Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Sep. 30, 2018 | Nov. 13, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | Flux Power Holdings, Inc. | |
Entity Central Index Key | 1,083,743 | |
Trading Symbol | flux | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Current Reporting Status | Yes | |
Entity Common Stock, Shares Outstanding | 46,932,368 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) | Sep. 30, 2018 | Jun. 30, 2018 |
Current assets: | ||
Cash | $ 504,000 | $ 2,706,000 |
Accounts receivable | 551,000 | 946,000 |
Inventories | 2,569,000 | 1,512,000 |
Other current assets | 77,000 | 92,000 |
Total current assets | 3,701,000 | 5,256,000 |
Other assets | 26,000 | 26,000 |
Property, plant and equipment, net | 120,000 | 87,000 |
Total assets | 3,847,000 | 5,369,000 |
Current liabilities: | ||
Accounts payable | 730,000 | 417,000 |
Accrued expenses | 371,000 | 391,000 |
Line of credit - related party | 10,380,000 | 10,380,000 |
Convertible promissory note - related party | 500,000 | 500,000 |
Accrued interest | 1,288,000 | 1,014,000 |
Total current liabilities | 13,269,000 | 12,702,000 |
Long term liabilities: | ||
Customer deposits from related party | 98,000 | 102,000 |
Total liabilities | 13,367,000 | 12,804,000 |
Stockholders' deficit: | ||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; none issued and outstanding | 0 | 0 |
Common stock, $0.001 par value; 300,000,000 shares authorized; 31,110,783 and 31,060,028 shares issued and outstanding at September 30, 2018 and June 30, 2018, respectively | 31,000 | 31,000 |
Additional paid-in capital | 19,512,000 | 19,196,000 |
Accumulated deficit | (29,063,000) | (26,662,000) |
Total stockholders' deficit | (9,520,000) | (7,435,000) |
Total liabilities and stockholders' deficit | $ 3,847,000 | $ 5,369,000 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2018 | Jun. 30, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 31,110,783 | 31,060,028 |
Common stock, shares outstanding | 31,110,783 | 31,060,028 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||
Net revenue | $ 1,835,000 | $ 153,000 |
Cost of sales | 1,817,000 | 314,000 |
Gross profit (loss) | 18,000 | (161,000) |
Operating expenses: | ||
Selling and administrative expenses | 1,483,000 | 671,000 |
Research and development | 662,000 | 478,000 |
Total operating expenses | 2,145,000 | 1,149,000 |
Operating loss | (2,127,000) | (1,310,000) |
Other income (expense): | ||
Interest expense | (274,000) | (136,000) |
Net loss | $ (2,401,000) | $ (1,446,000) |
Net loss per share - basic and diluted (in dollars per share) | $ (0.08) | $ (0.06) |
Weighted average number of common shares outstanding - basic and diluted (in shares) | 31,068,411 | 25,086,794 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (2,401,000) | $ (1,446,000) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation | 11,000 | 12,000 |
Stock-based compensation | 164,000 | 11,000 |
Stock issuance for services | 152,000 | 12,000 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 395,000 | 6,000 |
Inventories | (1,057,000) | (190,000) |
Other current assets | 15,000 | 45,000 |
Accounts payable | 313,000 | (94,000) |
Accrued expenses | (20,000) | (58,000) |
Accrued interest | 274,000 | 158,000 |
Customer deposits | (4,000) | (5,000) |
Net cash used in operating activities | (2,158,000) | (1,549,000) |
Cash flows from investing activities | ||
Purchases of equipment | (44,000) | (27,000) |
Net cash used in investing activities | (44,000) | (27,000) |
Cash flows from financing activities: | ||
Borrowings from line of credit - related party debt | 0 | 1,495,000 |
Net cash provided by financing activities | 0 | 1,495,000 |
Net change in cash | (2,202,000) | (81,000) |
Cash, beginning of period | 2,706,000 | 121,000 |
Cash, end of period | 504,000 | 40,000 |
Supplemental Disclosures of Non-Cash Investing and Financing Activities: | ||
Stock issuance for services | $ 152,000 | $ 12,000 |
Note 1 - Nature of Business
Note 1 - Nature of Business | 3 Months Ended |
Sep. 30, 2018 | |
Notes To Financial Statements [Abstract] | |
Nature of Business | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules of the Securities and Exchange Commission (“SEC”) applicable to interim reports of companies filing as a smaller reporting company. These financial statements should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2018 filed with the SEC on September 26, 2018. In the opinion of management, the accompanying condensed consolidated interim financial statements include all necessary adjustments. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year or any other future period. Certain notes to the financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year as reported in the Company’s Annual Report on Form 10-K have been omitted. The accompanying condensed consolidated balance sheet at September 30, 2018 has been derived from the audited balance sheet at June 30, 2018 contained in such Form 10-K. Nature of Business Flux Power Holdings, Inc. designs, develops and sells rechargeable advanced lithium-ion batteries for industrial equipment. As used herein, the terms “we”, “us”, “our”, “Flux” and “Company” refer to Flux Power Holdings, Inc. and our wholly owned subsidiary, Flux Power, Inc. (“Flux Power”), unless otherwise indicated. We have structured our business around our core technology, the “Battery Management System” (“BMS”). Our BMS provides three critical functions to our battery systems: cell balancing, monitoring and error reporting. Using our proprietary management technology, we are able to offer complete integrated energy storage solutions or custom modular standalone systems to our customers. We have also developed a suite of complementary technologies and products that accompany our core products. Sales have been primarily to customers located throughout the United States. |
Note 2 - Liquidity and Going Co
Note 2 - Liquidity and Going Concern | 3 Months Ended |
Sep. 30, 2018 | |
Notes To Financial Statements [Abstract] | |
Liquidity and Going Concern | The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred an accumulated deficit of $29,063,000 through September 30, 2018, and a net loss of $2,401,000 for the three months ended September 30, 2018. To date, our revenues and operating cash flows have not been sufficient to sustain our operations and we have relied on debt and equity financing to fund our operations. These factors raise substantial doubt about our ability to continue as a going concern for the twelve months following the filing date of this Quarterly Report on Form 10-Q. Our ability to continue as a going concern is dependent upon our ability to raise additional capital on a timely basis until such time as revenues and related cash flows are sufficient to fund our operations. Management has undertaken steps to improve operations with the goal of sustaining our operations. These steps include (a) developing additional products to serve the Class 1 and Class 2 industrial equipment markets; and (b) expand our sales force throughout the United States. In that regard, we have increased our research and development efforts to focus on completing the development of energy storage solutions that can be used on larger forklifts and have also doubled our sales force since December 2016 with personnel having significant experience in the industrial equipment handling industry. Those efforts have resulted in evaluations of battery packs on larger forklifts and ground support equipment (“GSE”) along with commercial sales of GSE packs. We have evaluated our expected cash requirements over the next twelve months, which include, but are not limited to, investments in additional sales and marketing and product development resources, capital expenditures, and working capital requirements and have determined that our existing cash resources are not sufficient to meet our anticipated needs during the next twelve months, and that additional financing is required to support current operations. Based on our current and planned levels of expenditure, we estimate that total financing proceeds of approximately $7,800,000 will be required to fund current and planned operations for the twelve months following the filing date of this Quarterly Report on Form 10-Q. In addition, we anticipate that further additional financing may be required to fund our business plan subsequent to that date, until such time as revenues and related cash flows become sufficient to support our operating costs. We intend to continue to seek capital through the sale of equity securities through private placements, convertible debt placements and the utilization of our existing related-party credit facility. Although management believes that the additional required funding will be obtained, there is no guarantee we will be able to obtain the additional required funds on a timely basis or that funds will be available on terms acceptable to us. If such funds are not available when required, management will be required to curtail its investments in additional sales and marketing and product development resources, and capital expenditures, which may have a material adverse effect on our future cash flows and results of operations, and our ability to continue operating as a going concern. The accompanying financial statements do not include any adjustments that would be necessary should we be unable to continue as a going concern and, therefore, be required to liquidate our assets and discharge our liabilities in other than the normal course of business and at amounts that may differ from those reflected in the accompanying condensed consolidated financial statements. |
Note 3 - Summary of Significant
Note 3 - Summary of Significant Accounting Policies | 3 Months Ended |
Sep. 30, 2018 | |
Notes To Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | The Company's significant accounting policies are described in Note 3, "Summary of Significant Accounting Policies," in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2018. There have been no material changes in these policies or their application. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation for comparative purposes. Net Loss Per Common Share The Company calculates basic loss per common share by dividing net loss by the weighted average number of common shares outstanding during the periods. Diluted loss per common share includes the impact from all dilutive potential common shares relating to outstanding convertible securities. For the three months ended September 30, 2018 and 2017, basic and diluted weighted-average common shares outstanding were 31,068,411 and 25,086,794, respectively. The Company incurred a net loss for the three months ended September 30, 2018 and 2017, and therefore, basic and diluted loss per share for the periods are the same because the inclusion of potential common equivalent shares were excluded from diluted weighted-average common shares outstanding during the period, as the inclusion of such shares would be anti-dilutive. The total potentially dilutive common shares outstanding at September 30, 2018 and 2017, excluded from diluted weighted-average common shares outstanding, which include common shares underlying outstanding convertible debt, stock options and warrants, were 18,745,125 and 15,050,184, respectively. Recent Accounting Pronouncements Not Yet Adopted On June 20, 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Management has considered all recent accounting pronouncements issued since the last audit of the Company’s consolidated financial statements, and believes that these recent pronouncements will not have a material effect on the Company’s condensed consolidated financial statements. |
Note 4 - Related Party Debt Agr
Note 4 - Related Party Debt Agreements | 3 Months Ended |
Sep. 30, 2018 | |
Notes To Financial Statements [Abstract] | |
Related Party Debt Agreements | Esenjay Credit Facilities Between October 2011 and September 2012, the Company entered into three debt agreements with Esenjay. Esenjay is deemed to be a related party as Mr. Michael Johnson, the beneficial owner and director of Esenjay, is a current member of our board of directors and a major shareholder of the Company (owning approximately 52% of our outstanding common shares as of September 30, 2018). The three debt agreements consisted of a Bridge Loan Promissory Note, a Secondary Revolving Promissory Note and an Unrestricted Line of Credit (collectively, the “Loan Agreements”). On December 31, 2015, the Bridge Loan Promissory Note and the Secondary Revolving Promissory Note expired, leaving the Unrestricted Line of Credit available for future draws. The Unrestricted Line of Credit has a maximum borrowing amount of $10,000,000, is convertible at a rate of $0.60 per share, bears interest at 8% per annum and matures on January 31, 2019. Advances under the Unsecured Line of Credit are subject to Esenjay's approval. The outstanding principal balance of the Unrestricted Line of Credit as of September 30, 2018 was $7,975,000, convertible at $0.60 per share or 13,291,667 shares of common stock, resulting in a remaining $2,025,000 available for future draws under this agreement, subject to lender’s approval. During the three months ended September 30, 2018 and 2017, the Company recorded approximately $161,000 and $121,000, respectively of interest expense in the accompanying condensed consolidated statements of operations related to the Unrestricted Line of Credit. The Unrestricted Line of Credit was converted to common stock in October 2018 (see Note 8). On March 22, 2018, Flux Power entered into a credit facility agreement with Esenjay with a maximum borrowing amount of $5,000,000. Proceeds from the credit facility are to be used to purchase inventory and related operational expenses and accrue interest at a rate of 15% per annum (the “Inventory Line of Credit”). The outstanding balance of the Inventory Line of Credit and accrued interest is due and payable on March 31, 2019. Funds received from Esenjay since December 5, 2017 were transferred to the Inventory Line of Credit resulting in $2,405,000 outstanding as of September 30, 2018 and $2,595,000 available for future draws, subject to the lender’s approval. During the three months ended September 30, 2018, the Company recorded approximately $91,000 of interest expense in the accompanying condensed consolidated statements of operations related to the Inventory Line of Credit. Shareholder Convertible Promissory Note On April 27, 2017, we formalized an oral agreement for advances totaling $500,000, received from a shareholder (“Shareholder”) into a written Convertible Promissory Note (the “Convertible Note”). Borrowings under the Convertible Note accrue interest at 12% per annum, with all unpaid principal and accrued interest due and payable on October 27, 2018. In addition, at any time commencing on or after the date that is six (6) months from the issue date, at the election of Shareholder, all or any portion of the outstanding principal, accrued but unpaid interest and/or late charges under the Convertible Note may be converted into shares of the Company’s common stock at a conversion price of $1.20 per share; provided, however, the Shareholder shall not have the right to convert any portion of the Convertible Note to the extent that the Shareholder would beneficially own in excess of 5% of the total number of shares of common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon conversion of the Convertible Note. During the three months ended September 30, 2018, we recorded approximately $15,000 of interest expense in the accompanying condensed consolidated statements of operations related to the Convertible Note. The Convertible Note was converted to common stock in October 2018 (see Note 8). |
Note 5 - Stockholders' Deficit
Note 5 - Stockholders' Deficit | 3 Months Ended |
Sep. 30, 2018 | |
Notes To Financial Statements [Abstract] | |
Stockholders' Deficit | Advisory Agreements Catalyst Global LLC. Shenzhen Reach Investment Development Co. (“SRID”). Warrant Activity Warrant detail is reflected below: Number Weighted Average Exercise Price Per Share Remaining Contract Term (# years) Shares purchasable under outstanding warrants at June 30, 2018 1,740,790 $ 2.03 0.74 Stock purchase warrants exercised (40,000 ) $ 2.00 - Shares purchasable under outstanding warrants at September 30, 2018 1,700,790 $ 2.03 0.47 Stock-based Compensation On November 26, 2014, our board of directors approved our 2014 Equity Incentive Plan (the “2014 Plan”), which was approved by our shareholders on February 17, 2015. The 2014 Option Plan was amended by our board of directors on October 26, 2017 and approved by our shareholders on July 23, 2018. The 2014 Plan offers selected employees, directors, and consultants the opportunity to acquire our common stock, and serves to encourage such persons to remain employed by us and to attract new employees. The 2014 Plan allows for the award of stock and options, up to 10,000,000 shares of our common stock. Activity in stock options during the three months ended September 30, 2018 and related balances outstanding as of that date are reflected below: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Term (# years) Outstanding at June 30, 2018 3,544,473 $ 0.83 8.87 Granted 335,264 Exercised - Forfeited and cancelled 103,125 Outstanding at September 30, 2018 3,766,612 $ 0.94 8.33 Exercisable at September 30, 2018 1,609,667 $ 0.77 7.99 Activity in stock options during the three months ended September 30, 2017 and related balances outstanding as of that date are reflected below: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Term (# years) Outstanding at June 30, 2017 716,277 $ 1.01 Granted - Exercised - Forfeited and cancelled - Outstanding at September 30, 2017 716,277 $ 1.01 6.83 Exercisable at September 30, 2017 612,623 $ 1.09 6.60 Stock-based compensation expense recognized in our condensed consolidated statements of operations for the three months ended September 30, 2018 and 2017, includes compensation expense for stock-based options and awards granted based on the grant date fair value. For options and awards granted, expenses are amortized under the straight-line method over the expected vesting period. Stock-based compensation expense recognized in the condensed consolidated statements of operations has been reduced for estimated forfeitures of options that are subject to vesting. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Our average stock price during the three months ended September 30, 2018 was $2.27 and as a result the intrinsic value of the exercisable options at September 30, 2018 was $2,218,000. We allocated stock-based compensation expense included in the condensed consolidated statements of operations for employee option grants and non-employee option grants as follows: Three months ended September 30, 2018 2017 Research and development $ 15,000 $ 8,000 General and administrative 149,000 3,000 Total stock-based compensation expense $ 164,000 $ 11,000 The Company uses the Black-Scholes valuation model to calculate the fair value of stock options. The fair value of stock options was measured at the grant date using the assumptions (annualized percentages) in the table below: Three months ended September 30, 2018 2017 Expected volatility 142 % 100 % Risk free interest rate 2.63 % 1.31 % Forfeiture rate 20.0 % 23.0 % Dividend yield 0 % 0 % Expected term (years) 5 3 The remaining amount of unrecognized stock-based compensation expense at September 30, 2018 relating to outstanding stock options is approximately $1,648,000 which is expected to be recognized over the weighted average period of 1.47 years. |
Note 6 - Other Related Party Tr
Note 6 - Other Related Party Transactions | 3 Months Ended |
Sep. 30, 2018 | |
Notes To Financial Statements [Abstract] | |
Other Related Party Transactions | Transactions with Epic Boats The Company subleases office and manufacturing space to Epic Boats (an entity founded and controlled by Chris Anthony, our board member and former Chief Executive Officer) in our facility in Vista, California pursuant to a month-to-month sublease agreement. Pursuant to this agreement, Epic Boats pays Flux Power 10% of facility costs through the end of our lease agreement. The Company received $5,000 and $5,000 during the three-month ended September 30, 2018 and 2017, respectively, from Epic Boats under the sublease rental agreement which is recorded as a reduction to rent expense and the customer deposits discussed below. As of September 30, 2018 and June 30, 2018, customer deposits totaling approximately $98,000 and $102,000, respectively, were recorded in the accompanying condensed consolidated balance sheets. There were no receivables outstanding from Epic Boats as of September 30, 2018 and June 30, 2018. |
Note 7 - Concentrations
Note 7 - Concentrations | 3 Months Ended |
Sep. 30, 2018 | |
Notes To Financial Statements [Abstract] | |
Concentrations | Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments and unsecured trade accounts receivable. The Company maintains cash balances at a financial institution in San Diego, California. Our cash balance at this institution is secured by the Federal Deposit Insurance Corporation up to $250,000. The Company has not experienced any losses in such accounts. Management believes that the Company is not exposed to any significant credit risk with respect to its cash. Customer Concentrations During the three months ended September 30, 2018, we had three major customers that each represented more than 10% of our revenues on an individual basis, or approximately 89% in the aggregate. During the three months ended September 30, 2017, we had three major customers that each represented more than 10% of our revenues on an individual basis, or approximately 71% in the aggregate. Suppliers/Vendor Concentrations We obtain a limited number of components and supplies included in our products from a small group of suppliers. During the three months ended September 30, 2018 we had two suppliers who accounted for more than 10% of our total inventory purchases on an individual basis or approximately 56% in the aggregate. During the three months ended September 30, 2017 we had three suppliers who accounted for more than 10% of our total inventory purchases on an individual basis or approximately 50% in the aggregate. |
Note 8 - Subsequent Events
Note 8 - Subsequent Events | 3 Months Ended |
Sep. 30, 2018 | |
Notes To Financial Statements [Abstract] | |
Subsequent Events | On October 26, 2018, we entered into a credit facility agreement with Cleveland Capital, L.P., a Delaware limited partnership (“Cleveland”), our minority shareholder, pursuant to which Cleveland agreed to make available to Flux a line of credit (“Cleveland LOC”) in a maximum principal amount at any time outstanding of up to $2,000,000. The Cleveland LOC has an origination fee of $20,000, which represents one percent (1%) of the Cleveland LOC, and carries a simple interest of twelve percent (12%) per annum. Interest is calculated on the basis of the actual daily balances outstanding under the Cleveland LOC. The Cleveland LOC is due on December 31, 2018. On October 31, 2018, we entered into a credit facility agreement with a private investor in Louisiana (“Investor”), pursuant to which Investor agreed to make available to Flux a line of credit (“Investor LOC”) in a maximum principal amount at any time outstanding of up to $500,000. The Investor LOC has an origination fee in of $5,000, which represents one percent (1%) of the Investor LOC, and carries a simple interest of twelve percent (12%) per annum. Interest is calculated on the basis of the actual daily balances outstanding under the Investor LOC. The Investor LOC is due on December 31, 2018. On October 31, 2018, the Company entered into an Early Note Conversion Agreement (the “Early Note Conversion Agreement”) with Esenjay, pursuant to which Esenjay agreed to immediately exercise its conversion rights under the Unrestricted and Open Line of Credit, dated September 24, 2012 (as amended from time to time, the “Esenjay Loan”) to convert the outstanding principal amount of $7,975,000 (“Principal”) plus accrued and unpaid interest of $1,041,280 for 15,027,134 shares of the Company’s common stock. In order to induce Esenjay to exercise early the conversion of the Esenjay Loan, the Company agreed to issue an additional 268,018 Shares (“Additional Shares”), valued at $466,351 based on the fair market value of the shares as of the conversion date. On October 25, 2018, the Company and Scott Kiewit entered into an Amendment (“Amendment to Kiewit Note”) to amend the Convertible Promissory Note, dated as of April 27, 2017 (the “Kiewit Note”), pursuant to which Scott Kiewit loaned $500,000 to the Company. The Amendment (i) extends the maturity date of the Convertible Note from October 27, 2018 to February 1, 2019 and (ii) allows for the automatic conversion of the Convertible Note immediately following the full conversion of the line of credit granted by Esenjay to the Company under the Esenjay Loan into shares of Common Stock of the Company. As a result of the conversion of Esenjay Loan, the Kiewit Note automatically converted into the right to receive 502,091 Shares. |
Note 3 - Significant Accounting
Note 3 - Significant Accounting Policies (Policies) | 3 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Reclassifications | Certain prior period amounts have been reclassified to conform to the current period presentation for comparative purposes. |
Net Loss Per Common Share | The Company calculates basic loss per common share by dividing net loss by the weighted average number of common shares outstanding during the periods. Diluted loss per common share includes the impact from all dilutive potential common shares relating to outstanding convertible securities. For the three months ended September 30, 2018 and 2017, basic and diluted weighted-average common shares outstanding were 31,068,411 and 25,086,794, respectively. The Company incurred a net loss for the three months ended September 30, 2018 and 2017, and therefore, basic and diluted loss per share for the periods are the same because the inclusion of potential common equivalent shares were excluded from diluted weighted-average common shares outstanding during the period, as the inclusion of such shares would be anti-dilutive. The total potentially dilutive common shares outstanding at September 30, 2018 and 2017, excluded from diluted weighted-average common shares outstanding, which include common shares underlying outstanding convertible debt, stock options and warrants, were 18,745,125 and 15,050,184, respectively. |
Recent Accounting Pronouncements Not Yet Adopted | On June 20, 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Management has considered all recent accounting pronouncements issued since the last audit of the Company’s consolidated financial statements, and believes that these recent pronouncements will not have a material effect on the Company’s condensed consolidated financial statements. |
Note 5 - Stockholders' Deficit
Note 5 - Stockholders' Deficit (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Stockholders' deficit: | |
Schedule of Warrant Activity | Number Weighted Average Exercise Price Per Share Remaining Contract Term (# years) Shares purchasable under outstanding warrants at June 30, 2018 1,740,790 $ 2.03 0.74 Stock purchase warrants exercised (40,000 ) $ 2.00 - Shares purchasable under outstanding warrants at September 30, 2018 1,700,790 $ 2.03 0.47 |
Schedule of Stock Option Activity | Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Term (# years) Outstanding at June 30, 2018 3,544,473 $ 0.83 8.87 Granted 335,264 Exercised - Forfeited and cancelled 103,125 Outstanding at September 30, 2018 3,766,612 $ 0.94 8.33 Exercisable at September 30, 2018 1,609,667 $ 0.77 7.99 Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Term (# years) Outstanding at June 30, 2017 716,277 $ 1.01 Granted - Exercised - Forfeited and cancelled - Outstanding at September 30, 2017 716,277 $ 1.01 6.83 Exercisable at September 30, 2017 612,623 $ 1.09 6.60 |
Schedule of Stock-based Compensation | Three months ended September 30, 2018 2017 Research and development $ 15,000 $ 8,000 General and administrative 149,000 3,000 Total stock-based compensation expense $ 164,000 $ 11,000 |
Schedule of Stock Options Valuation Assumptions | Three months ended September 30, 2018 2017 Expected volatility 142 % 100 % Risk free interest rate 2.63 % 1.31 % Forfeiture rate 20.0 % 23.0 % Dividend yield 0 % 0 % Expected term (years) 5 3 |
Note 2 - Liquidity and Going _2
Note 2 - Liquidity and Going Concern (Details Narrative) - USD ($) | 3 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | |
Note 2 - Liquidity And Going Concern | |||
Accumulated Deficit | $ (29,063,000) | $ (26,662,000) | |
Net Loss | $ (2,401,000) | $ (1,446,000) |
Note 3 - Summary of Significa_2
Note 3 - Summary of Significant Accounting Policies (Details Narrative) - shares | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Accounting Policies [Abstract] | ||
Weighted Average Number of Shares Outstanding, Basic and Diluted | 31,068,411 | 25,086,794 |
Antidilutive Securities Excluded from Computation of Earnings Per Share | 18,745,125 | 15,050,184 |
Note 4 - Related Party Debt A_2
Note 4 - Related Party Debt Agreements (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Shareholder [Member] | Shareholder Convertible Promissory Note [Member] | ||
Line of Credit Facility, Interest Rate During Period | 12.00% | |
Long-term Line of Credit | $ 500,000 | |
Interest Expense, Borrowings | 15,000 | |
Unrestricted Line of Credit [Member] | Esenjay Investments, LLC [Member] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 10,000,000 | |
Line of Credit Facility, Interest Rate During Period | 8.00% | |
Long-term Line of Credit | $ 7,975,000 | |
Line of Credit Facility, Remaining Borrowing Capacity | 2,025,000 | |
Interest Expense, Borrowings | 161,000 | $ 121,000 |
Inventory Line of Credit [Member] | Esenjay Investments, LLC [Member] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 5,000,000 | |
Line of Credit Facility, Interest Rate During Period | 15.00% | |
Long-term Line of Credit | $ 2,405,000 | |
Line of Credit Facility, Remaining Borrowing Capacity | 2,595,000 | |
Interest Expense, Borrowings | $ 91,000 |
Note 5 - Stockholders' Defici_2
Note 5 - Stockholders' Deficit (Details) | 3 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Warrants outstanding and exercisable, beginning | shares | 1,740,790 |
Warrants exchanged | shares | (40,000) |
Warrants outstanding and exercisable, ending | shares | 1,700,790 |
Warrants outstanding and exercisable, weighted average exercise price, beginning | $ / shares | $ 2.03 |
Warrants exchanged, weighted average exercise price | $ / shares | 2 |
Warrants outstanding and exercisable, weighted average exercise price, ending | $ / shares | $ 2.03 |
Warrants outstanding and exercisable, remaining contractual term | 5 months 19 days |
Note 5 - Stockholders' Defici_3
Note 5 - Stockholders' Deficit (Details 1) - Employee Stock Option [Member] - $ / shares | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Options outstanding, beginning | 3,544,473 | 716,277 |
Options granted | 335,264 | 0 |
Options exercised | 0 | 0 |
Options forfeited and cancelled | 103,125 | 0 |
Options outstanding, ending | 3,766,612 | 716,277 |
Options exercisable | 1,609,667 | 612,623 |
Weighted average exercise price outstanding, beginning | $ 0.83 | $ 1.01 |
Weighted average exercise price outstanding, ending | 0.94 | 1.01 |
Weighted average exercise price exercisable | $ 0.77 | $ 1.09 |
Weighted average remaining contract term, outstanding | 8 years 3 months 29 days | 6 years 9 months 29 days |
Weighted average remaining contract term, exercisable | 7 years 11 months 26 days | 6 years 7 months 6 days |
Note 5 - Stockholders' Defici_4
Note 5 - Stockholders' Deficit (Details 2) - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Allocated Share-based Compensation Expense | $ 164,000 | $ 11,000 |
Research and Development Expense [Member] | ||
Allocated Share-based Compensation Expense | 15,000 | 8,000 |
General and Administrative Expense [Member] | ||
Allocated Share-based Compensation Expense | $ 149,000 | $ 3,000 |
Note 5 - Stockholders' Defici_5
Note 5 - Stockholders' Deficit (Details 3) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Stockholders' deficit: | ||
Expected volatility | 142.00% | 100.00% |
Risk free interest rate | 2.63% | 1.31% |
Forfeiture rate | 20.00% | 23.00% |
Dividend yield | 0.00% | 0.00% |
Expected term | 5 years | 3 years |
Note 5 - Stockholders' Defici_6
Note 5 - Stockholders' Deficit (Details Narrative) | 3 Months Ended |
Sep. 30, 2018USD ($)$ / sharesshares | |
Stockholders' deficit: | |
Stock Issued During Period, Shares, New Issues | shares | 8,710 |
Shares Issued, Price Per Share | $ 2.01 |
Share Price | $ 2.27 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $ | $ 2,218,000 |
Note 6 - Other Related Party _2
Note 6 - Other Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |||
Sublease Revenue | $ 5,000 | $ 5,000 | |
Customer Deposits | $ 98,000 | $ 102,000 |
Note 7 - Concentrations (Detail
Note 7 - Concentrations (Details Narrative) - Customer Concentration Risk [Member] - Integer | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | |
Sales Revenue, Net [Member] | |||
Number of Major Customers | 3 | 3 | |
Concentration Risk, Percentage | 89.00% | 71.00% | |
Accounts Receivable [Member] | |||
Number of Major Suppliers | 2 | 3 | |
Concentration Risk, Percentage | 56.00% | 50.00% |