Cover
Cover - USD ($) | 12 Months Ended | ||
Jun. 30, 2022 | Sep. 09, 2022 | Dec. 31, 2021 | |
Cover [Abstract] | |||
Entity Registrant Name | LIGHTPATH TECHNOLOGIES, INC. | ||
Entity Central Index Key | 0000889971 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Current Reporting Status | Yes | ||
Document Period End Date | Jun. 30, 2022 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Entity Common Stock Shares Outstanding | 27,071,929 | ||
Entity Public Float | $ 64,792,006 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 000-27548 | ||
Entity Incorporation State Country Code | DE | ||
Entity Tax Identification Number | 86-0708398 | ||
Entity Address Address Line 1 | 2603 Challenger Tech Court | ||
Entity Address Address Line 2 | Suite 100 | ||
Entity Address City Or Town | Orlando | ||
Entity Address State Or Province | FL | ||
Entity Address Postal Zip Code | 32826 | ||
City Area Code | 407 | ||
Icfr Auditor Attestation Flag | false | ||
Local Phone Number | 382-4003 | ||
Security 12b Title | Class A CommonStock, par value $0.01 | ||
Trading Symbol | LPTH | ||
Security Exchange Name | NASDAQ | ||
Entity Interactive Data Current | Yes | ||
Auditor Name | MSL, P.A. | ||
Auditor Location | Orlando, Florida | ||
Auditor Firm Id | 569 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2022 | Jun. 30, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 5,507,891 | $ 6,774,694 |
Trade accounts receivable, net of allowance of $36,313 and $45,643 | 5,211,292 | 4,656,354 |
Inventories, net | 6,985,427 | 8,659,587 |
Other receivables | 0 | 137,103 |
Prepaid expenses and other assets | 464,804 | 475,364 |
Total current assets | 18,169,414 | 20,703,102 |
Property and equipment, net | 11,640,463 | 13,279,867 |
Operating lease right-of-use assets | 10,420,604 | 9,015,498 |
Intangible assets, net | 4,457,798 | 5,582,881 |
Goodwill | 5,854,905 | 5,854,905 |
Deferred tax assets, net | 143,000 | 147,000 |
Other assets | 27,737 | 27,737 |
Total assets | 50,713,921 | 54,610,990 |
Current liabilities: | ||
Accounts payable | 3,073,933 | 2,924,333 |
Accrued liabilities | 558,750 | 1,067,265 |
Accrued payroll and benefits | 2,081,212 | 2,810,043 |
Operating lease liabilities, current | 965,622 | 799,507 |
Loans payable, current portion | 998,692 | 634,846 |
Finance lease obligation, current portion | 55,348 | 212,212 |
Total current liabilities | 7,733,557 | 8,448,206 |
Deferred tax liabilities, net | 541,015 | 0 |
Finance lease obligation, less current portion | 11,454 | 66,801 |
Operating lease liabilities, noncurrent | 9,478,077 | 8,461,133 |
Loans payable, less current portion | 3,218,580 | 4,057,365 |
Total liabilities | 20,982,683 | 21,033,505 |
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; 27,046,790 and 26,985,913 shares issued and outstanding | 270,468 | 269,859 |
Additional paid-in capital | 232,315,003 | 231,438,651 |
Accumulated other comprehensive income | 935,125 | 2,116,152 |
Accumulated deficit | (203,789,358) | (200,247,177) |
Total stockholders' equity | 29,731,238 | 33,577,485 |
Total liabilities and stockholders' equity | $ 50,713,921 | $ 54,610,990 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2022 | Jun. 30, 2021 |
Consolidated Balance Sheets | ||
Allowance For Doubtful Trade Accounts Receivable | $ 36,313 | $ 45,643 |
Preferred Stock: Series D, Par Value | $ 0.01 | $ 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 | $ 0.01 | $ 0.01 |
Common Stock: Class A, Shares Authorized | 44,500,000 | 44,500,000 |
Common Stock: Class A, Shares Issued | 27,046,790 | 26,985,913 |
Common Stock: Class A, Shares Outstanding | 27,046,790 | 26,985,913 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Consolidated Statements of Comprehensive Income (Loss) | ||
Revenue, net | $ 35,559,160 | $ 38,464,821 |
Cost of sales | 23,744,524 | 25,017,051 |
Gross margin | 11,814,636 | 13,447,770 |
Operating expenses: | ||
Selling, general and administrative | 11,221,866 | 11,989,597 |
New product development | 2,085,686 | 2,165,951 |
Amortization of intangible assets | 1,125,083 | 1,125,083 |
Loss on disposal of property and equipment | 9,235 | 8,951 |
Total operating expenses | 14,441,870 | 15,289,582 |
Operating loss | (2,627,234) | (1,841,812) |
Other income (expense): | ||
Interest expense, net | (229,475) | (215,354) |
Other income (expense), net | 177,435 | (194,170) |
Total other income (expense), net | (52,040) | (409,524) |
Loss before income taxes | (2,679,274) | (2,251,336) |
Income tax provision | 862,907 | 933,915 |
Net loss | (3,542,181) | (3,185,251) |
Foreign currency translation adjustment | (1,181,027) | 1,380,260 |
Comprehensive loss | $ (4,723,208) | $ (1,804,991) |
Loss per common share (basic) | $ (0.13) | $ (0.12) |
Number of shares used in per share calculation (basic) | 27,019,534 | 26,314,025 |
Loss per common share (diluted) | $ (0.13) | $ (0.12) |
Number of shares used in per share calculation (diluted) | 27,019,534 | 26,314,025 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Total | Class A Common Stock | Additional Paid-In Capital | Accumulated other comprehensive Income | Accumulated Deficit |
Balance, shares at Jun. 30, 2020 | 25,891,885 | ||||
Balance, amount at Jun. 30, 2020 | $ 34,566,941 | $ 258,919 | $ 230,634,056 | $ 735,892 | $ (197,061,926) |
Issuance of common stock for: | |||||
Employee Stock Purchase Plan, shares | 8,145 | ||||
Employee Stock Purchase Plan, amount | 29,978 | $ 81 | 29,897 | 0 | 0 |
Exercise of Stock Options & RSUs, net, shares | 1,085,883 | ||||
Exercise of Stock Options & RSUs, net, amount | 142,692 | $ 10,859 | 131,833 | 0 | 0 |
Stock-based compensation on stock options & RSUs | 642,865 | 0 | 642,865 | 0 | 0 |
Foreign currency translation adjustment | 1,380,260 | 0 | 0 | 1,380,260 | 0 |
Net loss | (3,185,251) | 0 | 0 | 0 | (3,185,251) |
Balance, amount at Jun. 30, 2021 | 33,577,485 | $ 269,859 | 231,438,651 | 2,116,152 | (200,247,177) |
Balance, shares at Jun. 30, 2021 | 26,985,913 | ||||
Issuance of common stock for: | |||||
Employee Stock Purchase Plan, shares | 21,012 | ||||
Employee Stock Purchase Plan, amount | 51,711 | $ 210 | 51,501 | 0 | 0 |
Exercise of Stock Options & RSUs, net, shares | 39,865 | ||||
Exercise of Stock Options & RSUs, net, amount | 0 | $ 399 | (399) | 0 | 0 |
Stock-based compensation on stock options & RSUs | 825,250 | 0 | 825,250 | 0 | 0 |
Foreign currency translation adjustment | (1,181,027) | 0 | 0 | (1,181,027) | 0 |
Net loss | (3,542,181) | 0 | 0 | 0 | (3,542,181) |
Balance, amount at Jun. 30, 2022 | $ 29,731,238 | $ 270,468 | $ 232,315,003 | $ 935,125 | $ (203,789,358) |
Balance, shares at Jun. 30, 2022 | 27,046,790 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (3,542,181) | $ (3,185,251) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 3,617,743 | 3,509,436 |
Interest from amortization of debt costs | 51,974 | 18,572 |
Loss on disposal of property and equipment | 9,235 | 8,951 |
Stock-based compensation on stock options & RSUs, net | 825,250 | 642,865 |
Provision for doubtful accounts receivable | 7,713 | (35,799) |
Change in operating lease assets and liabilities | (222,047) | (187,616) |
Inventory write-offs to allowance | 456,538 | 157,399 |
Deferred taxes | 545,015 | 512,000 |
Changes in operating assets and liabilities: | ||
Trade accounts receivable | (562,651) | 1,568,171 |
Other receivables | 137,103 | (5,052) |
Inventories | 1,217,622 | 167,496 |
Prepaid expenses and other assets | 10,560 | 137,810 |
Accounts payable and accrued liabilities | (1,087,746) | 1,423,042 |
Net cash provided by operating activities | 1,464,128 | 4,732,024 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (1,626,614) | (3,158,784) |
Net cash used in investing activities | (1,626,614) | (3,158,784) |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options | 0 | 142,692 |
Proceeds from sale of common stock from Employee Stock Purchase Plan | 51,711 | 29,978 |
Loan costs | (61,223) | 0 |
Borrowings on loans payable | 266,850 | 275,377 |
Payments on loans payable | (681,301) | (1,013,014) |
Repayment of finance lease obligations | (212,211) | (278,462) |
Net cash used in financing activities | (636,174) | (843,429) |
Effect of exchange rate on cash and cash equivalents | (468,143) | 657,495 |
Change in cash and cash equivalents | (1,266,803) | 1,387,306 |
Cash and cash equivalents, beginning of period | 6,774,694 | 5,387,388 |
Cash and cash equivalents, end of period | 5,507,891 | 6,774,694 |
Supplemental disclosure of cash flow information: | ||
Interest paid in cash | 157,407 | 199,524 |
Income taxes paid | $ 267,585 | $ 1,054,232 |
Organization and History
Organization and History | 12 Months Ended |
Jun. 30, 2022 | |
Organization and History | |
Organization and History | 1. Organization and History LightPath Technologies, Inc. (“LightPath”, the “Company”, “we”, “us” or “our”) was incorporated in Delaware in 1992. It was the successor to LightPath Technologies Limited Partnership formed in 1989, and its predecessor, Integrated Solar Technologies Corporation formed in 1985. The Company completed its initial public offering during fiscal year 1996. On April 14, 2000, the Company acquired Horizon Photonics, Inc. (“Horizon”). On September 20, 2000, the Company acquired Geltech, Inc. (“Geltech”). In November 2005, we formed LightPath Optical Instrumentation (Shanghai) Co., Ltd (“LPOI”), a wholly-owned subsidiary located in Jiading, People’s Republic of China. In December 2013, we formed LightPath Optical Instrumentation (Zhenjiang) Co., Ltd (“LPOIZ”), a wholly-owned subsidiary located in Zhenjiang, Jiangsu Province, People’s Republic of China. In December 2016, we acquired ISP Optics Corporation, a New York corporation (“ISP”), and its wholly-owned subsidiary, ISP Optics Latvia, SIA, a limited liability company founded in 1998 under the Laws of the Republic of Latvia (“ISP Latvia”). LightPath is a manufacturer of optical components and higher-level assemblies, including precision molded glass aspheric optics, molded and diamond-turned infrared aspheric lenses, and other optical components used to produce products that manipulate light. LightPath designs, develops, manufactures, and distributes optical components and assemblies utilizing advanced optical manufacturing processes. LightPath products are incorporated into a variety of applications by customers in many industries, including defense products, medical devices, laser aided industrial tools, automotive safety applications, barcode scanners, optical data storage, hybrid fiber coax datacom, telecommunications, machine vision and sensors, among others. As used herein, the terms “LightPath,” the “Company,” “we,” “us” or “our,” refer to LightPath individually or, as the context requires, collectively with its subsidiaries on a consolidated basis. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2022 | |
Significant Accounting Policies | |
Significant Accounting Policies | 2. Significant Accounting Policies Consolidated Financial Statements Management estimates. Cash and cash equivalents Allowance for accounts receivable Inventories , Property and equipment Long-lived assets , Goodwill and Intangible Assets The Company will assess the qualitative factors to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the goodwill impairment analysis. If the Company determines that it is more likely than not that its fair value is less than its carrying amount, then the goodwill impairment test is performed. The first step, identifying a potential impairment, compares the fair value of the reporting unit with its carrying amount. If the carrying amount exceeds its fair value, the second step would need to be performed; otherwise, no further steps are required. The second step, measuring the impairment loss, compares the implied fair value of the goodwill with the carrying amount of the goodwill. Any excess of the goodwill carrying amount over the implied fair value is recognized as an impairment loss, and the carrying value of goodwill is written down to fair value. The Company did not record any goodwill impairment during the fiscal years ended June 30, 2022 or 2021. Leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, the Company uses an estimate of its incremental borrowing rate based on observed market data and other information available at the lease commencement date. The operating lease ROU assets also include any lease payments made and exclude lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. The Company does not record leases on the consolidated balance sheet with a term of one year or less. The Company does not separate lease and non-lease components but rather accounts for each separate component as a single lease component for all underlying classes of assets. Variable lease payments are expensed as incurred and are not included within the operating lease ROU asset and lease liability calculation. Variable lease payments primarily include reimbursements of costs incurred by lessors for common area maintenance and utilities. Lease expense for minimum operating lease payments is recognized on a straight-line basis over the lease term. Income taxes The Company has not recognized a liability for uncertain tax positions. A reconciliation of the beginning and ending amount of unrecognized tax benefits or penalties has not been provided since there has been no unrecognized benefit or penalty. If there were an unrecognized tax benefit or penalty, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company files United States (“U.S.”) Federal income tax returns, as well as tax returns in various states and foreign jurisdictions. Open tax years subject to examination by the Internal Revenue Service generally remain open for three years from the filing date. Tax years subject to examination by the state jurisdictions generally remain open for up to four years from the filing date. In Latvia, tax years subject to examination remain open for up to five years from the filing date and, in China, tax years subject to examination remain open for up to ten years from the filing date. Our cash, cash equivalents totaled approximately $5.5 million at June 30, 2022. 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. Historically, we considered unremitted earnings held by our foreign subsidiaries to be permanently reinvested. However, during fiscal 2020, we began declaring intercompany dividends to remit a portion of the earnings of our foreign subsidiaries to the U.S. parent company. It is still our intent to reinvest a significant portion of earnings generated by our foreign subsidiaries, however we also plan to repatriate a portion of their earnings. With respect to the funds generated by our foreign subsidiaries in China, the retained earnings of the legal entity must equal at least 50% of the registered capital before any funds can be repatriated. During fiscal 2022 and 2021, we repatriated approximately $2.8 million and $4 million, respectively, from LPOIZ. As of June 30, 2022, LPOIZ had approximately $3.9 million in retained earnings available for repatriation, and LPOI did not have any earnings available for repatriation, based on earnings accumulated through December 31, 2021, the end of the most recent statutory tax year, that remained undistributed as of June 30, 2022. During fiscal year 2020 we began to accrue for the applicable Chinese withholding taxes on the portion of earnings that we intend to repatriate. As of June 30, 2022 and 2021, accrued and unpaid withholding taxes were $40,000 and $100,000, respectively. Beginning in fiscal year 2019, earnings from the Company’s non-U.S. subsidiaries were subject to the global intangible low-taxed income (“GILTI”) inclusion pursuant to U.S. income tax rules. See Note 8, Income Taxes Revenue recognition Revenue VAT New product development Stock-based compensation Fair value of financial instruments. Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable. Level 3 - Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include accounts receivable, accounts payable and accrued liabilities. Fair values were assumed to approximate carrying values for these financial instruments since they are short term in nature and their carrying amounts approximate fair values or they are receivable or payable on demand. The fair value of the Company’s finance lease obligations and loans payable approximate their carrying values, based upon current rates available to us. See Note 13, Loans Payable The Company does not have any other financial or non-financial assets or liabilities that would be characterized as Level 1, Level 2 or Level 3 instruments. Debt issuance costs Comprehensive income Business segments. Recent accounting pronouncements. |
Revenue
Revenue | 12 Months Ended |
Jun. 30, 2022 | |
Revenue | |
Revenue | 3. Revenue Product Revenue The Company manufactures optical components and higher-level assemblies, including precision molded glass aspheric optics, molded and diamond-turned infrared aspheric lenses, and other optical components used to produce products that manipulate light. The Company designs, develops, manufactures, and distributes optical components and assemblies utilizing advanced optical manufacturing processes. The Company also performs 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 products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company generally bears all costs, risk of loss, or damage and retains 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. Revenue is presented net of sales taxes and any similar assessments. Customary payment terms are granted to customers, based on credit evaluations. The Company does not have any contracts where revenue is recognized, but the customer payment is contingent on a future event. Deferred revenue is recorded when cash payments are received or due in advance of the Company’s performance. Deferred revenue was not significant as of June 30, 2022 and 2021. 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. The Company has organized its products in three groups: precision molded optics (“PMO”), infrared, and specialty products. Revenues from product development agreements are included in specialty products. The Company’s revenue by product group for the years ended June 30, 2022 and 2021 was as follows: Year Ended June 30, 2022 2021 PMO $ 15,020,542 $ 15,882,189 Infrared Products 18,735,325 20,971,080 Specialty Products 1,803,293 1,611,552 Total revenue $ 35,559,160 $ 38,464,821 |
Inventories net
Inventories net | 12 Months Ended |
Jun. 30, 2022 | |
Inventories net | |
Inventories, net | 4. Inventories, net The components of inventories include the following: June 30, 2022 June 30, 2021 Raw materials $ 3,019,156 $ 3,908,630 Work in process 2,243,907 2,473,070 Finished goods 3,052,001 3,467,105 Allowance for obsolescence (1,329,637 ) (1,189,218 ) $ 6,985,427 $ 8,659,587 During fiscal 2022 and 2021, the Company evaluated all allowed items and disposed of approximately $457,000 and $157,000, respectively, of inventory parts and wrote them off against the allowance for obsolescence. The value of tooling in raw materials, net of the related allowance for obsolescence, was approximately $1.6 million and $2.0 million at June 30, 2022 and 2021, respectively. |
Property and Equipment net
Property and Equipment net | 12 Months Ended |
Jun. 30, 2022 | |
Property and Equipment net | |
Property and Equipment, net | 5. Property and Equipment, net Property and equipment consist of the following: Estimated Lives (Years) June 30, 2022 June 30, 2021 Manufacturing equipment 5 - 10 $ 22,058,636 $ 21,465,402 Computer equipment and software 3 - 5 978,348 918,679 Furniture and fixtures 5 352,060 362,944 Leasehold improvements 5 - 7 3,043,867 2,944,543 Construction in progress 943,793 1,529,452 Total property and equipment 27,376,704 27,221,020 Less accumulated depreciation and amortization (15,736,241 ) (13,941,153 ) Total property and equipment, net $ 11,640,463 $ 13,279,867 During fiscal 2015, the Company extended the term of its Orlando lease and received a tenant improvement allowance from the landlord of $420,014. During fiscal 2019, the Company received a tenant improvement allowance from the landlord related to the new portion of the Orlando facility in the amount of $309,450. These allowances were used to construct improvements and were initially recorded as leasehold improvements and deferred rent liability. The balances are being amortized over the corresponding lease terms, and are included in leasehold improvements and operating lease liabilities as of June 30, 2022 and 2021. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 6. Goodwill and Intangible Assets In connection with the December 2016 acquisition of ISP, the Company identified intangible assets, which were recorded at fair value and are being amortized on a straight-line basis over their useful lives. The excess purchase price over the fair values of all identified assets and liabilities was recorded as goodwill, attributable primarily to expected synergies and the assembled workforce of ISP. There were no changes in the net carrying value of goodwill during the years ended June 30, 2022 and 2021, and there have been no events or changes in circumstances that indicate the carrying value of goodwill may not be recoverable. Identifiable intangible assets were comprised of: Useful Lives (Years) June 30, 2022 June 30, 2021 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 (6,218,202 ) (5,093,119 ) Total intangible assets, net $ 4,457,798 $ 5,582,881 Future amortization of identifiable intangibles is as follows: Fiscal year ending: June 30, 2023 1,125,083 June 30, 2024 1,125,083 June 30, 2025 658,398 June 30, 2026 239,334 After June 30, 2026 1,309,900 $ 4,457,798 |
Stockholders Equity
Stockholders Equity | 12 Months Ended |
Jun. 30, 2022 | |
Stockholders' equity: | |
Stockholders' Equity | 7. Stockholders’ Equity The Company’s authorized capital stock consists of 55,000,000 shares, comprised of 50,000,000 shares of common stock, par value $0.01 per share, and 5,000,000 shares of preferred stock, par value $0.01 per share. Of the 5,000,000 shares of preferred stock authorized, the board of directors has previously designated: · 250 shares of preferred stock as Series A Preferred Stock, all previously outstanding shares of which have been previously redeemed or converted into shares of our Class A common stock and may not be reissued; · 300 shares of preferred stock as Series B Preferred Stock, all previously outstanding shares of which have been previously redeemed or converted into shares of our Class A common stock and may not be reissued; · 500 shares of preferred stock as Series C Preferred Stock, all previously outstanding shares of which have been previously redeemed or converted into shares of our Class A common stock and may not be reissued; · 500,000 shares of preferred stock as Series D Preferred Stock, none of which have been issued; and · 500 shares of our preferred stock as Series F Preferred Stock, all previously outstanding shares of which have been previously redeemed or converted into shares of our Class A common stock and may not be reissued. Of the 50,000,000 shares of common stock authorized, the board of directors has previously designated 44,500,000 shares authorized as Class A common stock. The stockholders of Class A common stock are entitled to one vote for each share held. The remaining 5,500,000 shares of authorized common stock were designated as Class E-1 common stock, Class E-2 common stock, or Class E-3 common stock, all previously outstanding shares of which have been previously redeemed or converted into shares of Class A common stock. |
Income Taxes
Income Taxes | 12 Months Ended |
Jun. 30, 2022 | |
Income Taxes | |
Income Taxes | 8. Income Taxes For financial reporting purposes, income (loss) before income taxes includes the following components: Year Ended June 30, 2022 2021 Pretax income (loss): United States $ (5,129,955 ) $ (5,265,803 ) Foreign 2,450,681 3,014,467 Loss before income taxes $ (2,679,274 ) $ (2,251,336 ) The components of the provision for income taxes are as follows: Year Ended June 30, 2022 2021 Current: Federal tax $ - $ - State 3,829 18,563 Foreign 314,063 403,352 Total current 317,892 421,915 Deferred: Federal tax 4,000 510,069 State - 1,931 Foreign 541,015 - Total deferred 545,015 512,000 Total income tax provision $ 862,907 $ 933,915 The reconciliation of income tax computed at the U.S. federal statutory rates to the total income tax provision is as follows: Year Ended June 30, 2022 2021 U.S. federal statutory tax rate 21.0 % 21.0 % Income tax provision reconciliation: Tax at statutory rate: $ (562,648 ) $ (472,782 ) Net foreign income subject to lower tax rate (297,049 ) (169,276 ) State income taxes, net of federal benefit (159,950 ) (196,719 ) Valuation allowance (1,255,273 ) (1,400,450 ) NOL expiration and adjustments 2,550,645 3,516,695 GILTI 138,611 310,431 Federal research and development and other credits (121,990 ) (74,288 ) Stock-based compensation 20,472 (265,485 ) Other permanent differences 11,387 (67,893 ) Other, net 538,702 (246,318 ) $ 862,907 $ 933,915 On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law, which, among other things, is intended to provide emergency assistance to qualifying businesses and individuals. The CARES Act also suspends the limitation on the deduction of NOLs arising in taxable years beginning before January 1, 2021, permits a five-year carryback of NOLs arising in taxable years beginning after December 31, 2017 and before January 1, 2021, and generally modifies the limitation on the deduction for net interest expense to 50% of adjusted taxable income for taxable years beginning in 2019 and 2020. During fiscal 2020, as a result of the CARES Act, the Company was able to accelerate the recovery of an income tax receivable related to previously paid alternative minimum tax. The receivable amount of approximately $107,000 as of June 30, 2020 was collected in July 2020. In addition, the Company elected to utilize the payroll tax deferral under the CARES Act, resulting in cash savings of approximately $325,000, accrued as of June 30, 2021. Half of this amount was remitted on December 31, 2021, with the remainder deferred until December 31, 2022. Income Tax Law of the People’s Republic of China The Company’s Chinese subsidiaries, LPOI and LPOIZ, are governed by the Income Tax Law of the People’s Republic of China concerning the privately run and foreign invested enterprises, which are generally subject to tax at a statutory rate of 25% on income reported in the statutory financial statements after appropriate tax adjustments. For both the years ended June 30, 2022 and 2021, the tax rate for LPOIZ was 15%, in accordance with an incentive program for technology companies. Historically, no deferred tax provision was recorded for LPOIZ. However, during the year ended June 30, 2022, as a result of audits performed by the Chinese taxing authorities, and the Chinese subsidiaries’ statutory audits, it was determined that a net deferred tax liability was required. Accordingly, an approximately $541,000 net deferred tax liability related to LPOIZ was recorded in the Company’s Consolidated Financial Statements as of and for the year ended June 30, 2022. Historically, the Company considered unremitted earnings held by its foreign subsidiaries to be permanently reinvested. However, during fiscal year 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 year 2020 the Company began to accrue for these taxes on the portion of historical earnings that it intends to repatriate. During the years ended June 30, 2022 and 2021, the Company declared and paid intercompany dividends of $2.8 million and $4 million, respectively, from LPOIZ, payable to the Company as its parent company. Accordingly, the Company paid Chinese withholding taxes of $280,000 and $400,000 associated with these dividends during fiscal years 2022 and 2021, respectively. Income tax expense associated with these dividends was $208,000 and $500,000 for fiscal year 2022 and 2021, respectively. As of June 30, 2022 and 2021, accrued and unpaid withholding taxes were $40,000 and $100,000, respectively. Other than these withholding taxes, these intercompany dividends have no impact on the Consolidated Financial Statements. Law of Corporate Income Tax of Latvia The Company’s Latvian subsidiary, ISP Latvia, is governed by the Law of Corporate Income Tax of Latvia. Until December 31, 2017, ISP Latvia was subject to a statutory income tax rate of 15%. 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 tax rate was changed to 20%; however, distribution amounts are first divided by 0.8 to arrive at the taxable amount of profit, resulting in an effective tax rate of 25%. As a transitional measure, distributions made from earnings prior to January 1, 2018, distributed prior to December 31, 2019, 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. The Company currently does not intend to distribute any current earnings generated after January 1, 2018. If, in the future, the Company changes such intention, distribution taxes, if any, will be accrued as profits are generated. The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities are as follows at June 30: Year Ended June 30, 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 12,197,277 $ 13,585,000 Stock-based compensation 536,000 563,000 R&D and other credits 2,279,000 2,177,000 Capitalized R&D expenses 371,000 564,000 Inventories 263,973 253,000 Accrued expenses and other 267,000 347,000 Gross deferred tax assets 15,914,250 17,489,000 Valuation allowance for deferred tax assets (14,388,277 ) (15,644,000 ) Total deferred tax assets 1,525,973 1,845,000 Deferred tax liabilities: Depreciation and other (763,988 ) (255,000 ) Intangible assets (1,160,000 ) (1,443,000 ) Total deferred tax liabilities (1,923,988 ) (1,698,000 ) Net deferred tax assets (liabilities) $ (398,015 ) $ 147,000 In assessing the potential future recognition of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. In order to fully realize the deferred tax asset, the Company will need to generate future taxable income of approximately $53 million prior to the expiration of federal NOL carry-forwards from 2023 through 2037. Based on the level of historical taxable income, management has provided for a valuation adjustment against the deferred tax assets of approximately $14.4 million at June 30, 2022, a decrease of approximately $1.2 million as compared to June 30, 2021. The decrease in the valuation allowance for deferred tax assets as compared to the prior year is primarily the result of the various movements in the current year deferred items. The net deferred tax asset of $143,000 results from federal and state tax credits with indefinite carryover periods. State income tax expense disclosed on the effective tax rate reconciliation above includes state deferred taxes that are offset by a full valuation allowance. At June 30, 2022, in addition to net operating loss carry forwards, the Company also has research and development and other credit carry forwards of approximately $2.0 million, which will expire from 2023 through 2041. A portion of the NOL carry forwards may be subject to certain limitations of the Internal Revenue Code Sections 382 and 383, which would restrict the annual utilization in future periods due principally to changes in ownership in prior periods. |
Compensatory Equity Incentive P
Compensatory Equity Incentive Plan and Other Equity Incentives | 12 Months Ended |
Jun. 30, 2022 | |
Compensatory Equity Incentive Plan and Other Equity Incentives | |
Compensatory Equity Incentive Plan and Other Equity Incentives | 9. Compensatory Equity Incentive Plan and Other Equity Incentives Share-based payment arrangements — The LightPath Technologies, Inc. Employee Stock Purchase Plan (“2014 ESPP”) was adopted by the Company’s board of directors on October 30, 2014 and approved by the Company’s stockholders on January 29, 2015. The 2014 ESPP permits employees to purchase Class A common stock through payroll deductions, which may not exceed 15% of an employee’s compensation, at a price not less than 85% of the market value of the Class A common stock on specified dates (June 30 and December 31). In no event can any participant purchase more than $25,000 worth of shares of Class A common stock in any calendar year and an employee cannot purchase more than 8,000 shares on any purchase date within an offering period of 12 months and 4,000 shares on any purchase date within an offering period of six months. This discount of approximately $5,000 and $3,000 for fiscal years 2022 and 2021, respectively, is included in the selling, general and administrative expense in the accompanying Consolidated Statements Comprehensive Income (Loss), which represents the value of the 10% discount given to the employees purchasing stock under the 2014 ESPP. These plans are summarized below: Equity Compensation Arrangement Award Shares Authorized Outstanding at June 30, 2022 Available for Issuance at June 30, 2022 SICP (or Omnibus Plan) 5,115,625 2,614,131 365,324 2014 ESPP 400,000 — 277,443 5,515,625 2,614,131 642,767 Grant Date Fair Values and Underlying Assumptions; Contractual Terms — For stock options and RSUs granted in the years ended June 30, 2022 and 2021, the Company estimated the fair value of each stock award as of the date of grant using the following assumptions: Year Ended June 30, 2022 2021 Weighted-average expected volatility 80.8 % 72.0 % Dividend yields 0 % 0 % Weighted-average risk-free interest rate 2.09 % 0.74 % Weighted-average expected term, in years 3.75 7.49 The assumed forfeiture rates used in calculating the fair value of options and restricted stock unit grants with both performance and service conditions were 20% for each of the years ended June 30, 2022 and 2021. 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. Information Regarding Current Share-Based Payment Awards — Stock Options Restricted Stock Units (RSUs) Weighted- Weighted- Weighted- Average Average Average Exercise Remaining Remaining Shares Price Contract Shares Contract June 30, 2020 942,575 $ 1.65 6.5 2,328,303 0.9 Granted 121,933 $ 2.97 9.7 296,386 2.3 Exercised (225,137 ) $ 1.50 (862,804 ) Cancelled/Forfeited (406,444 ) $ 1.75 - June 30, 2021 432,927 $ 2.01 8.8 1,761,885 0.9 Granted 125,000 $ 2.02 368,461 1.2 Exercised - $ - (45,143 ) Cancelled/Forfeited (23,465 ) $ 1.67 (5,534 ) June 30, 2022 534,462 $ 2.03 7.0 2,079,669 0.9 Awards exercisable/ vested as of June 30, 2022 215,141 $ 1.87 7.1 1,334,978 — Awards unexercisable/ unvested as of June 30, 2022 319,321 $ 2.14 7.1 744,691 0.9 534,462 2,079,669 No stock options were exercised during the year ended June 30, 2022. The total intrinsic value of stock options exercised for the year ended June 30, 2021was approximately $344,000. The total intrinsic value of stock options outstanding and exercisable at June 30, 2022 and 2021 was approximately $42,000 and $285,000, respectively. The total fair value of stock options vested during the years ended June 30, 2022 and 2021 was approximately $24,000 and $142,000, respectively. The total intrinsic value of RSUs exercised during the years ended June 30, 2022 and 2021 was approximately $77,000 and $2.8 million, respectively. The total intrinsic value of RSUs outstanding and exercisable at June 30, 2022 and 2021 was approximately $1.6 million and $3.0 million, respectively. The total fair value of RSUs vested during the years ended June 30, 2022 and 2021 was approximately $395,000 and $1.1 million, respectively. As of June 30, 2022, there was approximately $1.1 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements, including share options and RSUs, granted under the Omnibus Plan, through October 2018 and after that date, the SICP. The expected compensation cost to be recognized is as follows: Fiscal Year Ending: Stock Options RSUs Total June 30, 2023 $ 205,978 $ 531,850 $ 737,828 June 30, 2024 94,196 190,864 285,060 June 30, 2025 33,885 54,308 88,193 $ 334,059 $ 777,022 $ 1,111,081 The table above does not include shares under the Company’s 2014 ESPP, which has purchase settlement dates in the second and fourth fiscal quarters. RSU awards vest immediately or up to four years from the grant date. The Company issues new shares of Class A common stock upon the exercise of stock options. The following table is a summary of the number and weighted-average grant date fair values, estimated using the Black-Scholes-Merton pricing model, regarding the Company’s unexercisable/unvested awards as of June 30, 2022 and 2021 and changes during the two years then ended: Unexercisable/Unvested Awards Stock Options Shares RSU Shares Total Shares Weighted-Average Grant Date Fair Values (per share) June 30, 2020 266,282 669,526 935,808 $ 1.10 Granted 121,933 296,386 418,319 $ 2.48 Vested (64,636 ) (367,325 ) (431,961 ) $ 1.39 Cancelled/Forfeited (1,595 ) - (1,595 ) $ 2.85 June 30, 2021 321,984 598,587 920,571 $ 1.59 Granted 125,000 368,461 493,461 $ 1.74 Vested (118,696 ) (216,823 ) (335,519 ) $ 1.42 Cancelled/Forfeited (8,967 ) (5,534 ) (14,501 ) $ 1.97 June 30, 2022 319,321 744,691 1,064,012 $ 1.71 Acceleration of Vesting — Financial Statement Effects and Presentation — Year Ended June 30, 2022 2021 Stock options $ 144,682 $ 76,616 RSUs 680,568 566,249 Total $ 825,250 $ 642,865 |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 12 Months Ended |
Jun. 30, 2022 | |
Earnings (Loss) Per Share | |
Earnings (Loss) Per Share | 10. Earnings (Loss) Per Share Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of Class A common stock outstanding during each period presented. Diluted earnings (loss) per share is computed similarly to basic earnings (loss) 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 (loss) per share are described in the following table: Year Ended June 30, 2022 2021 Net loss $ (3,542,181 ) $ (3,185,251 ) Weighted-average common shares outstanding: Basic number of shares 27,019,534 26,314,025 Effect of dilutive securities: Options to purchase common stock - - RSUs - - Diluted number of shares 27,019,534 26,314,025 Loss per common share: Basic $ (0.13 ) $ (0.12 ) Diluted $ (0.13 ) $ (0.12 ) The following weighted-average potential dilutive shares were not included in the computation of diluted earnings per share, as their effects would be anti-dilutive: Year Ended June 30, 2022 2021 Options to purchase common stock 445,397 490,703 RSUs 1,944,737 2,220,710 2,390,134 2,711,413 |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Jun. 30, 2022 | |
Defined Contribution Plan | |
Defined Contribution Plan | 11. Defined Contribution Plan The Company provides retirement benefits to its U.S.-based employees through a defined contribution retirement plan. These benefits are offered under the Insperity 401(k) plan (the “Insperity Plan”). The Insperity Plan is a defined 401(k) contribution plan that all employees, over the age of 21, are eligible to participate in after three months of employment. Under the Insperity Plan, the Company matches 100% of the first 2% of employee contributions. As of June 30, 2022, there were 72 employees enrolled in this plan. The Company made matching contributions of approximately $123,000 and $111,000 during the years ended June 30, 2022 and 2021, respectively. |
Leases
Leases | 12 Months Ended |
Jun. 30, 2022 | |
Leases | |
Leases | 12. Leases The Company has operating leases for its manufacturing and office space. As of June 30, 2021, the Company had two lease agreements for its corporate headquarters and manufacturing facilities in Orlando, Florida. The first lease (the “Orlando Lease”) was amended effective April 30, 2021 to expand the space from approximately 26,000 square feet to approximately 58,500 square feet. The lease term was extended from April 30, 2022, to that certain date that is one hundred twenty-seven (127) months after the date the landlord completes certain work to be done at the leased premises. The commencement date is expected to be November 1, 2022, subject to completion of the build-out. Minimum rental rates for the extension term were established based on annual increases of approximately three percent (3%). Additionally, there is one five-year extension option exercisable by the Company. The minimum rental rates for such additional extension option will be determined at the time an option is exercised and will be based on a “fair market rental rate,” as determined in accordance with the Orlando Lease, as amended. The second lease was entered into in April 2018 for 12,378 square feet in Orlando, Florida (the “Orlando Lease II”), which provides additional manufacturing and office space near the Company’s corporate headquarters. The commencement date of the Orlando Lease II was December 1, 2018, and it has a four-year original term with one renewal option for an additional five-year term. In October 2021, this lease was amended to reduce the square footage to approximately 3,700. This lease will expire in November 2022 and will not be renewed, as this manufacturing and office space will be relocated to the expanded space included in the Orlando Lease, as amended. As of June 30, 2021, the Company, through its wholly-owned subsidiary, LPOI, had a lease agreement for an office facility in Shanghai, China (the “Shanghai Lease”) for 1,900 square feet. The Shanghai Lease commenced in October 2015. During fiscal 2020, the Shanghai Lease was renewed for an additional three-year term, and now expires in October 2022. We do not expect to renew this lease. As of June 30, 2021, the Company, through its wholly-owned subsidiary, LPOIZ, had three lease agreements for manufacturing and office facilities in Zhenjiang, China for an aggregate of 55,000 square feet. The initial lease (the “Zhenjiang Lease I”) is for approximately 26,000 square feet, and had a five-year original term with renewal options. In fiscal year 2019, the Company renewed the Zhenjiang Lease I and was set to expire in June 2022. During fiscal year 2018, another lease was executed for 13,000 additional square feet in this same facility (the “Zhenjiang Lease II”). In January 2022, these leases were combined and extended to December 31, 2024. At June 30, 2021, the Company, through ISP’s wholly-owned subsidiary ISP Latvia, had two lease agreements for a manufacturing and office facility in Riga, Latvia for an aggregate of 29,000 square feet. The first lease (“Riga Lease I”) was amended in August 2020, to expand the space to approximately 24,000 square feet. The lease term was extended from December 31, 2022 to December 31, 2025. The second lease (“Riga Lease II”), for approximately 5,000 square feet, had a five-year original term with renewal options, and was set to expire in December 2019. In January 2022, these leases were extended to December 31, 2030. The Company’s facility leases are classified as operating leases, and the Company also has finance leases related to certain equipment located in Orlando, Florida. The operating leases for facilities are non-cancelable, expiring through 2024 to 2032. The Company includes options to renew (or terminate) in the lease term, and as part of the ROU assets and lease liabilities, when it is reasonably certain that the Company will exercise that option. The Company currently has obligations under two finance lease agreements, entered into during fiscal year 2019, with terms ranging from three to five years. The leases are for computer and manufacturing equipment. The Company’s 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 the Company’s leases do not provide an implicit rate, the Company used its collateralized incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. Currently, none of the Company’s leases include variable lease payments that are dependent on an index or rate. The Company is responsible for payment of certain real estate taxes, insurance and other expenses on certain of its leases. These amounts are generally considered to be variable and are not included in the measurement of the ROU asset and lease liability. The Company generally accounts for non-lease components, such as maintenance, separately from lease components. The Company’s 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 Consolidated Balance Sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company received tenant improvement allowances for the Orlando Lease and for Orlando Lease II. 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: Year Ended June 30, 2022 2021 Operating lease cost $ 668,054 $ 682,980 Finance lease cost: Depreciation of lease assets 162,057 207,931 Interest on lease liabilities 19,571 44,248 Total finance lease cost 181,628 252,179 Total lease cost $ 849,682 $ 935,159 Supplemental balance sheet information related to leases was as follows: Classification June 30, 2022 June 30, 2021 Assets: Operating lease assets Operating lease assets $ 10,420,604 $ 9,015,498 Finance lease assets Property and equipment, net (1) 61,566 477,102 Total lease assets $ 10,482,170 $ 9,492,600 Liabilities: Current: Operating leases Operating lease liabilities, current $ 965,622 $ 799,507 Finance leases Finance lease liabilities, current 55,348 212,212 Noncurrent: Operating leases Operating lease liabilities, less current portion 9,478,077 8,461,133 Finance leases Finance lease liabilities, less current portion 11,454 66,801 Total lease liabilities $ 10,510,501 $ 9,539,653 (1) Finance lease assets are recorded net of accumulated depreciation of approximately $418,000 and $477,000 as of June 30, 2022 and 2021, respectively. Lease term and discount rate information related to leases was as follows: Lease Term and Discount Rate June 30, 2022 Weighted Average Remaining Lease Term (in years) Operating leases 10.1 Finance leases 0.9 Weighted Average Discount Rate Operating leases 3.0 % Finance leases 7.6 % Supplemental cash flow information: Year Ended June 30, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash used for operating leases $ 870,911 $ 869,668 Operating cash used for finance leases $ 19,571 $ 44,247 Financing cash used for finance leases $ 212,211 $ 278,462 Future maturities of lease liabilities were as follows as of June 30, 2022: Fiscal year ending: Finance Leases Operating Leases June 30, 2023 59,647 $ 721,901 June 30, 2024 11,811 1,204,323 June 30, 2025 — 1,225,047 June 30, 2026 — 1,193,987 June 30, 2027 — 1,163,610 Thereafter — 6,928,833 Total future minimum payments 71,458 12,437,701 Less imputed interest (4,656 ) (1,994,002 ) Present value of lease liabilities $ 66,802 $ 10,443,699 |
Loans Payable
Loans Payable | 12 Months Ended |
Jun. 30, 2022 | |
Loans Payable | |
Loans Payable | 13. Loans Payable BankUnited Loans On February 26, 2019, the Company 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”). On May 6, 2019, the Company 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. On September 9, 2021, the Company entered into a letter agreement with BankUnited (the “Letter Agreement”). The Letter Agreement: (i) reduces the fixed charge coverage ratio to 1.0 for the quarter ending September 30, 2021 and to 1.1 for the quarter ended December 31, 2021; (ii) modifies the calculation for both the fixed charge coverage ratio and the total leverage ratio to provide for adjustments related to expenses incurred in connection with the events at LPOI and LPOIZ, which expenses must be approved by BankUnited; (iii) terminates the Guidance Line; and (iv) requires approval from BankUnited prior to our being able to draw upon the Revolving Line, subject to our compliance with the fixed charge coverage ratio for the quarters ending September 30, 2021 and December 31, 2021. The Letter Agreement also granted the Company a waiver of default arising prior to the Letter Agreement for its failure to comply with the fixed charge coverage ratio measured on June 30, 2021. Based on the waiver, the Company was no longer in default of the Amended Loan Agreement. Finally, in connection with the Letter Agreement, the Company paid BankUnited a fee equal to $10,000. On November 5, 2021, the Company entered into a letter agreement with BankUnited (the “Second Letter Agreement”). In accordance with the Second Letter Agreement, the parties agreed to initiate discussions regarding a possible modification, forbearance, or other resolution of the Amended Loan Agreement (as defined below), which resolution would occur on or before December 31, 2021. On December 20, 2021, the Company entered into the Second Amendment to the Loan Agreement dated February 26, 2019 (the “Second Amendment”), which further amended the Loan Agreement with BankUnited. In accordance with the Second Amendment, the parties agreed to the following terms, among others: (i) a maturity date of April 15, 2023 with respect to the Term Loan (as defined in the Amended Loan Agreement); (ii) an increased monthly payment amount of $100,000 commencing on November 1, 2022; (iii) beginning on December 20, 2021, each facility will bear interest at BankUnited’s then-prime rate of interest minus fifty (50) basis points (4.25% as of June 30, 2022), as adjusted from time to time, (iv) the Term Loan will bear a higher interest rate commencing on August 1, 2022; (v) an exit fee equal to 4% of the outstanding principal balance of the Term Loan on April 15, 2023 (to the extent the Term Loan is still outstanding on such date and has not been refinanced with another lender); and (vi) a fee of $50,000 payable upon execution of the Second Amendment. The Second Amendment also granted us a waiver of compliance for the Financial Covenants (as set forth in the Amended Loan Agreement) for the periods ended December 31, 2021, March 31, 2022 and June 30, 2022. On May 11, 2022, the Company entered into the Third Amendment to the Loan Agreement dated February 26, 2019 (the “Third Amendment”; and, together with the First Amendment, the Letter Agreement and the Second Letter Agreement, the “Amended Loan Agreement”), which further amended the Loan Agreement with BankUnited. In accordance with the Third Amendment, the parties agreed to the following terms, among others: (i) an amended maturity date of April 15, 2024 with respect to the Term Loan (as defined in the Amended Loan Agreement); and (ii) an amended exit fee equal to (a) 2% of the outstanding principal balance of the Term Loan on September 30, 2022, (b) 1% of the outstanding principal balance on December 31, 2022, (c) 1% of the outstanding principal balance on March 31, 2023, and (d) 4% of the outstanding principal balance on April 15, 2024 (to the extent the Term Loan is still outstanding on the respective dates and has not been refinanced with another lender). BankUnited Revolving Line Pursuant to the Amended Loan Agreement, BankUnited agreed to make loan advances to the Company under the BankUnited Revolving Line up to a maximum aggregate principal amount outstanding not to exceed $2,000,000, which proceeds could have been used for working capital and general corporate purposes. The BankUnited Revolving Line expired on February 26, 2022. No amounts were outstanding under the BankUnited Revolving Line as of June 30, 2021 or February 26, 2022. BankUnited Term Loan Pursuant to the Amended Loan Agreement, BankUnited advanced the Company $5,813,500 to satisfy in full the amounts owed to Avidbank 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. Pursuant to the Second Amendment, the maturity date of the Term Loan was April 15, 2023, and pursuant to the Third Amendment, the maturity date of the Term Loan is April 15, 2024. The Term Loan initially bore interest at a per annum rate equal to 2.75% above the 30-day LIBOR. However, pursuant to the Second Amendment, beginning on December 20, 2021, each facility bears interest at BankUnited’s then-prime rate of interest minus fifty (50) basis points (4.25% as of June 30, 2022), as adjusted from time to time. Equal monthly principal payments of approximately $48,446, plus accrued interest, are due and payable, in arrears, on the first day of each month during the term. Pursuant to the Second Amendment, the monthly payment, including principal and interest, will increase to $100,000, commencing November 1, 2022. Upon maturity, all principal and interest shall be immediately due and payable. As of June 30, 2022, the applicable interest rate on the BankUnited Term Loan was 4.25%. Guidance Line The Amended Loan Agreement provided BankUnited, in its sole discretion, could make loan advances to the Company under the Guidance Line up to a maximum aggregate principal amount outstanding not to exceed $10,000,000, which proceeds could have been used for capital expenditures and approved business acquisitions. The Guidance Line terminated on September 9, 2022 in accordance with the Letter Agreement. There were no amounts outstanding under the Guidance Line at June 30, 2021 or on September 9, 2022. Security and Guarantees The Company’s obligations under the Amended Loan Agreement are collateralized by a first priority security interest (subject to permitted liens) in all of its assets and the assets of the Company’s U.S. subsidiaries, GelTech, and ISP, pursuant to a Security Agreement granted by GelTech, ISP, and the Company in favor of BankUnited. The Company’s equity interests in, and the assets of, its foreign subsidiaries are excluded from the security interest. In addition, all of the Company’s subsidiaries have guaranteed the Company’s obligations under the Amended Loan Agreement and related documents, pursuant to Guaranty Agreements executed by the Company and its 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 the Company’s 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. The Letter Agreement granted the Company a waiver of default arising prior to the Letter Agreement from its failure to comply with the fixed charge coverage ratio measured on June 30, 2021. The Second Amendment to the Amended Loan Agreement granted us a waiver of compliance for the Financial Covenants (as set forth in the Amended Loan Agreement) through June 30, 2022. Based on the waivers, the Company is no longer in default of the Amended Loan Agreement. As of June 30, 2022, the Company was in compliance with all other covenants. We may prepay any or all of the BankUnited Loans in whole or in part at any time, without penalty or premium other than the exit fees, as discussed above. 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 related to the BankUnited Loans were recorded as a discount on debt and are being amortized over the term. Amortization of approximately $52,000 and $19,000 for each the years ended June 30, 2022 and 2021, respectively, is included in interest expense. Equipment Loan In December 2020, ISP Latvia entered into an equipment loan with a third party (the “Equipment Loan”), which party is also a significant customer, and which the Equipment Loan is subordinate to the BankUnited Loans, and collateralized by certain equipment. The initial advance under the Equipment Loan was 225,000 EUR (or USD $275,000), payable in equal installments over 60 months, the proceeds of which were used to make a prepayment to a vendor for equipment to be delivered at a future date. The Equipment Loan bears interest at a fixed rate of 3.3%. An additional 225,000 EUR (or USD $267,000) was drawn in September 2021, which proceeds were paid to the vendor for the equipment, payable in equal installments over 52 months. Future maturities of loans payable are as follows: BankUnited Term Loan Equipment Loan Unamortized Debt Costs Total Fiscal year ending: June 30, 2023 $ 896,758 $ 103,005 (58,775 ) $ 940,988 June 30, 2024 3,027,355 103,005 — 3,130,360 June 30, 2025 — 103,005 — 103,005 June 30, 2026 — 42,919 — 42,919 After June 30, 2026 — — — — Total payments $ 3,924,113 $ 351,934 $ (58,775 ) 4,217,272 Less current portion (998,692 ) Non-current portion $ 3,218,580 Liquidity The Company generally relies on cash from operations and equity offerings, and commercial debt, to the extent available, to satisfy its liquidity needs and to meet its payment obligations, including payments due under the BankUnited Term Loan. The Company has commenced discussions with other lenders, and anticipates refinancing its debt obligations with a new lender prior to the maturity date of the Term Loan, of which there can be no assurances. If the Company is unable to refinance the credit facility with other commercial lenders prior to maturity, it may need to raise additional equity financing, source financing through non-commercial lenders or further reduce certain operating expenses and capital expenditures in order to repay the credit facility and all charges related thereto upon its maturity on April 14, 2024. In February 2022, the Company filed a shelf registration statement to facilitate the issuance of its Class A common stock, warrants exercisable for shares of its Class A common stock, and/or units up to an aggregate offering price of $75.8 million from time to time. In connection with the filing of the shelf registration statement, the Company also included a prospectus supplement relating to an at-the-market equity program under which the Company may issue and sell shares of its Class A common stock up to an aggregate offering price of $25.2 million from time to time, decreasing the aggregate offering price available under its shelf registration statement to $50.6 million. The shelf registration statement was declared effective by the SEC on March 1, 2022. The Company has not issued any shares of its Class A common stock pursuant to the at-the-market equity program. There are a number of factors that could result in the need to raise additional funds, including a decline in revenue or a lack of anticipated sales growth, increased material costs, increased labor costs, planned production efficiency improvements not being realized, increases in property, casualty, benefit and liability insurance premiums, and increases in other costs. In addition, greater than 50% of the Company’s cash and cash equivalents is held by its foreign subsidiaries and, although the Company regularly repatriates cash, it may not be readily available to repay its liabilities in the U.S. The Company will also continue efforts to keep costs under control as it seeks renewed sales growth. The Company’s efforts are directed toward generating positive cash flow and profitability. If these efforts are not successful, the Company may need to raise additional capital. Should capital not be available to the Company at reasonable terms, other actions may become necessary in addition to cost control measures and continued efforts to increase sales. These actions may include exploring strategic options for the sale of the Company, the sale of certain product lines, the creation of joint ventures or strategic alliances under which we will pursue business opportunities, the creation of licensing arrangements with respect to our technology, or other alternatives. |
Contingencies
Contingencies | 12 Months Ended |
Jun. 30, 2022 | |
Contingencies | |
Contingencies | 14. 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. In April 2021, the Company terminated several employees of its China subsidiaries, LPOIZ and LPOI, including the General Manager, the Sales Manager, and the Engineering Manager, after determining that they had engaged in malfeasance and conduct adverse to our interests, including efforts to misappropriate certain of our proprietary technology, diverting sales to entities owned or controlled by these former employees and other suspected acts of fraud, theft and embezzlement. In connection with such terminations, the Company’s China subsidiaries have engaged in certain legal proceedings with the terminated employees. The Company has incurred various expenses associated with its investigation into these matters prior and subsequent to the termination of the employees and the associated legal proceedings. These expenses, which included legal, consulting and other transitional management fees, totaled $718,000 during the year ended June 30, 2021. During the year ended June 30, 2022, approximately $400,000 of related expenses were incurred. Such expenses were recorded as “Selling, general and administrative” expenses in the accompanying Consolidated Statements of Comprehensive Income (Loss). The Company also identified a further liability in the amount of $210,000, which may be incurred in the future due to the actions of these employees. This amount has been accrued as of June 30, 2021, pending further investigation, and included in “Other Expense, net” in the accompanying Consolidated Statement of Comprehensive Income (Loss). During fiscal 2022 it was determined that LPOIZ would not be responsible for this amount, and the accrual was reversed with the benefit included in “Other income (expense), net” in the accompanying Consolidated Statement of Comprehensive Income (Loss) for the year ended June 30, 2022. Knowing that employee transitions in international subsidiaries can lead to lengthy legal proceedings that can interrupt the subsidiary’s ability to operate, compounded by the fact that our officers could not travel to China to oversee the transitions because of the travel restrictions imposed by COVID-19, the Company chose to enter into severance agreements with certain of the employees at the time of termination. Pursuant to the severance agreements, LPOIZ and LPOI agreed to pay such employees severance of approximately $485,000 in the aggregate, to be paid over a six-month period. After the execution of the severance agreements, we discovered additional wrongdoing by the terminated employees. As a result, LPOIZ and LPOI have not yet paid the severance payments and have disputed the employees’ rights to such payments. However, based on the likelihood that the courts in China will determine that the Company’s subsidiaries will ultimately be obligated to pay these amounts, we have accrued for these payments as of June 30, 2021. Such expenses were recorded as “Selling, general and administrative” expenses in the accompanying Consolidated Statement of Comprehensive Income (Loss) for the year ended June 30, 2021. As of June 30, 2022, approximately $430,000 remains accrued; legal action is ongoing and our obligation to pay these amounts has been awarded to the former employees by the Chinese Labor Court. We continue to seek legal options. The Company has transitioned the management of LPOI and LPOIZ to a new management team without any significant detrimental effects on the ability of those subsidiaries to operate. Management does not expect any material adverse impact to the business operations of LPOI or LPOIZ as a result of the transition. The Company expects to incur additional legal fees and consulting expenses in future periods as all legal options and remedies are pursued; however, such future fees are expected to be at lower levels than have been incurred to date. Although the Company has taken steps to minimize the business impacts from the termination of the management employees and transition to new management personnel, the Company experienced some short-term adverse impacts on LPOIZ’s and LPOI’s domestic sales in China and results of operations in the three-month period ended June 30, 2021, which continued throughout fiscal year 2022. The Company has not experienced, nor does management anticipate, any material adverse impact on LPOIZ’s or LPOI’s production and supply of products to its other subsidiaries for their customers. 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 financial 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 2023 or beyond. Impact of Russian-Ukraine Conflict In February 2022, Russian military forces invaded Ukraine. This conflict has resulted in significant economic disruption and continues to adversely impact the broader global economy, including certain of our customers and suppliers. Given the dynamic nature of this situation, the Company cannot reasonably estimate the impact of the Russian-Ukraine conflict on its financial condition, results of operations or cash flows into the foreseeable future. |
Foreign Operations
Foreign Operations | 12 Months Ended |
Jun. 30, 2022 | |
Foreign Operations | |
Foreign Operations | 15. 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 $935,000 and $2.1 million as of June 30, 2022 and 2021, respectively. During the years ended June 30, 2022 and 2021, we also recognized net foreign currency transaction losses of approximately $3,000 and $1,000, respectively, included in the Consolidated Statements of Comprehensive Income (Loss) in the line item entitled “Other income (expense), net.” Assets and net assets in foreign countries are as follows: China Latvia June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Assets $19.6 million $20.1 million $12.7 million $11.3 million Net assets $15.7 million $16.6 million $10.0 million $9.0 million |
Supplier and Customer Concentra
Supplier and Customer Concentrations | 12 Months Ended |
Jun. 30, 2022 | |
Supplier and Customer Concentrations | |
Supplier and Customer Concentrations | 16. Supplier and Customer Concentrations The Company utilizes a number of glass compositions in manufacturing its molded glass aspheres and lens array products. These glasses or equivalents are available from a large number of suppliers, including CDGM Glass Company Ltd., Ohara Corporation, and Sumita Optical Glass, Inc. Base optical materials, used in certain of the Company’s specialty products, are manufactured and supplied by a number of optical and glass manufacturers. The Company also utilizes major infrared material suppliers located around the globe for a broad spectrum of infrared crystal and glass. The Company believes that a satisfactory supply of such production materials will continue to be available, however, at higher, inflationary prices largely due to the war in the Ukraine, although there can be no assurance in this regard. In fiscal year 2022, the Company had sales to three customers that comprised an aggregate of approximately 35% of its annual revenue, and 13% of its June 30, 2022 accounts receivable. Sales to these customers as a percentage of our fiscal year 2022 revenue include one customer at 19%, another customer at 9%, and the third customer at 7%. One of these customers comprised 7% of accounts receivable, a second customer comprised 6% of accounts receivable and the other customer had no accounts receivable balance as of June 30, 2022. In fiscal year 2021, the Company had sales to three customers that comprised an aggregate of approximately 38% of its annual revenue, and 31% of its June 30, 2021 accounts receivable. Sales to these customers as a percentage of our fiscal year 2021 revenue include one customer at 18%, another customer at 10%, and the third customer at 10%. One of these customers comprised 21% of accounts receivable, a second customer comprised 10% of accounts receivable and the other customer had no accounts receivable balance as of June 30, 2021. The loss of any of these customers, or a significant reduction in sales to any such customer, would adversely affect the Company’s revenues. In fiscal year 2022, 61% of the Company’s net revenue was derived from sales outside of the U.S., with 95% of foreign sales derived from customers in Europe and Asia. In fiscal year 2021, 68% of the Company’s net revenue was derived from sales outside of the U.S., with 95% of foreign sales derived from customers in Europe and Asia. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2022 | |
Significant Accounting Policies | |
Consolidated financial statements | Consolidated Financial Statements |
Management estimates | Management estimates. |
Cash and cash equivalents | Cash and cash equivalents |
Allowance for accounts receivable | Allowance for accounts receivable |
Inventories | Inventories , |
Property and equipment | Property and equipment |
Long-lived assets | Long-lived assets , |
Goodwill and intangible assets | Goodwill and Intangible Assets The Company will assess the qualitative factors to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the goodwill impairment analysis. If the Company determines that it is more likely than not that its fair value is less than its carrying amount, then the goodwill impairment test is performed. The first step, identifying a potential impairment, compares the fair value of the reporting unit with its carrying amount. If the carrying amount exceeds its fair value, the second step would need to be performed; otherwise, no further steps are required. The second step, measuring the impairment loss, compares the implied fair value of the goodwill with the carrying amount of the goodwill. Any excess of the goodwill carrying amount over the implied fair value is recognized as an impairment loss, and the carrying value of goodwill is written down to fair value. The Company did not record any goodwill impairment during the fiscal years ended June 30, 2022 or 2021. |
Leases | Leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, the Company uses an estimate of its incremental borrowing rate based on observed market data and other information available at the lease commencement date. The operating lease ROU assets also include any lease payments made and exclude lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. The Company does not record leases on the consolidated balance sheet with a term of one year or less. The Company does not separate lease and non-lease components but rather accounts for each separate component as a single lease component for all underlying classes of assets. Variable lease payments are expensed as incurred and are not included within the operating lease ROU asset and lease liability calculation. Variable lease payments primarily include reimbursements of costs incurred by lessors for common area maintenance and utilities. Lease expense for minimum operating lease payments is recognized on a straight-line basis over the lease term. |
Income taxes | Income taxes The Company has not recognized a liability for uncertain tax positions. A reconciliation of the beginning and ending amount of unrecognized tax benefits or penalties has not been provided since there has been no unrecognized benefit or penalty. If there were an unrecognized tax benefit or penalty, the Company would recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The Company files United States (“U.S.”) Federal income tax returns, as well as tax returns in various states and foreign jurisdictions. Open tax years subject to examination by the Internal Revenue Service generally remain open for three years from the filing date. Tax years subject to examination by the state jurisdictions generally remain open for up to four years from the filing date. In Latvia, tax years subject to examination remain open for up to five years from the filing date and, in China, tax years subject to examination remain open for up to ten years from the filing date. Our cash, cash equivalents totaled approximately $5.5 million at June 30, 2022. 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. Historically, we considered unremitted earnings held by our foreign subsidiaries to be permanently reinvested. However, during fiscal 2020, we began declaring intercompany dividends to remit a portion of the earnings of our foreign subsidiaries to the U.S. parent company. It is still our intent to reinvest a significant portion of earnings generated by our foreign subsidiaries, however we also plan to repatriate a portion of their earnings. With respect to the funds generated by our foreign subsidiaries in China, the retained earnings of the legal entity must equal at least 50% of the registered capital before any funds can be repatriated. During fiscal 2022 and 2021, we repatriated approximately $2.8 million and $4 million, respectively, from LPOIZ. As of June 30, 2022, LPOIZ had approximately $3.9 million in retained earnings available for repatriation, and LPOI did not have any earnings available for repatriation, based on earnings accumulated through December 31, 2021, the end of the most recent statutory tax year, that remained undistributed as of June 30, 2022. During fiscal year 2020 we began to accrue for the applicable Chinese withholding taxes on the portion of earnings that we intend to repatriate. As of June 30, 2022 and 2021, accrued and unpaid withholding taxes were $40,000 and $100,000, respectively. Beginning in fiscal year 2019, earnings from the Company’s non-U.S. subsidiaries were subject to the global intangible low-taxed income (“GILTI”) inclusion pursuant to U.S. income tax rules. See Note 8, Income Taxes |
Revenue recognition | Revenue recognition Revenue |
VAT | VAT |
New product development | New product development |
Stock-based compensation | Stock-based compensation |
Fair value of financial instruments | Fair value of financial instruments. Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable. Level 3 - Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include accounts receivable, accounts payable and accrued liabilities. Fair values were assumed to approximate carrying values for these financial instruments since they are short term in nature and their carrying amounts approximate fair values or they are receivable or payable on demand. The fair value of the Company’s finance lease obligations and loans payable approximate their carrying values, based upon current rates available to us. See Note 13, Loans Payable The Company does not have any other financial or non-financial assets or liabilities that would be characterized as Level 1, Level 2 or Level 3 instruments. |
Debt issuance costs | Debt issuance costs |
Comprehensive income | Comprehensive income |
Business segments | Business segments. |
Recent accounting pronouncements | Recent accounting pronouncements. |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Revenue | |
Schedule of revenue by product group | Year Ended June 30, 2022 2021 PMO $ 15,020,542 $ 15,882,189 Infrared Products 18,735,325 20,971,080 Specialty Products 1,803,293 1,611,552 Total revenue $ 35,559,160 $ 38,464,821 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Inventories net | |
Schedule of components of inventory | June 30, 2022 June 30, 2021 Raw materials $ 3,019,156 $ 3,908,630 Work in process 2,243,907 2,473,070 Finished goods 3,052,001 3,467,105 Allowance for obsolescence (1,329,637 ) (1,189,218 ) $ 6,985,427 $ 8,659,587 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Property and Equipment net | |
Schedule of property and quipment | Estimated Lives (Years) June 30, 2022 June 30, 2021 Manufacturing equipment 5 - 10 $ 22,058,636 $ 21,465,402 Computer equipment and software 3 - 5 978,348 918,679 Furniture and fixtures 5 352,060 362,944 Leasehold improvements 5 - 7 3,043,867 2,944,543 Construction in progress 943,793 1,529,452 Total property and equipment 27,376,704 27,221,020 Less accumulated depreciation and amortization (15,736,241 ) (13,941,153 ) Total property and equipment, net $ 11,640,463 $ 13,279,867 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets | |
Intangible assets | Useful Lives (Years) June 30, 2022 June 30, 2021 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 (6,218,202 ) (5,093,119 ) Total intangible assets, net $ 4,457,798 $ 5,582,881 |
Schedule of future amortization of intangible assets | Fiscal year ending: June 30, 2023 1,125,083 June 30, 2024 1,125,083 June 30, 2025 658,398 June 30, 2026 239,334 After June 30, 2026 1,309,900 $ 4,457,798 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Income Taxes | |
Summary of total tax expense and effective income tax rate | Year Ended June 30, 2022 2021 Pretax income (loss): United States $ (5,129,955 ) $ (5,265,803 ) Foreign 2,450,681 3,014,467 Loss before income taxes $ (2,679,274 ) $ (2,251,336 ) Year Ended June 30, 2022 2021 Current: Federal tax $ - $ - State 3,829 18,563 Foreign 314,063 403,352 Total current 317,892 421,915 Deferred: Federal tax 4,000 510,069 State - 1,931 Foreign 541,015 - Total deferred 545,015 512,000 Total income tax provision $ 862,907 $ 933,915 |
Reconciliation of income tax | Year Ended June 30, 2022 2021 U.S. federal statutory tax rate 21.0 % 21.0 % Income tax provision reconciliation: Tax at statutory rate: $ (562,648 ) $ (472,782 ) Net foreign income subject to lower tax rate (297,049 ) (169,276 ) State income taxes, net of federal benefit (159,950 ) (196,719 ) Valuation allowance (1,255,273 ) (1,400,450 ) NOL expiration and adjustments 2,550,645 3,516,695 GILTI 138,611 310,431 Federal research and development and other credits (121,990 ) (74,288 ) Stock-based compensation 20,472 (265,485 ) Other permanent differences 11,387 (67,893 ) Other, net 538,702 (246,318 ) $ 862,907 $ 933,915 |
Deferred tax assets and liabilities | Year Ended June 30, 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 12,197,277 $ 13,585,000 Stock-based compensation 536,000 563,000 R&D and other credits 2,279,000 2,177,000 Capitalized R&D expenses 371,000 564,000 Inventories 263,973 253,000 Accrued expenses and other 267,000 347,000 Gross deferred tax assets 15,914,250 17,489,000 Valuation allowance for deferred tax assets (14,388,277 ) (15,644,000 ) Total deferred tax assets 1,525,973 1,845,000 Deferred tax liabilities: Depreciation and other (763,988 ) (255,000 ) Intangible assets (1,160,000 ) (1,443,000 ) Total deferred tax liabilities (1,923,988 ) (1,698,000 ) Net deferred tax assets (liabilities) $ (398,015 ) $ 147,000 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Earnings (Loss) Per Share | |
Schedule of the computations for basic and diluted earnings (loss) per common share | Year Ended June 30, 2022 2021 Net loss $ (3,542,181 ) $ (3,185,251 ) Weighted-average common shares outstanding: Basic number of shares 27,019,534 26,314,025 Effect of dilutive securities: Options to purchase common stock - - RSUs - - Diluted number of shares 27,019,534 26,314,025 Loss per common share: Basic $ (0.13 ) $ (0.12 ) Diluted $ (0.13 ) $ (0.12 ) |
Schedule of potential dilutive shares were not included in the computation of diluted earnings (loss) per common share | Year Ended June 30, 2022 2021 Options to purchase common stock 445,397 490,703 RSUs 1,944,737 2,220,710 2,390,134 2,711,413 |
Compensatory Equity Incentive_2
Compensatory Equity Incentive Plan and Other Equity Incentives (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Compensatory Equity Incentive Plan and Other Equity Incentives | |
Schedule of share based compensation award plans | Equity Compensation Arrangement Award Shares Authorized Outstanding at June 30, 2022 Available for Issuance at June 30, 2022 SICP (or Omnibus Plan) 5,115,625 2,614,131 365,324 2014 ESPP 400,000 — 277,443 5,515,625 2,614,131 642,767 |
Schedule of stock options fair value assumptions | Year Ended June 30, 2022 2021 Weighted-average expected volatility 80.8 % 72.0 % Dividend yields 0 % 0 % Weighted-average risk-free interest rate 2.09 % 0.74 % Weighted-average expected term, in years 3.75 7.49 |
Schedule of share-based payment awards activity | Stock Options Restricted Stock Units (RSUs) Weighted- Weighted- Weighted- Average Average Average Exercise Remaining Remaining Shares Price Contract Shares Contract June 30, 2020 942,575 $ 1.65 6.5 2,328,303 0.9 Granted 121,933 $ 2.97 9.7 296,386 2.3 Exercised (225,137 ) $ 1.50 (862,804 ) Cancelled/Forfeited (406,444 ) $ 1.75 - June 30, 2021 432,927 $ 2.01 8.8 1,761,885 0.9 Granted 125,000 $ 2.02 368,461 1.2 Exercised - $ - (45,143 ) Cancelled/Forfeited (23,465 ) $ 1.67 (5,534 ) June 30, 2022 534,462 $ 2.03 7.0 2,079,669 0.9 Awards exercisable/ vested as of June 30, 2022 215,141 $ 1.87 7.1 1,334,978 — Awards unexercisable/ unvested as of June 30, 2022 319,321 $ 2.14 7.1 744,691 0.9 534,462 2,079,669 |
Schedule of share-based compensation future cost to be recognized | Fiscal Year Ending: Stock Options RSUs Total June 30, 2023 $ 205,978 $ 531,850 $ 737,828 June 30, 2024 94,196 190,864 285,060 June 30, 2025 33,885 54,308 88,193 $ 334,059 $ 777,022 $ 1,111,081 |
Summary of the number and weighted average grant date fair values regarding our unexercisable/unvested awards | Unexercisable/Unvested Awards Stock Options Shares RSU Shares Total Shares Weighted-Average Grant Date Fair Values (per share) June 30, 2020 266,282 669,526 935,808 $ 1.10 Granted 121,933 296,386 418,319 $ 2.48 Vested (64,636 ) (367,325 ) (431,961 ) $ 1.39 Cancelled/Forfeited (1,595 ) - (1,595 ) $ 2.85 June 30, 2021 321,984 598,587 920,571 $ 1.59 Granted 125,000 368,461 493,461 $ 1.74 Vested (118,696 ) (216,823 ) (335,519 ) $ 1.42 Cancelled/Forfeited (8,967 ) (5,534 ) (14,501 ) $ 1.97 June 30, 2022 319,321 744,691 1,064,012 $ 1.71 |
Schedule of total stock-based compensation expense included in the consolidated statements of comprehensive income | Year Ended June 30, 2022 2021 Stock options $ 144,682 $ 76,616 RSUs 680,568 566,249 Total $ 825,250 $ 642,865 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Leases | |
Lease costs | Year Ended June 30, 2022 2021 Operating lease cost $ 668,054 $ 682,980 Finance lease cost: Depreciation of lease assets 162,057 207,931 Interest on lease liabilities 19,571 44,248 Total finance lease cost 181,628 252,179 Total lease cost $ 849,682 $ 935,159 |
Supplemental lease information | Classification June 30, 2022 June 30, 2021 Assets: Operating lease assets Operating lease assets $ 10,420,604 $ 9,015,498 Finance lease assets Property and equipment, net (1) 61,566 477,102 Total lease assets $ 10,482,170 $ 9,492,600 Liabilities: Current: Operating leases Operating lease liabilities, current $ 965,622 $ 799,507 Finance leases Finance lease liabilities, current 55,348 212,212 Noncurrent: Operating leases Operating lease liabilities, less current portion 9,478,077 8,461,133 Finance leases Finance lease liabilities, less current portion 11,454 66,801 Total lease liabilities $ 10,510,501 $ 9,539,653 Lease Term and Discount Rate June 30, 2022 Weighted Average Remaining Lease Term (in years) Operating leases 10.1 Finance leases 0.9 Weighted Average Discount Rate Operating leases 3.0 % Finance leases 7.6 % Year Ended June 30, 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash used for operating leases $ 870,911 $ 869,668 Operating cash used for finance leases $ 19,571 $ 44,247 Financing cash used for finance leases $ 212,211 $ 278,462 |
Future maturities of lease liabilities | Fiscal year ending: Finance Leases Operating Leases June 30, 2023 59,647 $ 721,901 June 30, 2024 11,811 1,204,323 June 30, 2025 — 1,225,047 June 30, 2026 — 1,193,987 June 30, 2027 — 1,163,610 Thereafter — 6,928,833 Total future minimum payments 71,458 12,437,701 Less imputed interest (4,656 ) (1,994,002 ) Present value of lease liabilities $ 66,802 $ 10,443,699 |
Loans Payable (Tables)
Loans Payable (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Loans Payable | |
Schedule of future maturities of loans payable | BankUnited Term Loan Equipment Loan Unamortized Debt Costs Total Fiscal year ending: June 30, 2023 $ 896,758 $ 103,005 (58,775 ) $ 940,988 June 30, 2024 3,027,355 103,005 — 3,130,360 June 30, 2025 — 103,005 — 103,005 June 30, 2026 — 42,919 — 42,919 After June 30, 2026 — — — — Total payments $ 3,924,113 $ 351,934 $ (58,775 ) 4,217,272 Less current portion (998,692 ) Non-current portion $ 3,218,580 |
Foreign Operations (Tables)
Foreign Operations (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Foreign Operations | |
Assets and net assets in foreign countries | China Latvia June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Assets $19.6 million $20.1 million $12.7 million $11.3 million Net assets $15.7 million $16.6 million $10.0 million $9.0 million |
Significant Accounting Polici_3
Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Significant Accounting Policies | ||
Cash and cash equivalents | $ 5,500,000 | |
Repatriated earning | 2,800,000 | $ 4,000,000 |
Retained earnings | 3,900,000 | |
Accrued and withholding tax | $ 40,000 | $ 100,000 |
Inventory description | The Company looks at the following criteria for parts to consider for the inventory allowance: (i) items that have not been sold in two years and (ii) items that have not been purchased in two years. These items, as identified, are allowed for at 100%, as well as allowing 50% for other items deemed to be slow moving within the last twelve months and allowing 25% for items deemed to have low material usage within the last six months. Items of which we have greater than a two-year supply are also reserved at 25% to 100%, depending on usage rates. |
Revenue (Details)
Revenue (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenues | $ 35,559,160 | $ 38,464,821 | |
PMO | |||
Revenues | 15,020,542 | 15,882,189 | $ 14,639,687 |
Speciality Products [Member] | |||
Revenues | 1,803,293 | 1,611,552 | |
Infrared Products | |||
Revenues | $ 18,735,325 | $ 20,971,080 |
Inventories (Details)
Inventories (Details) - USD ($) | Jun. 30, 2022 | Jun. 30, 2021 |
Inventories net | ||
Raw materials | $ 3,019,156 | $ 3,908,630 |
Work in process | 2,243,907 | 2,473,070 |
Finished goods | 3,052,001 | 3,467,105 |
Reserve for obsolescence | (1,329,637) | (1,189,218) |
Inventories, net | $ 6,985,427 | $ 8,659,587 |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Inventory write-offs to reserves | $ 457,000 | $ 157,000 |
Raw materials | 3,019,156 | 3,908,630 |
Inventory - Tooling | ||
Raw materials | $ 1,600,000 | $ 2,000,000 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Total property and equipment, gross | $ 27,376,704 | $ 27,221,020 |
Less accumulated depreciation and amortization | (15,736,241) | (13,941,153) |
Total property and equipment, net | 11,640,463 | 13,279,867 |
Manufacturing Equipment | ||
Total property and equipment, gross | $ 22,058,636 | 21,465,402 |
Manufacturing Equipment | Minimum [Member] | ||
Estimated life | 5 years | |
Manufacturing Equipment | Maximum [Member] | ||
Estimated life | 10 years | |
Computer Equipment And Software | ||
Total property and equipment, gross | $ 978,348 | 918,679 |
Computer Equipment And Software | Minimum [Member] | ||
Estimated life | 3 years | |
Computer Equipment And Software | Maximum [Member] | ||
Estimated life | 5 years | |
Furniture And Fixtures | ||
Total property and equipment, gross | $ 352,060 | 362,944 |
Estimated life | 5 years | |
Leasehold Improvements | ||
Total property and equipment, gross | $ 3,043,867 | 2,944,543 |
Leasehold Improvements | Minimum [Member] | ||
Estimated life | 5 years | |
Leasehold Improvements | Maximum [Member] | ||
Estimated life | 7 years | |
Construction In Progress | ||
Total property and equipment, gross | $ 943,793 | $ 1,529,452 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2015 | |
Property and Equipment net | ||
Proceeds from tenant improvement allowance | $ 309,450 | $ 420,014 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Intangible Assets, Gross | $ 10,676,000 | $ 10,676,000 |
Less Accumulated Amortization | (6,218,202) | (5,093,119) |
Intangible Assets, Net | 4,457,798 | 5,582,881 |
Trade Secrets | ||
Intangible Assets, Gross | $ 3,272,000 | 3,272,000 |
Useful Life | 8 years | |
Trademark | ||
Intangible Assets, Gross | $ 3,814,000 | 3,814,000 |
Useful Life | 8 years | |
Customer Relationships | ||
Intangible Assets, Gross | $ 3,590,000 | $ 3,590,000 |
Useful Life | 15 years |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Details 1) - USD ($) | Jun. 30, 2022 | Jun. 30, 2021 |
Intangible Assets, Net | $ 4,457,798 | $ 5,582,881 |
Intangible Assets [Member] | ||
Fiscal Year Ended: | ||
June 30, 2023 | 1,125,083 | |
June 30, 2024 | 1,125,083 | |
June 30, 2025 | 658,398 | |
June 30, 2026 | 239,334 | |
After June 30, 2026 | $ 1,309,900 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Capital stock, authorized | 55,000,000 | |
Common stock, authorized | 50,000,000 | |
Common stock par value | $ 0.01 | $ 0.01 |
Preferred stock, authorized | 5,000,000 | |
Preferred stock par value | $ 0.01 | $ 0.01 |
Series A Preferred Stock [Member] | ||
Preferred stock, designated | 250 | |
Series B Preferred Stock [Member] | ||
Preferred stock, designated | 300 | |
Series C Preferred Stock [Member] | ||
Preferred stock, designated | 500 | |
Series D Preferred Stock [Member] | ||
Preferred stock, designated | 500,000 | |
Series F Preferred Stock [Member] | ||
Preferred stock, designated | 500 | |
Class A Common Stock [Member] | ||
Common stock, designated | 44,500,000 | |
Purchase of common stock | $ 25,000 | |
Class E-2 Common Stock [Member] | ||
Common stock, designated | 5,500,000 | |
Class E-1 Common Stock [Member] | ||
Common stock, designatedFF | 5,500,000 | |
Class E-3 Common Stock [Member] | ||
Common stock, designated | 5,500,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Income (loss) before income taxes | $ (2,679,274) | $ (2,251,336) |
Foreign | ||
Income (loss) before income taxes | 2,450,681 | 3,014,467 |
United States | ||
Income (loss) before income taxes | $ (5,129,955) | $ (5,265,803) |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Current: | ||
Federal tax | $ 0 | $ 0 |
State | 3,829 | 18,563 |
Foreign | 314,063 | 403,352 |
Total current | 317,892 | 421,915 |
Deferred: | ||
Federal tax | 4,000 | 510,069 |
State | 0 | 1,931 |
Foreign | 541,015 | 0 |
Total deferred | 545,015 | 512,000 |
Total income tax (benefit) | $ 862,907 | $ 933,915 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Income Taxes | ||
U.S. federal statutory tax rate | 21% | 21% |
Income tax provision reconciliation: | ||
Tax at statutory rate: | $ (562,648) | $ (472,782) |
Net foreign income subject to lower tax rate | (297,049) | (169,276) |
State income taxes, net of federal benefit | (159,950) | (196,719) |
Valuation allowance | (1,255,273) | (1,400,450) |
IRC 965 repatriation | 2,550,645 | 3,516,695 |
GILTI | 138,611 | 310,431 |
Federal research and development and other credits | (121,990) | (74,288) |
Stock-based compensation | 20,472 | (265,485) |
Other permanent differences | 11,387 | (67,893) |
Other, net | 538,702 | (246,318) |
Total income tax (benefit) | $ 862,907 | $ 933,915 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) | Jun. 30, 2022 | Jun. 30, 2021 |
Deferred tax assets: | ||
Net operating loss and credit carryforwards | $ 12,197,277 | $ 13,585,000 |
Stock-based compensation | 536,000 | 563,000 |
R&D and other credits | 2,279,000 | 2,177,000 |
Capitalized R&D expenses | 371,000 | 564,000 |
Inventories | 263,973 | 253,000 |
Accrued expenses and other | 267,000 | 347,000 |
Gross deferred tax assets | 15,914,250 | 17,489,000 |
Valuation allowance for deferred tax assets | (14,388,277) | (15,644,000) |
Total deferred tax assets | 1,525,973 | 1,845,000 |
Deferred tax liabilities: | ||
Depreciation and other | (763,988) | (255,000) |
Intangible assets | (1,160,000) | (1,443,000) |
Total deferred tax liabilities | (1,923,988) | (1,698,000) |
Net deferred tax asset | $ (398,015) | $ 147,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | 24 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | |
Statutory income tax rate | 25% | |||
Deferred tax asset | $ 143,000 | |||
Cash saving due to utilization of payroll tax deferral | $ 325,000 | $ 325,000 | ||
Change in statutory income tax rate | 20% | |||
Future taxable income | $ 53,000,000 | |||
Valuation adjustment against deferred tax asset | 14,400,000 | |||
Change in valuation allowance against deferred tax asset | 1,200,000 | |||
Dividend paid | 2,800,000 | 4,000,000 | ||
Chinese withholding tax paid | 280,000 | 400,000 | ||
Unpaid withholding tax | 40,000 | $ 100,000 | 100,000 | |
Income tax expense | $ 208,000 | 500,000 | ||
Income tax receivable | $ 107,000 | |||
Statutory income tax rate | 21% | 21% | ||
Net deferred tax liability | $ 1,923,988 | $ 1,698,000 | $ 1,698,000 | |
Research [Member] | ||||
Credit carry forwards | $ 2,000,000 | |||
Tax credit carryforward, description | expire from 2023 through 2041 | |||
LATVIA | ||||
Statutory income tax rate | 25% | 15% | ||
LPOIZ | CHINA | ||||
Statutory income tax rate | 15% | |||
Net deferred tax liability | $ 541,000 |
Compensatory Equity Incentive_3
Compensatory Equity Incentive Plan and Other Equity Incentives (Details) | Jun. 30, 2022 shares |
Award shares, authorized | 5,515,625 |
Award shares, outstanding | 2,614,131 |
Available for issuance | 642,767 |
2014 ESPP | |
Award shares, authorized | 400,000 |
Award shares, outstanding | 0 |
Available for issuance | 277,443 |
SICP (or Omnibus Plan) | |
Award shares, authorized | 5,115,625 |
Award shares, outstanding | 2,614,131 |
Available for issuance | 365,324 |
Compensatory Equity Incentive_4
Compensatory Equity Incentive Plan and Other Equity Incentives (Details 1) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Compensatory Equity Incentive Plan and Other Equity Incentives | ||
Weighted average expected volatility | 80.80% | 72% |
Dividend yields | 0% | 0% |
Weighted average risk free interest rate | 2.09% | 0.74% |
Weighted average expected term, in years | 3 years 9 months | 7 years 5 months 26 days |
Compensatory Equity Incentive_5
Compensatory Equity Incentive Plan and Other Equity Incentives (Details 2) - $ / shares | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Stock Options | ||
Balance, beginning, shares | 432,927 | 942,575 |
Granted, shares | 125,000 | 121,933 |
Exercised, shares | (225,137) | |
Cancelled/Forfeited, shares | (23,465) | (406,444) |
Balance, ending, shares | 534,462 | 432,927 |
Balance ending, shares exercisable and vested | 215,141 | |
Balance ending, shares unexercisable and unvested | 319,321 | 321,984 |
Weighted average exercise price - Stock Options | ||
Balance Beginning | $ 2.01 | $ 1.65 |
Granted | 2.02 | 2.97 |
Exercised | 0 | 1.50 |
Cancelled/Forfeited | 1.67 | 1.75 |
Balance Ending | 2.03 | $ 2.01 |
Exercisable - Balance Ending | 1.87 | |
Unexercisable/unvested - Balance Ending | $ 2.14 | |
Weighted average remaining contract life - Stock Options | ||
Balance Beginning | 6 years 6 months | |
Granted | 9 years 8 months 12 days | |
Balance Ending | 7 years | 8 years 9 months 18 days |
Exercisable/vested | 7 years 1 month 6 days | |
Unexercisable/unvested | 7 years 1 month 6 days | |
RSU Shares | ||
Balance, beginning | 1,761,885 | 2,328,303 |
Granted | 368,461 | 296,386 |
Exercised | (45,143) | (862,804) |
Cancelled/forfeited | (5,534) | |
Balance, ending | 2,079,669 | 1,761,885 |
Balance, ending, shares exercisable and vested | 1,334,978 | |
Balance, ending, shares unexercisable/unvested | 744,691 | 598,587 |
Weighted average remaining contract life - Restricted Stock Units, beginning | 10 months 24 days | 10 months 24 days |
Weighted average remaining contract life - Restricted Stock Units, granted | 1 year 2 months 12 days | 2 years 3 months 18 days |
Weighted average remaining contract life - Restricted Stock Units, ending | 10 months 24 days | 10 months 24 days |
Weighted average remaining contract life unexercisable/unvested - Restricted Stock Units | 10 months 24 days |
Compensatory Equity Incentive_6
Compensatory Equity Incentive Plan and Other Equity Incentives (Details 3) | Jun. 30, 2022 USD ($) |
Stock options | $ 334,059 |
Restricted stock units | 777,022 |
Total unrecognized compensation cost | 1,111,081 |
Year ended June 30, 2023 | |
Stock options | 205,978 |
Restricted stock units | 531,850 |
Total unrecognized compensation cost | 737,828 |
Year ended June 30, 2024 | |
Stock options | 94,196 |
Restricted stock units | 190,864 |
Total unrecognized compensation cost | 285,060 |
Year ended June 30, 2025 | |
Stock options | 33,885 |
Restricted stock units | 54,308 |
Total unrecognized compensation cost | $ 88,193 |
Compensatory Equity Incentive_7
Compensatory Equity Incentive Plan and Other Equity Incentives (Details 4) - $ / shares | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Stock Options | ||
Beginning Balance | 321,984 | 266,282 |
Granted | 125,000 | 121,933 |
Vested | (118,696) | (64,636) |
Cancelled/Forfeited | (8,967) | (1,595) |
Balance ending, shares unexercisable and unvested | 319,321 | 321,984 |
RSU Shares | ||
Beginning Balance | 598,587 | 669,526 |
Granted | 368,461 | 296,386 |
Vested | (216,823) | (367,325) |
Cancelled/Forfeited | (5,534) | |
Balance, ending, shares unexercisable/unvested | 744,691 | 598,587 |
Total Shares | ||
Beginning balance | 920,571 | 935,808 |
Granted | 493,461 | 418,319 |
Vested | (302,298) | (431,961) |
Cancelled/Forfeited | 14,501 | 1,595 |
Balance,ending | 1,064,012 | 920,571 |
Weighted Average Grant Date Fair Values (per share) | ||
Beginning Balance | $ 1.59 | $ 1.10 |
Granted | 1.74 | 2.48 |
Vested | 1.42 | 1.39 |
Cancelled/Forfeited | 1.97 | 2.85 |
Ending balance | $ 1.71 | $ 1.59 |
Compensatory Equity Incentive_8
Compensatory Equity Incentive Plan and Other Equity Incentives (Details 5) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Stock-based compensation | $ 825,250 | $ 642,865 |
Stock Options | ||
Stock-based compensation | 144,682 | 76,616 |
Restricted Stock Units | ||
Stock-based compensation | $ 680,568 | $ 566,249 |
Compensatory Equity Incentive_9
Compensatory Equity Incentive Plan and Other Equity Incentives (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Intrinsic value of options outstanding and exercisable | $ 42,000 | $ 285,000 |
Intrinsic value of options exercised | 0 | 344,000 |
Fair value of options vested | 24,000 | 142,000 |
Intrinsic value of RSUs exercised | 77,000,000,000 | 2,800,000 |
Intrinsic value of RSUs outstanding and exercisable | 1,600,000 | 3,000,000 |
Fair value of RSUs Vested | 395,000 | 1,100,000 |
Total unrecognized compensation cost | $ 1,100,000 | |
Maximum employee can purchase | 8,000 | |
Offering period | 12 years | |
Number of common purcase within offering period | 4,000 | |
Discount of purchase of common stock | $ 5,000 | $ 3,000 |
Class A Common Stock [Member] | ||
Maximum value employee can purchase | $ 25,000 | |
Common stock description | The 2014 ESPP permits employees to purchase Class A common stock through payroll deductions, which may not exceed 15% of an employee’s compensation, at a price not less than 85% of the market value of the Class A common stock on specified dates (June 30 and December 31). |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Earnings (Loss) Per Share | ||
Net income (loss) | $ (3,542,181) | $ (3,185,251) |
Weighted Average Number Of Shares Outstanding | ||
Basic number of shares | 27,019,534 | 26,314,025 |
Effect of dilutive securities: | ||
Diluted number of shares | 27,019,534 | 26,314,025 |
Loss per common share: | ||
Basic | $ (0.13) | $ (0.12) |
Diluted | $ (0.13) | $ (0.12) |
Earnings (Loss) Per Share (De_2
Earnings (Loss) Per Share (Details 1) - shares | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Antidilutive Securities | 2,390,134 | 2,711,413 |
Stock Options | ||
Antidilutive Securities | 445,397 | 490,703 |
Restricted Stock Units | ||
Antidilutive Securities | 1,944,737 | 2,220,710 |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details Narrative ) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Defined Contribution Plan (Details Narrative ) | ||
Description of plan | Under the Insperity Plan, the Company matches 100% of the first 2% of employee contributions. As of June 30, 2022, there were 72 employees enrolled in this plan | |
Contributions made | $ 123,000 | $ 111,000 |
Leases (Details)
Leases (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Leases | ||
Operating lease cost | $ 668,054 | $ 682,980 |
Finance lease cost, depreciation of lease assets | 162,057 | 207,931 |
Finance lease cost, interest on lease liabilities | 19,571 | 44,248 |
Total finance lease cost | 181,628 | 252,179 |
Total lease cost | $ 849,682 | $ 935,159 |
Leases (Details 1)
Leases (Details 1) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Assets | ||
Operating lease assets | $ 10,420,604 | $ 9,015,498 |
Finance lease assets | 61,566 | 477,102 |
Total lease assets | 10,482,170 | 9,492,600 |
Liabilities | ||
Operating leases, current | 965,622 | 799,507 |
Finance leases, current | 55,348 | 212,212 |
Operating leases, noncurrent | 9,478,077 | 8,461,133 |
Finance leases, noncurrent | 11,454 | 66,801 |
Total lease liabilities | $ 10,510,501 | 9,539,653 |
Weighted average remaining lease term (in years), operating leases | 10 years 1 month 6 days | |
Weighted average remaining lease term (in years), finance leases | 10 months 24 days | |
Weighted average discount rate, operating leases | 3% | |
Weighted average discount rate, finance leases | 7.60% | |
Operating cash used for operating leases | $ 870,911 | 869,668 |
Operating cash used for finance leases | 19,571 | 44,247 |
Finance lease assets, accumulated depreciation | 418,000 | 477,000 |
Financing cash used for finance leases | $ 212,211 | $ 278,462 |
Leases (Details 2)
Leases (Details 2) | Jun. 30, 2022 USD ($) |
Finance Lease - Fiscal year ending June 30, | |
June 30, 2023 | $ 59,647 |
June 30, 2024 | 11,811 |
June 30, 2025 | 0 |
June 30, 2026 | 0 |
June 30, 2027 | 0 |
Thereafter | 0 |
Total future minimum payments | 71,458 |
Less imputed interest | (4,656) |
Present value of lease liabilities | 66,802 |
Operating Lease - Fiscal Year ending June 30, | |
June 30, 2021 | 721,901 |
June 30, 2022 | 1,204,323 |
June 30, 2023 | 1,225,047 |
June 30, 2024 | 1,193,987 |
June 30, 2026 | 1,163,610 |
Thereafter | 6,928,833 |
Total future minimum payments | 12,437,701 |
Less imputed interest | (1,994,002) |
Present value of lease liabilities | $ 10,443,699 |
Leases (Details Narrative)
Leases (Details Narrative) | 1 Months Ended | 12 Months Ended | |||||||
Jan. 31, 2022 | Jun. 30, 2022 USD ($) ft² | Jun. 30, 2021 ft² | Jun. 30, 2020 | Jun. 30, 2019 USD ($) ft² | Jun. 30, 2015 USD ($) | Apr. 30, 2021 ft² | Aug. 31, 2020 ft² | Jun. 30, 2018 ft² | |
Lease term | 12 years | ||||||||
Description of lease | expiring through 2024 to 2032 | ||||||||
Square footage of leased office space | 55,000 | ||||||||
Lease expiration | Apr. 30, 2022 | ||||||||
Tenant improvement allowance received | $ | $ (309,450) | $ (420,014) | |||||||
Orlando Lease | |||||||||
Square footage of leased office space | 58,500 | 26,000 | |||||||
Increase in rental rates | 3% | ||||||||
Lease ammendment date, first | 127 years | ||||||||
Lease expiration | Apr. 30, 2022 | ||||||||
Orlando Lease II | |||||||||
Square footage of leased office space | 12,378 | ||||||||
Lease expiration | Nov. 30, 2022 | ||||||||
Tenant improvement allowance received | $ | $ (3,700) | ||||||||
Zhenjiang Lease 1 | |||||||||
Square footage of leased office space | 26,000 | ||||||||
Lease expiration | Jun. 30, 2022 | ||||||||
Shanghai Lease | |||||||||
Description of lease | expire in October 2022 | ||||||||
Square footage of leased office space | 1,900 | ||||||||
Lease commencement | Oct. 31, 2015 | ||||||||
Zhenjiang Lease 2 | |||||||||
Square footage of leased office space | 13,000 | ||||||||
Lease expiration | Dec. 31, 2024 | ||||||||
Riga Lease | |||||||||
Description of lease | lease term was extended from December 31, 2022 to December 31, 2025 | ||||||||
Square footage of leased office space | 29,000 | 24,000 | |||||||
Riga Lease 1 | |||||||||
Square footage of leased office space | 5,000 | ||||||||
Lease expiration | Dec. 31, 2030 | Dec. 31, 2019 |
Loans Payable (Details)
Loans Payable (Details) - USD ($) | Jun. 30, 2022 | Jun. 30, 2021 |
Fiscal year ending June 30, | ||
June 30, 2023 | $ 940,988 | |
June 30, 2024 | 3,130,360 | |
June 30, 2025 | 103,005 | |
June 30, 2026 | 42,919 | |
After June 30, 2026 | 0 | |
Total payments | 4,217,272 | |
Less current portion | (998,692) | $ (634,846) |
Non-current portion | 3,218,580 | |
Equipment Loan | ||
Fiscal year ending June 30, | ||
June 30, 2023 | 103,005 | |
June 30, 2024 | 103,005 | |
June 30, 2025 | 103,005 | |
June 30, 2026 | 42,919 | |
After June 30, 2026 | 0 | |
Total Payments | 351,934 | |
Unamortized Debt Cost | ||
Fiscal year ending June 30, | ||
June 30, 2023 | 58,775 | |
June 30, 2024 | 0 | |
June 30, 2025 | 0 | |
June 30, 2026 | 0 | |
After June 30, 2026 | 0 | |
Total payments | (58,775) | |
BankUnited Term Loan | ||
Fiscal year ending June 30, | ||
June 30, 2023 | 896,758 | |
June 30, 2024 | 3,027,355 | |
June 30, 2025 | 0 | |
June 30, 2026 | 0 | |
After June 30, 2026 | 0 | |
Total Payments | $ 3,924,113 |
Loans Payable (Details Narrativ
Loans Payable (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2022 | Jun. 30, 2021 | Feb. 26, 2019 | |
Cash and cash equivalents | 50% | ||||
Offering price | $ 75,800,000 | ||||
A common stock offering price | 25,200,000 | ||||
Offering price, decreasing | 50,600,000 | ||||
Interest expense | $ 229,475 | $ 215,354 | |||
Equipment Loan | |||||
Interest Rate On Borrowing | 3.30% | ||||
Installment Term | 52 years | 60 years | |||
Advances | $ 267,000 | $ 275,000 | |||
BankUnited [Member] | |||||
Revolving Line Maximum Credit Limit | $ 2,000,000 | ||||
Term Loan | 5,813,500 | ||||
Non Revolving Maximum Credit Limit | $ 10,000,000 | ||||
Interest Rate On Borrowing | 4.25% | ||||
Letter Agreement [Member] | |||||
Fixed Charge Coverage Ratio | reduces the fixed charge coverage ratio to 1.0 for the quarter ending September 30, 2021 and to 1.1 for the quarter ended December 31, 2021 | ||||
Fee Paid | $ 10,000 | ||||
November 5, 2021 [Member] | Second Letter Agreement [Member] | |||||
Fee Percentage | 4% | ||||
Fees Payable | $ 50,000 | ||||
May 11, 2022 [Member] | Third Agreement [Member] | |||||
Amendment Description | an amended maturity date of April 15, 2024 with respect to the Term Loan (as defined in the Amended Loan Agreement); and (ii) an amended exit fee equal to (a) 2% of the outstanding principal balance of the Term Loan on September 30, 2022, (b) 1% of the outstanding principal balance on December 31, 2022, (c) 1% of the outstanding principal balance on March 31, 2023, and (d) 4% of the outstanding principal balance on April 15, 2024 (to the extent the Term Loan is still outstanding on the respective dates and has not been refinanced with another lender) | ||||
BankUnited Term Loan | |||||
Term Loan | $ 5,813,500 | ||||
Interest Rate On Borrowing | 4.25% | 2.75% | |||
Term Loan Tenure | 5 years | ||||
Equal Monthly Principal Payment | $ 48,446 | ||||
Late payment fee | 5% | ||||
Increase in monthly payment | $ 100,000 | ||||
Fixed Charge Coverage Ratio | fixed charge coverage ratio of 1.25 to 1.00 and a total leverage ratio of 4.00 to 1.00 | ||||
Interest expense | $ 52,000 | $ 19,000 |
Contingencies (Details Narrativ
Contingencies (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Contingencies | ||
Contingent Liability | $ 210,000 | |
Contingent Liability Pursuant To Severance Agreements | 485,000 | |
Related expenses | $ 400,000 | |
Legal, consulting and other transitional management fees | $ 718,000 | |
Accrued Expenses | $ 430,000 |
Foreign Operations (Details)
Foreign Operations (Details) - USD ($) | Jun. 30, 2022 | Jun. 30, 2021 |
Assets | $ 27,737 | $ 27,737 |
CHINA | ||
Assets | 19,600,000 | 20,100,000 |
Net Assets | 15,700,000 | 16,600,000 |
LATVIA | ||
Assets | 12,700,000 | 11,300,000 |
Net Assets | $ 10,000,000 | $ 9,000,000 |
Foreign Operations (Details Nar
Foreign Operations (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Foreign Operations | ||
Gain (loss) On Foreign Currency | $ 3,000 | $ 1,000 |
Cumulative Gain | $ 935,000 | $ 2,100,000 |
Supplier and Customer Concent_2
Supplier and Customer Concentrations (Details Narrative) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Aggregate Annual Revenue | 35% | 38% |
Aggregate Accounts Receivable | 13% | 31% |
Customer 1 | Annual Revenue | ||
Concentrations | 19% | 18% |
Customer 1 | Accounts Receivable | ||
Concentrations | 7% | 21% |
Customer 2 | Annual Revenue | ||
Concentrations | 9% | 10% |
Customer 2 | Accounts Receivable | ||
Concentrations | 6% | 10% |
Customer 3 | Annual Revenue | ||
Concentrations | 7% | 10% |
Foreign Sales | Annual Revenue | ||
Concentrations | 61% | 68% |
Europe-Asia [Member] | Annual Revenue [Member] | ||
Concentrations | 95% | 95% |