Lantronix (LTRX) 10-Q 30 Apr 15 2015 Q3 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	9 Months Ended
	Mar. 31, 2015	Apr. 24, 2015
Document And Entity Information
Entity Registrant Name	LANTRONIX INC
Entity Central Index Key	1114925
Document Type	10-Q
Document Period End Date	31-Mar-15
Amendment Flag	FALSE
Current Fiscal Year End Date	-24
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 Common Stock, Shares Outstanding		14,942,205
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2015

Unaudited_Condensed_Consolidat

Unaudited Condensed Consolidated Balance Sheets (USD $)	Mar. 31, 2015	Jun. 30, 2014
In Thousands, unless otherwise specified
Current assets:
Cash and cash equivalents	$5,598	$6,264
Accounts receivable, net	2,631	3,631
Contract manufacturers' receivable	486	359
Inventories, net	8,740	8,404
Prepaid expenses and other current assets	493	524
Total current assets	17,948	19,182
Property and equipment, net	1,311	1,487
Goodwill	9,488	9,488
Deferred tax assets	400	400
Other assets	95	125
Total assets	29,242	30,682
Current liabilities:
Accounts payable	4,032	4,547
Accrued payroll and related expenses	1,676	1,863
Warranty reserve	111	150
Deferred tax liabilities	400	400
Other current liabilities	3,614	3,418
Total current liabilities	9,833	10,378
Non-current liabilities:
Long-term capital lease obligations	8	7
Other non-current liabilities	93	131
Total liabilities	9,934	10,516
Commitments and contingencies
Stockholders' equity:
Common stock	1	1
Additional paid-in capital	205,888	205,013
Accumulated deficit	-186,952	-185,219
Accumulated other comprehensive income	371	371
Total stockholders' equity	19,308	20,166
Total liabilities and stockholders' equity	$29,242	$30,682

Unaudited_Condensed_Consolidat1

Unaudited Condensed Consolidated Statements of Operations (USD $)	3 Months Ended				9 Months Ended
In Thousands, except Share data, unless otherwise specified	Mar. 31, 2015		Mar. 31, 2014		Mar. 31, 2015		Mar. 31, 2014
Income Statement [Abstract]
Net revenue	$10,444	[1]	$11,593	[1]	$32,715	[1]	$33,444	[1]
Cost of revenue	5,735		5,694		17,237		16,718
Gross profit	4,709		5,899		15,478		16,726
Operating expenses:
Selling, general and administrative	3,914		4,248		11,981		12,258
Research and development	1,619		1,757		5,145		5,081
Total operating expenses	5,533		6,005		17,126		17,339
Loss from operations	-824		-106		-1,648		-613
Interest expense, net	-4		-6		-12		-22
Other expense, net	-5		-2		-25		-30
Loss before income taxes	-833		-114		-1,685		-665
Provision for income taxes	6		16		48		55
Net loss and comprehensive loss	-839		-130		-1,733		-720
Net loss per share (basic and diluted)	($0.06)		($0.01)		($0.12)		($0.05)
Weighted-average common shares (basic and diluted)	14,942,000		14,686,000		14,868,000		14,629,000
Net revenue from related parties	$28		$79		$219		$452
[1]	Includes net revenue from related parties.

Unaudited_Condensed_Consolidat2

Unaudited Condensed Consolidated Statements of Cash Flows (USD $)	9 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Operating activities
Net loss	($1,733)	($720)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Share-based compensation	770	662
Depreciation	680	693
Provision for excess and obsolete inventories	262	111
Changes in operating assets and liabilities:
Accounts receivable	1,000	-1,288
Contract manufacturers' receivable	-127	41
Inventories	-598	1,029
Prepaid expenses and other current assets	31	-39
Other assets	17	-30
Accounts payable	-514	1,182
Accrued payroll and related expenses	-187	356
Warranty reserve	-39	-36
Other liabilities	179	-862
Net cash provided by (used in) operating activities	-259	1,099
Investing activities
Purchases of property and equipment	-474	-417
Net cash used in investing activities	-474	-417
Financing activities
Payment of term loan	0	-167
Net proceeds from issuances of common stock	158	154
Minimum tax withholding paid on behalf of employees for restricted shares	-53	0
Payment of capital lease obligations	-38	-35
Net cash provided by (used in) financing activities	67	-48
Increase (decrease) in cash and cash equivalents	-666	634
Cash and cash equivalents at beginning of period	6,264	5,243
Cash and cash equivalents at end of period	$5,598	$5,877

1_Basis_of_Presentation

1. Basis of Presentation	9 Months Ended
	Mar. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
1. Basis of Presentation	The accompanying unaudited condensed consolidated financial statements of Lantronix, Inc. (referred to in these unaudited condensed consolidated financial statements as “Lantronix,” “we,” “us,” or “our”) have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Securities and Exchange Commission (“SEC”) Regulation S-X. Accordingly, they should be read in conjunction with the audited consolidated financial statements and notes thereto for the fiscal year ended June 30, 2014, included in our Annual Report on Form 10-K filed with the SEC on August 22, 2014. The unaudited condensed consolidated financial statements contain all normal recurring accruals and adjustments that in the opinion of management, are necessary to present fairly the consolidated financial position of Lantronix at March 31, 2015, the consolidated results of our operations for the three and nine months ended March 31, 2015 and our consolidated cash flows for the nine months ended March 31, 2015. All intercompany accounts and transactions have been eliminated. It should be understood that accounting measurements at interim dates inherently involve greater reliance on estimates than at year-end. The results of operations for the three and nine months ended March 31, 2015 are not necessarily indicative of the results to be expected for the full year or any future interim periods.
	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. Currently, 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. Currently, early adoption is not permitted. In April 2015, the FASB issued a proposal to defer the effective date of the new standard by one year, but to permit companies to adopt one year earlier if they choose. 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 August 2014, the FASB issued a new standard that will require management of an entity to assess, for each annual and interim period, if there is substantial doubt about the entity’s ability to continue as a going concern within one year of the financial statement issuance date. The definition of substantial doubt within the new standard incorporates a likelihood threshold of “probable” similar to the use of that term under current U.S. GAAP for loss contingencies. Certain disclosures will be required if conditions give rise to substantial doubt. The standard will be effective for Lantronix in the fiscal year beginning July 1, 2016. Early adoption is permitted. We are currently evaluating the impact of this standard on our financial statements and related disclosures.

2_Supplemental_Financial_Infor

2. Supplemental Financial Information	9 Months Ended
	Mar. 31, 2015
Supplemental Financial Information
2. Supplemental Financial Information	Inventories
	Inventories are stated at the lower of cost (first-in, first-out) or market and consist of the following:
		March 31,			June 30,
		2015			2014
		(In thousands)
	Finished goods	$	5,059		$	5,162
	Raw materials		2,292			1,890
	Finished goods held by distributors		1,261			1,242
	Large scale integration chips *		128			110
	Inventories, net	$	8,740		$	8,404
	* This item is sold individually and embedded into our products.
	Other Liabilities
	The following table presents details of our other liabilities:
		March 31,			June 30,
		2015			2014
		(In thousands)
	Current
	Customer deposits and refunds	$	924		$	711
	Accrued raw materials purchases		729			1,138
	Deferred revenue		599			128
	Capital lease obligations		25			47
	Taxes payable		235			235
	Accrued operating expenses		1,102			1,159
	Total other current liabilities	$	3,614		$	3,418
	Non-current
	Deferred revenue	$	93		$	91
	Deferred rent		–			40
	Total other non-current liabilities	$	93		$	131
	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 applicable period.
	The following table presents the computation of net loss per share:
		Three Months Ended						Nine Months Ended
		March 31,						March 31,
		2015			2014			2015			2014
		(In thousands, except per share data)
	Numerator:
	Net loss	$	(839	)	$	(130	)	$	(1,733	)	$	(720	)
	Denominator:
	Weighted-average common shares outstanding (basic and diluted)		14,942			14,686			14,868			14,629
	Net loss per share (basic and diluted)	$	(0.06	)	$	(0.01	)	$	(0.12	)	$	(0.05	)
	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.
		Three Months Ended						Nine Months Ended
		March 31,						March 13,
		2015			2014			2015			2014
		(In thousands)
	Common stock equivalents		1,700			930			1,653			1,696
	Supplemental Cash Flow Information
	The following table presents non-cash investing and financing transactions excluded from the unaudited condensed consolidated statements of cash flows:
		Nine Months Ended
		March 31,
		2015			2014
		(In thousands)
	Non-cash acquisition of property and equipment under capital leases	$	17		$	–

3_Warranty_Reserve

3. Warranty Reserve	9 Months Ended
	Mar. 31, 2015
Standard Product Warranty Disclosure [Abstract]
3. Warranty Reserve	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. 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.
	The following table presents details of our warranty reserve:
		Nine Months Ended			Year Ended
		March 31,			June 30,
		2015			2014
		(In thousands)
	Beginning balance	$	150		$	193
	Charged to cost of revenues		43			40
	Usage		(82	)		(83	)
	Ending balance	$	111		$	150

4_Bank_Line_of_Credit

4. Bank Line of Credit	9 Months Ended
	Mar. 31, 2015
Debt Disclosure [Abstract]
4. Bank Line of Credit	On September 30, 2014, we entered into an amendment (the “Amendment”) to our existing Loan and Security Agreement dated May 23, 2006 (as amended, the “Loan Agreement”) with Silicon Valley Bank (“SVB”). The Amendment provides, among other things, for (i) a renewal of our $4.0 million revolving line of credit with an extended maturity date of September 30, 2016 and (ii) a modification of the revolving credit line borrowing base formula to include a portion of our foreign accounts receivable to the borrowing base and increase the borrowing limit related to domestic accounts receivable.
	The Loan Agreement provides for an interest 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 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%. We maintained a monthly quick ratio greater than 1.0 to 1.0 as of and during the three months ended March 31, 2015.
	The Loan Agreement includes a covenant requiring us to maintain a certain Minimum Tangible Net Worth (“Minimum TNW”), which is currently required to be at least $6.0 million. This amount is subject to adjustment upward 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 stockholders’ equity, less goodwill. If we continue to incur net losses, we may have difficulty satisfying the Minimum TNW financial covenant in the future, in which case we may be unable to borrow funds under the Loan Agreement and any amounts outstanding may need to be repaid immediately.
	As of March 31, 2015, we had no borrowings outstanding on the revolving line of credit.
	The following table sets forth the Minimum TNW compared to our Actual TNW:
		March 31,
		2015
		(In thousands)
	Minimum TNW	$	6,000
	Actual TNW	$	9,820
	The following table presents the available borrowing capacity on the revolving line of credit and outstanding letters of credit. To date, we have not used any of the borrowing capacity under the revolving line of credit.
		March 31,		June 30,
		2015		2014
		(In thousands)
	Available borrowing capacity	$	2,541	$	1,721
	Outstanding letters of credit	$	755	$	113
	In February 2015, we executed a letter of credit with SVB for $591,000 in connection with the purchase of raw materials from one of our contract manufacturers. We paid for the purchase of such materials in early April 2015. All other outstanding letters of credit at March 31, 2015 and June 30, 2014 were used as security deposits.

5_Stockholders_Equity

5. Stockholders' Equity	9 Months Ended
	Mar. 31, 2015
Equity [Abstract]
5. Stockholders' Equity	Share-Based Plans
	Our share-based plans permit the granting of stock options (both incentive and nonqualified stock options), restricted stock units (“RSUs”), stock appreciation rights, non-vested stock, and performance shares to certain employees, directors and consultants. As of March 31, 2015, no stock appreciation rights, non-vested stock, or performance shares were outstanding.
	Stock Option Awards
	The following table presents a summary of stock option activity under all of our stock option plans during the nine months ended March 31, 2015:
									Weighted
									Average
					Number of				Exercise Price
					Shares				per Share
					(In thousands)
		Balance of options outstanding at June 30, 2014				2,719			$	2.35
		Granted				935				1.87
		Forfeited				(24	)			1.9
		Expired				(74	)			4.23
		Exercised				(25	)			1.4
		Balance of options outstanding at March 31, 2015				3,531			$	2.19
	Restricted Stock Units
	The following table presents a summary of activity with respect to RSUs during the nine months ended March 31, 2015:
							Weighted
							Average
							Grant - Date
			Number of				Fair Value
			Shares				per Share
			(In thousands)
	Balance of restricted stock units at June 30, 2014			61			$	1.4
	Granted			28				1.98
	Vested			(61	)			1.4
	Balance of restricted stock units at March 31, 2015			28			$	1.98
	Employee Stock Purchase Plan
	Our 2013 Employee Stock Purchase Plan (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 following table presents a summary of activity under our ESPP during the nine months ended March 31, 2015:
					Number of
					Shares
					(In thousands)
		Shares available for issuance at June 30, 2014				1,126
		Issued				(97	)
		Shares available for issuance at March 31, 2015				1,029
	Share-Based Compensation Expense
	The following table presents a summary of share-based compensation expense included in each functional line item on our unaudited condensed consolidated statements of operations:
			Three Months Ended								Nine Months Ended
			March 31,								March 31,
			2015				2014				2015		2014
			(In thousands)
	Cost of revenues		$	17			$	11			$	53	$	35
	Selling, general and administrative			189				144				558		461
	Research and development			44				54				159		166
	Total share-based compensation expense		$	250			$	209			$	770	$	662
	The following table summarizes the remaining unrecognized share-based compensation expense related to our outstanding share-based awards as of March 31, 2015:
			Remaining				Remaining
			Unrecognized				Weighted
			Compensation				Average Years
			Cost				To Recognize
			(In thousands)
	Stock options		$	1,422				2.7
	Restricted stock units			17				0.3
	Stock purchase rights under ESPP			99				0.6
	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.

6_Income_Taxes

6. Income Taxes	9 Months Ended
	Mar. 31, 2015
Income Tax Disclosure [Abstract]
6. Income Taxes	We utilize the liability method of accounting for income taxes. The following table presents our effective tax rates based upon the income tax provision for the periods shown:
		Three Months Ended				Nine Months Ended
		March 31,				March 31,
		2015		2014		2015		2014
	Effective tax rate		1%		14%		3%		8%
	The difference between our effective tax rates in the periods presented above and the federal statutory rate is primarily due to a tax benefit from our domestic losses being recorded with a full valuation allowance, as well as the effect of foreign earnings taxed at rates differing from the federal statutory rate.
	We record net deferred tax assets to the extent that we believe these assets will more likely than not be realized. As a result of our cumulative losses and uncertainty of generating future taxable income, we have provided a full valuation allowance against our net deferred tax assets as of March 31, 2015 and June 30, 2014.

7_Litigation_and_Contingencies

7. Litigation and Contingencies	9 Months Ended
	Mar. 31, 2015
Commitments and Contingencies Disclosure [Abstract]
7. Litigation and Contingencies	From time to time, we are subject to legal proceedings and claims in the ordinary course of business. We are not currently aware of any such legal proceedings or claims that are expected to have, individually or in the aggregate, a material adverse effect on our business, prospects, financial position, operating results or cash flows.

8_Facility_Lease

8. Facility Lease	9 Months Ended
	Mar. 31, 2015
Leases [Abstract]
8. Facility Lease	On January 16, 2015, we entered into a building lease agreement (the “Lease”) with the Irvine Company, LLC (the “Landlord”). Pursuant to the Lease, we will lease approximately 27,000 square feet of office space for our corporate headquarters in Irvine, California. The Lease shall commence on the date which is the earlier to occur of: (a) the date we take possession of the premises following the completion of certain tenant improvements to the premises, but not earlier than March 1, 2015, or (b) the date we commence our regular business activities on the premises. We currently expect to take possession of the premises, and commence our regular business activities, sometime in June 2015.
	The Landlord is obligated to provide a tenant improvement allowance of up to $242,600 for tenant improvements, as defined by the Lease. The term of the Lease will be 65 months from the commencement date. The aggregate basic rent payable under the Lease during the 65-month term is currently expected to be paid as follows:
		Fiscal year ending June 30,
		(In thousands)
		2015	$	37
		2016		444
		2017		463
		2018		486
		2019		505
		Thereafter		713
			$	2,648
	Our existing lease with the Landlord shall terminate effective as of the day preceding the commencement date of the Lease, with no early termination fee.

1_Basis_of_Presentation_Polici

1. Basis of Presentation (Policies)	9 Months Ended
	Mar. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	The accompanying unaudited condensed consolidated financial statements of Lantronix, Inc. (referred to in these unaudited condensed consolidated financial statements as “Lantronix,” “we,” “us,” or “our”) have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Securities and Exchange Commission (“SEC”) Regulation S-X. Accordingly, they should be read in conjunction with the audited consolidated financial statements and notes thereto for the fiscal year ended June 30, 2014, included in our Annual Report on Form 10-K filed with the SEC on August 22, 2014. The unaudited condensed consolidated financial statements contain all normal recurring accruals and adjustments that in the opinion of management, are necessary to present fairly the consolidated financial position of Lantronix at March 31, 2015, the consolidated results of our operations for the three and nine months ended March 31, 2015 and our consolidated cash flows for the nine months ended March 31, 2015. All intercompany accounts and transactions have been eliminated. It should be understood that accounting measurements at interim dates inherently involve greater reliance on estimates than at year-end. The results of operations for the three and nine months ended March 31, 2015 are not necessarily indicative of the results to be expected for the full year or any future interim periods.
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. Currently, 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. Currently, early adoption is not permitted. In April 2015, the FASB issued a proposal to defer the effective date of the new standard by one year, but to permit companies to adopt one year earlier if they choose. 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 August 2014, the FASB issued a new standard that will require management of an entity to assess, for each annual and interim period, if there is substantial doubt about the entity’s ability to continue as a going concern within one year of the financial statement issuance date. The definition of substantial doubt within the new standard incorporates a likelihood threshold of “probable” similar to the use of that term under current U.S. GAAP for loss contingencies. Certain disclosures will be required if conditions give rise to substantial doubt. The standard will be effective for Lantronix in the fiscal year beginning July 1, 2016. Early adoption is permitted. We are currently evaluating the impact of this standard on our financial statements and related disclosures.

2_Supplemental_Financial_Infor1

2. Supplemental Financial Information (Tables)	9 Months Ended
	Mar. 31, 2015
Supplemental Financial Information
Schedule of Inventory		March 31,			June 30,
		2015			2014
		(In thousands)
	Finished goods	$	5,059		$	5,162
	Raw materials		2,292			1,890
	Finished goods held by distributors		1,261			1,242
	Large scale integration chips *		128			110
	Inventories, net	$	8,740		$	8,404
Schedule of Other Liabilities		March 31,			June 30,
		2015			2014
		(In thousands)
	Current
	Customer deposits and refunds	$	924		$	711
	Accrued raw materials purchases		729			1,138
	Deferred revenue		599			128
	Capital lease obligations		25			47
	Taxes payable		235			235
	Accrued operating expenses		1,102			1,159
	Total other current liabilities	$	3,614		$	3,418
	Non-current
	Deferred revenue	$	93		$	91
	Deferred rent		–			40
	Total other non-current liabilities	$	93		$	131
Schedule of Computation of Net Loss per Share		Three Months Ended						Nine Months Ended
		March 31,						March 31,
		2015			2014			2015			2014
		(In thousands, except per share data)
	Numerator:
	Net loss	$	(839	)	$	(130	)	$	(1,733	)	$	(720	)
	Denominator:
	Weighted-average common shares outstanding (basic and diluted)		14,942			14,686			14,868			14,629
	Net loss per share (basic and diluted)	$	(0.06	)	$	(0.01	)	$	(0.12	)	$	(0.05	)
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share		Three Months Ended						Nine Months Ended
		March 31,						March 13,
		2015			2014			2015			2014
		(In thousands)
	Common stock equivalents		1,700			930			1,653			1,696
Schedule of non-cash investing and financing transactions		Nine Months Ended
		March 31,
		2015			2014
		(In thousands)
	Non-cash acquisition of property and equipment under capital leases	$	17		$	–

3_Warranty_Reserve_Tables

3. Warranty Reserve (Tables)	9 Months Ended
	Mar. 31, 2015
Standard Product Warranty Disclosure [Abstract]
Warranty reserve		Nine Months Ended			Year Ended
		March 31,			June 30,
		2015			2014
		(In thousands)
	Beginning balance	$	150		$	193
	Charged to cost of revenues		43			40
	Usage		(82	)		(83	)
	Ending balance	$	111		$	150

4_Bank_Line_of_Credit_and_Debt

4. Bank Line of Credit and Debt (Tables)	9 Months Ended
	Mar. 31, 2015
Debt Disclosure [Abstract]
Schedule of Minimum Tangible Net Worth		March 31,
		2015
		(In thousands)
	Minimum TNW	$	6,000
	Actual TNW	$	9,820
Outstanding balances of loans		March 31,		June 30,
		2015		2014
		(In thousands)
	Available borrowing capacity	$	2,541	$	1,721
	Outstanding letters of credit	$	755	$	113

5_Stockholders_Equity_Tables

5. Stockholders Equity (Tables)	9 Months Ended
	Mar. 31, 2015
Summary of stock option activity									Weighted
									Average
					Number of				Exercise Price
					Shares				per Share
					(In thousands)
		Balance of options outstanding at June 30, 2014				2,719			$	2.35
		Granted				935				1.87
		Forfeited				(24	)			1.9
		Expired				(74	)			4.23
		Exercised				(25	)			1.4
		Balance of options outstanding at March 31, 2015				3,531			$	2.19
Schedule of share-based compensation expense			Three Months Ended								Nine Months Ended
			March 31,								March 31,
			2015				2014				2015		2014
			(In thousands)
	Cost of revenues		$	17			$	11			$	53	$	35
	Selling, general and administrative			189				144				558		461
	Research and development			44				54				159		166
	Total share-based compensation expense		$	250			$	209			$	770	$	662
Schedule of unrecognized compensation costs			Remaining				Remaining
			Unrecognized				Weighted
			Compensation				Average Years
			Cost				To Recognize
			(In thousands)
	Stock options		$	1,422				2.7
	Restricted stock units			17				0.3
	Stock purchase rights under ESPP			99				0.6
Restricted Stock Units (RSUs) [Member]
Summary of other than options activity							Weighted
							Average
							Grant - Date
			Number of				Fair Value
			Shares				per Share
			(In thousands)
	Balance of restricted stock units at June 30, 2014			61			$	1.4
	Granted			28				1.98
	Vested			(61	)			1.4
	Balance of restricted stock units at March 31, 2015			28			$	1.98
ESPP [Member]
Summary of other than options activity					Number of
					Shares
					(In thousands)
		Shares available for issuance at June 30, 2014				1,126
		Issued				(97	)
		Shares available for issuance at March 31, 2015				1,029

6_Income_Taxes_Tables

6. Income Taxes (Tables)	9 Months Ended
	Mar. 31, 2015
Income Taxes Tables
Effective tax rate		Three Months Ended				Nine Months Ended
		March 31,				March 31,
		2015		2014		2015		2014
	Effective tax rate		1%		14%		3%		8%

8_Facility_Lease_Tables

8. Facility Lease (Tables)	9 Months Ended
	Mar. 31, 2015
Leases [Abstract]
Schedule of minimum lease payments	On January 16, 2015, we entered into a building lease agreement (the “Lease”) with the Irvine Company, LLC (the “Landlord”). Pursuant to the Lease, we will lease approximately 27,000 square feet of office space for our corporate headquarters in Irvine, California. The Lease shall commence on the date which is the earlier to occur of: (a) the date we take possession of the premises following the completion of certain tenant improvements to the premises, but not earlier than March 1, 2015, or (b) the date we commence our regular business activities on the premises. We currently expect to take possession of the premises, and commence our regular business activities, sometime in June 2015.
	The Landlord is obligated to provide a tenant improvement allowance of up to $242,600 for tenant improvements, as defined by the Lease. The term of the Lease will be 65 months from the commencement date. The aggregate basic rent payable under the Lease during the 65-month term is currently expected to be paid as follows:
		Fiscal year ending June 30,
		(In thousands)
		2015	$	37
		2016		444
		2017		463
		2018		486
		2019		505
		Thereafter		713
			$	2,648
	Our existing lease with the Landlord shall terminate effective as of the day preceding the commencement date of the Lease, with no early termination fee.

2_Supplemental_Financial_Infor2

2. Supplemental Financial Information (Details - Inventories) (USD $)	Mar. 31, 2015		Jun. 30, 2014
In Thousands, unless otherwise specified
Inventories, net	$8,740		$8,404
Finished Goods
Inventories, net	5,059		5,162
Raw Materials
Inventories, net	2,292		1,890
Finished Goods Held By Distributors
Inventories, net	1,261		1,242
Large Scale Integration Chips
Inventories, net	$128	[1]	$110	[1]
[1]	This item is sold individually and embedded into our products.

2_Supplemental_Financial_Infor3

2. Supplemental Financial Information (Details - Other liabilities) (USD $)	Mar. 31, 2015	Jun. 30, 2014
In Thousands, unless otherwise specified
Current
Customer deposits and refunds	$924	$711
Accrued raw materials purchases	729	1,138
Deferred revenue	599	128
Capital lease obligations	25	47
Taxes payable	235	235
Other accrued liabilities	1,102	1,159
Total other current liabilities	3,614	3,418
Non-current
Deferred revenue	93	91
Deferred rent	0	40
Total other non-current liabilities	$93	$131

2_Supplemental_Financial_Infor4

2. Supplemental Financial Information (Details - Computation of Net Loss per Share) (USD $)	3 Months Ended		9 Months Ended
In Thousands, except Share data, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
Numerator:
Net loss	($839)	($130)	($1,733)	($720)
Denominator:
Weighted-average shares outstanding (basic and diluted)	14,942,000	14,686,000	14,868,000	14,629,000
Net loss per share (basic and diluted)	($0.06)	($0.01)	($0.12)	($0.05)

2_Supplemental_Financial_Infor5

2. Supplemental Financial Information (Details - Common Stock Equivalents)	3 Months Ended		9 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
Supplemental Financial Information
Common stock equivalents	1,700	930	1,653	1,696

2_Supplemental_Financial_Infor6

2. Supplemental Financial Information (Details - Supplemental Cash Flow Information) (USD $)	9 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014
Supplemental Financial Information
Accrued property and equipment paid for in the subsequent period	$17	$0

3_Warranty_Reserve_Details

3. Warranty Reserve (Details) (USD $)	9 Months Ended	12 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Jun. 30, 2014
Standard Product Warranty Disclosure [Abstract]
Beginning balance	$150	$193
Charged to cost of revenues	43	40
Usage	-82	-83
Ending balance	$111	$150

4_Bank_Line_of_Credit_and_Debt1

4. Bank Line of Credit and Debt (Details - TNW) (USD $)	Mar. 31, 2015
In Thousands, unless otherwise specified
Line of Credit Facility [Abstract]
Minimum TNW	$6,000
Actual TNW	$9,820

4_Bank_Line_of_Credit_Details_

4. Bank Line of Credit (Details - Available Borrowing Capacity) (USD $)	Mar. 31, 2015	Jun. 30, 2014
In Thousands, unless otherwise specified
Line of Credit Facility [Abstract]
Available borrowing capacity under the revolving line	$2,541	$1,721
Outstanding letters of credit	$755	$113

4_Bank_Line_of_Credit_and_Debt2

4. Bank Line of Credit and Debt (Details Narrative) (USD $)	9 Months Ended
	Mar. 31, 2015
Line of Credit Facility [Abstract]
Revolving Line description	On September 30, 2014, we entered into an amendment (the BAmendmentB) to our existing Loan and Security Agreement dated May 23, 2006 (the BLoan AgreementB) with Silicon Valley Bank (BSVBB). The Amendment provides, among other things, for (i) a renewal of our $4.0 million revolving line of credit with an extended maturity date of September 30, 2016 and (ii) a modification of the revolving credit line borrowing base formula in the Loan Agreement to include a portion of our foreign accounts receivable to the borrowing base and increase the borrowing limit related to domestic accounts receivable.
Maximum borrowing amount	$4,000,000
Maturity date	30-Sep-16
Interest rate description	The Loan Agreement provides for an interest 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.

5_Stockholders_Equity_Details_

5. Stockholders' Equity (Details - Stock Option Awards) (Options, USD $)	9 Months Ended
	Mar. 31, 2015
Options
Number of shares
Number of Shares Options Outstanding, Beginning	2,719,000
Number of Shares Options Granted	935,000
Number of Shares Options Forfeited	-24,000
Number of Shares Options Expired	-74,000
Number of Shares Options Exercised	-25,000
Number of Shares Options Outstanding, Ending	3,531,000
Weighted Average Exercise Price per share
Exercise Price Outstanding, Beginning	$2.35
Exercise Price Granted	$1.87
Exercise Price Forfeited	$1.90
Exercise Price Expired	$4.23
Exercise Price Exercised	$1.40
Exercise Price Outstanding, Ending	$2.19

5_Stockholders_Equity_Details_1

5. Stockholders' Equity (Details - RSUs) (Restricted Stock Units (RSUs) [Member])	9 Months Ended
	Mar. 31, 2015
Restricted Stock Units (RSUs) [Member]
Number of shares
Beginning balance RSU's	61,000
Granted	28,000
Vested	-61,000
Ending balance RSU's	28,000

5_Stockholders_Equity_Details_2

5. Stockholders' Equity (Details - Employee Stock Purchase Plan) (ESPP [Member])	9 Months Ended
	Mar. 31, 2015
ESPP [Member]
Number of shares
Shares available for issuance at beginning of period	1,126,000
Shares issued	-97,000
Shares available for issuance at end of period	1,029,000

5_Stockholders_Equity_Details_3

5. Stockholders' Equity (Details - Share-Based Compensation Expense) (USD $)	3 Months Ended		9 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
Total share-based compensation	$250	$209	$770	$662
Cost of revenues
Total share-based compensation	17	11	53	35
Selling, general and administrative
Total share-based compensation	189	144	558	461
Research and development
Total share-based compensation	$44	$54	$159	$166

5_Stockholders_Equity_Details_4

5. Stockholders' Equity (Details - Unrecognized compensation expense) (USD $)	9 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2015
Options
Unrecognized compensation cost	$1,422
Remaining weighted average years to recognize	2 years 8 months 12 days
Restricted Stock Units (RSUs) [Member]
Unrecognized compensation cost	17
Remaining weighted average years to recognize	3 months 18 days
ESPP [Member]
Unrecognized compensation cost	$99
Remaining weighted average years to recognize	7 months 6 days

6_Income_Taxes_Details

6. Income Taxes (Details)	3 Months Ended		9 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
Income Taxes Details
Effective tax rate	1.00%	14.00%	3.00%	8.00%

8_Facility_Lease_Details

8. Facility Lease (Details) (USD $)	Mar. 31, 2015
In Thousands, unless otherwise specified
Leases [Abstract]
2015	$37
2016	444
2017	463
2018	486
2019	505
Thereafter	713
Total lease payable	$2,648