Lantronix (LTRX) 10-Q 30 Oct 15 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Sep. 30, 2015	Oct. 24, 2015
Document And Entity Information
Entity Registrant Name	LANTRONIX INC
Entity Central Index Key	1,114,925
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
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 Common Stock, Shares Outstanding		15,104,710
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,016

Unaudited Condensed Consolidate

Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2015	Jun. 30, 2015
Current assets:
Cash and cash equivalents	$ 4,718	$ 4,989
Accounts receivable, net	2,970	2,658
Inventories, net	8,988	9,503
Contract manufacturers' receivable	365	369
Prepaid expenses and other current assets	315	400
Total current assets	17,356	17,919
Property and equipment, net	1,476	1,471
Goodwill	9,488	9,488
Deferred tax assets	442	442
Other assets	60	93
Total assets	28,822	29,413
Current liabilities:
Accounts payable	2,922	3,633
Line of Credit	700	700
Accrued payroll and related expenses	1,800	1,685
Warranty reserve	127	163
Deferred tax liabilities	442	442
Other current liabilities	3,790	3,849
Total current liabilities	9,781	10,472
Non-current liabilities:
Long-term capital lease obligations	138	152
Other non-current liabilities	308	80
Total liabilities	10,227	10,704
Stockholders' equity:
Common stock	2	2
Additional paid-in capital	206,543	206,326
Accumulated deficit	(188,321)	(187,990)
Accumulated other comprehensive income	371	371
Total stockholders' equity	18,595	18,709
Total liabilities and stockholders' equity	$ 28,822	$ 29,413

Unaudited Condensed Consolidat3

Unaudited Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands		3 Months Ended
		Sep. 30, 2015	Sep. 30, 2014
Income Statement [Abstract]
Net revenue (1)	[1]	$ 10,573	$ 11,536
Cost of revenue		5,506	5,937
Gross profit		5,067	5,599
Operating expenses:
Selling, general and administrative		3,725	4,075
Research and development		1,671	1,744
Total operating expenses		5,396	5,819
Loss from operations		(329)	(220)
Interest expense, net		(6)	(5)
Other income (expense), net		19	(21)
Loss before income taxes		(316)	(246)
Provision for income taxes		15	16
Net loss and comprehensive loss		$ (331)	$ (262)
Net loss per share (basic and diluted)		$ (.02)	$ (.02)
Weighted-average common shares (basic and diluted)		15,103	14,787
Net revenue from related parties		$ 68	$ 79
[1]	Includes net revenue from related parties.

Unaudited Condensed Consolidat4

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Operating activities
Net loss	$ (331)	$ (262)
Adjustments to reconcile net loss to net cash provided by operating activities:
Share-based compensation	233	255
Depreciation	218	229
Provision for excess and obsolete inventories	73	47
Changes in operating assets and liabilities:
Accounts receivable	(312)	88
Contract manufacturers' receivable	4	(222)
Inventories	442	(188)
Prepaid expenses and other current assets	85	168
Other assets	26	17
Accounts payable	(722)	390
Accrued payroll and related expenses	115	(40)
Warranty reserve	(36)	(30)
Other liabilities	(67)	(240)
Cash received related to tenant lease incentives	53	0
Net cash provided by operating activities	(219)	212
Investing activities
Purchases of property and equipment	(15)	(181)
Net cash used in investing activities	(15)	(181)
Financing activities
Minimum tax withholding paid on behalf of employees for restricted shares	(16)	0
Proceeds from borrowing on line of credit	700	0
Payment on borrowings on line of credit	(700)	0
Payment of capital lease obligations	(21)	(12)
Net cash used in financing activities	(37)	(12)
Increase in cash and cash equivalents	(271)	19
Cash and cash equivalents at beginning of period	4,989	6,264
Cash and cash equivalents at end of period	$ 4,718	$ 6,283

1. Basis of Presentation

1. Basis of Presentation	3 Months Ended
	Sep. 30, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
1. Basis of Presentation	1. Summary of Significant Accounting Policies The Company Lantronix, Inc. (the “Company,” “Lantronix,” “we,” “our,” or “us”) is a specialized networking company providing machine to machine (“M2M”) and Internet of Things (“IoT”) solutions. Our products deliver secure connectivity, device management and mobility for today's increasingly connected world. By networking and managing devices and machines that have never before been connected, we enable our customers to realize the possibilities of the IoT. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company 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, 2015, included in our Annual Report on Form 10-K filed with the SEC on August 21, 2015. 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 September 30, 2015 and the consolidated results of our operations and cash flows for the three months ended September 30, 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 months ended September 30, 2015 are not necessarily indicative of the results to be expected for the full year or any future interim periods. Reclassifications Certain reclassifications have been made to the prior year financial information to conform to the current period presentation. 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 standard permits the use of either a retrospective or cumulative effect transition method. In July 2015, the FASB deferred the effective date of the standard by an additional year; however, it provided companies the option to adopt one year earlier, commensurate with the original effective date. Accordingly, the standard will be effective for Lantronix in the fiscal year beginning July 1, 2018, with an option to adopt the standard for the fiscal year beginning July 1, 2017. We are currently evaluating this standard and have not yet selected a transition method or the effective date on which we plan to adopt the standard, 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. In July 2015, the FASB issued final guidance that simplifies the subsequent measurement of inventory for which cost is determined by methods other than last-in first-out (“LIFO”) and the retail inventory method. For inventory within the scope of the new guidance, entities will be required to compare the cost of inventory t

2. Supplemental Financial Infor

2. Supplemental Financial Information	3 Months Ended
	Sep. 30, 2015
Supplemental Financial Information Details - Computation Of Net Loss Per Share
2. Supplemental Financial Information	2. Supplemental Financial Information Inventories Inventories are stated at the lower of cost (first-in, first-out) or net realizable value and consist of the following: September 30, June 30, 2015 2015 (In thousands) Finished goods $ 5,640 $ 6,044 Raw materials 2,182 2,122 Finished goods held by distributors 1,166 1,337 Inventories, net $ 8,988 $ 9,503 Other Liabilities The following table presents details of our other liabilities: September 30, June 30, 2015 2015 (In thousands) Current Customer deposits and refunds $ 663 $ 854 Accrued raw materials purchases 1,125 916 Deferred revenue 536 690 Capital lease obligations 55 62 Deferred rent 52 40 Taxes payable 248 247 Accrued operating expenses 1,111 1,040 Total other current liabilities $ 3,790 $ 3,849 Non-current Deferred revenue $ 80 $ 80 Deferred rent 228 – Total other non-current liabilities $ 308 $ 80 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 September 30, 2015 2014 (In thousands, except per share data) Numerator: Net loss $ (331 ) $ (262 ) Denominator: Weighted average common shares outstanding (basic and diluted) 15,103 14,787 Net loss per share (basic and diluted) $ (0.02 ) $ (0.02 ) 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 September 30, 2015 2014 (In thousands) Common stock equivalents 3,550 1,664 Facility Lease The lease for our new corporate headquarters in Irvine, California, commenced in July 2015. The lease agreement provided for a tenant improvement allowance from the landlord of up to $243,000 for tenant improvements and other qualified expenses. In connection with this allowance, the landlord paid for approximately $190,000 in tenant improvements, and, in September 2015, reimbursed Lantronix for the remaining $53,000. Supplemental Cash Flow Information The following table presents non-cash investing and financing transactions excluded from the unaudited condensed consolidated statements of cash flows: Three Months Ended September 30, 2015 2014 (In thousands) Accrued property and equipment paid for in the subsequent period $ 11 $ 48 Non-cash tenant improvements paid by landlord $ 190 $ –

3. Warranty Reserve

3. Warranty Reserve	3 Months Ended
	Sep. 30, 2015
Standard Product Warranty Disclosure [Abstract]
3. Warranty Reserve	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: Three Months Ended Year Ended September 30, June 30, 2015 2015 (In thousands) Beginning balance $ 163 $ 150 Charged to cost of revenues (14 ) 112 Usage (22 ) (99 ) Ending balance $ 127 $ 163

4. Bank Line of Credit

4. Bank Line of Credit	3 Months Ended
	Sep. 30, 2015
Debt Disclosure [Abstract]
4. Bank Line of Credit	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%. 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. The following table sets forth the Minimum TNW compared to our Actual TNW: September 30, 2015 (In thousands) Minimum TNW $ 6,000 Actual TNW $ 9,107 The following table presents certain information with respect to the Loan Agreement with SVB: September 30, June 30, 2015 2015 (In thousands) Outstanding borrowings on the line of credit $ 700 $ 700 Available borrowing capacity $ 1,910 $ 1,736 Outstanding letters of credit $ 51 $ 110 Our outstanding letters of credit were used as security deposits.

5. Stockholders' Equity

5. Stockholders' Equity	3 Months Ended
	Sep. 30, 2015
Equity [Abstract]
5. Stockholders' Equity	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 September 30, 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: Weighted Average Number of Exercise Price Shares per Share (In thousands) Balance of options outstanding at June 30, 2015 3,546 $ 2.19 Granted 544 1.35 Forfeited (49 ) 1.79 Expired (9 ) 1.93 Exercised – – Balance of options outstanding at September 30, 2015 4,032 $ 2.08 Restricted Stock Units The following table presents a summary of activity with respect to our RSUs: Weighted Average Grant - Date Number of Fair Value Shares per Share (In thousands) Balance of RSUs outstanding at June 30, 2015 28 $ 1.98 Granted 50 1.35 Vested (25 ) 2.00 Balance of RSUs outstanding at September 30, 2015 53 $ 1.38 In September 2015, our Chief Executive Officer was granted 50,000 performance-based RSUs. Vesting of these RSUs is subject to the achievement of certain financial performance targets for the fiscal year ending June 30, 2016 ("Fiscal 2016"). If we achieve the performance targets for Fiscal 2016: (a) 50% of the RSUs will vest on September 1, 2016, and (b) the remaining 50% of the RSUs will vest in four equal quarterly installments beginning on December 1, 2016. We have recorded share-based compensation expense for these RSUs based on management’s current estimates of the probability of achieving the performance targets. 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: Number of Shares (In thousands) Shares available for issuance at June 30, 2015 906 Reserved for issuance – Issued – Shares available for issuance at September 30, 2015 906 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 September 30, 2015 2014 (In thousands) Cost of revenues $ 18 $ 20 Selling, general and administrative 171 174 Research and development 44 61 Total share-based compensation expense $ 233 $ 255 The following table summarizes the remaining unrecognized share-based compensation expense related to our outstanding share-based awards as of September 30, 2015: Remaining Remaining Unrecognized Weighted Compensation Average Years Cost To Recognize (In thousands) Stock options $ 1,048 2.9 Restricted stock units 65 1.8 Stock purchase rights under ESPP 41 0.7 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	3 Months Ended
	Sep. 30, 2015
Income Tax Disclosure [Abstract]
6. Income Taxes	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 September 30, 2015 2014 Effective tax rate 5% 7% 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 September 30, 2015 and June 30, 2015.

7. Commitments and Contingencie

7. Commitments and Contingencies	3 Months Ended
	Sep. 30, 2015
Commitments and Contingencies Disclosure [Abstract]
7. Commitments and Contingencies	7. Commitments 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.

1. Basis of Presentation (Polic

1. Basis of Presentation (Policies)	3 Months Ended
	Sep. 30, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
The Company	The Company Lantronix, Inc. (the “Company,” “Lantronix,” “we,” “our,” or “us”) is a specialized networking company providing machine to machine (“M2M”) and Internet of Things (“IoT”) solutions. Our products deliver secure connectivity, device management and mobility for today's increasingly connected world. By networking and managing devices and machines that have never before been connected, we enable our customers to realize the possibilities of the IoT.
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company 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, 2015, included in our Annual Report on Form 10-K filed with the SEC on August 21, 2015. 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 September 30, 2015 and the consolidated results of our operations and cash flows for the three months ended September 30, 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 months ended September 30, 2015 are not necessarily indicative of the results to be expected for the full year or any future interim periods.
Reclassifications	Reclassifications Certain reclassifications have been made to the prior year financial information to conform to the current period presentation.
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 standard permits the use of either a retrospective or cumulative effect transition method. In July 2015, the FASB deferred the effective date of the standard by an additional year; however, it provided companies the option to adopt one year earlier, commensurate with the original effective date. Accordingly, the standard will be effective for Lantronix in the fiscal year beginning July 1, 2018, with an option to adopt the standard for the fiscal year beginning July 1, 2017. We are currently evaluating this standard and have not yet selected a transition method or the effective date on which we plan to adopt the standard, 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. In July 2015, the FASB issued final guidance that simplifies the subsequent measurement of inventory for which cost is determined by methods other than last-in first-out (“LIFO”) and the retail inventory method. For inventory within the scope of the new guidance, entities will be required to compare the cost of inventory t

2. Supplemental Financial Inf13

2. Supplemental Financial Information (Tables)	3 Months Ended
	Sep. 30, 2015
Supplemental Financial Information Details - Computation Of Net Loss Per Share
Schedule of Inventory	September 30, June 30, 2015 2015 (In thousands) Finished goods $ 5,640 $ 6,044 Raw materials 2,182 2,122 Finished goods held by distributors 1,166 1,337 Inventories, net $ 8,988 $ 9,503
Schedule of Other Liabilities	September 30, June 30, 2015 2015 (In thousands) Current Customer deposits and refunds $ 663 $ 854 Accrued raw materials purchases 1,125 916 Deferred revenue 536 690 Capital lease obligations 55 62 Deferred rent 52 40 Taxes payable 248 247 Accrued operating expenses 1,111 1,040 Total other current liabilities $ 3,790 $ 3,849 Non-current Deferred revenue $ 80 $ 80 Deferred rent 228 – Total other non-current liabilities $ 308 $ 80
Schedule of Computation of Net Loss per Share	Three Months Ended September 30, 2015 2014 (In thousands, except per share data) Numerator: Net loss $ (331 ) $ (262 ) Denominator: Weighted average common shares outstanding (basic and diluted) 15,103 14,787 Net loss per share (basic and diluted) $ (0.02 ) $ (0.02 )
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share	Three Months Ended September 30, 2015 2014 (In thousands) Common stock equivalents 3,550 1,664
Schedule of non-cash investing and financing transactions	Three Months Ended September 30, 2015 2014 (In thousands) Accrued property and equipment paid for in the subsequent period $ 11 $ 48 Non-cash tenant improvements paid by landlord $ 190 $ –

3. Warranty Reserve (Tables)

3. Warranty Reserve (Tables)	3 Months Ended
	Sep. 30, 2015
Standard Product Warranty Disclosure [Abstract]
Warranty reserve	Three Months Ended Year Ended September 30, June 30, 2015 2015 (In thousands) Beginning balance $ 163 $ 150 Charged to cost of revenues (14 ) 112 Usage (22 ) (99 ) Ending balance $ 127 $ 163

4. Bank Line of Credit and Debt

4. Bank Line of Credit and Debt (Tables)	3 Months Ended
	Sep. 30, 2015
Debt Disclosure [Abstract]
Schedule of Minimum Tangible Net Worth	September 30, 2015 (In thousands) Minimum TNW $ 6,000 Actual TNW $ 9,107
Outstanding balances of loans	September 30, June 30, 2015 2015 (In thousands) Outstanding borrowings on the line of credit $ 700 $ 700 Available borrowing capacity $ 1,910 $ 1,736 Outstanding letters of credit $ 51 $ 110

5. Stockholders Equity (Tables)

5. Stockholders Equity (Tables)	3 Months Ended
	Sep. 30, 2015
Summary of stock option activity	Weighted Average Number of Exercise Price Shares per Share (In thousands) Balance of options outstanding at June 30, 2015 3,546 $ 2.19 Granted 544 1.35 Forfeited (49 ) 1.79 Expired (9 ) 1.93 Exercised – – Balance of options outstanding at September 30, 2015 4,032 $ 2.08
Schedule of share-based compensation expense	Three Months Ended September 30, 2015 2014 (In thousands) Cost of revenues $ 18 $ 20 Selling, general and administrative 171 174 Research and development 44 61 Total share-based compensation expense $ 233 $ 255
Schedule of unrecognized compensation costs	Remaining Remaining Unrecognized Weighted Compensation Average Years Cost To Recognize (In thousands) Stock options $ 1,048 2.9 Restricted stock units 65 1.8 Stock purchase rights under ESPP 41 0.7
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 RSUs outstanding at June 30, 2015 28 $ 1.98 Granted 50 1.35 Vested (25 ) 2.00 Balance of RSUs outstanding at September 30, 2015 53 $ 1.38
ESPP [Member]
Summary of other than options activity	Number of Shares (In thousands) Shares available for issuance at June 30, 2015 906 Reserved for issuance – Issued – Shares available for issuance at September 30, 2015 906

6. Income Taxes (Tables)

6. Income Taxes (Tables)	3 Months Ended
	Sep. 30, 2015
Income Taxes Tables
Effective tax rate	Three Months Ended September 30, 2015 2014 Effective tax rate 5% 7%

2. Supplemental Financial Inf18

2. Supplemental Financial Information (Details - Inventories) - USD ($) $ in Thousands	Sep. 30, 2015	Jun. 30, 2015
Supplemental Financial Information Details - Computation Of Net Loss Per Share
Finished goods	$ 5,640	$ 6,044
Raw materials	2,182	2,122
Finished goods held by distributors	1,166	1,337
Inventories, net	$ 8,988	$ 9,503

2. Supplemental Financial Inf19

2. Supplemental Financial Information (Details - Other liabilities) - USD ($) $ in Thousands	Sep. 30, 2015	Jun. 30, 2015
Current
Customer deposits and refunds	$ 663	$ 854
Accrued raw materials purchases	1,125	916
Deferred revenue	536	690
Capital lease obligations	55	62
Deferred rent	52	40
Taxes payable	248	247
Accrued operating expenses	1,111	1,040
Total other current liabilities	3,790	3,849
Non-current
Deferred revenue	80	80
Deferred rent	228	0
Total other non-current liabilities	$ 308	$ 80

2. Supplemental Financial Inf20

2. Supplemental Financial Information (Details - Computation of Net Loss per Share) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Numerator:
Net loss	$ (331)	$ (262)
Denominator:
Weighted-average shares outstanding (basic and diluted)	15,103	14,787
Net loss per share (basic and diluted)	$ (.02)	$ (.02)

2. Supplemental Financial Inf21

2. Supplemental Financial Information (Details - Common Stock Equivalents) - shares shares in Thousands	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Supplemental Financial Information Details - Computation Of Net Loss Per Share
Common stock equivalents	3,550	1,664

2. Supplemental Financial Inf22

2. Supplemental Financial Information (Details - Supplemental Cash Flow Information) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Supplemental Cash Flow Information [Abstract]
Accrued property and equipment paid for in the subsequent period	$ 11	$ 48
Non-cash tenant improvements paid by landlord	$ 190	$ 0

2. Supplemental Cash Flow Infor

2. Supplemental Cash Flow Information (Details Narrative) $ in Thousands	Sep. 30, 2015USD ($)
Supplemental Cash Flow Information Details Narrative
Tenant Improvement Allowance	$ 243

3. Warranty Reserve (Details)

3. Warranty Reserve (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Sep. 30, 2015	Jun. 30, 2015
Standard Product Warranty Disclosure [Abstract]
Beginning balance	$ 163	$ 150
Charged to cost of revenues	(14)	112
Usage	(22)	(99)
Ending balance	$ 127	$ 163

4. Bank Line of Credit and De25

4. Bank Line of Credit and Debt (Details - TNW) $ in Thousands	Sep. 30, 2015USD ($)
Line of Credit Facility [Abstract]
Minimum TNW	$ 6,000
Actual TNW	$ 9,107

4. Bank Line of Credit (Details

4. Bank Line of Credit (Details - Available Borrowing Capacity) - USD ($) $ in Thousands	Sep. 30, 2015	Jun. 30, 2015
Line of Credit Facility [Abstract]
Outstanding borrowings on the line of credit	$ (700)	$ (700)
Available borrowing capacity under the revolving line	1,910	1,736
Outstanding letters of credit	$ 51	$ 110

4. Bank Line of Credit and De27

4. Bank Line of Credit and Debt (Details Narrative) $ in Thousands	3 Months Ended
	Sep. 30, 2015USD ($)
Line of Credit Facility [Abstract]
Revolving Line description	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.
Maximum borrowing amount	$ 4,000
Maturity date	Sep. 30, 2016
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. If this ratio is not met, the interest rate will become the greater of the prime rate plus 1.25% or 4.0%.

5. Stockholders' Equity (Detail

5. Stockholders' Equity (Details - Stock Option Awards) - Options shares in Thousands	3 Months Ended
	Sep. 30, 2015$ / sharesshares
Number of shares (in thousands)
Number of Shares Options Outstanding, Beginning | shares	3,546
Number of Shares Options Granted | shares	544
Number of Shares Options Forfeited | shares	(49)
Number of Shares Options Expired | shares	(9)
Number of Shares Options Exercised | shares	0
Number of Shares Options Outstanding, Ending | shares	4,032
Weighted Average Exercise Price per share
Exercise Price Outstanding, Beginning	$ 2.19
Exercise Price Granted	1.35
Exercise Price Forfeited	1.79
Exercise Price Expired	1.93
Exercise Price Exercised	0
Exercise Price Outstanding, Ending	$ 2.08

5. Stockholders' Equity (Deta29

5. Stockholders' Equity (Details - RSUs) - Restricted Stock Units (RSUs) [Member] shares in Thousands	3 Months Ended
	Sep. 30, 2015$ / sharesshares
Number of shares (in thousands)
Beginning balance RSU's | shares	28
Granted | shares	50
Vested | shares	(25)
Ending balance RSU's | shares	53
Weighted Average Grant Date Fair Value Per Share Abstract
RSU Shares Weighted-Average Grant-Date Fair Value per Share, beginning	$ 1.98
RSU Shares Granted, Weighted-Average Grant-Date Fair Value per Share	1.35
RSU Shares Vested, Weighted-Average Grant-Date Fair Value per Share	2
RSU Shares Weighted-Average Grant-Date Fair Value per Share, ending	$ 1.38

5. Stockholders' Equity (Deta30

5. Stockholders' Equity (Details - Employee Stock Purchase Plan) - ESPP [Member] shares in Thousands	3 Months Ended
	Sep. 30, 2015shares
Shares available for issuance at beginning of period	906
Shares reserved for issuance	0
Shares issued	0
Shares available for issuance at end of period	906

5. Stockholders' Equity (Deta31

5. Stockholders' Equity (Details - Share-Based Compensation Expense) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Total share-based compensation	$ 233	$ 255
Cost of revenues
Total share-based compensation	18	20
Selling, general and administrative
Total share-based compensation	171	174
Research and development
Total share-based compensation	$ 44	$ 61

5. Stockholders' Equity (Deta32

5. Stockholders' Equity (Details - Unrecognized compensation expense) $ in Thousands	3 Months Ended
	Sep. 30, 2015USD ($)
Options
Unrecognized compensation cost	$ 1,048
Remaining weighted average years to recognize	2 years 10 months 24 days
Restricted Stock Units (RSUs) [Member]
Unrecognized compensation cost	$ 65
Remaining weighted average years to recognize	1 year 9 months 18 days
ESPP [Member]
Unrecognized compensation cost	$ 41
Remaining weighted average years to recognize	8 months 12 days

5. Stockholders' Equity (Deta33

5. Stockholders' Equity (Details Narrative) shares in Thousands	Sep. 30, 2015shares
Restricted Stock Units (RSUs) [Member]
Performance-based RSUs granted	50

6. Income Taxes (Details)

6. Income Taxes (Details)	3 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Income Taxes Details
Effective tax rate	5.00%	7.00%