Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Sep. 12, 2019 | Dec. 31, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | Flux Power Holdings, Inc. | ||
Entity Central Index Key | 0001083743 | ||
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 | Non-accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 5,104,474 | ||
Entity Public Float | $ 21,710,258 | ||
Document Type | 10-K | ||
Document Period End Date | Jun. 30, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Current assets: | ||
Cash | $ 102,000 | $ 2,706,000 |
Accounts receivable | 2,416,000 | 946,000 |
Inventories, net | 3,813,000 | 1,512,000 |
Other current assets | 371,000 | 92,000 |
Total current assets | 6,702,000 | 5,256,000 |
Other assets | 158,000 | 26,000 |
Property, plant and equipment, net | 346,000 | 87,000 |
Total assets | 7,206,000 | 5,369,000 |
Current liabilities: | ||
Accounts payable | 2,483,000 | 417,000 |
Accrued expenses | 858,000 | 391,000 |
Line of credit - related party | 6,405,000 | 10,380,000 |
Convertible promissory note - related party | 0 | 500,000 |
Capital lease payable | 29,000 | 0 |
Accrued interest | 571,000 | 1,014,000 |
Total current liabilities | 10,346,000 | 12,702,000 |
Long term liabilities: | ||
Capital lease payable | 29,000 | 0 |
Customer deposits from related party | 0 | 102,000 |
Total liabilities | 10,375,000 | 12,804,000 |
Stockholders' deficit: | ||
Preferred stock, $0.001 par value; 500,000 shares authorized; none issued and outstanding | 0 | 0 |
Common stock, $0.001 par value; 30,000,000 shares authorized; 5,101,580 and 3,106,103 shares issued and outstanding at June 30, 2019 and 2018, respectively | 5,000 | 3,000 |
Additional paid-in capital | 35,902,000 | 19,224,000 |
Accumulated deficit | (39,076,000) | (26,662,000) |
Total stockholders' deficit | (3,169,000) | (7,435,000) |
Total liabilities and stockholders' deficit | $ 7,206,000 | $ 5,369,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2019 | Jun. 30, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 500,000 | 500,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 5,101,580 | 3,106,103 |
Common stock, shares outstanding | 5,101,580 | 3,106,103 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||
Net revenue | $ 9,317,000 | $ 4,118,000 |
Cost of sales | 8,768,000 | 4,913,000 |
Gross profit (loss) | 549,000 | (795,000) |
Operating expenses: | ||
Selling and administrative expenses | 7,712,000 | 3,462,000 |
Research and development | 4,088,000 | 1,956,000 |
Total operating expenses | 11,800,000 | 5,418,000 |
Operating loss | (11,251,000) | (6,213,000) |
Other income (expense): | ||
Other income | 84,000 | 0 |
Interest expense | (1,247,000) | (752,000) |
Net loss | $ (12,414,000) | $ (6,965,000) |
Net loss per share - basic and diluted | $ (2.84) | $ (2.74) |
Weighted average number of common shares outstanding - basic and diluted | 4,364,271 | 2,539,427 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Deficit - USD ($) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance, shares at Jun. 30, 2017 | 2,508,424 | |||
Balance at Jun. 30, 2017 | $ 2,000 | $ 14,946,000 | $ (19,697,000) | $ (4,749,000) |
Issuance of common stock - services, shares | 17,361 | |||
Issuance of common stock - services | 49,000 | 49,000 | ||
Issuance of common stock - private placement transactions, net of offering costs, shares | 571,529 | |||
Issuance of common stock - private placement transactions, net of offering costs | $ 1,000 | 3,974,000 | 3,975,000 | |
Warrants exchanged for common stock, shares | 8,789 | |||
Warrants exchanged for common stock | 0 | |||
Stock based compensation | 255,000 | 255,000 | ||
Net loss | (6,965,000) | (6,965,000) | ||
Balance, shares at Jun. 30, 2018 | 3,106,103 | |||
Balance at Jun. 30, 2018 | $ 3,000 | 19,224,000 | (26,662,000) | (7,435,000) |
Issuance of common stock - services, shares | 11,390 | |||
Issuance of common stock - services | 261,000 | 261,000 | ||
Issuance of common stock - private placement transactions, net of offering costs, shares | 399,256 | |||
Issuance of common stock - private placement transactions, net of offering costs | 4,390,000 | 4,390,000 | ||
Issuance of common stock - loan conversion, shares | 1,581,118 | |||
Issuance of common stock - loan conversion | $ 2,000 | 10,083,000 | 10,085,000 | |
Warrants exchanged for common stock, shares | 3,713 | |||
Warrants exchanged for common stock | 0 | |||
Stock based compensation | 1,944,000 | 1,944,000 | ||
Net loss | (12,414,000) | (12,414,000) | ||
Balance, shares at Jun. 30, 2019 | 5,101,580 | |||
Balance at Jun. 30, 2019 | $ 5,000 | $ 35,902,000 | $ (39,076,000) | $ (3,169,000) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (12,414,000) | $ (6,965,000) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation | 81,000 | 57,000 |
Stock-based compensation | 1,944,000 | 255,000 |
Stock issuance for services | 261,000 | 49,000 |
Interest expense on conversion | 699,000 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,470,000) | (866,000) |
Inventories | (2,301,000) | 54,000 |
Other current assets | (411,000) | (23,000) |
Accounts payable | 2,065,000 | 51,000 |
Accrued expenses | 385,000 | 131,000 |
Accrued interest | 551,000 | 775,000 |
Customer deposits | (102,000) | (18,000) |
Net cash used in operating activities | (10,712,000) | (6,500,000) |
Cash flows from investing activities | ||
Purchases of equipment | (275,000) | (85,000) |
Net cash used in investing activities | (275,000) | (85,000) |
Cash flows from financing activities: | ||
Repayment of line of credit | (2,500,000) | 0 |
Proceeds from the sale of common stock, net of offering costs | 4,390,000 | 3,975,000 |
Borrowings from line of credit - related party | 6,500,000 | 5,195,000 |
Payment on lease payable | (7,000) | 0 |
Net cash provided by financing activities | 8,383,000 | 9,170,000 |
Net change in cash | (2,604,000) | 2,585,000 |
Cash, beginning of period | 2,706,000 | 121,000 |
Cash, end of period | 102,000 | 2,706,000 |
Supplemental Disclosures of Non-Cash Investing and Financing Activities: | ||
Conversion of related party debt to equity | 8,475,000 | 0 |
Common stock issued for interest | 1,610,000 | 0 |
Equipment purchase through capital lease | $ 65,000 | $ 0 |
Note 1 - Nature of Business and
Note 1 - Nature of Business and Reverse Stock Split | 12 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Reverse Stock Split | Nature of Business Flux Power Holdings, Inc. ("Flux") was incorporated in 1998 in the State of Nevada. On June 14, 2012, we changed our name to Flux Power Holdings, Inc. Flux's operations are conducted through its wholly owned subsidiary, Flux Power, Inc. (“Flux Power”), a California corporation (collectively, the "Company"). The Company designs, develops and sells rechargeable lithium-ion energy storage systems for industrial applications, such as, electric fork lifts and airport ground support equipment. The Company has structured its business around its core technology, “The Battery Management System” (“BMS”). The Company’s BMS provides three critical functions to their battery systems: cell balancing, monitoring and error reporting. Using its proprietary management technology, the Company is able to offer complete integrated energy storage solutions or custom modular standalone systems to their customers. The Company has also developed a suite of complementary technologies and products that accompany their core products. Sales during the years ended June 30, 2019 and 2018 were primarily to customers located throughout the United States. As used herein, the terms “we,” “us,” “our,”, “Flux” and “Company” mean Flux Power Holdings, Inc., unless otherwise indicated. All dollar amounts herein are in U.S. dollars unless otherwise stated. Reverse Stock Split The Company effected a 1-for-10 reverse split of its common stock and preferred stock on July 11, 2019 (2019 Reverse Split). No fractional shares were issued in connection with the 2019 Reverse Split. If, as a result of the 2019 Reverse Split, a stockholder would otherwise have been entitled to a fractional share, each fractional share was rounded up. The 2019 Reverse Split resulted in a reduction of our outstanding shares of common stock from 51,000,868 to 5,101,580. In addition, it resulted in a reduction of our authorized shares of common stock from 300,000,000 to 30,000,000, and a reduction of our authorized shares of preferred stock from 5,000,000 to 500,000. The par value of the Company’s stock remained unchanged at $0.001. In addition, by reducing the number of the Company’s outstanding shares, the Company’s loss per share in all periods presented was increased by a factor of ten. As the par value per share of the Company’s common stock remained unchanged at $0.001 per share, a total of $46,000 was reclassified from common stock to additional paid-in capital. In connection with the Reverse Stock Split, proportionate adjustments have been made to the per share exercise price and the number of shares issuable upon the exercise or conversion of all outstanding options, warrants, convertible or exchangeable securities entitling the holders to purchase, exchange for, or convert into, shares of common stock. All references to shares of common stock and per share data for all periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted to reflect the Reverse Stock Split on a retroactive basis. |
Note 2 - Going Concern
Note 2 - Going Concern | 12 Months Ended |
Jun. 30, 2019 | |
Note 2 - Going Concern | |
Going Concern | The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred an accumulated deficit of $39,076,000 through June 30, 2019 and a net loss of $12,414,000 for the year ended June 30, 2019. To date, the Company’s revenues and operating cash flows have not been sufficient to sustain its operations and it has relied on debt and equity financing to fund its operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern for the twelve months following the filing of this Annual Report on Form 10-K. The Company’s ability to continue as a going concern is dependent upon its ability to raise additional capital on a timely basis until such time as revenues and related cash flows are sufficient to fund its operations. Management has undertaken steps as part of a plan to improve operations with the goal of sustaining its operations. These steps include (a) developing additional products to cater to the Class 1 and Class 2 industrial equipment markets; and (b) expand its sales force throughout the United States. In addition, the Company has increased its research and development efforts to focus on completing the development of energy storage solutions that can be used on larger fork lifts and has also doubled its sales force since December 2016 with personnel having significant experience in the industrial equipment handling industry. Management also plans to raise additional capital through the sale of equity securities through private placements, convertible debt placements and the utilization of its existing related-party credit facility. On March 31, 2019, the Company amended its line of credit with Esenjay, a related party, to: (i) increase the maximum principal amount available under line of credit from $5,000,000 to $7,000,000 (LOC), (ii) add Cleveland, our minority stockholder, as an additional lender to the LOC pursuant to which each lender has a right to advance a pro rata amount of the principal amount available under the LOC, (iii) extend the maturity date from March 31, 2019 to December 31, 2019, and (iv) to provide for additional parties to become a lender under the LOC. $6,405,000 remains outstanding under the LOC as of June 30, 2019, and $595,000 is available for future draws with all parties combined. Esenjay has contributed $2,405,000, Cleveland $2,000,0000, Winn Exploration Co. $1,000,000, Otto Candies Jr. $500,000, Paul Candies $250,000 and Brett Candies $250,000. Although management believes that the additional required funding will be obtained, there is no guarantee the Company will be able to obtain the additional required funds on a timely basis or that funds will be available on acceptable terms. If such funds are not available when required, management will be required to curtail its investments in additional sales and marketing and product development resources, and capital expenditures, which may have a material adverse effect on its future cash flows and results of operations, and its ability to continue operating as a going concern. The accompanying financial statements do not include any adjustments that would be necessary should the Company be unable to continue as a going concern and, therefore, be required to liquidate its assets and discharge its liabilities in other than the normal course of business and at amounts that may differ from those reflected in the accompanying consolidated financial statements. |
Note 3 - Summary of Significant
Note 3 - Summary of Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | A summary of the Company’s significant accounting policies which have been consistently applied in the preparation of the accompanying consolidated financial statements follows: Principles of Consolidation The consolidated financial statements include Flux Power Holdings, Inc. and its wholly-owned subsidiary Flux Power, Inc. after elimination of all intercompany accounts and transactions. Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation for comparative purposes. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, as well as certain financial statement disclosures. Significant estimates include valuation allowances relating to inventory and deferred tax assets. While management believes that the estimates and assumptions used in the preparation of the financial statements are appropriate, actual results could differ from these estimates. Cash and Cash Equivalents As of June 30, 2019, cash totaled approximately $102,000 and consists of funds held in a non-interest bearing bank deposit account. The Company considers all liquid short-term investments with maturities of less than three months when acquired to be cash equivalents. The Company had no cash equivalents at June 30, 2019 and 2018. Fair Values of Financial Instruments The carrying amount of our cash, accounts payable, accounts receivable, and accrued liabilities approximates their estimated fair values due to the short-term maturities of those financial instruments. The carrying amount of the line of credit agreement approximates its fair values as interest approximates current market interest rates for similar instruments. Management has concluded that it is not practical to determine the estimated fair value of amounts due to related parties because the transactions cannot be assumed to have been consummated at arm’s length, the terms are not deemed to be market terms, there are no quoted values available for these instruments, and an independent valuation would not be practical due to the lack of data regarding similar instruments, if any, and the associated potential costs. The Company does not have any other assets or liabilities that are measured at fair value on a recurring or non-recurring basis. Accounts Receivable Accounts receivable are carried at their estimated collectible amounts. The Company has not experienced collection issues related to its accounts receivable, and has not recorded an allowance for doubtful accounts during the fiscal year ended June 30, 2019 and 2018. Inventories Inventories consist primarily of battery management systems and the related subcomponents, and are stated at the lower of cost (first-in, first-out) or net realizable value. The Company evaluates inventories to determine if write-downs are necessary due to obsolescence or if the inventory levels are in excess of anticipated demand at market value based on consideration of historical sales and product development plans. The Company recorded an adjustment related to obsolete inventory in the amount of approximately $90,000 and $27,000 during the years ended June 30, 2019 and 2018, respectively. We reviewed our inventory valuation with regards to our gross loss for the fiscal year ended June 30, 2018. The gross loss was due to factors related to new product launch of the GSE packs, such as low volume, early higher cost designs, and limited sourcing as we have seen with the launch of the LiFT Packs. As sales volumes rise we are seeing increased margins. As such, we do not believe the gross loss would require any write-downs to inventory on hand. Property, Plant and Equipment Property, plant and equipment are stated at cost, net of accumulated depreciation. Depreciation and amortization are provided using the straight-line method over the estimated useful lives, of the related assets ranging from three to ten years, or, in the case of leasehold improvements, over the lesser of the useful life of the related asset or the lease term. Stock-based Compensation Pursuant to the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic No. 718-10, Compensation-Stock Compensation Common stock or equity instruments such as warrants issued for services to non-employees are valued at their estimated fair value at the measurement date (the date when a firm commitment for performance of the services is reached, typically the date of issuance, or when performance is complete). If the total value exceeds the par value of the stock issued, the value in excess of the par value is added to the additional paid-in-capital. Revenue Recognition On July 1, 2018, the Company adopted the new accounting standard FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”) for all contracts using the modified retrospective method. Based on the Company’s analysis of contracts with customers in prior periods, there was no cumulative effect adjustment to the opening balance of the Company’s accumulated deficit as a result of the adoption of this new standard. The Company derives its revenue from the sale of products to customers. The Company sells its products primarily through a distribution network of equipment dealers, OEMs and battery distributors in North America. The Company recognizes revenue for products when all the significant risks and rewards have been transferred to the customer, no continuing managerial involvement usually associated with ownership of the goods is retained, no effective control over the goods sold is retained, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transactions will flow to the Company and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Product revenue is recognized as a distinct single performance obligation which represents the point in time that our customer receives delivery of the products. Our customers do have a right to return product but our returns have historically been insignificant. Product Warranties The Company evaluates its exposure to product warranty obligations based on historical experience. Our products, primarily lift equipment packs, are warrantied for five years unless modified by a separate agreement. As of June 30, 2019 and 2018, the Company carried warranty liability of approximately $361,000 and $158,000, respectively, which is included in accrued expenses on the Company’s consolidated balance sheets. Impairment of Long-lived Assets In accordance with authoritative guidance for the impairment or disposal of long-lived assets, if indicators of impairment exist, the Company assesses the recoverability of the affected long-lived assets by determining whether the carrying value of such assets can be recovered through the undiscounted future operating cash flows. If impairment is indicated, the Company measures the amount of such impairment by comparing the carrying value of the asset to the present value of the expected future cash flows associated with the use of the asset. The Company believes that no impairment indicators were present, and accordingly no impairment losses were recognized during the fiscal years ended June 30, 2019 and 2018. Research and Development The Company is actively engaged in new product development efforts. Research and development cost relating to possible future products are expensed as incurred. Income Taxes Pursuant to FASB ASC Topic No. 740, Income Taxes, The Company records deferred tax assets and liabilities based on the differences between the financial statement and tax bases of assets and liabilities and on operating loss carry forwards using enacted tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. Net Loss Per Common Share The Company calculates basic loss per common share by dividing net loss by the weighted average number of common shares outstanding during the periods. Diluted loss per common share includes the impact from all dilutive potential common shares relating to outstanding convertible securities. For the years ended June 30, 2019 and 2018, basic and diluted weighted-average common shares outstanding were 4,364,271 and 2,539,427, respectively. The Company incurred a net loss for the years ended June 30, 2019 and 2018, and therefore, basic and diluted loss per share for each fiscal year are the same because the inclusion of potential common equivalent shares were excluded from diluted weighted-average common shares outstanding during the period, as the inclusion of such shares would be anti-dilutive. The total potentially dilutive common shares outstanding at June 30, 2019 and 2018, excluded from diluted weighted-average common shares outstanding, which include common shares underlying outstanding convertible debt, stock options and warrants, were 588,504 and 1,610,922, respectively. New Accounting Standards Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. generally accepted accounting principles when it becomes effective. In July 2015, the FASB deferred the effective date of the standard by an additional year; however, it provided companies the option to adopt one year earlier, commensurate with the original effective date. Accordingly, the standard was effective for the Company in the fiscal year beginning July 1, 2018. Subsequently, the FASB issued additional guidance (ASUs 2015-14; 2016-08; 2016-10; 2016-12; 2016-13; 2016-20). The adoption of this guidance by the Company, effective July 1, 2018, did not have a material impact on the Company’s consolidated financial statements (see Revenue Recognition, for further detail). In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments Recently Issued Accounting Pronouncements Not Yet Adopted In 2016, the FASB issued ASU 2016-02, Leases On June 20, 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting |
Note 4 - Inventories
Note 4 - Inventories | 12 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories consist of the following: June 30, 2019 June 30, 2018 Raw materials $ 2,118,000 $ 807,000 Work in process 645,000 333,000 Finished goods 1,050,000 372,000 Total Inventories $ 3,813,000 $ 1,512,000 Inventories consist primarily of our energy storage systems and the related subcomponents, and are stated at the lower of cost or net realizable value. Inventory held at consignment locations is included in our finished goods inventory and totaled $19,000 and $14,000 as of June 30, 2019 and June 30, 2018, respectively. |
Note 5 - Other Current Assets
Note 5 - Other Current Assets | 12 Months Ended |
Jun. 30, 2019 | |
Other Assets [Abstract] | |
Other Current Assets | Other current assets consist of the following: June 30, 2019 June 30, 2018 Prepaid insurance $ 28,000 $ 5,000 Prepaid inventory 59,000 52,000 Prepaid rent 42,000 - Prepaid offering costs 198,000 - Other - 25,000 Prepaid expenses 44,000 9,000 Security deposits - 1,000 Total Other current assets $ 371,000 $ 92,000 |
Note 6 - Accrued Expenses
Note 6 - Accrued Expenses | 12 Months Ended |
Jun. 30, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued expenses consist of the following: June 30, 2019 June 30, 2018 Payroll accrual $ 294,000 $ 166,000 PTO accrual 200,000 67,000 Warranty liability 361,000 158,000 Sales tax payable 2,000 - Garnishments 1,000 - Total Accrued expenses $ 858,000 $ 391,000 |
Note 7 - Property, Plant and Eq
Note 7 - Property, Plant and Equipment, Net | 12 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment, Net [Abstract] | |
Property, Plant and Equipment, Net | Property, plant and equipment, net consist of the following: June 30, 2019 June 30, 2018 Vehicles $ 20,000 $ 1,000 Machinery and equipment 246,000 112,000 Office equipment 233,000 162,000 Furniture and Equipment 116,000 39,000 Leasehold improvements - 34,000 615,000 348,000 Less: Accumulated depreciation (269,000 ) (261,000 ) Property, plant and equipment, net $ 346,000 $ 87,000 Depreciation expense was approximately $81,000 and $57,000, for the years ended June 30, 2019 and 2018, respectively, and is included in selling and administrative expenses in the accompanying consolidated statements of operations. |
Note 8 - Related Party Debt Agr
Note 8 - Related Party Debt Agreements | 12 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Debt Agreements | Esenjay Credit Facilities Between October 2011 and September 2012, the Company entered into three debt agreement with Esenjay Investments, LLC (“Esenjay”). Esenjay is deemed to be a related party as Mr. Michael Johnson, the beneficial owner and director of Esenjay is a current member of our board of directors and a major shareholder of the Company (owning approximately 61.4% of our outstanding common shares as of June 30, 2019). The three debt agreements consisted of a Bridge Loan Promissory Note, a Secondary Revolving Promissory Note and an Unrestricted Line of Credit (collectively, the “Loan Agreements”). On December 31, 2015, the Bridge Loan Promissory Note and the Secondary Revolving Promissory Note expired leaving the Unrestricted Line of Credit, available for future draws. The Unrestricted Line of Credit had a maximum borrowing amount of $10,000,000, was convertible at a rate of $6.00 per share, bore interest at 8% per annum and was converted to the Company’s common stock on October 31, 2018 prior to maturity on January 31, 2019. On March 22, 2018, Flux Power entered into a credit facility agreement with Esenjay with a maximum borrowing amount of $5,000,000. Proceeds from the credit facility were to be used to purchase inventory and related operational expenses and accrue interest at a rate of 15% per annum (the “Inventory Line of Credit”). The outstanding balance of the Inventory Line of Credit and all accrued interest was due and payable on March 31, 2019. Funds received from Esenjay since December 5, 2017 were transferred to the Inventory Line of Credit resulting in $2,405,000 outstanding as of June 30, 2018. This credit facility was amended on March 28, 2019 (see Amended Credit Facility). On October 31, 2018, the Company entered into an Early Note Conversion Agreement (the “Early Note Conversion Agreement”) with Esenjay, pursuant to which Esenjay agreed to immediately exercise its conversion rights under the Unrestricted Line of Credit, dated September 24, 2012 to convert the outstanding principal amount of $7,975,000 plus accrued and unpaid interest of $1,041,280 for 1,502,714 shares of the Company’s common stock. The Early Note Conversion Agreement included issuance of 26,802 additional shares of common stock as an inducement to convert which was recorded as interest expense at the common stock’s fair value of $466,351 at October 31, 2018. As of June 30, 2019 and 2018, the Company had approximately $571,000 and $1,014,000, respectively of accrued interest associated with such credit facilities. Shareholder Convertible Promissory Note On April 27, 2017, we formalized an oral agreement for advances totaling $500,000, received from a shareholder (“Shareholder”) into a written Convertible Promissory Note (the “Convertible Note”). Borrowings under the Convertible Note accrue interest at 12% per annum, with all unpaid principal and accrued interest due and payable on October 27, 2018. In addition, at the election of Shareholder, all or any portion of the outstanding principal, accrued but unpaid interest and/or late charges under the Convertible Note may be converted into shares of the Company’s common stock at a conversion price of $12.00 per share; provided, however, the Shareholder shall not have the right to convert any portion of the Convertible Note to the extent that the Shareholder would beneficially own in excess of 5% of the total number of shares of common stock outstanding immediately after giving effect to the issuance of shares of common stock issuable upon conversion of the Convertible Note. On October 25, 2018, the Company and the Shareholder entered into an amendment to the Convertible Promissory Note. The amendment (i) extended the maturity date of the Convertible Note from October 27, 2018 to February 1, 2019 and (ii) allowed for the automatic conversion of the Convertible Note immediately following the full conversion of the line of credit granted by Esenjay to the Company under the Esenjay Loan into shares of Common Stock of the Company. As a result of the Early Note Conversion Agreement on October 31, 2018, the Shareholder Convertible Note of $500,000 plus accrued interest of $102,510 automatically converted into 50,210 shares of common stock. Shareholder Short Term Lines of Credit On October 26, 2018, the Company entered into a credit facility agreement with Cleveland Capital, L.P., a Delaware limited partnership (“Cleveland”), a minority shareholder, pursuant to which Cleveland agreed to make available to the Company a line of credit (“Cleveland LOC”) in a maximum principal amount at any time outstanding of up to $2,000,000 with a maturity date of December 31, 2018. The Cleveland LOC had an origination fee of 20,000, which represents 1% of the Cleveland LOC, and carries a simple interest of 12% per annum. Interest is calculated on the basis of the actual daily balances outstanding under the Cleveland LOC. The Cleveland LOC was repaid on December 27, 2018. On October 31, 2018, the Company entered into a credit facility agreement with a shareholder, (“Investor”), pursuant to which Investor agreed to make available to the Company a line of credit (“Investor LOC”) in a maximum principal amount at any time outstanding of up to $500,000 with a maturity date of December 31, 2018. The Investor LOC had an origination fee in the amount of $5,000, which represents 1% of the Investor LOC, and carries a simple interest of 12% per annum. Interest is calculated on the basis of the actual daily balances outstanding under the Investor LOC. The Investor LOC was repaid on December 28, 2018. Amended Credit Facility On March 28, 2019, the Company, entered into an amended and restated credit facility agreement (“Amended and Restated Credit Facility Agreement”) with Esenjay and, Cleveland to amend and restate the terms of the Credit Facility Agreement dated March 22, 2018 between the Company and Esenjay (the “Original Agreement”) in its entirety. The Original Agreement was amended, among other things, to (i) increase the maximum principal amount available under line of credit from $5,000,000 to $7,000,000 (“LOC”), (ii) add Cleveland as additional lender to the LOC pursuant to which each lender has a right to advance a pro rata amount of the principal amount available under the LOC, (iii) extend the maturity date from March 31, 2019 to December 31, 2019, and (iv) to provide for additional parties to become a “Lender” under the Amended and Restated Credit Facility Agreement. In connection with the LOC, on March 28, 2019 the Company issued a secured promissory note to Cleveland (the “Cleveland Note”), and an amended and restated secured promissory note to Esenjay which amended and superseded the secured promissory note dated March 22, 2018 (“Esenjay Note” and together with the Cleveland Note, the “Notes”). The Notes were issued for the principal amount of $7,000,000 or such lesser principal amount advanced by the respective Lender under the Amended and Restated Credit Facility Agreement (the “Principal Amount”). The Notes bear an interest of 15% per annum and a maturity date of December 31, 2019. The outstanding balance as of June 30, 2019 was $6,405,000. Esenjay has contributed $2,405,000, Cleveland $2,000,0000, Winn Exploration Co. $1,000,000, Otto Candies Jr. $500,000, Paul Candies $250,000 and Brett Candies $250,000. As of September 12, 2019, we had $595,000 under the LOC available for future draws with all parties combined. To secure the obligations under the Notes, the Company entered into an amended and restated credit facility agreement dated March 28, 2019 with the Lenders (the “Amended Security Agreement”). The Amended Security Agreement amends and restates the Guaranty and Security Agreement dated March 22, 2018 by and between Cleveland as a secured party to the agreement and appointing Esenjay as collateral agent. |
Note 9 - Stockholders' Deficit
Note 9 - Stockholders' Deficit | 12 Months Ended |
Jun. 30, 2019 | |
Stockholders' deficit: | |
Stockholders' Deficit | Private Placements In December 2018, our Board of Directors approved the private placement of up to 454,546 shares of common stock to select accredited investors for a total amount of $5,000,000, or $11.00 per share of common stock with the right of the Board to increase the offering amount to $7,000,000 (the “Offering”). On December 26, 2018, the Company completed an initial closing of the Offering, pursuant to which it sold an aggregate of 335,910 shares of common stock, at $11.00 per share, for an aggregate purchase price of $3,695,010 in cash. A portion of the proceeds from the Offering was used to repay in full approximately $2.6 million in borrowings and accrued interest under two short-term credit facilities provided by C leveland Capital, L.P. and a stockholder On January 29, 2019, the Company conducted its final closing (the “Final Closing”) to its round of private placement to accredited investors that initially closed on December 26, 2018 (“Initial Closing”). Following the Initial Closing to the Final Closing, the Company sold an additional 63,347 shares of its Common Stock (“Shares”), at $11.00 per share, for an aggregate purchase price of $696,810 to two accredited investors. The shares offered and sold in the Offering have not been registered under the Securities Act of 1933, as amended (“Securities Act”), and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act. The shares were offered and sold to the accredited investors in reliance upon exemptions from registration pursuant to Rule 506(c) of Regulation D promulgated under Section 4(a)(2) under the Securities Act. In the aggregate, the Company issued 399,257 for an aggregate gross proceeds of approximately $4.39 million. The Shares were issued on identical terms to those previously reported for the Initial Closing on the Company’s Form 8-K filed with the Securities and Exchange Commission (“SEC”) on December 28, 2018. The Company relied on the exemption from registration pursuant to Rule 506(c) of Regulation D promulgated under Section 4(a)(2) under the Securities Act of 1933, as amended. Advisory Agreements Catalyst Global LLC. Shenzhen Reach Investment Development Co. (“SRID”). Warrant Activity Warrant detail for the year ended June 30, 2019 is reflected below: Number of Warrants Weighted Average Exercise Price Per Warrant Remaining Contract Term (# years) Warrants outstanding and exercisable at June 30, 2018 174,079 $ 20.30 0.74 Warrants issued - $ - - Warrants exchanged (7,996 ) $ 14.80 - Warrants forfeited (157,750 ) $ 19.93 - Warrants outstanding and exercisable at June 30, 2019 8,333 $ 20.00 0.25 Warrant detail for year ended June 30, 2018 is reflected below: Number of Warrants Weighted Average Exercise Price Per Warrant Remaining Contract Term (# years) Warrants outstanding and exercisable at June 30, 2017 234,259 $ 19.70 0.12-1.55 Warrants issued - $ - - Warrants exchanged (14,165 ) $ 6.00 - Warrants forfeited (46,015 ) $ 21.50 - Warrants outstanding and exercisable at June 30, 2018 174,079 $ 20.30 0.74 Stock-based Compensation On November 26, 2014, the board of directors approved the 2014 Equity Incentive Plan (the “2014 Plan”), which was approved by the Company’s shareholders on February 17, 2015. The 2014 Plan offers selected employees, directors, and consultants the opportunity to acquire our common stock, and serves to encourage such persons to remain employed by us and to attract new employees. The 2014 Plan allows for the award of stock and options, up to 1,000,000 shares of our common stock. Activity in stock options during the year ended June 30, 2019 and related balances outstanding as of that date are reflected below: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Term (# years) Outstanding at June 30, 2018 350,726 $ 8.38 8.87 Granted 245,027 $ 14.45 9.71 Exercised - $ - - Forfeited and cancelled (15,582 ) $ 4.64 - Outstanding at June 30, 2019 580,171 $ 11.05 8.59 Exercisable at June 30, 2019 303,611 $ 10.02 8.01 Activity in stock options during the year ended June 30, 2018 and related balances outstanding as of that date are reflected below: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Term (# years) Outstanding at June 30, 2017 71,628 $ 11.00 7.09 Granted 292,511 $ 7.80 Exercised - - Forfeited and cancelled (13,413 ) $ 4.60 Outstanding at June 30, 2018 350,726 $ 8.38 8.87 Exercisable at June 30, 2018 139,169 $ 7.30 7.70 Stock-based compensation expense recognized in the consolidated statements of operations for the year ended June 30, 2019 and 2018, includes compensation expense for stock-based options and awards granted based on the grant date fair value. For options and awards granted, expenses are amortized under the straight-line method over the expected vesting period. Stock-based compensation expense recognized in the consolidated statements of operations has been reduced for estimated forfeitures of options that are subject to vesting. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. At June 30, 2019, the aggregate intrinsic value of exercisable options was $1,377,000. We allocated stock-based compensation expense included in the consolidated statements of operations for employee option grants and non-employee option grants as follows: Years ended June 30, 2019 2018 Research and development $ 314,000 $ 96,000 Selling and administrative 1,630,000 159,000 Total stock-based compensation expense $ 1,944,000 $ 255,000 The Company uses the Black-Scholes valuation model to calculate the fair value of stock options. The fair value of stock options was measured at the grant date using the assumptions (annualized percentages) in the table below: 2019 2018 Expected volatility 111.4% -112.2% 138% -143% Risk free interest rate 2.43% - 2.45% 1.76% - 2.63% Forfeiture rate 20% 20% -23% Dividend yield 0% 0% Expected term (years) 5.61 5 The remaining amount of unrecognized stock-based compensation expense at June 30, 2019 relating to outstanding stock options, is approximately $2,292,000, which is expected to be recognized over the weighted average period of 1.08 years. |
Note 10 - Income Taxes
Note 10 - Income Taxes | 12 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Pursuant to the provisions of FASB ASC Topic No. 740 Income Taxes , The Company is subject to taxation in the United States and California. The Company’s tax years for 2010 and forward are subject to examination by the United States and California tax authorities due to the carry forward of unutilized net operating losses and research and development credits (if any). No current income tax provision or benefit has been recorded as the Company incurred a net loss for each of the two years ended June 30, 2019 and 2018. Significant components of net deferred tax assets are shown in the table below. Year Ended June 30, 2019 2018 Net operating loss carryforwards $ 10,028,000 $ 7,333,000 Stock compensation 1,407,000 1,160,000 Interest expense Sec. 163 55.000 - Other, net 146,000 96,000 Net deferred tax assets 11,636,000 8,589,000 Valuation allowance for deferred tax assets (11,636,000 ) (8,589,000 ) Net deferred tax assets $ - $ - At June 30, 2019, the Company had unused net operating loss carryovers of approximately $35,846,000 and $35,802,000 that are available to offset future federal and state taxable income, respectively. These operating losses begin to expire in 2030. The provision for income taxes on earnings subject to income taxes differs from the statutory federal rate at June 30, 2019 and 2018, due to the following: Year Ended June 30, 2019 2018 Federal income taxes at 21% and 34%, respectively $ (2,607,000 ) $ (1,915,000 ) State income taxes, net (867,000 ) (446,000 ) Permanent differences and other 450,000 345,000 Other true ups, if any (23,000 ) (206,000 ) Change in federal tax rate - 3,560,000 Change in valuation allowance (3,047,000 ) (1,338,000 ) Provision for income taxes $ - $ - Internal Revenue Code Sections 382 limits the use of net operating loss carryforwards if there has been a cumulative change in ownership of more than 50% within a three-year period. The Company has not yet completed a Section 382 net operating loss analysis. In the event that such analysis determines there is a limitation on the use on net operating loss carryforwards to offset future taxable income, the recorded deferred tax asset relating to such net operating loss carryforwards will be reduced. However, as the Company has recorded a full valuation allowance against its net deferred tax assets, there is no impact on the Company’s consolidated financial statements as of June 30, 2019 and 2018. Under ASC 740, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC 740 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. In accordance with ASC 740, there are no unrecognized tax benefits as of June 30, 2019 or June 30, 2018. On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (“Tax Act”). The legislation significantly changes U.S. tax law by, among other things, reducing the US federal corporate tax rate from 35% to 21%, repealing the alternative minimum tax, implementing a territorial tax system and imposing a repatriation tax on deemed repatriated earnings of foreign subsidiaries. Pursuant to the SEC’s Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”), given the amount and complexity of the changes in the tax law resulting from the tax legislation, the Company has not finalized the accounting for the income tax effects of the tax legislation related to the remeasurement of deferred taxes and provisional amounts recorded related to the transition tax. The impact of the tax legislation may differ from the estimate, during the one-year measurement period due to, among other things, further refinement of the Company’s calculations, changes in interpretations and assumptions the Company has made, guidance that may be issued and actions the Company may take as a result of the tax legislation. We have resmeasured deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21% plus state and local tax. The Company recorded a decrease related to the deferred tax assets and liabilities of $3.6 million as a result of the tax rate decrease, with a corresponding adjustment to the valuation allowance for the year ended June 30, 2018. |
Note 11 - Other Related Party T
Note 11 - Other Related Party Transactions | 12 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Other Related Party Transactions | The Company subleased office and manufacturing space to Epic Boats (an entity founded and controlled by Chris Anthony, former board member and former Chief Executive Officer) in our facility in Vista, California pursuant to a month-to-month sublease agreement. Pursuant to this agreement, Epic Boats paid Flux Power 10% of facility costs through the end of our lease agreement which was June 30, 2019. The Company received $18,000 for each of the years ended June 30, 2019 and 2018 from Epic Boats under the sublease rental agreement which is recorded as a reduction to rent expense and the customer deposits discussed below. As of June 30, 2019 the customer deposit totaling approximately $84,000 was recognized as Other Income since Epic Boats has released that deposit liability. As of June 30, 2019 and June 30, 2018, customer deposits totaling approximately $0 and $102,000, respectively, related to such products were recorded in the accompanying consolidated balance sheets. There were no receivables outstanding from Epic Boats as of June 30, 2019 and June 30, 2018. |
Note 12 - Concentrations
Note 12 - Concentrations | 12 Months Ended |
Jun. 30, 2019 | |
Risks and Uncertainties [Abstract] | |
Concentrations | Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments and unsecured trade accounts receivable. The Company maintains cash balances at a financial institution in San Diego, California. Our cash balance at this institution is secured by the Federal Deposit Insurance Corporation up to $250,000. As of June 30, 2019, cash totaled approximately $102,000, which consists of funds held in a non-interest bearing bank deposit account. The Company has not experienced any losses in such accounts. Management believes that the Company is not exposed to any significant credit risk with respect to its cash. Customer Concentrations During the year ended June 30, 2019, the Company had four major customers that each represented more than 10% of its revenues on an individual basis, or approximately $8,072,000 or 87% of its total revenues. During the year ended June 30, 2018, the Company had two major customers that each represented more than 10% of its revenues on an individual basis, or approximately $3,181,000 or 77% of its total revenues. Suppliers/Vendor Concentrations The Company obtains a limited number of components and supplies included in its products from a small group of suppliers. During the year ended June 30, 2019 the Company had three suppliers who accounted for more than 10% of its total purchases, on an individual basis. Purchases for these three suppliers totaled $6,855,000 or 62% of its total purchases. During the year ended June 30, 2018 the Company had three suppliers who accounted for more than 10% of its total purchases, on an individual basis. Purchases for these three suppliers totaled $2,285,000 or 50% of our total purchases. |
Note 13 - Commitments and Conti
Note 13 - Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | From time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. To the best knowledge of management, there are no material legal proceedings pending against the Company. Operating Leases On April 25, 2019 the Company signed a lease with Accutek to rent approximately 45,600 square feet of industrial space at 2685 S. Melrose Drive, Vista, California. The lease has an initial term of seven years and four months, commencing on or about July 2019. The lease contains an option to extend the term for two periods of twenty-four months, and the right of first refusal to lease an additional approximate 15,300 square feet. The monthly rental rate is $42,400 for the first 12 months, escalating at 3% each year. The Company relocated to its new facility on June 28, 2019. Total rent expense was approximately $168,000 and $160,000 for the years ended June 30, 2019 and 2018, respectively, net of sublease income. The Future Minimum Lease Payments for the new lease are: 2020 $ 381,814 2021 393,269 2022 496,354 2023 512,518 2024 571,590 Thereafter 1,454,497 Total Future Minimum Lease Payments $ 3,810,042 |
Note 14 - Subsequent Events
Note 14 - Subsequent Events | 12 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Reverse Split. On July 3, 2019, the Company entered into a certain loan agreement with Cleveland, pursuant to which Cleveland agreed to loan the Company $1,000,000 (the Loan). In connection with the Loan, on July 3, 2019, the Company issued Cleveland an unsecured short-term promissory in the amount of $1,000,000 (the Unsecured Promissory Note). The promissory note bears an interest rate of 15.0% per annum and was due on September 1, 2019, unless repaid earlier from a percentage of proceeds from certain identified accounts receivable. In connection with the Loan, the Company issued Cleveland a three-year warrant (the Cleveland Warrant) to purchase the Company’s common stock in a number equal to 0.5% of the number of shares of common stock outstanding after giving effect to the total number of shares of common stock sold in a public offering. The Cleveland Warrant has an exercise price equal to a future per share public offering price. On August 30, 2019, the Company entered in an agreement to amend the loan agreement and the Unsecured Promissory Note to extend the maturity date from September 1, 2019 to December 1, 2019 (the Amendment). In connection with the Amendment, the Company replaced the Cleveland Warrant with a certain Amended and Restated Warrant Certificate (the Amended Warrant). The Amended Warrant increased the warrant coverage from .5% to 1% of the number of shares of common stock outstanding after giving effect to the total number of shares of common stock sold in the next private or public offering (Offering). In addition, the exercise price was also changed to equal the per share price of common stock sold in the Offering. As of September 12, 2019, $1,000,000 in principal remains outstanding under the Loan. On August 23, 2019, the Company entered into a Factoring Agreement (Factoring Agreement) with CSNK Working Capital Finance Corp. d/b/a Bay View Funding (“CSNK”) for a factoring facility under which CSNK will, from time to time, buy approved receivables from the Company. The factoring facility provides for the Company to have access to the lesser of (i) $3 million (Maximum Credit) or (ii) the sum of all undisputed receivables purchased by CSNK multiplied by the 90% (which percentages may be adjusted by CSNK in its sole discretion). Upon receipt of any advance, Company will have sold and assigned all of its rights in such receivables and all proceeds thereof. The factoring facility is secured by the Company’s accounts, equipment, inventory, financial assets, chattel paper, electronic chattel paper, letters of credit, letters of credit rights, general intangibles, investment property, deposit accounts, documents, instruments, supporting obligations, commercial tort claims, the reserve, motor vehicles, all books, records, files and computer data relating to the foregoing, and all proceeds of the foregoing. Company is required to pay CSNK a facility fee of 1.0% of the Maximum Credit upon execution of the Factoring Agreement and a factoring fee of 0.75% of the face value of purchased receivables for 1st 30-days such receivables are outstanding after purchase and 0.35% for each 15-days thereafter until the receivables are repaid in full or otherwise repurchased by Company or otherwise written off by CSNK. In addition, Company is required to pay financing fees on the outstanding advances equal to a floating rate per annum equal to the Prime + 2.0% (8.0% floor). In the event, the aggregate factoring fee and financing fee is less than 0.5% of the Maximum Credit in any one month, Company will pay CSNK the difference for such month. CSNK has the right to demand repayment of any purchased receivables which remain unpaid for 90-days after purchase or with respect to which any account debtor asserts a dispute. The factoring facility is for an initial term of twelve months and will renew on a year to year basis thereafter, unless terminated in accordance with the Factoring Agreement. Company may terminate the Factoring Agreement at any time upon 60 days prior written notice and payment to CSNK of an early termination fee equal to 0.5% of the Maximum Credit multiplied by the number of months remaining in the current term. As of September 11, 2019, the Company has received $302,600 for the sale of receivables pursuant to Factoring Agreement. In August 2019, we issued a total of 2,894 shares of common stock in connection with a net exercise of 4,438 outstanding options by the holder. |
Note 3 - Significant Accounting
Note 3 - Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | The consolidated financial statements include Flux Power Holdings, Inc. and its wholly-owned subsidiary Flux Power, Inc. after elimination of all intercompany accounts and transactions. |
Reclassifications | Certain prior year amounts have been reclassified to conform to the current year presentation for comparative purposes. |
Use of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, as well as certain financial statement disclosures. Significant estimates include valuation allowances relating to inventory and deferred tax assets. While management believes that the estimates and assumptions used in the preparation of the financial statements are appropriate, actual results could differ from these estimates. |
Cash and Cash Equivalents | As of June 30, 2019, cash totaled approximately $102,000 and consists of funds held in a non-interest bearing bank deposit account. The Company considers all liquid short-term investments with maturities of less than three months when acquired to be cash equivalents. The Company had no cash equivalents at June 30, 2019 and 2018. |
Fair Value of Financial Instruments | The carrying amount of our cash, accounts payable, accounts receivable, and accrued liabilities approximates their estimated fair values due to the short-term maturities of those financial instruments. The carrying amount of the line of credit agreement approximates its fair values as interest approximates current market interest rates for similar instruments. Management has concluded that it is not practical to determine the estimated fair value of amounts due to related parties because the transactions cannot be assumed to have been consummated at arm’s length, the terms are not deemed to be market terms, there are no quoted values available for these instruments, and an independent valuation would not be practical due to the lack of data regarding similar instruments, if any, and the associated potential costs. The Company does not have any other assets or liabilities that are measured at fair value on a recurring or non-recurring basis. |
Accounts Receivable | Accounts receivable are carried at their estimated collectible amounts. The Company has not experienced collection issues related to its accounts receivable, and has not recorded an allowance for doubtful accounts during the fiscal year ended June 30, 2019 and 2018. |
Inventories | Inventories consist primarily of battery management systems and the related subcomponents, and are stated at the lower of cost (first-in, first-out) or net realizable value. The Company evaluates inventories to determine if write-downs are necessary due to obsolescence or if the inventory levels are in excess of anticipated demand at market value based on consideration of historical sales and product development plans. The Company recorded an adjustment related to obsolete inventory in the amount of approximately $90,000 and $27,000 during the years ended June 30, 2019 and 2018, respectively. We reviewed our inventory valuation with regards to our gross loss for the fiscal year ended June 30, 2018. The gross loss was due to factors related to new product launch of the GSE packs, such as low volume, early higher cost designs, and limited sourcing as we have seen with the launch of the LiFT Packs. As sales volumes rise we are seeing increased margins. As such, we do not believe the gross loss would require any write-downs to inventory on hand. |
Property, Plant and Equipment | Property, plant and equipment are stated at cost, net of accumulated depreciation. Depreciation and amortization are provided using the straight-line method over the estimated useful lives, of the related assets ranging from three to ten years, or, in the case of leasehold improvements, over the lesser of the useful life of the related asset or the lease term. |
Stock-based Compensation | Pursuant to the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic No. 718-10, Compensation-Stock Compensation Common stock or equity instruments such as warrants issued for services to non-employees are valued at their estimated fair value at the measurement date (the date when a firm commitment for performance of the services is reached, typically the date of issuance, or when performance is complete). If the total value exceeds the par value of the stock issued, the value in excess of the par value is added to the additional paid-in-capital. |
Revenue Recognition | On July 1, 2018, the Company adopted the new accounting standard FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”) for all contracts using the modified retrospective method. Based on the Company’s analysis of contracts with customers in prior periods, there was no cumulative effect adjustment to the opening balance of the Company’s accumulated deficit as a result of the adoption of this new standard. The Company derives its revenue from the sale of products to customers. The Company sells its products primarily through a distribution network of equipment dealers, OEMs and battery distributors in North America. The Company recognizes revenue for products when all the significant risks and rewards have been transferred to the customer, no continuing managerial involvement usually associated with ownership of the goods is retained, no effective control over the goods sold is retained, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transactions will flow to the Company and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Product revenue is recognized as a distinct single performance obligation which represents the point in time that our customer receives delivery of the products. Our customers do have a right to return product but our returns have historically been insignificant. |
Product Warranties | The Company evaluates its exposure to product warranty obligations based on historical experience. Our products, primarily lift equipment packs, are warrantied for five years unless modified by a separate agreement. As of June 30, 2019 and 2018, the Company carried warranty liability of approximately $361,000 and $158,000, respectively, which is included in accrued expenses on the Company’s consolidated balance sheets. |
Impairment of Long-lived Assets | In accordance with authoritative guidance for the impairment or disposal of long-lived assets, if indicators of impairment exist, the Company assesses the recoverability of the affected long-lived assets by determining whether the carrying value of such assets can be recovered through the undiscounted future operating cash flows. If impairment is indicated, the Company measures the amount of such impairment by comparing the carrying value of the asset to the present value of the expected future cash flows associated with the use of the asset. The Company believes that no impairment indicators were present, and accordingly no impairment losses were recognized during the fiscal years ended June 30, 2019 and 2018. |
Research and Development | The Company is actively engaged in new product development efforts. Research and development cost relating to possible future products are expensed as incurred. |
Income Taxes | Pursuant to FASB ASC Topic No. 740, Income Taxes, The Company records deferred tax assets and liabilities based on the differences between the financial statement and tax bases of assets and liabilities and on operating loss carry forwards using enacted tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. |
Net Loss Per Common Share | The Company calculates basic loss per common share by dividing net loss by the weighted average number of common shares outstanding during the periods. Diluted loss per common share includes the impact from all dilutive potential common shares relating to outstanding convertible securities. For the years ended June 30, 2019 and 2018, basic and diluted weighted-average common shares outstanding were 4,364,271 and 2,539,427, respectively. The Company incurred a net loss for the years ended June 30, 2019 and 2018, and therefore, basic and diluted loss per share for each fiscal year are the same because the inclusion of potential common equivalent shares were excluded from diluted weighted-average common shares outstanding during the period, as the inclusion of such shares would be anti-dilutive. The total potentially dilutive common shares outstanding at June 30, 2019 and 2018, excluded from diluted weighted-average common shares outstanding, which include common shares underlying outstanding convertible debt, stock options and warrants, were 588,504 and 1,610,922, respectively. |
New Accounting Standards | Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. generally accepted accounting principles when it becomes effective. In July 2015, the FASB deferred the effective date of the standard by an additional year; however, it provided companies the option to adopt one year earlier, commensurate with the original effective date. Accordingly, the standard was effective for the Company in the fiscal year beginning July 1, 2018. Subsequently, the FASB issued additional guidance (ASUs 2015-14; 2016-08; 2016-10; 2016-12; 2016-13; 2016-20). The adoption of this guidance by the Company, effective July 1, 2018, did not have a material impact on the Company’s consolidated financial statements (see Revenue Recognition, for further detail). In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments Recently Issued Accounting Pronouncements Not Yet Adopted In 2016, the FASB issued ASU 2016-02, Leases On June 20, 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting |
Note 4 - Inventories (Tables)
Note 4 - Inventories (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | June 30, 2019 June 30, 2018 Raw materials $ 2,118,000 $ 807,000 Work in process 645,000 333,000 Finished goods 1,050,000 372,000 Total Inventories $ 3,813,000 $ 1,512,000 |
Note 5 - Other Current Assets (
Note 5 - Other Current Assets (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Other Assets [Abstract] | |
Schedule of Other Current Assets | June 30, 2019 June 30, 2018 Prepaid insurance $ 28,000 $ 5,000 Prepaid inventory 59,000 52,000 Prepaid rent 42,000 - Prepaid offering costs 198,000 - Other - 25,000 Prepaid expenses 44,000 9,000 Security deposits - 1,000 Total Other current assets $ 371,000 $ 92,000 |
Note 6 - Accrued Expenses (Tabl
Note 6 - Accrued Expenses (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | June 30, 2019 June 30, 2018 Payroll accrual $ 294,000 $ 166,000 PTO accrual 200,000 67,000 Warranty liability 361,000 158,000 Sales tax payable 2,000 - Garnishments 1,000 - Total Accrued expenses $ 858,000 $ 391,000 |
Note 7 - Property, Plant and _2
Note 7 - Property, Plant and Equipment, Net (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment, Net | June 30, 2019 June 30, 2018 Vehicles $ 20,000 $ 1,000 Machinery and equipment 246,000 112,000 Office equipment 233,000 162,000 Furniture and Equipment 116,000 39,000 Leasehold improvements - 34,000 615,000 348,000 Less: Accumulated depreciation (269,000 ) (261,000 ) Property, plant and equipment, net $ 346,000 $ 87,000 |
Note 9 - Stockholders' Deficit
Note 9 - Stockholders' Deficit (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Stockholders' deficit: | |
Schedule of Warrant Activity | Number of Warrants Weighted Average Exercise Price Per Warrant Remaining Contract Term (# years) Warrants outstanding and exercisable at June 30, 2018 174,079 $ 20.30 0.74 Warrants issued - $ - - Warrants exchanged (7,996 ) $ 14.80 - Warrants forfeited (157,750 ) $ 19.93 - Warrants outstanding and exercisable at June 30, 2019 8,333 $ 20.00 0.25 Number of Warrants Weighted Average Exercise Price Per Warrant Remaining Contract Term (# years) Warrants outstanding and exercisable at June 30, 2017 234,259 $ 19.70 0.12-1.55 Warrants issued - $ - - Warrants exchanged (14,165 ) $ 6.00 - Warrants forfeited (46,015 ) $ 21.50 - Warrants outstanding and exercisable at June 30, 2018 174,079 $ 20.30 0.74 |
Schedule of Stock Option Activity | Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Term (# years) Outstanding at June 30, 2018 350,726 $ 8.38 8.87 Granted 245,027 $ 14.45 9.71 Exercised - $ - - Forfeited and cancelled (15,582 ) $ 4.64 - Outstanding at June 30, 2019 580,171 $ 11.05 8.59 Exercisable at June 30, 2019 303,611 $ 10.02 8.01 Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Term (# years) Outstanding at June 30, 2017 71,628 $ 11.00 7.09 Granted 292,511 $ 7.80 Exercised - - Forfeited and cancelled (13,413 ) $ 4.60 Outstanding at June 30, 2018 350,726 $ 8.38 8.87 Exercisable at June 30, 2018 139,169 $ 7.30 7.70 |
Schedule of Stock-based Compensation | Years ended June 30, 2019 2018 Research and development $ 314,000 $ 96,000 Selling and administrative 1,630,000 159,000 Total stock-based compensation expense $ 1,944,000 $ 255,000 |
Schedule of Stock Options Valuation Assumptions | 2019 2018 Expected volatility 111.4% -112.2% 138% -143% Risk free interest rate 2.43% - 2.45% 1.76% - 2.63% Forfeiture rate 20% 20% -23% Dividend yield 0% 0% Expected term (years) 5.61 5 |
Note 10 - Income Taxes (Tables)
Note 10 - Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | Year Ended June 30, 2019 2018 Net operating loss carryforwards $ 10,028,000 $ 7,333,000 Stock compensation 1,407,000 1,160,000 Interest expense Sec. 163 55.000 - Other, net 146,000 96,000 Net deferred tax assets 11,636,000 8,589,000 Valuation allowance for deferred tax assets (11,636,000 ) (8,589,000 ) Net deferred tax assets $ - $ - |
Schedule of Effective Income Tax Rate Reconciliation | Year Ended June 30, 2019 2018 Federal income taxes at 21% and 34%, respectively $ (2,607,000 ) $ (1,915,000 ) State income taxes, net (867,000 ) (446,000 ) Permanent differences and other 450,000 345,000 Other true ups, if any (23,000 ) (206,000 ) Change in federal tax rate - 3,560,000 Change in valuation allowance (3,047,000 ) (1,338,000 ) Provision for income taxes $ - $ - |
Note 13 - Commitments and Con_2
Note 13 - Commitments and Contingencies (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments | 2020 $ 381,814 2021 393,269 2022 496,354 2023 512,518 2024 571,590 Thereafter 1,454,497 Total Future Minimum Lease Payments $ 3,810,042 |
Note 2 - Going Concern (Details
Note 2 - Going Concern (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Note 2 - Going Concern | ||
Accumulated deficit | $ (39,076,000) | $ (26,662,000) |
Net loss | $ (12,414,000) | $ (6,965,000) |
Note 3 - Summary of Significa_2
Note 3 - Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash | $ 102,000 | |
Cash equivalents | 0 | |
Inventory adjustments | 90,000 | $ 27,000 |
Standard and extended product warranty accrual | 361,000 | 158,000 |
Impairment of long-lived assets held-for-use | 0 | 0 |
Unrecognized tax benefits | $ 0 | $ 0 |
Weighted average number of shares outstanding, basic and diluted | 4,364,271 | 2,539,427 |
Minimum | ||
Property, plant and equipment, useful life | 3 years | |
Maximum | ||
Property, plant and equipment, useful life | 10 years |
Note 4 - Inventories (Details)
Note 4 - Inventories (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 2,118,000 | $ 807,000 |
Work in process | 645,000 | 333,000 |
Finished goods | 1,050,000 | 372,000 |
Total inventories | $ 3,813,000 | $ 1,512,000 |
Note 4 - Inventories (Details N
Note 4 - Inventories (Details Narrative) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Inventory, finished goods, net of reserves | $ 1,050,000 | $ 372,000 |
Held at Consignment [Member] | ||
Inventory, finished goods, net of reserves | $ 19,000 | $ 14,000 |
Note 5 - Other Current Assets_2
Note 5 - Other Current Assets (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Other Assets [Abstract] | ||
Prepaid insurance | $ 28,000 | $ 5,000 |
Prepaid inventory | 59,000 | 52,000 |
Prepaid rent | 42,000 | 0 |
Prepaid offering costs | 198,000 | 0 |
Other | 0 | 25,000 |
Prepaid expenses | 44,000 | 9,000 |
Security deposits | 0 | 1,000 |
Total other current assets | $ 371,000 | $ 92,000 |
Note 6 - Accrued Expenses (Deta
Note 6 - Accrued Expenses (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Payables and Accruals [Abstract] | ||
Payroll accrual | $ 294,000 | $ 166,000 |
PTO accrual | 200,000 | 67,000 |
Warranty liability | 361,000 | 158,000 |
Sales tax payable | 2,000 | 0 |
Garnishments | 1,000 | 0 |
Total accrued expenses | $ 858,000 | $ 391,000 |
Note 7 - Property, Plant and _3
Note 7 - Property, Plant and Equipment, Net (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Property, plant and equipment, gross | $ 615,000 | $ 348,000 |
Less: accumulated depreciation | (269,000) | (261,000) |
Property, plant and equipment, net | 346,000 | 87,000 |
Vehicles | ||
Property, plant and equipment, gross | 20,000 | 1,000 |
Machinery and Equipment | ||
Property, plant and equipment, gross | 246,000 | 112,000 |
Office Equipment | ||
Property, plant and equipment, gross | 233,000 | 162,000 |
Furniture and Fixtures | ||
Property, plant and equipment, gross | 116,000 | 39,000 |
Leasehold Improvements | ||
Property, plant and equipment, gross | $ 0 | $ 34,000 |
Note 7 - Property, Plant and _4
Note 7 - Property, Plant and Equipment, Net (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Property, Plant and Equipment, Net [Abstract] | ||
Depreciation | $ 81,000 | $ 57,000 |
Note 8 - Related Party Debt A_2
Note 8 - Related Party Debt Agreements (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Interest expense, borrowings | $ 571,000 | $ 1,014,000 |
Unrestricted Line of Credit | Esenjay Investments, LLC | ||
Line of credit facility, maximum borrowing capacity | $ 10,000,000 | |
Line of credit facility, interest rate during period | 8.00% | |
Inventory Line of Credit | Esenjay Investments, LLC | ||
Line of credit facility, maximum borrowing capacity | $ 5,000,000 | |
Line of credit facility, interest rate during period | 15.00% | |
Long-term line of credit | $ 2,405,000 | |
Line of credit facility, remaining borrowing capacity | $ 2,595,000 |
Note 9 - Stockholders' Defici_2
Note 9 - Stockholders' Deficit (Details) - $ / shares | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Stockholders' deficit: | ||
Shares purchasable under outstanding warrants, beginning | 174,079 | 234,259 |
Stock purchase warrants issued | 0 | 0 |
Stock purchase warrants exchanged | (7,996) | (14,165) |
Stock purchase warrants forfeited | (157,750) | (46,015) |
Shares purchasable under outstanding warrants, ending | 8,333 | 174,079 |
Shares purchasable under outstanding warrants, weighted average exercise price, beginning | $ 20.30 | $ 19.70 |
Stock purchase warrants issued, weighted average exercise price | .00 | 0 |
Stock purchase warrants exchanged, weighted average exercise price | 14.80 | 6 |
Stock purchase warrants forfeited, weighted average exercise price | 19.93 | 21.50 |
Shares purchasable under outstanding warrants, weighted average exercise price, ending | $ 20 | $ 20.30 |
Shares purchasable under outstanding warrants, remaining contractual term | 3 months | 8 months 27 days |
Note 9 - Stockholders' Defici_3
Note 9 - Stockholders' Deficit (Details 1) - Employee Stock Option [Member] - $ / shares | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Options outstanding, beginning | 350,726 | 71,628 |
Options granted | 245,027 | 292,511 |
Options exercised | 0 | 0 |
Options forfeited and cancelled | (15,582) | (13,413) |
Options outstanding, ending | 580,171 | 350,726 |
Options exercisable | 303,611 | 139,169 |
Weighted average exercise price outstanding, beginning | $ 8.38 | $ 11 |
Weighted average exercise price, granted | 14.45 | 7.80 |
Weighted average exercise price, exercised | .00 | .00 |
Weighted average exercise price, forfeited and cancelled | 4.64 | 4.60 |
Weighted average exercise price outstanding, ending | 11.05 | 8.38 |
Weighted average exercise price exercisable | $ 10.02 | $ 7.30 |
Weighted average remaining contract term, outstanding | 8 years 7 months 2 days | 8 years 10 months 6 days |
Weighted average remaining contract term, exercisable | 8 years 4 days | 7 years 8 months 12 days |
Note 9 - Stockholders' Defici_4
Note 9 - Stockholders' Deficit (Details 2) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Allocated share-based compensation expense | $ 1,944,000 | $ 255,000 |
Research and Development Expense | ||
Allocated share-based compensation expense | 314,000 | 96,000 |
General and Administrative Expense | ||
Allocated share-based compensation expense | $ 1,630,000 | $ 159,000 |
Note 9 - Stockholders' Defici_5
Note 9 - Stockholders' Deficit (Details 3) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Dividend yield | 0.00% | 0.00% |
Expected term | 5 years 7 months 10 days | 5 years |
Minimum | ||
Expected volatility | 111.40% | 138.00% |
Risk free interest rate | 2.43% | 1.76% |
Forfeiture rate | 20.00% | 20.00% |
Maximum | ||
Expected volatility | 112.20% | 143.00% |
Risk free interest rate | 2.45% | 2.63% |
Forfeiture rate | 23.00% |
Note 9 - Stockholders' Defici_6
Note 9 - Stockholders' Deficit (Details Narrative) | 12 Months Ended |
Jun. 30, 2019USD ($) | |
Stockholders' deficit: | |
Share-based compensation arrangement by share-based payment award, options, exercisable, intrinsic value | $ 1,377,000 |
Employee service share-based compensation, nonvested awards, compensation not yet recognized, stock options | $ 2,292,000 |
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition | 1 year 29 days |
Note 10 - Income Taxes (Details
Note 10 - Income Taxes (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Deferred Tax Assets: | ||
Net operating loss carryforwards | $ 10,028,000 | $ 7,333,000 |
Stock compensation | 1,407,000 | 1,160,000 |
Interest expense Sec. 163 | 55,000 | 0 |
Other, net | 146,000 | 96,000 |
Net deferred tax assets | 11,636,000 | 8,589,000 |
Valuation allowance for deferred tax assets | (11,636,000) | (8,589,000) |
Net deferred tax assets | $ 0 | $ 0 |
Note 10 - Income Taxes (Detai_2
Note 10 - Income Taxes (Details 1) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||
Federal income taxes at 21% and 34%, respectively | $ (2,607,000) | $ (1,915,000) |
State income taxes, net | (867,000) | (446,000) |
Permanent differences and other | 450,000 | 345,000 |
Other true ups, if any | (23,000) | (206,000) |
Change in federal tax rate | 0 | 3,560,000 |
Change in valuation allowance | (3,047,000) | (1,338,000) |
Provision for income taxes | $ 0 | $ 0 |
Note 10 - Income Taxes (Detai_3
Note 10 - Income Taxes (Details Narrative) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Income Tax Disclosure [Abstract] | ||
Deferred tax assets, valuation allowance | $ 11,636,000 | $ 8,589,000 |
Unrecognized tax benefits | $ 0 | $ 0 |
Note 11 - Other Related Party_2
Note 11 - Other Related Party Transactions (Details Narrtive) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Related Party Transactions [Abstract] | ||
Subease revenue | $ 18,000 | $ 18,000 |
Customer deposits | $ 0 | $ 102,000 |
Note 12 - Concentrations (Detai
Note 12 - Concentrations (Details Narrative) | 12 Months Ended | |
Jun. 30, 2019USD ($)CustomersSuppliers | Jun. 30, 2018USD ($)CustomersSuppliers | |
Revenues | $ 9,317,000 | $ 4,118,000 |
Sales Revenue, Net | Customer Concentration Risk | ||
Number of major customers | Customers | 4 | 2 |
Concentration risk, percentage | 87.00% | 77.00% |
Revenues | $ 8,072,000 | $ 3,181,000 |
Cost of Goods, Total | Supplier Concentration Risk | ||
Number of major suppliers | Suppliers | 3 | 3 |
Concentration risk, percentage | 62.00% | 50.00% |
Purchases from suppliers | $ 6,855,000 | $ 2,285,000 |
Note 13 - Commitments and Con_3
Note 13 - Commitments and Contingencies (Details) | Jun. 30, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 | $ 381,814 |
2021 | 393,269 |
2022 | 496,354 |
2023 | 512,518 |
2024 | 571,590 |
Thereafter | 1,454,497 |
Total future minimum lease payments | $ 3,810,042 |
Note 13 - Commitments and Con_4
Note 13 - Commitments and Contingencies (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Rent expense | $ 168,000 | $ 160,000 |