Lantronix (LTRX) 10-K 22 Aug 14 2014 FY Annual report Financial data

Document_and_Entity_Informatio

Document and Entity Information (USD $)	12 Months Ended
	Jun. 30, 2014	Jul. 31, 2014	Dec. 31, 2013
Document And Entity Information	'	'	'
Entity Registrant Name	'LANTRONIX INC	'	'
Entity Central Index Key	'0001114925	'	'
Document Type	'10-K	'	'
Document Period End Date	30-Jun-14	'	'
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	'	'	$9,800,000
Entity Common Stock, Shares Outstanding	'	14,787,158	'
Document Fiscal Period Focus	'FY	'	'
Document Fiscal Year Focus	'2014	'	'

Consolidated_Balance_Sheets

Consolidated Balance Sheets (USD $)	Jun. 30, 2014	Jun. 30, 2013
In Thousands, unless otherwise specified
Current assets:	'	'
Cash and cash equivalents	$6,264	$5,243
Accounts receivable (net of allowance for doubtful accounts of $34 and $107 at June 30, 2014 and 2013, respectively)	3,631	2,599
Inventories, net	8,404	8,741
Contract manufacturers' receivable	359	607
Prepaid expenses and other current assets	524	431
Total current assets	19,182	17,621
Property and equipment, net	1,487	1,687
Goodwill	9,488	9,488
Deferred tax assets	400	476
Other assets	125	87
Total assets	30,682	29,359
Current liabilities:	'	'
Accounts payable	4,547	2,870
Accrued payroll and related expenses	1,863	1,516
Warranty reserve	150	193
Short-term debt	0	167
Deferred tax liabilities	400	476
Other current liabilities	3,418	3,877
Total current liabilities	10,378	9,099
Long-term capital lease obligations	7	54
Other non-current liabilities	131	249
Total liabilities	10,516	9,402
Commitments and contingencies	'	'
Stockholders' equity:	'	'
Preferred stock, $0.0001 par value; 5,000,000 shares authorized; none issued and outstanding	0	0
Common stock, $0.0001 par value; 100,000,000 shares authorized; 14,787,158 and 14,579,764 shares issued and outstanding at June 30, 2014 and 2013, respectively	1	1
Additional paid-in capital	205,013	203,871
Accumulated deficit	-185,219	-184,286
Accumulated other comprehensive income	371	371
Total stockholders' equity	20,166	19,957
Total liabilities and stockholders' equity	$30,682	$29,359

Consolidated_Balance_Sheets_Pa

Consolidated Balance Sheets (Parenthetical) (USD $)	Jun. 30, 2014	Jun. 30, 2013
In Thousands, except Share data, unless otherwise specified
Assets	'	'
Allowance for Receivables	$34	$107
Stockholders Equity	'	'
Preferred Stock par value	$0.00	$0.00
Preferred Stock Authorized	5,000,000	5,000,000
Preferred Stock Issued	0	0
Preferred Stock Outstanding	0	0
Common Stock par value	$0.00	$0.00
Common Stock Authorized	100,000,000	100,000,000
Common Stock Issued	14,787,158	14,579,764
Common Stock Outstanding	14,787,158	14,579,764

Consolidated_Statements_of_Ope

Consolidated Statements of Operations (USD $)	12 Months Ended
In Thousands, except Share data, unless otherwise specified	Jun. 30, 2014		Jun. 30, 2013
Income Statement [Abstract]	'		'
Net revenue	$44,546	[1]	$46,655	[1]
Cost of revenue	22,261		24,555
Gross profit	22,285		22,100
Operating expenses:	'		'
Selling, general and administrative	16,355		17,990
Research and development	6,746		6,748
Total operating expenses	23,101		24,738
Loss from operations	-816		-2,638
Interest expense, net	-28		-59
Other expense, net	-28		-18
Loss before income taxes	-872		-2,715
Provision for income taxes	61		54
Net loss	-933		-2,769
Net loss per share (basic and diluted)	($0.06)		($0.19)
Weighted-average shares (basic and diluted)	14,657,000		14,574,000
Net revenue from related parties	$524		$1,058
[1]	(1) Includes net revenue from related parties

Consolidated_Statements_of_Sto

Consolidated Statements of Stockholders' Equity (USD $)	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Accumulated Other Comprehensive Income	Total
In Thousands, except Share data
Beginning balance, amount at Jun. 30, 2012	$1	$203,049	($181,517)	$399	$21,932
Beginning balance, shares at Jun. 30, 2012	14,549,000	'	'	'	'
Shars issued pursuant to stock awards, net, shares issued	31,000	'	'	'	'
Minimum tax withholding paid on behalf of employees for restricted shares	'	-26	'	'	-26
Share-based compensation	'	848	'	'	848
Reclassification of foreign currency translation adjustments	'	'	'	-28	-28
Net loss and comprehensive loss	'	'	-2,769	'	-2,769
Ending balance, amount at Jun. 30, 2013	1	203,871	-184,286	371	19,957
Ending balance, shares at Jun. 30, 2013	14,580,000	'	'	'	'
Shars issued pursuant to stock awards, net, shares issued	207,000	'	'	'	'
Shars issued pursuant to stock awards, net, amount	'	273	'	'	273
Share-based compensation	'	869	'	'	869
Net loss and comprehensive loss	'	'	-933	'	-933
Ending balance, amount at Jun. 30, 2014	$1	$205,013	($185,219)	$371	$20,166
Ending balance, shares at Jun. 30, 2014	14,787,000	'	'	'	'

Consolidated_Statements_of_Cas

Consolidated Statements of Cash Flows (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Operating activities	'	'
Net loss	($933)	($2,769)
Adjustments to reconcile net loss to net cash used in operating activities:	'	'
Share-based compensation	869	848
Depreciation	895	852
Provision for excess and obsolete inventories	207	283
Gain on reversal of foreign currency translation	0	-28
Loss on disposal of property and equipment	2	0
Changes in operating assets and liabilities:	'	'
Accounts receivable	-1,032	75
Inventories	130	-3,069
Contract manufacturers' receivable	248	15
Prepaid expenses and other current assets	-93	118
Other assets	-38	0
Accounts payable	1,575	-693
Accrued payroll and related expenses	347	-584
Warranty reserve	-43	-39
Other liabilities	-577	512
Net cash provided by (used in) operating activities	1,557	-4,479
Investing activities	'	'
Purchases of property and equipment	-595	-866
Net cash used in investing activities	-595	-866
Financing activities	'	'
Minimum tax withholding paid on behalf of employees for restricted shares	0	-26
Payment of term loan	-167	-667
Net proceeds from issuances of common stock	273	0
Payment of capital lease obligations	-47	-93
Net cash provided by (used in) financing activities	59	-786
Increase (decrease) in cash and cash equivalents	1,021	-6,131
Cash and cash equivalents at beginning of year	5,243	11,374
Cash and cash equivalents at end of year	6,264	5,243
Supplemental disclosure of cash flow information	'	'
Interest paid	29	63
Income taxes paid	$52	$59

1_Summary_of_Significant_Accou

1. Summary of Significant Accounting Policies	12 Months Ended
	Jun. 30, 2014
Accounting Policies [Abstract]	'
1. Summary of Significant Accounting Policies	'
	The Company
	Lantronix, Inc. (referred to in these consolidated financial statements as “Lantronix”, “we,” “us,” or “our”), incorporated in California in June 1989 and re-incorporated in Delaware in May 2000, designs, develops, markets and sells networking and communications products to make it easier and more cost effective for our customers to participate in the Internet of Things (“IoT”) market. We provide solutions that enable machines, devices and sensors to be securely accessed, managed and controlled. The manufacturing of our products is outsourced to third parties.
	Basis of Presentation
	The consolidated financial statements include the accounts of Lantronix and our wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. At June 30, 2014, approximately $2.0 million of our tangible assets (primarily inventory held at our third- party logistics provider in Hong Kong) were located outside of the United States (“U.S.”).
	Use of Estimates
	The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The industry in which we operate is characterized by rapid technological change. As a result, estimates made in preparing the consolidated financial statements include the allowance for doubtful accounts, sales returns and allowances, inventory reserves, goodwill valuation, deferred income tax asset valuation allowances, share-based compensation and warranty reserves. To the extent there are material differences between our estimates and actual results, future results of operations will be affected.
	Revenue Recognition
	We recognize revenue when all of the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the price to the buyer is fixed or determinable; and collectability is reasonably assured.
	For each of the fiscal years ended June 30, 2014 and 2013, approximately 99% of our net revenues came from sales of hardware products. The remaining 1% of our net revenues in each of these years was primarily attributable to professional engineering services and extended warranty services. We sell extended warranty services which extend the warranty period for an additional one to three years, depending upon the product. Warranty net revenue is deferred and recognized ratably over the warranty service period.
	A significant portion of our sales are made to distributors under agreements which include a limited right to return unsold product and price protection provisions. Therefore, the recognition of net revenue and related cost of revenue from sales to these distributors are deferred until the distributor resells the product. Further, when the deferred revenue attributable to any distributor exceeds their receivable balance due to Lantronix at the balance sheet date, such excess is reclassified from net accounts receivable to a customer deposit and refunds liability, which is included in other current liabilities on the accompanying consolidated balance sheets.
	When product revenue is recognized, we establish an estimated allowance for future product returns based on historical returns experience; when price reductions are approved, we establish an estimated liability for price protection payable on inventories owned by distributors. Actual product returns or pricing adjustments that differ from our estimates could result in increases or decreases to revenue.
	Allowance for Doubtful Accounts
	We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. Our allowance for doubtful accounts is based on our assessment of the collectability of specific customer accounts, the aging of accounts receivable, our history of bad debts and the general condition of the industry. Accounts that are deemed uncollectible are written off against the allowance for doubtful accounts. If a major customer’s creditworthiness deteriorates, or our customers’ actual defaults exceed our historical experience, such estimates could change and impact our reported financial results.
	Concentration of Credit Risk
	Our accounts receivable are primarily derived from revenue earned from customers located throughout North America, Europe and Asia. We perform ongoing credit evaluations of our customers’ financial condition and maintain allowances for potential credit losses. Credit losses have historically been within our expectations. We generally do not require collateral or other security from our customers.
	Fair Value of Financial Instruments
	Our financial instruments consist principally of cash and cash equivalents, accounts receivable, notes receivable, contract manufacturers’ receivable, accounts payable, accrued liabilities and long-term debt. The fair value of a financial instrument is the amount that would be received in an asset sale or paid to transfer a liability in an orderly transaction between unaffiliated market participants. Assets and liabilities measured at fair value are categorized based on whether or not the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial instruments within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels (with Level 3 being the lowest) defined as follows:
	Level 1:     Inputs are based on quoted market prices for identical assets and liabilities in active markets at the measurement date.
	Level 2:     Inputs include quoted prices for similar assets or liabilities in active markets and/or quoted prices for identical or similar assets or liabilities in markets that are not active near the measurement date.
	Level 3:     Inputs include management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument’s valuation.
	The hierarchy noted above requires us to minimize the use of unobservable inputs and to use observable market data, if available, when determining fair value. We do not have any assets or liabilities that were measured at fair value on a recurring basis, and during the years ended June 30, 2014 and June 30, 2013 did not have any assets or liabilities that were measured at fair value on a non-recurring basis.
	We believe all of our financial instruments’ recorded values approximate their current fair values because of the nature and short duration of these instruments. The fair value of long-term debt approximates its carrying value because the related effective rates of interest approximate current market rates available to us for debt with similar terms and similar remaining maturities.
	Foreign Currency Remeasurement
	The functional currency for all foreign subsidiaries is currently the U.S. dollar. Non-monetary and monetary foreign currency assets and liabilities are valued in U.S. dollars at historical and end-of-period exchange rates, respectively. Exchange gains and losses from foreign currency transactions and remeasurements are recognized in the consolidated statements of operations. Translation adjustments for foreign subsidiaries whose functional currency was previously the local currency are suspended in accumulated other comprehensive income.
	Accumulated Other Comprehensive Income
	Accumulated other comprehensive income is composed of accumulated translation adjustments as of June 30, 2014 and 2013. We did not have any other comprehensive income or losses during the fiscal years ended June 30, 2014 or 2013.
	As a result of the final dissolution of a foreign subsidiary, during the fiscal year ended June 30, 2013, we reclassified to other income $28,000 in accumulated foreign currency translation adjustments related to this subsidiary that were previously suspended in accumulated other comprehensive income.
	Cash and Cash Equivalents
	Cash and cash equivalents consist of cash and short-term investments, with original maturities of 90 days or less.
	Inventories
	Inventories are stated at the lower of cost (on a first-in, first-out basis) or market. We provide reserves for excess and obsolete inventories determined primarily based upon estimates of future demand for our products. Shipping and handling costs are classified as a component of cost of revenue in the consolidated statements of operations.
	Inventory Sale and Purchase Transactions with Contract Manufacturers
	Under certain circumstances, we sell raw materials to our contract manufacturers and subsequently repurchase finished goods from the contract manufacturers which contain such raw materials. Net sales of raw materials to the contract manufacturers are recorded on the consolidated balance sheets as contract manufacturers’ receivables, and are eliminated from net revenue as we intend to repurchase the raw materials from the contract manufacturers in the form of finished goods.
	We have contractual arrangements with certain of our contract manufacturers that provide for us to purchase unused inventory that the contract manufacturer has purchased to fulfill our forecasted manufacturing demand. To the extent that inventory on-hand at one or more of these contract manufacturers exceeds our contractually reported forecasts, we record the amount we may be required to purchase as part of other current liabilities and inventories on the consolidated balance sheets.
	Property and Equipment
	Property and equipment are carried at cost. Depreciation is provided using the straight-line method over the assets’ estimated useful lives generally ranging from three to five years. Depreciation and amortization of leasehold improvements are computed using the shorter of the remaining lease term or five years. Major renewals and betterments are capitalized, while replacements, maintenance and repairs, which do not improve or extend the estimated useful lives of the respective assets, are expensed as incurred.
	Capitalized Internal Use Software Costs
	We capitalize the costs of computer software developed or obtained for internal use. Capitalized computer software costs consist of purchased software licenses and implementation costs. The capitalized software costs are being amortized on a straight-line basis over a period of three to five years.
	Goodwill
	Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible and intangible assets acquired. In performing our goodwill impairment analysis, we first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we conduct a two-step goodwill impairment test. The first step of the impairment test involves comparing the estimated fair value of our single reporting unit with its carrying value, including goodwill. If the carrying amount of the reporting unit exceeds the reporting unit’s fair value, we perform the second step of the analysis, which involves comparing the implied fair value of the reporting unit’s goodwill with the carrying value of that goodwill, the difference of which represents the impairment loss. The determination of the reporting unit’s fair value requires significant judgment and is based on management’s best estimate. We generally use valuation techniques based on our market capitalization and multiples of revenue for similar companies. In addition, management may consider the reporting unit’s expected future earnings, and a control premium, which is the amount that a buyer is willing to pay over the current market price of a company as indicated by the traded price per share (i.e., market capitalization), in order to acquire a controlling interest.
	During the fiscal year ended June 30, 2014, we made a qualitative assessment of whether goodwill impairment exists. Since we did not determine that it was more likely than not that the fair value of our single reporting unit is less than its carrying amount, we were not required to perform the two-step goodwill impairment test.
	Income Taxes
	Income taxes are computed under the liability method. This method requires the recognition of deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities. The impact on deferred taxes of changes in tax rates and laws, if any, are applied to the years during which temporary differences are expected to be settled and are reflected in the consolidated financial statements in the period of enactment. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized.
	Financial statement effects of a tax position are initially recognized when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that meets the more-likely-than-not threshold of being realized upon ultimate settlement with a taxing authority. We recognize potential accrued interest and penalties related to unrecognized tax benefits as income tax expense.
	Share-Based Compensation
	We account for share-based compensation by expensing the estimated grant date fair value of stock options and other equity instruments over the requisite service period. We record amortization of share-based compensation expense ratably over the requisite service period of the grant. We also estimate forfeitures based on historical experience in our calculation of share-based compensation expense.
	Net Income (Loss) Per Share
	Net income (loss) per share (basic) is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the fiscal year. Net income (loss) per share (diluted) is calculated by adjusting the weighted average number of common shares outstanding, assuming any dilutive effects of outstanding share-based awards using the treasury stock method.
	Research and Development Costs
	Costs incurred in the research and development of new products and enhancements to existing products are expensed as incurred. We believe our current process for developing products is essentially completed concurrently with the establishment of technological feasibility. Software development costs incurred after the establishment of technological feasibility have not been material and, therefore, have been expensed as incurred.
	Warranty
	The warranty periods for our products generally range from one to five years. We establish reserves for estimated product warranty costs at the time revenue is recognized based upon our historical warranty experience, and additionally for any known product warranty issues. Although we engage in product quality programs and processes, our warranty obligation is affected by product failure rates, use of materials or service delivery costs that differ from our estimates. As a result, increases or decreases to warranty reserves could be required, which could impact our gross margins.
	Advertising Expenses
	Advertising costs are expensed in the period incurred.
	Segment Information
	We have one operating and reportable segment.
	Recent Accounting Pronouncements
	In May 2014, the Financial Accounting Standards Board (“FASB”) issued an accounting standard which will supersede existing revenue recognition guidance under current U.S. GAAP. The new standard is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. In doing so, among other things, companies will generally need to use more judgment and make more estimates than under the current guidance. The accounting standard will be effective for Lantronix in the fiscal year beginning July 1, 2017. The standard may be adopted using a full retrospective or a modified retrospective (cumulative effect) method. Early adoption is not permitted. We are currently evaluating this standard and have not yet selected a transition method nor have we determined the effect of the standard on our financial statements and related disclosures.
	In June 2014, the FASB issued final guidance for shared-based payment awards where the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The guidance requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. The guidance will be effective for Lantronix in the fiscal year beginning July 1, 2016, and early adoption is permitted. We are currently evaluating the impact of this guidance, if any, on our financial statements.

2_Supplemental_Financial_Infor

2. Supplemental Financial Information	12 Months Ended
	Jun. 30, 2014
Supplemental Financial Information	'
2. Supplemental Financial Information	'
	Inventories
	The following table presents details of our inventories:
		June 30,
		2014			2013
		(In thousands)
	Finished goods	$	5,162		$	5,107
	Raw materials		1,890			2,129
	Inventory at distributors		1,242			1,429
	Large scale integration chips *		110			76
	Inventories, net	$	8,404		$	8,741
	* This item is sold individually and embedded into our products.
	Property and Equipment
	The following table presents details of property and equipment:
		June 30,
		2014			2013
		(In thousands)
	Computer and office equipment	$	3,368		$	3,322
	Furniture and fixtures		966			929
	Production, development and warehouse equipment		3,151			2,832
	Construction-in-progress		250			–
	Property and equipment, gross		7,735			7,083
	Less accumulated depreciation		(6,248	)		(5,396	)
	Property and equipment, net	$	1,487		$	1,687
	As of June 30, 2014, approximately $43,000 of our net property and equipment was held in our foreign subsidiaries, mainly consisting of office equipment and furniture.
	The following table presents details of property and equipment recorded in connection with capital lease obligations:
		June 30,
		2014			2013
		(In thousands)
	Property and equipment	$	160		$	160
	Less accumulated depreciation		(102	)		(56	)
	Total	$	58		$	104
	The following table presents details of the unamortized costs capitalized as internal use software included in computer and office equipment:
		June 30,
		2014			2013
		(In thousands)
	Capitalized internal use software	$	213		$	450
	The following table presents the details of depreciation of capitalized internal use software:
		Years Ended June 30,
		2014			2013
		(In thousands)
	Depreciation of capitalized internal use software	$	237		$	251
	Warranty Reserve
	The following table presents details of our warranty reserve:
		Years Ended June 30,
		2014			2013
		(In thousands)
	Beginning balance	$	193		$	232
	Charged to cost of revenues		40			91
	Usage		(83	)		(130	)
	Ending balance	$	150		$	193
	Other Liabilities
	The following table presents details of our other liabilities:
		June 30,
		2014			2013
		(In thousands)
	Current
	Customer deposits and refunds	$	711		$	1,042
	Accrued raw materials purchases		1,138			1,382
	Deferred revenue		128			138
	Capital lease obligations		47			47
	Taxes payable		235			229
	Accrued operating expenses		1,159			1,039
	Total other current liabilities	$	3,418		$	3,877
Non-current
Deferred rent	$	40		$	128
Deferred revenue		91			121
Total other non-current liabilities	$	131		$	249
Advertising Expenses
The following table presents details of our advertising expenses:
	Years Ended June 30,
	2014			2013
	(In thousands)
Advertising expenses	$	168		$	703
Computation of Net Loss per Share
Basic and diluted net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the fiscal year.
The following table presents the computation of net loss per share:
	Years Ended June 30,
	2014			2013
	(In thousands, except per share data)
Numerator:
Net loss	$	(933	)	$	(2,769	)
Denominator:
Weighted-average shares outstanding (basic and diluted)		14,657			14,574
Net loss per share (basic and diluted)	$	(0.06	)	$	(0.19	)
The following table presents the common stock equivalents excluded from the diluted net loss per share calculation because they were anti-dilutive for the periods presented. These excluded common stock equivalents could be dilutive in the future.
	Years Ended June 30,
	2014			2013
	(In thousands)
Common stock equivalents		1,693			1,876
Supplemental Cash Flow Information
The following table presents non-cash investing and financing transactions excluded from the consolidated statements of cash flows:
	Years Ended June 30,
	2014			2013
	(In thousands)
Non-cash acquisition of property and equipment under capital leases	$	102		$	68

3_Line_of_Credit_and_Term_Loan

3. Line of Credit and Term Loan	12 Months Ended
	Jun. 30, 2014
Debt Disclosure [Abstract]	'
3. Line of Credit and Term Loan	'
	We have a Loan and Security Agreement (the “Loan and Security Agreement”) with Silicon Valley Bank (“SVB”) dated May 23, 2006. We also have (i) a Loan and Security Agreement/(Ex-Im Program) (the “Ex-Im Loan and Security Agreement”) dated May 23, 2006 with terms that are generally parallel to the Loan and Security Agreement and (ii) an Export-Import Bank of the United States (the “Ex-Im Bank”) Working Capital Guarantee Program Borrower Agreement (the “Guarantee Agreement”).On October 16, 2012, we entered into amendments to the SVB loan agreements, effective September 30, 2012, and also re-executed the Guarantee Agreement as of October 16, 2012 (the “2012 Amendments”). We collectively refer to the Loan and Security Agreement and the Ex-Im Loan and Security Agreement herein, as each have been amended time to time, as the “Amended SVB Loan Agreements.”  The Loan and Security Agreement and the Ex-Im Loan and Security Agreement were established in favor of SVB for the purpose of providing us with working capital to finance the manufacture, production or purchase and subsequent export of our finished goods or services and a means to use our assets related to our domestic and foreign receivables to secure our borrowings. The Ex-Im Loan and Security Agreement and the Guaranty Agreement were established primarily as a means to use our assets related to our foreign receivables to secure our borrowings. SVB and the Ex-Im Bank required that we execute the Guarantee Agreement as a condition precedent to SVB establishing the Loan and Security Agreement and Ex-Im Bank providing the Guarantee Agreement.
	The Amended SVB Loan Agreements provide for a revolving line of credit that in the aggregate may not exceed $4.0 million and a $2.0 million term loan (the “Term Loan”).
	The extended maturity date for the revolving line of credit under the Amended SVB Loan Agreements is September 30, 2014. The 2012 Amendments also reduced the interest rate to a rate per annum equal to the greater of the prime rate plus 0.75% or 4.0%, provided that we maintain a monthly quick ratio of 1.0 to 1.0 or greater. The quick ratio measures our ability to use our cash and cash equivalents maintained at SVB (or “quick assets”) to extinguish or retire our current liabilities immediately. If this ratio is not met, the interest rate will become the greater of the prime rate plus 1.25% or 4.0%. Additionally, the interest rate on the Term Loan was reduced to the prime rate plus 1.50%, payable monthly. The 2012 Amendments required the payment of a fee of $5,000 for the Amended Loan and Security Agreement and $10,000 for the Amended Ex-Im Loan and Security Agreement, upon execution, respectively. We also were required to pay an additional $5,000 and $10,000 fee for the Amended Loan and Security Agreement and Amended Ex-Im Loan and Security Agreement, respectively, on September 30, 2013.
	Pursuant to the Amended SVB Loan Agreements, the available borrowing capacity under the revolving line of credit is limited to the lesser of (i) $4.0 million or (ii) the current portion of the trade receivable balance, less 50% of the balance of deferred revenue, less outstanding borrowings on the revolving line of credit.
	As of June 30, 2014, there were no borrowings outstanding on the revolving line of credit under the Amended SVB Loan Agreements. The Term Loan was fully repaid as of September 30, 2013.
	The Amended SVB Loan Agreements adjusted our Minimum Tangible Net Worth (“Minimum TNW”) covenant beginning as of September 30, 2012 from approximately $7.5 million to $6.0 million. This amount will adjust upward, as further defined in the agreements, to the extent we raise additional equity or debt financing or achieve net income in future quarters. Our Actual Tangible Net Worth (“Actual TNW”) is calculated as total shareholders’ equity, less goodwill. If we continue to incur net losses, we may have difficulty satisfying the Minimum TNW financial covenant in the future.
	The following table sets forth the Minimum TNW compared to our Actual TNW:
		30-Jun-14
		(In thousands)
	Minimum TNW	$	6,000
	Actual TNW	$	10,678
	Availability under the Line of Credit
	To date, we have not used any of the borrowing capacity under the revolving line. With respect to our foreign trade receivables, only trade receivables from shipments originating within the U.S. are used to determine our borrowing capacity, which effectively reduces our borrowing capacity to the extent we ship products to foreign customers from an overseas warehouse.
	The following table presents the balance outstanding on the Term Loan, our available borrowing capacity and outstanding letters of credit, which were used as security deposits:
		June 30,
		2014		2013
		(In thousands)
	Term Loan	$	–	$	167
	Available borrowing capacity	$	1,721	$	2,187
	Outstanding letters of credit	$	113	$	113

4_Stockholders_Equity

4. Stockholders' Equity	12 Months Ended
	Jun. 30, 2014
Equity [Abstract]	'
4. Stockholders' Equity	'
	Stock Incentive Plans
	We have stock incentive plans in effect under which non-qualified and incentive options to purchase shares of Lantronix common stock (“stock options”) have been granted to employees, non-employees and board members. In addition, we have previously granted restricted common stock awards (“non-vested shares”) to employees and board members under these plans. Our current stock incentive program is governed by our Amended and Restated 2010 Stock Incentive Plan (“Amended and Restated 2010 SIP”), which was approved by our board of directors and shareholders during the fiscal year ended June 30, 2013. Upon approval of this plan, the number of shares of common stock reserved for issuance pursuant to awards made under the plan increased from 1,350,000 to 3,050,000. In addition, shares reserved for issuance under this plan include rollover shares, which are any shares subject to equity compensation awards granted under the Lantronix, Inc. Amended and Restated 2000 Stock Plan that expire or otherwise terminate without having been exercised in full or that are forfeited or repurchased by Lantronix by virtue of their failure to vest. A maximum of 2,100,000 such shares are eligible for rollover. The Amended and Restated 2010 SIP authorizes awards of stock options (both incentive and non-qualified), stock appreciation rights, non-vested shares, restricted stock units and performance shares. New shares are issued to satisfy stock option exercises and share issuances. As of June 30, 2014, approximately 1,885,000 shares remain available for issuance under the Amended and Restated 2010 SIP.
	The Compensation Committee of our board of directors determines eligibility, vesting schedules and exercise prices for options and shares granted under the plans. Stock option awards are generally granted with an exercise price equal to the market price of our common stock at the date of grant. Stock option awards generally have a contractual term of 7 to 10 years. Share-based awards generally vest and become exercisable over a one to four year service period. As of June 30, 2014, no stock appreciation rights, non-vested shares, or performance shares were outstanding.
	No income tax benefit was realized from activity in the share-based plans during the fiscal years ended June 30, 2014 and 2013.
	Stock Option Awards
	The fair value of each stock option grant was estimated on the grant date using the Black-Scholes-Merton (“BSM”) option-pricing formula. Expected volatilities were based on the historical volatility of our stock price. The expected term of options granted was estimated using the simplified method, as permitted by guidance issued by the Securities and Exchange Commission. We use the simplified method because we believe we are unable to rely on historical data or alternative information as a reasonable basis upon which to estimate the expected term of such options. The risk-free interest rate assumption was based on the U.S. Treasury interest rates appropriate for the expected term of our stock options.
	The fair value of options granted was estimated using the following weighted-average assumptions for all of our stock option plans:
		Years Ended June 30,
		2014			2013
	Expected term (in years)		4.96			4.97
	Expected volatility		74%			85%
	Risk-free interest rate		1.61%			0.73%
	Dividend yield		0.00%			0.00%
	The following table presents a summary of activity under all of our stock option plans:
					Weighted-Average
					Exercise		Remaining		Aggregate
		Number of			Price		Contractual		Intrinsic
		Shares			Per Share		Term		Value
		(In thousands)					(In years)		(In thousands)
	Balance at June 30, 2013		2,305		$	2.63
	Options granted		696			1.57
	Options forfeited		(86	)		1.93
	Options expired		(163	)		3.38
	Options exercised		(33	)		1.6
	Balance at June 30, 2014		2,719		$	2.35		4.9	$	463
	Vested or expected to vest at June 30, 2014		2,572		$	2.38		4.9	$	421
	Options exercisable at June 30, 2014		1,637		$	2.73		4.5	$	184
	The following table presents a summary of grant-date fair value and intrinsic value information for all of our stock option plans:
		Years Ended June 30,
		2014			2013
		(In thousands,
		except per share data)
	Weighted-average grant-date fair value per share	$	0.95		$	1.28
	Intrinsic value of options exercised	$	30		$	–
	Restricted Stock Units
	In October 2013, we granted to certain employees approximately 61,000 restricted stock units (“RSUs”). Such RSUs vest in their entirety on the one year anniversary of the grant date. The fair value of our RSUs is based on the closing market price of our common stock on the date of grant.
	The following table presents a summary of activity with respect to RSUs during the fiscal year ended June 30, 2014:
		Number of Shares			Weighted Average Grant Date Fair Value per Share
		(In thousands)
	Balance of restricted stock units at June 30, 2013		–		$	–
	Restricted stock units granted		61			1.40
	Restricted stock units cancelled		–			–
	Restricted stock units vested		–			–
	Balance of restricted stock units at June 30, 2014		61		$	1.4
	Employee Stock Purchase Plan
	During the fiscal year ended June 30, 2013, our Board of Directors and stockholders approved the 2013 Employee Stock Purchase Plan (the “ESPP”), in which 1,300,000 shares of our common stock were reserved for future issuance under the ESPP. The ESPP is intended to provide employees with an opportunity to purchase our common stock through accumulated payroll deductions. Each of our employees (including officers) is eligible to participate in the ESPP, subject to certain limitations as defined in the ESPP plan document.
	The ESPP is implemented by consecutive, overlapping offering periods lasting 24 months (an “Offering Period”), with a new Offering Period commencing on the first trading day on or after May 16 and November 16 of each year. The initial Offering Period under the ESPP commenced on May 16, 2013. Common stock may be purchased under the ESPP every six months (a “Purchase Period”), at a price not less than 85% of the lesser of the fair market value of our common stock on the (i) the first trading day of each Offering Period or (ii) the last trading day of each Purchase Period. To the extent the fair market value of our common stock on the enrollment date of a new Offering Period is lower than the fair market value of our common stock on the enrollment date of the immediately preceding Offering Period, then all participants in the immediately preceding Offering Period will be automatically withdrawn from such Offering Period immediately after the exercise of their options on the exercise date immediately preceding the new Offering Period and automatically re-enrolled in the new Offering Period as of the first day thereof. Generally, a participant in the ESPP may withdraw from an Offering Period at any time without affecting his or her eligibility to participate in future Offering Periods and may increase or decrease the rate of their payroll deductions during an Offering Period.
	The per share fair value of stock purchase rights granted in connection with the ESPP was estimated using the following weighted average assumptions:
		Years Ended June 30,
		2014			2013
	Expected term (in years)		1.22			1.25
	Expected volatility		53%			64%
	Risk-free interest rate		0.19%			0.15%
	Dividend yield		0.00%			0.00%
	The following table presents a summary of activity under our ESPP:
		Year Ended
		30-Jun-14
		(In thousands, except per share data)
	Shares available for issuance at June 30, 2013		1,300
	Shares reserved for issuance		–
	Shares issued		(174	)
	Shares available for future issuance at June 30, 2014		1,126
	Weighted average purchase price per share	$	1.26
Intrinsic value of ESPP shares on purchase date	$	68
In accordance with the terms of the ESPP, the exercise price of the 80,000 shares that were purchased and issued on November 15, 2013 was $1.27 per share, which represents 85% of the closing market price of our common stock on that date. The exercise price of the 94,000 shares that were purchased and issued on May 15, 2014 was $1.26 per share, which represents 85% of the closing market price of our common stock on November 18, 2013.
Share-Based Compensation Expense
The following table presents a summary of share-based compensation expense included in each functional line item on our consolidated statements of operations:
	Years Ended June 30,
	2014			2013
	(In thousands)
Cost of revenues	$	45		$	44
Selling, general and administrative		606			562
Research and development		218			242
Total share-based compensation	$	869		$	848
The following table summarizes the remaining unrecognized share-based compensation expense related to our outstanding share-based awards as of June 30, 2014:
	Remaining			Remaining Weighted Average Years to Recognize
	Unrecognized Compensation Cost
	(In thousands)
Stock options	$	1,062			2.4
Restricted stock units		28			0.3
Stock purchase rights under ESPP		136			1.4
If there are any modifications or cancellations of the underlying unvested share-based awards, we may be required to accelerate, increase or cancel remaining unearned share-based compensation expense. Future share-based compensation expense and unearned share-based compensation will increase to the extent that we grant additional share-based awards.

5_401k_Plan

5. 401(k) Plan	12 Months Ended
	Jun. 30, 2014
Compensation and Retirement Disclosure [Abstract]	'
5. 401(k) Plan	'
	We have a savings plan (the “Plan”) which is qualified under Section 401(k) of the Internal Revenue Code. Eligible employees may elect to make contributions to the Plan through salary deferrals up to 15% of their base pay, subject to limitations. In addition, we have the ability to make discretionary contributions, subject to limitations. During the fiscal years ended June 30, 2014 and 2013, we made no discretionary contributions to the Plan.

6_Litigation

6. Litigation	12 Months Ended
	Jun. 30, 2014
Commitments and Contingencies Disclosure [Abstract]	'
6. Litigation	'
	From time to time, we are subject to other legal proceedings and claims in the ordinary course of business. We are currently not aware of any such legal proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, prospects, financial position, operating results or cash flows.

7_Income_Taxes

7. Income Taxes	12 Months Ended
	Jun. 30, 2014
Income Tax Disclosure [Abstract]	'
7. Income Taxes	'
	The income tax provision consists of the following components:
		Years Ended June 30,
		2014			2013
		(In thousands)
	Current:
	Federal	$	–		$	–
	State		1			(4	)
	Foreign		60			58
			61			54
	Deferred:
	Federal		–			–
	State		–			–
			–			–
	Provision for income taxes	$	61		$	54
	The following table presents U.S. and foreign income (loss) before income taxes:
		Years Ended June 30,
		2014			2013
		(In thousands)
	United States	$	(984	)	$	(2,824	)
	Foreign		112			109
	Loss before income taxes	$	(872	)	$	(2,715	)
	The tax effects of temporary differences that give rise to deferred tax assets and liabilities are as follows:
		Years Ended June 30,
		2014			2013
		(In thousands)
	Deferred tax assets:
	Tax losses and credits	$	31,443		$	31,119
	Reserves not currently deductible		2,693			2,800
	Deferred compensation		2,640			2,468
	Inventory capitalization		1,013			938
	Marketing rights		368			451
	Depreciation		494			511
	Gross deferred tax assets		38,651			38,287
	Valuation allowance		(37,853	)		(37,614	)
	Deferred tax assets, net		798			673
	Deferred tax liabilities:
	State taxes		(798	)		(673	)
	Other		–			–
	Deferred tax liabilities		(798	)		(673	)
	Net deferred tax assets (liabilities)	$	–		$	–
	We have recorded a valuation allowance against our net deferred tax assets. If or when realized, the tax benefits relating to, and the reversal of, approximately $4.3 million of the valuation allowance will be accounted for as an increase in additional paid-in capital as a result of tax deductible compensation arising from stock option exercises. The valuation allowance was established due to uncertainties surrounding the realization of the deferred tax assets.
	The following table presents a reconciliation of the income tax provision (benefit) to taxes computed at the U.S. federal statutory rate:
		Years Ended June 30,
		2014			2013
		(In thousands)
	Statutory federal provision (benefit) for income taxes	$	(292	)	$	(931	)
	Increase (decrease) resulting from:
	Permanent differences		20			58
	Change in valuation allowance		24			651
	Deferred compensation		191			197
	Foreign tax rate variances		22			21
	Other		96			58
	Provision for income taxes	$	61		$	54
	Due to the “change of ownership” provision of the Tax Reform Act of 1986, utilization of our net operating loss (“NOL”) carryforwards and tax credit carryforwards may be subject to an annual limitation against taxable income in future periods. As a result of the annual limitation, a portion of these carryforwards may expire before ultimately becoming available to reduce future income tax liabilities. The following table summarizes our NOLs:
		June 30,
		2014
		(In thousands)
	Federal	$	86,644
	State	$	32,803
	Our NOL carryovers for federal income tax purposes begin to expire in the fiscal year ending June 30, 2021. Our NOL carryovers for state income tax purposes began to expire in the fiscal year ended June 30, 2013. Deferred income taxes were not provided on undistributed earnings of certain foreign subsidiaries because such undistributed earnings are expected to be reinvested indefinitely.
	The following table summarizes our liability for uncertain tax positions for the fiscal year ended June 30, 2014 (in thousands):
	Balance as of June 30, 2013	$	6,700
	Change in balances related to uncertain tax positions		–
Balance as of June 30, 2014	$	6,700
At June 30, 2014, we had $6.7 million of gross unrecognized tax benefits. Of the total unrecognized benefits at June 30, 2014, $6.6 million was recorded as a reduction to deferred tax assets, which caused a corresponding reduction in our valuation allowance of $6.6 million. To the extent such portion of unrecognized tax benefits is recognized at a time such valuation allowance no longer exists, the recognition would reduce the effective tax rate. Our continuing practice is to recognize interest and penalties related to income tax matters in income tax expense. During the fiscal years ended June 30, 2014 and 2013 we recorded an immaterial expense for interest and penalties related to income tax matters in the provision for income taxes. At June 30, 2014, we had approximately $141,000 of accrued interest and penalties related to uncertain tax positions.
At June 30, 2014, our fiscal 2011 through 2014 tax years remain open to examination by the federal taxing jurisdiction and the fiscal 2010 through 2014 tax years remain open to examination by the state taxing jurisdictions. However, we have NOLs beginning in fiscal 2001 which would cause the statute of limitations to remain open for the year in which the NOL was incurred. Our fiscal 2007 through fiscal 2014 tax years remain open to examination by the foreign taxing authorities. We do not anticipate that the amount of unrecognized tax benefits as of June 30, 2014 will significantly increase or decrease within the next 12 months.

8_Commitments_and_Contingencie

8. Commitments and Contingencies	12 Months Ended
	Jun. 30, 2014
Commitments and Contingencies Disclosure [Abstract]	'
8. Commitments and Contingencies	'
	Leases
	We lease office equipment and office and warehouse facilities under non-cancelable capital and operating leases.
	The following schedule represents minimum lease payments for all non-cancelable operating and capital leases as of June 30, 2014:
		Capital			Operating
	Years Ended June 30,	Leases			Leases		Total
					(In thousands)
	2015	$	49		$	838	$	887
	2016		7			404		411
	2017		–			74		74
	Total		56		$	1,316	$	1,372
	Amounts representing interest		(2	)
	Present value of net minimum lease payments		54
	Less: capital lease obligations, short-term portion
	(included in other current liabilities)		47
	Capital lease obligations, long-term portion	$	7
	The following table presents rent expense:
		Years Ended June 30,
		2014			2013
		(In thousands)
	Rent expense	$	806		$	795

9_Significant_Geographic_Produ

9. Significant Geographic, Product Line, Customer and Supplier Information	12 Months Ended
	Jun. 30, 2014
Segment Reporting [Abstract]	'
9. Significant Geographic, Product Line, Customer and Supplier Information	'
	The following table presents our sales within geographic regions as a percentage of net revenue:
		Years Ended June 30,
		2014		2013
	Americas		53%		54%
	Europe, Middle East, and Africa		30%		29%
	Asia Pacific		9%		9%
	Japan		8%		8%
	Total		100.00%		100.00%
	The following table presents sales to significant countries as a percentage of net revenue:
		Years Ended June 30,
		2014		2013
	U.S. and Canada		53%		54%
	Germany		17%		18%
	Japan		8%		8%
	Customers
	The following table presents sales to our significant customers and related parties as a percentage of net revenue:
		Years Ended June 30,
		2014		2013
	Top five customers (1)(2)		48%		49%
	Tech Data		13%		11%
	Ingram Micro		12%		13%
	Related parties		1%		2%
	(1) Includes Ingram Micro and Tech Data
	(2) All top five customers are distributors, who are part of our product distribution system
	No other customer represented more than 10% of our annual net revenue during these fiscal years.
	Related Party Transactions
	We have historically reported net revenues from two international customers, Lynx IT-Systeme GmbH (“Lynx”) and Barix AG, as related party transactions due to common ownership by our largest stockholder and Lantronix director, Bernhard Bruscha. Beginning on February 1, 2014, we no longer sell our products directly to Lynx, and therefore, as of this date, our net revenue from related parties only includes net revenues from Barix AG. Subsequent to February 1, 2014, Lynx continued to purchase our products from independent third party distributors and such sales are not included in our net revenue from related parties.
	As of June 30, 2014, we had approximately $21,000 in receivables outstanding from Barix AG, which is included in net accounts receivable in the accompanying Consolidated Balance Sheet.
	Suppliers
	We do not own or operate a manufacturing facility. Six third-party contract manufacturers located primarily in Asia manufacture substantially all of our products and two independent third party foundries located in Asia manufacture substantially all of our large scale integration chips. We have several single-sourced supplier relationships, either because alternative sources are not available or because the relationship is advantageous to us. If these suppliers are unable to provide a timely and reliable supply of components, we could experience manufacturing delays that could adversely affect our consolidated results of operations.

1_Summary_of_Significant_Accou1

1. Summary of Significant Accounting Policies (Policies)	12 Months Ended
	Jun. 30, 2014
Accounting Policies [Abstract]	'
Basis of Presentation	'
	Basis of Presentation
	The consolidated financial statements include the accounts of Lantronix and our wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. At June 30, 2014, approximately $2.0 million of our tangible assets (primarily inventory held at our third- party logistics provider in Hong Kong) were located outside of the United States (“U.S.”).
Use of Estimates	'
	Use of Estimates
	The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The industry in which we operate is characterized by rapid technological change. As a result, estimates made in preparing the consolidated financial statements include the allowance for doubtful accounts, sales returns and allowances, inventory reserves, goodwill valuation, deferred income tax asset valuation allowances, share-based compensation and warranty reserves. To the extent there are material differences between our estimates and actual results, future results of operations will be affected.
Revenue Recognition	'
	Revenue Recognition
	We recognize revenue when all of the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the price to the buyer is fixed or determinable; and collectability is reasonably assured.
	For each of the fiscal years ended June 30, 2014 and 2013, approximately 99% of our net revenues came from sales of hardware products. The remaining 1% of our net revenues in each of these years was primarily attributable to professional engineering services and extended warranty services. We sell extended warranty services which extend the warranty period for an additional one to three years, depending upon the product. Warranty net revenue is deferred and recognized ratably over the warranty service period.
	A significant portion of our sales are made to distributors under agreements which include a limited right to return unsold product and price protection provisions. Therefore, the recognition of net revenue and related cost of revenue from sales to these distributors are deferred until the distributor resells the product. Further, when the deferred revenue attributable to any distributor exceeds their receivable balance due to Lantronix at the balance sheet date, such excess is reclassified from net accounts receivable to a customer deposit and refunds liability, which is included in other current liabilities on the accompanying consolidated balance sheets.
	When product revenue is recognized, we establish an estimated allowance for future product returns based on historical returns experience; when price reductions are approved, we establish an estimated liability for price protection payable on inventories owned by distributors. Actual product returns or pricing adjustments that differ from our estimates could result in increases or decreases to revenue.
Allowance for Doubtful Accounts	'
	Allowance for Doubtful Accounts
	We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. Our allowance for doubtful accounts is based on our assessment of the collectability of specific customer accounts, the aging of accounts receivable, our history of bad debts and the general condition of the industry. Accounts that are deemed uncollectible are written off against the allowance for doubtful accounts. If a major customer’s creditworthiness deteriorates, or our customers’ actual defaults exceed our historical experience, such estimates could change and impact our reported financial results.
Concentration of Credit Risk	'
	Concentration of Credit Risk
	Our accounts receivable are primarily derived from revenue earned from customers located throughout North America, Europe and Asia. We perform ongoing credit evaluations of our customers’ financial condition and maintain allowances for potential credit losses. Credit losses have historically been within our expectations. We generally do not require collateral or other security from our customers.
Fair Value of Financial Instruments	'
	Fair Value of Financial Instruments
	Our financial instruments consist principally of cash and cash equivalents, accounts receivable, notes receivable, contract manufacturers’ receivable, accounts payable, accrued liabilities and long-term debt. The fair value of a financial instrument is the amount that would be received in an asset sale or paid to transfer a liability in an orderly transaction between unaffiliated market participants. Assets and liabilities measured at fair value are categorized based on whether or not the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial instruments within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels (with Level 3 being the lowest) defined as follows:
	Level 1:     Inputs are based on quoted market prices for identical assets and liabilities in active markets at the measurement date.
	Level 2:     Inputs include quoted prices for similar assets or liabilities in active markets and/or quoted prices for identical or similar assets or liabilities in markets that are not active near the measurement date.
	Level 3:     Inputs include management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument’s valuation.
	The hierarchy noted above requires us to minimize the use of unobservable inputs and to use observable market data, if available, when determining fair value. We do not have any assets or liabilities that were measured at fair value on a recurring basis, and during the years ended June 30, 2014 and June 30, 2013 did not have any assets or liabilities that were measured at fair value on a non-recurring basis.
	We believe all of our financial instruments’ recorded values approximate their current fair values because of the nature and short duration of these instruments. The fair value of long-term debt approximates its carrying value because the related effective rates of interest approximate current market rates available to us for debt with similar terms and similar remaining maturities.
Foreign Currency Remeasurement	'
	Foreign Currency Remeasurement
	The functional currency for all foreign subsidiaries is currently the U.S. dollar. Non-monetary and monetary foreign currency assets and liabilities are valued in U.S. dollars at historical and end-of-period exchange rates, respectively. Exchange gains and losses from foreign currency transactions and remeasurements are recognized in the consolidated statements of operations. Translation adjustments for foreign subsidiaries whose functional currency was previously the local currency are suspended in accumulated other comprehensive income.
Accumulated Other Comprehensive Income	'
	Accumulated Other Comprehensive Income
	Accumulated other comprehensive income is composed of accumulated translation adjustments as of June 30, 2014 and 2013. We did not have any other comprehensive income or losses during the fiscal years ended June 30, 2014 or 2013.
	As a result of the final dissolution of a foreign subsidiary, during the fiscal year ended June 30, 2013, we reclassified to other income $28,000 in accumulated foreign currency translation adjustments related to this subsidiary that were previously suspended in accumulated other comprehensive income.
Cash and Cash Equivalents	'
	Cash and Cash Equivalents
	Cash and cash equivalents consist of cash and short-term investments, with original maturities of 90 days or less.
Inventories	'
	Inventories
	Inventories are stated at the lower of cost (on a first-in, first-out basis) or market. We provide reserves for excess and obsolete inventories determined primarily based upon estimates of future demand for our products. Shipping and handling costs are classified as a component of cost of revenue in the consolidated statements of operations.
Inventory Sale and Purchase Transactions with Contract Manufacturers	'
	Inventory Sale and Purchase Transactions with Contract Manufacturers
	Under certain circumstances, we sell raw materials to our contract manufacturers and subsequently repurchase finished goods from the contract manufacturers which contain such raw materials. Net sales of raw materials to the contract manufacturers are recorded on the consolidated balance sheets as contract manufacturers’ receivables, and are eliminated from net revenue as we intend to repurchase the raw materials from the contract manufacturers in the form of finished goods.
	We have contractual arrangements with certain of our contract manufacturers that provide for us to purchase unused inventory that the contract manufacturer has purchased to fulfill our forecasted manufacturing demand. To the extent that inventory on-hand at one or more of these contract manufacturers exceeds our contractually reported forecasts, we record the amount we may be required to purchase as part of other current liabilities and inventories on the consolidated balance sheets.
Property and Equipment	'
	Property and Equipment
	Property and equipment are carried at cost. Depreciation is provided using the straight-line method over the assets’ estimated useful lives generally ranging from three to five years. Depreciation and amortization of leasehold improvements are computed using the shorter of the remaining lease term or five years. Major renewals and betterments are capitalized, while replacements, maintenance and repairs, which do not improve or extend the estimated useful lives of the respective assets, are expensed as incurred.
Capitalized Internal Use Software Costs	'
	Capitalized Internal Use Software Costs
	We capitalize the costs of computer software developed or obtained for internal use. Capitalized computer software costs consist of purchased software licenses and implementation costs. The capitalized software costs are being amortized on a straight-line basis over a period of three to five years.
Goodwill	'
	Goodwill
	Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible and intangible assets acquired. In performing our goodwill impairment analysis, we first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we conduct a two-step goodwill impairment test. The first step of the impairment test involves comparing the estimated fair value of our single reporting unit with its carrying value, including goodwill. If the carrying amount of the reporting unit exceeds the reporting unit’s fair value, we perform the second step of the analysis, which involves comparing the implied fair value of the reporting unit’s goodwill with the carrying value of that goodwill, the difference of which represents the impairment loss. The determination of the reporting unit’s fair value requires significant judgment and is based on management’s best estimate. We generally use valuation techniques based on our market capitalization and multiples of revenue for similar companies. In addition, management may consider the reporting unit’s expected future earnings, and a control premium, which is the amount that a buyer is willing to pay over the current market price of a company as indicated by the traded price per share (i.e., market capitalization), in order to acquire a controlling interest.
	During the fiscal year ended June 30, 2014, we made a qualitative assessment of whether goodwill impairment exists. Since we did not determine that it was more likely than not that the fair value of our single reporting unit is less than its carrying amount, we were not required to perform the two-step goodwill impairment test.
Income Taxes	'
	Income Taxes
	Income taxes are computed under the liability method. This method requires the recognition of deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities. The impact on deferred taxes of changes in tax rates and laws, if any, are applied to the years during which temporary differences are expected to be settled and are reflected in the consolidated financial statements in the period of enactment. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized.
	Financial statement effects of a tax position are initially recognized when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that meets the more-likely-than-not threshold of being realized upon ultimate settlement with a taxing authority. We recognize potential accrued interest and penalties related to unrecognized tax benefits as income tax expense.
Share-Based Compensation	'
	Share-Based Compensation
	We account for share-based compensation by expensing the estimated grant date fair value of stock options and other equity instruments over the requisite service period. We record amortization of share-based compensation expense ratably over the requisite service period of the grant. We also estimate forfeitures based on historical experience in our calculation of share-based compensation expense.
Net Income (Loss) Per Share	'
	Net Income (Loss) Per Share
	Net income (loss) per share (basic) is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the fiscal year. Net income (loss) per share (diluted) is calculated by adjusting the weighted average number of common shares outstanding, assuming any dilutive effects of outstanding share-based awards using the treasury stock method.
Research and Development Costs	'
	Research and Development Costs
	Costs incurred in the research and development of new products and enhancements to existing products are expensed as incurred. We believe our current process for developing products is essentially completed concurrently with the establishment of technological feasibility. Software development costs incurred after the establishment of technological feasibility have not been material and, therefore, have been expensed as incurred.
Warranty	'
	Warranty
	The warranty periods for our products generally range from one to five years. We establish reserves for estimated product warranty costs at the time revenue is recognized based upon our historical warranty experience, and additionally for any known product warranty issues. Although we engage in product quality programs and processes, our warranty obligation is affected by product failure rates, use of materials or service delivery costs that differ from our estimates. As a result, increases or decreases to warranty reserves could be required, which could impact our gross margins.
Advertising Expenses	'
	Advertising Expenses
	Advertising costs are expensed in the period incurred.
Segment Information	'
	Segment Information
	We have one operating and reportable segment.
Recent Accounting Pronouncements	'
	Recent Accounting Pronouncements
	In May 2014, the Financial Accounting Standards Board (“FASB”) issued an accounting standard which will supersede existing revenue recognition guidance under current U.S. GAAP. The new standard is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. In doing so, among other things, companies will generally need to use more judgment and make more estimates than under the current guidance. The accounting standard will be effective for Lantronix in the fiscal year beginning July 1, 2017. The standard may be adopted using a full retrospective or a modified retrospective (cumulative effect) method. Early adoption is not permitted. We are currently evaluating this standard and have not yet selected a transition method nor have we determined the effect of the standard on our financial statements and related disclosures.
	In June 2014, the FASB issued final guidance for shared-based payment awards where the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The guidance requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. The guidance will be effective for Lantronix in the fiscal year beginning July 1, 2016, and early adoption is permitted. We are currently evaluating the impact of this guidance, if any, on our financial statements.

2_Supplemental_Financial_Infor1

2. Supplemental Financial Information (Tables)	12 Months Ended
	Jun. 30, 2014
Supplemental Financial Information	'
Schedule of Inventory	'
		June 30,
		2014			2013
		(In thousands)
	Finished goods	$	5,162		$	5,107
	Raw materials		1,890			2,129
	Inventory at distributors		1,242			1,429
	Large scale integration chips *		110			76
	Inventories, net	$	8,404		$	8,741
Schedule of Property and Equipment	'
		June 30,
		2014			2013
		(In thousands)
	Computer and office equipment	$	3,368		$	3,322
	Furniture and fixtures		966			929
	Production, development and warehouse equipment		3,151			2,832
	Construction-in-progress		250			–
	Property and equipment, gross		7,735			7,083
	Less accumulated depreciation		(6,248	)		(5,396	)
	Property and equipment, net	$	1,487		$	1,687
Schedule of Capital Leased Assets	'
		June 30,
		2014			2013
		(In thousands)
	Property and equipment	$	160		$	160
	Less accumulated depreciation		(102	)		(56	)
	Total	$	58		$	104
Schedule of capitalized internal use software	'
	The following table presents details of the unamortized costs capitalized as internal use software included in computer and office equipment:
		June 30,
		2014			2013
		(In thousands)
	Capitalized internal use software	$	213		$	450
	The following table presents the details of depreciation of capitalized internal use software:
		Years Ended June 30,
		2014			2013
		(In thousands)
	Depreciation of capitalized internal use software	$	237		$	251
Schedule of Warranty Reserve	'
		Years Ended June 30,
		2014			2013
		(In thousands)
	Beginning balance	$	193		$	232
	Charged to cost of revenues		40			91
	Usage		(83	)		(130	)
	Ending balance	$	150		$	193
Schedule of Other Liabilities	'
		June 30,
		2014			2013
		(In thousands)
	Current
	Customer deposits and refunds	$	711		$	1,042
	Accrued raw materials purchases		1,138			1,382
	Deferred revenue		128			138
	Capital lease obligations		47			47
	Taxes payable		235			229
	Accrued operating expenses		1,159			1,039
	Total other current liabilities	$	3,418		$	3,877
	Non-current
	Deferred rent	$	40		$	128
	Deferred revenue		91			121
	Total other non-current liabilities	$	131		$	249
Schedule of Advertising Expenses	'
		Years Ended June 30,
		2014			2013
		(In thousands)
	Advertising expenses	$	168		$	703
Schedule of Computation of Net Loss per Share	'
		Years Ended June 30,
		2014			2013
		(In thousands, except per share data)
	Numerator:
	Net loss	$	(933	)	$	(2,769	)
	Denominator:
	Weighted-average shares outstanding (basic and diluted)		14,657			14,574
	Net loss per share (basic and diluted)	$	(0.06	)	$	(0.19	)
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share	'
		Years Ended June 30,
		2014			2013
		(In thousands)
	Common stock equivalents		1,693			1,876
Schedule of Supplemental Cash Flow Information	'
		Years Ended June 30,
		2014			2013
		(In thousands)
	Non-cash acquisition of property and equipment under capital leases	$	102		$	68

3_Line_of_Credit_and_Term_Loan1

3. Line of Credit and Term Loan (Tables)	12 Months Ended
	Jun. 30, 2014
Debt Disclosure [Abstract]	'
Schedule of Minimum Tangible Net Worth	'
		30-Jun-14
		(In thousands)
	Minimum TNW	$	6,000
	Actual TNW	$	10,678
Availability under the Line of Credit	'
		June 30,
		2014		2013
		(In thousands)
	Term Loan	$	–	$	167
	Available borrowing capacity	$	1,721	$	2,187
	Outstanding letters of credit	$	113	$	113

4_Stockholders_Equity_Tables

4. Stockholders' Equity (Tables)	12 Months Ended
	Jun. 30, 2014
Summary of stock option activity	'
					Weighted-Average
					Exercise		Remaining		Aggregate
		Number of			Price		Contractual		Intrinsic
		Shares			Per Share		Term		Value
		(In thousands)					(In years)		(In thousands)
	Balance at June 30, 2013		2,305		$	2.63
	Options granted		696			1.57
	Options forfeited		(86	)		1.93
	Options expired		(163	)		3.38
	Options exercised		(33	)		1.6
	Balance at June 30, 2014		2,719		$	2.35		4.9	$	463
	Vested or expected to vest at June 30, 2014		2,572		$	2.38		4.9	$	421
	Options exercisable at June 30, 2014		1,637		$	2.73		4.5	$	184
Summary of option grant-date fair value and intrinsic value information	'
		Years Ended June 30,
		2014			2013
		(In thousands,
		except per share data)
	Weighted-average grant-date fair value per share	$	0.95		$	1.28
	Intrinsic value of options exercised	$	30		$	–
Schedule of share-based compensation expense by functional line item	'
		Years Ended June 30,
		2014			2013
		(In thousands)
	Cost of revenues	$	45		$	44
	Selling, general and administrative		606			562
	Research and development		218			242
	Total share-based compensation	$	869		$	848
Schedule of unrecognized share-based compensation expense	'
		Remaining			Remaining Weighted Average Years to Recognize
		Unrecognized Compensation Cost
		(In thousands)
	Stock options	$	1,062			2.4
	Restricted stock units		28			0.3
	Stock purchase rights under ESPP		136			1.4
Stock Options	'
Schedule of Stock Options Valuation Assumptions	'
		Years Ended June 30,
		2014			2013
	Expected term (in years)		4.96			4.97
	Expected volatility		74%			85%
	Risk-free interest rate		1.61%			0.73%
	Dividend yield		0.00%			0.00%
ESPP	'
Schedule of Stock Options Valuation Assumptions	'
		Years Ended June 30,
		2014			2013
	Expected term (in years)		1.22			1.25
	Expected volatility		53%			64%
	Risk-free interest rate		0.19%			0.15%
	Dividend yield		0.00%			0.00%
Summary of other-than-option activity	'
		Year Ended
		30-Jun-14
		(In thousands, except per share data)
	Shares available for issuance at June 30, 2013		1,300
	Shares reserved for issuance		–
	Shares issued		(174	)
	Shares available for future issuance at June 30, 2014		1,126
	Weighted average purchase price per share	$	1.26
	Intrinsic value of ESPP shares on purchase date	$	68
Restricted Stock Units (RSUs) [Member]	'
Summary of other-than-option activity	'
		Number of Shares			Weighted Average Grant Date Fair Value per Share
		(In thousands)
	Balance of restricted stock units at June 30, 2013		–		$	–
	Restricted stock units granted		61			1.40
	Restricted stock units cancelled		–			–
	Restricted stock units vested		–			–
	Balance of restricted stock units at June 30, 2014		61		$	1.4

7_Income_Taxes_Tables

7. Income Taxes (Tables)	12 Months Ended
	Jun. 30, 2014
Income Tax Disclosure [Abstract]	'
Schedule of Components of Income Tax Expense	'
		Years Ended June 30,
		2014			2013
		(In thousands)
	Current:
	Federal	$	–		$	–
	State		1			(4	)
	Foreign		60			58
			61			54
	Deferred:
	Federal		–			–
	State		–			–
			–			–
	Provision for income taxes	$	61		$	54
Schedule of Income before Income Tax, Domestic and Foreign	'
		Years Ended June 30,
		2014			2013
		(In thousands)
	United States	$	(984	)	$	(2,824	)
	Foreign		112			109
	Loss before income taxes	$	(872	)	$	(2,715	)
Schedule of Deferred Tax Assets and Liabilities	'
		Years Ended June 30,
		2014			2013
		(In thousands)
	Deferred tax assets:
	Tax losses and credits	$	31,443		$	31,119
	Reserves not currently deductible		2,693			2,800
	Deferred compensation		2,640			2,468
	Inventory capitalization		1,013			938
	Marketing rights		368			451
	Depreciation		494			511
	Gross deferred tax assets		38,651			38,287
	Valuation allowance		(37,853	)		(37,614	)
	Deferred tax assets, net		798			673
	Deferred tax liabilities:
	State taxes		(798	)		(673	)
	Other		–			–
	Deferred tax liabilities		(798	)		(673	)
	Net deferred tax assets (liabilities)	$	–		$	–
Schedule of Effective Income Tax Reconciliation	'
		Years Ended June 30,
		2014			2013
		(In thousands)
	Statutory federal provision (benefit) for income taxes	$	(292	)	$	(931	)
	Increase (decrease) resulting from:
	Permanent differences		20			58
	Change in valuation allowance		24			651
	Deferred compensation		191			197
	Foreign tax rate variances		22			21
	Other		96			58
	Provision for income taxes	$	61		$	54
Summary of Operating Loss Carryforwards	'
		June 30,
		2014
		(In thousands)
	Federal	$	86,644
	State	$	32,803
Summary of uncertain tax position	'
	Balance as of June 30, 2013	$	6,700
	Change in balances related to uncertain tax positions		–
	Balance as of June 30, 2014	$	6,700

8_Commitments_and_Contingencie1

8. Commitments and Contingencies (Tables)	12 Months Ended
	Jun. 30, 2014
Commitments and Contingencies Disclosure [Abstract]	'
Schedule of Minimum Lease Payments	'
		Capital			Operating
	Years Ended June 30,	Leases			Leases		Total
					(In thousands)
	2015	$	49		$	838	$	887
	2016		7			404		411
	2017		–			74		74
	Total		56		$	1,316	$	1,372
	Amounts representing interest		(2	)
	Present value of net minimum lease payments		54
	Less: capital lease obligations, short-term portion
	(included in other current liabilities)		47
	Capital lease obligations, long-term portion	$	7
Schedule of Rent Expense	'
		Years Ended June 30,
		2014			2013
		(In thousands)
	Rent expense	$	806		$	795

9_Significant_Geographic_Produ1

9. Significant Geographic, Product Line, Customer and Supplier Information (Tables)	12 Months Ended
	Jun. 30, 2014
Segment Reporting [Abstract]	'
Schedule of Revenue by Geographic Area	'
		Years Ended June 30,
		2014		2013
	Americas		53%		54%
	Europe, Middle East, and Africa		30%		29%
	Asia Pacific		9%		9%
	Japan		8%		8%
	Total		100.00%		100.00%
Schedule of Significant countries as a percentage of net revenue	'
		Years Ended June 30,
		2014		2013
	U.S. and Canada		53%		54%
	Germany		17%		18%
	Japan		8%		8%
Schedule of Revenue by Major Customers	'
		Years Ended June 30,
		2014		2013
	Top five customers (1)(2)		48%		49%
	Tech Data		13%		11%
	Ingram Micro		12%		13%
	Related parties		1%		2%
	(1) Includes Ingram Micro and Tech Data
	(2) All top five customers are distributors, who are part of our product distribution system

2_Supplemental_Financial_Infor2

2. Supplemental Financial Information (Details - Inventories) (USD $)	Jun. 30, 2014	Jun. 30, 2013
In Thousands, unless otherwise specified
Supplemental Financial Information	'	'
Finished goods	$5,162	$5,107
Raw materials	1,890	2,129
Inventory at distributors	1,242	1,429
Large scale integration chips	110	76
Inventories, net	$8,404	$8,741

2_Supplemental_Financial_Infor3

2. Supplemental Financial Information (Details - Property and Equipment) (USD $)	Jun. 30, 2014	Jun. 30, 2013
In Thousands, unless otherwise specified
Property and equipment, gross	$7,735	$7,083
Less accumulated depreciation	-6,248	-5,396
Property and equipment, net	1,487	1,687
Computer and office equipment	'	'
Property and equipment, gross	3,368	3,322
Furniture and Fixtures	'	'
Property and equipment, gross	966	929
Production, development and warehouse equipment	'	'
Property and equipment, gross	3,151	2,832
Construction in Progress [Member]	'	'
Property and equipment, gross	$250	$0

2_Supplemental_Financial_Infor4

2. Supplemental Financial Information (Details - Capital lease obligations) (Capital lease obligations, USD $)	Jun. 30, 2014	Jun. 30, 2013
In Thousands, unless otherwise specified
Capital lease obligations	'	'
Property and equipment	$160	$160
Less accumulated depreciation	-102	-56
Total	$58	$104

2_Supplemental_Financial_Infor5

2. Supplemental Financial Information (Details - Capitalized software) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Supplemental Financial Information	'	'
Capitalized internal use software	$213	$450
Depreciation of capitalized internal use software	$237	$251

2_Supplemental_Financial_Infor6

2. Supplemental Financial Information (Details - Warranty reserve) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Supplemental Financial Information	'	'
Beginning balance	$193	$232
Charged to cost of revenues	40	91
Usage	-83	-130
Ending balance	$150	$193

2_Supplemental_Financial_Infor7

2. Supplemental Financial Information (Details - Other liabilities) (USD $)	Jun. 30, 2014	Jun. 30, 2013
In Thousands, unless otherwise specified
Current	'	'
Customer deposits and refunds	$711	$1,042
Accrued raw materials purchases	1,138	1,382
Deferred revenue	128	138
Capital lease obligations	47	47
Taxes payable	235	229
Other accrued liabilities	1,159	1,039
Total other current liabilities	3,418	3,877
Non-current	'	'
Deferred rent	40	128
Deferred revenue	91	121
Total other non-current liabilities	$131	$249

2_Supplemental_Financial_Infor8

2. Supplemental Financial Information (Details - Advertising expense) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Supplemental Financial Information	'	'
Advertising expenses	$168	$703

2_Supplemental_Financial_Infor9

2. Supplemental Financial Information (Details - Net Loss per Share) (USD $)	12 Months Ended
In Thousands, except Share data, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Numerator:	'	'
Net loss	($933)	($2,769)
Denominator:	'	'
Weighted-average shares outstanding (basic and diluted)	14,657,000	14,574,000
Net loss per share (basic and diluted)	($0.06)	($0.19)

Recovered_Sheet1

2. Supplemental Financial Information (Details - Equivalents)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Supplemental Financial Information	'	'
Common stock equivalents	1,693,000	1,876,000

Recovered_Sheet2

2. Supplemental Financial Information (Details - Non-cash acquisition) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Supplemental Financial Information	'	'
Non-cash acquisition of property and equipment under capital leases	$102	$68

Recovered_Sheet3

2. Supplemental Financial Information (Details Narrative) (Foreign Subsidiaries, USD $)	Jun. 30, 2014
In Thousands, unless otherwise specified
Foreign Subsidiaries	'
Fixed assets held in foreign subsidiaries	$43,000

3_Bank_Line_of_Credit_and_Debt

3. Bank Line of Credit and Debt (Details - TNW) (USD $)	Jun. 30, 2014
In Thousands, unless otherwise specified
Debt Disclosure [Abstract]	'
Minimum TNW	$6,000
Actual TNW	$10,678

3_Bank_Line_of_Credit_and_Debt1

3. Bank Line of Credit and Debt (Details - Credit Line) (USD $)	Jun. 30, 2014	Jun. 30, 2013
In Thousands, unless otherwise specified
Debt Disclosure [Abstract]	'	'
Term Loan	$0	$167
Available borrowing capacity	1,721	2,187
Outstanding letters of credit	$113	$113

3_Bank_Line_of_Credit_and_Debt2

3. Bank Line of Credit and Debt (Details Narrative)	12 Months Ended
	Jun. 30, 2014
Debt Disclosure [Abstract]	'
Revolving Line	'Two-year $4.0 million maximum revolving line
Term Loan	'Three-year $2.0 million term loan
Maturity date	30-Sep-14
Interest rate description	'
	Rate per annum equal to the greater of the prime rate plus 0.75% or 4.0%, provided that we maintain a monthly quick ratio of 1.0 to 1.0 or greater. The quick ratio measures our ability to use our cash and cash equivalents maintained at SVB (or “quick assets”) to extinguish or retire our current liabilities immediately. If this ratio is not met, the interest rate will become the greater of the prime rate plus 1.25% or 4.0%. Additionally, the interest rate on the Term Loan was reduced to the prime rate plus 1.50%, payable monthly.

4_Stockholders_Equity_Details_

4. Stockholders Equity (Details - Option assumptions) (Stock Options)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Stock Options	'	'
Expected term (in years)	'4 years 11 months 16 days	'4 years 11 months 19 days
Expected volatility	74.00%	85.00%
Risk-free interest rate	1.61%	0.73%
Dividend yield	0.00%	0.00%

4_Stockholders_Equity_Details_1

4. Stockholders Equity (Details - Option activity) (Stock Options, USD $)	12 Months Ended
In Thousands, except Share data, unless otherwise specified	Jun. 30, 2014
Stock Options	'
Number of shares	'
Number of Shares Options Outstanding, Beginning	2,305,000
Number of Shares Options Granted	696,000
Number of Shares Options Forfeited	-86,000
Number of Shares Options Expired	-163,000
Number of Shares Options Exercised	-33,000
Number of Shares Options Outstanding, Ending	2,719,000
Number of Shares Options Vested or expected to vest at end of period	2,572,000
Number of Shares Options Options exercisable at end of period	1,637,000
Weighted Average Exercise Price per share	'
Exercise Price Outstanding, Beginning	$2.63
Exercise Price Granted	$1.57
Exercise Price Forfeited	$1.93
Exercise Price Expired	$3.38
Exercise Price Exercised	$1.60
Exercise Price Outstanding, Ending	$2.35
Exercise Price Vested or expected to vest at June 30, 2013	$2.38
Exercise PriceOptions exercisable at June 30, 2013	$2.73
Weighted Average Remaining Contractual Life (in years) Outstanding, Ending	'4 years 10 months 24 days
Weighted Average Remaining Contractual Life (in years), Options vested or expected to vest	'4 years 10 months 24 days
Weighted Average Remaining Contractual Life (in years) Exercisable	'4 years 6 months
Aggregate Intrinsic Value Outstanding, Ending	$463
Aggregate Intrinsic Value, Options vested or expected to vest	421
Aggregate Intrinsic Value Exercisable	$184

4_Stockholders_Equity_Details_2

4. Stockholders Equity (Details - Other option information) (Stock Options, USD $)	12 Months Ended
In Thousands, except Per Share data, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Stock Options	'	'
Weighted-average grant-date fair value per share	$0.95	$1.28
Intrinsic value of options exercised	$30	$0

4_Stockholders_Equity_Details_3

4. Stockholders Equity (Details - RSU activity) (Restricted Stock Units (RSUs) [Member], USD $)	12 Months Ended
	Jun. 30, 2014
Restricted Stock Units (RSUs) [Member]	'
Number of RSU's Shares	'
Balance of RSU's, beginning	0
Granted	61
Cancelled	0
Vested	0
Balance of RSU's, ending	61
Weighted Average Grant Date Fair Value per share	'
RSU Shares Granted, Weighted-Average Grant-Date Fair Value per Share	$1.40
RSU Shares Weighted-Average Grant-Date Fair Value per Share, ending	$1.40

4_Stockholders_Equity_Details_4

4. Stockholders Equity (Details - ESPP Assumptions) (ESPP)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
ESPP	'	'
Expected term (in years)	'1 year 2 months 19 days	'1 year 3 months
Expected volatility	53.00%	64.00%
Risk-free interest rate	0.19%	0.15%
Dividend yield	0.00%	0.00%

4_Stockholders_Equity_Details_5

4. Stockholders Equity (Details - ESPP activity) (ESPP, USD $)	12 Months Ended
In Thousands, except Share data, unless otherwise specified	Jun. 30, 2014
ESPP	'
Shares available for issuance at beginning of year	1,300,000
Shares reserved for issuance	0
Shares issued	-174,000
Shares available for future issuance at end of year	1,126,000
Weighted average purchase price per share	$1.26
Intrinsic value of ESPP shares on purchase date	$68

4_Stockholders_Equity_Details_6

4. Stockholders Equity (Details - Share based compensation) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Total share-based compensation	$869	$848
Cost of revenues	'	'
Total share-based compensation	45	44
Selling, general and administrative	'	'
Total share-based compensation	606	562
Research and development	'	'
Total share-based compensation	$218	$242

4_Stockholders_Equity_Details_7

4. Stockholders Equity (Details - Unrecognized expense) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Jun. 30, 2014
Stock Options	'
Unrecognized share-based compensation expense	$1,062
Weighted average years to recognize	'2 years 4 months 24 days
Restricted Stock Units (RSUs) [Member]	'
Unrecognized share-based compensation expense	28
Weighted average years to recognize	'3 months 18 days
ESPP	'
Unrecognized share-based compensation expense	$136
Weighted average years to recognize	'1 year 4 months 24 days

4_Stockholders_Equity_Details_8

4. Stockholders' Equity (Details Narrative) (Stock Options)	Jun. 30, 2014
Stock Options	'
Shares available for issuance under stock incentive plans	1,885,000

5_401k_Plan_Details_Narrative

5. 401(k) Plan (Details Narrative) (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Compensation and Retirement Disclosure [Abstract]	'	'
Contributions made by Company	$0	$0

7_Income_Taxes_Details_Income_

7. Income Taxes (Details - Income tax provision) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Current:	'	'
Federal	$0	$0
State	1	-4
Foreign	60	58
Total Current taxes	61	54
Deferred:	'	'
Federal	0	0
State	0	0
Total Deferred Taxes	0	0
Provision for income taxes	$61	$54

7_Income_Taxes_Details_US_and_

7. Income Taxes (Details - US and foreign income) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Income Tax Disclosure [Abstract]	'	'
United States	($984)	($2,824)
Foreign	112	109
Loss before income taxes	($872)	($2,715)

7_Income_Taxes_Details_Deferre

7. Income Taxes (Details - Deferred tax assets) (USD $)	Jun. 30, 2014	Jun. 30, 2013
In Thousands, unless otherwise specified
Deferred tax assets:	'	'
Tax losses and credits	$31,443	$31,119
Reserves not currently deductible	2,693	2,800
Deferred compensation	2,640	2,468
Inventory capitalization	1,013	938
Marketing rights	368	451
Depreciation	494	511
Gross deferred tax assets	38,651	38,287
Valuation allowance	-37,853	-37,614
Deferred tax assets, net	798	673
Deferred tax liabilities:	'	'
State taxes	-798	-673
Other deferred tax liabilities	0	0
Deferred tax liabilities	-798	-673
Net deferred tax assets (liabilities)	$0	$0

7_Income_Taxes_Details_Reconci

7. Income Taxes (Details - Reconciliation) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Income Tax Disclosure [Abstract]	'	'
Statutory federal provision (benefit) for income taxes	($292)	($931)
Increase (decrease) resulting from:	'	'
Permanent differences	20	58
Change in valuation allowance	24	651
Deferred compensation	191	197
Foreign tax rate variances	22	21
Other	96	58
Provision for income taxes	$61	$54

7_Income_Taxes_Details_NOLs

7. Income Taxes (Details - NOL's) (USD $)	Jun. 30, 2014
In Thousands, unless otherwise specified
Income Tax Disclosure [Abstract]	'
Federal	$86,644
State	$32,803

7_Income_Taxes_Details_Uncerta

7. Income Taxes (Details - Uncertain tax positions) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Jun. 30, 2014
Income Tax Disclosure [Abstract]	'
Balance, beginning	$6,700
Change in balances related to uncertain tax positions	0
Balance, ending	$6,700

7_Income_Taxes_Details_Narrati

7. Income Taxes (Details Narrative) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Jun. 30, 2014
Income Tax Disclosure [Abstract]	'
Net operating loss expiration date	30-Jun-21
Accrued interest and penalties related to uncertain tax positions	$141,000

8_Commitments_and_Contingencie2

8. Commitments and Contingencies (Details - Capital lease) (USD $)	Jun. 30, 2014	Jun. 30, 2013
In Thousands, unless otherwise specified
Capital Leases	'	'
2015	$49	'
2016	7	'
2017	0	'
Total	56	'
Amounts representing interest	-2	'
Present value of net minimum lease payments	54	'
Less: capital lease obligations, short-term portion (included in other current liabilities)	47	'
Capital lease obligations, long-term portion	7	54
Operating Leases	'	'
2015	838	'
2016	404	'
2017	74	'
Total	1,316	'
Total lease payments 2015	887	'
Total lease payments 2016	411	'
Total lease payments 2017	74	'
Total lease payments	$1,372	'

8_Commitments_and_Contingencie3

8. Commitments and Contingencies (Details - rent expense) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Commitments and Contingencies Disclosure [Abstract]	'	'
Rent expense	$806	$795

9_Significant_Geographic_Custo

9. Significant Geographic, Customer and Supplier Information (Details - Geographic) (Sales Revenue, Net [Member])	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
America	'	'
Geographic regions, net revenue percentage	53.00%	54.00%
Euprope, Middle East, Africa	'	'
Geographic regions, net revenue percentage	30.00%	29.00%
Asia Pacific	'	'
Geographic regions, net revenue percentage	9.00%	9.00%
JAPAN	'	'
Geographic regions, net revenue percentage	8.00%	8.00%

9_Significant_Geographic_Custo1

9. Significant Geographic, Customer and Supplier Information (Details - by country) (Sales Revenue, Net [Member])	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
U.S. and Canada	'	'
Significant countries, net revenue percentage	53.00%	54.00%
GERMANY	'	'
Significant countries, net revenue percentage	17.00%	18.00%
JAPAN	'	'
Significant countries, net revenue percentage	8.00%	8.00%

9_Significant_Geographic_Custo2

9. Significant Geographic, Customer and Supplier Information (Details - Significant customers) (Sales Revenue, Net [Member])	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Top five customers	'	'
Significant customers, net revenue percentage	48.00%	49.00%
Tech Data	'	'
Significant customers, net revenue percentage	13.00%	11.00%
Ingram Micro	'	'
Significant customers, net revenue percentage	12.00%	13.00%
Related Parties	'	'
Significant customers, net revenue percentage	1.00%	2.00%