Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Sep. 30, 2020 | Nov. 02, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | LIGHTPATH TECHNOLOGIES INC | |
Entity Central Index Key | 0000889971 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | DE | |
Entity File Number | 000-27548 | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 26,109,225 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2020 | Jun. 30, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 5,386,587 | $ 5,387,388 |
Trade accounts receivable, net of allowance of $10,153 and $9,917 | 6,258,927 | 6,188,726 |
Inventories, net | 9,647,434 | 8,984,482 |
Other receivables | 0 | 132,051 |
Prepaid expenses and other assets | 666,501 | 565,181 |
Total current assets | 21,959,449 | 21,257,828 |
Property and equipment, net | 12,270,410 | 11,799,061 |
Operating lease right-of-use assets | 1,502,488 | 1,220,430 |
Intangible assets, net | 6,426,694 | 6,707,964 |
Goodwill | 5,854,905 | 5,854,905 |
Deferred tax assets, net | 659,000 | 659,000 |
Other assets | 27,737 | 75,730 |
Total assets | 48,700,683 | 47,574,918 |
Current liabilities: | ||
Accounts payable | 2,337,477 | 2,558,638 |
Accrued liabilities | 1,161,796 | 992,221 |
Accrued payroll and benefits | 1,976,053 | 1,827,740 |
Operating lease liabilities, current | 814,307 | 765,422 |
Loans payable, current portion | 881,350 | 981,350 |
Finance lease obligation, current portion | 284,008 | 278,040 |
Total current liabilities | 7,454,991 | 7,403,411 |
Finance lease obligation, less current portion | 205,966 | 279,435 |
Operating lease liabilities, noncurrent | 1,075,781 | 887,766 |
Loans payable, less current portion | 4,296,670 | 4,437,365 |
Total liabilities | 13,033,408 | 13,007,977 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock: Series D, $.01 par value, voting; 500,000 shares authorized; none issued and outstanding | 0 | 0 |
Common stock: Class A, $.01 par value, voting; 44,500,000 shares authorized; 26,102,831 and 25,891,885 shares issued and outstanding | 261,028 | 258,919 |
Additional paid-in capital | 230,905,905 | 230,634,056 |
Accumulated other comprehensive income | 1,465,200 | 735,892 |
Accumulated deficit | (196,964,858) | (197,061,926) |
Total stockholders' equity | 35,667,275 | 34,566,941 |
Total liabilities and stockholders' equity | $ 48,700,683 | $ 47,574,918 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2020 | Jun. 30, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful trade accounts receivable | $ 10,153 | $ 9,917 |
Preferred stock: Series D, par value | $ .01 | $ 0.01 |
Preferred stock: Series D, shares authorized | 500,000 | 500,000 |
Preferred stock: Series D, shares issued | 0 | 0 |
Preferred stock: Series D, shares outstanding | 0 | 0 |
Common stock: Class A, par value | $ .01 | $ 0.01 |
Common stock: Class A, shares authorized | 44,500,000 | 44,500,000 |
Common stock: Class A, shares issued | 26,102,831 | 25,891,885 |
Common stock: Class A, shares outstanding | 26,102,831 | 25,891,885 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Revenues, net | $ 9,508,972 | $ 7,551,930 |
Cost of sales | 5,658,780 | 5,161,112 |
Gross margin | 3,850,192 | 2,390,818 |
Operating expenses: | ||
Selling, general and administrative | 2,440,477 | 2,341,778 |
New product development | 450,497 | 428,411 |
Amortization of intangibles | 281,271 | 283,521 |
Gain on disposal of property and equipment | (45) | (50,000) |
Total operating expenses | 3,172,200 | 3,003,710 |
Operating income (loss) | 677,992 | (612,892) |
Other income (expense): | ||
Interest expense, net | (58,549) | (98,541) |
Other income (expense), net | (87,735) | (515,406) |
Total other income (expense), net | (146,284) | (613,947) |
Income (loss) before income taxes | 531,708 | (1,226,839) |
Income tax provision | 434,640 | 148,318 |
Net income (loss) | 97,068 | (1,375,157) |
Foreign currency translation adjustment | 729,308 | 53,766 |
Comprehensive income (loss) | $ 826,376 | $ (1,321,391) |
Earnings (loss) per common share (basic) | $ 0 | $ (0.05) |
Number of shares used in per share calculation (basic) | 25,982,260 | 25,826,771 |
Earnings (loss) per common share (diluted) | $ 0 | $ (0.05) |
Number of shares used in per share calculation (diluted) | 28,432,275 | 25,826,771 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($) | Class A Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Total |
Balance, beginning, shares at Jun. 30, 2019 | 25,813,895 | ||||
Balance, beginning at Jun. 30, 2019 | $ 258,139 | $ 230,321,324 | $ 808,518 | $ (197,928,855) | $ 33,459,126 |
Issuance of common stock for: | |||||
Employee Stock Purchase Plan, shares | 13,370 | ||||
Employee Stock Purchase Plan | $ 134 | 12,033 | 12,167 | ||
Exercise of stock options & RSUs, shares | 4,394 | ||||
Exercise of stock options & RSUs | $ 44 | (44) | 0 | ||
Stock-based compensation on stock options & RSUs | 98,459 | 98,459 | |||
Foreign currency translation adjustment | 53,766 | 53,766 | |||
Net income (loss) | (1,375,157) | (1,375,157) | |||
Balance, ending, shares at Sep. 30, 2019 | 25,831,659 | ||||
Balance, ending at Sep. 30, 2019 | $ 258,317 | 230,431,772 | 862,284 | (199,304,012) | 32,248,361 |
Balance, beginning, shares at Jun. 30, 2020 | 25,891,885 | ||||
Balance, beginning at Jun. 30, 2020 | $ 258,919 | 230,634,056 | 735,892 | (197,061,926) | 34,566,941 |
Issuance of common stock for: | |||||
Employee Stock Purchase Plan, shares | 3,306 | ||||
Employee Stock Purchase Plan | $ 33 | 10,976 | 11,009 | ||
Exercise of stock options & RSUs, shares | 207,640 | ||||
Exercise of stock options & RSUs | $ 2,076 | 124,024 | 126,100 | ||
Stock-based compensation on stock options & RSUs | 136,849 | 136,849 | |||
Foreign currency translation adjustment | 729,308 | 729,308 | |||
Net income (loss) | 97,068 | 97,068 | |||
Balance, ending, shares at Sep. 30, 2020 | 26,102,831 | ||||
Balance, ending at Sep. 30, 2020 | $ 261,028 | $ 230,905,905 | $ 1,465,200 | $ (196,964,858) | $ 35,667,275 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities | ||
Net income (loss) | $ 97,068 | $ (1,375,157) |
Adjustments to reconcile net income (loss) to cash provided by operating activities | ||
Depreciation and amortization | 826,308 | 892,072 |
Interest from amortization of debt costs | 4,643 | 4,643 |
Gain on disposal of property and equipment | (45) | (50,000) |
Stock-based compensation on stock options & RSU, net | 136,849 | 98,459 |
Change in operating lease liabilities | (45,158) | (24,844) |
Inventory write-offs to allowance | 112,282 | 0 |
Changes in operating assets and liabilities: | ||
Trade accounts receivables | (70,201) | 682,975 |
Other receivables | 132,051 | 353,695 |
Inventories | (775,234) | (332,161) |
Prepaid expenses and other assets | 147,148 | 190,940 |
Accounts payable and accrued liabilities | 96,727 | 9,443 |
Net cash provided by operating activities | 662,438 | 450,065 |
Cash flows from investing activities | ||
Purchase of property and equipment | (1,216,817) | (256,573) |
Proceeds from sale of equipment | 0 | 50,000 |
Net cash used in investing activities | (1,216,817) | (206,573) |
Cash flows from financing activities | ||
Proceeds from exercise of stock options | 126,100 | 0 |
Proceeds from sale of common stock from Employee Stock Purchase Plan | 11,009 | 12,167 |
Payments on loan payable | (245,338) | (145,338) |
Repayment of finance lease obligations | (67,501) | (103,618) |
Net cash used in financing activities | (175,730) | (236,789) |
Effect of exchange rate on cash and cash equivalents | 729,308 | 53,766 |
Change in cash and cash equivalents and restricted cash | (801) | 60,469 |
Cash and cash equivalents and restricted cash, beginning of period | 5,387,388 | 4,604,701 |
Cash and cash equivalents and restricted cash, end of period | 5,386,587 | 4,665,170 |
Supplemental disclosure of cash flow information: | ||
Interest paid in cash | 54,089 | 95,870 |
Income taxes paid | $ 241,293 | $ 57,660 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | References in this document to “the Company,” “LightPath,” “we,” “us,” or “our” are intended to mean LightPath Technologies, Inc., individually, or as the context requires, collectively with its subsidiaries on a consolidated basis. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the requirements of Article 8 of Regulation S-X promulgated under the Exchange Act and, therefore, do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with our Consolidated Financial Statements and related notes, included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020, filed with the Securities and Exchange Commission (the “SEC”). Unless otherwise stated, references to particular years or quarters refer to our fiscal years ended June 30 and the associated quarters of those fiscal years. These Condensed Consolidated Financial Statements are unaudited, but include all adjustments, including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly our financial position, results of operations and cash flows for the interim periods presented. The Consolidated Balance Sheet as of June 30, 2020 has been derived from the audited financial statements at that date but does not include all of the information and notes required by generally accepted accounting principles for complete financial statements. Results of operations for interim periods are not necessarily indicative of the results that may be expected for the year as a whole. The unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Our significant accounting policies are provided in Note 2, Summary of Significant Accounting Policies Use of Estimates Management makes estimates and assumptions during the preparation of our unaudited Condensed Consolidated Financial Statements that affect amounts reported in the unaudited Condensed Consolidated Financial Statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes available, which, in turn, could impact the amounts reported and disclosed herein. Recently Adopted Accounting Standards There have been no material changes to our significant accounting policies during the three months ended September 30, 2020, from those disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020. |
Revenue
Revenue | 3 Months Ended |
Sep. 30, 2020 | |
Disaggregation of Revenue [Abstract] | |
Revenue | Product Revenue We are a manufacturer of optical components and higher-level assemblies, including precision molded glass aspheric optics, molded and diamond-turned infrared optical components, and other optical materials used to produce products that manipulate light. We design, develop, manufacture, and distribute optical components and assemblies utilizing advanced optical manufacturing processes. We also perform research and development for optical solutions for a wide range of optics markets. Revenue is derived primarily from the sale of optical components and assemblies. Revenue Recognition Revenue is generally recognized upon transfer of control, including the risks and rewards of ownership, of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. We generally bear all costs, risk of loss, or damage and retain title to the goods up to the point of transfer of control of products to customers. Shipping and handling costs are included in the cost of goods sold. We present revenue net of sales taxes and any similar assessments. Customary payment terms are granted to customers, based on credit evaluations. We currently do not have any contracts where revenue is recognized, but the customer payment is contingent on a future event. We record deferred revenue when cash payments are received or due in advance of our performance. Deferred revenue was immaterial as of June 30, 2020 and September 30, 2020. Nature of Products Revenue from the sale of optical components and assemblies is recognized upon transfer of control, including the risks and rewards of ownership, to the customer. The performance obligations for the sale of optical components and assemblies are satisfied at a point in time. Product development agreements are generally short term in nature, with revenue recognized upon satisfaction of the performance obligation, and transfer of control of the agreed-upon deliverable. We have organized our products in three groups: precision molded optics (“PMO”), infrared, and specialty products. Revenues from product development agreements are included in specialty products. Revenue by product group for the three months ended September 30, 2020 and 2019 was as follows: Three Months Ended September 30, 2020 2019 PMO $ 4,293,603 $ 3,184,458 Infrared Products 4,724,504 3,959,625 Specialty Products 490,865 407,847 Total revenue $ 9,508,972 $ 7,551,930 |
Inventories
Inventories | 3 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | The components of inventories include the following: September 30, 2020 June 30, 2020 Raw materials $ 4,111,137 $ 3,876,955 Work in process 3,320,842 2,989,070 Finished goods 3,192,137 3,134,800 Allowance for obsolescence (976,682 ) (1,016,343 ) $ 9,647,434 $ 8,984,482 The value of tooling in raw materials, net of the related allowance for obsolescence, was approximately $2.1 million and $2.3 million at September 30, 2020 and June 30, 2020, respectively. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment are summarized as follows: Estimated September 30, June 30, Lives (Years) 2020 2020 Manufacturing equipment 5 - 10 $ 19,875,155 $ 18,444,448 Computer equipment and software 3 - 5 833,609 801,625 Furniture and fixtures 5 340,036 321,418 Leasehold improvements 5 - 7 2,469,818 2,171,388 Construction in progress 685,988 1,274,880 Total property and equipment 24,204,606 23,013,759 Less accumulated depreciation and amortization (11,934,196 ) (11,214,698 ) Total property and equipment, net $ 12,270,410 $ 11,799,061 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | There were no changes in the net carrying value of goodwill during the three months ended September 30, 2020. Identifiable intangible assets were comprised of: Useful Lives (Years) September 30, 2020 June 30, 2020 Customer relationships 15 $ 3,590,000 $ 3,590,000 Trade secrets 8 3,272,000 3,272,000 Trademarks 8 3,814,000 3,814,000 Total intangible assets 10,676,000 10,676,000 Less accumulated amortization (4,249,306 ) (3,968,036 ) Total intangible assets, net $ 6,426,694 $ 6,707,964 Future amortization of identifiable intangibles is as follows: Fiscal year ending: June 30, 2021 (remaining nine months) $ 843,813 June 30, 2022 1,125,083 June 30, 2023 1,125,083 June 30, 2024 1,125,083 June 30, 2025 and later 2,207,632 $ 6,426,694 |
Accounts Payable
Accounts Payable | 3 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Accounts Payable | The accounts payable balance as of September 30, 2020 and June 30, 2020 both include approximately $91,000 of earned but unpaid Board of Directors’ fees. |
Income Taxes
Income Taxes | 3 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | A summary of our total income tax expense and effective income tax rate for the three months ended September 30, 2020 and 2019 is as follows: Three Months Ended September 30, 2020 2019 Income (loss) before income taxes $ 531,708 $ (1,226,839 ) Income tax provision $ 434,640 $ 148,318 Effective income tax rate 82 % -12 % The difference between our effective tax rates in the periods presented above and the federal statutory rate is due to the mix of taxable income and losses generated in our various tax jurisdictions, which include the United States (the “U.S.”), the People’s Republic of China, and the Republic of Latvia. For the three months ended September 30, 2020 and 2019, income tax expense was primarily related to income taxes from our operations in China. Income tax expense for the three months ended September 30, 2020 also includes withholding taxes of $300,000 accrued on a $3 million intercompany dividend declared in July 2020 by LightPath Optical Instrumentation (Zhenjiang) Co., Ltd. (“LPOIZ”), which dividend will be paid to us, as its parent company. We record net deferred tax assets to the extent we believe it is more likely than not that some portion or all of these assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. We consider the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. As of September 30, 2020 and June 30, 2020, we have provided for a valuation allowance against our net deferred tax assets to reduce the net deferred tax assets to the amount we estimate is more-likely-than-not to be realized. Our net deferred tax asset consists primarily of U.S. net operating loss (“NOL”) carryforward benefits, and federal and state tax credits with indefinite carryover periods. U.S. Federal and State Income Taxes Our U.S. federal and state statutory income tax rate is estimated to be 25.5%. Based on our current assessment of the valuation allowance position on our net deferred tax assets, no tax benefit is expected to be recorded on pre-tax losses generated in the U.S. Income Tax Law of the People’s Republic of China Our Chinese subsidiaries, LightPath Optical Instrumentation (Shanghai) Co., Ltd. (“LPOI”) and LightPath Optical Instrumentation (Zhenjiang) Co., Ltd. (“LPOIZ”), are governed by the Income Tax Law of the People’s Republic of China. As of September 30, 2020, LPOI and LPOIZ were subject to statutory income tax rates of 25% and 15%, respectively. In July 2020, we declared an intercompany dividend of $3 million from LPOIZ, payable to us as its parent company. Accordingly, we accrued Chinese withholding taxes of $300,000 associated with the dividend. LPOIZ paid to us $900,000, after the withholding of $100,000 in taxes, during the quarter ended September 30, 2020. The remaining $200,000 of withholding taxes are included in accrued liabilities in the accompanying unaudited Condensed Consolidated Balance Sheet as of September 30, 2020. Other than these withholding taxes, this intercompany dividend has no impact on our unaudited Condensed Consolidated Financial Statements. Historically, the Company considered unremitted earnings held by its foreign subsidiaries to be permanently reinvested. However, during fiscal 2020, the Company began declaring intercompany dividends to remit a portion of the historical earnings of its foreign subsidiaries to the U.S. parent company. It is still the Company’s intent to reinvest a significant portion of the more recent earnings generated by its foreign subsidiaries, however the Company also plans to repatriate a portion of the historical earnings of its subsidiaries. Based on its previous intent, the Company had not historically provided for future Chinese withholding taxes on the related earnings. However, during fiscal 2020 the Company began to accrue for these taxes on the portion of historical earnings that it intends to repatriate. Law of Corporate Income Tax of Latvia Our Latvian subsidiary, ISP Optics Latvia, SIA (“ISP Latvia”), is governed by the Law of Corporate Income Tax of Latvia. Effective January 1, 2018, the Republic of Latvia enacted tax reform with the following key provisions: (i) corporations are no longer subject to income tax, but are instead subject to a distribution tax on distributed profits (or deemed distributions, as defined) and (ii) the rate of tax was changed to 20%; however, distribution amounts are first divided by 0.8 to arrive at the profit before tax amount, resulting in an effective tax rate of 25%. As a transitional measure, distributions of earnings prior to January 1, 2018 are not subject to tax if declared prior to December 31, 2019. ISP Latvia has declared an intercompany dividend to be paid to ISP, its U.S. parent company, for the full amount of earnings accumulated prior to January 1, 2018. Distributions of this dividend will be from earnings prior to January 1, 2018 and, therefore, will not be subject to tax. We currently do not intend to distribute any earnings generated after January 1, 2018. If, in the future, we change such intention, we will accrue distribution taxes, if any, as profits are generated. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Our directors, officers, and key employees are granted stock-based compensation through our Amended and Restated Omnibus Incentive Plan, as amended (the “Omnibus Plan”), through October 2018 and after that date, the 2018 Stock and Incentive Compensation Plan (the “SICP”), including incentive stock options, non-qualified stock options, and restricted stock unit (“RSU”) awards. The stock-based compensation expense is based primarily on the fair value of the award as of the grant date, and is recognized as an expense over the requisite service period. The following table shows total stock-based compensation expense for the three months ended September 30, 2020 and 2019 included in the accompanying unaudited Condensed Consolidated Statements of Comprehensive Income: Three Months Ended September 30, 2020 2019 Stock options $ 15,220 $ 3,495 RSUs 121,629 94,964 Total $ 136,849 $ 98,459 The amounts above were included in: Selling, general & administrative $ 136,849 $ 98,459 Cost of sales - - New product development - - $ 136,849 $ 98,459 We also adopted the LightPath Technologies, Inc. Employee Stock Purchase Plan (the “2014 ESPP”). The 2014 ESPP permits employees to purchase Class A common stock through payroll deductions, subject to certain limitations. A discount of $1,091 and $384 for the three months ended September 30, 2020 and 2019, respectively, is included in the selling, general and administrative expense in the accompanying unaudited Condensed Consolidated Statements of Comprehensive Income, which represents the value of the 10% discount given to the employees purchasing stock under the 2014 ESPP. Grant Date Fair Values and Underlying Assumptions; Contractual Terms We estimate the fair value of each stock option as of the date of grant, using the Black-Scholes-Merton pricing model. The fair value of 2014 ESPP shares is the amount of the discount the employee obtains at the date of the purchase transaction. Most stock options granted vest ratably over two to four years and are generally exercisable for ten years. The assumed forfeiture rates used in calculating the fair value of RSU grants was 0%, and the assumed forfeiture rates used in calculating the fair value of options for performance and service conditions were 20% for each of the three months ended September 30, 2019 and 2018. The volatility rate and expected term are based on seven-year historical trends in Class A common stock closing prices and actual forfeitures. The interest rate used is the U.S. Treasury interest rate for constant maturities. No stock options were granted in the three-month periods ended September 30, 2020 and 2019. Information Regarding Current Share-Based Compensation Awards A summary of the activity for share-based compensation awards in the three months ended September 30, 2020 is presented below: Stock Options Restricted Stock Units (RSUs) Shares Weighted-Average Exercise Price Weighted-Average Remaining Contract Shares Weighted-Average Remaining Contract June 30, 2020 942,575 $ 1.65 6.5 2,328,303 0.9 Granted - $ - - - - Exercised (207,640 ) $ 1.47 - Cancelled/Forfeited (373,058 ) $ 1.71 - September 30, 2020 361,877 $ 1.68 8.8 2,328,303 0.9 Awards exercisable/ vested as of September 30, 2020 95,595 $ 1.65 7.4 1,658,777 — Awards unexercisable/ unvested as of September 30, 2020 266,282 $ 1.70 9.3 669,526 0.9 361,877 2,328,303 RSU awards vest immediately or from two to four years from the date of grant. As of September 30, 2020, there was approximately $649,000 of total unrecognized compensation cost related to non-vested share-based compensation arrangements (including stock options and RSUs) granted. We expect to recognize the compensation cost as follows: Fiscal Year Ending: Stock Options RSUs Total June 30, 2021 (remaining nine months) $ 44,352 $ 181,425 $ 225,777 June 30, 2022 55,654 148,543 204,197 June 30, 2023 62,517 68,704 131,221 June 30, 2024 46,945 40,539 87,484 $ 209,468 $ 439,211 $ 648,679 |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 3 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Basic earnings per share is computed by dividing net income or loss by the weighted-average number of shares of Class A common stock outstanding, during each period presented. Diluted earnings per share is computed similarly to basic earnings per share, except that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue shares of Class A common stock were exercised or converted into shares of Class A common stock. The computations for basic and diluted earnings per share of Class A common stock are described in the following table: Three Months Ended September 30, 2020 2019 Net income (loss) $ 97,068 $ (1,375,157 ) Weighted-average common shares outstanding: Basic number of shares 25,982,260 25,826,771 Effect of dilutive securities: Options to purchase common stock 289,506 - RSUs 2,160,509 - Diluted number of shares 28,432,275 25,826,771 Earnings (loss) per common share: Basic $ 0.00 $ (0.05 ) Diluted $ 0.00 $ (0.05 ) The following potential dilutive shares were not included in the computation of diluted earnings per share of Class A common stock, as their effects would be anti-dilutive: Three Months Ended September 30, 2020 2019 Options to purchase common stock 517,502 979,925 RSUs 166,794 1,863,591 684,296 2,843,516 |
Leases
Leases | 3 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | The Company adopted ASC Topic 842 effective July 1, 2019. Our leases primarily consist of operating leases related to our facilities located in Orlando, Florida; Latvia; Shanghai, China; and Zhenjiang, China, and finance leases related to certain equipment located in Orlando, Florida. The operating leases for facilities are non-cancelable operating leases, expiring through 2025. We include options to renew (or terminate) in our lease term, and as part of our right-of-use ("ROU") assets and lease liabilities, when it is reasonably certain that we will exercise that option. We currently have obligations under four finance lease agreements, entered into during fiscal years 2018 to 2019, with terms ranging from three to five years. The leases are for computer and manufacturing equipment. Our operating lease ROU assets and the related lease liabilities are initially measured at the present value of future lease payments over the lease term. Two of our operating leases include renewal options, which were not included in the measurement of the operating lease ROU assets and related lease liabilities. As most of our leases do not provide an implicit rate, we use our collateralized incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. Currently, none of our leases include variable lease payments that are dependent on an index or rate. We are responsible for payment of certain real estate taxes, insurance and other expenses on certain of our leases. These amounts are generally considered to be variable and are not included in the measurement of the ROU asset and lease liability. We generally account for non-lease components, such as maintenance, separately from lease components. Our lease agreements do not contain any material residual value guarantees or material restricted covenants. Leases with a term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. We received tenant improvement allowances for each of our two leases with respect to our facility located in Orlando, Florida (the “Orlando Facility”). These allowances were used to construct improvements and are included in leasehold improvements and operating lease liabilities. The balances are being amortized over the corresponding lease terms. The components of lease expense were as follows: Three Months Ended September 30, 2020 2019 Operating lease cost $ 166,974 $ 164,871 Finance lease cost: Depreciation of lease assets 65,869 86,063 Interest on lease liabilities 12,824 22,532 Total finance lease cost 78,693 108,595 Total lease cost $ 245,667 $ 273,466 Supplemental balance sheet information related to leases was as follows: Classification September 30, 2020 June 30, 2020 Assets: Operating lease assets Operating lease assets $ 1,502,488 $ 1,220,430 Finance lease assets Property and equipment, net(1) 619,165 666,519 Total lease assets $ 2,121,653 $ 1,886,949 Liabilities: Current: Operating leases Operating lease liabilities, current $ 814,307 $ 765,422 Short-term leases Accrued liabilities(2) - 97,665 Finance leases Finance lease liabilities, current 284,005 278,040 Noncurrent: Operating leases Operating lease liabilities, less current portion 1,075,781 887,766 Finance leases Finance lease liabilities, less current portion 205,966 279,435 Total lease liabilities $ 2,380,059 $ 2,308,328 (1) Finance lease assets were recorded net of accumulated depreciation of approximately $1.1 million as of September 30, 2020, and $1.0 million as of June 30, 2020. (2) Represents accrual related to the lease of a manufacturing and office facility in Irvington, New York, which we ceased use of as of June 30, 2019 as the relocation of the operations formerly housed in this facility was complete. All remaining lease payments were accrued as of that date, through the lease expiration in August 2020. Lease term and discount rate information related to leases was as follows: Lease Term and Discount Rate September 30, 2020 Weighted Average Remaining Lease Term (in years) Operating leases 2.9 Finance leases 1.9 Weighted Average Discount Rate Operating leases 4.6 % Finance leases 7.9 % Supplemental cash flow information: Three Months Ended September 30, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash used for operating leases $ 212,132 $ 189,715 Operating cash used for finance leases $ 12,824 $ 22,545 Financing cash used for finance leases $ 67,501 $ 103,618 Future maturities of lease liabilities were as follows as of September 30, 2020: Fiscal year ending: Finance Leases Operating Leases June 30, 2021 (remaining nine months) $ 240,972 $ 653,026 June 30, 2022 231,783 822,780 June 30, 2023 59,647 237,341 June 30, 2024 11,811 117,852 June 30, 2025 — 117,852 Total future minimum payments 544,213 1,948,851 Less imputed interest (54,242 ) (58,763 ) Present value of lease liabilities $ 489,971 $ 1,890,088 |
Loans Payable
Loans Payable | 3 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Loans Payable | During the three months ended September 30, 2019, loans payable consisted of the BankUnited Term Loan (as defined below) payable to BankUnited N.A. (“BankUnited”). On February 26, 2019, we entered into a Loan Agreement (the “Loan Agreement”) with BankUnited for (i) a revolving line of credit up to maximum amount of $2,000,000 (the “BankUnited Revolving Line”), (ii) a term loan in the amount of up to $5,813,500 (“BankUnited Term Loan”), and (iii) a non-revolving guidance line of credit up to a maximum amount of $10,000,000 (the “Guidance Line” and, together with the BankUnited Revolving Line and BankUnited Term Loan, the “BankUnited Loans”). Each of the BankUnited Loans is evidenced by a promissory note in favor of BankUnited (the “BankUnited Notes”). Simultaneously with the execution of the Loan Agreement, we used the proceeds from the BankUnited Term Loan to pay in full, all outstanding amounts owed to Avidbank Corporate Finance, a division of Avidbank (“Avidbank”) pursuant to an acquisition term loan. For additional information related to the Avidbank loans, please see Note 17, Loans Payable On May 6, 2019, we entered into that certain First Amendment to Loan Agreement, effective February 26, 2019, with BankUnited (the “Amendment” and, together with the Loan Agreement, the “Amended Loan Agreement”). The Amendment amended the definition of the fixed charge coverage ratio to more accurately reflect the parties’ understandings at the time the Loan Agreement was executed. BankUnited Revolving Line Pursuant to the Amended Loan Agreement, BankUnited will make loan advances under the BankUnited Revolving Line to us up to a maximum aggregate principal amount outstanding not to exceed $2,000,000, which proceeds will be used for working capital and general corporate purposes. Amounts borrowed under the BankUnited Revolving Line may be repaid and re-borrowed at any time prior to February 26, 2022, at which time all amounts will be immediately due and payable. The advances under the BankUnited Revolving Line bear interest, on the outstanding daily balance, at a per annum rate equal to 2.75% above the 30-day LIBOR. Interest payments are due and payable, in arrears, on the first day of each month. As of September 30, 2020, the applicable interest rate was 2.91%. BankUnited Term Loan Pursuant to the Amended Loan Agreement, BankUnited advanced us $5,813,500 to satisfy in full the amounts owed to Avidbank, including the outstanding principal amount and all accrued interest under the acquisition term loan and to pay the fees and expenses incurred in connection with closing of the BankUnited Loans. The BankUnited Term Loan is for a 5-year term, but co-terminus with the BankUnited Revolving Line should the BankUnited Revolving Line not be renewed beyond February 26, 2022. Management expects the BankUnited Revolving Line to be renewed. The BankUnited Term Loan bears interest at a per annum rate equal to 2.75% above the 30-day LIBOR. Equal monthly principal payments of $48,445.83, plus accrued interest, are due and payable, in arrears, on the first day of each month during the term. Upon maturity, all principal and interest shall be immediately due and payable. As of September 30, 2020, the applicable interest rate was 2.91%. Guidance Line Pursuant to the Amended Loan Agreement, BankUnited, in its sole discretion, may make loan advances to us under the Guidance Line up to a maximum aggregate principal amount outstanding not to exceed $10,000,000, which proceeds will be used for capital expenditures and approved business acquisitions. Such advances must be in minimum amounts of $1,000,000 for acquisitions and $500,000 for capital expenditures, and will be limited to 80% of cost or as otherwise determined by BankUnited. Amounts borrowed under the Guidance Line may not re-borrowed. The advances under the Guidance Line bear interest, on the outstanding daily balance, at a per annum rate equal to 2.75% above the 30-day LIBOR. Interest payments are due and payable, in arrears, on the first day of each month. On each anniversary of the Amended Loan Agreement, monthly principal payments become payable, amortized based on a ten-year term. There were no borrowings under the Guidance Line as of September 30, 2020. Security and Guarantees Our obligations under the Amended Loan Agreement are collateralized by a first priority security interest (subject to permitted liens) in all of our assets and the assets of our U.S. subsidiaries, GelTech, Inc. (“GelTech”), and ISP, pursuant to a Security Agreement granted by GelTech, ISP, and us in favor of BankUnited. Our equity interests in, and the assets of, our foreign subsidiaries are excluded from the security interest. In addition, all of our subsidiaries have guaranteed our obligations under the Amended Loan Agreement and related documents, pursuant to Guaranty Agreements executed by us and our subsidiaries in favor of BankUnited. General Terms The Amended Loan Agreement contains customary covenants, including, but not limited to: (i) limitations on the disposition of property; (ii) limitations on changing our business or permitting a change in control; (iii) limitations on additional indebtedness or encumbrances; (iv) restrictions on distributions; and (v) limitations on certain investments. The Amended Loan Agreement also contains certain financial covenants, including obligations to maintain a fixed charge coverage ratio of 1.25 to 1.00 and a total leverage ratio of 4.00 to 1.00. As of September 30, 2020, the Company was in compliance with all required covenants. We may prepay any or all of the BankUnited Loans in whole or in part at any time, without penalty or premium. Late payments are subject to a late fee equal to five percent (5%) of the unpaid amount. Amounts outstanding during an event of default accrue interest at a rate of five percent (5%) above the 30-day LIBOR applicable immediately prior to the occurrence of the event of default. The Amended Loan Agreement contains other customary provisions with respect to events of default, expense reimbursement, and confidentiality. Financing costs incurred were recorded as a discount on debt and will be amortized over the term. Amortization of approximately $4,600 is included in interest expense for both the three months ended September 30, 2020 and 2019. Future maturities of loans payable are as follows: BankUnited Term Loan BankUnited Revolver Unamortized Debt Costs Total Fiscal year ending: June 30, 2021 (remaining nine months) $ 436,012 $ 300,000 $ (13,929 ) $ 722,083 June 30, 2022 581,350 - (18,572 ) 562,778 June 30, 2023 581,350 - (18,572 ) 562,778 June 30, 2024 3,342,762 - (12,381 ) 3,330,381 Total payments $ 4,941,474 $ 300,000 $ (63,454 ) 5,178,020 Less current portion (881,350 ) Non-current portion $ 4,296,670 |
Foreign Operations
Foreign Operations | 3 Months Ended |
Sep. 30, 2020 | |
Foreign Currency [Abstract] | |
Foreign Operations | Assets and liabilities denominated in non-U.S. currencies are translated at rates of exchange prevailing on the balance sheet date, and revenues and expenses are translated at average rates of exchange for the period. Gains or losses on the translation of the financial statements of a non-U.S. operation, where the functional currency is other than the U.S. dollar, are reflected as a separate component of equity, which was a cumulative gain of approximately $1.5 million and $862,000 as of September 30, 2020 and 2019, respectively. During the three months ended September 30, 2020 and 2019, we also recognized net foreign currency transaction losses of approximately $98,000 and $497,000, respectively, included in the unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) in the line item entitled “Other income (expense), net.” Our cash and cash equivalents totaled $5.4 million at September 30, 2020. Of this amount, greater than 50% was held by our foreign subsidiaries in China and Latvia. These foreign funds were generated in China and Latvia as a result of foreign earnings. With respect to the funds generated by our foreign subsidiaries in China, the retained earnings of the respective subsidiary must equal at least 50% of its registered capital before any funds can be repatriated through dividends. As of December 31, 2019, the end of the most recent statutory tax year, LPOIZ had approximately $4.8 million available for repatriation and LPOI did not have any earnings available for repatriation. Assets and net assets in foreign countries are as follows: China Latvia September 30, 2020 June 30, 2020 September 30, 2020 June 30, 2020 Assets $19.4 million $19.0 million $10.2 million $9.8 million Net assets $16.6 million $16.2 million $8.8 million $8.2 million |
Contingencies
Contingencies | 3 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Legal The Company from time to time is involved in various legal actions arising in the normal course of business. Management, after reviewing with legal counsel all of these actions and proceedings, believes that the aggregate losses, if any, will not have a material adverse effect on the Company’s financial position or results of operations. COVID-19 The Company’s business, results of operations financial condition, cash flows, and the stock price of its Class A common stock can be adversely affected by pandemics, epidemics, or other public health emergencies, such as the recent outbreak of the coronavirus (“COVID-19”), which has spread from China to many other countries across the world, including the United States. In March 2020, the World Health Organization (the “WHO”) declared COVID-19 as a pandemic. The COVID-19 pandemic has resulted in governments around the world implementing increasingly stringent measures to help control the spread of the virus, including “stay at home” orders, travel restrictions, business curtailments, school closures, and other measures. To date, the Company has not experienced any significant direct negative impact of COVID-19 to its business. However, the COVID-19 pandemic continues to impact economic conditions, which could impact the short-term and long-term demand from customers and, therefore, has the potential to negatively impact the Company’s results of operations, cash flows, and financial position in the future. Management is actively monitoring this situation and any impact on our financial condition, liquidity, and results of operations. However, given the daily evolution of the COVID-19 pandemic and the global responses to curb its spread, we are not presently able to estimate the effects of the COVID-19 pandemic on our future results of operations, financial, or liquidity in fiscal year 2021 or beyond. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Use of Estimates | Management makes estimates and assumptions during the preparation of our unaudited Condensed Consolidated Financial Statements that affect amounts reported in the unaudited Condensed Consolidated Financial Statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes available, which, in turn, could impact the amounts reported and disclosed herein. |
Recently Adopted Accounting Standards | There have been no material changes to our significant accounting policies during the three months ended September 30, 2020, from those disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Disaggregation of Revenue [Abstract] | |
Disaggregation of revenue | Three Months Ended September 30, 2020 2019 PMO $ 4,293,603 $ 3,184,458 Infrared Products 4,724,504 3,959,625 Specialty Products 490,865 407,847 Total revenue $ 9,508,972 $ 7,551,930 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory | September 30, 2020 June 30, 2020 Raw materials $ 4,111,137 $ 3,876,955 Work in process 3,320,842 2,989,070 Finished goods 3,192,137 3,134,800 Allowance for obsolescence (976,682 ) (1,016,343 ) $ 9,647,434 $ 8,984,482 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Estimated September 30, June 30, Lives (Years) 2020 2020 Manufacturing equipment 5 - 10 $ 19,875,155 $ 18,444,448 Computer equipment and software 3 - 5 833,609 801,625 Furniture and fixtures 5 340,036 321,418 Leasehold improvements 5 - 7 2,469,818 2,171,388 Construction in progress 685,988 1,274,880 Total property and equipment 24,204,606 23,013,759 Less accumulated depreciation and amortization (11,934,196 ) (11,214,698 ) Total property and equipment, net $ 12,270,410 $ 11,799,061 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets | Useful Lives (Years) September 30, 2020 June 30, 2020 Customer relationships 15 $ 3,590,000 $ 3,590,000 Trade secrets 8 3,272,000 3,272,000 Trademarks 8 3,814,000 3,814,000 Total intangible assets 10,676,000 10,676,000 Less accumulated amortization (4,249,306 ) (3,968,036 ) Total intangible assets, net $ 6,426,694 $ 6,707,964 |
Future amortization of intangible assets | Fiscal year ending: June 30, 2021 (remaining nine months) $ 843,813 June 30, 2022 1,125,083 June 30, 2023 1,125,083 June 30, 2024 1,125,083 June 30, 2025 and later 2,207,632 $ 6,426,694 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income tax expense and effective income tax rate | Three Months Ended September 30, 2020 2019 Income (loss) before income taxes $ 531,708 $ (1,226,839 ) Income tax provision $ 434,640 $ 148,318 Effective income tax rate 82 % -12 % |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based compensation expense | Three Months Ended September 30, 2020 2019 Stock options $ 15,220 $ 3,495 RSUs 121,629 94,964 Total $ 136,849 $ 98,459 The amounts above were included in: Selling, general & administrative $ 136,849 $ 98,459 Cost of sales - - New product development - - $ 136,849 $ 98,459 |
Share-based payment awards activity | Stock Options Restricted Stock Units (RSUs) Shares Weighted-Average Exercise Price Weighted-Average Remaining Contract Shares Weighted-Average Remaining Contract June 30, 2020 942,575 $ 1.65 6.5 2,328,303 0.9 Granted - $ - - - - Exercised (207,640 ) $ 1.47 - Cancelled/Forfeited (373,058 ) $ 1.71 - September 30, 2020 361,877 $ 1.68 8.8 2,328,303 0.9 Awards exercisable/ vested as of September 30, 2020 95,595 $ 1.65 7.4 1,658,777 — Awards unexercisable/ unvested as of September 30, 2020 266,282 $ 1.70 9.3 669,526 0.9 361,877 2,328,303 |
Share-based compensation future cost to be recognized | Fiscal Year Ending: Stock Options RSUs Total June 30, 2021 (remaining nine months) $ 44,352 $ 181,425 $ 225,777 June 30, 2022 55,654 148,543 204,197 June 30, 2023 62,517 68,704 131,221 June 30, 2024 46,945 40,539 87,484 $ 209,468 $ 439,211 $ 648,679 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Computations for basic and diluted earnings (loss) per share | Three Months Ended September 30, 2020 2019 Net income (loss) $ 97,068 $ (1,375,157 ) Weighted-average common shares outstanding: Basic number of shares 25,982,260 25,826,771 Effect of dilutive securities: Options to purchase common stock 289,506 - RSUs 2,160,509 - Diluted number of shares 28,432,275 25,826,771 Earnings (loss) per common share: Basic $ 0.00 $ (0.05 ) Diluted $ 0.00 $ (0.05 ) |
Potential dilutive shares | Three Months Ended September 30, 2020 2019 Options to purchase common stock 517,502 979,925 RSUs 166,794 1,863,591 684,296 2,843,516 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Lease costs | Three Months Ended September 30, 2020 2019 Operating lease cost $ 166,974 $ 164,871 Finance lease cost: Depreciation of lease assets 65,869 86,063 Interest on lease liabilities 12,824 22,532 Total finance lease cost 78,693 108,595 Total lease cost $ 245,667 $ 273,466 |
Supplemental lease information | Supplemental balance sheet information related to leases was as follows: Classification September 30, 2020 June 30, 2020 Assets: Operating lease assets Operating lease assets $ 1,502,488 $ 1,220,430 Finance lease assets Property and equipment, net(1) 619,165 666,519 Total lease assets $ 2,121,653 $ 1,886,949 Liabilities: Current: Operating leases Operating lease liabilities, current $ 814,307 $ 765,422 Short-term leases Accrued liabilities(2) - 97,665 Finance leases Finance lease liabilities, current 284,005 278,040 Noncurrent: Operating leases Operating lease liabilities, less current portion 1,075,781 887,766 Finance leases Finance lease liabilities, less current portion 205,966 279,435 Total lease liabilities $ 2,380,059 $ 2,308,328 (1) Finance lease assets were recorded net of accumulated depreciation of approximately $1.1 million as of September 30, 2020, and $1.0 million as of June 30, 2020. (2) Represents accrual related to the lease of a manufacturing and office facility in Irvington, New York, which we ceased use of as of June 30, 2019 as the relocation of the operations formerly housed in this facility was complete. All remaining lease payments were accrued as of that date, through the lease expiration in August 2020. Lease term and discount rate information related to leases was as follows: Lease Term and Discount Rate September 30, 2020 Weighted Average Remaining Lease Term (in years) Operating leases 2.9 Finance leases 1.9 Weighted Average Discount Rate Operating leases 4.6 % Finance leases 7.9 % Supplemental cash flow information: Three Months Ended September 30, 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash used for operating leases $ 212,132 $ 189,715 Operating cash used for finance leases $ 12,824 $ 22,545 Financing cash used for finance leases $ 67,501 $ 103,618 |
Future maturities of lease liabilities | Fiscal year ending: Finance Leases Operating Leases June 30, 2021 (remaining nine months) $ 240,972 $ 653,026 June 30, 2022 231,783 822,780 June 30, 2023 59,647 237,341 June 30, 2024 11,811 117,852 June 30, 2025 — 117,852 Total future minimum payments 544,213 1,948,851 Less imputed interest (54,242 ) (58,763 ) Present value of lease liabilities $ 489,971 $ 1,890,088 |
Loans Payable (Tables)
Loans Payable (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Future maturities of loans payable | BankUnited Term Loan BankUnited Revolver Unamortized Debt Costs Total Fiscal year ending: June 30, 2021 (remaining nine months) $ 436,012 $ 300,000 $ (13,929 ) $ 722,083 June 30, 2022 581,350 - (18,572 ) 562,778 June 30, 2023 581,350 - (18,572 ) 562,778 June 30, 2024 3,342,762 - (12,381 ) 3,330,381 Total payments $ 4,941,474 $ 300,000 $ (63,454 ) 5,178,020 Less current portion (881,350 ) Non-current portion $ 4,296,670 |
Foreign Operations (Tables)
Foreign Operations (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Foreign Currency [Abstract] | |
Foreign assets | China Latvia September 30, 2020 June 30, 2020 September 30, 2020 June 30, 2020 Assets $19.4 million $19.0 million $10.2 million $9.8 million Net assets $16.6 million $16.2 million $8.8 million $8.2 million |
Revenue (Details)
Revenue (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues | $ 9,508,972 | $ 7,551,930 |
PMO | ||
Revenues | 4,293,603 | 3,184,458 |
Infrared Products | ||
Revenues | 4,724,504 | 3,959,625 |
Specialty Products | ||
Revenues | $ 490,865 | $ 407,847 |
Inventories (Details)
Inventories (Details) - USD ($) | Sep. 30, 2020 | Jun. 30, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 4,111,137 | $ 3,876,955 |
Work in process | 3,320,842 | 2,989,070 |
Finished goods | 3,192,137 | 3,134,800 |
Allowance for obsolescence | (976,682) | (1,016,343) |
Inventories, net | $ 9,647,434 | $ 8,984,482 |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) | Sep. 30, 2020 | Jun. 30, 2020 |
Raw materials | $ 4,111,137 | $ 3,876,955 |
Inventory - Tooling | ||
Raw materials | $ 2,100,000 | $ 2,300,000 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2020 | Jun. 30, 2020 | |
Property and equipment, gross | $ 24,204,606 | $ 23,013,759 |
Less accumulated depreciation and amortization | (11,934,196) | (11,214,698) |
Property and equipment, net | 12,270,410 | 11,799,061 |
Manufacturing Equipment | ||
Property and equipment, gross | $ 19,875,155 | 18,444,448 |
Manufacturing Equipment | Lower Limit | ||
Estimated life | 5 years | |
Manufacturing Equipment | Upper Limit | ||
Estimated life | 10 years | |
Computer Equipment And Software | ||
Property and equipment, gross | $ 833,609 | 801,625 |
Computer Equipment And Software | Lower Limit | ||
Estimated life | 3 years | |
Computer Equipment And Software | Upper Limit | ||
Estimated life | 5 years | |
Furniture and Fixtures | ||
Property and equipment, gross | $ 340,036 | 321,418 |
Estimated life | 5 years | |
Leasehold Improvements | ||
Property and equipment, gross | $ 2,469,818 | 2,171,388 |
Leasehold Improvements | Lower Limit | ||
Estimated life | 5 years | |
Leasehold Improvements | Upper Limit | ||
Estimated life | 7 years | |
Construction in Progress | ||
Property and equipment, gross | $ 685,988 | $ 1,274,880 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2020 | Jun. 30, 2020 | |
Acquired intangible assets | $ 10,676,000 | $ 10,676,000 |
Amortization | (4,249,306) | (3,968,036) |
Intangible assets net | 6,426,694 | 6,707,964 |
Customer Relationships | ||
Acquired intangible assets | $ 3,590,000 | 3,590,000 |
Useful life | 15 years | |
Trade Secrets | ||
Acquired intangible assets | $ 3,272,000 | 3,272,000 |
Useful life | 8 years | |
Trademark | ||
Acquired intangible assets | $ 3,814,000 | $ 3,814,000 |
Useful life | 8 years |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Details 1) - USD ($) | Sep. 30, 2020 | Jun. 30, 2020 |
Fiscal year ended June 30,: | ||
2021 (remaining nine months) | $ 843,813 | |
2022 | 1,125,083 | |
2023 | 1,125,083 | |
2024 | 1,125,083 | |
2025 and later | 2,207,632 | |
Total | $ 6,426,694 | $ 6,707,964 |
Accounts Payable (Details Narra
Accounts Payable (Details Narrative) - USD ($) | Sep. 30, 2020 | Jun. 30, 2020 |
Board of Directors | ||
Accounts payable - related parties for directors' fees | $ 91,000 | $ 91,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Income (loss) before income taxes | $ 531,708 | $ (1,226,839) |
Income tax provision | $ 434,640 | $ 148,318 |
Effective income tax rate | 82.00% | (12.00%) |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 3 Months Ended |
Sep. 30, 2020 | |
U.S. Federal and State | |
Statutory income tax rate | 25.50% |
LPOI | China | |
Statutory income tax rate | 25.00% |
LPOIZ | China | |
Statutory income tax rate | 15.00% |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Stock-based compensation | $ 136,849 | $ 98,459 |
Selling, General & Administrative | ||
Stock-based compensation | 136,849 | 98,459 |
Cost of Sales | ||
Stock-based compensation | 0 | 0 |
New Product Development | ||
Stock-based compensation | 0 | 0 |
Stock Options | ||
Stock-based compensation | 15,220 | 3,495 |
Restricted Stock Units | ||
Stock-based compensation | $ 121,629 | $ 94,964 |
Stock-Based Compensation (Det_2
Stock-Based Compensation (Details 1) | 3 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Stock options | |
Balance, beginning, shares | 942,575 |
Granted, shares | 0 |
Exercised, shares | (207,640) |
Cancelled/forfeited, shares | (373,058) |
Balance ending, shares | 361,877 |
Exercisable and vested, shares | 95,595 |
Unexercisable and unvested, shares | 266,282 |
Weighted average exercise price - stock options | |
Balance beginning | $ / shares | $ 1.65 |
Granted | $ / shares | .00 |
Exercised | $ / shares | 1.47 |
Cancelled/forfeited | $ / shares | 1.71 |
Balance ending | $ / shares | 1.68 |
Exercisable and vested | $ / shares | 1.65 |
Unexercisable/unvested | $ / shares | $ 1.70 |
Weighted average remaining contract life - stock options | |
Balance, beginning | 6 years 6 months |
Granted | 0 years |
Balance, ending | 8 years 9 months 18 days |
Exercisable/vested | 7 years 4 months 24 days |
RSU shares | |
Balance, beginning, shares | 2,328,303 |
Granted, shares | 0 |
Exercised, shares | 0 |
Cancelled/forfeited, shares | 0 |
Balance, ending, shares | 2,328,303 |
Exercisable and vested, shares | 1,658,777 |
Unexercisable and unvested, shares | 669,526 |
Weighted average remaining contract life - RSUs | |
Balance, beginning | 10 months 24 days |
Granted | 0 years |
Balance, ending | 10 months 24 days |
Unexercisable/unvested | 10 months 24 days |
Stock-Based Compensation (Det_3
Stock-Based Compensation (Details 2) | Sep. 30, 2020USD ($) |
Stock options | $ 209,468 |
Restricted stock units | 439,211 |
Total unrecognized compensation cost | 648,679 |
2021 | |
Stock options | 44,352 |
Restricted stock units | 181,425 |
Total unrecognized compensation cost | 225,777 |
2022 | |
Stock options | 55,654 |
Restricted stock units | 148,543 |
Total unrecognized compensation cost | 204,197 |
2023 | |
Stock options | 62,517 |
Restricted stock units | 68,704 |
Total unrecognized compensation cost | 131,221 |
2024 | |
Stock options | 46,945 |
Restricted stock units | 40,539 |
Total unrecognized compensation cost | $ 87,484 |
Stock-Based Compensation (Det_4
Stock-Based Compensation (Details Narrative) | Sep. 30, 2020USD ($) |
Share-based Payment Arrangement [Abstract] | |
Unrecognized compensation costs | $ 648,679 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Share [Abstract] | ||
Net income (loss) | $ 97,068 | $ (1,375,157) |
Basic number of shares | 25,982,260 | 25,826,771 |
Effect of dilutive securities: | ||
Options to purchase common stock | 289,506 | 0 |
RSUs | 2,160,509 | 0 |
Diluted number of shares | 28,432,275 | 25,826,771 |
Earnings (loss) per common share: | ||
Basic | $ 0 | $ (0.05) |
Diluted | $ 0 | $ (0.05) |
Earnings (Loss) Per Share (De_2
Earnings (Loss) Per Share (Details 1) - shares | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Antidilutive securities | 684,296 | 2,843,516 |
Stock Options | ||
Antidilutive securities | 517,502 | 979,925 |
Restricted Stock Units | ||
Antidilutive securities | 166,794 | 1,863,591 |
Leases (Details)
Leases (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 166,974 | $ 164,871 |
Finance lease cost, depreciation of lease assets | 65,869 | 86,063 |
Finance lease cost, interest on lease liabilities | 12,824 | 22,532 |
Total finance lease cost | 78,693 | 108,595 |
Total lease cost | $ 245,667 | $ 273,466 |
Leases (Details 1)
Leases (Details 1) - USD ($) | 3 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | ||
Assets | ||||
Operating lease assets | $ 1,502,488 | $ 1,220,430 | ||
Finance lease assets | [1] | 619,165 | 666,519 | |
Total lease assets | 2,121,653 | 1,886,949 | ||
Liabilities | ||||
Operating leases, current | 814,307 | 765,422 | ||
Short-term leases, current | [2] | 0 | 97,665 | |
Finance leases, current | 284,008 | 278,040 | ||
Operating leases, noncurrent | 1,075,781 | 887,766 | ||
Finance leases, noncurrent | 205,966 | 279,435 | ||
Total lease liabilities | $ 2,380,059 | $ 2,308,328 | ||
Weighted average remaining lease term (in years), operating leases | 2 years 10 months 24 days | |||
Weighted average remaining lease term (in years), finance leases | 1 year 10 months 24 days | |||
Weighted average discount rate, operating leases | 4.60% | |||
Weighted average discount rate, finance leases | 7.90% | |||
Operating cash used for operating leases | $ 212,132 | $ 189,715 | ||
Operating cash used for finance leases | 12,824 | 22,545 | ||
Financing cash used for finance leases | $ 67,501 | $ 103,618 | ||
[1] | Finance lease assets were recorded net of accumulated depreciation of approximately $1.1 million as of September 30, 2020, and $1.0 million as of June 30, 2020. | |||
[2] | Represents accrual related to the lease of a manufacturing and office facility in Irvington, New York, which we ceased use of as of June 30, 2019 as the relocation of the operations formerly housed in this facility was complete. All remaining lease payments were accrued as of that date, through the lease expiration in August 2020. |
Leases (Details 2)
Leases (Details 2) | Sep. 30, 2020USD ($) |
Finance lease - fiscal year ending June 30, | |
2021 (remaining nine months) | $ 240,972 |
2022 | 231,783 |
2023 | 59,647 |
2024 | 11,811 |
2025 | 0 |
Total minimum payments | 544,213 |
Less imputed interest | (54,242) |
Present value of lease liabilities | 489,971 |
Operating lease - fiscal year ending June 30, | |
2021 (remaining nine months) | 653,026 |
2022 | 822,780 |
2023 | 237,341 |
2024 | 117,852 |
2025 | 117,852 |
Total minimum payments | 1,948,851 |
Less imputed interest | (58,763) |
Present value of lease liabilities | $ 1,890,088 |
Loans Payable (Details)
Loans Payable (Details) - USD ($) | Sep. 30, 2020 | Jun. 30, 2020 |
Fiscal year ending June 30, | ||
2021 (remaining nine months) | $ 722,083 | |
2022 | 562,778 | |
2023 | 562,778 | |
2024 | 3,330,381 | |
Total payments | 5,178,020 | |
Less current portion | (881,350) | $ (981,350) |
Non-current portion | 4,296,670 | $ 4,437,365 |
Unamortized Debt Costs | ||
Fiscal year ending June 30, | ||
2021 (remaining nine months) | (13,929) | |
2022 | (18,572) | |
2023 | (18,572) | |
2024 | (12,381) | |
Total payments | (63,454) | |
BankUnited Term Loan | ||
Fiscal year ending June 30, | ||
2021 (remaining nine months) | 436,012 | |
2022 | 581,350 | |
2023 | 581,350 | |
2024 | 3,342,762 | |
Total payments | 4,941,474 | |
BankUnited Revolver | ||
Fiscal year ending June 30, | ||
2021 (remaining nine months) | 300,000 | |
2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
Total payments | $ 300,000 |
Loans Payable (Details Narrativ
Loans Payable (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Debt Disclosure [Abstract] | ||
Amortization of debt costs | $ 4,643 | $ 4,643 |
Foreign Operations (Details)
Foreign Operations (Details) - USD ($) | Sep. 30, 2020 | Jun. 30, 2020 |
China | ||
Assets | $ 19,400,000 | $ 19,000,000 |
Net assets | 16,600,000 | 16,200,000 |
Latvia | ||
Assets | 10,200,000 | 9,800,000 |
Net assets | $ 8,800,000 | $ 8,200,000 |
Foreign Operations (Details Nar
Foreign Operations (Details Narrative) - USD ($) | 3 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | |
Foreign Currency [Abstract] | |||
Gain on foreign currency | $ 1,500,000 | $ 862,000 | |
Loss on foreign currency | 98,000 | $ 497,000 | |
Cash and cash equivalents | $ 5,386,587 | $ 5,387,388 |