|
Chief Executive Officer and President
|
|
(Principal Executive Officer)
|
1. | I have reviewed this annual report on Form 10-K of Sharps Compliance Corp; |
2. | Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 26, 2015
|
By:
/s/ DIANA P. DIAZ
|
Diana P. Diaz
|
|
Vice President and Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|
(1) | The Form 10-K report for the year ended June 30, 2015, filed with the Securities and Exchange Commission on August 26, 2015 fully complies with the requirements of Section 13 (a) or 15(d) of the Securities and Exchange Act of 1934; and |
(2) | The information contained in the Form 10-K report for the year ended June 30, 2015 fairly presents, in all material respects, the financial condition and results of operations of Sharps Compliance Corp. |
Date: August 26, 2015
|
By:
/s/ DAVID P. TUSA
|
David P. Tusa
|
|
Chief Executive Officer and President
|
|
(Principal Executive Officer)
|
(1) | The Form 10-K report for the year ended June 30, 2015, filed with the Securities and Exchange Commission on August 26, 2015, fully complies with the requirements of Section 13 (a) or 15(d) of the Securities and Exchange Act of 1934; and |
(2) | The information contained in the Form 10-K report for the year ended June 30, 2015 fairly presents, in all material respects, the financial condition and results of operations of Sharps Compliance Corp. |
Date: August 26, 2015
|
By:
/s/ DIANA P. DIAZ
|
Diana P. Diaz
|
|
Vice President and Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|