Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2016 | Sep. 28, 2016 | Dec. 31, 2015 | |
Document And Entity Information | |||
Entity Registrant Name | FRANKLIN WIRELESS CORP | ||
Entity Central Index Key | 722,572 | ||
Document Type | 10-K | ||
Document Period End Date | Jun. 30, 2016 | ||
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 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 11,989,000 | ||
Entity Common Stock, Shares Outstanding | 10,477,203 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 13,156,754 | $ 11,822,620 |
Accounts receivable | 12,341,419 | 5,464,182 |
Other receivables, net | 41,870 | 143,384 |
Inventories, net | 2,285,254 | 2,281,667 |
Prepaid expenses and other current assets | 11,838 | 60,339 |
Prepaid income taxes | 30,866 | 1,055,788 |
Deferred tax assets, current | 292,622 | 206,902 |
Advance payments to vendors | 8,382 | 62,321 |
Total current assets | 28,169,005 | 21,097,203 |
Property and equipment, net | 317,764 | 314,492 |
Intangible assets, net | 1,126,887 | 1,042,281 |
Deferred tax assets, non-current | 1,726,114 | 1,860,347 |
Goodwill | 273,285 | 273,285 |
Other assets | 136,074 | 129,859 |
TOTAL ASSETS | 31,749,129 | 24,717,467 |
Current liabilities | ||
Accounts payable | 13,276,125 | 7,362,075 |
Advance payments from customers | 1,901 | 693,317 |
Accrued liabilities | 247,302 | 238,619 |
Short-term borrowings | 0 | 148,295 |
Total current liabilities | 13,525,328 | 8,442,306 |
Total liabilities | 13,525,328 | 8,442,306 |
Commitments and contingencies (Notes 9) | ||
Parent Company stockholders' equity: | ||
Preferred stock, par value $0.001 per share, authorized 10,000,000 shares; No preferred stock issued and outstanding as of June 30, 2016 and 2015 | 0 | 0 |
Common stock, par value $0.001 per share, authorized 50,000,000 shares; 10,442,203 and 10,533,869 shares issued and outstanding as of June 30, 2016 and 2015, respectively | 13,844 | 13,806 |
Additional paid-in capital | 7,295,580 | 7,305,767 |
Retained earnings | 14,972,062 | 13,361,091 |
Treasury stock, 3,472,286 and 3,342,286 shares as of June 30, 2016 and 2015, respectively | (4,513,479) | (4,279,479) |
Accumulated other comprehensive loss | (648,127) | (664,722) |
Total Parent Company stockholders' equity | 17,119,880 | 15,736,463 |
Non-controlling interests | 1,103,921 | 538,698 |
Total Stockholders' Equity | 18,223,801 | 16,275,161 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 31,749,129 | $ 24,717,467 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2016 | Jun. 30, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock Authorized | 100,000,000 | 100,000,000 |
Preferred stock Issued | 0 | 0 |
Preferred stock Outstanding | 0 | 0 |
Common stock par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock Authorized | 50,000,000 | 50,000,000 |
Common stock Issued | 10,442,203 | 10,533,869 |
Common stock Outstanding | 10,442,203 | 10,533,869 |
Treasury stock shares | 3,472,286 | 3,342,286 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Income Statement [Abstract] | ||
Net sales | $ 59,804,694 | $ 46,344,233 |
Cost of goods sold | 49,879,514 | 37,944,155 |
Gross profit | 9,925,180 | 8,400,078 |
Operating expenses: | ||
Selling, general, and administrative | 4,815,725 | 4,973,277 |
Research and development | 2,990,496 | 2,915,143 |
Total operating expenses | 7,806,221 | 7,888,420 |
Income (loss) from operations | 2,118,959 | 511,658 |
Other income, net: | ||
Interest income | 10,301 | 23,264 |
Other income, net | 81,867 | 430,704 |
Total other income, net | 92,168 | 453,968 |
Income before provision (benefit) for income taxes | 2,211,127 | 965,626 |
Income tax provision (benefit) | 34,933 | (88,272) |
Net income | 2,176,194 | 1,053,898 |
Non-controlling interests in net income of subsidiary 48.2% | (565,223) | (293,890) |
Net income attributable to Parent Company | $ 1,610,971 | $ 760,008 |
Basic earnings per share attributable to Parent Company stockholders | $ .15 | $ 0.07 |
Diluted earnings per share attributable to Parent Company stockholders | $ .15 | $ 0.07 |
Weighted average common shares outstanding - basic | 10,414,755 | 10,533,869 |
Weighted average common shares outstanding - diluted | 10,653,897 | 10,640,733 |
Comprehensive income (loss) | ||
Net income | $ 2,176,194 | $ 1,053,898 |
Translation adjustments | 16,595 | (421,622) |
Comprehensive income | 2,192,789 | 632,276 |
Comprehensive income attributable to non-controlling interest | (565,223) | (293,890) |
Comprehensive income attributable to controlling interest | $ 1,627,566 | $ 338,386 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income / Loss | Noncontrolling Interest | Total |
Beginning balance, shares at Jun. 30, 2014 | 10,533,869 | |||||
Beginning balance, value at Jun. 30, 2014 | $ 13,806 | $ 7,245,283 | $ 12,601,083 | $ (243,100) | $ 244,808 | $ 15,582,401 |
Net income attributable to Parent Company | 760,008 | 760,008 | ||||
Foreign exchange translation | (421,622) | (421,622) | ||||
Comprehensive income attributable to non-controlling interest | 293,890 | 293,890 | ||||
Share-based compensation | 60,484 | 60,484 | ||||
Ending balance, shares at Jun. 30, 2015 | 10,533,869 | |||||
Ending balance, value at Jun. 30, 2015 | $ 13,806 | 7,305,767 | 13,361,091 | (664,722) | 538,698 | 16,275,161 |
Net income attributable to Parent Company | 1,610,971 | 1,610,971 | ||||
Foreign exchange translation | 16,595 | 16,595 | ||||
Comprehensive income attributable to non-controlling interest | 565,223 | 565,223 | ||||
Repurchase of common stock, shares | (130,000) | |||||
Repurchase of common stock, value | (234,000) | |||||
Share-based compensation | (50,000) | (50,000) | ||||
Issuance of stock related to stock options exercised, shares issued | 38,334 | |||||
Issuance of stock related to stock options exercised, value | $ 38 | 39,813 | 39,851 | |||
Ending balance, shares at Jun. 30, 2016 | 10,442,203 | |||||
Ending balance, value at Jun. 30, 2016 | $ 13,844 | $ 7,295,580 | $ 14,972,062 | $ (648,127) | $ 1,103,921 | $ 18,223,801 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 2,176,194 | $ 1,053,898 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 169,928 | 237,005 |
Amortization of intangible assets | 797,797 | 1,223,692 |
Reserve for obsolete inventory | 90,917 | 120,867 |
Deferred tax (benefit) | 48,513 | (26,645) |
Share-based compensation | (50,000) | 60,484 |
Gain from debt extinguishment | (10,222) | (414,480) |
Gain on sale of vehicle | (8,000) | (4,386) |
Increase (decrease) in cash due to change in: | ||
Accounts receivable | (6,775,723) | 114,484 |
Inventories | (94,504) | (435,144) |
Prepaid expenses and other current assets | 48,501 | 130,880 |
Prepaid income taxes | 1,024,922 | 800 |
Advance payments to vendor | 53,939 | (16,212) |
Other assets | (6,215) | (22,450) |
Accounts payable | 5,924,272 | 1,867,779 |
Advance payments from customers | (691,416) | 373,429 |
Accrued liabilities | 8,683 | (78,679) |
Net cash provided by operating activities | 2,707,586 | 4,185,322 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (173,200) | (53,032) |
Payments for capitalized development costs | (686,291) | (89,145) |
Purchases of intangible assets | (196,112) | (51,012) |
Proceeds from the sale of fixed assets | 8,000 | 4,386 |
Receipt of loan repayments from an employee | 0 | 7,128 |
Net cash used in investing activities | (1,047,603) | (181,675) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repurchase of common stock | (234,000) | 0 |
Issuance of stock related to stock options exercised | 39,851 | 0 |
Principal repayment of short-term borrowings | (148,295) | 0 |
Net cash used in financing activities | (342,444) | 0 |
Effect of foreign currency translation | 16,595 | (421,622) |
Net increase in cash and cash equivalents | 1,334,134 | 3,582,025 |
Cash and cash equivalents, beginning of year | 11,822,620 | 8,240,595 |
Cash and cash equivalents, end of year | 13,156,754 | 11,822,620 |
Cash received (paid) during the years for: | ||
Interest paid | 10,301 | (5,552) |
Income taxes | 1,039,381 | 63,000 |
Disposal of fully depreciated property and equipment | $ 17,423 | $ 0 |
1. BUSINESS OVERVIEW
1. BUSINESS OVERVIEW | 12 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS OVERVIEW | We are a provider of intelligent wireless solutions including mobile hotspots, routers and modems as well as innovative hardware and software products that support machine-to-machine (M2M) applications and the Internet of Things (IoT). Our M2M and IoT solutions include embedded modules, modems and gateways built to deliver reliable always-on connectivity supporting a broad spectrum of applications. These products are designed to solve wireless connectivity challenges in a variety of vertical markets including video surveillance, digital signage, home security, oil and gas exploration, kiosks, fleet management, smart grid, vehicle diagnostics, telematics and many more. We have a majority ownership position in FTI, a research and development company located in Seoul, South Korea. FTI primarily provides design and development services to us for our wireless products. Our products are generally marketed and sold directly to wireless operators, and indirectly through strategic partners and distributors. Our global customer base extends primarily from the United States to countries in South America, the Caribbean, Europe, the Middle East and Africa ("EMEA") and Asia. |
2. SUMMARY OF SIGNIFICANT ACCOU
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Principles of Consolidation The consolidated financial statements include the accounts of the Company, and a subsidiary with a majority voting interest of 51.8% (48.2% is owned by non-controlling interests) as of June 30, 2016 and 2015. In the preparation of consolidated financial statements of the Company, intercompany transactions and balances are eliminated and net earnings are reduced by the portion of the net earnings of the subsidiary applicable to non-controlling interests. As consolidated financial statements are based on the assumption that they represent the financial position and operating results of a single economic entity, the retained earnings or deficit of the subsidiary at the date of acquisition, October 1, 2009, by the parent are excluded from consolidated retained earnings. When a subsidiary is consolidated, the consolidated financial statements include the subsidiary’s revenues, expenses, gains, and losses only from the date the subsidiary is initially consolidated, and the non-controlling interest is reported in the consolidated statement of financial position within equity, separately from the parent’s equity. There are no shares of the Company held by any subsidiaries as of June 30, 2016 or June 30, 2015. Non-controlling Interest in a Consolidated Subsidiary As of June 30, 2016, the non-controlling interest was $1,103,921, which represents a $565,223 increase from $538,698 as of June 30, 2015. The increase of $565,223 in the non-controlling interest was due to the non-controlling interests in net income of subsidiary for the year ended June 30, 2016. Segment Reporting Accounting Standards Codification (“ASC”) 280, “Segment Reporting,” requires public companies to report financial and descriptive information about their reportable operating segments. We identify our operating segments based on how our chief operating decision maker internally evaluates separate financial information, business activities and management responsibility. We have one reportable segment, consisting of the sale of wireless access products. We generate revenues from four geographic areas, consisting of the United States, the Caribbean and South America, Europe, the Middle East and Africa ("EMEA") and Asia. The following enterprise-wide disclosure is prepared on a basis consistent with the preparation of the consolidated financial statements. The following table contains certain financial information by geographic area: Fiscal Year Ended June 30, Net sales: 2016 2015 United States $ 51,741,991 $ 36,710,081 Caribbean and South America 100,699 1,416,052 Europe, the Middle East and Africa ("EMEA") 7,906,900 4,578,970 Asia 55,104 3,639,130 Totals $ 59,804,694 $ 46,344,233 Long-lived assets, net (property and equipment and intangible assets): June 30, 2016 June 30, 2015 United States $ 1,113,745 $ 785,144 Asia 330,905 571,629 Totals $ 1,444,650 $ 1,356,773 Fair Value of Financial Instruments The carrying amounts of financial instruments such as assets, cash equivalents, accounts receivable, accounts payable and debt approximate the related fair values due to the short-term maturities of these instruments. We invest our excess cash into financial instruments which are readily convertible into cash, such as money market funds and certificates of deposit (see Note 3). Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. Allowance for Doubtful Accounts Based upon our review of our collection history as well as the current balances associated with all significant customers and associated invoices, we do not believe an allowance for doubtful accounts was necessary as of June 30, 2016 and June 30, 2015. Revenue Recognition We recognize revenue in accordance with ASC 605, “Revenue Recognition,” when persuasive evidence of an arrangement exists, the price is fixed or determinable, collection is reasonably assured and delivery of products has occurred or services have been rendered. Accordingly, we recognize revenues from product sales upon shipment of the products to customers or when the products are received by the customers in accordance with the shipping or delivery terms. We provide a warranty for one year from the shipment or delivery date, which is covered by our vendors pursuant to purchase agreements. Any net warranty related expenditures made by us have not historically been material. Under our sales return policy, customers may generally return products that are under warranty for repair or replacement. Cost of Goods Sold All costs associated with our contract manufacturers, as well as distribution, fulfillment and repair services are included in our cost of goods sold. Cost of goods sold also includes amortization expense associated with capitalized product development costs associated with complete technology. Capitalized Product Development Costs Accounting Standards Codification (“ASC”) Topic 350, “Intangibles - Goodwill and Other” includes software that is part of a product or process to be sold to a customer and shall be accounted for under Subtopic 985-20. Our products contain embedded software internally developed by FTI, which is an integral part of these products because it allows the various components of the products to communicate with each other and the products are clearly unable to function without this coding. The costs of product development that are capitalized once technological feasibility is determined (noted as Technology in progress in the Intangible Assets table in Note 2 to Notes to Consolidated Financial Statements) include related licenses, certification costs, payroll, employee benefits, and other headcount-related expenses associated with product development. We determine that technological feasibility for our products is reached after all high-risk development issues have been resolved. Once the products are available for general release to our customers, we cease capitalizing the product development costs and any additional costs, if any, are expensed. The capitalized product development costs are amortized on a product-by-product basis using the greater of straight-line amortization or the ratio of the current gross revenues to the current and anticipated future gross revenues. The amortization begins when the products are available for general release to our customers. As of June 30, 2016 and June 30, 2015, capitalized product development costs in progress were $157,492 and $0, respectively, and these amounts are included in intangible assets in our consolidated balance sheets. During the year ended June 30, 2016, we incurred $686,291 in capitalized product development costs, and such amounts are primarily comprised of certifications and licenses. All costs incurred before technological feasibility is reached are expensed and included in our consolidated statements of comprehensive income. Research and Development Costs Costs associated with research and development are expensed as incurred. Research and development costs were $2,990,496 and $2,915,143 for the years ended June 30, 2016 and 2015, respectively. Advertising and Promotion Costs Costs associated with advertising and promotions are expensed as incurred. Advertising and promotion costs were $22,726 and $23,362 for the years ended June 30, 2016 and 2015, respectively. Warranties We provide a warranty for one year which is covered by our vendors and manufacturers under purchase agreements between the Company and the vendors. As a result, we believe we do not have any net warranty exposure and do not accrue any warranty expenses. Historically, the Company has not experienced any material net warranty expenditures. Shipping and Handling Costs Costs associated with product shipping and handling are expensed as incurred. Shipping and handling costs, which are included in selling, general and administrative expenses on the statement of comprehensive income, were $1,408,607 and $1,162,427 for the years ended June 30, 2016 and 2015, respectively. Cash and Cash Equivalents For purposes of the consolidated statements of cash flow, we consider all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. Inventories Our inventories consist of finished goods and are stated at the lower of cost or market, cost being determined on a first-in, first-out basis. We assess the inventory carrying value and reduce it, if necessary, to its net realizable value based on customer orders on hand, and internal demand forecasts using management’s best estimates given information currently available. Our customer demand is highly unpredictable, and can fluctuate significantly caused by factors beyond our control. We may write down our inventory value for potential obsolescence and excess inventory. As of June 30, 2016 and 2015, we have recorded inventory reserves in the amount of $90,917 and $120,867, respectively, for inventories that we have identified as obsolete or slow-moving. Property and Equipment Property and equipment are recorded at cost. Significant additions or improvements extending useful lives of assets are capitalized. Maintenance and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives as follows: Machinery 6 years Office equipment 5 years Molds 3 years Vehicles 5 years Computers and software 5 years Furniture and fixtures 7 years Facilities 5 years or life of the lease, whichever is shorter Goodwill and Intangible Assets Goodwill and certain intangible assets were recorded in connection with the FTI acquisition in October 2009, and are accounted for in accordance with ASC 805, “Business Combinations.” Goodwill represents the excess of the purchase price over the fair value of the tangible and intangible net assets acquired. Intangible assets are recorded at their fair value at the date of acquisition. Goodwill and other intangible assets are accounted for in accordance with ASC 350, “Goodwill and Other Intangible Assets.” Goodwill and other intangible assets are tested for impairment at least annually and any related impairment losses are recognized in earnings when identified. No impairment was recognized during the years ended June 30, 2016 and 2015. Intangible Assets The definite lived intangible assets consisted of the following as of June 30, 2016: Definite lived intangible assets: Expected Life Average Remaining life Gross Intangible Assets Accumulated Amortization Net Intangible Assets Complete technology 3 years - $ 490,000 $ 490,000 $ – Complete technology 3 years - 1,517,683 1,517,683 – Complete technology 3 years - 281,714 281,714 – Complete technology 3 years - 361,249 361,249 – Complete technology 3 years - 174,009 174,009 – Complete technology 3 years - 909,962 909,962 – Complete technology 3 years 0.8 years 65,000 48,750 16,250 Complete technology 3 years 1.5 years 2,402 1,201 1,201 Complete technology 3 years 1.8 years 6,405 2,669 3,736 Complete technology 3 years 3.0 years 18,397 – 18,397 Supply and development agreement 8 years 1.2 years 1,121,000 945,844 175,156 Technology in progress Not Applicable - 157,492 – 157,492 Software 5 years 1.3 years 214,398 203,941 10,457 Patents 10 years 7.0 years 58,391 2,705 55,686 Certifications & licenses 3 years 2.0 years 2,472,359 1,783,847 688,512 Total as of June 30, 2016 $ 7,850,461 $ 6,723,574 $ 1,126,887 The definite lived intangible assets consisted of the following as of June 30, 2015: Definite lived intangible assets: Expected Life Average Remaining life Gross Intangible Assets Accumulated Amortization Net Intangible Assets Complete technology 3 years - $ 490,000 $ 490,000 $ – Complete technology 3 years - 1,517,683 1,517,683 – Complete technology 3 years - 281,714 281,714 – Complete technology 3 years - 361,249 361,249 – Complete technology 3 years 0.3 years 174,009 159,508 14,501 Complete technology 3 years 0.5 years 909,962 733,025 176,937 Complete technology 3 years 1.8 years 65,000 27,083 37,917 Complete technology 3 years 2.5 years 2,402 400 2,002 Complete technology 3 years 2.8 years 6,405 534 5,871 Supply and development agreement 8 years 2.3 years 1,121,000 805,719 315,281 Technology in progress Not Applicable - – – – Software 5 years 1.1 years 197,418 158,284 39,134 Patents 10 years 6.8 years 57,655 1,005 56,650 Certifications & licenses 3 years 0.4 years 1,783,561 1,389,573 393,988 Total as of June 30, 2015 $ 6,968,058 $ 5,925,777 $ 1,042,281 Amortization expense recognized during the years ended June 30, 2016 and 2015 was $797,797 and $1,223,692, respectively. The amortization expenses of the definite lived intangible assets for the next five years and thereafter are as follows: FY2017 FY2018 FY2019 FY2020 FY2021 Thereafter Total $ 563,403 $ 447,723 $ 64,469 $ 18,963 $ 5,839 $ 26,490 Long-lived Assets In accordance with ASC 360, “Property, Plant, and Equipment,” we review for impairment of long-lived assets and certain identifiable intangibles whenever events or circumstances indicate that the carrying amount of assets may not be recoverable. We consider the carrying value of assets may not be recoverable based upon our review of the following events or changes in circumstances: the asset’s ability to continue to generate income from operations and positive cash flow in future periods; loss of legal ownership or title to the assets; significant changes in our strategic business objectives and utilization of the asset; or significant negative industry or economic trends. An impairment loss would be recognized when estimated future cash flows expected to result from the use of the asset are less than its carrying amount. We are not aware of any events or changes in circumstances during the year ended June 30, 2016 that would indicate that the long-lived assets are impaired. Stock-based Compensation The Company’s employee share-based awards result in a cost that is measured at fair value on an award’s grant date, based on the estimated number of awards that are expected to vest. Stock-based compensation is recognized on a straight-line basis over the award’s vesting period. The Company estimates the fair value of stock options using a Black-Scholes option pricing model. Transactions with non-employees in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued is the earlier of the date on which the counterparty’s performance is complete or the date on which it is probable that performance will occur. Stock-based compensation costs are reflected in the accompanying consolidated statements of comprehensive income based upon the underlying recipients' roles within the Company. Income Taxes The Company uses the asset and liability method of accounting for income taxes. Accordingly, deferred tax assets and liabilities are determined based on the difference between the financial statement and income tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is recorded to reduce the carrying amount of deferred tax assets, unless it is more likely than not such assets will be realized. Current income taxes are based on the year’s taxable income for federal and state income tax reporting purposes and the annual change in deferred taxes. The Company assesses its income tax positions and records tax benefits based upon management’s evaluation of the facts, circumstances, and information available at the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, the Company records the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit is recognized in the financial statements. The Company classifies interest and penalties associated with such uncertain tax positions as a component of income tax expense. Earnings per Share Attributable to Common Stockholders Basic earnings per share is calculated by dividing the net income by the weighted-average number of common shares that were outstanding for the period, without consideration for potential common shares. Diluted earnings per share is calculated by dividing the net income by the sum of the weighted-average number of dilutive potential common shares outstanding for the period determined using the treasury-stock method or the as-converted method. Potentially dilutive shares are comprised of common stock options outstanding under our stock plan. Concentrations of Credit Risk We extend credit to our customers and perform ongoing credit evaluations of such customers. We evaluate our accounts receivable on a regular basis for collectability and provide for an allowance for potential credit losses as deemed necessary. No reserve was required or recorded for any of the periods presented. Substantially all of our revenues are derived from sales of wireless data products. Any significant decline in market acceptance of our products or in the financial condition of our existing customers could impair our ability to operate effectively. A significant portion of our revenue is derived from a small number of customers. For the year ended June 30, 2016, net sales to our three largest customers represented 64%, 18% and 13% of our consolidated net sales, respectively, and 58%, 34% and 0% of our accounts receivable balance as of June 30, 2016. For the year ended June 30, 2015, net sales to our two largest customers represented 68% and 10% of our consolidated net sales, respectively, and 87%, and 7% of our accounts receivable balance as of June 30, 2015. No other customers accounted for more than ten percent of total net sales for the years ended June 30, 2016 and 2015. For the year ended June 30, 2016, sales to Verizon, Sprint and Smile Communications each comprised more the 10% of our net sales. For the year ended June 30, 2015, sales to Verizon comprised more than 10% of our net sales. For the year ended June 30, 2016, we purchased the majority of our wireless data products from one manufacturing company located in Asia. If this manufacturing company were to experience delays, capacity constraints or quality control problems, product shipments to our customers could be delayed, or our customers could consequently elect to cancel the underlying product purchase order, which would negatively impact our revenue. For the year ended June 30, 2016, we purchased wireless data products from this supplier in the amount of $49,057,120, or 99% of total purchases, and had related accounts payable of $12,840,858 as of June 30, 2016. For the year ended June 30, 2015, we purchased wireless data products from this supplier in the amount of $30,466,215, or 81% of total purchases, and had related accounts payable of $6,749,486 as of June 30, 2015. We maintain our cash accounts with established commercial banks. Such cash deposits exceed the Federal Deposit Insurance Corporation insured limit of $250,000 for each financial institution. However, we do not anticipate any losses on excess deposits. Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers. This amendment addresses revenue from contracts with customers, which clarifies existing accounting literature relating to how and when a company recognizes revenue. Under the update, a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. ASU 2015-14 delayed the effective date of this update to annual reporting periods beginning after December 15, 2017, and the amendment is to be applied retrospectively or the cumulative effect as of the date of adoption. Management is currently evaluating the impact ASU 2014-09 will have on the consolidated financial statements and related disclosures. In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This ASU introduces an explicit requirement for management to assess if there is substantial doubt about an entity’s ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. In connection with each annual and interim period, management must assess if there is substantial doubt about an entity’s ability to continue as a going concern within one year after the issuance date. Disclosures are required if conditions give rise to substantial doubt. ASU 2014-15 is effective for all entities in the first annual period ending after December 15, 2016. Management does not believe the potential effects of this ASU on the consolidated financial statements will be material. In April 2015, the FASB issued ASU 2015-03, Interest—Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs. The update requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. Debt disclosures will include the face amount of the debt liability and the effective interest rate. The update requires retrospective application and represents a change in accounting principle. ASU 2015-15 was issued subsequently to permit costs associated with a line of credit arrangement to be presented as assets and amortized ratably over the term of the arrangement. These updates will be effective for the Company on July 1, 2016. Management does not believe that these updates will materially impact the Company’s consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Inventory—Simplifying the Measurement of Inventory. ASU 2015-11 requires inventory to be subsequently measured using the lower of cost and net realizable value, thereby eliminating the market value approach. Net realizable value is defined as the “estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.” ASU 2015-11 is effective for the Company beginning on July 1, 2017 and is applied prospectively. Early adoption is permitted. The Company is currently evaluating the impact that this guidance will have on its consolidated financial statements and disclosure. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which modified lease accounting for both lessees and lessors to increase transparency and comparability by recognizing lease assets and lease liabilities by lessees for those leases classified as operating leases under previous accounting standards and disclosing key information about leasing arrangements. ASU 2016-02 were effective for the Company beginning in the first quarter of fiscal 2020 and early adoption is permitted. The Company is currently evaluating the impact of adopting the new lease standard on its consolidated financial statements. |
3. FAIR VALUE OF FINANCIAL INST
3. FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | Fair value accounting is applied for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis (at least annually). Assets and liabilities recorded at fair value in the financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels, which are directly related to the amount of subjectivity, associated with the inputs to the valuation of these assets or liabilities are as follows: • Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the measurement date. • Level 2 inputs are observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 inputs are unobservable inputs for the asset or liability. The carrying values of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, and accounts payable, approximate their fair values due to the short period of time to maturity or repayment. The carrying value of the Company’s short-term borrowings approximate fair value as of June 30, 2015, as the related interest rate approximates market rates currently available to the Company. |
4. PROPERTY AND EQUIPMENT
4. PROPERTY AND EQUIPMENT | 12 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | Property and equipment consisted of the following as of: June 30, 2016 June 30, 2015 Machinery and facility $ 303,520 $ 300,650 Office equipment 365,430 373,554 Molds 938,680 775,499 Construction-in progress – 2,130 1,607,630 1,451,853 Less accumulated depreciation (1,289,866 ) (1,137,361 ) Total $ 317,764 $ 314,492 Depreciation expense associated with property and equipment was $169,928 and $237,005 for the fiscal years ended June 30, 2016 and 2015, respectively. |
5. ACCRUED LIABILITIES
5. ACCRUED LIABILITIES | 12 Months Ended |
Jun. 30, 2016 | |
Payables and Accruals [Abstract] | |
ACCRUED LIABILITIES | Accrued liabilities consisted of the following as of: June 30, 2016 June 30, 2015 Accrued salaries, severance $ 129,119 $ 140,820 Accrued salaries, payroll deductions owed to government entities 10,133 8,434 Accrued vacation 45,031 75,477 Taxes 380 10,823 Other accrued liabilities 62,639 3,065 Total $ 247,302 $ 238,619 |
6. SHORT-TERM BORROWINGS
6. SHORT-TERM BORROWINGS | 12 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
SHORT-TERM BORROWINGS | Short-term borrowings consisted of the following as of: June 30, 2016 June 30, 2015 Loan dated June 2011, due to a financial institution, with monthly interest payments (interest rate of 8.90% per annum), and the principal balance due March 2016 (interest rate of 5.025% per annum as extended). The loan was paid off in full during the year ended June 30, 2016. $ – $ 148,295 Total $ – $ 148,295 The short-term borrowings of $148,295 as of June 30, 2015 resulted from the consolidation of FTI’s debt. |
7. INCOME TAXES
7. INCOME TAXES | 12 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | Income tax provision (benefit) for the years ended June 30, 2016 and 2015 consists of the following: Year Ended June 30, 2016 2015 Current income tax expense (benefit): Federal $ 19,343 $ (40,659 ) State (32,715 ) 800 (13,372 ) (39,859 ) Deferred income tax expense (benefit): Federal 350,958 (237,769 ) State – – Foreign (302,653 ) 189,356 48,305 (48,413 ) Provision (benefit) for income taxes $ 34,933 $ (88,272 ) The provision (benefit) for income taxes reconciles to the amount computed by applying effective federal statutory income tax rate to income (loss) before provision for income taxes as follows: Year Ended June 30, 2016 2015 Federal tax provision, at statutory rate of 34% $ 751,773 $ 170,323 State tax, net of federal tax benefit 800 528 Nondeductible expenses (16,619 ) 48,245 R&D credits (43,664 ) (140,829 ) Uncertain tax position – 1,360 Foreign rate difference (33,828 ) (82,162 ) Other (72,803 ) (85,737 ) Change in valuation allowance (550,726 ) – Provision (benefit) for income taxes $ 34,933 $ (88,272 ) Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets are as follows: June 30, 2016 June 30, 2015 Deferred tax asset: Net operating losses $ 1,716,980 $ 1,773,959 State tax 272 (272 ) Intangibles 19,993 151,643 Tax credits 425,011 56,934 Other, net 111,732 142,191 Total deferred tax assets 2,273,988 2,124,455 Deferred tax liabilities: Fixed asset (16,600 ) – Intangibles (38,535 ) – Total deferred tax liabilities (55,135 ) – Less valuation allowance (200,117 ) (57,206 ) Net deferred tax asset $ 2,018,736 $ 2,067,249 Deferred income tax assets and liabilities are recorded for differences between the financial statement and tax basis of the assets and liabilities that will result in taxable or deductible amounts in the future based on enacted laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. We have evaluated the available evidence supporting the realization of our gross deferred tax assets, including the amount and timing of forecasted future taxable income. Management determined it is more likely than not that the federal deferred tax assets will be fully realized and no valuation allowance is necessary as of June 30, 2016. Management also determined that certain state deferred tax assets required a partial valuation allowance as of June 30, 2016. As of June 30, 2016, we have federal and state net operating loss carryforwards of approximately $4.2 million and $1.7 million, which expire through 2034 and 2017, respectively. The utilization of net operating loss carryforwards may be subject to limitations under provision of the Internal Revenue Code Section 382 and similar state provisions. We adopted the provision of ASC 740 related to accounting for uncertain tax positions effective July 1, 2007, which prescribes a recognition threshold and measurement process for recording in the financial statements, uncertain tax positions taken or expected to be taken in a tax return. Under this provision, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. Tax benefits of an uncertain tax position will not be recognized if it has less than a 50% likelihood of being sustained based on technical merits. A reconciliation of the beginning and ending balance of unrecognized tax benefits, which have been considered in the Company’s computation of its deferred tax assets, is as follows: Balance as of June 30, 2014 $ 60,135 Gross increase or (decrease) 74,684 Reversal of reserve on unrecognized tax benefits (4,355 ) Balance as of June 30, 2015 130,464 Gross increase or (decrease) 38,059 Balance as of June 30, 2016 $ 168,523 We do not anticipate any material change in the total amount of unrecognized tax benefits to occur within the next twelve months. ASC 740 requires us to accrue interest and penalties where there is an underpayment of taxes based on our best estimate of the amount ultimately to be paid. Our policy is to recognize interest accrued related to unrecognized tax benefits and penalties as income tax expense. We have not recorded any interest or penalties as the liability associated with the unrecognized tax benefits is immaterial. We are subject to taxation in the U.S., various state and foreign jurisdictions. The Internal Revenue Service and Franchise Tax Board have completed their examinations of our 2007 and 2008 taxable years with a favorable final resolution of the Company’s claim for research and development tax credits. As of June 30, 2016, the R&D tax credits that we have claimed have been received in full. In addition, the Franchise Tax Board completed their examination of our taxable years from 2008 to 2011 with a favorable resolution of the Company’s claim for tax refunds in regards to the California apportionment of our income. As of June 30, 2016, the tax refunds that we have claimed have been received in full from the Franchise Tax Board. |
8. EARNINGS PER SHARE
8. EARNINGS PER SHARE | 12 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | We report earnings per share in accordance with ASC 260, “Earnings Per Share.” Basic earnings per share are computed using the weighted average number of shares outstanding during the period. Diluted earnings per share represent basic earnings per share adjusted to include the potentially dilutive effect of outstanding stock options. The weighted average number of shares outstanding used to compute earnings per share is as follows: Year Ended June 30, 2016 2015 Net income attributable to Parent Company $ 1,610,971 $ 760,008 Weighted-average shares of common stock outstanding: Basic 10,414,755 10,533,869 Dilutive effect of common stock equivalents arising from stock options 239,142 106,864 Diluted Outstanding shares 10,653,897 10,640,733 Basic earnings per share $ 0.15 $ 0.07 Diluted earnings per share $ 0.15 $ 0.07 |
9. COMMITMENTS AND CONTINGENCIE
9. COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Leases We have agreements to lease office space that expire in fiscal 2018 and 2020. On September 10, 2015, we signed a lease for an office space consisting of approximately 12,775 square feet, located in San Diego, California, at a monthly rent of $23,115, which commenced on October 28, 2015. In addition to monthly rent, the lease includes payment for certain common area costs. The term of the lease for this office space is four years from the lease commencement date. FTI leases approximately 10,000 square feet of office space, located in Seoul, Korea, at a monthly rent of approximately $8,000. The lease associated with this office space expires on September 1, 2017. Beginning on June 12, 2015, FTI leased additional office space consisting of approximately 2,682 square feet, also located in Seoul, Korea, at a monthly rent of approximately $2,700, and the lease expires on September 1, 2017. We lease one corporate housing facility primarily for our employees who travel, under a non-cancelable operating lease that expired on September 5, 2016, and was extended to September 5, 2017. Rent expense for the years ended June 30, 2016 and 2015 was $407,892 and $308,187, respectively. Future minimum payments under operating leases are as follows: Payments Due by June 30, 2017 2018 2019 2020 Thereafter Total Administrative office, San Diego, CA $ 277,377 $ 277,377 $ 277,377 $ 92,459 $ – $ 924,590 Administrative office, Korea 128,400 21,400 – – – 149,800 Corporate housing facility 10,364 2,591 – – – 12,955 Total Obligations $ 416,141 $ 301,368 $ 277,377 $ 92,459 $ – $ 1,087,345 Contingency On July 27, 2010, we entered into a Common Stock Repurchase Agreement with C-Motech (the “Agreement”), under which we agreed to repurchase 3,370,356 shares of our Common Stock from C-Motech for $3,500,000. A total of 1,803,684 shares were repurchased on the date of the Agreement in exchange for non-cash consideration in the amount of $1,873,065, which represented amounts owed to the Company by C-Motech for certain marketing funds as well as the settlement of a price dispute for products previously purchased by the Company from C-Motech. Under the Agreement, the remaining 1,566,672 shares were to be repurchased by us upon payment of the balance, $1,626,935, on or before December 31, 2010. On January 28, 2011 (the “Amendment Date”) the Agreement was amended to reflect (1) a change in the date the 1,566,672 shares are to be repurchased from C-Motech from December 31, 2010 to March 31, 2011, and (2) a change to the non-cash consideration of $1,873,065. In exchange for the 1,803,684 shares, we were to pay cash to C-Motech (in the same amount) for the shares, by March 31, 2011. In addition, in a separate agreement dated January 28, 2011, C-Motech agreed to pay us $1,873,065, for amounts owed, by March 31, 2011. The purpose of these revisions was to more clearly differentiate each party’s payment obligations to the other with respect to this transaction. Following the Amendment Date, we paid C-Motech $1,873,065 in exchange for the 1,803,684 shares previously transferred to us by C-Motech, and C-Motech paid us $1,873,065 for amounts owed, of which $1,581,457 was booked to other income and $291,608 was booked to cost of goods sold. The repurchase of the remaining 1,566,672 shares has not been completed. We have provided formal notification to C-Motech that it is in breach of its obligations and we have also provided a demand to sell the shares back to us. We have attempted to tender payment for the shares without results, and we are unable to determine whether or not this repurchase will take place. We were previously advised that two individuals, Cheng-Ji Zhu and Ok-Nam Yun, claim to have purchased the shares from C-Motech through its former CEO; however, the authority of the former CEO to agree to the sale of the shares was disputed by C-Motech. The ownership of the shares was the subject of litigation involving Cheng-Ji Zhu and Ok-Nam Yun ("Plaintiffs") and C-Motech in U.S. and Korean courts in which the Plaintiffs prevailed over C-Motech. On May 7, 2013, we filed a lawsuit against C-Motech in the Superior Court of California for the County of San Diego for breach of the Agreement and breach of other contracts between the parties relating to indemnification and other obligations. On February 25, 2014, C-Motech answered the complaint and on February 26, 2014, C-Motech filed a Notice of Removal from the Superior Court of the State of California for the County of San Diego to the United States District Court for the Southern District of California. On June 19, 2014, C-Motech filed a voluntary petition for relief under Chapter 15 of the U.S. Bankruptcy Code and on June 27, 2014, C-Motech filed a Motion for Recognition of a Foreign Main Proceeding under Chapter 15 of the U.S. Bankruptcy Code and Further Relief. On July 10, 2014, this motion was heard in the U.S. Bankruptcy Court for the Southern District of California during which the Court ordered that C-Motech's bankruptcy proceeding in South Korea was recognized as a foreign main proceeding and that our lawsuit against C-Motech in the U.S. District Court is stayed. The effect of this ruling is that we must participate in C-Motech's bankruptcy proceeding in South Korea if we wish to pursue our various claims against C-Motech. On September 9, 2015, registered ownership of the shares was transferred from C-Motech to Cheng-Ji Zhu (838,350 shares) and Ok-Nam Yun (728,322 shares). Subsequently, on December 30, 2015, the Company repurchased 130,000 of the shares from Ok-Nam Yun for cash of $234,000. Litigation We are from time to time involved in certain legal proceedings and claims arising in the ordinary course of business. Novatel Wireless, Inc. On December 10, 2010, Novatel Wireless, Inc. and Novatel Wireless Solutions, Inc. ("Novatel") filed a complaint in the United States District Court for the Southern District of California, against us and one other defendant. The complaint alleges that certain products, including, but not limited to, mobile data hot spots and data modems, infringe on U.S. Patent Nos. 5,129,098; 7,318,225; 7,574,737 and 7,319,715. On April 13, 2012, the plaintiff filed a Second Amended Complaint which amended certain claims and added U.S. Patent No. 7,944,901 to the original complaint. On April 27, 2012, we filed a Motion to Dismiss the Second Amended Complaint as to certain of the claims. On July 6, 2012, the Court held oral argument on the Motion to Dismiss and on July 19, 2012, the Court issued an order granting in part and denying in part the Motion to Dismiss. On August 2, 2012, we answered the complaint and an Early Neutral Evaluation Conference took place on October 31, 2012 and a follow-up Settlement Conference was held on June 12, 2013. A claim construction hearing took place on October 9, 2014. On November 25, 2014, the Court granted plaintiff's Joint Motion to Joinder of Required Party, which added Nova Intellectual Solutions, LLC ("NIS") as a plaintiff to this litigation. Novatel had previously assigned the patents-in-suit to Strategic Intellectual Solutions, LLC, which is the parent company of NIS. On April 24, 2015, NIS filed a complaint in the United States District Court for the Southern District of California, against us and FTI. The complaint alleges that one of the Company's products infringes on U.S. Patent No. 7,944,901. On July 20, 2015, a Settlement Conference took place during which we and NIS agreed to settle this matter and an agreement governing the settlement was executed on October 20, 2015. On October 1, 2015, we and Novatel filed a Joint Motion For Dismissal With Prejudice as to the patent infringement claims made by Novatel against us. On October 28, 2015, we and NIS filed a Joint Motion For Dismissal With Prejudice as to the patent infringement claims made by it against the Company and FTI. Adaptix, Inc. In October 2015 we were notified that on June 12, 2015, Adaptix, Inc. filed a complaint in the United States District Court for the Eastern District of Texas, Tyler Division against one of our customers. The complaint alleges that certain wireless devices, including one device provided by the Company, infringe on U.S. Patent No. 8,934,375. On July 12, 2016, the case was dismissed following settlement by the parties to the litigation. TC Technology LLC In June 2016 we were notified that on March 10, 2016, TC Technology LLC filed a complaint in the United States District Court for the District of Delaware against one of our customers. The complaint alleges that certain voice, data and text services infringe U.S. Patent No. 5,815,488. The complaint does not name any products provided by the Company. As of June 30, 2016, this legal proceeding is pending, but we do not believe that this action will have a material effect on the Company. Change of Control Agreements On September 21, 2009 we entered into Change of Control Agreements with OC Kim, our President, Yun J. (David) Lee, our Chief Operating Officer, and Yong Bae Won, our Vice President, Engineering. Each Change of Control Agreement provides for a lump sum payment to the officer in case of a change of control of the Company. The term includes the acquisition of Common Stock of the Company resulting in one person or company owning more than 50% of the outstanding shares, a significant change in the composition of the Board of Directors of the Company during any 12-month period, a reorganization, merger, consolidation or similar transaction resulting in the transfer of ownership of more than fifty percent (50%) of the Company's outstanding Common Stock, or a liquidation or dissolution of the Company or sale of substantially all of the Company's assets. The Change of Control Agreement with Mr. Kim calls for a payment of $5 million upon a change of control; the agreement with Mr. Lee calls for a payment of $2 million upon a change of control; and the agreement with Mr. Won was for two years and called for a payment of $1 million upon a change of control. The Board of Directors has approved extension of the Change of Control Agreements with Mr. Kim and Mr. Lee, through September 21, 2017. The Change of Control Agreement with Mr. Won expired on September 21, 2014 and was not renewed or extended. |
10. LONG-TERM INCENTIVE PLAN AW
10. LONG-TERM INCENTIVE PLAN AWARDS | 12 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
LONG-TERM INCENTIVE PLAN AWARDS | We apply the provisions of ASC 718, “Compensation - Stock Compensation,” using a modified prospective application, and the Black-Scholes model. Under this application, we are required to record compensation expense for all awards granted after the date of adoption and for the unvested portion of previously granted awards that remain outstanding at the date of adoption. Compensation costs will be recognized over the period that an employee provides service in exchange for the award. We adopted the 2009 Stock Incentive Plan (“2009 Plan”) on June 11, 2009, which provided for the grant of incentive stock options and non-qualified stock options to our employees and directors. Options granted under the 2009 Plan generally have a term of ten years and generally vest and become exercisable at the rate of 33% after one year and 33% on the second and third anniversaries of the option grant dates. Historically, some stock option grants have included shorter vesting periods ranging from one to two years. The estimated forfeiture rate considers historical turnover rates stratified into employee pools in comparison with an overall employee turnover rate, as well as expectations about the future. We periodically revise the estimated forfeiture rate in subsequent periods if actual forfeitures differ from those estimates. Compensation expense recorded under this method for the year ended June 30, 2016 was ($50,000). The expense credits for the year ended June 30, 2016 resulted from the reversal of expenses booked in prior periods for stock options for a small number of employees that were cancelled. This amount increased income from operations and income before provision for income taxes by the same amount by decreasing compensation expense recognized in selling, general and administrative expense. A summary of the status of our stock options is presented below: Weighted- Average Weighted- Remaining Average Contractual Aggregate Exercise Life Intrinsic Options Shares Price (In Years) Value Outstanding as of June 30, 2015 895,337 $ 1.24 5.50 $ 497,350 Granted – – – – Exercised – – – – Cancelled (45,000 ) (1.34 ) (6.96 ) (72,000 ) Forfeited or Expired – – – – Outstanding as of June 30, 2015 850,337 1.24 4.36 306,583 Granted Exercised (38,334 ) (1.04 ) (1.88 ) (88,935 ) Cancelled Forfeited or Expired Outstanding as of June 30, 2016 812,003 $ 1.25 3.35 $ 869,740 Exercisable as of June 30, 2016 812,003 $ 1.25 3.35 $ 869,740 The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based upon the Company’s closing stock price of $2.32 as of June 30, 2016, which would have been received by the option holders had all option holders exercised their options as of that date. The weighted-average grant-date fair value of stock options outstanding as of June 30, 2016 in the amount of 812,003 shares was $1.14 per share. As of June 30, 2016, there was no unrecognized compensation cost related to non-vested stock options granted. |
11. RELATED PARTY TRANSACTIONS
11. RELATED PARTY TRANSACTIONS | 12 Months Ended |
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | Refer to NOTE 9 - COMMITMENTS AND CONTINGENCIES . |
12. SUBSEQUENT EVENTS
12. SUBSEQUENT EVENTS | 12 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | ASC 855, “Subsequent Events” establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. During this period, we did not have any material recognizable subsequent events required to be disclosed or accrued. |
2. SUMMARY OF SIGNIFICANT ACC19
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company, and a subsidiary with a majority voting interest of 51.8% (48.2% is owned by non-controlling interests) as of June 30, 2016 and 2015. In the preparation of consolidated financial statements of the Company, intercompany transactions and balances are eliminated and net earnings are reduced by the portion of the net earnings of the subsidiary applicable to non-controlling interests. As consolidated financial statements are based on the assumption that they represent the financial position and operating results of a single economic entity, the retained earnings or deficit of the subsidiary at the date of acquisition, October 1, 2009, by the parent are excluded from consolidated retained earnings. When a subsidiary is consolidated, the consolidated financial statements include the subsidiary’s revenues, expenses, gains, and losses only from the date the subsidiary is initially consolidated, and the non-controlling interest is reported in the consolidated statement of financial position within equity, separately from the parent’s equity. There are no shares of the Company held by any subsidiaries as of June 30, 2016 or June 30, 2015. |
Non-controlling Interest in a Consolidated Subsidiary | Non-controlling Interest in a Consolidated Subsidiary As of June 30, 2016, the non-controlling interest was $1,103,921, which represents a $565,223 increase from $538,698 as of June 30, 2015. The increase of $565,223 in the non-controlling interest was due to the non-controlling interests in net income of subsidiary for the year ended June 30, 2016. |
Segment Reporting | Segment Reporting Accounting Standards Codification (“ASC”) 280, “Segment Reporting,” requires public companies to report financial and descriptive information about their reportable operating segments. We identify our operating segments based on how our chief operating decision maker internally evaluates separate financial information, business activities and management responsibility. We have one reportable segment, consisting of the sale of wireless access products. We generate revenues from four geographic areas, consisting of the United States, the Caribbean and South America, Europe, the Middle East and Africa ("EMEA") and Asia. The following enterprise-wide disclosure is prepared on a basis consistent with the preparation of the consolidated financial statements. The following table contains certain financial information by geographic area: Fiscal Year Ended June 30, Net sales: 2016 2015 United States $ 51,741,991 $ 36,710,081 Caribbean and South America 100,699 1,416,052 Europe, the Middle East and Africa ("EMEA") 7,906,900 4,578,970 Asia 55,104 3,639,130 Totals $ 59,804,694 $ 46,344,233 Long-lived assets, net (property and equipment and intangible assets): June 30, 2016 June 30, 2015 United States $ 1,113,745 $ 785,144 Asia 330,905 571,629 Totals $ 1,444,650 $ 1,356,773 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of financial instruments such as assets, cash equivalents, accounts receivable, accounts payable and debt approximate the related fair values due to the short-term maturities of these instruments. We invest our excess cash into financial instruments which are readily convertible into cash, such as money market funds and certificates of deposit (see Note 3). |
Estimates | Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts Based upon our review of our collection history as well as the current balances associated with all significant customers and associated invoices, we do not believe an allowance for doubtful accounts was necessary as of June 30, 2016 and June 30, 2015. |
Revenue Recognition | Revenue Recognition We recognize revenue in accordance with ASC 605, “Revenue Recognition,” when persuasive evidence of an arrangement exists, the price is fixed or determinable, collection is reasonably assured and delivery of products has occurred or services have been rendered. Accordingly, we recognize revenues from product sales upon shipment of the products to customers or when the products are received by the customers in accordance with the shipping or delivery terms. We provide a warranty for one year from the shipment or delivery date, which is covered by our vendors pursuant to purchase agreements. Any net warranty related expenditures made by us have not historically been material. Under our sales return policy, customers may generally return products that are under warranty for repair or replacement. |
Cost of Goods Sold | Cost of Goods Sold All costs associated with our contract manufacturers, as well as distribution, fulfillment and repair services are included in our cost of goods sold. Cost of goods sold also includes amortization expense associated with capitalized product development costs associated with complete technology. |
Capitalized Product Development Costs | Capitalized Product Development Costs Accounting Standards Codification (“ASC”) Topic 350, “Intangibles - Goodwill and Other” includes software that is part of a product or process to be sold to a customer and shall be accounted for under Subtopic 985-20. Our products contain embedded software internally developed by FTI, which is an integral part of these products because it allows the various components of the products to communicate with each other and the products are clearly unable to function without this coding. The costs of product development that are capitalized once technological feasibility is determined (noted as Technology in progress in the Intangible Assets table in Note 2 to Notes to Consolidated Financial Statements) include related licenses, certification costs, payroll, employee benefits, and other headcount-related expenses associated with product development. We determine that technological feasibility for our products is reached after all high-risk development issues have been resolved. Once the products are available for general release to our customers, we cease capitalizing the product development costs and any additional costs, if any, are expensed. The capitalized product development costs are amortized on a product-by-product basis using the greater of straight-line amortization or the ratio of the current gross revenues to the current and anticipated future gross revenues. The amortization begins when the products are available for general release to our customers. As of June 30, 2016 and June 30, 2015, capitalized product development costs in progress were $157,492 and $0, respectively, and these amounts are included in intangible assets in our consolidated balance sheets. During the year ended June 30, 2016, we incurred $686,291 in capitalized product development costs, and such amounts are primarily comprised of certifications and licenses. All costs incurred before technological feasibility is reached are expensed and included in our consolidated statements of comprehensive income. |
Research and Development Costs | Research and Development Costs Costs associated with research and development are expensed as incurred. Research and development costs were $2,990,496 and $2,915,143 for the years ended June 30, 2016 and 2015, respectively. |
Advertising and Promotion Costs | Advertising and Promotion Costs Costs associated with advertising and promotions are expensed as incurred. Advertising and promotion costs were $22,726 and $23,362 for the years ended June 30, 2016 and 2015, respectively. |
Warranties | Warranties We provide a warranty for one year which is covered by our vendors and manufacturers under purchase agreements between the Company and the vendors. As a result, we believe we do not have any net warranty exposure and do not accrue any warranty expenses. Historically, the Company has not experienced any material net warranty expenditures. |
Shipping and Handling Costs | Shipping and Handling Costs Costs associated with product shipping and handling are expensed as incurred. Shipping and handling costs, which are included in selling, general and administrative expenses on the statement of comprehensive income, were $1,408,607 and $1,162,427 for the years ended June 30, 2016 and 2015, respectively. |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of the consolidated statements of cash flow, we consider all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. |
Inventories | Inventories Our inventories consist of finished goods and are stated at the lower of cost or market, cost being determined on a first-in, first-out basis. We assess the inventory carrying value and reduce it, if necessary, to its net realizable value based on customer orders on hand, and internal demand forecasts using management’s best estimates given information currently available. Our customer demand is highly unpredictable, and can fluctuate significantly caused by factors beyond our control. We may write down our inventory value for potential obsolescence and excess inventory. As of June 30, 2016 and 2015, we have recorded inventory reserves in the amount of $90,917 and $120,867, respectively, for inventories that we have identified as obsolete or slow-moving. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Significant additions or improvements extending useful lives of assets are capitalized. Maintenance and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives as follows: Machinery 6 years Office equipment 5 years Molds 3 years Vehicles 5 years Computers and software 5 years Furniture and fixtures 7 years Facilities 5 years or life of the lease, whichever is shorter |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill and certain intangible assets were recorded in connection with the FTI acquisition in October 2009, and are accounted for in accordance with ASC 805, “Business Combinations.” Goodwill represents the excess of the purchase price over the fair value of the tangible and intangible net assets acquired. Intangible assets are recorded at their fair value at the date of acquisition. Goodwill and other intangible assets are accounted for in accordance with ASC 350, “Goodwill and Other Intangible Assets.” Goodwill and other intangible assets are tested for impairment at least annually and any related impairment losses are recognized in earnings when identified. No impairment was recognized during the years ended June 30, 2016 and 2015. |
Intangible Assets | Intangible Assets The definite lived intangible assets consisted of the following as of June 30, 2016: Definite lived intangible assets: Expected Life Average Remaining life Gross Intangible Assets Accumulated Amortization Net Intangible Assets Complete technology 3 years - $ 490,000 $ 490,000 $ – Complete technology 3 years - 1,517,683 1,517,683 – Complete technology 3 years - 281,714 281,714 – Complete technology 3 years - 361,249 361,249 – Complete technology 3 years - 174,009 174,009 – Complete technology 3 years - 909,962 909,962 – Complete technology 3 years 0.8 years 65,000 48,750 16,250 Complete technology 3 years 1.5 years 2,402 1,201 1,201 Complete technology 3 years 1.8 years 6,405 2,669 3,736 Complete technology 3 years 3.0 years 18,397 – 18,397 Supply and development agreement 8 years 1.2 years 1,121,000 945,844 175,156 Technology in progress Not Applicable - 157,492 – 157,492 Software 5 years 1.3 years 214,398 203,941 10,457 Patents 10 years 7.0 years 58,391 2,705 55,686 Certifications & licenses 3 years 2.0 years 2,472,359 1,783,847 688,512 Total as of June 30, 2016 $ 7,850,461 $ 6,723,574 $ 1,126,887 The definite lived intangible assets consisted of the following as of June 30, 2015: Definite lived intangible assets: Expected Life Average Remaining life Gross Intangible Assets Accumulated Amortization Net Intangible Assets Complete technology 3 years - $ 490,000 $ 490,000 $ – Complete technology 3 years - 1,517,683 1,517,683 – Complete technology 3 years - 281,714 281,714 – Complete technology 3 years - 361,249 361,249 – Complete technology 3 years 0.3 years 174,009 159,508 14,501 Complete technology 3 years 0.5 years 909,962 733,025 176,937 Complete technology 3 years 1.8 years 65,000 27,083 37,917 Complete technology 3 years 2.5 years 2,402 400 2,002 Complete technology 3 years 2.8 years 6,405 534 5,871 Supply and development agreement 8 years 2.3 years 1,121,000 805,719 315,281 Technology in progress Not Applicable - – – – Software 5 years 1.1 years 197,418 158,284 39,134 Patents 10 years 6.8 years 57,655 1,005 56,650 Certifications & licenses 3 years 0.4 years 1,783,561 1,389,573 393,988 Total as of June 30, 2015 $ 6,968,058 $ 5,925,777 $ 1,042,281 Amortization expense recognized during the years ended June 30, 2016 and 2015 was $797,797 and $1,223,692, respectively. The amortization expenses of the definite lived intangible assets for the next five years and thereafter are as follows: FY2017 FY2018 FY2019 FY2020 FY2021 Thereafter Total $ 563,403 $ 447,723 $ 64,469 $ 18,963 $ 5,839 $ 26,490 |
Long-lived Assets | Long-lived Assets In accordance with ASC 360, “Property, Plant, and Equipment,” we review for impairment of long-lived assets and certain identifiable intangibles whenever events or circumstances indicate that the carrying amount of assets may not be recoverable. We consider the carrying value of assets may not be recoverable based upon our review of the following events or changes in circumstances: the asset’s ability to continue to generate income from operations and positive cash flow in future periods; loss of legal ownership or title to the assets; significant changes in our strategic business objectives and utilization of the asset; or significant negative industry or economic trends. An impairment loss would be recognized when estimated future cash flows expected to result from the use of the asset are less than its carrying amount. We are not aware of any events or changes in circumstances during the year ended June 30, 2016 that would indicate that the long-lived assets are impaired. |
Stock-based Compensation | Stock-based Compensation The Company’s employee share-based awards result in a cost that is measured at fair value on an award’s grant date, based on the estimated number of awards that are expected to vest. Stock-based compensation is recognized on a straight-line basis over the award’s vesting period. The Company estimates the fair value of stock options using a Black-Scholes option pricing model. Transactions with non-employees in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued is the earlier of the date on which the counterparty’s performance is complete or the date on which it is probable that performance will occur. Stock-based compensation costs are reflected in the accompanying consolidated statements of comprehensive income based upon the underlying recipients' roles within the Company. |
Income Taxes | Income Taxes The Company uses the asset and liability method of accounting for income taxes. Accordingly, deferred tax assets and liabilities are determined based on the difference between the financial statement and income tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is recorded to reduce the carrying amount of deferred tax assets, unless it is more likely than not such assets will be realized. Current income taxes are based on the year’s taxable income for federal and state income tax reporting purposes and the annual change in deferred taxes. The Company assesses its income tax positions and records tax benefits based upon management’s evaluation of the facts, circumstances, and information available at the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, the Company records the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit is recognized in the financial statements. The Company classifies interest and penalties associated with such uncertain tax positions as a component of income tax expense. |
Earnings per Share Attributable to Common Stockholders | Earnings per Share Attributable to Common Stockholders Basic earnings per share is calculated by dividing the net income by the weighted-average number of common shares that were outstanding for the period, without consideration for potential common shares. Diluted earnings per share is calculated by dividing the net income by the sum of the weighted-average number of dilutive potential common shares outstanding for the period determined using the treasury-stock method or the as-converted method. Potentially dilutive shares are comprised of common stock options outstanding under our stock plan. |
Concentrations of Credit Risk | Concentrations of Credit Risk We extend credit to our customers and perform ongoing credit evaluations of such customers. We evaluate our accounts receivable on a regular basis for collectability and provide for an allowance for potential credit losses as deemed necessary. No reserve was required or recorded for any of the periods presented. Substantially all of our revenues are derived from sales of wireless data products. Any significant decline in market acceptance of our products or in the financial condition of our existing customers could impair our ability to operate effectively. A significant portion of our revenue is derived from a small number of customers. For the year ended June 30, 2016, net sales to our three largest customers represented 64%, 18% and 13% of our consolidated net sales, respectively, and 58%, 34% and 0% of our accounts receivable balance as of June 30, 2016. For the year ended June 30, 2015, net sales to our two largest customers represented 68% and 10% of our consolidated net sales, respectively, and 87%, and 7% of our accounts receivable balance as of June 30, 2015. No other customers accounted for more than ten percent of total net sales for the years ended June 30, 2016 and 2015. For the year ended June 30, 2016, sales to Verizon, Sprint and Smile Communications each comprised more the 10% of our net sales. For the year ended June 30, 2015, sales to Verizon comprised more than 10% of our net sales. For the year ended June 30, 2016, we purchased the majority of our wireless data products from one manufacturing company located in Asia. If this manufacturing company were to experience delays, capacity constraints or quality control problems, product shipments to our customers could be delayed, or our customers could consequently elect to cancel the underlying product purchase order, which would negatively impact our revenue. For the year ended June 30, 2016, we purchased wireless data products from this supplier in the amount of $49,057,120, or 99% of total purchases, and had related accounts payable of $12,840,858 as of June 30, 2016. For the year ended June 30, 2015, we purchased wireless data products from this supplier in the amount of $30,466,215, or 81% of total purchases, and had related accounts payable of $6,749,486 as of June 30, 2015. We maintain our cash accounts with established commercial banks. Such cash deposits exceed the Federal Deposit Insurance Corporation insured limit of $250,000 for each financial institution. However, we do not anticipate any losses on excess deposits. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers. This amendment addresses revenue from contracts with customers, which clarifies existing accounting literature relating to how and when a company recognizes revenue. Under the update, a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. ASU 2015-14 delayed the effective date of this update to annual reporting periods beginning after December 15, 2017, and the amendment is to be applied retrospectively or the cumulative effect as of the date of adoption. Management is currently evaluating the impact ASU 2014-09 will have on the consolidated financial statements and related disclosures. In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This ASU introduces an explicit requirement for management to assess if there is substantial doubt about an entity’s ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. In connection with each annual and interim period, management must assess if there is substantial doubt about an entity’s ability to continue as a going concern within one year after the issuance date. Disclosures are required if conditions give rise to substantial doubt. ASU 2014-15 is effective for all entities in the first annual period ending after December 15, 2016. Management does not believe the potential effects of this ASU on the consolidated financial statements will be material. In April 2015, the FASB issued ASU 2015-03, Interest—Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs. The update requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. Debt disclosures will include the face amount of the debt liability and the effective interest rate. The update requires retrospective application and represents a change in accounting principle. ASU 2015-15 was issued subsequently to permit costs associated with a line of credit arrangement to be presented as assets and amortized ratably over the term of the arrangement. These updates will be effective for the Company on July 1, 2016. Management does not believe that these updates will materially impact the Company’s consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Inventory—Simplifying the Measurement of Inventory. ASU 2015-11 requires inventory to be subsequently measured using the lower of cost and net realizable value, thereby eliminating the market value approach. Net realizable value is defined as the “estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.” ASU 2015-11 is effective for the Company beginning on July 1, 2017 and is applied prospectively. Early adoption is permitted. The Company is currently evaluating the impact that this guidance will have on its consolidated financial statements and disclosure. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which modified lease accounting for both lessees and lessors to increase transparency and comparability by recognizing lease assets and lease liabilities by lessees for those leases classified as operating leases under previous accounting standards and disclosing key information about leasing arrangements. ASU 2016-02 were effective for the Company beginning in the first quarter of fiscal 2020 and early adoption is permitted. The Company is currently evaluating the impact of adopting the new lease standard on its consolidated financial statements. |
2. SUMMARY OF SIGNIFICANT ACC20
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Segment information by geographic areas | Fiscal Year Ended June 30, Net sales: 2016 2015 United States $ 51,741,991 $ 36,710,081 Caribbean and South America 100,699 1,416,052 Europe, the Middle East and Africa ("EMEA") 7,906,900 4,578,970 Asia 55,104 3,639,130 Totals $ 59,804,694 $ 46,344,233 Long-lived assets, net (property and equipment and intangible assets): June 30, 2016 June 30, 2015 United States $ 1,113,745 $ 785,144 Asia 330,905 571,629 Totals $ 1,444,650 $ 1,356,773 |
Useful lives of property and equipment | Machinery 6 years Office equipment 5 years Molds 3 years Vehicles 5 years Computers and software 5 years Furniture and fixtures 7 years Facilities 5 years or life of the lease, whichever is shorter |
Intangible Assets | The definite lived intangible assets consisted of the following as of June 30, 2016: Definite lived intangible assets: Expected Life Average Remaining life Gross Intangible Assets Accumulated Amortization Net Intangible Assets Complete technology 3 years - $ 490,000 $ 490,000 $ – Complete technology 3 years - 1,517,683 1,517,683 – Complete technology 3 years - 281,714 281,714 – Complete technology 3 years - 361,249 361,249 – Complete technology 3 years - 174,009 174,009 – Complete technology 3 years - 909,962 909,962 – Complete technology 3 years 0.8 years 65,000 48,750 16,250 Complete technology 3 years 1.5 years 2,402 1,201 1,201 Complete technology 3 years 1.8 years 6,405 2,669 3,736 Complete technology 3 years 3.0 years 18,397 – 18,397 Supply and development agreement 8 years 1.2 years 1,121,000 945,844 175,156 Technology in progress Not Applicable - 157,492 – 157,492 Software 5 years 1.3 years 214,398 203,941 10,457 Patents 10 years 7.0 years 58,391 2,705 55,686 Certifications & licenses 3 years 2.0 years 2,472,359 1,783,847 688,512 Total as of June 30, 2016 $ 7,850,461 $ 6,723,574 $ 1,126,887 The definite lived intangible assets consisted of the following as of June 30, 2015: Definite lived intangible assets: Expected Life Average Remaining life Gross Intangible Assets Accumulated Amortization Net Intangible Assets Complete technology 3 years - $ 490,000 $ 490,000 $ – Complete technology 3 years - 1,517,683 1,517,683 – Complete technology 3 years - 281,714 281,714 – Complete technology 3 years - 361,249 361,249 – Complete technology 3 years 0.3 years 174,009 159,508 14,501 Complete technology 3 years 0.5 years 909,962 733,025 176,937 Complete technology 3 years 1.8 years 65,000 27,083 37,917 Complete technology 3 years 2.5 years 2,402 400 2,002 Complete technology 3 years 2.8 years 6,405 534 5,871 Supply and development agreement 8 years 2.3 years 1,121,000 805,719 315,281 Technology in progress Not Applicable - – – – Software 5 years 1.1 years 197,418 158,284 39,134 Patents 10 years 6.8 years 57,655 1,005 56,650 Certifications & licenses 3 years 0.4 years 1,783,561 1,389,573 393,988 Total as of June 30, 2015 $ 6,968,058 $ 5,925,777 $ 1,042,281 |
Schedule of Expected Amortization Expense | FY2017 FY2018 FY2019 FY2020 FY2021 Thereafter Total $ 563,403 $ 447,723 $ 64,469 $ 18,963 $ 5,839 $ 26,490 |
4. PROPERTY AND EQUIPMENT (Tabl
4. PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | June 30, 2016 June 30, 2015 Machinery and facility $ 303,520 $ 300,650 Office equipment 365,430 373,554 Molds 938,680 775,499 Construction-in progress – 2,130 1,607,630 1,451,853 Less accumulated depreciation (1,289,866 ) (1,137,361 ) Total $ 317,764 $ 314,492 |
5. ACCRUED LIABILITIES (Tables)
5. ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of accrued liabilities | June 30, 2016 June 30, 2015 Accrued salaries, severance $ 129,119 $ 140,820 Accrued salaries, payroll deductions owed to government entities 10,133 8,434 Accrued vacation 45,031 75,477 Taxes 380 10,823 Other accrued liabilities 62,639 3,065 Total $ 247,302 $ 238,619 |
6. SHORT-TERM BORROWINGS FROM B
6. SHORT-TERM BORROWINGS FROM BANKS (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of short term borrowings | June 30, 2016 June 30, 2015 Loan dated June 2011, due to a financial institution, with monthly interest payments (interest rate of 8.90% per annum), and the principal balance due March 2016 (interest rate of 5.025% per annum as extended). The loan was paid off in full during the year ended June 30, 2016. $ – $ 148,295 Total $ – $ 148,295 |
7. INCOME TAXES (Tables)
7. INCOME TAXES (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income tax provision from continuing operations | Year Ended June 30, 2016 2015 Current income tax expense (benefit): Federal $ 19,343 $ (40,659 ) State (32,715 ) 800 (13,372 ) (39,859 ) Deferred income tax expense (benefit): Federal 350,958 (237,769 ) State – – Foreign (302,653 ) 189,356 48,305 (48,413 ) Provision (benefit) for income taxes $ 34,933 $ (88,272 ) |
Schedule of effective income tax rate | Year Ended June 30, 2016 2015 Federal tax provision, at statutory rate of 34% $ 751,773 $ 170,323 State tax, net of federal tax benefit 800 528 Nondeductible expenses (16,619 ) 48,245 R&D credits (43,664 ) (140,829 ) Uncertain tax position – 1,360 Foreign rate difference (33,828 ) (82,162 ) Other (72,803 ) (85,737 ) Change in valuation allowance (550,726 ) – Provision (benefit) for income taxes $ 34,933 $ (88,272 ) |
Schedule of deferred tax assets | June 30, 2016 June 30, 2015 Deferred tax asset: Net operating losses $ 1,716,980 $ 1,773,959 State tax 272 (272 ) Intangibles 19,993 151,643 Tax credits 425,011 56,934 Other, net 111,732 142,191 Total deferred tax assets 2,273,988 2,124,455 Deferred tax liabilities: Fixed asset (16,600 ) – Intangibles (38,535 ) – Total deferred tax liabilities (55,135 ) – Less valuation allowance (200,117 ) (57,206 ) Net deferred tax asset $ 2,018,736 $ 2,067,249 |
Schedule of unrecognized tax benefits | Balance as of June 30, 2014 $ 60,135 Gross increase or (decrease) 74,684 Reversal of reserve on unrecognized tax benefits (4,355 ) Balance as of June 30, 2015 130,464 Gross increase or (decrease) 38,059 Balance as of June 30, 2016 $ 168,523 |
8. EARNINGS PER SHARE (Tables)
8. EARNINGS PER SHARE (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share | Year Ended June 30, 2016 2015 Net income attributable to Parent Company $ 1,610,971 $ 760,008 Weighted-average shares of common stock outstanding: Basic 10,414,755 10,533,869 Dilutive effect of common stock equivalents arising from stock options 239,142 106,864 Diluted Outstanding shares 10,653,897 10,640,733 Basic earnings per share $ 0.15 $ 0.07 Diluted earnings per share $ 0.15 $ 0.07 |
9. COMMITMENTS AND CONTINGENC26
9. COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Payments Due by June 30, 2017 2018 2019 2020 Thereafter Total Administrative office, San Diego, CA $ 277,377 $ 277,377 $ 277,377 $ 92,459 $ – $ 924,590 Administrative office, Korea 128,400 21,400 – – – 149,800 Corporate housing facility 10,364 2,591 – – – 12,955 Total Obligations $ 416,141 $ 301,368 $ 277,377 $ 92,459 $ – $ 1,087,345 |
10. LONG-TERM INCENTIVE PLAN 27
10. LONG-TERM INCENTIVE PLAN AWARDS (Tables) | 12 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Option Activity | Weighted- Average Weighted- Remaining Average Contractual Aggregate Exercise Life Intrinsic Options Shares Price (In Years) Value Outstanding as of June 30, 2015 895,337 $ 1.24 5.50 $ 497,350 Granted – – – – Exercised – – – – Cancelled (45,000 ) (1.34 ) (6.96 ) (72,000 ) Forfeited or Expired – – – – Outstanding as of June 30, 2015 850,337 1.24 4.36 306,583 Granted Exercised (38,334 ) (1.04 ) (1.88 ) (88,935 ) Cancelled Forfeited or Expired Outstanding as of June 30, 2016 812,003 $ 1.25 3.35 $ 869,740 Exercisable as of June 30, 2016 812,003 $ 1.25 3.35 $ 869,740 |
2. Summary of Significant Acc28
2. Summary of Significant Accounting Policies (Details - Segments) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Net sales | $ 59,804,694 | $ 46,344,233 |
Long-lived assets, net (property and equipment and intangible assets) | 1,444,650 | 1,356,773 |
United States [Member] | ||
Net sales | 51,741,991 | 36,710,081 |
Long-lived assets, net (property and equipment and intangible assets) | 1,113,745 | 785,144 |
Caribbean and South America [Member] | ||
Net sales | 100,699 | 1,416,052 |
EMEA [Member] | ||
Net sales | 7,906,900 | 4,578,970 |
Asia [Member] | ||
Net sales | 55,104 | 3,639,130 |
Long-lived assets, net (property and equipment and intangible assets) | $ 330,905 | $ 571,629 |
2. Summary of Significant Acc29
2. Summary of Significant Accounting Policies (Details - Useful lives) | 12 Months Ended |
Jun. 30, 2016 | |
Machinery [Member] | |
Estimated useful lives | 6 years |
Office Equipment [Member] | |
Estimated useful lives | 5 years |
Molds [Member] | |
Estimated useful lives | 3 years |
Vehicles[Member] | |
Estimated useful lives | 5 years |
Computers and software [Member] | |
Estimated useful lives | 5 years |
Furniture and fixtures [Member] | |
Estimated useful lives | 7 years |
Facilities [Member] | |
Estimated useful lives | 5 years |
2. Summary of Significant Acc30
2. Summary of Significant Accounting Policies (Details - Intangibles) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Intangible Assets, Gross | $ 7,850,461 | $ 6,968,058 |
Accumulated Amortization | 6,723,574 | 5,925,777 |
Intangible Assets, Net | $ 1,126,887 | $ 1,042,281 |
Complete Technology 1 [Member] | ||
Expected Life | 3 years | 3 years |
Intangible Assets, Gross | $ 490,000 | $ 490,000 |
Accumulated Amortization | 490,000 | 490,000 |
Intangible Assets, Net | $ 0 | $ 0 |
Complete Technology 2 [Member] | ||
Expected Life | 3 years | 3 years |
Intangible Assets, Gross | $ 1,517,683 | $ 1,517,683 |
Accumulated Amortization | 1,517,683 | 1,517,683 |
Intangible Assets, Net | $ 0 | $ 0 |
Complete Technology 3 [Member] | ||
Expected Life | 3 years | 3 years |
Intangible Assets, Gross | $ 281,714 | $ 281,714 |
Accumulated Amortization | 281,714 | 281,714 |
Intangible Assets, Net | $ 0 | $ 0 |
Complete Technology 4 [Member] | ||
Expected Life | 3 years | 3 years |
Intangible Assets, Gross | $ 361,249 | $ 361,249 |
Accumulated Amortization | 361,249 | 361,249 |
Intangible Assets, Net | $ 0 | $ 0 |
Complete Technology 5 [Member] | ||
Expected Life | 3 years | 3 years |
Remaining Life | 3 months 18 days | |
Intangible Assets, Gross | $ 174,009 | $ 174,009 |
Accumulated Amortization | 174,009 | 159,508 |
Intangible Assets, Net | $ 0 | $ 14,501 |
Complete Technology 6 [Member] | ||
Expected Life | 3 years | 3 years |
Remaining Life | 6 months | |
Intangible Assets, Gross | $ 909,962 | $ 909,962 |
Accumulated Amortization | 909,962 | 733,025 |
Intangible Assets, Net | $ 0 | $ 176,937 |
Complete Technology 7 [Member] | ||
Expected Life | 3 years | 3 years |
Remaining Life | 9 months 18 days | 1 year 9 months 18 days |
Intangible Assets, Gross | $ 65,000 | $ 65,000 |
Accumulated Amortization | 48,750 | 27,083 |
Intangible Assets, Net | $ 16,250 | $ 37,917 |
Complete Technology 8 [Member] | ||
Expected Life | 3 years | 3 years |
Remaining Life | 1 year 6 months | 2 years 6 months |
Intangible Assets, Gross | $ 2,402 | $ 2,402 |
Accumulated Amortization | 1,201 | 400 |
Intangible Assets, Net | $ 1,201 | $ 2,002 |
Complete Technology 9 [Member] | ||
Expected Life | 3 years | 3 years |
Remaining Life | 1 year 9 months 18 days | 2 years 9 months 18 days |
Intangible Assets, Gross | $ 6,405 | $ 6,405 |
Accumulated Amortization | 2,669 | 534 |
Intangible Assets, Net | $ 3,736 | $ 5,871 |
Complete Technology 10 [Member] | ||
Expected Life | 3 years | |
Remaining Life | 3 years | |
Intangible Assets, Gross | $ 18,397 | |
Accumulated Amortization | 0 | |
Intangible Assets, Net | 18,397 | |
Supply And Development Agreement [Member] | ||
Expected Life | 8 years | |
Remaining Life | 2 years 3 months 18 days | |
Intangible Assets, Gross | 1,121,000 | $ 1,121,000 |
Accumulated Amortization | 945,844 | 805,719 |
Intangible Assets, Net | 175,156 | $ 315,281 |
Technology in progress [Member] | ||
Intangible Assets, Gross | 157,492 | |
Accumulated Amortization | 0 | |
Intangible Assets, Net | $ 157,492 | |
Software [Member] | ||
Expected Life | 5 years | 5 years |
Remaining Life | 1 year 3 months 18 days | 1 year 1 month 6 days |
Intangible Assets, Gross | $ 214,398 | $ 197,418 |
Accumulated Amortization | 203,941 | 158,284 |
Intangible Assets, Net | $ 10,457 | $ 39,134 |
Patents [Member] | ||
Expected Life | 10 years | 10 years |
Remaining Life | 7 years | 6 years 9 months 18 days |
Intangible Assets, Gross | $ 58,391 | $ 57,655 |
Accumulated Amortization | 2,705 | 1,005 |
Intangible Assets, Net | $ 55,686 | $ 56,650 |
Certifications And Licenses [Member] | ||
Expected Life | 3 years | 3 years |
Remaining Life | 2 years | 4 months 24 days |
Intangible Assets, Gross | $ 2,472,359 | $ 1,783,561 |
Accumulated Amortization | 1,783,847 | 1,389,573 |
Intangible Assets, Net | $ 688,512 | 393,988 |
Technology In Progress [Member] | ||
Intangible Assets, Gross | 0 | |
Accumulated Amortization | 0 | |
Intangible Assets, Net | $ 0 |
2. Summary of Significant Acc31
2. Summary of Significant Accounting Policies (Details - Amortization) | Jun. 30, 2016USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
FYE 2,017 | $ 563,403 |
FYE 2,018 | 447,723 |
FYE 2,019 | 64,469 |
FYE 2,020 | 18,963 |
FYE 2,021 | 5,839 |
Thereafter | $ 26,490 |
2. Summary of Significant Acc32
2. Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Noncontrolling interest percentage | 48.20% | 48.20% |
Noncontrolling interest | $ 1,103,921 | $ 538,698 |
Increase in noncontrolling interest | $ 565,223 | |
Increase in noncontrolling interest explanation | The increase of $565,223 in the non-controlling interest was due to the non-controlling interests in net income of subsidiary for the year ended June 30, 2016. | |
Capitalized product development costs | $ 157,492 | 0 |
Product development costs incurred | 686,291 | 89,145 |
Research and development costs | 2,990,496 | 2,915,143 |
Advertising costs | 22,726 | 23,362 |
Warranty expense | 0 | 0 |
Shipping and handling expense | 1,408,607 | 1,162,427 |
Inventory reserve | 90,917 | 120,867 |
Goodwill impairment | 0 | 0 |
Amortization expense | 797,797 | 1,223,692 |
Products purchased | 49,879,514 | 37,944,155 |
Accounts payable | $ 13,276,125 | $ 7,362,075 |
Sales [Member] | Customer 1 [Member] | ||
Concentration of credit risk | 64.00% | 68.00% |
Sales [Member] | Customer 2 [Member] | ||
Concentration of credit risk | 18.00% | 10.00% |
Sales [Member] | Customer 3 [Member] | ||
Concentration of credit risk | 13.00% | |
Accounts Receivable [Member] | Customer 1 [Member] | ||
Concentration of credit risk | 58.00% | 87.00% |
Accounts Receivable [Member] | Customer 2 [Member] | ||
Concentration of credit risk | 34.00% | 7.00% |
Accounts Receivable [Member] | Customer 3 [Member] | ||
Concentration of credit risk | 0.00% | |
Purchases [Member] | Supplier Concentration Risk [Member] | ||
Concentration of credit risk | 99.00% | 81.00% |
Products purchased | $ 49,057,120 | $ 30,466,215 |
Accounts payable | $ 12,840,858 | $ 6,749,486 |
4. Property and Equipment (Deta
4. Property and Equipment (Details) - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Property and equipment, gross | $ 1,607,630 | $ 1,451,853 |
Less accumulated depreciation | (1,289,866) | (1,137,361) |
Total | 317,764 | 314,492 |
Machinery and Facility [Member] | ||
Property and equipment, gross | 303,520 | 300,650 |
Office Equipment [Member] | ||
Property and equipment, gross | 365,430 | 373,554 |
Molds [Member] | ||
Property and equipment, gross | 938,680 | 775,499 |
Vehicles[Member] | ||
Property and equipment, gross | 0 | 2,130 |
Construction in Progress [Member] | ||
Property and equipment, gross | $ 2,130 | $ 37,466 |
4. Property and Equipment (De34
4. Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 169,928 | $ 237,005 |
5. Accrued Liabilities (Details
5. Accrued Liabilities (Details) - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Payables and Accruals [Abstract] | ||
Accrued salaries, severance | $ 129,119 | $ 140,820 |
Accrued salaries, payroll deduction to pay | 10,133 | 8,434 |
Accrued vacation | 45,031 | 75,477 |
Taxes | 380 | 10,823 |
Other accrued liabilities | 62,639 | 3,065 |
Total | $ 247,302 | $ 238,619 |
6. Short-Term Borrowings from36
6. Short-Term Borrowings from Banks (Details) - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Debt Disclosure [Abstract] | ||
Short term borrowings | $ 0 | $ 148,295 |
Total | $ 0 | $ 148,295 |
6. Short-Term Borrowings from37
6. Short-Term Borrowings from Bank (Details Narrative) | 12 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Interest rate | 8.90% |
Maturity date | Mar. 31, 2016 |
7. Income Taxes (Details - Prov
7. Income Taxes (Details - Provision for Income Taxes) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Current income tax expense (benefit): | ||
Federal | $ 19,343 | $ (40,659) |
State | (32,715) | 800 |
Total Current income tax expense (benefit) | (13,372) | (39,859) |
Deferred income tax expense (benefit): | ||
Federal | 350,958 | (237,769) |
State | 0 | 0 |
Foreign | (302,653) | 189,356 |
Total deferred income tax expense (benefit) | 48,305 | (48,413) |
Provision (benefit) for income taxes | $ 34,933 | $ (88,272) |
7. Income Taxes (Details - Reco
7. Income Taxes (Details - Reconciliation of Tax Rate) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation | ||
Federal tax provision, at statutory rate of 34% | $ 751,773 | $ 170,323 |
State tax, net of federal tax benefit | 800 | 528 |
Nondeductible expenses | (16,619) | 48,245 |
R&D Credits | (43,664) | (140,829) |
Uncertain tax position | 0 | 1,360 |
Foreign rate difference | (33,828) | (82,162) |
Other | (72,803) | (85,737) |
Change in valuation allowance | (550,726) | 0 |
Provision (benefit) for income taxes | $ 34,933 | $ (88,272) |
7. Income Taxes (Details - Defe
7. Income Taxes (Details - Deferred Income Taxes) - USD ($) | Jun. 30, 2016 | Jun. 30, 2015 |
Deferred tax asset: | ||
Net operating losses | $ 1,716,980 | $ 1,773,959 |
State tax | 272 | (272) |
Intangibles | 19,993 | 151,643 |
Tax credits | 425,011 | 56,934 |
Other, net | 111,732 | 142,191 |
Total deferred tax assets | 2,273,988 | 2,124,455 |
Deferred tax liabilities: | ||
Fixed asset | (16,600) | 0 |
Intangibles | (38,535) | 0 |
Total deferred tax liabilities | (55,135) | 0 |
Less valuation allowance | (200,117) | (57,206) |
Net deferred tax asset | $ 2,018,736 | $ 2,067,249 |
7. Income Taxes (Details - Unre
7. Income Taxes (Details - Unrecognized tax benefits) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Reconciliation of unrecognized tax benefits | ||
Beginning Balance | $ 130,464 | $ 60,135 |
Gross increase or (decrease) | 38,059 | 74,684 |
Reversal of reserve on unrecognized tax benefits | 0 | (4,355) |
Ending Balance | $ 168,523 | $ 130,464 |
7. Income Taxes (Details Narrat
7. Income Taxes (Details Narrative) | 12 Months Ended |
Jun. 30, 2016USD ($) | |
Federal [Member] | |
Operating loss carryforward | $ 4,200,000 |
Carryforward expiration dates | Dec. 31, 2034 |
State [Member] | |
Operating loss carryforward | $ 1,700,000 |
Carryforward expiration dates | Dec. 31, 2017 |
8. Earnings Per Share (Details)
8. Earnings Per Share (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Earnings Per Share [Abstract] | ||
Net income attributable to parent company | $ 1,610,971 | $ 760,008 |
Weighted-average shares of common stock outstanding: | ||
Basic | 10,414,755 | 10,533,869 |
Dilutive effect of common stock equivalents arising from stock options | 239,142 | 106,864 |
Diluted Outstanding shares | 10,653,897 | 10,640,733 |
Basic earnings (loss) per share | $ .15 | $ 0.07 |
Diluted earnings (loss) per share | $ .15 | $ 0.07 |
9. Commitments and Contingenc44
9. Commitments and Contingencies (Details) | Jun. 30, 2016USD ($) |
Payments Due by June 30, | |
2,017 | $ 416,141 |
2,018 | 301,368 |
2,019 | 277,377 |
2,020 | 92,459 |
Thereafter | 0 |
Total | 1,087,345 |
Administrative office, San Diego, CA [Member] | |
Payments Due by June 30, | |
2,017 | 277,377 |
2,018 | 277,377 |
2,019 | 277,377 |
2,020 | 92,459 |
Thereafter | 0 |
Total | 924,590 |
Administrative office, Korea [Member] | |
Payments Due by June 30, | |
2,017 | 128,400 |
2,018 | 21,400 |
2,019 | 0 |
2,020 | 0 |
Thereafter | 0 |
Total | 149,800 |
Corporate housing facility [Member] | |
Payments Due by June 30, | |
2,017 | 10,364 |
2,018 | 2,591 |
2,019 | 0 |
2,020 | 0 |
Thereafter | 0 |
Total | $ 12,955 |
9. Commitments and Contingenc45
9. Commitments and Contingencies (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Rent Expense | $ 407,892 | $ 308,187 |
10. Long-Term Incentive Plan 46
10. Long-Term Incentive Plan Awards (Details - Option Activity) - Options [Member] - USD ($) | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | |
Shares | |||
Number of Options Outstanding, Beginning | 850,337 | 895,337 | |
Number of Options Granted | 0 | 0 | |
Number of Options Exercised | (38,334) | 0 | |
Number of Options Cancelled | 0 | (45,000) | |
Number of Options Forfeited or Expired | 0 | 0 | |
Number of Options Outstanding, Ending | 812,003 | 850,337 | 895,337 |
Number of Options Exercisable | 812,003 | ||
Weighted-Average Exercise Price | |||
Weighted Average Exercise Price Outstanding, Beginning | $ 1.24 | $ 1.24 | |
Weighted Average Exercise Price Exercised | (1.04) | ||
Weighted Average Exercise Price Canceled | (1.34) | ||
Weighted Average Exercise Price Outstanding, Ending | 1.25 | $ 1.24 | $ 1.24 |
Weighted Average Exercise Price Exercisable | $ 1.25 | ||
Weighted-Average Remaining Contractual Life (In Years) | |||
Weighted Average Remaining Contractual Life (in years) Outstanding | 3 years 4 months 6 days | 4 years 4 months 10 days | 5 years 6 months |
Weighted Average Remaining Contractual Life (in years) Exercised | 1 year 10 months 17 days | ||
Weighted Average Remaining Contractual Life (in years) Cancelled | 6 years 11 months 16 days | ||
Weighted Average Remaining Contractual Life (in years) Exercisable | 3 years 4 months 6 days | ||
Aggregate Intrinsic Value | |||
Aggregate Intrinsic Value Outstanding, Beginning | $ 306,583 | $ 497,350 | |
Aggregate Intrinsic Value Exercised | (88,935) | ||
Aggregate Intrinsic Value Cancelled | (72,000) | ||
Aggregate Intrinsic Value Outstanding, Ending | 869,740 | $ 306,583 | $ 497,350 |
Aggregate Intrinsic Value Exercisable | $ 869,740 |
10. Long-Term Incentive Plan 47
10. Long-Term Incentive Plan Awards (Details Narrative) - Options [Member] | 12 Months Ended |
Jun. 30, 2016USD ($)$ / sharesshares | |
Weighted average grant-date fair value of stock options | shares | 812,003 |
Weighted average grant-date fair value of stock options, per share price | $ / shares | $ 1.14 |
Unrecognized compensation cost related to non-vested options | $ | $ 0 |