Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Oct. 11, 2019 | Dec. 31, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | Luvu Brands, Inc. | ||
Entity Central Index Key | 0001374567 | ||
Document Type | 10-K | ||
Document Period End Date | Jun. 30, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --06-30 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Is Entity a Shell Company? | false | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 1,099,041 | ||
Entity Common Stock, Shares Outstanding | 73,452,596 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 649 | $ 431 |
Accounts receivable | 830 | 657 |
Inventories | 1,751 | 1,692 |
Prepaid expenses | 52 | 135 |
Total current assets | 3,282 | 2,915 |
Equipment and leasehold improvements, net | 792 | 786 |
Other assets | 13 | 12 |
Total assets | 4,087 | 3,713 |
Current liabilities: | ||
Accounts payable | 2,561 | 2,273 |
Current debt | 2,373 | 2,359 |
Other accrued liabilities | 618 | 565 |
Total current liabilities | 5,552 | 5,197 |
Long-term liabilities: | ||
Long-term debt | 656 | 440 |
Deferred rent payable | 34 | 97 |
Total noncurrent liabilities | 690 | 537 |
Total liabilities | 6,242 | 5,734 |
Commitments and contingencies (See Note 15) | ||
Stockholders' deficit: | ||
Common stock | 735 | 735 |
Additional paid-in capital | 6,126 | 6,103 |
Accumulated deficit | (9,016) | (8,859) |
Total stockholders' deficit | (2,155) | (2,021) |
Total liabilities and stockholders' deficit | 4,087 | 3,713 |
Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock | ||
Convertible Preferred Stock | ||
Stockholders' deficit: | ||
Preferred stock |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2018 |
Doubtful accounts receivable | $ 20 | $ 30 |
Inventory reserve | $ 81 | $ 58 |
Preferred stock - par value | $ 0.0001 | $ 0.0001 |
Preferred stock - shares authorized | 10,000,000 | 10,000,000 |
Common stock- par value | $ 0.01 | $ 0.01 |
Common stock- shares authorized | 175,000,000 | 175,000,000 |
Common stock- shares issued | 73,452,596 | 73,452,596 |
Common stock- shares outstanding | 73,452,596 | 73,452,596 |
Preferred Stock [Member] | ||
Preferred stock - par value | $ 0.0001 | $ 0.0001 |
Preferred stock - shares authorized | 5,700,000 | 5,700,000 |
Preferred stock - shares issued | ||
Preferred stock - shares outstanding | ||
Convertible Preferred Stock | ||
Preferred stock - par value | $ 0.0001 | $ 0.0001 |
Preferred stock - shares authorized | 4,300,000 | 4,300,000 |
Preferred stock - shares issued | 4,300,000 | 4,300,000 |
Preferred stock - shares outstanding | 4,300,000 | 4,300,000 |
Preferred stock - liquidation preference | $ 1 | $ 1 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||
Net Sales | $ 17,003 | $ 16,426 |
Cost of goods sold | 12,579 | 11,631 |
Gross profit | 4,424 | 4,795 |
Operating expenses: | ||
Advertising and promotion | 356 | 404 |
Other selling and marketing | 1,157 | 1,113 |
General and administrative | 2,336 | 2,409 |
Depreciation and amortization | 165 | 193 |
Total operating expenses | 4,014 | 4,119 |
Income from operatio | 410 | 676 |
Other income (expense): | ||
Interest expense and financing costs | (567) | (529) |
Total Other (Expense) | (567) | (529) |
Income (loss) from operations before income taxes | (157) | 147 |
Provision for income taxes | ||
Net income (loss) | $ (157) | $ 147 |
Net loss per share: Basic and diluted loss per common shares | $ 0 | $ 0 |
Shares used in computing net income per share: Basic | 73,452,596 | 73,452,596 |
Shares used in computing net income per share: Diluted | 73,452,596 | 74,478,742 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders Deficit - USD ($) $ in Thousands | Series A Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning Balance (in shares) at Jun. 30, 2017 | 4,300,000 | 73,452,596 | |||
Beginning Balance at Jun. 30, 2017 | $ 735 | $ 6,079 | $ (9,006) | $ (2,192) | |
Stock-based compensation | 24 | 24 | |||
Net Loss | (147) | 147 | |||
Ending Balance (in shares) at Jun. 30, 2018 | 4,300,000 | 73,452,596 | |||
Ending Balance at Jun. 30, 2018 | $ 735 | 6,103 | (8,859) | (2,021) | |
Stock-based compensation | 23 | 23 | |||
Net Loss | (157) | (157) | |||
Ending Balance (in shares) at Jun. 30, 2019 | 4,300,000 | 73,452,596 | |||
Ending Balance at Jun. 30, 2019 | $ 735 | $ 6,126 | $ (9,016) | $ (2,155) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
OPERATING ACTIVITIES: | ||
Net income | $ (157) | $ 147 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 165 | 193 |
Stock based compensation expense | 23 | 24 |
Provision for bad debt | (1) | 20 |
Provision for inventory reserves | 23 | (32) |
Deferred rent payable | (51) | (39) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (172) | (47) |
Inventories | (82) | (114) |
Prepaid expenses and other assets | 81 | (57) |
Accounts payable | 288 | 97 |
Accrued expenses and interest | 32 | 12 |
Accrued payroll and related | 9 | 6 |
Net cash provided by operating activities | 158 | 210 |
INVESTING ACTIVITIES: | ||
Investment in equipment and leasehold improvements | (13) | (40) |
Net cash used in investing activities | (13) | (40) |
FINANCING ACTIVITIES: | ||
Borrowing (repayment) under revolving line of credit | 281 | 38 |
Borrowing (repayment) of unsecured line of credit | (8) | 18 |
Proceeds from credit card advance | 635 | 500 |
Repayment of credit card advance | (816) | (673) |
Borrowings under secured note payable | 452 | |
Repayment of unsecured note payable | (3) | |
Proceeds from unsecured note payable | 1,150 | 850 |
Repayment of unsecured line of credit | (1,291) | (924) |
Repayment of term note-shareholder | (186) | (156) |
Payments on equipment notes | (113) | (94) |
Principal payments on capital leases | (28) | (40) |
Net cash provided by (used in) financing activities | 73 | (481) |
Net increase (decrease) in cash and cash equivalents | 218 | (311) |
Cash and cash equivalents at beginning of period | 431 | 742 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 649 | 431 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Non cash item: Additions to capital leases/equipment notes | 158 | 70 |
Cash paid during the period for: Interest | 564 | 525 |
Cash paid during the period for: Income taxes |
Organization and Nature of Busi
Organization and Nature of Business | 12 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Business | NOTE 1. ORGANIZATION AND NATURE OF BUSINESS Luvu Brands, Inc. (the “Company” or Luvu) was incorporated in the State of Florida on February 25, 1999. References to the “Company” in these notes include the Company and its wholly owned subsidiaries, OneUp Innovations, Inc. (“OneUp”), and Foam Labs, Inc. (“Foam Labs”). All operations of the Company are currently conducted by OneUp Innovations, Inc. The Company is an Atlanta, Georgia based designer, manufacturer and marketer of a portfolio of consumer lifestyle brands including: Liberator ® ® ® Sales are generated through internet and print advertisements. We have a diversified customer base with only one customer accounting for 10% or more of consolidated net sales in the current and prior fiscal year and no particular concentration of credit risk in one economic sector. Foreign operations and foreign net sales are not material. Our business is seasonal and as a result we typically experience higher sales in our second and third fiscal quarters. |
Going Concern
Going Concern | 12 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | NOTE 2. GOING CONCERN The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, which contemplates continuation of the Company as a going concern. The Company reported a net loss of approximately $(157,000) for the year ended June 30, 2019 and net income of approximately $147,000 for the year ended June 30, 2018 and as of June 30, 2019 the Company has an accumulated deficit of approximately $9.0 million and a working capital deficit of approximately $2.3 million. This raises substantial doubt about its ability to continue as a going concern. In view of these matters, realization of a major portion of the assets in the accompanying consolidated balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to meet its financing requirements, and the success of its future operations. Management believes that actions presently being taken to revise the Company’s operating and financial requirements provide the opportunity for the Company to continue as a going concern. These actions include an ongoing initiative to increase sales, gross profits and our gross profit margin. To that end, we evaluated various options for increasing the throughput of our compressed foam products and during the first quarter of fiscal 2018, we purchased new foam compression equipment for installation during the second quarter of fiscal 2018. These actions have yielded higher factory throughput at a lower cost of goods sold. However, these operational improvements have been more than offset by rising wages and raw material costs. We also plan to continue to manage discretionary expense levels to be better aligned with current and expected revenue levels. We estimate that the operational and strategic growth plans we have identified over the next twelve months will, at a minimum, require approximately $150,000 of funding, of which we estimate will be provided by debt financing and, to a lesser extent, cash flow from operations as well as cash on hand. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. However, management cannot provide any assurances that the Company will be successful in accomplishing these plans. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation These consolidated financial statements include the accounts and operations of our wholly owned operating subsidiaries, OneUp and Foam Labs. Intercompany accounts and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current year presentation. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions in determining the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Significant estimates in these consolidated financial statements include estimates of: income taxes; tax valuation reserves; allowances for doubtful accounts; inventory valuation and reserves, share-based compensation; and useful lives for depreciation and amortization. Actual results could differ materially from these estimates. Revenue Recognition Net revenue is measured based on the amount of consideration that we expect to receive, reduced by discounts and estimates for credits and returns (calculated based upon previous experience and management’s evaluation). Outbound shipping charged to customers is recognized at the time the related merchandise revenues are recognized and are included in net revenues. Inbound and outbound shipping and delivery costs are included in cost of revenues. Net revenues exclude sales and other similar taxes collected from customers. A description of our principal revenue generating activities is as follows: · E-commerce revenues - consumer products sold through our online and telephonic channels. Revenue is recognized when control of the merchandise is transferred to the customer, which generally occurs upon shipment. Payment is typically due on the date of shipment. · Wholesale revenues - products sold to our wholesale customers for subsequent resale. Revenue is recognized when control of the goods is transferred to the customer, in accordance with the terms of the applicable agreement. Payment terms are typically 30 days from the date control over the product is transferred to the customer. · Retail revenues - consumer products sold through our retail store. Revenue is recognized when control of the goods is transferred to the customer, at the point of sale, at which time payment is received. The Company accounts for revenue in accordance with Topic 606 which was adopted at the beginning of fiscal year 2019 using the modified retrospective method. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company did not recognize any cumulative-effect adjustment to retained earnings upon adoption as the effect was immaterial. The adoption of these standards did not have a material impact on the Company's condensed consolidated statements of operations during the year ended June 30, 2019. Refer to Note 3 – Segment Information for disclosure of disaggregated revenues. Deferred revenues Deferred revenues are recorded when the Company has received consideration (i.e. advance payment) before satisfying its performance obligations. Deferred revenues primarily relate to gift cards purchased, but not used, prior to the end of the fiscal period. Our total deferred revenue as of June 30, 2018 was $13,324 and was included in “Accrued expenses” on our consolidated balance sheets. The deferred revenue balance as of June 30, 2019 was $14,198. Cost of Goods Sold Cost of goods sold includes raw material, labor, manufacturing overhead, and royalty expense. Shipping and Handling Costs We include fees earned on the shipment of our products to customers in sales and include costs incurred on the shipment of product to customers in costs of goods sold. Cash and Cash Equivalents For purposes of reporting cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Allowance for Doubtful Accounts The allowance for doubtful accounts reflects management's best estimate of probable credit losses inherent in the accounts receivable balance. The Company determines the allowance based on historical experience, specifically identified nonpaying accounts and other currently available evidence. The Company reviews its allowance for doubtful accounts monthly with a focus on significant individual past due balances over 90 days. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance sheet credit exposure related to its customers. The following is a summary of Accounts Receivable as of June 30, 2019 and June 30, 2018. June 30, June 30, (in thousands) Accounts receivable $ 850 $ 687 Allowance for doubtful accounts (20 ) (24 ) Allowance for discounts and returns — (6 ) Total accounts receivable, net $ 830 $ 657 Inventories and Inventory Reserves Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out (FIFO) method. Net realizable value is defined as sales price less cost to dispose and a normal profit margin. Inventory costs include materials, labor, depreciation and overhead. The company establishes reserves for excess and obsolete inventory, based on prevailing circumstances and judgment for consideration of current events, such as economic conditions, that may affect inventory. The reserve required to record inventory at lower of cost or net realizable value may be adjusted in response to changing conditions. Concentration of Credit Risk The Company maintains its cash accounts with banks located in Georgia. The total cash balances are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per bank. The Company had cash balances on deposit at June 30, 2019 and 2018 that exceeded the balance insured by the FDIC by $134,016 and $191,101, respectively. Accounts receivable are typically unsecured and are derived from revenue earned from customers primarily located in North America and Europe. During 2019, we purchased 37% of total inventory purchases from one vendor. During 2018, we purchased 17% of total inventory purchases from one vendor. As of June 30, 2019 and 2018, one of the Company’s customers (Amazon) represents 50% and 54% of the total accounts receivables, respectively. Sales to (and through) Amazon accounted for 34% of our net sales during the year ended June 30, 2019 and 33% of our sales for the year ended June 30, 2018. Fair Value of Financial Instruments At June 30, 2019 and 2018, our financial instruments included cash and cash equivalents, accounts receivable, accounts payable, short-term debt, and other long-term debt. The fair values of these financial instruments approximated their carrying values based on either their short maturity or current terms for similar instruments. The Company measures the fair value of its assets and liabilities under the guidance of ASC 820, Fair Value Measurements and Disclosures ASC 820 clarifies that fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based on the highest and best use of the asset or liability. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. ASC 820 requires the Company to use valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows: · Level 1 · Level 2 · Level 3 The valuation techniques that may be used to measure fair value are as follows: A. Market approach B. Income approach C. Cost approach Advertising Costs Advertising costs are expensed in the period when the advertisements are first aired or distributed to the public. Prepaid advertising (included in prepaid expenses) was $1,500 at June 30, 2019 and $13,040 at June 30, 2018. Advertising expense for the years ended June 30, 2019 and 2018 was $356,154 and $404,436, respectively. Research and Development Research and development expenses for new products are expensed as they are incurred. Expenses for new product development (included in general and administrative expense) totaled $123,478 for the year ended June 30, 2019 and $150,742 for the year ended June 30, 2018. Property and Equipment Property and equipment are stated at cost. Depreciation and amortization are computed using the straight-line method over estimated service lives for financial reporting purposes of 2-10 years. Expenditures for major renewals and betterments which extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. When properties are disposed of, the related costs and accumulated depreciation are removed from the respective accounts, and any gain or loss is recognized currently. Operating Leases On July 23, 2014, the Company entered into an agreement with its landlord to extend the facilities lease by five years. The previous ten year lease was to expire on December 31, 2015. The agreement amended the lease to expire on December 31, 2020. The lease amendment was effective August 1, 2014 and included a four-month rental abatement in the amount of $117,660. In exchange for the rental abatement, the Company agreed to make improvements to the facility totaling $123,505 within six months of August 1, 2014. As of June 30, 2019, the Company has completed $101,776 of the leasehold improvements. Under the lease amendment, the monthly rent on the facility was $29,415 per month, beginning on December 1, 2014. Beginning January 1, 2015, the monthly rent increases annually with the final year of the lease at $35,123 per month. The rent expense under this lease for the years ended June 30, 2019 and 2018 was $352,479 in each year. The Company also leases certain equipment under operating leases, as more fully described in Note 16 - Commitments and Contingencies Segment Information We have identified three reportable sales channels: Direct, Wholesale Other Direct Wholesale Wholesale Other Direct The following is a summary of sales results for the Direct, Wholesale Other Year Ended Year Ended % (in thousands) Net Sales by Channel: Direct $ 4,929 $ 5,326 (7 )% Wholesale $ 11,757 $ 10,718 10 % Other $ 317 $ 382 (17 )% Total Net Sales $ 17,003 $ 16,426 4 % Year Ended Margin Year Ended Margin % June 30, 2019 % June 30, 2018 % Change (in thousands) Gross Profit by Channel: Direct $ 2,229 45 % $ 2,400 45 % (7)% Wholesale $ 3,077 26 % $ 3,097 29 % (1)% Other $ (882 ) (278 )% $ (702 ) (183 )% (26)% Total Gross Profit $ 4,424 26 % $ 4,795 29 % (8)% Recent accounting pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by the Company as of the specified effective date. Recently adopted In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, which creates a single, comprehensive revenue recognition model for all contracts with customers. Under this ASU and subsequently issued amendments, an entity should recognize revenue to reflect the transfer of promised goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods and services. ASU 2014-9 may be adopted either retrospectively or on a modified retrospective basis. The standard is effective for interim and annual reporting periods beginning after December 15, 2017. The Company adopted the standard for its 2019 fiscal year. The impact of adopting the standard was not material. Not yet adopted In February 2016, the FASB issued ASU No. 2016-12, Leases, which requires entities to recognize right-of-use assets and lease liabilities on the balance sheet for the rights and obligations created by all leases, including operating leases, with terms of more than 12 months. The new guidance also requires additional disclosures on the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative information. This amendment is effective for the Company's fiscal year ending June 2020 with early adoption permitted. The adoption of ASU 2016-02 will have an impact on the consolidated balance sheet as the Company will record assets and obligations primarily related to our facility. The Company has estimated that the adoption of this guidance will result in an operating lease liability of approximately $545,000 being recorded on July 1, 2019 which is calculated based on the present value of the remaining minimum rental payments using discount rates as of the effective date. The Company also has estimated the corresponding right to use asset of approximately $448,000, based upon the operating lease liability adjusted for deferred rent, unamortized initial direct costs, liabilities associated with lease termination costs and impairment of right-of-use assets. The adoption is expected to be done on a modified retrospective basis with no adjustments made to periods prior to July 1, 2019. The Company does not expect a material impact on the consolidated statement of income or statement of cash flows. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. As part of the FASB's disclosure framework project, it has eliminated, amended and added disclosure requirements for fair value measurements. Entities will no longer be required to disclose the amount of, and reasons for, transfers between Level 1 and Level 2 of the fair value hierarchy, the policy of timing of transfers between levels of the fair value hierarchy and the valuation processes for Level 3 fair value measurements. Public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. This ASU is effective for public entities for annual and interim periods beginning after December 15, 2019. Early adoption is permitted as of the beginning of any interim or annual reporting period. The Company does not believe it will materially impact the disclosures. All other newly issued accounting pronouncements, but not yet effective, have been deemed either immaterial or not applicable. Net Income (Loss) Per Share In accordance with FASB Accounting Standards Codification No. 260, “Earnings Per Share”, basic net income (loss) per share is computed by dividing the net income (loss) available to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common and common equivalent shares outstanding during the period. Common equivalent shares outstanding as of June 30, 2019, which consists of options and convertible preferred stock, have been excluded from the diluted net loss per common share calculation for the year ended June 30, 2019 because they are anti-dilutive. The total potential dilutive securities as of June 30, 2019 and 2018 are as follows: 2019 2018 Convertible Preferred Stock 4,300,000 4,300,000 Stock options 4,050,000 5,065,000 Total 8,350,000 9,365,000 Income Taxes We utilize the asset and liability method of accounting for income taxes. We recognize deferred tax liabilities or assets for the expected future tax consequences of temporary differences between the book and tax basis of assets and liabilities. We regularly assess the likelihood that our deferred tax assets will be recovered from future taxable income. We consider projected future taxable income and ongoing tax planning strategies in assessing the amount of the valuation allowance necessary to offset our deferred tax assets that will not be recoverable. We have recorded and continue to carry a full valuation allowance against our gross deferred tax assets that will not reverse against deferred tax liabilities within the scheduled reversal period. If we determine in the future that it is more likely than not that we will realize all or a portion of our deferred tax assets, we will adjust our valuation allowance in the period we make the determination. We expect to provide a full valuation allowance on our future tax benefits until we can sustain a level of profitability that demonstrates our ability to realize these assets. At June 30, 2019, we carried a valuation allowance of $3.0 million against our net deferred tax assets. Stock Based Compensation We account for stock-based compensation to employees in accordance with FASB ASC 718, Compensation – Stock Compensation. We measure the cost of each stock option and restricted stock award at its fair value on the grant date. Each award vests over the subsequent period during which the recipient is required to provide service in exchange for the award (the vesting period). The cost of each award is recognized as expense in the financial statements over the respective vesting period. |
Impairment of Long-Lived Assets
Impairment of Long-Lived Assets | 12 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Impairment of Long-Lived Assets | NOTE 4. IMPAIRMENT OF LONG-LIVED ASSETS We follow FASB ASC 360, Property, Plant, and Equipment, regarding impairment of our other long-lived assets (property, plant and equipment). Our policy is to assess our long-lived assets for impairment annually in the fourth quarter of each year or more frequently if events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. An impairment loss is recognized only if the carrying value of a long-lived asset is not recoverable and is measured as the excess of its carrying value over its fair value. The carrying amount of a long-lived asset is considered not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of a long-lived asset. Assets to be disposed of and related liabilities would be separately presented in the consolidated balance sheet. Assets to be disposed of would be reported at the lower of the carrying value or fair value less costs to sell and would not be depreciated. There was no impairment as of June 30, 2019 or 2018. |
Inventories
Inventories | 12 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 5. INVENTORIES All inventories are stated at the lower of cost (which approximates first-in, first-out) or net realizable value. The Company’s inventories consist of the following components at June 30, 2019 and 2018: 2019 2018 (in thousands) Raw materials $ 872 $ 759 Work in process 111 238 Finished goods 849 753 Total inventories 1,832 1,750 Allowance for inventory reserves (81 ) (58 ) Total inventories, net of allowance $ 1,751 $ 1,692 |
Equipment and Leasehold Improve
Equipment and Leasehold Improvements, Net | 12 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Equipment and Leasehold Improvements, Net | NOTE 6. EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET Property and equipment at June 30, 2019 and 2018 consisted of the following: 2019 2018 Estimated (in thousands) Factory equipment $ 2,558 $ 2,472 2-10 years Computer equipment and software 1,050 1,048 5-7 years Office equipment and furniture 205 205 5-7 years Leasehold improvements 446 446 10 years Projects in process 83 — Subtotal 4,342 4,171 Accumulated depreciation (3,550 ) (3,385 ) Equipment and leasehold improvements, net $ 792 $ 786 Depreciation expense was $165,116 and $192,637 for the years ended June 30, 2019 and 2018, respectively. |
Other Accrued Liabilities
Other Accrued Liabilities | 12 Months Ended |
Jun. 30, 2019 | |
Payables and Accruals [Abstract] | |
Other Accrued Liabilities | NOTE 7. OTHER ACCRUED LIABILITIES Other accrued liabilities at June 30, 2019 and 2018 consisted of the following: 2019 2018 (in thousands) Accrued compensation $ 367 $ 358 Accrued expenses and interest 188 156 Current portion of deferred rent payable 63 51 Other accrued liabilities $ 618 $ 565 |
Current and Long- term Debt Sum
Current and Long- term Debt Summary | 12 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Current and Long- term Debt Summary | NOTE 8. CURRENT AND LONG-TERM DEBT SUMMARY Current and long-term debt at June 30, 2019 and 2018 consisted of the following: 2019 2018 Current debt: (in thousands) Unsecured lines of credit (Note 14) $ 25 $ 33 Line of credit (Note 13) 953 672 Short-term unsecured notes payable (Note 9) 523 865 Current portion of term note payable – shareholder (Note 11) 49 182 Current portion of equipment notes payable (Note 16) 127 103 Current portion secured notes payable (Note 15) 392 — Current portion of leases payable (Note 16) 8 27 Credit card advance (net of discount) (Note 12) 180 361 Notes payable – related party (Note 10) 116 116 Total current debt 2,373 2,359 Long-term debt: Leases payable (Note 16) — 8 Unsecured notes payable (Note 9) 400 200 Secured notes payable (Note 15) 57 — Equipment note payable (Note 16) 199 178 Term note payable – shareholder (Note 11) — 54 Total long-term debt $ 656 $ 440 |
Unsecured Notes Payable
Unsecured Notes Payable | 12 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Unsecured Notes Payable | NOTE 9. UNSECURED NOTES PAYABLE 2019 2018 Current debt: (in thousands) 20% Unsecured note, interest only, due January 2, 2019 (1) $ — $ 300 20% Unsecured note, interest only, due May 1, 2019 (4) — 200 20% Unsecured note, bi-weekly principal and interest, due March 1, 2019 (5) — 214 20% Unsecured note, bi-weekly principal and interest, due October 26, 2018 (6)(9) — 99 20% Unsecured note, bi-weekly principal and interest, due September 7, 2018 (7)(8) — 52 20% Unsecured note, bi-weekly principal and interest, due April 26, 2020 (11) 247 — 20% Unsecured note, bi-weekly principal and interest, due September 13, 2019 (9) 62 — 20% Unsecured note, bi-weekly principal and interest, due March 1, 2020 (10) 214 — Total current debt 523 865 Long-term debt: 20% Unsecured note, interest only, due May 1, 2021 (4) 200 — 20% Unsecured note, interest only, due October 31, 2021 (2) 100 100 20% Unsecured note, interest only, due July 31, 2021 (3) 100 100 Total long-term debt 400 200 Total unsecured notes payable $ 923 $ 1,065 (1) Unsecured note payable for $300,000 to an individual, with interest at 20%, principal and interest originally due in full on January 3, 2013; extended to January 2, 2019 with interest payable monthly and principal due on maturity. $200,000 was repaid prior to December 1, 2018 and the balance was repaid on January 31, 2019. Personally guaranteed by principal stockholder. (2) Unsecured note payable for $100,000 to an individual with interest at 20% payable monthly; principal originally due in full on October 31, 2014; extended to October 31, 2019; then extended to October 31, 2021. Personally guaranteed by principal stockholder. (3) Unsecured note payable for $100,000 to an individual, with interest at 20% payable monthly; principal due in full on July 31, 2013; extended to July 31, 2019; then extended by the holder to July 31, 2021. Personally guaranteed by principal stockholder. (4) Unsecured note payable for $200,000 to an individual, with interest payable monthly at 20%, principal due in full on May 1, 2013; extended to May 1, 2019; then extended to May 1, 2021. Personally guaranteed by principal stockholder. (5) Unsecured note payable for $300,000 to two individual shareholders with interest at 20%, principal and interest paid bi-weekly, maturing March 1, 2019. The loan was repaid in full on March 1, 2019. Personally guaranteed by principal stockholder. (6) Unsecured note payable for $300,000 to two individual shareholders with interest at 20%, principal and interest paid bi-weekly, maturing October 26, 2018. The note was repaid in full on September 13, 2018. Personally guaranteed by principal stockholder. (7) Unsecured note payable for $250,000 to two individual shareholders with interest at 20%, principal and interest paid bi-weekly, maturing September 7, 2018. The note was repaid in full on July 30, 2018. Personally guaranteed by principal stockholder. (8) Unsecured note payable for $250,000 to two individual shareholders with interest at 20%, principal and interest paid bi-weekly, maturing July 26, 2019. $31,452 from the proceeds of this unsecured note payable was used to retire the balance of the unsecured note maturing on September 7, 2018. This note was repaid in full on April 26, 2019. Personally guaranteed by principal stockholder. (9) Unsecured note payable for $300,000 to two individual shareholders with interest at 20%, principal and interest paid bi-weekly, maturing September 13, 2019. $37,743 from the proceeds of this unsecured note payable was used to retire the balance of the unsecured note maturing October 26, 2018. This note was fully paid on September 13, 2019. Personally guaranteed by principal stockholder. (10) Unsecured note payable for $300,000 to two individual shareholders with interest at 20%, principal and interest paid bi-weekly, maturing March 1, 2020. Personally guaranteed by principal stockholder. (11) Unsecured note payable for $300,000 to two individual shareholders with interest at 20%, principal and interest paid bi-weekly, maturing April 26, 2020. $72,279 from the proceeds of this unsecured note payable was used to retire the balance of the unsecured note payable maturing July 26, 2019. Personally guaranteed by principal stockholder. |
Notes Payable-Related Party
Notes Payable-Related Party | 12 Months Ended |
Jun. 30, 2019 | |
Notes to Financial Statements | |
Notes Payable-Related Party | NOTE 10. NOTES PAYABLE- RELATED PARTY Related party notes payable at June 30, 2019 and 2018 consisted of the following: 2019 2018 (in thousands) Unsecured note payable to an officer, with interest at 5%, due on demand $ 40 $ 40 Unsecured note payable to an officer, with interest at 5%, due on demand 76 76 Total unsecured notes payable 116 116 Less: current portion (116 ) (116 ) Long-term unsecured notes payable $ — $ — |
Term Notes Payable Shareholder
Term Notes Payable Shareholder | 12 Months Ended |
Jun. 30, 2019 | |
Notes to Financial Statements | |
Term Notes Payable Shareholder | NOTE 11. TERM NOTES PAYABLE – SHAREHOLDER On September 5, 2014, the Company amended and restated its outstanding 3% Convertible Note in the original principal amount of $375,000 issued by the Company to Hope Capital, Inc. (“HCI”) on June 24, 2009, as amended (the “June 2009 Note”), and the 3% Convertible Note in the original principal amount of $250,000 issued by the Company to HCI on September 2, 2009, as amended (the “September 2009 Note”), the June 2009 Note and September 2009 Note collectively referred to as the “Original Notes”, to provide for a 3% unsecured promissory note in the principal amount of $700,000 (the “Note”) to HCI. The Note is due on or before August 31, 2019 and bears interest at the rate of 3% per annum. Principal and interest payments under the Note shall be made on a monthly basis, starting on October 1, 2014 and continuing on the first day of each month thereafter for 60 monthly payments. The first 12 payments are $9,406 each and increase 15% each year, with 12 payments of $16,450 during year five. In the event the Company fails to make a monthly payment under the Note or the Company is subject to a bankruptcy event (as defined under the Note), subject to the Company’s ability to cure such default, HCI may convert all or any portion of the outstanding principal, accrued and unpaid interest, and any other sums due and payable under the Note into shares of our common stock at a conversion price equal to $0.10 per share. Conversion is subject to HCI not being able to beneficially own more than 9.99% of our outstanding common stock upon any conversion, subject to waiver by HCI. The Company has the right to prepay the Note, in whole or in part, subject to notice to HCI, without penalty. As of June 30, 2019 the principal balance under this Note was $49,106 and this Note was repaid in full on September 1, 2019. The principal payments required at maturity under the Company’s outstanding short term notes, secured line of credit, unsecured line of credit, credit cards loans, short term related party notes and term note payable at June 30, 2019 are as follows: Fiscal Years Ending June 30, (in thousands) 2020 $ 2,238 2021 457 Total $ 2,695 |
Credit Card Advance
Credit Card Advance | 12 Months Ended |
Jun. 30, 2019 | |
Notes to Financial Statements | |
Credit Card Advance | NOTE 12. CREDIT CARD ADVANCES On June 29, 2017, OneUp Innovations entered into an agreement with Power Up Lending Group, Ltd. (“Power Up”) whereby Power Up agreed to loan OneUp and Foam Labs a total of $400,000 from Power Up. The loan called for a repayment of $452,000, which included a one-time finance charge of $52,000, approximately ten months after the funding date. The balance of the September 22, 2016 credit card loan was deducted from this loan and the Company received net proceeds of approximately $374,173. This loan was repaid in full on April 18, 2018. This loan was guaranteed by the Company and was personally guaranteed by the Company’s CEO and controlling shareholder, Louis S. Friedman (see Note 17). On April 6, 2018, OneUp Innovations borrowed an additional amount of $500,000 from PowerUp. The loan is secured by OneUp’s and Foam Lab’s existing and future credit card collections. The loan calls for a repayment of $570,000, which includes a one-time finance charge of $70,000, approximately ten months after the funding date. This loan was repaid in full on January 29, 2019. This loan was guaranteed by the Company and was personally guaranteed by the Company’s CEO and controlling shareholder, Louis S. Friedman (see Note 17). On October 12, 2018, the Company borrowed an additional $250,000 from Power Up against its future credit card receivables. Terms for this loan calls for a repayment of $290,000 which includes a one-time finance charge of $40,000, approximately ten months after the funding date. A .5% loan origination fee was deducted, and the Company received net proceeds of $248,750. This loan was repaid in full on August 6, 2019. This loan is guaranteed by the Company and is personally guaranteed by the Company’s CEO and controlling shareholder (see Note 17). On January 29, 2019, the Company borrowed an additional $300,000 from Power Up against its future credit card receivables. Terms for this loan calls for a repayment of $345,000 which includes a one-time finance charge of $45,000, approximately ten months after the funding date. A 1% loan origination fee was deducted, and the Company received net proceeds of $297,000. This loan is guaranteed by the Company and is personally guaranteed by the Company’s CEO and controlling shareholder (see Note 17). As of June 30, 2019, the principal amount of the credit card advance totaled $179,738, net of a discount of $26,500. |
Line of Credit
Line of Credit | 12 Months Ended |
Jun. 30, 2019 | |
Notes to Financial Statements | |
Line of Credit | NOTE 13. LINE OF CREDIT On May 24, 2011, the Company’s wholly owned subsidiary, OneUp and OneUp’s wholly owned subsidiary, Foam Labs entered into a credit facility with a finance company, Advance Financial Corporation, to provide it with an asset based line of credit of up to $750,000 against 85% of eligible accounts receivable (as defined in the agreement) for the purpose of improving working capital. The term of the agreement was one year, renewable for additional one-year terms unless either party provides written notice of non-renewal at least 90 days prior to the end of the current financing period. The credit facility was secured by our accounts receivable and other rights to payment, general intangibles, inventory and equipment, and are subject to eligibility requirements for current accounts receivable. Advances under the agreement were charged interest at a rate of 2.5% over the lenders Index Rate. In addition there was a Monthly Service Fee (as defined in the agreement) of up to 1.25% per month. On September 4, 2013, the credit agreement with Advance Financial Corporation was amended and restated to increase the asset based line of credit to $1,000,000 to include an Inventory Advance (as defined in the amended and restated receivable financing agreement) of up to the lesser of $300,000 or 75% of the eligible accounts receivable loan. In addition, the amended and restated agreement changed the interest calculation to prime rate plus 3% (as of June 30, 2019, the interest rate was 8.5%) and the Monthly Service Fee was changed to .5% per month. On December 9, 2015, the credit agreement with Advance Financial Corporation was amended to increase the asset based line of credit to $1,200,000 to include an Inventory Advance (as defined in the amended and restated receivable financing agreement) of up to the lesser of $300,000 or 75% of the eligible accounts receivable loan. All other terms of the credit facility remain the same. On November 27, 2018, the credit agreement with Advance Financial Corporation was amended to increase the Inventory Advance (as defined in the amended and restated receivable financing agreement) of up to the lesser of $500,000 or 125% of the eligible accounts receivable loan. All other terms of the credit facility remain the same. The Company’s CEO, Louis Friedman, has personally guaranteed the repayment of the facility. In addition, Luvu Brands has provided its corporate guarantee of the credit facility (see Note 16). On June 30, 2019, the balance owed under this line of credit was $952,758. As of June 30, 2019, we were current and in compliance with all terms and conditions of this line of credit. Management believes cash flows generated from operations, along with current cash and investments as well as borrowing capacity under the line of credit should be sufficient to finance capital requirements required by operations. If new business opportunities do arise, additional outside funding may be required. |
Unsecured Lines of Credit
Unsecured Lines of Credit | 12 Months Ended |
Jun. 30, 2019 | |
Notes to Financial Statements | |
Unsecured Lines of Credit | NOTE 14. UNSECURED LINES OF CREDIT The Company has drawn a cash advance on one unsecured lines of credit that is in the name of the Company and Louis S. Friedman (see Note 16). The terms of this unsecured line of credit calls for monthly payments of principal and interest, with interest at 8%. The aggregate amount owed on the unsecured line of credit was $25,278 at June 30, 2019 and $33,145 at June 30, 2018. |
Secured Note Payable
Secured Note Payable | 12 Months Ended |
Jun. 30, 2019 | |
Notes to Financial Statements | |
Secured Note Payable | NOTE 15. SECURED NOTE PAYABLE On June 11, 2019, the Company entered into an agreement with a secured lender, whereby the lender agreed to loan OneUp Innovations a total of $150,000. Repayment of this note is by 78 weekly payments of $2,327. This note payable is guaranteed by the Company and is personally guaranteed by the Company’s CEO and controlling shareholder, Louis S. Friedman. On June 28, 2019, the Company entered into an agreement with Amazon, whereby Amazon agreed to loan OneUp Innovations a total of $302,000. Repayment of this note is by 12 monthly payments of $26,301, which includes interest at 8.22%. The Company has granted Amazon a security interest in the assets of the Company. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 16. COMMITMENTS AND CONTINGENCIES Operating Leases On July 23, 2014, the Company entered into an agreement with its landlord to extend the facilities lease by five years. The previous ten year lease was to expire on December 31, 2015. The agreement amends the lease to expire on December 31, 2020. The lease amendment was effective August 1, 2014 and included a four month rental abatement in the amount of $117,660. In exchange for the rental abatement, the Company agreed to make improvements to the facility totaling $123,505 within six months of August 1, 2014. As of June 30, 2019, the Company has completed $101,776 of the leasehold improvements. In addition, the monthly rent on the facility decreased from the current rent of $33,139 to $29,415 per month, beginning on December 1, 2014. Beginning January 1, 2015, the monthly rent changed to an escalating schedule with the final year of the lease at $35,123 per month. The rent expense under this lease for the years ended June 30, 2019 and 2018 was $352,479 in each year. The Company also leases certain postage equipment under an operating lease. The monthly lease is $102 per month and expires January 2023. Future minimum lease payments under non-cancelable operating leases at June 30, 2019 are as follows: Years ending June 30, (in thousands) 2020 $ 417 2021 212 2022 1 2023 1 Total minimum lease payments $ 631 Capital Leases The Company has acquired equipment under the provisions of long-term leases. For financial reporting purposes, minimum lease payments relating to the equipment have been capitalized. The leased properties under these capital leases have a total cost of $145,916. These assets are included in the fixed assets listed in Note 6 and include computers, software, furniture, and equipment. The capital leases have stated or imputed interest rates ranging from 7% to 21%. The following is an analysis of the minimum future lease payments subsequent to the year ended June 30, 2019: Years ending June 30, (in thousands) 2020 $ 8 2021 — Future Minimum Lease Payments $ 8 Less Amount Representing Interest — Present Value of Minimum Lease Payments 8 Less Current Portion (8 ) Long-Term Obligations under Leases Payable $ — Equipment Notes Payable The Company has acquired equipment under the provisions of long-term equipment notes. For financial reporting purposes, minimum note payments relating to the equipment have been capitalized. The equipment acquired with these equipment notes has a total cost of $657,187. These assets are included in the fixed assets listed in Note 6 - Equipment and Leasehold Improvements The following is an analysis of the minimum future equipment note payable payments subsequent to June 30, 2019: Year ending June 30, (in thousands) 2020 $ 157 2021 104 2022 62 2023 40 2024 23 Future Minimum Note Payable Payments $ 386 Less Amount Representing Interest (60 ) Present Value of Minimum Note Payable Payments 326 Less Current Portion (127 ) Long-Term Obligations under Equipment Notes Payable $ 199 Employment Agreements The Company has entered into an employment agreement with Louis Friedman, President and Chief Executive Officer. The agreement provides for an annual base salary of $150,000 and eligibility to receive a bonus. In certain termination situations, the Company is liable to pay severance compensation to Mr. Friedman for up to nine months at his current salary. Legal Proceedings As of the date of this Annual Report, there are no material pending legal or governmental proceedings relating to the Company or properties to which the Company is a party, and to the Company’s knowledge there are no material proceedings to which any of its directors, executive officers or affiliates are a party adverse to the Company or which have a material interest adverse to the Company. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Parties | NOTE 17. RELATED PARTY TRANSACTIONS The Company has a subordinated note payable to an officer of the Company who is also the wife of the Company’s CEO (Louis Friedman) and majority shareholder in the amount of $76,000 (see Note 10). Interest on the note during the year ended June 30, 2019 was accrued by the Company at the prevailing prime rate (which is currently 5.5%) and totaled $4,045. The accrued interest on the note as of June 30, 2019 was $27,846. This note is subordinate to all other credit facilities currently in place. On October 30, 2010, Mr. Friedman, loaned the Company $40,000 (see Note 10). Interest on the note during the year ended June 30, 2019 was accrued by the Company at the prevailing prime rate (which is currently 5.5%) and totaled $2,128. The accrued interest on the note as of June 30, 2019 was $8,710. This note is subordinate to all other credit facilities currently in place. On January 3, 2011, an individual loaned the Company $300,000 with an interest rate of 20%. Interest on the loan is being paid monthly, with the principal due in full on January 3, 2012; extended to January 3, 2019 (see Note 9). This loan was fully repaid on January 31, 2019. Mr. Friedman personally guaranteed the repayment of the loan obligation. The Company’s CEO, Louis Friedman, has personally guaranteed the repayment of the loan obligation to Advance Financial Corporation (see Note 13 – Line of Credit). In addition, Luvu Brands has provided its corporate guarantees of the credit facility. On June 30, 2019, the balance owed under this line of credit was $952,758. On July 20, 2011, the Company issued an unsecured promissory note to an individual for $100,000. Terms of the promissory note call for monthly interest payments of $1,667 (equal to interest at 20% per annum), with the principal amount due in full on July 31, 2012; extended by the holder to July 31, 2021 under the same terms (see Note 9). Repayment of the promissory note is personally guaranteed by the Company’s CEO and controlling shareholder, Louis S. Friedman. On October 31, 2013, the Company issued an unsecured promissory note to an individual for $100,000. Terms of the promissory note call for monthly interest payments of $1,667 (equal to interest at 20% per annum) beginning on November 30, 2013, with the principal amount due in full on or before October 31, 2014 extended by the holder to October 31, 2021 (see Note 9). Repayment of the promissory note is personally guaranteed by the Company’s CEO and majority shareholder, Louis S. Friedman. On May 1, 2012, an individual loaned the Company $200,000 with an interest rate of 20%. Interest on the loan is being paid monthly, with the principal due in full on May 1, 2013; then extended to May 1, 2021 (see Note 9). Mr. Friedman personally guaranteed the repayment of the loan obligation. The loans from Power Up Lending Group, Ltd. (see Note 12) are guaranteed by the Company (including OneUp and Foam Labs) and are personally guaranteed by the Company’s CEO and majority shareholder, Louis S. Friedman. Power Up Lending Group, Ltd. is controlled by Curt Kramer, who also controls HCI. As last reported to us, HCI owns 7.5% of our common stock. On September 7, 2017, the Company borrowed $250,000 from two individual shareholders with interest at 20% on an unsecured note payment, principal and interest paid bi-weekly with the final payment due September 7, 2018. This note was repaid in full on July 30, 2018. The loan was personally guaranteed by the Company’s CEO and majority shareholder, Louis S. Friedman. On October 26, 2017, the Company borrowed $300,000 from two individual shareholders with interest at 20% on an unsecured note payable, principal and interest paid bi-weekly with the final payment due October 26, 2018. This note was repaid in full on September 13, 2018. The loan was personally guaranteed by the Company’s CEO and majority shareholder, Louis S. Friedman. On March 1, 2018, the Company borrowed $300,000 from two individual shareholders with interest at 20% on an unsecured note payable, principal and interest paid bi-weekly with the final payment due March 1, 2019. This loan was repaid in full on March 1, 2019. The loan was personally guaranteed by the Company’s CEO and majority shareholder, Louis S. Friedman. On July 30, 2018, the Company borrowed $250,000 from two individual shareholders with interest at 20% on an unsecured note payable, principal and interest paid bi-weekly with the final payment due July 26, 2019. A portion of the note proceeds were used to satisfy the balance due on the September 7, 2018 note payable and the remaining proceeds of $218,548 are for working capital purposes. This loan was repaid in full from the proceeds of the April 26, 2019 loan. The loan is personally guaranteed by the Company’s CEO and majority shareholder, Louis S. Friedman. On September 13, 2018, the Company borrowed $300,000 from two individual shareholders with interest at 20% on an unsecured note payable, principal and interest paid bi-weekly with the final payment due September 13, 2019. A portion of the note proceeds were used to satisfy the balance due on the October 27, 2017 note payable and the remaining proceeds of $262,257 are for working capital purposes. The loan is personally guaranteed by the Company’s CEO and majority shareholder, Louis S. Friedman. On March 1, 2019, the Company borrowed $300,000 from two individual shareholders with interest at 20% on an unsecured note payable, principal and interest paid bi-weekly with the final payment due March 1, 2020. The loan is personally guaranteed by the Company’s CEO and majority shareholder, Louis S. Friedman. On April 26, 2019, the Company borrowed $300,000 from two individual shareholders with interest at 20% on an unsecured note payable, principal and interest paid bi-weekly with the final payment due April 24, 2020. A portion of the note proceeds were used to satisfy the balance due on the July 30, 2018 note payable and the remaining proceeds of $227,721 are for working capital purposes. The loan is personally guaranteed by the Company’s CEO and majority shareholder, Louis S. Friedman. The Company has drawn a cash advance on one unsecured line of credit that is in the name of the Company and Louis S. Friedman. The terms of this unsecured line of credit calls for monthly payments of principal and interest, with interest at 8%. The aggregate amount owed on the unsecured line of credit was $25,278 at June 30, 2019 and $33,145 at June 30, 2018 (see Note 14). The loan is personally guaranteed by the Company’s CEO and majority shareholder, Louis S. Friedman. On June 11, 2019, the Company entered into an agreement with a secured lender, whereby the lender agreed to loan OneUp Innovations a total of $150,000. Repayment of this note is by 78 weekly payments of $2,327. This note payable is guaranteed by the Company and is personally guaranteed by the Company’s CEO and controlling shareholder, Louis S. Friedman. On September 5, 2014, the Company amended and restated its HCI Original Notes, to provide for a 3% unsecured promissory note in the principal amount of $700,000 (the “Note”) to HCI. The Note is due on or before August 31, 2019 and bears interest at the rate of 3% per annum. Principal and interest payments under the Note shall be made on a monthly basis, starting on October 1, 2014 and continuing on the first day of each month thereafter for 60 monthly payments. The first 12 payments are $9,405.60 each and increase 15% every year, with 12 payments of $16,450.45 during year five. In the event the Company fails to make a monthly payment under the Note or the Company is subject to a bankruptcy event (as defined under the Note), subject to the Company’s ability to cure such default, HCI may convert all or any portion of the outstanding principal, accrued and unpaid interest, and any other sums due and payable under the Note into shares of our common stock at a conversion price equal to $0.10 per share. Conversion is subject to HCI not being able to beneficially own more than 9.99% of our outstanding common stock upon any conversion, subject to waiver by HCI. The Company has the right to prepay the Note, in whole or in part, subject to notice to HCI, without penalty. As of June 30, 2019 the principal balance under this Note was $49,106 and this Note was repaid in full on September 1, 2019. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | NOTE 18. STOCKHOLDERS’ EQUITY Options At June 30, 2019, the Company had the 2009 and 2015 Stock Option Plans (the “Plans”), which are shareholder-approved and under which 200,000 shares are reserved for issuance under the 2009 Plan until that Plan terminates on October 20, 2019 and 5,000,000 shares are reserved for issuance under the 2015 Plan until that Plan terminates on August 31, 2025. Under the Plans, eligible employees and certain independent consultants may be granted options to purchase shares of the Company’s common stock. The shares issuable under the Plan will either be shares of the Company’s authorized but previously unissued common stock or shares reacquired by the Company, including shares purchased on the open market. As of June 30, 2019, the number of shares available for issuance under the 2015 Plan was 1,150,000. There are no shares available for issuance under the 2009 Plan, other than the 200,000 stock options that have already been granted. A summary of option activity under the Company’s stock plan for the years ended June 30, 2019 and 2018 is presented below: Option Activity Shares Weighted Weighted Average Remaining Contractual Term Aggregate Outstanding at June 30, 2017 6,975,000 $ .03 2.7 years $ 135,975 Granted 1,100,000 $ .03 Exercised — $ — Forfeited or Expired (3,010,000 ) $ .06 Outstanding at June 30, 2018 5,065,000 $ .03 2.7 years $ 98,600 Granted 400,000 $ .04 Exercised — $ — Forfeited or Expired (1,415,000 ) $ .04 Outstanding at June 30, 2019 4,050,000 $ .02 2.3 years $ 13,500 Exercisable at June 30, 2019 2,237,500 $ .02 1.9 years $ 10,125 The aggregate intrinsic value in the table above is before applicable income taxes and represents the excess amount over the exercise price optionees would have received if all options had been exercised on the last business day of the period indicated, based on the Company’s closing stock price of $.02, $.05, and $.05 at June 30, 2019, 2018 and 2017, respectively. There were 400,000 stock options granted during the year ended June 30, 2019 and 1,100,000 stock options granted during the year ended June 30, 2018. The range of fair value assumptions related to options granted during the years ended June 30, 2019 and 2018 were as follows: 2019 2018 Exercise Price: $ .038-.046 $ .03-.04 Volatility: 380% - 391% 403% - 409% Risk Free Rate: 2.3% - 2.7% 2.06% - 2.49% Vesting Period: 4 years 4 years Forfeiture Rate: 0% 0% Expected Life: 4.1 years 4.1 years Dividend Rate: 0% 0% The following table summarizes the weighted average characteristics of outstanding stock options as of June 30, 2019: Outstanding Options Exercisable Options Exercise Prices Number of Shares Remaining Life (Years) Weighted Average Price Number of Shares Weighted Average Price .01 to .03 3,650,000 2.2 $ .02 2,137,500 $.02 .034 to .09 400,000 3.2 $ .05 100,000 $.04 Total stock options 4,050,000 2.3 $ .02 2,237,500 $.02 We account for stock-based compensation to employees in accordance with FASB ASC 718, Compensation – Stock Compensation. We measure the cost of each stock option and at its fair value on the grant date. Each award vests over the subsequent period during which the recipient is required to provide service in exchange for the award (the vesting period). The cost of each award is recognized as expense in the financial statements over the respective vesting period. All stock option grants made under the Plan were at exercise prices no less than the Company’s closing stock price on the date of grant. Options under the Plan were determined by the board of directors in accordance with the provisions of the plan. The terms of each option grant include vesting, exercise, and other conditions are set forth in a Stock Option Agreement evidencing each grant. No option can have a life in excess of ten (10) years. The Company records compensation expense for employee stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes option-pricing model. The model requires various assumptions, including a risk-free interest rate, the expected term of the options, the expected stock price volatility over the expected term of the options, and the expected dividend yield. Compensation expense for employee stock options is recognized ratably over the vesting term. The Company has no awards with market or performance conditions. Stock-based compensation expense recognized in the consolidated statements of operations for each of the fiscal years ended June 30, 2019 and 2018 is based on awards ultimately expected to vest. As of June 30, 2019, total unrecognized stock-based compensation expense related to all unvested stock options was $36,770 which is expected to be expensed over a weighted average period of 2.3 years. In determining the grant date fair value of option awards under the equity incentive plans, the Company applied the Black-Scholes option pricing model. Based upon limited option exercise history, the Company has generally used the “simplified” method outlined in SEC Staff Accounting Bulletin No. 110 to estimate the expected life of stock option grants. Management believes that the historical volatility of the Company’s stock price on OTCQB best represents the expected volatility over the estimated life of the option. The risk-free interest rate is based upon published U.S. Treasury yield curve rates at the date of grant corresponding to the expected life of the stock option. An assumed dividend yield of zero reflects the fact that the Company has never paid cash dividends and has no intentions to pay dividends in the foreseeable future. The following table summarizes stock-based compensation expense by line item in the consolidated statements of operations, all relating to employee stock plans: For the Years Ended June 30, 2019 2018 (in thousands) Cost of Goods Sold $ — $ 1 Other Selling and Marketing 4 6 General and Administrative 19 17 Total $ 23 $ 24 Share Purchase Warrants As of June 30, 2019 and 2018, there were no share purchase warrants outstanding. Common Stock The Company’s authorized common stock was 175,000,000 shares at June 30, 2019 and 2018. Common shareholders are entitled to dividends if and when declared by the Company’s Board of Directors, subject to preferred stockholder dividend rights. At June 30, 2019, the Company had reserved the following shares of common stock for issuance: June 30, 2019 Shares of common stock reserved for issuance under the 2009 Stock Option Plan 200,000 Shares of common stock reserved for issuance under the 2015 Stock Option Plan 5,000,000 Shares of common stock issuable upon conversion of the Preferred Stock 4,300,000 Total shares of common stock equivalents 9,500,000 Preferred Stock On February 18, 2011, the Company filed an amendment to its Articles of Incorporation, effective February 9, 2011, authorizing the issuance of preferred stock and the Company now has 10,000,000 authorized shares of preferred stock, par value $.0001 per share, of which 4,300,000 shares have been designated and issued as Series A Convertible Preferred Stock. Each share of Series A Convertible Preferred Stock is convertible into one share of common stock and has a liquidation preference of $.2325 ($1,000,000 in the aggregate). Liquidation payments to the preferred holders have priority and are made in preference to any payments to the holders of common stock. In addition, each share of Series A Convertible Preferred Stock is entitled to the number of votes equal to the result of: (i) the number of shares of common stock of the Company issued and outstanding at the time of such vote multiplied by 1.01; divided by (ii) the total number of Series A Convertible Preferred Shares issued and outstanding at the time of such vote. At each meeting of shareholders of the Company with respect to any and all matters presented to the shareholders of the Company for their action or consideration, including the election of directors, holders of Series A Convertible Preferred Shares shall vote together with the holders of common shares as a single class. |
Income Taxes
Income Taxes | 12 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 19. INCOME TAXES Deferred tax assets and liabilities are computed by applying the effective U.S. federal income tax rate to the gross amounts of temporary differences and other tax attributes. Deferred tax assets and liabilities relating to state income taxes are not material. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. As of June 30, 2019 and 2018, the Company believed it was more likely than not that future tax benefits from net operating loss carryforwards and other deferred tax assets would not be realizable through generation of future taxable income; therefore, they were fully reserved. The components of deferred tax assets and liabilities at June 30, 2019 and 2018 are approximately as follows: 2019 2018 (in thousands) Deferred tax assets: Inventory reserves $ 21 $ 12 Allowance for doubtful accounts 14 14 Stock-based compensation 91 82 Net operating loss carry-forwards 2,884 2,843 Total gross deferred tax assets 3,010 2,951 Valuation allowance (3,010 ) (2,951 ) Net deferred tax assets $ — $ — The income tax provision differs from the amount of income tax determined by applying the U.S. federal and state income tax rates of 38% to pretax (income) loss from operations for the years ended June 30, 2019 and 2018 due to the following: 2019 2018 Net (income) loss $ 41 $ 222 Temporary differences 18 5 Valuation (allowance) (59 ) (227 ) Net tax benefit $ — $ — At June 30, 2019, the Company had net operating loss (NOL) carryforwards of approximately $3.0 million that may be offset against future taxable income. During 2019 and 2018, the total increase in the valuation allowance was $59,021 and $227,411, respectively. The Company’s ability to use its NOL carryforwards may be substantially limited due to ownership change limitations that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (the Code), as well as similar state provisions. These ownership changes may limit the amount of NOL that can be utilized annually to offset future taxable income and tax, respectively. In general, an “ownership change” as defined by Section 382 of the Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50.0% of the outstanding stock of a company by certain stockholders or public groups. The Company has not completed a study to assess whether an ownership change has occurred or whether there have been multiple ownership changes since the Company became a “loss corporation” under the definition of Section 382. If the Company has experienced an ownership change, utilization of the NOL carryforwards would be subject to an annual limitation under Section 382 of the Code, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term, tax-exempt rate, and then could be subject to additional adjustments, as required. Any limitation may result in expiration of a portion of the NOL carryforwards before utilization. Further, until a study is completed and any limitation known, no positions related to limitations are being considered as an uncertain tax position or disclosed as an unrecognized tax benefit. Any carryforwards that expire prior to utilization as a result of such limitations will be removed from deferred tax assets with a corresponding reduction of the valuation allowance. Due to the existence of the valuation allowance, it is not expected that any possible limitation will have an impact on the results of operations or financial position of the Company. The NOL carryforwards expire through 2037. The tax years that remain subject to examination by major taxing jurisdictions are those for the years ended June 30, 2012 through 2019. The Company has not filed its Federal or State tax returns for 2016 through 2018 but expects to file these returns before the end of calendar year 2019. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 20. – SUBSEQUENT EVENTS Subsequent to June 30, 2019, the Company borrowed an additional $250,000 from Power Up against its future credit card receivables. Terms for this loan calls for a repayment of $290,000 which includes a one-time finance charge of $40,000, approximately ten months after the funding date. A 1% loan origination fee was deducted, and the Company received net proceeds of $247,500. This loan is guaranteed by the Company and is personally guaranteed by the Company’s CEO and controlling shareholder. Subsequent to June 30, 2019, the Company borrowed $300,000 from two individual shareholders with interest at 20% on an unsecured note payable, principal and interest paid bi-weekly with the final payment due September 18, 2020. The lenders charged a 3% loan origination fee and the remaining proceeds of $291,000 will be used working capital purposes. This note payable is personally guaranteed by the principal stockholder |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Organization | NOTE 1. ORGANIZATION AND NATURE OF BUSINESS Luvu Brands, Inc. (the “Company” or Luvu) was incorporated in the State of Florida on February 25, 1999. References to the “Company” in these notes include the Company and its wholly owned subsidiaries, OneUp Innovations, Inc. (“OneUp”), and Foam Labs, Inc. (“Foam Labs”). All operations of the Company are currently conducted by OneUp Innovations, Inc. The Company is an Atlanta, Georgia based designer, manufacturer and marketer of a portfolio of consumer lifestyle brands including: Liberator ® ® ® Sales are generated through internet and print advertisements. We have a diversified customer base with only one customer accounting for 10% or more of consolidated net sales in the current and prior fiscal year and no particular concentration of credit risk in one economic sector. Foreign operations and foreign net sales are not material. Our business is seasonal and as a result we typically experience higher sales in our second and third fiscal quarters. |
Basis of Presentation | Basis of Presentation These consolidated financial statements include the accounts and operations of our wholly owned operating subsidiaries, OneUp and Foam Labs. Intercompany accounts and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current year presentation. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions in determining the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Significant estimates in these consolidated financial statements include estimates of: income taxes; tax valuation reserves; allowances for doubtful accounts; inventory valuation and reserves, share-based compensation; and useful lives for depreciation and amortization. Actual results could differ materially from these estimates. |
Revenue Recognition | Revenue Recognition Net revenue is measured based on the amount of consideration that we expect to receive, reduced by discounts and estimates for credits and returns (calculated based upon previous experience and management’s evaluation). Outbound shipping charged to customers is recognized at the time the related merchandise revenues are recognized and are included in net revenues. Inbound and outbound shipping and delivery costs are included in cost of revenues. Net revenues exclude sales and other similar taxes collected from customers. A description of our principal revenue generating activities is as follows: · E-commerce revenues - consumer products sold through our online and telephonic channels. Revenue is recognized when control of the merchandise is transferred to the customer, which generally occurs upon shipment. Payment is typically due on the date of shipment. · Wholesale revenues - products sold to our wholesale customers for subsequent resale. Revenue is recognized when control of the goods is transferred to the customer, in accordance with the terms of the applicable agreement. Payment terms are typically 30 days from the date control over the product is transferred to the customer. · Retail revenues - consumer products sold through our retail store. Revenue is recognized when control of the goods is transferred to the customer, at the point of sale, at which time payment is received. The Company accounts for revenue in accordance with Topic 606 which was adopted at the beginning of fiscal year 2019 using the modified retrospective method. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The Company did not recognize any cumulative-effect adjustment to retained earnings upon adoption as the effect was immaterial. The adoption of these standards did not have a material impact on the Company's condensed consolidated statements of operations during the year ended June 30, 2019. Refer to Note 3 – Segment Information for disclosure of disaggregated revenues. |
Deferred Revenues | Deferred revenues Deferred revenues are recorded when the Company has received consideration (i.e. advance payment) before satisfying its performance obligations. Deferred revenues primarily relate to gift cards purchased, but not used, prior to the end of the fiscal period. Our total deferred revenue as of June 30, 2018 was $13,324 and was included in “Accrued expenses” on our consolidated balance sheets. The deferred revenue balance as of June 30, 2019 was $14,198. |
Cost of Goods Sold | Cost of Goods Sold Cost of goods sold includes raw material, labor, manufacturing overhead, and royalty expense. |
Shipping and Handling Costs | Shipping and Handling Costs We include fees earned on the shipment of our products to customers in sales and include costs incurred on the shipment of product to customers in costs of goods sold. |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of reporting cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The allowance for doubtful accounts reflects management's best estimate of probable credit losses inherent in the accounts receivable balance. The Company determines the allowance based on historical experience, specifically identified nonpaying accounts and other currently available evidence. The Company reviews its allowance for doubtful accounts monthly with a focus on significant individual past due balances over 90 days. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance sheet credit exposure related to its customers. The following is a summary of Accounts Receivable as of June 30, 2019 and June 30, 2018. June 30, June 30, (in thousands) Accounts receivable $ 850 $ 687 Allowance for doubtful accounts (20 ) (24 ) Allowance for discounts and returns — (6 ) Total accounts receivable, net $ 830 $ 657 |
Inventories and Inventory Reserves | Inventories and Inventory Reserves Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out (FIFO) method. Net realizable value is defined as sales price less cost to dispose and a normal profit margin. Inventory costs include materials, labor, depreciation and overhead. The company establishes reserves for excess and obsolete inventory, based on prevailing circumstances and judgment for consideration of current events, such as economic conditions, that may affect inventory. The reserve required to record inventory at lower of cost or net realizable value may be adjusted in response to changing conditions. |
Concentration of Credit Risk | Concentration of Credit Risk The Company maintains its cash accounts with banks located in Georgia. The total cash balances are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per bank. The Company had cash balances on deposit at June 30, 2019 and 2018 that exceeded the balance insured by the FDIC by $134,016 and $191,101, respectively. Accounts receivable are typically unsecured and are derived from revenue earned from customers primarily located in North America and Europe. During 2019, we purchased 37% of total inventory purchases from one vendor. During 2018, we purchased 17% of total inventory purchases from one vendor. As of June 30, 2019 and 2018, one of the Company’s customers (Amazon) represents 50% and 54% of the total accounts receivables, respectively. Sales to (and through) Amazon accounted for 34% of our net sales during the year ended June 30, 2019 and 33% of our sales for the year ended June 30, 2018. |
Fair Value of Financial and Derivative Instruments | Fair Value of Financial Instruments At June 30, 2019 and 2018, our financial instruments included cash and cash equivalents, accounts receivable, accounts payable, short-term debt, and other long-term debt. The fair values of these financial instruments approximated their carrying values based on either their short maturity or current terms for similar instruments. The Company measures the fair value of its assets and liabilities under the guidance of ASC 820, Fair Value Measurements and Disclosures ASC 820 clarifies that fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based on the highest and best use of the asset or liability. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. ASC 820 requires the Company to use valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows: · Level 1 · Level 2 · Level 3 The valuation techniques that may be used to measure fair value are as follows: A. Market approach B. Income approach C. Cost approach |
Advertising Costs | Advertising Costs Advertising costs are expensed in the period when the advertisements are first aired or distributed to the public. Prepaid advertising (included in prepaid expenses) was $1,500 at June 30, 2019 and $13,040 at June 30, 2018. Advertising expense for the years ended June 30, 2019 and 2018 was $356,154 and $404,436, respectively. |
Research and Development | Research and Development Research and development expenses for new products are expensed as they are incurred. Expenses for new product development (included in general and administrative expense) totaled $123,478 for the year ended June 30, 2019 and $150,742 for the year ended June 30, 2018. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Depreciation and amortization are computed using the straight-line method over estimated service lives for financial reporting purposes of 2-10 years. Expenditures for major renewals and betterments which extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. When properties are disposed of, the related costs and accumulated depreciation are removed from the respective accounts, and any gain or loss is recognized currently. |
Operating Leases | Operating Leases On July 23, 2014, the Company entered into an agreement with its landlord to extend the facilities lease by five years. The previous ten year lease was to expire on December 31, 2015. The agreement amended the lease to expire on December 31, 2020. The lease amendment was effective August 1, 2014 and included a four-month rental abatement in the amount of $117,660. In exchange for the rental abatement, the Company agreed to make improvements to the facility totaling $123,505 within six months of August 1, 2014. As of June 30, 2019, the Company has completed $101,776 of the leasehold improvements. Under the lease amendment, the monthly rent on the facility was $29,415 per month, beginning on December 1, 2014. Beginning January 1, 2015, the monthly rent increases annually with the final year of the lease at $35,123 per month. The rent expense under this lease for the years ended June 30, 2019 and 2018 was $352,479 in each year. The Company also leases certain equipment under operating leases, as more fully described in Note 16 - Commitments and Contingencies |
Segment Information | Segment Information We have identified three reportable sales channels: Direct, Wholesale Other Direct Wholesale Wholesale Other Direct The following is a summary of sales results for the Direct, Wholesale Other Year Ended Year Ended % (in thousands) Net Sales by Channel: Direct $ 4,929 $ 5,326 (7 )% Wholesale $ 11,757 $ 10,718 10 % Other $ 317 $ 382 (17 )% Total Net Sales $ 17,003 $ 16,426 4 % Year Ended Margin Year Ended Margin % June 30, 2019 % June 30, 2018 % Change (in thousands) Gross Profit by Channel: Direct $ 2,229 45 % $ 2,400 45 % (7)% Wholesale $ 3,077 26 % $ 3,097 29 % (1)% Other $ (882 ) (278 )% $ (702 ) (183 )% (26)% Total Gross Profit $ 4,424 26 % $ 4,795 29 % (8)% |
Recently Accounting Pronouncements | Recent accounting pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by the Company as of the specified effective date. Recently adopted In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, which creates a single, comprehensive revenue recognition model for all contracts with customers. Under this ASU and subsequently issued amendments, an entity should recognize revenue to reflect the transfer of promised goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods and services. ASU 2014-9 may be adopted either retrospectively or on a modified retrospective basis. The standard is effective for interim and annual reporting periods beginning after December 15, 2017. The Company adopted the standard for its 2019 fiscal year. The impact of adopting the standard was not material. Not yet adopted In February 2016, the FASB issued ASU No. 2016-12, Leases, which requires entities to recognize right-of-use assets and lease liabilities on the balance sheet for the rights and obligations created by all leases, including operating leases, with terms of more than 12 months. The new guidance also requires additional disclosures on the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative information. This amendment is effective for the Company's fiscal year ending June 2020 with early adoption permitted. The adoption of ASU 2016-02 will have an impact on the consolidated balance sheet as the Company will record assets and obligations primarily related to our facility. The Company has estimated that the adoption of this guidance will result in an operating lease liability of approximately $545,000 being recorded on July 1, 2019 which is calculated based on the present value of the remaining minimum rental payments using discount rates as of the effective date. The Company also has estimated the corresponding right to use asset of approximately $448,000, based upon the operating lease liability adjusted for deferred rent, unamortized initial direct costs, liabilities associated with lease termination costs and impairment of right-of-use assets. The adoption is expected to be done on a modified retrospective basis with no adjustments made to periods prior to July 1, 2019. The Company does not expect a material impact on the consolidated statement of income or statement of cash flows. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. As part of the FASB's disclosure framework project, it has eliminated, amended and added disclosure requirements for fair value measurements. Entities will no longer be required to disclose the amount of, and reasons for, transfers between Level 1 and Level 2 of the fair value hierarchy, the policy of timing of transfers between levels of the fair value hierarchy and the valuation processes for Level 3 fair value measurements. Public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. This ASU is effective for public entities for annual and interim periods beginning after December 15, 2019. Early adoption is permitted as of the beginning of any interim or annual reporting period. The Company does not believe it will materially impact the disclosures. All other newly issued accounting pronouncements, but not yet effective, have been deemed either immaterial or not applicable. |
Net Income Per Share | Net Income (Loss) Per Share In accordance with FASB Accounting Standards Codification No. 260, “Earnings Per Share”, basic net income (loss) per share is computed by dividing the net income (loss) available to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common and common equivalent shares outstanding during the period. Common equivalent shares outstanding as of June 30, 2019, which consists of options and convertible preferred stock, have been excluded from the diluted net loss per common share calculation for the year ended June 30, 2019 because they are anti-dilutive. The total potential dilutive securities as of June 30, 2019 and 2018 are as follows: 2019 2018 Convertible Preferred Stock 4,300,000 4,300,000 Stock options 4,050,000 5,065,000 Total 8,350,000 9,365,000 |
Income Taxes | Income Taxes We utilize the asset and liability method of accounting for income taxes. We recognize deferred tax liabilities or assets for the expected future tax consequences of temporary differences between the book and tax basis of assets and liabilities. We regularly assess the likelihood that our deferred tax assets will be recovered from future taxable income. We consider projected future taxable income and ongoing tax planning strategies in assessing the amount of the valuation allowance necessary to offset our deferred tax assets that will not be recoverable. We have recorded and continue to carry a full valuation allowance against our gross deferred tax assets that will not reverse against deferred tax liabilities within the scheduled reversal period. If we determine in the future that it is more likely than not that we will realize all or a portion of our deferred tax assets, we will adjust our valuation allowance in the period we make the determination. We expect to provide a full valuation allowance on our future tax benefits until we can sustain a level of profitability that demonstrates our ability to realize these assets. At June 30, 2019, we carried a valuation allowance of $3.0 million against our net deferred tax assets. |
Stock based Compensation | Stock Based Compensation We account for stock-based compensation to employees in accordance with FASB ASC 718, Compensation – Stock Compensation. We measure the cost of each stock option and restricted stock award at its fair value on the grant date. Each award vests over the subsequent period during which the recipient is required to provide service in exchange for the award (the vesting period). The cost of each award is recognized as expense in the financial statements over the respective vesting period. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Accounts Receivable | June 30, June 30, (in thousands) Accounts receivable $ 850 $ 687 Allowance for doubtful accounts (20 ) (24 ) Allowance for discounts and returns — (6 ) Total accounts receivable, net $ 830 $ 657 |
Business Segments | The following is a summary of sales results for the Direct, Wholesale Other Year Ended Year Ended % (in thousands) Net Sales by Channel: Direct $ 4,929 $ 5,326 (7 )% Wholesale $ 11,757 $ 10,718 10 % Other $ 317 $ 382 (17 )% Total Net Sales $ 17,003 $ 16,426 4 % Year Ended Margin Year Ended Margin % June 30, 2019 % June 30, 2018 % Change (in thousands) Gross Profit by Channel: Direct $ 2,229 45 % $ 2,400 45 % (7)% Wholesale $ 3,077 26 % $ 3,097 29 % (1)% Other $ (882 ) (278 )% $ (702 ) (183 )% (26)% Total Gross Profit $ 4,424 26 % $ 4,795 29 % (8)% |
Anti-dilutive securities | 2019 2018 Convertible Preferred Stock 4,300,000 4,300,000 Stock options 4,050,000 5,065,000 Total 8,350,000 9,365,000 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | 2019 2018 (in thousands) Raw materials $ 872 $ 759 Work in process 111 238 Finished goods 849 753 Total inventories 1,832 1,750 Allowance for inventory reserves (81 ) (58 ) Total inventories, net of allowance $ 1,751 $ 1,692 |
Equipment and Leasehold Impro_2
Equipment and Leasehold Improvements, Net (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Equipment and Leasehold Improvements, Net | 2019 2018 Estimated (in thousands) Factory equipment $ 2,558 $ 2,472 2-10 years Computer equipment and software 1,050 1,048 5-7 years Office equipment and furniture 205 205 5-7 years Leasehold improvements 446 446 10 years Projects in process 83 — Subtotal 4,342 4,171 Accumulated depreciation (3,550 ) (3,385 ) Equipment and leasehold improvements, net $ 792 $ 786 |
Other Accrued Liabilities (Tabl
Other Accrued Liabilities (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Payables and Accruals [Abstract] | |
Other Accrued Liabilities | 2019 2018 (in thousands) Accrued compensation $ 367 $ 358 Accrued expenses and interest 188 156 Current portion of deferred rent payable 63 51 Other accrued liabilities $ 618 $ 565 |
Current and Long- term Debt S_2
Current and Long- term Debt Summary (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Current and Long-term Debt Summary | 2019 2018 Current debt: (in thousands) Unsecured lines of credit (Note 14) $ 25 $ 33 Line of credit (Note 13) 953 672 Short-term unsecured notes payable (Note 9) 523 865 Current portion of term note payable – shareholder (Note 11) 49 182 Current portion of equipment notes payable (Note 16) 127 103 Current portion secured notes payable (Note 15) 392 — Current portion of leases payable (Note 16) 8 27 Credit card advance (net of discount) (Note 12) 180 361 Notes payable – related party (Note 10) 116 116 Total current debt 2,373 2,359 Long-term debt: Leases payable (Note 16) — 8 Unsecured notes payable (Note 9) 400 200 Secured notes payable (Note 15) 57 — Equipment note payable (Note 16) 199 178 Term note payable – shareholder (Note 11) — 54 Total long-term debt $ 656 $ 440 |
Unsecured Notes Payable (Tables
Unsecured Notes Payable (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Unsecured Notes Payable | 2019 2018 Current debt: (in thousands) 20% Unsecured note, interest only, due January 2, 2019 (1) $ — $ 300 20% Unsecured note, interest only, due May 1, 2019 (4) — 200 20% Unsecured note, bi-weekly principal and interest, due March 1, 2019 (5) — 214 20% Unsecured note, bi-weekly principal and interest, due October 26, 2018 (6)(9) — 99 20% Unsecured note, bi-weekly principal and interest, due September 7, 2018 (7)(8) — 52 20% Unsecured note, bi-weekly principal and interest, due April 26, 2020 (11) 247 — 20% Unsecured note, bi-weekly principal and interest, due September 13, 2019 (9) 62 — 20% Unsecured note, bi-weekly principal and interest, due March 1, 2020 (10) 214 — Total current debt 523 865 Long-term debt: 20% Unsecured note, interest only, due May 1, 2021 (4) 200 — 20% Unsecured note, interest only, due October 31, 2021 (2) 100 100 20% Unsecured note, interest only, due July 31, 2021 (3) 100 100 Total long-term debt 400 200 Total unsecured notes payable $ 923 $ 1,065 |
Notes Payable-Related Party (Ta
Notes Payable-Related Party (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Notes to Financial Statements | |
Notes Payable - Related Party | 2019 2018 (in thousands) Unsecured note payable to an officer, with interest at 5%, due on demand $ 40 $ 40 Unsecured note payable to an officer, with interest at 5%, due on demand 76 76 Total unsecured notes payable 116 116 Less: current portion (116 ) (116 ) Long-term unsecured notes payable $ — $ — |
Term Notes Payable Shareholder
Term Notes Payable Shareholder (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Term Notes Payable Shareholder Tables Abstract | |
Term Notes Payable Shareholder | Fiscal Years Ending June 30, (in thousands) 2020 $ 2,238 2021 457 Total $ 2,695 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum operating lease payments | Years ending June 30, (in thousands) 2020 $ 417 2021 212 2022 1 2023 1 Total minimum lease payments $ 631 |
Future minimum capital lease payments | Years ending June 30, (in thousands) 2020 $ 8 2021 — Future Minimum Lease Payments $ 8 Less Amount Representing Interest — Present Value of Minimum Lease Payments 8 Less Current Portion (8 ) Long-Term Obligations under Leases Payable $ — |
Equipment lease payments | Year ending June 30, (in thousands) 2020 $ 157 2021 104 2022 62 2023 40 2024 23 Future Minimum Note Payable Payments $ 386 Less Amount Representing Interest (60 ) Present Value of Minimum Note Payable Payments 326 Less Current Portion (127 ) Long-Term Obligations under Equipment Notes Payable $ 199 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Stockholders Equity | |
Summary of Option Activity | Option Activity Shares Weighted Weighted Average Remaining Contractual Term Aggregate Outstanding at June 30, 2017 6,975,000 $ .03 2.7 years $ 135,975 Granted 1,100,000 $ .03 Exercised — $ — Forfeited or Expired (3,010,000 ) $ .06 Outstanding at June 30, 2018 5,065,000 $ .03 2.7 years $ 98,600 Granted 400,000 $ .04 Exercised — $ — Forfeited or Expired (1,415,000 ) $ .04 Outstanding at June 30, 2019 4,050,000 $ .02 2.3 years $ 13,500 Exercisable at June 30, 2019 2,237,500 $ .02 1.9 years $ 10,125 |
Assumptions | 2019 2018 Exercise Price: $ .038-.046 $ .03-.04 Volatility: 380% - 391% 403% - 409% Risk Free Rate: 2.3% - 2.7% 2.06% - 2.49% Vesting Period: 4 years 4 years Forfeiture Rate: 0% 0% Expected Life: 4.1 years 4.1 years Dividend Rate: 0% 0% |
Outstanding stock options | Outstanding Options Exercisable Options Exercise Prices Number of Shares Remaining Life (Years) Weighted Average Price Number of Shares Weighted Average Price .01 to .03 3,650,000 2.2 $ .02 2,137,500 $.02 .034 to .09 400,000 3.2 $ .05 100,000 $.04 Total stock options 4,050,000 2.3 $ .02 2,237,500 $.02 |
Stock option compensation expense | For the Years Ended June 30, 2019 2018 (in thousands) Cost of Goods Sold $ — $ 1 Other Selling and Marketing 4 6 General and Administrative 19 17 Total $ 23 $ 24 |
Common Stock for issuance | June 30, 2019 Shares of common stock reserved for issuance under the 2009 Stock Option Plan 200,000 Shares of common stock reserved for issuance under the 2015 Stock Option Plan 5,000,000 Shares of common stock issuable upon conversion of the Preferred Stock 4,300,000 Total shares of common stock equivalents 9,500,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Income Taxes Tables Abstract | |
Components of deferred tax assets and liabilities | 2019 2018 (in thousands) Deferred tax assets: Inventory reserves $ 21 $ 12 Allowance for doubtful accounts 14 14 Stock-based compensation 91 82 Net operating loss carry-forwards 2,884 2,843 Total gross deferred tax assets 3,010 2,951 Valuation allowance (3,010 ) (2,951 ) Net deferred tax assets $ — $ — |
Income tax provision | 2019 2018 Net (income) loss $ 41 $ 222 Temporary differences 18 5 Valuation (allowance) (59 ) (227 ) Net tax benefit $ — $ — |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Going Concern | ||
Net income | $ (157) | $ 147 |
Accumulated deficit | (9,016) | $ (8,859) |
Working Capital Deficit | (2,300) | |
Operational and Strategic growth plans | ||
Finances required | $ 150 |
Deferred Revenue (Details Narra
Deferred Revenue (Details Narrative) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Deferred Revenue [Abstract] | ||
Deferred Revenue | $ 14,198 | $ 13,324 |
Allowance for Doubtful Accounts
Allowance for Doubtful Accounts (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Allowance for Doubtful Accounts | ||
Accounts Receivable | $ 850 | $ 687 |
Allowance for doubtful accounts | (20) | (24) |
Allowance for discounts and returns | (6) | |
Accounts receivable, net | $ 830 | $ 657 |
Concentrations (Details Narrati
Concentrations (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Concentration Risk [Line Items] | ||
FDIC Insured | $ 250,000 | |
Exceed FDIC | $ 134,016 | $ 191,101 |
Supplier Concentration Risk [Member] | Suppliers #1[Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk Supplier | 1 | 1 |
Concentration Risk (percent) | 37.00% | 17.00% |
Customer Concentration Risk [Member] | Amazon [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk Accounts Receivable | 50% | 54% |
Concentration Risk Net Sales | 34% | 33% |
Advertising Costs (Details Narr
Advertising Costs (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Marketing and Advertising Expense [Abstract] | ||
Prepaid Advertising | $ 1,500 | $ 13,040 |
Advertising Expense | $ 356,154 | $ 404,436 |
Research and development (Detai
Research and development (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Research and Development [Abstract] | ||
New product development | $ 123,478 | $ 150,742 |
Opearting Leases (Details Narra
Opearting Leases (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Operating Leased Assets [Line Items] | ||
Rental abatement | $ 117,660 | |
Capital lease improvements | 123,505 | |
Capital lease improvement completed | 28,000 | $ 40,000 |
Current monthly rent | 33,139 | |
New monthly rent | 35,123 | |
Facility [Member] | ||
Operating Leased Assets [Line Items] | ||
Capital lease improvement completed | 101,776 | |
Monthly rental, final year on lease | 29,415 | |
Rent Expense | $ 352,479 | $ 352,479 |
Business Segments (Details Narr
Business Segments (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Segment Reporting Information [Line Items] | ||
Net Sales | $ 17,003 | $ 16,426 |
Gross profit | $ 4,424 | $ 4,795 |
% Change in Sales | 4.00% | |
Gross Profit Margin | 26.00% | 29.00% |
% Change in Gross Profit | (8.00%) | |
Direct [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Sales | $ 4,929 | $ 5,326 |
Gross profit | $ 2,229 | $ 2,400 |
% Change in Sales | (7.00%) | |
Gross Profit Margin | 45.00% | 45.00% |
% Change in Gross Profit | (7.00%) | |
Wholesale [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Sales | $ 11,757 | $ 10,718 |
Gross profit | $ 3,077 | $ 3,097 |
% Change in Sales | 10.00% | |
Gross Profit Margin | 26.00% | 29.00% |
% Change in Gross Profit | (1.00%) | |
Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Sales | $ 317 | $ 382 |
Gross profit | $ (882) | $ (702) |
% Change in Sales | (17.00%) | |
Gross Profit Margin | (278.00%) | (183.00%) |
% Change in Gross Profit | (26.00%) |
Net Income (Loss) per share (De
Net Income (Loss) per share (Details Narrative) - shares | 9 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive Securities | 8,350,000 | 9,365,000 | |
Convertible Preferred Stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive Securities | 4,300,000 | 4,300,000 | |
Stock Options[Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive Securities | 4,050,000 | 5,065,000 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 872 | $ 759 |
Work in Process | 111 | 238 |
Finished Goods | 849 | 753 |
Total inventories | 1,832 | 1,750 |
Allowance for inventory reserves | (81) | (58) |
Total inventories, net of allowance | $ 1,751 | $ 1,692 |
Equipment and Leasehold Impro_3
Equipment and Leasehold Improvements, Net (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | $ 4,342 | $ 4,171 |
Accumulated depreciation | (3,509) | (3,385) |
Property and Equipment, net | 792 | 786 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 2,558 | 2,472 |
Computer equipment and software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 1,050 | 1,048 |
Office equipment and furniture [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 205 | 205 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | 446 | 446 |
Projects in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment, gross | $ 83 |
Equipment and Leasehold Impro_4
Equipment and Leasehold Improvements, Net (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation expense | $ 192,637 | $ 165,116 |
Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation life | 2 | |
Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation life | 10 | |
Computer equipment and software [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation life | 5 | |
Computer equipment and software [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation life | 7 | |
Office equipment and furniture [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation life | 5 | |
Office equipment and furniture [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation life | 7 | |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation life | 10 |
Other Accrued Liabilities (Deta
Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2018 |
Accounts Payable and Accrued Liabilities, Current [Abstract] | ||
Accrued compensation | $ 367 | $ 358 |
Accrued expenses and interest | 188 | 156 |
Current portion of deferred rent payable | 63 | 51 |
Other accrued liabilities | $ 618 | $ 565 |
Current and Long- term Debt S_3
Current and Long- term Debt Summary - Current and Long-term Debt Summary (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2018 |
Current debt: | ||
Unsecured lines of credit (Note 14) | $ 25 | $ 33 |
Line of credit (Note 13) | 953 | 672 |
Short-term unsecured notes payable (Note 9) | 523 | 865 |
Current portion of term note payable- shareholder (Note 11) | 49 | 182 |
Current portion of equipment notes payable (Note 16) | 127 | 103 |
Current portion secured notes payable (Note 15) | 392 | |
Current portion of leases payable (Note 16) | 8 | 27 |
Credit card advance (net of discount) (Note 12) | 180 | 361 |
Notes payable- related party (Note 10) | 116 | 116 |
Total current debt | 2,373 | 2,359 |
Long-term debt: | ||
Leases payable (Note 16) | 8 | |
Unsecured notes payable (Note 9) | 400 | 200 |
Secured notes payable (Note 15) | 57 | |
Equipment note payable (Note 16) | 199 | 178 |
Term note payable- shareholder (Note 11) | 54 | |
Total long-term debt | $ 656 | $ 440 |
Unsecured Notes Payable (Detail
Unsecured Notes Payable (Details Narrative) (USD $) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Debt Instrument [Line Items] | ||
Short-term unsecured notes payable | $ 523 | $ 865 |
Long-term unsecured notes payable | 400 | 200 |
Unsecured notes payable | 923 | 1,065 |
Note 1 [Member] | ||
Debt Instrument [Line Items] | ||
Note Face Amount | $ 300 | |
Interest Rate | 20.00% | |
Date of Maturity | Jan. 2, 2019 | |
Short-term unsecured notes payable | 300 | |
Note 2 [Member] | ||
Debt Instrument [Line Items] | ||
Note Face Amount | $ 100 | |
Interest Rate | 20.00% | |
Date of Maturity | Oct. 31, 2021 | |
Long-term unsecured notes payable | $ 100 | 100 |
Note 3 [Member] | ||
Debt Instrument [Line Items] | ||
Note Face Amount | $ 100 | |
Interest Rate | 20.00% | |
Date of Maturity | Jul. 31, 2021 | |
Short-term unsecured notes payable | $ 100 | |
Long-term unsecured notes payable | 100 | 100 |
Note 4 [Member] | ||
Debt Instrument [Line Items] | ||
Note Face Amount | $ 300 | |
Interest Rate | 20.00% | |
Date of Maturity | May 1, 2021 | |
Short-term unsecured notes payable | 200 | |
Long-term unsecured notes payable | 200 | |
Note 5 [Member] | ||
Debt Instrument [Line Items] | ||
Note Face Amount | $ 200 | |
Interest Rate | 20.00% | |
Date of Maturity | Mar. 1, 2019 | |
Short-term unsecured notes payable | 214 | |
Note 6 [Member] | ||
Debt Instrument [Line Items] | ||
Note Face Amount | $ 300 | |
Interest Rate | 20.00% | |
Date of Maturity | Oct. 26, 2018 | |
Short-term unsecured notes payable | 99 | |
Note 7 [Member] | ||
Debt Instrument [Line Items] | ||
Note Face Amount | $ 250 | |
Interest Rate | 20.00% | |
Date of Maturity | Sep. 7, 2018 | |
Short-term unsecured notes payable | 52 | |
Note 8 [Member] | ||
Debt Instrument [Line Items] | ||
Note Face Amount | $ 250 | |
Interest Rate | 20.00% | |
Date of Maturity | Apr. 26, 2020 | |
Short-term unsecured notes payable | $ 247 | |
Note 9 [Member] | ||
Debt Instrument [Line Items] | ||
Note Face Amount | $ 300 | |
Interest Rate | 20.00% | |
Date of Maturity | Sep. 13, 2019 | |
Short-term unsecured notes payable | $ 62 | |
Note 10 [Member] | ||
Debt Instrument [Line Items] | ||
Interest Rate | 20.00% | |
Date of Maturity | Mar. 1, 2020 | |
Short-term unsecured notes payable | $ 214 | |
Note 11 [Member] | ||
Debt Instrument [Line Items] | ||
Note Face Amount | $ 300 | |
Date of Maturity | Apr. 26, 2020 |
Unsecured Notes Payable (Deta_2
Unsecured Notes Payable (Details Narrative) (USD $) (Parenthetical) | 12 Months Ended |
Jun. 30, 2019USD ($) | |
Note 8 [Member] | |
Proceeds used to payoff other debts | $ 31,452 |
Note 9 [Member] | |
Proceeds used to payoff other debts | 37,743 |
Note 11 [Member] | |
Proceeds used to payoff other debts | $ 72,279 |
Short-term Notes Payable-Relate
Short-term Notes Payable-Related Party (Details Narrative) (USD $) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2018 |
Short-term Debt [Line Items] | ||
Unsecured notes payable | $ 116 | $ 116 |
Note 1 [Member] | ||
Short-term Debt [Line Items] | ||
Interest Rate | 5.00% | |
Unsecured notes payable | $ 40 | 40 |
Note 2 [Member] | ||
Short-term Debt [Line Items] | ||
Interest Rate | 5.00% | |
Unsecured notes payable | $ 76 | $ 76 |
Term Notes Payable Shareholde_2
Term Notes Payable Shareholder (Details Narrative 1) $ in Thousands | 12 Months Ended | |
Jun. 30, 2019USD ($) | ||
Debt Conversion [Line Items] | ||
Note Payable - Shareholder | $ 49,106 | |
Convertible Notes #1 [Member] | ||
Debt Conversion [Line Items] | ||
Date issued | Jun. 24, 2009 | |
Note Face Amount | $ 375 | |
Interest Rate | 3.00% | |
Convertible Notes #2 [Member] | ||
Debt Conversion [Line Items] | ||
Date issued | Feb. 2, 2009 | |
Note Face Amount | $ 250 | |
Interest Rate | 3.00% | |
New Convertible Notes #1 [Member] | ||
Debt Conversion [Line Items] | ||
Note Face Amount | $ 700 | |
Interest Rate | 3.00% | [1] |
Date of Maturity | Aug. 31, 2019 | |
[1] | Upon maturity, the Company has the option to either repay the note plus accrued interest in cash or issue the equivalent number of shares of common stock at $.10 per share, unless such conversion would force the holders' total ownership of common stock of the Company to exceed 9.9% of the total shares outstanding. |
Term Notes Payable Shareholde_3
Term Notes Payable Shareholder (Details Narrative 2) - New Convertible Notes #1 [Member] - USD ($) | 9 Months Ended | 48 Months Ended |
Jun. 30, 2015 | Jun. 30, 2019 | |
Debt Conversion [Line Items] | ||
Payments | $ 9,406 | $ 16,450 |
Frequency of payments | monthly | monthly |
Term Notes Payable Shareholde_4
Term Notes Payable Shareholder (Details) - USD ($) $ in Thousands | 12 Months Ended | 24 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | |
Principal payments | $ 457 | $ 2,238 | |
Total Debt [Member] | |||
Principal payments | $ 2,695 |
Credit Card Advance (Details Na
Credit Card Advance (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | 15 Months Ended |
Jun. 29, 2017 | Jan. 29, 2019 | Apr. 06, 2018 | Jun. 30, 2019 | Oct. 12, 2018 | |
Credit card principal amount from advances | $ 179 | ||||
Unamortized discount | $ 26 | ||||
Credit Card Advance [Member] | |||||
Credit Card Advance | $ 400 | $ 300 | $ 500 | $ 250 | |
Repayment Amount | 452 | 345 | 570 | 290 | |
Finance charge | 52 | 45 | $ 70 | 40 | |
Net proceeds from advance | $ 374 | $ 297 | $ 248 |
Line of Credit (Details Narrati
Line of Credit (Details Narrative) - USD ($) $ in Thousands | Sep. 04, 2013 | May 24, 2011 | Nov. 27, 2018 | Jun. 30, 2019 | Dec. 05, 2015 | Jun. 30, 2018 |
Line of Credit Facility [Line Items] | ||||||
Line of credit | $ 953 | $ 672 | ||||
Line of Credit [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Date issued | May 24, 2011 | |||||
Line of credit, limit | $ 1,000 | $ 750 | $ 1,200 | |||
Collateral | lesser of $300,000 or 75% of the eligible accounts receivable loan | 85% of eligible accounts receivable | lesser of $300,000 or 75% of the eligible accounts receivable loan | |||
Interest Rate Description | prime rate plus 3% | 2.5% over the lenders Index Rate | 82.5% | |||
Lenders Index Rate | 7.50% | |||||
Monthly Service Fee | 0.50% | 1.25% | ||||
Invetory Advance [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Collateral | 125% of the eligible accounts receivable loan | |||||
Inventory advance | $ 500 |
Unsecured Lines of Credit (Deta
Unsecured Lines of Credit (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2018 |
Line of Credit Facility [Abstract] | ||
Unsecured lines of credit | $ 25 | $ 33 |
Interest rate | 8.00% |
Secured Note Payable (Details N
Secured Note Payable (Details Narrative) $ in Thousands | 12 Months Ended |
Jun. 30, 2019USD ($) | |
Secured Lender [Member] | |
Note Face Amount | $ 150 |
Payments | $ 2 |
Frequency of payments | 78 weekly payments |
Amazon [Member] | |
Note Face Amount | $ 302 |
Interest Rate | 8.22% |
Payments | $ 26 |
Commitments and Contingencies -
Commitments and Contingencies - Operating Leases (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Capital Leases | ||
Capital lease | $ 145,916 | |
Employment Agreements | ||
Officer Salary | $ 150,000 | |
Minimum [Member] | ||
Capital Leases | ||
Interest rates | 7.80% | |
Maximum [Member] | ||
Capital Leases | ||
Interest rates | 11.80% | |
Equipment [Member] | ||
Capital Leases | ||
Capital lease | $ 546,003 | |
Equipment [Member] | Minimum [Member] | ||
Capital Leases | ||
Interest rates | 8.90% | |
Equipment [Member] | Maximum [Member] | ||
Capital Leases | ||
Interest rates | 11.30% | |
Facility [Member] | ||
Operating Leases | ||
Rent Expense | $ 352,479 | $ 352,479 |
Monthly rental, final year | $ 29,415 | |
Term of lease | Signed in September 2005 and expires December 31, 2015 |
Commitments and Contingencies_2
Commitments and Contingencies - Future minimum operarting lease payments (Details) (USD $) $ in Thousands | Jun. 30, 2019USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2020 | $ 417 |
2021 | 212 |
2022 | 1 |
2023 | 1 |
Total minimum lease payments | $ 631 |
Commitments and Contingencies_3
Commitments and Contingencies - Future minimum capital lease payments (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2018 |
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2020 | $ 8 | |
2021 | ||
Future Minimum Lease Payments | 8 | |
Less Amount Representing Interest | ||
Present Value of Minimum Lease Payments | 8 | |
Less Current Portion | (8) | $ (27) |
Long-Term Obligations under Leases Payable | $ 8 |
Commitments and Contingencies_4
Commitments and Contingencies - Future minimum equipment lease payments (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2018 |
Commitments And Contingencies - Future Minimum Equipment Lease Payments | ||
2020 | $ 157 | |
2021 | 104 | |
2022 | 62 | |
2023 | 40 | |
2024 | 23 | |
Future Minimum Lease Payments | 386 | |
Less Amount Representing Interest | (60) | |
Present Value of Minimum Lease Payments | 326 | |
Less Current Portion | (127) | $ (103) |
Long-Term Obligations under Leases Payable | $ 199 | $ 178 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) | 12 Months Ended |
Jun. 30, 2019USD ($)$ / shares | |
Shareholder Wife Note [Member] | |
Related Party Transaction [Line Items] | |
Issue Date | Jun. 30, 2010 |
Note Face Amount | $ 76,000 |
Interest Rate | 5.50% |
Acrrued Interest | $ 27,486 |
Interest Expense | $ 4,045 |
October 30, 2010 Note [Member] | |
Related Party Transaction [Line Items] | |
Issue Date | Oct. 30, 2010 |
Note Face Amount | $ 40,000 |
Interest Rate | 5.50% |
Acrrued Interest | $ 8,710 |
Interest Expense | $ 2,128 |
January 3, 2011 Note [Member] | |
Related Party Transaction [Line Items] | |
Issue Date | Jan. 3, 2011 |
Note Face Amount | $ 300,000 |
Interest Rate | 20.00% |
Date of Maturity | Jan. 3, 2012 |
Extended Date of Maturity | Jan. 3, 2019 |
July 20, 2011 Note [Member] | |
Related Party Transaction [Line Items] | |
Issue Date | Jul. 20, 2011 |
Note Face Amount | $ 100,000 |
Interest Payment | $ 1,667 |
Interest Rate | 20.00% |
Date of Maturity | Jul. 31, 2012 |
Extended Date of Maturity | Jul. 31, 2019 |
October 31, 2013 [Member] | |
Related Party Transaction [Line Items] | |
Issue Date | Oct. 31, 2013 |
Note Face Amount | $ 100,000 |
Interest Payment | $ 1,667 |
Frequency | monthly |
Interest Rate | 20.00% |
Date of Maturity | Oct. 31, 2014 |
Extended Date of Maturity | Oct. 31, 2019 |
May12, 2012 Note [Member] | |
Related Party Transaction [Line Items] | |
Issue Date | May 1, 2012 |
Note Face Amount | $ 200,000 |
Interest Rate | 20.00% |
Date of Maturity | May 1, 2013 |
Extended Date of Maturity | May 1, 2019 |
September 2017 [Member] | |
Related Party Transaction [Line Items] | |
Issue Date | Sep. 7, 2017 |
Note Face Amount | $ 250,000 |
Interest Rate | 20.00% |
Date of Maturity | Jun. 30, 2018 |
October 2017 [Member] | |
Related Party Transaction [Line Items] | |
Note Face Amount | $ 300,000 |
Interest Rate | 20.00% |
Date of Maturity | Sep. 13, 2018 |
March 1, 2018 [Member] | |
Related Party Transaction [Line Items] | |
Note Face Amount | $ 300,000 |
Interest Rate | 20.00% |
Date of Maturity | Mar. 1, 2019 |
July 30, 2018 [Member] | |
Related Party Transaction [Line Items] | |
Note Face Amount | $ 250,000 |
Interest Rate | 20.00% |
Date of Maturity | Jul. 26, 2019 |
Proceeds from note payable - working capital | $ 218,548 |
September 13, 2018 [Member] | |
Related Party Transaction [Line Items] | |
Note Face Amount | $ 300,000 |
Interest Rate | 20.00% |
Date of Maturity | Sep. 13, 2019 |
Proceeds from note payable - working capital | $ 262,257 |
March 1, 2019 [Member] | |
Related Party Transaction [Line Items] | |
Note Face Amount | $ 300,000 |
Interest Rate | 20.00% |
Date of Maturity | Mar. 1, 2020 |
April 26, 2019 [Member] | |
Related Party Transaction [Line Items] | |
Note Face Amount | $ 300,000 |
Interest Rate | 20.00% |
Date of Maturity | Apr. 24, 2020 |
Note payable-related party | $ 227,721 |
September 5, 2014 [Member] | |
Related Party Transaction [Line Items] | |
Conversion price | $ / shares | $ .10 |
Note payable-related party | $ 49,106 |
Stock-based Compensation (Detai
Stock-based Compensation (Details Narrative) | Jun. 30, 2019$ / sharesshares |
Share-based Goods and Nonemployee Services Transaction [Line Items] | |
Options, authorized | 5,000,000 |
Closing stock price | $ / shares | $ 0.05 |
Stock Options - 2015 [Member] | |
Share-based Goods and Nonemployee Services Transaction [Line Items] | |
Options, authorized | 5,000,000 |
Options, available for issurance | 1,150,000 |
Stock Options - 2009 [Member] | |
Share-based Goods and Nonemployee Services Transaction [Line Items] | |
Options, authorized | 200,000 |
Stock Options Activity (Details
Stock Options Activity (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Number of Options | 5,065,000 | 6,975,000 | |
Options, Granted | 400,000 | 1,100,000 | |
Options, Exercised | |||
Options, Forefeited or expired | (1,415,000) | (3,010,000) | |
Number of Options | 4,050,000 | 5,065,000 | |
Ending,Number of Options, exercisable | 2,237,500 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |||
Weighted Average Exercise Price, outstanding | $ .03 | $ .03 | |
Weighted Average Exercise Price, Granted | .04 | .03 | |
Weighted Average Exercise Price, Exercised | |||
Weighted Average Exercise Price, Forfeited or expired | .04 | .06 | |
Weighted Average Exercise Price, outstanding | .02 | $ .03 | |
Weighted Average Exercise Price, exercisable | $ .02 | ||
Beginning, Weighted Average Remaining Contractual Life, outstanding | 2 years 7 months | 2 years 7 months | |
Ending, Weighted Average Remaining Contractual Life, outstanding - granted | 2 years 3 months | 2 years 7 months | |
Weighted Average Remaining Contractual Life, exercisable | 1 year 9 months | ||
Aggregate Intrinsic Value | |||
Aggregate Intrinsic Value, outstanding | $ 13,500 | $ 98,600 | $ 135,975 |
Aggregate Intrinsic Value, exercisable | $ 24,500 |
Assumptions (Details)
Assumptions (Details) - $ / shares | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Vesting Period | 4 years | 4 years |
Forfeiture Rate | 0.00% | 0.00% |
Expected Life | 4 years 1 month | 4 years 1 month |
Dividend Rate | 0.00% | 0.00% |
Minimum [Member] | ||
Exercise Price | $ .038 | $ 0.03 |
Volatility | 380.00% | 403.00% |
Risk Free Rate | 2.30% | 2.06% |
Maximum [Member] | ||
Exercise Price | $ 0.046 | $ 0.04 |
Volatility | 391.00% | 409.00% |
Risk Free Rate | 2.70% | 2.49% |
Weighted Average outstanding st
Weighted Average outstanding stock options (Details) - $ / shares | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Outstanding Options[Abstract] | ||||
Number of shares | 4,050,000 | 5,065,000 | 6,975,000 | |
Remaining Life (Years) | 2 years 3 months | |||
Weighted Average Price | $ 0.02 | |||
Exercisable Options [Abstract] | ||||
Number of Shares | 2,237,500 | |||
Weighted Average Exercise Price | $ .02 | |||
$.01 to .03 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Exercise price range, lower range (in dollars per share) | 0.01 | |||
Exercise price range, upper range (in dollars per share) | $ 0.03 | |||
Outstanding Options[Abstract] | ||||
Number of shares | 3,650,000 | |||
Remaining Life (Years) | 2 years 2 months | |||
Weighted Average Price | $ .02 | |||
Exercisable Options [Abstract] | ||||
Number of Shares | 2,137,500 | |||
Weighted Average Exercise Price | $ .02 | |||
$.034 to .05 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Exercise price range, lower range (in dollars per share) | .034 | |||
Exercise price range, upper range (in dollars per share) | $ 0.09 | |||
Outstanding Options[Abstract] | ||||
Number of shares | 400,000 | |||
Remaining Life (Years) | 3 years 25 months | |||
Weighted Average Price | $ .05 | |||
Exercisable Options [Abstract] | ||||
Number of Shares | 100,000 | |||
Weighted Average Exercise Price | $ .03 |
Compensation Expense (Details)
Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | $ 23 | $ 24 |
Unrecognized compensation costxx | $ 36,770 | |
Wieghted Average Vesting Period | 2 years 3 months | |
Cost of Goods Sold [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | 1 | |
Selling and Marketing[Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | 4 | $ 19 |
General and Administrative[Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expense | $ 17 |
Stockholders Equity (Details 1)
Stockholders Equity (Details 1) | Jun. 30, 2019shares |
Stockholders' deficit: | |
Shares of common stock reserved for issuance under the 2009 Stock Option Plan | 200,000 |
Shares of common stock reserved for issuance under the 2015 Stock Option Plan | 5,000,000 |
Options, Conversion of the Preferred Stock | 4,300,000 |
Common stock equivalents | 9,500,000 |
Stockholders Equity (Details 2)
Stockholders Equity (Details 2) - USD ($) $ / shares in Units, $ in Thousands | Feb. 11, 2011 | Jun. 30, 2019 | Jun. 30, 2018 |
Common stock- shares authorized | 175,000,000 | 175,000,000 | |
Preferred stock - par value | $ 0.0001 | $ 0.0001 | |
Preferred stock - shares authorized | 10,000,000 | 10,000,000 | |
Series A Convertible Preferred Stock [Member] | |||
Preferred stock - par value | $ 0.0001 | ||
Preferred stock - shares authorized | 4,300,000 | ||
Preferred stock - liquidation preference, per share | $ 0.2325 | ||
Preferred stock - liquidation preference | $ 1 | ||
Voting rights | the number of votes equal to the result of: (i) the number of shares of common stock of the Company issued and outstanding at the time of such vote multiplied by 1.01; divided by (ii) the total number of Series A Convertible Preferred Shares issued and outstanding at the time of such vote. |
Income Taxes-Components of Defe
Income Taxes-Components of Deferred tax assets and liabilities (Details Narrative) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2018 |
Deferred tax assets: | ||
Inventory reserves | $ 21 | $ 12 |
Allowance for doubtful accounts | 14 | 14 |
Stock-based compensation | 91 | 82 |
Net operating loss carry-forwards | 2,884 | 2,843 |
Total gross deferred tax assets | 3,010 | 2,951 |
Valuation allowance | (3,010) | (2,951) |
Net deferred tax assets |
Income Taxes- Income Tax Provis
Income Taxes- Income Tax Provision (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Income Taxes- Income Tax Provision | ||
Net loss | $ 41 | $ 222 |
Temporary differences | 18 | 5 |
Valuation (allowance) | (59) | (227) |
Net tax benefit |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Income Taxes Details Narrative Abstract | ||
Net operating loss | $ 3,000,000 | |
Valuation allowance | $ 59,021 | $ 227,411 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event[Member] - USD ($) $ in Thousands | Jul. 09, 2019 | Oct. 09, 2019 |
Note Face Amount | $ 250 | $ 300 |
Interest Rate | 20.00% | |
Repayment Amount | 290 | |
Finance charge | 40 | |
Proceeds from debt | $ 247 | $ 291 |