Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | |
Jun. 30, 2013 | Dec. 18, 2013 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'M LINE HOLDINGS INC | ' |
Entity Central Index Key | '0001072248 | ' |
Document Type | '10-K | ' |
Document Period End Date | 30-Jun-13 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--06-30 | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' |
Is Entity a Voluntary Filer? | 'No | ' |
Is Entity's Reporting Status Current? | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Public Float | ' | $595,594 |
Entity Common Stock, Shares Outstanding | ' | 75,306,275 |
Document Fiscal Period Focus | 'FY | ' |
Document Fiscal Year Focus | '2013 | ' |
Balance_Sheets
Balance Sheets (USD $) | Jun. 30, 2013 | Jun. 30, 2012 |
Current assets: | ' | ' |
Cash and cash equivalents | $182,305 | $5,212 |
Accounts receivable, net | 990,010 | 794,317 |
Inventory, net | 1,555,910 | 1,609,411 |
Due from related parties | 99,348 | 1,262,615 |
Deferred financing fees | 199,516 | ' |
Total current assets | 3,027,089 | 3,671,555 |
Non-Current Assets | ' | ' |
Property and equipment, net | 556,555 | 543,050 |
Deposits and other | 113,445 | 82,806 |
Total assets | 3,697,089 | 4,297,411 |
Current liabilities: | ' | ' |
Bank overdraft | 85,542 | ' |
Accounts payable | 1,421,626 | 996,861 |
Accounts payable - related party | 43,454 | ' |
Accrued expenses and other | 2,788,697 | 1,314,065 |
Litigation payable | 137,500 | ' |
Line of credit | 1,702,726 | 1,083,879 |
Notes payable - current, net of debt discount of $69,996 | 675,961 | 597,261 |
Current Portion of Capital Lease Obligations | 54,501 | 71,556 |
Deferred income | 10,000 | ' |
Total Current Liabilities | 7,010,749 | 4,180,163 |
Non-Current Liabilities | ' | ' |
Notes payable - net of current portion | 318,903 | 19,749 |
Deferred income taxes | ' | 16,710 |
Capital lease obligations net of current portion | 90,742 | ' |
Total liabilities | 7,329,652 | 4,216,622 |
Commitments and contingencies | ' | ' |
Shareholders' Equity (Deficit): | ' | ' |
Preferred Stock: $0.001 par value, 10,000,000 shares authorized, Series A - 200,000 and 0 shares issued and outstanding at June 30, 2013 and June 30, 2012 respectively | 200 | ' |
Common stock: $0.001 par, 100,000,000 shares authorized, 70,211,145 and 46,871,145 shares issued and outstanding at June 30, 2013 and June 30, 2012, respectively | 70,211 | 46,871 |
Additional paid in capital | 10,741,397 | 10,179,021 |
Related party receivable on issuance of shares | ' | -94,000 |
Accumulated deficit | -14,444,371 | -10,051,103 |
Total shareholders' equity (deficit) | -3,632,563 | 80,789 |
Total Liabilities and Shareholders' Equity (Deficit) | $3,697,089 | $4,297,411 |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) (USD $) | Jun. 30, 2013 | Jun. 30, 2012 |
Statement of Financial Position [Abstract] | ' | ' |
Debt Discount | $69,996 | $69,996 |
Preferred Stock, Par Value | $0.00 | $0.00 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 200,000 | 0 |
Preferred Stock, Shares Outstanding | 200,000 | 0 |
Common Stock, Par Value | $0.00 | $0.00 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares Issued | 70,211,145 | 46,871,145 |
Common Stock, SHares Outstanding | 70,211,145 | 46,871,145 |
Statements_of_Operations
Statements of Operations (USD $) | 12 Months Ended | |
Jun. 30, 2013 | Jun. 30, 2012 | |
Income Statement [Abstract] | ' | ' |
Net sales | $9,324,685 | $10,177,449 |
Cost of sales | 7,561,454 | 7,330,725 |
Gross profit | 1,763,231 | 2,846,724 |
Operating expenses: | ' | ' |
Selling, general and administrative | 4,226,647 | 2,629,232 |
Amortization of intangible assets | ' | 31,952 |
Write off of related party receivables | 1,446,067 | ' |
Total operating expense | 5,672,714 | 2,661,184 |
Operating income (loss) | -3,909,483 | 185,540 |
Other income (expense): | ' | ' |
Interest expense | -497,365 | -208,145 |
Research and development expenses | ' | -967,976 |
Gain on debt settlement | ' | 86,097 |
Gain on sale of assets | ' | 138,642 |
Total other income (expenses) | -497,365 | -951,382 |
Loss before income tax | -4,406,848 | -765,842 |
Income tax provision (benefit) | -13,580 | 2,400 |
Net loss | ($4,393,268) | ($768,242) |
Loss per common share: | ' | ' |
Basic and diluted | ($0.07) | ($0.02) |
Weighted average common shares outstanding Basic and diluted | 60,746,844 | 45,296,196 |
Shareholders_Equity
Shareholders Equity (USD $) | Preferred Stock | Common Stock | Additional Paid-In Capital | Related Party Receivable | Accumulated Deficit | Total |
Balance at Jun. 30, 2011 | ' | $38,571 | $9,813,315 | ($94,000) | ($9,282,861) | $475,025 |
Balance (in shares) at Jun. 30, 2011 | ' | 38,570,845 | ' | ' | ' | ' |
Shares issued for deferred financing costs | ' | ' | ' | ' | ' | ' |
Shares issued for deferred financing costs, Shares | ' | ' | ' | ' | ' | ' |
Shares issued for services | ' | 8,300 | 365,706 | ' | ' | 374,006 |
Shares issued for services (in shares) | ' | 8,300,300 | ' | ' | ' | 14,840,000 |
Shares issued in lieu of payroll | ' | ' | ' | ' | ' | 168,700 |
Shares issued in lieu of payroll, Shares | ' | ' | ' | ' | ' | 8,500,000 |
Net loss | ' | ' | ' | ' | -768,242 | -768,242 |
Balance at Jun. 30, 2012 | ' | 46,871 | 10,179,021 | -94,000 | -10,051,103 | 80,789 |
Balance (in shares) at Jun. 30, 2012 | ' | 46,871,145 | ' | ' | ' | ' |
Shares issued for deferred financing costs | 200 | ' | 149,074 | ' | ' | 149,274 |
Shares issued for deferred financing costs, Shares | 200,000 | ' | ' | ' | ' | 149,274 |
Shares issued for services | ' | 14,840 | 253,102 | ' | ' | 267,942 |
Shares issued for services (in shares) | ' | 14,840,000 | ' | ' | ' | 3,650,000 |
Shares issued in lieu of payroll | ' | 8,500 | 160,200 | ' | ' | 168,700 |
Shares issued in lieu of payroll, Shares | ' | 8,500,000 | ' | ' | ' | 4,237,500 |
Sharebased compensation | ' | ' | ' | 94,000 | ' | 94,000 |
Net loss | ' | ' | ' | ' | -4,393,268 | -4,393,268 |
Balance at Jun. 30, 2013 | $200 | $70,211 | $10,741,397 | ' | ($14,444,371) | ($3,632,563) |
Balance (in shares) at Jun. 30, 2013 | 200,000 | 70,211,145 | ' | ' | ' | ' |
Statements_of_Cash_Flows
Statements of Cash Flows (USD $) | 12 Months Ended | |
Jun. 30, 2013 | Jun. 30, 2012 | |
Cash flows from operating activities: | ' | ' |
Net loss | ($4,393,268) | ($768,242) |
Adjustment to reconcile loss to net cash provided by (used in) operating activities: | ' | ' |
Provision for deferred income taxes | -16,710 | ' |
Write off of related party receivable | -1,446,067 | ' |
Gain on disposition of assets | ' | -138,642 |
Bad debt expense | ' | -61,902 |
Amortization of deferred financing costs | 99,758 | ' |
Amortization of debt discount | 7,504 | ' |
Depreciation | 173,532 | 192,755 |
Amortization of intangible assets | ' | 31,952 |
Share based compensation | 530,642 | 374,006 |
Gain on debt settlement | ' | -86,097 |
Reserve for inventories | 200,000 | 50,099 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -195,693 | 161,783 |
Inventory | -146,499 | -460,088 |
Prepaid expenses and other assets | -30,639 | 11,994 |
Accounts payable, accrued expenses and other | 1,626,806 | 656,217 |
Accounts payable - related party | 43,454 | ' |
Deferred revenue | 10,000 | ' |
Litigation payable | 105,959 | -230,260 |
Net cash used in operating activities | -539,087 | -266,425 |
Cash flows from investing activities: | ' | ' |
Acquisition of property and equipment | -19,335 | -59,907 |
Net cash used in investing activities | -19,335 | -59,907 |
Cash flows from financing activities: | ' | ' |
Net borrowings (repayments) on line of credit | 348,847 | 456,834 |
Proceeds from notes payable | 596,051 | 150,000 |
Due from related party | -72,800 | -493,116 |
Payments on notes payable | -190,701 | ' |
Payments on capital leases | -31,424 | -3,210 |
Bank overdraft | 85,542 | ' |
Net cash provided by overdraft financing activities | 735,515 | 110,508 |
Net increase (decrease) in cash and cash equivalent | 177,093 | -215,824 |
Cash and cash equivalents at beginning of period | 5,212 | 221,036 |
Cash and cash equivalents at end of period | 182,305 | 5,212 |
Supplemental disclosure of non cash flow information: | ' | ' |
Cash paid for interest | 390,103 | 208,145 |
Cash paid for income taxes | ' | ' |
Supplemental disclosure of noncash financing activities | ' | ' |
Borrowings on capital leases | 167,702 | ' |
Shares issued for deferred financing costs | 149,274 | ' |
Settlement of liabilities and deferred financing costs through line of credit and notes payable | $270,000 | ' |
1_Organization_and_Business
1. Organization and Business | 12 Months Ended |
Jun. 30, 2013 | |
Accounting Policies [Abstract] | ' |
1. Organization and Business | ' |
1. Organization and Business | |
Organization and Business | |
M. Line Holdings, Inc. (the “Company”) was incorporated in Nevada on September 24, 1997. The Company and its subsidiaries are engaged in the following businesses: | |
Acquiring, refurbishing and selling pre-owned CNC machine-tool equipment through Elite Machine Tool Company (“Elite”), its wholly owned subsidiary, the machine sales group. | |
Precision Aerospace & Technologies, Inc., (formerly Eran Engineering, Inc.) (“Precision”), its wholly owned subsidiary, manufactures precision metal component parts for the aerospace, medical and defense industries. This is the precision manufacturing group. |
2_Basis_of_Presentation_and_Si
2. Basis of Presentation and Significant Accounting Policies | 12 Months Ended | ||||||||||
Jun. 30, 2013 | |||||||||||
Accounting Policies [Abstract] | ' | ||||||||||
2. Basis of Presentation and Significant Accounting Policies | ' | ||||||||||
2. Basis of Presentation and Significant Accounting Policies | |||||||||||
Basis of Presentation | |||||||||||
The accompanying financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. | |||||||||||
Principles of Consolidation | |||||||||||
The accompanying consolidated financial statements include the accounts of M Line Holdings, Inc. and its wholly-owned subsidiaries: Elite and Precision. All intercompany accounts and transactions have been eliminated. | |||||||||||
Business Segments | |||||||||||
FASB ASC Topic 280: Segment Reporting (“ASC 280”) requires the determination of reportable business segments (i.e., the management approach). This approach requires that business segment information used by the chief operating decision maker to assess performance and manage company resources be the source for segment information disclosure. The Company operates in two reportable segments consisting of (1) Machine Sales and (2) Precision Manufacturing. | |||||||||||
Concentrations of Credit Risks | |||||||||||
Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents and trade accounts receivable. The Company invests its cash balances through high-credit quality financial institutions. From time to time, the Company maintains bank account levels in excess of FDIC insurance limits. If the financial institutions in which the Company has its accounts have financial difficulties, the Company’s cash balances could be at risk. | |||||||||||
Sales from significant customers representing 10% or more of sales consist of the following customers for the years ended June 30: | |||||||||||
Year Ended June 30, 2013 | Year Ended June 30, 2012 | ||||||||||
Percent of Sales | 17 | % | 23 | % | |||||||
Number of Customers | 1 | 1 | |||||||||
Accounts receivable from this customer at June 30, 2013 and 2012 were $254,727 and $354,589, respectively. | |||||||||||
As a result of the Company's concentration of its customer base and industries served, the loss or cancellation of business from, or significant changes in scheduled deliveries of product sold to the above customers or a change in their financial position could materially and adversely affect the Company's consolidated financial position, results of operations and cash flows. | |||||||||||
One customer, included in the Precision Manufacturing segment represents a significant concentration. Sales to this customer as a percentage of sales within the Precision Manufacturing Segment are as follows for the years ended June 30: | |||||||||||
Year ended June 30, | |||||||||||
2013 | 2012 | ||||||||||
% of segment sales significant customer sales concentration | 45 | 54 | |||||||||
Accounts receivable from this customer at June 30, 2013 and 2012 were $254,757 and $354,589 respectively. | |||||||||||
The Company’s Precision Manufacturing segment operates a single manufacturing facility located in Tustin, California. A major interruption in the manufacturing operations at this facility would have a material adverse effect on the consolidated financial position and results of operations of the Company. | |||||||||||
Use of Estimates | |||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of sales and expenses during the reporting period. Significant estimates made by management are, among others, realization of inventories, collectability of accounts receivable, litigation, impairment of goodwill, and long-lived assets other than goodwill. Actual results could materially differ from those estimates. | |||||||||||
Cash and Cash Equivalents | |||||||||||
The Company considers all highly liquid investments with insignificant interest rate risk and original maturities of three months or less from the date of purchase to be cash equivalents. The carrying amounts of cash and cash equivalents approximate their fair values. The Company maintains cash and cash equivalents balances at certain financial institutions in excess of amounts insured by federal agencies. Management does not believe that as a result of this concentration, it is subject to any unusual financial risk beyond the normal risk associated with commercial banking relationships. | |||||||||||
Accounts Receivable | |||||||||||
The Company performs periodic credit evaluations and continually monitors its collection of amounts due from its customers. The Company adjusts credit limits and payment terms granted to its customers based upon payment history and the customer's current creditworthiness. The Company does not require collateral from its customers to secure amounts due from them. The Company regularly reviews its accounts receivable and collection of these balances subsequent to each of these periods. The Company maintains reserves for potential credit losses, and historically, such losses have been within management expectations. As of June 30, 2013 and 2012, accounts receivable totals were $990,010 and $794,317, net of an allowance for bad debt expense of $29,566 and $47,193 respectively. | |||||||||||
Inventories | |||||||||||
Inventories are stated at the lower of cost or market, cost being determined using the first in, first out (“FIFO”) method. The Company provides inventory reserves for obsolescence and other matters based on management’s review of current inventory levels. The Company includes labor and overhead costs directly associated with manufacturing its products in inventory costs. | |||||||||||
Deferred financing fees | |||||||||||
The Company incurs costs in connection with its line of credit which may consist of legal, finders and due diligence fees. Such costs are deferred and amortized to interest expense over the term of the line of credit. As of June 30, 2013, the Company incurred deferred financing costs of $299,274 of which $99,758 has been amortized to interest expense for the year ended June 30, 2013. | |||||||||||
Property and Equipment | |||||||||||
Property and equipment is stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Equipment under capital lease obligations is depreciated over the estimated useful life of the asset. Leasehold improvements are amortized over the shorter of the estimated useful life or the term of the lease. Repairs and maintenance are expensed as incurred, while improvements are capitalized. Upon the sale or retirement of property and equipment, the accounts are relieved of the cost and the related accumulated depreciation, which any resulting gain or loss included in the consolidated statements of operations. | |||||||||||
Long-Lived Assets | |||||||||||
The Company reviews its fixed assets and certain identifiable intangibles with definite lives for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted operating cash flow expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset or discounted cash flows. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. | |||||||||||
Based on management’s review, the Company determined that there was no impairment to its long-live assets for the years ended June 30, 2013 and 2012. | |||||||||||
Income Taxes | |||||||||||
The Company accounts for income taxes in accordance with FASB ASC Topic 740-10, Income Taxes, (“ASC 740”) which requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the differences between the financial statement and the tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense represents the tax payable for the period and the change during the period in deferred tax assets and liabilities. | |||||||||||
The Company accounts for uncertain tax positions in accordance with ASC 740, which prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return and also provides guidance on various related matters such as derecognition, interest, penalties and disclosures required. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense. | |||||||||||
Contingencies and Litigation | |||||||||||
The Company evaluates contingent liabilities including threatened or pending litigation. Management assesses the likelihood of any adverse judgments or outcomes to a potential claim or legal proceeding, as well as potential ranges of probable losses, when the outcomes of the claims or proceedings are probable and reasonably estimable. A determination of the amount of accrued liabilities required, if any, for these contingencies is made after the analysis of each matter. Because of uncertainties related to these matters, management bases its estimates on the information available at the time. As additional information becomes available, management reassess the potential liability related to its pending claims and litigation and may revise our estimates. Any revisions in the estimates of potential liabilities could have a material impact on the results of operations and financial position. | |||||||||||
Revenue Recognition | |||||||||||
The Company recognizes revenue in accordance with Staff Accounting Bulletin No. 104 “Revenue Recognition”. Revenue is recognized at the date of shipment to customers when; a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist, and collectability is reasonably assured. | |||||||||||
Revenues generated from the Precision Manufacturing segment consist of manufactured parts and in some instances, assembly of these items based on detailed engineering specifications received by the Company from the customer. The Company generally begins to manufacture the parts upon the receipt and acceptance of a purchase order which specifies the quantity, price and delivery dates such products are required to be shipped within. Prior to shipment, physical inspection of the parts is performed to ensure specifications meet the engineering requirements. Historically, customer returns have been inconsequential. | |||||||||||
Revenues generated from the sales of new and pre-owned Computer Numerically Controlled machines from the Machine Tools segment are based on the acceptance of a purchase order and the customer’s acknowledgement of the Company’s terms and conditions which specifies the shipping terms, payment terms and the warranty period, if any. In certain instances, the Company may perform installation services including the leveling of the machine, which is inconsequential. Under agreements with certain new equipment manufacturers, a ninety day warranty is provided to customers whereby the manufacturer is responsible for any replacement parts and the Company is responsible for the installation of the parts. In certain instances, the Company provides warranties for used equipment for periods ranging up to thirty days. Historically, warranty costs have been inconsequential. Generally, the Company does not accept returns of equipment. Warranty expense, included in cost of sales, for the years ended June 30, 2013 and 2012 amounted to $68,364 and $35,047, respectively. | |||||||||||
Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as customer deposits. | |||||||||||
Advertising | |||||||||||
The Company expenses the cost of advertising when incurred as selling expenses. Advertising expenses were $17,901 and $7,685, for the years ended June 30, 2013 and 2012, respectively. | |||||||||||
Stock-Based Compensation | |||||||||||
The Company accounts for share-based awards issued to employees in accordance with FASB ASC 718. Accordingly, employee share-based payment compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period or vesting period. Additionally, share-based awards to non-employees are expensed over the period in which the related services are rendered at their fair value. | |||||||||||
Net Income (Loss) per Share | |||||||||||
Basic net loss per share is calculated by dividing net loss by the Company’s weighted average common shares outstanding during the period. Diluted net income per share reflects the potential dilution to basic earnings per share that could occur upon conversion or exercise of securities, options or other such items to common shares using the treasury stock method, based upon the Company’s weighted average fair value of the common shares during the period. The weighted average number of shares used to compute basis and dilute loss per share is the same as the effect of potential dilutive securities is anti-dilutive. | |||||||||||
Fair Value of Financial Instruments | |||||||||||
The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, line of credit and notes payable approximates fair value due to the immediate or short-term maturity of these financial instruments. The fair value of long-term notes approximates the carrying amounts based upon the expected borrowing rate for debt with similar remaining maturities and comparable risk. | |||||||||||
Reclassification | |||||||||||
Certain reclassification has been made to the previous year’s financial statements to conform to current year presentation with no effect on previously reported net loss. | |||||||||||
Recent Accounting Pronouncements | |||||||||||
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
3_Going_Concern_and_Management
3. Going Concern and Management Plans. | 12 Months Ended |
Jun. 30, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
3. Going Concern and Management Plans. | ' |
3. Going Concern and Management Plans. | |
The Company's consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has an accumulated deficit of $14,444,371 as of June 30, 2013, negative working capital and negative cash flows from operations for the year ended June 30, 2013. | |
The Company recognizes that the very weak economy over the past few years and the difficulty in raising new funds has impacted the working capital needs of the Company. | |
The consolidated financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company's continuation as a going concern is dependent upon its ability to retain its current short term financing and ultimately to generate sufficient cash flow to meet its obligations on a timely basis in order to attain profitability. | |
To date the Company has funded its operations from both internally generated cash flow and external sources. The Company will pursue additional external capitalization opportunities, as necessary, to fund its long-term goals and objectives. |
4_Inventories
4. Inventories | 12 Months Ended | ||||||||
Jun. 30, 2013 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
4. Inventories | ' | ||||||||
4. Inventories | |||||||||
Inventories consist of the following at June 30: | |||||||||
2013 | 2012 | ||||||||
Finished goods and components | 971,099 | $ | 1,157,918 | ||||||
CNC machines held for sale | 364,583 | 116,000 | |||||||
Work in progress | 415,108 | 387,969 | |||||||
Raw materials and parts | 5,120 | 5,632 | |||||||
1,755,910 | 1,667,519 | ||||||||
Less: Reserve for inventories | (200,000 | ) | (58,108 | ) | |||||
Inventories, net. | 1,555,910 | $ | 1,609,411 | ||||||
5_Related_Parties
5. Related Parties | 12 Months Ended |
Jun. 30, 2013 | |
Related Party Transactions [Abstract] | ' |
5. Related Parties | ' |
5. Related Parties | |
As of June 30, 2013, due from related parties of $99,348 includes an amount due from an officer of Elite amounting to $83,348 which is expected to be repaid to the Company within the next fiscal year. The Company advanced funds and paid various general expenses incurred by the related party during the course of business for the years ended June 30, 2013 and 2012. | |
As of June 30, 2012, the amount due from related parties includes amounts advanced to an entity that is majority-owned by certain officers of the Company amounting to $1,176,229 in connection with its planned acquisitions of the entity’s subsidiaries. The acquisitions did not push through and the Company has written off the outstanding balance as of June 30, 2013 amounting to $1,446,067. | |
As of June 30, 2013, the Company owes $43,454 to one of its officers for expenses paid on behalf of the Company. |
6_Property_and_Equipment
6. Property and Equipment | 12 Months Ended | ||||||||||||
Jun. 30, 2013 | |||||||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||||||
6. Property and Equipment | ' | ||||||||||||
6. Property and Equipment | |||||||||||||
Property and equipment consists of the following at June 30: | |||||||||||||
Estimated Useful life (in years) | 2013 | 2012 | |||||||||||
Machinery and equipment | 7 | $ | 2,603,313 | $ | 2,435,611 | ||||||||
Fixtures, fixtures and office equipment | 3 to 5 | 341,308 | 321,973 | ||||||||||
Vehicles | 5 | 23,276 | 23,276 | ||||||||||
Leasehold improvements | 3 | 105,298 | 105,298 | ||||||||||
3,073,195 | 2,886,158 | ||||||||||||
Less - accumulated depreciation | (2,516,640 | ) | (2,343,108 | ) | |||||||||
Property and equipment net. | $ | 556,555 | $ | 543,050 | |||||||||
Depreciation expense was $173,532 and $192,755 for the years ended June 30, 2013 and 2012, respectively. | |||||||||||||
7_Accrued_Expenses_and_Other
7. Accrued Expenses and Other | 12 Months Ended | ||||||||
Jun. 30, 2013 | |||||||||
Other Income and Expenses [Abstract] | ' | ||||||||
7. Accrued Expenses and Other | ' | ||||||||
7. Accrued Expenses and Other | |||||||||
Accrued expenses consist of the following at June 30: | |||||||||
2013 | 2012 | ||||||||
Compensation and related benefits | 1,934,314 | $ | 993,077 | ||||||
Audit fees | 72,500 | 77,500 | |||||||
Other | 781,883 | 243,488 | |||||||
2,788,697 | $ | 1,314,065 | |||||||
8_Capital_Leases
8. Capital Leases | 12 Months Ended | ||||||||||
Jun. 30, 2013 | |||||||||||
Debt Disclosure [Abstract] | ' | ||||||||||
8. Capital Leases | ' | ||||||||||
8. Capital Leases | |||||||||||
The Company leases certain equipment under capital leases with terms ranging from four to five years. Future annual minimum lease payments are as follows as of June 30: | |||||||||||
2013 | 2012 | ||||||||||
2013 | $ | — | $ | 71,558 | |||||||
2014 | 54,501 | — | |||||||||
2015 | 54,501 | — | |||||||||
2016 | 36,241 | — | |||||||||
2017 | — | — | |||||||||
Total minimum lease payments | 145,243 | 71,558 | |||||||||
Less amount representing interest | — | — | |||||||||
Present value of future minimum lease payments | 145,243 | 71,558 | |||||||||
Less current portion of capital lease obligations | 54,501 | 71,558 | |||||||||
Capital lease obligations, net of current portion | $ | 90,742 | $ | — | |||||||
9_Line_of_Credit_and_Note_Paya
9. Line of Credit and Note Payable | 12 Months Ended |
Jun. 30, 2013 | |
Debt Disclosure [Abstract] | ' |
9. Line of Credit and Note Payable | ' |
9. Line of Credit and Note Payable | |
Pacific Western Bank: | |
The Company owed $0 and $253,128 plus accrued interest as of June 30, 2013 and 2012 respectively. | |
Main Credit: | |
As of June 30, 2013 the Company owed $20,753 principal, which sum was paid in full in July 2013. | |
TCA Global Master Credit Fund LLC (“TCA”): | |
The line of credit with Main Credit was replaced on April 30, 2013 with a line of credit from TCA up to the amount of $10 million. As of June 30, 2013, the Company has drawn $1,700,000 from the line of which $1,681,973 is outstanding as of June 30, 2013. Amounts drawn from the line of credit are subject to interest of 18% per annum and the loan matured on October 31, 2013 but was extended for a further six months. | |
The line of credit with Trafalgar Capital Advisors is secured by the receivables and inventory of Precision Aerospace and Technologhies, Inc.. and E. M. Tool Co. Inc. and a blanket lien over all of the group’s assets. |
10_Note_Payable
10. Note Payable | 12 Months Ended | ||||||||
Jun. 30, 2013 | |||||||||
Payables and Accruals [Abstract] | ' | ||||||||
10. Note Payable | ' | ||||||||
10. Note Payable | |||||||||
Notes payable as of June 30 consist of: | |||||||||
2013 | 2012 | ||||||||
Notes payable to a financial institution, secured by the underlying equipment in aggregate monthly installments of varying amounts, on a reducing balance method, with terms ranging from 48 to 50 months | 422,940 | $ | 253,129 | ||||||
An unsecured note payable to a corporation in respect of accounting software payable in monthly installments of $ 1,923. This note is now due and payable and is being negotiated with the company. | 46,811 | 46,811 | |||||||
An unsecured note payable to a corporation in respect of machines sold to us payable in monthly installments of $5,000 per month. This note was fully paid as of June 30, 2013. | — | 17,070 | |||||||
Two unsecured notes payable in the sum of $150,000, each, to a financial institution in full in November 2011 and March 31, 2012. The Company is currently in default and has negotiated to pay the notes in monthly installments of $20,000 commencing November 2012. | 354,459 | 300,000 | |||||||
An unsecured note payable to a corporation in weekday amounts of $700 increasing to $1,650in September 2013, and ending in December 2013, net of discount of $38,976 | 86,624 | — | |||||||
An unsecured note payable to a corporation in weekday amounts of $691.22 each and ending in December 2013, net of discount of $31,020. | 84,030 | — | |||||||
TOTAL | 994,864 | 617,010 | |||||||
Less - Current Portion | 675,961 | 597,261 | |||||||
Long Term Portion | $ | 318,903 | $ | 19,749 | |||||
2013 | $ | 675,961 | $ | 597,261 | |||||
2014 | 123,780 | 19,749 | |||||||
2015 | 123,780 | — | |||||||
2016 | 71,343 | — | |||||||
Thereafter | — | — | |||||||
$ | 994,864 | $ | 617,010 | ||||||
11_Litigation_Settlements_Paya
11. Litigation Settlements Payable | 12 Months Ended | ||||||||
Jun. 30, 2013 | |||||||||
Payables and Accruals [Abstract] | ' | ||||||||
12. Litigation Payable | ' | ||||||||
12. Litigation Payable: | |||||||||
Year Ended | Year Ended | ||||||||
Litigation payable consists of: | 30-Jun-13 | 30-Jun-12 | |||||||
An unsecured note payable to a | $ | 0 | $ | 48,316 | |||||
corporation in settlement of a lawsuit | |||||||||
payable on the refinance of the company's | |||||||||
equipment; expected to close in | |||||||||
October 2012. | |||||||||
An unsecured note payable to a | $ | 60,000 | $ | 60,000 | |||||
corporation in settlement of a lawsuit | |||||||||
Payable in 12 monthly payments of | |||||||||
$5,000 | |||||||||
An unsecured note payable to a corporation | $ | 0 | $ | 8225 | |||||
in settlement of a lawsuit payable in 12 | |||||||||
monthly installments of $1,000.00 | |||||||||
Unsecured notes payable to various | $ | 77,500 | $ | 0 | |||||
Parties in settlement of lawsuits payable | |||||||||
In full | |||||||||
$ | 137,500 | $ | 116,541 | ||||||
12_Commitments_and_Contingenci
12. Commitments and Contingencies | 12 Months Ended | ||||||
Jun. 30, 2013 | |||||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||||
12. Commitments and Contingencies | ' | ||||||
12. Commitments and Contingencies | |||||||
Leases | |||||||
The Company leased its manufacturing and office facilities under non-cancelable operating lease arrangements. | |||||||
Rent expense under operating leases was $460,565 and $383,932 for the years ended June 30, 2013 and 2012, respectively. | |||||||
Future rent under lease agreements for the next five years are as follows: | |||||||
2014 | $ | 457,410 | |||||
2015 | 471,132 | ||||||
2016 | 463,174 | ||||||
2017 | 472,508 | ||||||
Thereafter | 328,152 | ||||||
$ | 2,192,376 | ||||||
13_Litigation
13. Litigation | 12 Months Ended | ||
Jun. 30, 2013 | |||
Commitments and Contingencies Disclosure [Abstract] | ' | ||
13. Litigation | ' | ||
13. Litigation | |||
1 | James M. Cassidy v. Gateway International Holdings, Inc., American Arbitration Association, Case No. 73-194-32755-08. | ||
The Company was served with a Demand for Arbitration and Statement of Claim, which was filed on September 16, 2008. | |||
The Statement of Claim alleges that claimant is an attorney who performed services for the Company pursuant to an agreement dated April 2, 2007 between the Company and the claimant. The Statement of Claim alleges that the Company breached the agreement and seeks compensatory damages in the amount of $195,000 plus interest, attorneys’ fees and costs. Management denies the allegations of the Statement of Claim and will vigorously defend against these allegations. An arbitrator has not yet been selected, and a trial date has not yet been scheduled. | |||
No provision has been made in the June 30, 2013 financial statements with respect to this matter because the Company has assessed the litigation as having no merit and the likelihood of any liability pursuant to this litigation to be remote. | |||
2 | CNC Manufacturing v. All American CNC Sales, Inc., Elite Machine Tool Company/Sales & Services, CNC Repos, Superior Court for the State of California, County of Riverside, Case No. RIC 509650. | ||
Plaintiff filed this Complaint on October 2, 2008. | |||
The Complaint alleges causes of action for breach of contract and rescission and claims that All American breached the agreement with CNC Manufacturing by failing to deliver a machine that conforms to the specifications requested by CNC Manufacturing, and requests damages totaling $138,750. Elite Machine filed an answer timely, on January 15, 2009. | |||
Abstract of Judgment and Writ were issued August 17, 2012. | |||
A provision has been made in the June 30, 2013 financial statements with respect to this matter in the sum of $37,500. | |||
3 | Hwacheon Machinery v. All American CNC Sales, Circuit Court of the 19th Judicial Circuit, Lake County, Illinois, Case No. 09L544. | ||
The Complaint was filed on June 8, 2009. | |||
The Complaint alleges causes of action for account stated and arises from a claim by Hwacheon that All American CNC has not paid it for machines sold to All American CNC. The Complaint seeks damages of approximately $362,000. All American filed an answer on or about July 15, 2009. Default has been entered against All American CNC Sales, Inc. | |||
In a hearing in the Superior Court of California, Hwacheon filed an alter ego case against Eran Engineering, Inc. (currently known as Precision Aerospace and Technologies, Inc.), E.M. Tool Company, Inc. and M Line Holdings, Inc. The judge granted the summary judgment against all three defendants in the amount of $403,861, including interest through February 8, 2011. Post judgment proceedings have been initiated by Hwacheon. The Company and Eran Engineering, Inc. (currently known as Precision Aerospace and Technologies, Inc.) filed an appeal, which later was dismissed pursuant to settlement. | |||
The Company entered into a revised settlement agreement for a settlement in the total amount of $85,000, as of March 31, 2013, which was subsequently paid in full on April 30, 2013. | |||
A satisfaction of judgment has been filed in this matter. | |||
4 | Fadal Machining v. All American CNC Sales, et al., Los Angeles Superior Court, Los Angeles, California, Case No. BC415693. | ||
The Complaint was filed on June 12, 2009. | |||
The Complaint alleges causes of action for breach of contract and common counts against All American CNC seeking damages in the amount of at least $163,578.88, and arises from a claim by Fadal that All American failed to pay amounts due. On June 26, 2009, Fadal amended the Complaint to include M Line Holdings, Inc. as a Defendant. | |||
A settlement agreement in the amount of $60,000 was signed on May 31, 2011. | |||
The Company has made a provision in the sum of $60,000 in the financial statements as of June 30, 2013 but no payments that are due under the settlement agreement have been made. Judgment was entered on June 16, 2011, and a Writ was issued on February 24, 2012. | |||
5 | Fox Hills Machining v. CNC Repos, Orange County Superior Court, Orange County, California, Case No. 30-2009-00121514. | ||
The Complaint was filed on April 14, 2009. | |||
The Complaint alleges causes of action for Declaratory Relief, Breach of Contract, Fraud, Common Counts, and Negligent Misrepresentation, claiming the Defendant failed to pay Fox Hills Machining for the sale of two machines from Fox Hills to CNC Repos. The damages sought in the Complaint are estimated to be approximately $40,000. Court records show that a stipulated judgment was entered on August 27, 2012; a writ was issued on September 9, 2012. | |||
However, an agreement has been entered into with Fox Hills Machinery to pay off the judgment in the sum of $48,673. A sum of $40,000 has been paid in installments of $10,000 each effective November 8, 2013 with the final payment to be made on December 9, 2013. A provision of $48,673 was made for this matter in the June 30, 2013 financial statements, which was fully paid in December 2013. | |||
6 | C. William Kircher Jr. v. M Line Holdings, Inc. Orange County Superior Court Case No. 00397576 | ||
A former attorney for M Line Holdings, Inc. has sued seeking damages for failure to pay legal fees in the amount of $120,166.30. | |||
The parties reached a settlement. The terms of the settlement call for 12 payments of $5,000 per month commencing August 25, 2011 and the issuance of 150,000 shares of common stock. The Company has issued the 150,000 shares of common stock and made two payments to date. The Company has a provision in the sum of $50,000 in the financial statements as of June 30, 2013. | |||
The Company currently is in default of its payment obligations under the settlement. Plaintiff currently is seeking to obtain a judgment as a result of the breach of the settlement agreement. | |||
7 | Timothy D. Consalvi v. M Line Holdings, Inc. et.al., Orange County Superior Court Case No, 00308489. | ||
A former president of All American CNC Sales, Inc. has filed suit against the Company seeking payment on an alleged severance obligation by the Company. The Complaint does not specify the damages sought. The parties then reached a settlement in the principal sum of $40,000 to be documented in due course. Meanwhile a default was entered against the Company, which management believes was in error because a settlement was already reached by the principal parties involved. The default has since been vacated, and the Company has answered the complaint and has filed a motion for leave to file a cross complaint. | |||
A settlement of $50,000 was reached in this case, requiring payments commencing on March 11, 2011 for 10 months. The first two month’s payments were made; however, the Company currently is in default of the terms of this settlement agreement. Mr. Consalvi filed his stipulated judgment on March 5, 2012. Abstract of judgment and Writ were issued on March 13, 2012. | |||
A provision in the sum of $40,000 has been made in the financial statements as of June 30, 2013. | |||
To date there has been no further action on this case, and the Company plans to resolve this matter as soon as possible. | |||
8 | Joe Gledhill v. M Line Holdings, Inc., et. al.- Orange County Superior Court Case No. 30-2011-00506723 | ||
Joseph Gledhill, a former officer and director of the Company and its subsidiary, Eran Engineering, Inc. (currently known as Precision Aerospace and Technologies, Inc.), has filed suit within the Pacific Western case seeking indemnity of the Pacific Western claim and various other causes of action. Management has decided to vigorously defend these claims and believes Mr. Gledhill’s suit has no merit. This case has been dismissed. | |||
9 | M Line Holdings, Inc., v. Timothy Consalvi, et. al.- Orange County Superior Court Case No. 30-201100493329 | ||
The Company filed suit against two of its former directors alleging that they breached their fiduciary duties to the Company by mismanaging the corporate affairs of the Company and its subsidiaries, resulting in damages to the Company and its subsidiaries. The defendants were never served, and the defendants never answered the complaint. This case has been dismissed with prejudice. | |||
10 | All Direct Travel Services, Inc. v. Jitu Banker, M Line holdings, Inc., Airworks International, Inc., case number 30-2011-00472824-CL-CO-CJC | ||
This case was settled as to Jitu Banker and the Company for $2,000 payable on February 25, 2013. We do not yet have sufficient information to determine what the potential outcome of this may be or whether or to what extent it would or could have a financial impact on the Company. A default judgment was entered on January 6, 2012. | |||
11 | Douglas Technologies Group, Inc. v Elite Machine Tool Company and Lawrence Consalvi, et al., case number 30-2013-00657906-CU-FR-CJC. | ||
This suit was filed on June 20, 2013 in respect of an alleged deficiency in the machine supplied to Douglas Technologies. The Company decided to settle the lawsuit and thereby entered into a settlement agreement with the customer. | |||
This case was settled on November 5, 2013 for $50,000 requiring a commencing payment of $10,000 on November 15, 2013 with the balance being paid in 8 monthly installments of $5,000 each. | |||
12 | Donald Yu. v M Line Holdings, Inc., Anthony L Anish and Jitu Banker, et al., case number 30-2012-005-740-19-CU-BC-CJC. | ||
This suit was filed in respect of consulting services rendered to the Company. The Company decided to settle the lawsuit and thereby entered into a settlement agreement with Donald Yu. | |||
The case was settled on September 25, 2013 for $24,000 requiring two payments of $12,000 each, payable on September 30, 2013 and October 30, 2013. | |||
The Company made the first payment of $12,000 on September 30, 2013 but has not made the second payment due on October 30, 2013. | |||
A provision in the sum of $24,000 has been made in the financial statements as of June 30, 2013. | |||
13 | Alu Forge, Inc., dba American Handforge . v Jitu Banker, Precision Aerospace & Technologies, Inc., and M Line Holdings, Inc., et al., case number 30-2013-00670772-CL-BC-CJC. | ||
This suit was filed in respect of materials supplied to the Company. The Company decided to settle the lawsuit and thereby entered into a settlement agreement with the plaintiff. | |||
A provision in the sum of $19,500 has been made in the financial statements of the Company at June 30, 2013. | |||
The case was settled on October 31, 2013 for $19,500 with payments of $5,250 due on October 31, 2013, and $5,250 due on November 30, 2013 both of which have been paid with the balance of $9,000 due on December 31, 2013. | |||
14. Yates, Fontenot, Smith and Brum, LLC v M Line Holdings, Inc. (formerly Gateway International holdings, Inc.) et al; Case No. 30-2013-00630586 | |||
The above referenced matter is an unlawful detainer action comcerning the real property located at 2672 Dow | |||
Avenue, Tustin, California. The unlawful detainer action was filed against the Company by its landlord Yates, Fontenot et al on February 15, 2013. The action is pending in Orange County Superior Court. | |||
On or about September 2013, the parties settled the action for an agreed upon sum payable in installments through January 5, 2014. Assuming all payment obligations are made the plaintiff shall file a request for dismissal with prejudice of the entire action by March 14, 2014. | |||
A provision in the amount of $255,374 has been made in the financial statements as of June 30, 2013. | |||
Litigation is subject to inherent uncertainties, and unfavorable rulings could occur. If an unfavorable ruling were to occur in any of the above matters, there could be a material adverse effect on the Company’s financial condition, results of operations or liquidity. | |||
The related provisions for these litigations are reported under litigation payable and accrued expenses and other in the consolidated balance sheet. |
14_Income_Taxes
14. Income Taxes | 12 Months Ended | ||||||||
Jun. 30, 2013 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
14. Income Taxes | ' | ||||||||
14. Income Taxes | |||||||||
The provision (benefit) for income taxes is comprised of the following for the years ended June 30: | |||||||||
2013 | 2012 | ||||||||
Current tax expense | $ | — | $ | — | |||||
Federal | 360 | — | |||||||
State | 2,770 | 2,400 | |||||||
Deferred | (16,710 | ) | — | ||||||
$ | (13,580 | ) | $ | 2,400 | |||||
The benefit for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The differences between the federal statutory tax rate of 34% and the effective tax rates are primarily due to state income tax provisions, net operating loss (“NOL”) carry forwards, deferred tax valuation allowance and permanent differences as follows for the years ended June 30: | |||||||||
2013 | 2012 | ||||||||
Federal Tax at statutory rate | 34 | % | 34 | % | |||||
Permanent differences: | |||||||||
State Income Tax, net of federal benefit | 9 | % | 11 | % | |||||
Change in valuation allowance | (20 | )% | (34 | )% | |||||
Other | (23 | )% | (3 | )% | |||||
0 | % | 8 | % | ||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying value of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. | |||||||||
Deferred tax asset - current | 2013 | 2012 | |||||||
Allowances for bad debt | $ | 12,666 | $ | 14,816 | |||||
Reserve for inventories | 85,680 | 23,147 | |||||||
Accrued expenses | 12,884 | 14,281 | |||||||
Other | 15,390 | 14,311 | |||||||
126,620 | 66,555 | ||||||||
Non-Current: | |||||||||
Net operating loss carry forwards | 1,414,764 | 659,149 | |||||||
Depreciation | 9,767 | 25,767 | |||||||
Amortization of intangibles | 40,822 | 2,800 | |||||||
1,465,355 | 687,716 | ||||||||
Total deferred tax asset | 1,591,975 | 754,271 | |||||||
Valuation allowance | (1,591,975 | ) | (754,271 | ) | |||||
Net deferred tax asset | $ | — | $ | — | |||||
Miscellaneous deferred tax liability | |||||||||
Non-current | $ | — | $ | 16,710 | |||||
The Company’s income tax provision was computed based on the federal statutory rate and the average state statutory rates, net of the related federal benefit. As of June 30, 2013 and 2012 the Company had federal and state net operating loss (“NOL”) carry forwards of approximately $3.7 million and $550,000, respectively, net of Internal Revenue Code ("IRC") Section 382 limitations. If not used, these carry forwards will begin expiring between 2012 and 2021. These net operating losses are available to offset future regular and alternative minimum taxable income. | |||||||||
The Company has recorded as of June 30, 2013 a valuation allowance of $1,591,975, as it believes that it is more likely than not that the deferred tax assets will not be realizable in future years. Management has based its assessment on available historical and projected operating results. |
15_Shareholders_Equity_Disclos
15. Shareholders Equity Disclosure | 12 Months Ended | ||
Jun. 30, 2013 | |||
Equity [Abstract] | ' | ||
15. Shareholders Equity | ' | ||
15. Shareholders’ Equity | |||
The Company’s articles of incorporation authorize up to 100,000,000 shares of $0.001 par value common stock. Shares of common or preferential stock may be issued in one or more classes or series at such time as the Board of Directors determine. | |||
The Company’s articles of incorporation authorize up to 10,000,000 shares of $0.001 par value preferred stock. | |||
The Company designated 200,000 shares as Series A Preferred shares. The Series A preferred shares were issued to TCA Global Master Credit Fund LLC and valued for these purposes at $1 per share. | |||
During the year ended June 30, 2012, the Company issued the following shares of common stock: | |||
· | 3,650,000 common shares were issued to financial advisors and other parties in payment of services to the company. The Company valued the shares at the market price on the issuance date in the sum of $129,000. | ||
· | The Company also issued 4,237,500 common shares in lieu of salaries and expenses due on behalf of related parties. The shares were valued at $234,006 based on the market price. | ||
· | 412,800 common shares were issued to employees of the Company as a bonus in lieu of cash payments. The Company valued these shares at the market price on the issuance date in the sum of $11,000. | ||
During the year ended June 30, 2013, the company issued the following shares of common stock: | |||
· | 14,840,000 common shares were issued to financial advisors in payment of services to the company. The Company valued these shares at the market price on the issuance date in the sum of $267,942. | ||
· | The Company also issued 8,500,000 common shares in lieu of salaries and expenses due on behalf of related parties. The shares were valued at $168,700 based on the market price of the shares at the grant dates. | ||
During the year ended June 30, 2013, the Company issued 200,000 Series A Preferred shares to a lender in connection with the line of credit. | |||
Non-Qualified Stock Option Plan | |||
In November 2006, the Board approved a Non-Qualified Stock Option Plan for key managers, which, among other provisions, provides for the granting of options by the board at strike prices at or exceeding market value, and expiration periods of up to ten years. No stock options have been granted under this plan. |
16_Segments_and_Geographic_Inf
16. Segments and Geographic Information | 12 Months Ended | ||||||||||||||||
Jun. 30, 2013 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
16. Segments and Geographic Information | ' | ||||||||||||||||
16. Segments and Geographic Information | |||||||||||||||||
The Company’s segments consist of individual companies managed separately with each manager reporting to the Board. “Other” represents corporate functions. Sales, and operating or segment profit, are reflected net of inter-segment sales and profits. Segment profit is comprised of net sales less operating expenses and interest. Income taxes are not allocated and reported by segment since they are excluded from the measure of segment performance reviewed by management. | |||||||||||||||||
Segment information is as follows as of and for the years ended June 30, 2013 and 2012: | |||||||||||||||||
Machine Sales | Precision Manufacturing | Corporate | Total | ||||||||||||||
Revenue | 5,810,909 | 3,513,776 | — | $ | 9,324,685 | ||||||||||||
Interest expense | 44,913 | 266,400 | 186,052 | 497,365 | |||||||||||||
Depreciation and amortization | 3,000 | 166,745 | 3,787 | 173,532 | |||||||||||||
Loss before taxes | (55,673 | ) | (1,361,221 | ) | (2,989,954 | ) | (4,406,848 | ) | |||||||||
Total Assets | 1,077,202 | 2,384,185 | 235,702 | 3,697,089 | |||||||||||||
Capital Expenditure | — | 19,335 | — | $ | 19,335 | ||||||||||||
Segment Information for the year ended June 30, 2012 | |||||||||||||||||
Machine Sales | Precision Manufacturing | Corporate | Total | ||||||||||||||
Revenue | 5,929,967 | 4,247,482 | — | $ | 10,177,449 | ||||||||||||
Interest expense | 10,354 | 150,545 | 47,246 | 208,145 | |||||||||||||
Depreciation and amortization | 3,000 | 169,703 | 20,052 | 192,755 | |||||||||||||
Loss before taxes | (57,142 | ) | (670,597 | ) | (38,103 | ) | (765,842 | ) | |||||||||
Total Assets | 284,625 | 2,779,874 | 1,232,912 | 4,297,411 | |||||||||||||
Capital Expenditure | — | 337,191 | — | $ | 337,191 | ||||||||||||
Sales are derived principally from customers located within the United States | |||||||||||||||||
Long-lived assets consist of property, plant and equipment and intangible assets and are located within the United States. | |||||||||||||||||
2_Basis_of_Presentation_and_Si1
2. Basis of Presentation and Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||||
Jun. 30, 2013 | |||||||||||
Accounting Policies [Abstract] | ' | ||||||||||
Basis of Presentation | ' | ||||||||||
Basis of Presentation | |||||||||||
The accompanying financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. | |||||||||||
Principles of Consolidation | ' | ||||||||||
Principles of Consolidation | |||||||||||
The accompanying consolidated financial statements include the accounts of M Line Holdings, Inc. and its wholly-owned subsidiaries: Elite and Precision. All intercompany accounts and transactions have been eliminated. | |||||||||||
Business Segments | ' | ||||||||||
Business Segments | |||||||||||
FASB ASC Topic 280: Segment Reporting (“ASC 280”) requires the determination of reportable business segments (i.e., the management approach). This approach requires that business segment information used by the chief operating decision maker to assess performance and manage company resources be the source for segment information disclosure. The Company operates in two reportable segments consisting of (1) Machine Sales and (2) Precision Manufacturing. | |||||||||||
Concentrations of Credit Risks | ' | ||||||||||
Concentrations of Credit Risks | |||||||||||
Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and cash equivalents and trade accounts receivable. The Company invests its cash balances through high-credit quality financial institutions. From time to time, the Company maintains bank account levels in excess of FDIC insurance limits. If the financial institutions in which the Company has its accounts have financial difficulties, the Company’s cash balances could be at risk. | |||||||||||
Sales from significant customers representing 10% or more of sales consist of the following customers for the years ended June 30: | |||||||||||
Year Ended June 30, 2013 | Year Ended June 30, 2012 | ||||||||||
Percent of Sales | 17 | % | 23 | % | |||||||
Number of Customers | 1 | 1 | |||||||||
Accounts receivable from this customer at June 30, 2013 and 2012 were $254,727 and $354,589, respectively. | |||||||||||
As a result of the Company's concentration of its customer base and industries served, the loss or cancellation of business from, or significant changes in scheduled deliveries of product sold to the above customers or a change in their financial position could materially and adversely affect the Company's consolidated financial position, results of operations and cash flows. | |||||||||||
One customer, included in the Precision Manufacturing segment represents a significant concentration. Sales to this customer as a percentage of sales within the Precision Manufacturing Segment are as follows for the years ended June 30: | |||||||||||
Year ended June 30, | |||||||||||
2013 | 2012 | ||||||||||
% of segment sales significant customer sales concentration | 45 | 54 | |||||||||
Accounts receivable from this customer at June 30, 2013 and 2012 were $254,757 and $354,589 respectively. | |||||||||||
The Company’s Precision Manufacturing segment operates a single manufacturing facility located in Tustin, California. A major interruption in the manufacturing operations at this facility would have a material adverse effect on the consolidated financial position and results of operations of the Company. | |||||||||||
Use of Estimates | ' | ||||||||||
Use of Estimates | |||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of sales and expenses during the reporting period. Significant estimates made by management are, among others, realization of inventories, collectability of accounts receivable, litigation, impairment of goodwill, and long-lived assets other than goodwill. Actual results could materially differ from those estimates. | |||||||||||
Cash and Cash Equivalents | ' | ||||||||||
Cash and Cash Equivalents | |||||||||||
The Company considers all highly liquid investments with insignificant interest rate risk and original maturities of three months or less from the date of purchase to be cash equivalents. The carrying amounts of cash and cash equivalents approximate their fair values. The Company maintains cash and cash equivalents balances at certain financial institutions in excess of amounts insured by federal agencies. Management does not believe that as a result of this concentration, it is subject to any unusual financial risk beyond the normal risk associated with commercial banking relationships. | |||||||||||
Accounts Receivable | ' | ||||||||||
Accounts Receivable | |||||||||||
The Company performs periodic credit evaluations and continually monitors its collection of amounts due from its customers. The Company adjusts credit limits and payment terms granted to its customers based upon payment history and the customer's current creditworthiness. The Company does not require collateral from its customers to secure amounts due from them. The Company regularly reviews its accounts receivable and collection of these balances subsequent to each of these periods. The Company maintains reserves for potential credit losses, and historically, such losses have been within management expectations. As of June 30, 2013 and 2012, accounts receivable totals were $990,010 and $794,317, net of an allowance for bad debt expense of $29,566 and $47,193 respectively. | |||||||||||
Inventories | ' | ||||||||||
Inventories | |||||||||||
Inventories are stated at the lower of cost or market, cost being determined using the first in, first out (“FIFO”) method. The Company provides inventory reserves for obsolescence and other matters based on management’s review of current inventory levels. The Company includes labor and overhead costs directly associated with manufacturing its products in inventory costs. | |||||||||||
Deferred financing fees | ' | ||||||||||
Deferred financing fees | |||||||||||
The Company incurs costs in connection with its line of credit which may consist of legal, finders and due diligence fees. Such costs are deferred and amortized to interest expense over the term of the line of credit. As of June 30, 2013, the Company incurred deferred financing costs of $299,274 of which $99,758 has been amortized to interest expense for the year ended June 30, 2013. | |||||||||||
Property and Equipment | ' | ||||||||||
Property and Equipment | |||||||||||
Property and equipment is stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Equipment under capital lease obligations is depreciated over the estimated useful life of the asset. Leasehold improvements are amortized over the shorter of the estimated useful life or the term of the lease. Repairs and maintenance are expensed as incurred, while improvements are capitalized. Upon the sale or retirement of property and equipment, the accounts are relieved of the cost and the related accumulated depreciation, which any resulting gain or loss included in the consolidated statements of operations. | |||||||||||
Long-Lived Assets | ' | ||||||||||
Long-Lived Assets | |||||||||||
The Company reviews its fixed assets and certain identifiable intangibles with definite lives for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted operating cash flow expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset or discounted cash flows. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. | |||||||||||
Based on management’s review, the Company determined that there was no impairment to its long-live assets for the years ended June 30, 2013 and 2012. | |||||||||||
Income Taxes | ' | ||||||||||
Income Taxes | |||||||||||
The Company accounts for income taxes in accordance with FASB ASC Topic 740-10, Income Taxes, (“ASC 740”) which requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the differences between the financial statement and the tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense represents the tax payable for the period and the change during the period in deferred tax assets and liabilities. | |||||||||||
The Company accounts for uncertain tax positions in accordance with ASC 740, which prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return and also provides guidance on various related matters such as derecognition, interest, penalties and disclosures required. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense. | |||||||||||
Contingencies and Litigation | ' | ||||||||||
Contingencies and Litigation | |||||||||||
The Company evaluates contingent liabilities including threatened or pending litigation. Management assesses the likelihood of any adverse judgments or outcomes to a potential claim or legal proceeding, as well as potential ranges of probable losses, when the outcomes of the claims or proceedings are probable and reasonably estimable. A determination of the amount of accrued liabilities required, if any, for these contingencies is made after the analysis of each matter. Because of uncertainties related to these matters, management bases its estimates on the information available at the time. As additional information becomes available, management reassess the potential liability related to its pending claims and litigation and may revise our estimates. Any revisions in the estimates of potential liabilities could have a material impact on the results of operations and financial position. | |||||||||||
Revenue Recognition | ' | ||||||||||
Revenue Recognition | |||||||||||
The Company recognizes revenue in accordance with Staff Accounting Bulletin No. 104 “Revenue Recognition”. Revenue is recognized at the date of shipment to customers when; a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist, and collectability is reasonably assured. | |||||||||||
Revenues generated from the Precision Manufacturing segment consist of manufactured parts and in some instances, assembly of these items based on detailed engineering specifications received by the Company from the customer. The Company generally begins to manufacture the parts upon the receipt and acceptance of a purchase order which specifies the quantity, price and delivery dates such products are required to be shipped within. Prior to shipment, physical inspection of the parts is performed to ensure specifications meet the engineering requirements. Historically, customer returns have been inconsequential. | |||||||||||
Revenues generated from the sales of new and pre-owned Computer Numerically Controlled machines from the Machine Tools segment are based on the acceptance of a purchase order and the customer’s acknowledgement of the Company’s terms and conditions which specifies the shipping terms, payment terms and the warranty period, if any. In certain instances, the Company may perform installation services including the leveling of the machine, which is inconsequential. Under agreements with certain new equipment manufacturers, a ninety day warranty is provided to customers whereby the manufacturer is responsible for any replacement parts and the Company is responsible for the installation of the parts. In certain instances, the Company provides warranties for used equipment for periods ranging up to thirty days. Historically, warranty costs have been inconsequential. Generally, the Company does not accept returns of equipment. Warranty expense, included in cost of sales, for the years ended June 30, 2013 and 2012 amounted to $68,364 and $35,047, respectively. | |||||||||||
Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as customer deposits. | |||||||||||
Advertising | ' | ||||||||||
Advertising | |||||||||||
The Company expenses the cost of advertising when incurred as selling expenses. Advertising expenses were $17,901 and $7,685, for the years ended June 30, 2013 and 2012, respectively. | |||||||||||
Stock-Based Compensation | ' | ||||||||||
Stock-Based Compensation | |||||||||||
The Company accounts for share-based awards issued to employees in accordance with FASB ASC 718. Accordingly, employee share-based payment compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period or vesting period. Additionally, share-based awards to non-employees are expensed over the period in which the related services are rendered at their fair value. | |||||||||||
Net Income (Loss) per Share | ' | ||||||||||
Net Loss per Share | |||||||||||
Basic net loss per share is calculated by dividing net loss by the Company’s weighted average common shares outstanding during the period. Diluted net income per share reflects the potential dilution to basic earnings per share that could occur upon conversion or exercise of securities, options or other such items to common shares using the treasury stock method, based upon the Company’s weighted average fair value of the common shares during the period. The weighted average number of shares used to compute basis and dilute loss per share is the same as the effect of potential dilutive securities is anti-dilutive. | |||||||||||
Fair Value of Financial Instruments | ' | ||||||||||
Fair Value of Financial Instruments | |||||||||||
The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, line of credit and notes payable approximates fair value due to the immediate or short-term maturity of these financial instruments. The fair value of long-term notes approximates the carrying amounts based upon the expected borrowing rate for debt with similar remaining maturities and comparable risk. | |||||||||||
Reclassification | ' | ||||||||||
Reclassification | |||||||||||
Certain reclassification has been made to the previous year’s financial statements to conform to current year presentation with no effect on previously reported net loss. | |||||||||||
Recent Accounting Pronouncements | ' | ||||||||||
Recent Accounting Pronouncements | |||||||||||
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
2_Basis_of_Presentation_and_Si2
2. Basis of Presentation and Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||
Jun. 30, 2013 | |||||||||||
Accounting Policies [Abstract] | ' | ||||||||||
Concentrations of Credit Risk | ' | ||||||||||
Year Ended June 30, 2013 | Year Ended June 30, 2012 | ||||||||||
Percent of Sales | 17 | % | 23 | % | |||||||
Number of Customers | 1 | 1 | |||||||||
Accounts receivable from this customer at June 30, 2013 and 2012 were $254,727 and $354,589, respectively. | |||||||||||
As a result of the Company's concentration of its customer base and industries served, the loss or cancellation of business from, or significant changes in scheduled deliveries of product sold to the above customers or a change in their financial position could materially and adversely affect the Company's consolidated financial position, results of operations and cash flows. | |||||||||||
One customer, included in the Precision Manufacturing segment represents a significant concentration. Sales to this customer as a percentage of sales within the Precision Manufacturing Segment are as follows for the years ended June 30: | |||||||||||
Year ended June 30, | |||||||||||
2013 | 2012 | ||||||||||
% of segment sales significant customer sales concentration | 45 | 54 |
4_Inventories_Tables
4. Inventories (Tables) | 12 Months Ended | ||||||||
Jun. 30, 2013 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventories | ' | ||||||||
2013 | 2012 | ||||||||
Finished goods and components | 971,099 | $ | 1,157,918 | ||||||
CNC machines held for sale | 364,583 | 116,000 | |||||||
Work in progress | 415,108 | 387,969 | |||||||
Raw materials and parts | 5,120 | 5,632 | |||||||
1,755,910 | 1,667,519 | ||||||||
Less: Reserve for inventories | (200,000 | ) | (58,108 | ) | |||||
Inventories, net. | 1,555,910 | $ | 1,609,411 | ||||||
6_Property_and_Equipment_Table
6. Property and Equipment (Tables) | 12 Months Ended | ||||||||||||
Jun. 30, 2013 | |||||||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||||||
Property and Equipment | ' | ||||||||||||
Estimated Useful life (in years) | 2013 | 2012 | |||||||||||
Machinery and equipment | 7 | $ | 2,603,313 | $ | 2,435,611 | ||||||||
Fixtures, fixtures and office equipment | 3 to 5 | 341,308 | 321,973 | ||||||||||
Vehicles | 5 | 23,276 | 23,276 | ||||||||||
Leasehold improvements | 3 | 105,298 | 105,298 | ||||||||||
3,073,195 | 2,886,158 | ||||||||||||
Less - accumulated depreciation | (2,516,640 | ) | (2,343,108 | ) | |||||||||
Property and equipment net. | $ | 556,555 | $ | 543,050 | |||||||||
7_Accrued_Expenses_and_Other_T
7. Accrued Expenses and Other (Tables) | 12 Months Ended | ||||||||
Jun. 30, 2013 | |||||||||
Other Income and Expenses [Abstract] | ' | ||||||||
Accrued Expenses | ' | ||||||||
2013 | 2012 | ||||||||
Compensation and related benefits | 1,934,314 | $ | 993,077 | ||||||
Audit fees | 72,500 | 77,500 | |||||||
Other | 781,883 | 243,488 | |||||||
2,788,697 | $ | 1,314,065 |
8_Capital_Leases_Tables
8. Capital Leases (Tables) | 12 Months Ended | ||||||||||
Jun. 30, 2013 | |||||||||||
Debt Disclosure [Abstract] | ' | ||||||||||
Future Minimum Lease Payments for Capital Leases | ' | ||||||||||
2013 | 2012 | ||||||||||
2013 | $ | — | $ | 71,558 | |||||||
2014 | 54,501 | — | |||||||||
2015 | 54,501 | — | |||||||||
2016 | 36,241 | — | |||||||||
2017 | — | — | |||||||||
Total minimum lease payments | 145,243 | 71,558 | |||||||||
Less amount representing interest | — | — | |||||||||
Present value of future minimum lease payments | 145,243 | 71,558 | |||||||||
Less current portion of capital lease obligations | 54,501 | 71,558 | |||||||||
Capital lease obligations, net of current portion | $ | 90,742 | $ | — | |||||||
10_Note_Payable_Tables
10. Note Payable: (Tables) | 12 Months Ended | ||||||||
Jun. 30, 2013 | |||||||||
Payables and Accruals [Abstract] | ' | ||||||||
Notes Payable | ' | ||||||||
Notes payable as of June 30 consist of | |||||||||
2013 | 2012 | ||||||||
Notes payable to a financial institution, secured by the underlying equipment in aggregate monthly installments of varying amounts, on a reducing balance method, with terms ranging from 48 to 50 months | 422,940 | $ | 253,129 | ||||||
An unsecured note payable to a corporation in respect of accounting software payable in monthly installments of $ 1,923. This note is now due and payable and is being negotiated with the company. | 46,811 | 46,811 | |||||||
An unsecured note payable to a corporation in respect of machines sold to us payable in monthly installments of $5,000 per month. This note was fully paid as of June 30, 2013. | — | 17,070 | |||||||
Two unsecured notes payable in the sum of $150,000, each, to a financial institution in full in November 2011 and March 31, 2012. The Company is currently in default and has negotiated to pay the notes in monthly installments of $20,000 commencing November 2012. | 354,459 | 300,000 | |||||||
An unsecured note payable to a corporation in weekday amounts of $700 increasing to $1,650in September 2013, and ending in December 2013, net of discount of $38,976 | 86,624 | — | |||||||
An unsecured note payable to a corporation in weekday amounts of $691.22 each and ending in December 2013, net of discount of $31,020. | 84,030 | — | |||||||
TOTAL | 994,864 | 617,010 | |||||||
Less - Current Portion | 675,961 | 597,261 | |||||||
Long Term Portion | $ | 318,903 | $ | 19,749 | |||||
2013 | $ | 675,961 | $ | 597,261 | |||||
2014 | 123,780 | 19,749 | |||||||
2015 | 123,780 | — | |||||||
2016 | 71,343 | — | |||||||
Thereafter | — | — | |||||||
$ | 994,864 | $ | 617,010 | ||||||
11_Litigation_Settlements_Paya1
11. Litigation Settlements Payable (Tables) | 12 Months Ended | ||||||||
Jun. 30, 2013 | |||||||||
Payables and Accruals [Abstract] | ' | ||||||||
Litigation Settlements Payable | ' | ||||||||
Litigation payable at June 30 consists of: | 2013 | 2012 | |||||||
An unsecured note payable to a | $ | — | $ | 48,316 | |||||
corporation in settlement of a lawsuit | |||||||||
payable on the refinance of the Company's | |||||||||
equipment; fully paid in 2013 | |||||||||
An unsecured note payable to a | 60,000 | 60,000 | |||||||
corporation in settlement of a lawsuit | |||||||||
payable in 12 monthly payments of | |||||||||
$5,000 | |||||||||
An unsecured note payable to a corporation | — | 8,225 | |||||||
in settlement of a lawsuit payable in 12 | |||||||||
monthly installments of $1,000, fully paid in 2013 | |||||||||
Unsecured notes payable to various | 77,500 | — | |||||||
parties in settlement of lawsuits payable | |||||||||
in full | |||||||||
$ | 137,500 | $ | 116,541 | ||||||
12_Commitments_and_Contingenci1
12. Commitments and Contingencies (Tables) | 12 Months Ended | ||||||
Jun. 30, 2013 | |||||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||||
Future Rent Under Lease Agreements | ' | ||||||
2014 | $ | 457,410 | |||||
2015 | 471,132 | ||||||
2016 | 463,174 | ||||||
2017 | 472,508 | ||||||
Thereafter | 328,152 | ||||||
$ | 2,192,376 |
14_Income_Taxes_Tables
14. Income Taxes (Tables) | 12 Months Ended | ||||||||
Jun. 30, 2013 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Provision (Benefit) For Income Taxes | ' | ||||||||
2013 | 2012 | ||||||||
Current tax expense | $ | — | $ | — | |||||
Federal | 360 | — | |||||||
State | 2,770 | 2,400 | |||||||
Deferred | (16,710 | ) | — | ||||||
$ | (13,580 | ) | $ | 2,400 | |||||
Income Tax Rate Reconciliation | ' | ||||||||
2013 | 2012 | ||||||||
Federal Tax at statutory rate | 34 | % | 34 | % | |||||
Permanent differences: | |||||||||
State Income Tax, net of federal benefit | 9 | % | 11 | % | |||||
Change in valuation allowance | (20 | )% | (34 | )% | |||||
Other | (23 | )% | (3 | )% | |||||
0 | % | 8 | % | ||||||
Deferred Tax Assets and Liabilties | ' | ||||||||
Deferred tax asset - current | 2013 | 2012 | |||||||
Allowances for bad debt | $ | 12,666 | $ | 14,816 | |||||
Reserve for inventories | 85,680 | 23,147 | |||||||
Accrued expenses | 12,884 | 14,281 | |||||||
Other | 15,390 | 14,311 | |||||||
126,620 | 66,555 | ||||||||
Non-Current: | |||||||||
Net operating loss carry forwards | 1,414,764 | 659,149 | |||||||
Depreciation | 9,767 | 25,767 | |||||||
Amortization of intangibles | 40,822 | 2,800 | |||||||
1,465,355 | 687,716 | ||||||||
Total deferred tax asset | 1,591,975 | 754,271 | |||||||
Valuation allowance | (1,591,975 | ) | (754,271 | ) | |||||
Net deferred tax asset | $ | — | $ | — | |||||
Miscellaneous deferred tax liability | |||||||||
Non-current | $ | — | $ | 16,710 |
16_Segments_and_Geographic_Inf1
16. Segments and Geographic Information (Tables) | 12 Months Ended | ||||||||||||||||
Jun. 30, 2013 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
Segment Reporting Information | ' | ||||||||||||||||
Machine Sales | Precision Manufacturing | Corporate | Total | ||||||||||||||
Revenue | 5,810,909 | 3,513,776 | — | $ | 9,324,685 | ||||||||||||
Interest expense | 44,913 | 266,400 | 186,052 | 497,365 | |||||||||||||
Depreciation and amortization | 3,000 | 166,745 | 3,787 | 173,532 | |||||||||||||
Loss before taxes | (55,673 | ) | (1,361,221 | ) | (2,989,954 | ) | (4,406,848 | ) | |||||||||
Total Assets | 1,077,202 | 2,384,185 | 235,702 | 3,697,089 | |||||||||||||
Capital Expenditure | — | 19,335 | — | $ | 19,335 | ||||||||||||
Segment Information for the year ended June 30, 2012 | |||||||||||||||||
Machine Sales | Precision Manufacturing | Corporate | Total | ||||||||||||||
Revenue | 5,929,967 | 4,247,482 | — | $ | 10,177,449 | ||||||||||||
Interest expense | 10,354 | 150,545 | 47,246 | 208,145 | |||||||||||||
Depreciation and amortization | 3,000 | 169,703 | 20,052 | 192,755 | |||||||||||||
Loss before taxes | (57,142 | ) | (670,597 | ) | (38,103 | ) | (765,842 | ) | |||||||||
Total Assets | 284,625 | 2,779,874 | 1,232,912 | 4,297,411 | |||||||||||||
Capital Expenditure | — | 337,191 | — | $ | 337,191 |
2_Basis_of_Presentation_and_Si3
2. Basis of Presentation and Significant Accounting Policies - Concentrations of Credit Risk (Details) | 12 Months Ended | |
Jun. 30, 2013 | Jun. 30, 2012 | |
Percent of sales | 17.00% | 23.00% |
Number of customer | 1 | 1 |
custom:PrecisionManufacturingSegmentMember | ' | ' |
Percent of sales | 45.00% | 54.00% |
2_Basis_of_Presentation_and_Si4
2. Basis of Presentation and Significant Accounting Policies (Details Narrative) (USD $) | 12 Months Ended | |
Jun. 30, 2013 | Jun. 30, 2012 | |
Accounts Receivable, Credit Risk | $254,727 | $354,589 |
Accounts Receivable, Net | 990,010 | 794,317 |
Bad Debt Expense | 29,566 | 47,193 |
Deferred Financing Costs | 299,274 | ' |
Amortization of Deferred Financing Costs | 99,758 | ' |
Product Warranty Expense | 68,364 | 35,047 |
Advertising Expenses | 17,901 | 7,685 |
custom:PrecisionManufacturingSegmentMember | ' | ' |
Accounts Receivable, Credit Risk | $254,757 | $354,589 |
3_Going_Concern_and_Management1
3. Going Concern and Management Plans. (Details Narrative) (USD $) | Jun. 30, 2013 | Jun. 30, 2012 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ' |
Accumulated Deficit | ($14,444,371) | ($10,051,103) |
4_Inventories_Inventories_Deta
4. Inventories - Inventories (Details) (USD $) | Jun. 30, 2013 | Jun. 30, 2012 |
Inventory Disclosure [Abstract] | ' | ' |
Finished Goods and Components | $971,099 | $1,157,918 |
CNC Machines held for sale | 364,583 | 116,000 |
Work in Progress | 415,108 | 387,969 |
Raw Materials and Parts | 5,120 | 5,632 |
Inventory, Gross | 1,755,910 | 1,667,519 |
Less: Reserve for inventories | -200,000 | -58,108 |
Inventories, net. | $1,555,910 | $1,609,411 |
5_Related_Parties_Details_Narr
5. Related Parties (Details Narrative) (USD $) | 12 Months Ended | |
Jun. 30, 2013 | Jun. 30, 2012 | |
Related Party Transactions [Abstract] | ' | ' |
Due From Related Parties | $99,348 | $1,176,229 |
Account Receivable Write-Offs | 1,446,067 | ' |
Due to Officers | 43,454 | ' |
Due From Officers | $83,348 | ' |
6_Property_and_Equipment_Prope
6. Property and Equipment - Property and Equipment (Details) (USD $) | 12 Months Ended | |
Jun. 30, 2013 | Jun. 30, 2012 | |
Property, Plant and Equipment, Gross | $3,073,195 | $2,886,158 |
Less accumulated depreciation | 2,516,640 | 2,343,108 |
Property, Plant and Equipment, Net | 556,555 | 543,050 |
Machinery and Equipment | ' | ' |
Property, Plant and Equipment, Gross | 2,603,313 | 2,435,611 |
Property Plant and Equipment Useful Life | '7 years | ' |
Fixtures, Fixtures and Office Equipment | ' | ' |
Property, Plant and Equipment, Gross | 341,308 | 321,973 |
Property Plant and Equipment Useful Life | '3 years | ' |
Vehicles | ' | ' |
Property, Plant and Equipment, Gross | 23,276 | 23,276 |
Property Plant and Equipment Useful Life | '5 years | ' |
Leasehold Improvements | ' | ' |
Property, Plant and Equipment, Gross | $105,298 | $105,298 |
Property Plant and Equipment Useful Life | '3 years | ' |
6_Property_and_Equipment_Detai
6. Property and Equipment (Details Narrative) (USD $) | 12 Months Ended | |
Jun. 30, 2013 | Jun. 30, 2012 | |
Property, Plant and Equipment [Abstract] | ' | ' |
Depreciation Expense | $173,532 | $192,755 |
Amortization of Intangible Assets | ' | $31,952 |
7_Accrued_Expenses_and_Other_A
7. Accrued Expenses and Other - Accrued Expenses (Details) (USD $) | Jun. 30, 2013 | Jun. 30, 2012 |
Other Income and Expenses [Abstract] | ' | ' |
Compensation and related benefits | $1,934,314 | $993,077 |
Audit Fees | 72,500 | 77,500 |
Other | 781,883 | 243,488 |
Accrued Liabilities and Other Liabilities | $2,788,697 | $1,314,065 |
9_Capital_Leases_Future_Minimu
9. Capital Leases - Future Minimum Lease Payments for Capital Leases (Details) (USD $) | Jun. 30, 2013 | Jun. 30, 2012 |
Debt Disclosure [Abstract] | ' | ' |
2012 | ' | $71,558 |
2013 | 54,501 | ' |
2014 | 54,501 | ' |
2015 | 36,241 | ' |
2016 | ' | ' |
Total minimum lease payments | 145,243 | 71,558 |
Less amount representing interest | ' | ' |
Present value of future minimum lease payments | 145,243 | 71,558 |
Less current portion of capital lease obligations | 54,501 | 71,556 |
Capital Lease obligations, net of current portion | $90,742 | ' |
9_Line_of_Credit_and_Note_Paya1
9. Line of Credit and Note Payable(Details Narrative) (USD $) | 12 Months Ended | |
Jun. 30, 2013 | Jun. 30, 2012 | |
Debt Disclosure [Abstract] | ' | ' |
Principal Amount Owed, Main Credit | $20,753 | ' |
Line of Credit Assumed | 270,000 | ' |
Line of Credit, Amount Drawn | 1,700,000 | ' |
Line of Credit, Amount Outstanding | 1,681,973 | ' |
Line of Credit, Interest Rate | 18.00% | ' |
Note Payable | $0 | $253,128 |
10_Note_Payable_Notes_Payable_
10. Note Payable - Notes Payable (Details) (USD $) | Jun. 30, 2013 | Jun. 30, 2012 |
TOTAL | $994,864 | $617,010 |
Less: Current Portion | 675,961 | 597,261 |
Long Term Portion | 318,903 | 19,749 |
2013 | 675,961 | 597,261 |
2014 | 123,780 | 19,749 |
2015 | 123,780 | ' |
2016 | 71,343 | ' |
Thereafter | ' | ' |
Long Term Debt Maturities Repayements | 994,864 | 617,010 |
Notes Payable to Financial Institution | ' | ' |
TOTAL | 422,940 | 253,129 |
Unsecured Note Payable to Corporation, Software | ' | ' |
TOTAL | 46,811 | 46,811 |
Unsecured Note Payable to Corporation, Machines | ' | ' |
TOTAL | ' | 17,070 |
Two Unsecured Notes Payalbe to Financial Institutions | ' | ' |
TOTAL | 354,459 | 300,000 |
Unsecured Note Corporation 1 | ' | ' |
TOTAL | 86,624 | ' |
Unsecured Note Corporation 2 | ' | ' |
TOTAL | $84,030 | ' |
11_Litigation_Settlements_Paya2
11. Litigation Settlements Payable - Litigation Settlements Payable (Details) (USD $) | Jun. 30, 2013 | Jun. 30, 2012 |
Litigation payable | $137,500 | ' |
Unsecured Note Corporation 1 | ' | ' |
Litigation payable | ' | 48,316 |
Unsecured Note Corporation 2 | ' | ' |
Litigation payable | 60,000 | 60,000 |
Unsecured Note Corporation 3 | ' | ' |
Litigation payable | ' | 8,225 |
Unsecured Note Various Parties | ' | ' |
Litigation payable | $77,500 | ' |
12_Commitments_and_Contingenci2
12. Commitments and Contingencies - Future Rent Under Lease Agreements (Details) (USD $) | Jun. 30, 2013 |
Commitments and Contingencies Disclosure [Abstract] | ' |
2014 | $457,410 |
2015 | 471,132 |
2016 | 463,174 |
2017 | 472,508 |
Thereafter | 328,152 |
Total | $2,192,376 |
12_Commitments_and_Contingenci3
12. Commitments and Contingencies (Details Narrative) (USD $) | 12 Months Ended | |
Jun. 30, 2013 | Jun. 30, 2012 | |
Commitments and Contingencies Disclosure [Abstract] | ' | ' |
Rent Expense | $460,565 | $383,932 |
13_Litigation_Details_Narrativ
13. Litigation (Details Narrative) (USD $) | Jun. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2013 |
James M. Cassidy V. Gateway International Holdings, Inc [Member] | Cnc Manufacturing V. All American Cnc Sales, Inc., [Member] | Fox Hills Machining V. Cnc Repos [Member] | Hwacheon Machinery V. All American Cnc Sales [Member] | Fadal Machining V. All American Cnc Sales, Et Al., [Member] | Timothy D Consalviv M Line Holdings Incetal [Member] | C. William Kircher Jr. V M Line Holdings, Inc. [Member] | All Direct Travel Services Inc. Vs Jitu Banker [Member] | Douglas Technologies v Elite Machine Tool Co | Donald Yu v M Line Holdings | Alu Forge v Jitu Banker | Yates Fontenot Smith and Brum v MLine | ||
Loss Contingency, Lawsuit Filing Date | ' | 'September 16, 2008 | 'October 2, 2008 | 'April 14, 2009 | 'June 8, 2009 | 'June 12, 2009 | ' | ' | ' | 'June 30, 2013 | ' | ' | 'February 15, 2013 |
Loss Contingency, Damages Sought, Value | ' | $195,000 | $138,750 | $40,000 | $362,000 | $163,579 | $40,000 | ' | ' | ' | ' | ' | ' |
Litigation payable | 137,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,000 | ' |
Loss Contingency Damages Awarded Value | ' | ' | 37,500 | 48,673 | 403,861 | ' | ' | ' | ' | 50,000 | 24,000 | ' | ' |
Loss Contingency, Settlement Agreement, Date | ' | ' | 'June 30, 2013 | ' | 'March 31, 2013 | 'May 31, 2011 | ' | ' | ' | 'November 5, 2013 | 'September 25, 2013 | 'October 31, 2013 | ' |
Loss Contingency Settlement Agreement Consideration 1 | ' | ' | ' | ' | 85,000 | ' | ' | ' | ' | ' | ' | 19,500 | ' |
Loss Contingency Settlement Agreement Periodic Payments | ' | ' | ' | 10,000 | ' | ' | ' | 5,000 | ' | 5,000 | 12,000 | 5,250 | ' |
Loss Contingency, Settlement Agreement, Terms | ' | ' | ' | ' | ' | 'A settlement agreement in the amount of $60,000 was signed on May 31, 2011. | ' | 'The terms of the settlement call for 12 payments of $5,000 per month commencing August 25, 2011 and the issuance of 150,000 shares of common stock. | ' | 'This case was settled on November 5, 2013 for $50,000 requiring a commencing payment of $10,000 on November 15, 2013. | ' | ' | ' |
Loss Contingency Damages Paid Value | ' | ' | ' | 40,000 | ' | ' | ' | 10,000 | ' | ' | 12,000 | ' | ' |
Legal Fees | ' | ' | ' | ' | ' | ' | ' | 120,166 | ' | ' | ' | ' | ' |
Shares issued for deposit (in shares) | ' | ' | ' | ' | ' | ' | ' | 150,000 | ' | ' | ' | ' | ' |
Loss Contingency Accrual, Carrying Value, Payments | ' | ' | ' | ' | ' | ' | 50,000 | ' | ' | ' | ' | ' | ' |
Loss Contingency, Estimate of Possible Loss | ' | ' | ' | ' | ' | ' | ' | ' | 2,000 | ' | ' | ' | ' |
Loss Contingency Accrual, Carrying Value, Provision | ' | ' | ' | $48,673 | ' | $60,000 | $40,000 | $50,000 | ' | ' | ' | $19,500 | $255,374 |
14_Income_Taxes_Provision_Bene
14. Income Taxes - Provision (Benefit) For Income Taxes (Details) (USD $) | 12 Months Ended | |
Jun. 30, 2013 | Jun. 30, 2012 | |
Income Tax Disclosure [Abstract] | ' | ' |
Current tax expense | ' | ' |
Federal | 360 | ' |
State | 2,770 | 2,400 |
Deferred Federal | -16,710 | ' |
Income Tax Expense Total | ($13,580) | $2,400 |
14_Income_Taxes_Income_Tax_Rat
14. Income Taxes - Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Jun. 30, 2013 | Jun. 30, 2012 | |
Income Tax Disclosure [Abstract] | ' | ' |
Federal Tax at statury rate | 34.00% | 34.00% |
Permanent differences: | ' | ' |
State Income Tax, net of federal benefit | 9.00% | 11.00% |
Change in valuation allowance/Other | -20.00% | -34.00% |
Other | -23.00% | -3.00% |
Effective Income Tax Rate | 0.00% | 8.00% |
14_Income_Taxes_Deferred_Tax_A
14. Income Taxes - Deferred Tax Assets and Liabilties (Details) (USD $) | Jun. 30, 2013 | Jun. 30, 2012 |
Deferred tax asset - current | ' | ' |
Allowances for bad debt | $12,666 | $14,816 |
Reserve for inventories | 85,680 | 23,147 |
Accrued expenses | 12,884 | 14,281 |
Other | 15,390 | 14,311 |
Deferred Tax Assets, Gross, Current | 126,620 | 66,555 |
Non-Current: | ' | ' |
Net Operating loss carry forwards | 1,414,764 | 659,149 |
Depreciation | 9,767 | 25,767 |
Amortization of intangibles | 40,822 | 2,800 |
Deferred Tax Assets, Gross, Noncurrent | 1,465,355 | 687,716 |
Total deferred tax asset | 1,591,975 | 754,271 |
Valuation allowance | -1,591,975 | -754,271 |
Net deferred tax asset | ' | ' |
Miscellaneous deferred tax liability | ' | ' |
Non-current | ' | $16,710 |
14_Income_Taxes_Details_Narrat
14. Income Taxes (Details Narrative) (USD $) | 12 Months Ended | |
Jun. 30, 2013 | Jun. 30, 2012 | |
Income Tax Disclosure [Abstract] | ' | ' |
Federal Statutory Tax Rate | 34.00% | 34.00% |
Operating Loss Carryforwards | $3,700,000 | $550,000 |
Valuation Allowance | $1,591,975 | ' |
15_Shareholders_Equity_Details
15. Shareholders Equity (Details Narrative) (USD $) | 12 Months Ended | |
Jun. 30, 2013 | Jun. 30, 2012 | |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Par Value | $0.00 | $0.00 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Par Value | $0.00 | $0.00 |
Stock Issued, Services, Shares | 14,840,000 | 3,650,000 |
Stock Issued, Services, Value | $267,942 | $129,000 |
Stock Issued, Compensation, Shares | 4,237,500 | 8,500,000 |
Stock Issued, Compensation, Value | 234,006 | 168,700 |
Stock Issued, Other, Shares | ' | 412,800 |
Stock Issued, Other, Value | ' | 11,000 |
Preferred Class A [Member] | ' | ' |
Preferred Stock, Shares Authorized | 200,000 | ' |
Shares Issued, Price Per Share | $1 | ' |
Stock Issued, Other, Shares | $200,000 | ' |
16_Segments_and_Geographic_Inf2
16. Segments and Geographic Information - Segment Reporting Information (Details) (USD $) | 12 Months Ended | |
Jun. 30, 2013 | Jun. 30, 2012 | |
Revenue | $9,324,685 | $10,177,449 |
Interest Expense | 497,365 | 208,145 |
Depreciation and Amortization | 173,532 | 192,755 |
Income (loss) before taxes | -4,406,848 | -765,842 |
Total Assets | 3,697,089 | 4,297,411 |
Capital Expenditure | 19,335 | 337,191 |
Machine Sales | ' | ' |
Revenue | 5,810,909 | 5,929,967 |
Interest Expense | 44,913 | 10,354 |
Depreciation and Amortization | 3,000 | 3,000 |
Income (loss) before taxes | -55,673 | -57,142 |
Total Assets | 1,077,202 | 284,625 |
Capital Expenditure | ' | ' |
Precision Manufacturing | ' | ' |
Revenue | 3,513,776 | 4,247,482 |
Interest Expense | 266,400 | 150,545 |
Depreciation and Amortization | 166,745 | 169,703 |
Income (loss) before taxes | -1,361,221 | -670,597 |
Total Assets | 2,384,185 | 2,779,874 |
Capital Expenditure | 19,335 | 337,191 |
Corporate | ' | ' |
Revenue | ' | ' |
Interest Expense | 186,052 | 47,246 |
Depreciation and Amortization | 3,787 | 20,052 |
Income (loss) before taxes | -2,989,954 | -38,103 |
Total Assets | 235,702 | 1,232,912 |
Capital Expenditure | ' | ' |