Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Sep. 30, 2019 | Nov. 08, 2019 | |
Cover [Abstract] | ||
Entity Registrant Name | LANTRONIX INC | |
Entity Central Index Key | 0001114925 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 23,063,077 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 | |
Entity Shell Company | false | |
Entity Small Business | true | |
Entity Emerging Growth | false | |
Entity Ex Transition Period | false | |
Entity Interactive Data Current | Yes | |
Entity File Number | 001-16027 | |
Entity Incorporation State Code | DE |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Sep. 30, 2019 | Jun. 30, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 12,028 | $ 18,282 |
Accounts receivable, net | 7,845 | 7,388 |
Inventories, net | 12,423 | 10,509 |
Contract manufacturers' receivable | 419 | 1,324 |
Prepaid expenses and other current assets | 1,274 | 687 |
Total current assets | 33,989 | 38,190 |
Property and equipment, net | 1,351 | 1,199 |
Goodwill | 12,458 | 9,488 |
Purchased intangible assets, net | 1,768 | 0 |
Other assets | 1,188 | 67 |
Total assets | 50,754 | 48,944 |
Current liabilities: | ||
Accounts payable | 5,986 | 4,716 |
Accrued payroll and related expenses | 2,588 | 2,060 |
Warranty reserve | 108 | 116 |
Other current liabilities | 6,296 | 4,580 |
Total current liabilities | 14,978 | 11,472 |
Other non-current liabilities | 384 | 206 |
Total liabilities | 15,362 | 11,678 |
Stockholders' equity: | ||
Common stock | 2 | 2 |
Additional paid-in capital | 226,870 | 226,274 |
Accumulated deficit | (191,851) | (189,381) |
Accumulated other comprehensive income | 371 | 371 |
Total stockholders' equity | 35,392 | 37,266 |
Total liabilities and stockholders' equity | $ 50,754 | $ 48,944 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||
Net revenue | $ 12,741 | $ 12,279 |
Cost of revenue | 6,546 | 5,499 |
Gross profit | 6,195 | 6,780 |
Operating expenses: | ||
Selling, general and administrative | 4,473 | 4,271 |
Research and development | 2,621 | 2,215 |
Restructuring, severance and related charges | 749 | 323 |
Acquisition-related costs | 643 | 0 |
Amortization of purchased intangible assets | 144 | 0 |
Total operating expenses | 8,630 | 6,809 |
Loss from operations | (2,435) | (29) |
Interest income (expense), net | 56 | (4) |
Other expense, net | (43) | (10) |
Loss before income taxes | (2,422) | (43) |
Provision for income taxes | 48 | 40 |
Net loss | $ (2,470) | $ (83) |
Net loss per share - basic and diluted | $ (0.11) | $ 0 |
Weighted-average common shares - basic and diluted | 22,913 | 19,323 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders Equity (unaudited) - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Other Comprehensive Income / Loss | Total |
Beginning balance, shares at Jun. 30, 2018 | 18,908 | ||||
Beginning balance, value at Jun. 30, 2018 | $ 2 | $ 212,995 | $ (189,555) | $ 371 | $ 23,813 |
Cumulative effect of accounting change | 582 | 582 | |||
Shares issued pursuant to equity offering, net, shares | 2,600 | ||||
Shares issued pursuant to equity offering, net, value | 9,438 | 9,438 | |||
Shares issued pursuant to stock awards, net shares | 385 | ||||
Shares issued pursuant to stock awards, net value | 586 | 586 | |||
Tax withholding paid on behalf of employees for restricted shares | (113) | (113) | |||
Share-based compensation | 477 | 477 | |||
Net loss | (83) | (83) | |||
Ending balance, shares at Sep. 30, 2018 | 21,893 | ||||
Ending balance, value at Sep. 30, 2018 | $ 2 | 223,383 | (189,056) | 371 | 34,700 |
Beginning balance, shares at Jun. 30, 2019 | 22,812 | ||||
Beginning balance, value at Jun. 30, 2019 | $ 2 | 226,274 | (189,381) | 371 | 37,266 |
Shares issued pursuant to stock awards, net shares | 226 | ||||
Shares issued pursuant to stock awards, net value | 145 | 145 | |||
Tax withholding paid on behalf of employees for restricted shares | (127) | (127) | |||
Share-based compensation | 578 | 578 | |||
Net loss | (2,470) | (2,470) | |||
Ending balance, shares at Sep. 30, 2019 | 23,038 | ||||
Ending balance, value at Sep. 30, 2019 | $ 2 | $ 226,870 | $ (191,851) | $ 371 | $ 35,392 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Operating activities | ||
Net loss | $ (2,470) | $ (83) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Share-based compensation | 578 | 478 |
Depreciation and amortization | 147 | 105 |
Amortization of acquired intangible assets | 144 | 0 |
Amortization of manufacturing profit in acquired inventory associated with acquisition | 171 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 863 | (496) |
Inventories | (474) | (55) |
Contract manufacturers' receivable | 905 | 95 |
Prepaid expenses and other current assets | (304) | (331) |
Other assets | 74 | 1 |
Accounts payable | (381) | 11 |
Accrued payroll and related expenses | 279 | (836) |
Warranty reserve | (8) | (7) |
Other liabilities | (603) | 644 |
Net cash used in operating activities | (1,079) | (474) |
Investing activities | ||
Purchases of property and equipment | (118) | (64) |
Cash payment for acquisition of Maestro, net of cash and cash equivalents acquired | (5,073) | 0 |
Net cash used in investing activities | (5,191) | (64) |
Financing activities | ||
Net proceeds from issuances of common stock | 145 | 10,023 |
Tax withholding paid on behalf of employees for restricted shares | (127) | (113) |
Payment of financing lease obligations | (2) | (15) |
Net cash provided by financing activities | 16 | 9,895 |
Increase (decrease) in cash and cash equivalents | (6,254) | 9,357 |
Cash and cash equivalents at beginning of period | 18,282 | 9,568 |
Cash and cash equivalents at end of period | $ 12,028 | $ 18,925 |
1. Summary of Significant Accou
1. Summary of Significant Accounting Policies | 3 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies The Company Lantronix, Inc., which we refer to herein as the Company, Lantronix, we, our, or us, is a global provider of secure data access and management solutions for Internet of Things (“IoT”) assets. Our mission is to be the leading supplier of IoT and related Information Technology (“IT”) management solutions that enable companies to dramatically simplify the creation, deployment, and management of IoT projects while providing secure access to data for applications and people. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of Lantronix have been prepared in accordance with United States generally accepted accounting principles 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, 2019, included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2019, which was filed with the SEC on September 11, 2019. 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, 2019, and the consolidated results of our operations and cash flows for the three months ended September 30, 2019. All intercompany accounts and transactions have been eliminated. 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, 2019 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 fiscal year financial information to conform with the current fiscal year presentation. Recent Accounting Pronouncements Shared-Based Compensation On July 1, 2019 Lantronix adopted Accounting Standard Update No. 2018-07 that expands the scope of existing share-based compensation guidance for employees. The standard includes share-based payment transactions for acquiring goods and services from nonemployees, whereby share-based payments to nonemployees will be measured and recorded at the fair value of the equity instruments that an entity is obligated to issue on the grant date. The adoption of the standard did not have a material impact on our financial statements. Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-02 (“ASU 2016-02” or “Topic 842”) that revises lease accounting guidance. Most prominent among the changes in the standard is the recognition of right-of-use (“ROU”) assets and lease liabilities based on the present value of lease payments over the lease term by lessees for those leases classified as operating leases under the existing guidance. The Company adopted Topic 842 on July 1, 2019 using the modified retrospective approach by applying the new standard to leases existing at the date of adoption and not restating comparative prior periods. The adoption did not have a material impact on the Company’s results of operations or cash flows. Refer to Note 3 below for additional information. |
2. Revenue
2. Revenue | 3 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 2. Revenue The following tables present our net revenue by product line and by geographic region. Net revenues by geographic region are based on the “bill-to” location of our customers: Three Months Ended September 30, 2019 2018 (In thousands) IoT $ 10,221 $ 8,967 IT Management 2,301 3,101 Other 219 211 $ 12,741 $ 12,279 Three Months Ended September 30, 2019 2018 (In thousands) Americas $ 5,764 $ 6,914 EMEA 4,521 3,520 Asia Pacific Japan 2,456 1,845 $ 12,741 $ 12,279 Contract Balances In certain instances, the timing of revenue recognition may differ from the timing of invoicing to our customers. We record a contract asset receivable when revenue is recognized prior to invoicing, and a contract or deferred revenue liability when revenue is recognized subsequent to invoicing. With respect to product shipments, we expect to fulfill contract obligations within one year and so we have elected not to separately disclose the amount nor the timing of recognition of these remaining performance obligations. For contract balances related to contracts that include services and multiple performance obligations, refer to the deferred revenue discussion below. Deferred Revenue Deferred revenue is currently comprised primarily of unearned revenue related to our extended warranty services. These services are generally invoiced at the beginning of the contract period and revenue is recognized ratably over the service period. Current and non-current deferred revenue balances represent revenue allocated to the remaining unsatisfied performance obligations at the end of a reporting period and are respectively included in other current liabilities and other non-current liabilities in the accompanying condensed consolidated balance sheets. The following table presents the changes in our deferred revenue balance for the three months ended September 30, 2019 (in thousands): Balance, July 1, 2019 $ 486 New performance obligations 286 Performance obligations assumed from acquisition of Maestro 178 Recognition of revenue as a result of satisfying performance obligations (346 ) Balance, September 30, 2019 $ 604 Less: non-current portion of deferred revenue (159 ) Current portion, September 30, 2019 $ 445 We expect to recognize substantially all of the non-current portion of deferred revenue over the next two to four years. |
3. Business Combination
3. Business Combination | 3 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Business Combination | 3. Business Combination On July 5, 2019 (the "Acquisition Date"), Lantronix acquired all outstanding shares of Maestro Wireless Solutions Limited, a Hong Kong private company limited by shares (“MWS”), Fargo Telecom Asia Limited, a Hong Kong private company limited by shares (“FTA” and together with MWS and their respective subsidiaries, the “Acquired Companies” or “Maestro”) for $5,355,000 in cash. The acquisition provides various additional and complementary cellular connectivity technologies to our portfolio of IoT solutions. July 5, 2019 (provisional) Cash and cash equivalents 282 Accounts receivable, net 1,320 Inventories, net 1,611 Prepaid expense and other current assets 283 Property and equipment, net 108 Amortizable intangible assets 1,910 Other non-current assets 214 Goodwill 2,969 Accounts payable (1,568 ) Accrued payroll and related expenses (249 ) Other current liabilities (1,361 ) Other non-current liabilities (164 ) Total consideration $ 5,355 The factors that contributed to a purchase price resulting in the recognition of goodwill include our belief that the acquisition will create a more diverse IoT company with respect to product offerings and our belief that we are committed to improving cost structures in accordance with our operational and restructuring plans which should result in a realization of cost savings and an improvement of overall efficiencies. Acquisition-related costs are expensed in the periods in which the costs are incurred. The valuation of identifiable intangible assets and their estimated useful lives are as follows: Asset Fair Value Weighted Average Useful Life (years) (In thousands, except for useful life) Developed technology $ 1,530 5.0 Customer relationship 100 2.0 Order backlog 110 1.0 Non-compete agreements 30 2.0 Trade name $ 140 1.0 The intangible assets are amortized on a straight-line basis over the estimated weighted average useful lives. Supplemental Pro Forma Information The following supplemental pro forma data summarizes the Company’s results of operations for the periods presented, as if we completed the acquisition of Maestro as of the first day of fiscal 2019. The supplemental pro forma data reports actual operating results adjusted to include the pro forma effect and timing of the impact in amortization expense of identified intangible assets, restructuring costs, the purchase accounting effect on inventories acquired, and transaction costs. In accordance with the pro forma acquisition date, we recorded in the fiscal 2019, supplemental pro forma data (i) cost of goods sold from manufacturing profit in acquired inventory of $171,000, (ii) Maestro related restructuring costs of $469,000 and (iii) acquisition-related costs of $581,000, with a corresponding reduction in the fiscal 2020 supplemental proforma data. Additionally, we recorded $144,000 of amortization expense in the fiscal 2019 supplemental pro-forma data, and reversed amortization expense of $51,000 in the fiscal 2020 supplemental pro forma data to represent the amount related to assets that would have been fully amortized. Net sales related to products from the acquisition of Maestro contributed approximately 25% to 29% of net sales for the three months ended September 30, 2019. Post-acquisition net sales and earnings on a standalone basis are generally impracticable to determine, as on the Acquisition Date, we implemented a plan developed prior to the completion of the acquisition and began to immediately integrate the acquisition into existing operations, engineering groups, sales distribution networks and management structure. Supplemental pro forma data is as follows: Three Months Ended September 30, 2019 2018 (In thousands) Pro forma net revenue $ 12,741 $ 15,799 Pro forma net loss $ (1,198 ) $ (1,576 ) Pro forma net loss per share Basic $ (0.05 ) $ (0.08 ) Diluted $ (0.05 ) $ (0.08 ) |
4. Leases
4. Leases | 3 Months Ended |
Sep. 30, 2019 | |
Lessee Disclosure [Abstract] | |
Leases | 4. Leases On July 1, 2019, the Company adopted Topic 842 and elected the available practical expedient to recognize the cumulative effect of initially adopting the standard as an adjustment to the opening balance sheet of the period of adoption (i.e., July 1, 2019). The Company also elected the other available practical expedients and will not separate lease components from non-lease components for office leases, or reassess historical lease classification, whether existing or expired contracts are or contain leases, or the initial direct costs for existing leases as of July 1, 2019. The condensed consolidated balance sheets and results from operations for reporting periods beginning after July 1, 2019 are presented under Topic 842, while prior period amounts are not adjusted and continue to be reported in accordance with the historic accounting under Topic 840. Adoption of the standard resulted in the recording of net operating and financing lease ROU assets and corresponding operating and financing lease liabilities of $984,000 and $1,114,000, respectively on July 1, 2019. The adoption of the standard did not materially affect the condensed consolidated statements of operations and had no impact on cash flows. The Company's leases include office buildings for its facilities worldwide and car leases in Germany, which are all classified as operating leases. The Company also has a financing lease related to R&D equipment in the United States. The Company determines if an arrangement is a lease at inception. Certain leases include renewal options that are under the Company's sole discretion. The renewal options were included in the ROU asset and lease liability calculation if it is reasonably assured that the Company will exercise the option. As the Company's leases generally do not provide an implicit rate, the Company uses its collateralized incremental borrowing rate based on the information available at the lease commencement date, including lease term, in determining the present value of lease payments. Lease expense for these leases is recognized on a straight-line basis over the lease term. Components of lease expense and supplemental cash flow information: Three months ended September 30, 2019 (In thousands) Components of lease expense Operating lease cost $ 306 Financing lease cost $ 2 Supplemental cash flow information Cash paid for amounts included in the measurement of operating lease liabilities $ 246 Cash paid for amounts included in the measurement of financing lease liabilities $ 3 Right-of-use assets obtained in exchange for lease obligation $ 984 The weighted average remaining lease term is 1.7 years. The weighted average discount rate is 6.39 percent. Maturities of lease liabilities as of September 30, 2019 were as follows: Operating Financing (In thousands) 2020 (remainder of the year) $ 646 $ 2 2021 430 – 2022 24 – 2023 4 – Thereafter – – Total remaining lease payments 1,104 2 less: imputed interest 49 – Lease liability $ 1,055 $ 2 Reported as: Current liabilities $ (830 ) $ (2 ) Long-term liabilities $ (225 ) $ – The lease liabilities and ROU assets as of September 30, 2019 include leases assumed in the acquisition of Maestro if the remaining lease term at the acquisition date was determined to exceed one year. Refer to Note 4 below for further information on the acquisition of Maestro. As of September 30, 2019, the ROU assets totaled $957,000 and were recorded in other assets in the unaudited condensed consolidated balance sheet. |
5. Supplemental Financial Infor
5. Supplemental Financial Information | 3 Months Ended |
Sep. 30, 2019 | |
Supplemental Financial Information | |
Supplemental Financial Information | 5. 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, 2019 2019 (In thousands) Finished goods $ 7,144 $ 6,084 Raw materials 5,279 4,425 Inventories, net $ 12,423 $ 10,509 Other Liabilities The following table presents details of our other liabilities: September 30, June 30, 2019 2019 (In thousands) Current Accrued variable consideration $ 1,196 $ 1,313 Customer deposits and refunds 290 168 Accrued raw materials purchases 1,111 1,155 Deferred revenue 445 328 Lease liability 832 4 Taxes payable 389 322 Accrued operating expenses 2,033 1,290 Total other current liabilities $ 6,296 $ 4,580 Non-current Lease liability $ 225 $ 48 Deferred revenue 159 158 Total other non-current liabilities $ 384 $ 206 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, 2019 2018 (In thousands, except per share data) Numerator: Net loss $ (2,470 ) $ (83 ) Denominator: Weighted-average common shares outstanding - basic 22,913 19,323 Net loss per share - basic and diluted $ (0.11 ) $ (0.00 ) 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, 2019 2018 (In thousands) Common stock equivalents 1,769 1,828 Severance and Related Charges Current Fiscal Year During the three months ended September 30, 2019, we continued a plan to realign certain personnel resources to better fit our current business needs, particularly as it relates to identifying cost savings and synergies to be gained from the acquisition of Maestro. These activities resulted in a total charge of approximately $749,000. The following table presents details of the liability we recorded related to these activities: Three Months Ended September 30, 2019 (In thousands) Beginning balance $ 651 Charges 749 Payments (580 ) Ending balance $ 820 The ending balance is recorded in accrued payroll and related expenses on the accompanying unaudited condensed consolidated balance sheet at September 30, 2019. Prior Fiscal Year During the three months ended September 30, 2018, we executed a plan to realign certain personnel resources to better fit our current business needs. These activities were substantially completed by September 30, 2018 and resulted in a total charge of approximately $323,000 of severance costs. Supplemental Cash Flow Information The following table presents non-cash investing transactions excluded from the accompanying unaudited condensed consolidated statements of cash flows: Three Months Ended September 30, 2019 2018 (In thousands) Accrued property and equipment paid for in the subsequent period $ 83 $ 33 |
6. Warranty Reserve
6. Warranty Reserve | 3 Months Ended |
Sep. 30, 2019 | |
Product Warranties Disclosures [Abstract] | |
Warranty Reserve | 6. Warranty Reserve The standard warranty periods we provide for our products typically 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 for any known or anticipated product warranty issues. The following table presents details of our warranty reserve: Three Months Ended Year Ended September 30, June 30, 2019 2019 (In thousands) Beginning balance $ 116 $ 99 Charged to cost of revenue 8 96 Usage (16 ) (79 ) Ending balance $ 108 $ 116 |
7. Bank Line of Credit
7. Bank Line of Credit | 3 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Bank Line of Credit | 7. Bank Line of Credit In October 2018, we entered into a Loan and Security Agreement (the “Loan Agreement”) with Silicon Valley Bank (“SVB”). The Loan Agreement provided us with a $4.0 million revolving line of credit based on qualified accounts receivable and had a maturity date of September 30, 2020. There were no outstanding borrowings as of September 30, 2019 or June 30, 2019. The Loan Agreement provides for an interest rate per annum equal to the greater of (i) the prime rate plus 0.50% or (ii) 5.00%, 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 (i) the prime rate plus 1.00% or (ii) 5.00%. At September 30, 2019, we met the quick ratio requirement. The Loan Agreement also includes a covenant requiring us to maintain a certain Minimum Tangible Net Worth (“Minimum TNW”), currently required to be $7,750,000. The Minimum TNW is subject to adjustment upward to the extent we raise additional equity or debt financing or achieve net income in future periods. Our Actual Tangible Net Worth (“Actual TNW”) is calculated as total stockholders’ equity, less goodwill and other intangible assets. At September 30, 2019, our Actual TNW was $21,166,000. On November 12, 2019, we entered into a Second Amended and Restated Loan and Security Agreement (“Amended Agreement”) with Silicon Valley Bank, which amended, restated and superseded the Loan Agreement in its entirety. Pursuant to the Amended Agreement, SVB has agreed to make available to us a senior secured revolving line of credit of up to $6 million (“Revolving Facility”) and a senior secured term loan of up to $6 million (“Term Loan Facility”). Advances under the Revolving Facility may be borrowed from time to time prior to November 12, 2021, subject to the satisfaction of certain conditions, and may be used to fund our working capital and general business requirements. The proceeds of the Term Loan Facility were drawn in full at closing and may be used solely to fund our acquisition of Intrinsyc, refer to Note 11 below for further information on the acquisition of Intrinsyc. In the event the Intrinsyc acquisition is not consummated prior to January 31, 2020, we must immediately repay the obligations under the Term Loan Facility. The Revolving Facility matures on November 12, 2021. The Term Loan Facility is repayable over a 48 month period commencing January 1, 2020 after an initial interest-only period following closing. The interest rate on the Revolving Facility floats at a rate per annum equal to the greater of the prime rate and 5.00 percent. The interest rate on the Term Loan Facility floats at a rate per annum equal to the greater of 1.00 percent above the prime rate and 6.00 percent. We may elect to repay and reborrow the amounts outstanding under the Revolving Facility at any time prior to the maturity date of the Revolving Facility without premium or penalty. We may elect to repay the Term Loan Facility at any time without premium or penalty in minimum amounts equal to at least $1,000,000. A commitment fee in the amount of $60,000 was paid to the Lender on the closing date and a $10,000 anniversary fee is payable to the Lender on the earliest to occur of the one year anniversary of the effective date, the termination of the Amended Agreement or the Revolving Facility, or the occurrence of an event of default. The Amended Agreement includes a financial covenant that requires that we maintain a minimum cash balance of $3,000,000 at SVB, as measured at the end of each month. The Amended agreement also requires that we do not exceed a maximum leverage ratio, calculated as the ratio of funded debt to the consolidated trailing 12 month earnings before interest, taxes, depreciation and amortization, of (i) 3.0 to 1.0 for each calendar quarter ending December 31, 2019 through and including December 31, 2020, (ii) 2.5 to 1.0 for each calendar quarter ending March 31, 2021 through and including December 31, 2021, and (iii) 2.0 to 1.0 for each calendar quarter ending after January 1, 2022. We are in compliance with all covenants. |
8. Stockholders' Equity
8. Stockholders' Equity | 3 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | 8. Stockholders’ Equity Public Offering On September 18, 2018, we entered into an underwriting agreement with Needham & Company, LLC and Lake Street Capital Markets, LLC (the “Underwriters”) relating to the offer and sale of 2,500,000 shares of our common stock, par value $0.0001 per share, to the public at a price of $4.00 per share. We also granted the Underwriters a 30-day option to purchase up to 375,000 additional shares of our common stock to cover over-allotments, if any (the “Option Shares”). Pursuant to the underwriting agreement, we sold an aggregate of 2,700,000 shares, including 200,000 Option Shares, to the Underwriters and received proceeds net of underwriting discounts and expenses of approximately $9,774,000. Stock Incentive Plans Our stock incentive 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, 2019, no stock appreciation rights, non-vested stock, or performance shares were outstanding. Stock Options The following table presents a summary of activity during the three months ended September 30, 2019 with respect to our stock options: Weighted- Average Number of Exercise Price Shares per Share (In thousands) Balance of options outstanding at June 30, 2019 3,147 $ 2.29 Granted 3 3.36 Forfeited (8 ) 2.75 Exercised (218 ) 1.85 Balance of options outstanding at September 30, 2019 2,924 $ 2.32 Restricted Stock Units The following table presents a summary of activity during the three months ended September 30, 2019 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, 2019 866 $ 4.24 Granted 217 3.34 Vested (120 ) 5.06 Forfeited (1 ) 5.32 Balance of RSUs outstanding at September 30, 2019 962 $ 3.93 Employee Stock Purchase Plan Our 2013 Employee Stock Purchase Plan (“ESPP”) is intended to provide employees with an opportunity to purchase our common stock through accumulated payroll deductions at the end of a specified purchase period. Each of our employees (including officers) is eligible to participate in our ESPP, subject to certain limitations as set forth in our ESPP. The following table presents a summary of activity under our ESPP during the three months ended September 30, 2019: Number of Shares (In thousands) Shares available for issuance at June 30, 2019 517 Shares issued – Shares available for issuance at September 30, 2019 517 Share-Based Compensation Expense The following table presents a summary of share-based compensation expense included in each functional line item on our accompanying unaudited condensed consolidated statements of operations: Three Months Ended September 30, 2019 2018 (In thousands) Cost of revenue $ 24 $ 17 Selling, general and administrative 459 400 Research and development 95 61 Total share-based compensation expense $ 578 $ 478 The following table presents the remaining unrecognized share-based compensation expense related to our outstanding share-based awards as of September 30, 2019: Remaining Remaining Unrecognized Weighted- Compensation Average Years Expense To Recognize (In thousands) Stock options $ 1,805 2.7 RSUs $ 3,515 3.4 Stock purchase rights under ESPP $ 23 0.1 $ 5,343 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. |
9. Income Taxes
9. Income Taxes | 3 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes We utilize the liability method of accounting for income taxes. The following table presents our effective tax rates based upon our provision for income taxes for the periods shown: Three Months Ended September 30, 2019 2018 Effective tax rate 2% 93% 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 we believe it is more likely than not that these assets will be realized. Due to 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, 2019 and June 30, 2019. |
10. Commitments and Contingenci
10. Commitments and Contingencies | 3 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. Commitments and Contingencies From time to time, we are involved in various legal proceedings and claims arising in the ordinary course of our business. Although the results of legal proceedings and claims cannot be predicted with certainty, we currently believe that the final outcome of these ordinary course matters will not, individually or in the aggregate, have a material adverse effect on our business, operating results, financial condition or cash flows. However, regardless of the outcome, litigation can have an adverse impact on us because of legal costs, diversion of management time and resources, and other factors. |
11. Subsequent Events
11. Subsequent Events | 3 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 11. Subsequent Events Acquisition of Intrinsyc On October 30, 2019, Lantronix entered into an Arrangement Agreement (the “Agreement”) with Intrinsyc Technologies Corporation (“Intrinsyc”), a leading provider of solutions for the development of embedded and IoT products, pursuant to which all of the outstanding common shares of Intrinsyc (the “Intrinsyc Shares”) will be acquired by Lantronix (the “Transaction”). The transaction, which is subject to approval by the shareholders of Intrinsyc along with other specified closing conditions, is expected to be completed by December 31, 2019 or shortly thereafter. Under the Agreement, the terms of which were unanimously approved by the boards of directors of Lantronix and Intrinsyc, Lantronix will pay $0.55 and 0.2135 of a share of common stock, par value $0.0001, of Lantronix (the “Lantronix Common Stock”), for each issued and outstanding Intrinsyc Share. Pursuant to the Agreement, Lantronix will, in the aggregate, pay approximately $11,500,000 in cash and issue approximately 4,300,000 shares of Lantronix Common Stock to Intrinsyc shareholders. Following the Transaction, Intrinsyc shareholders are expected to own approximately 16% of the outstanding shares of Lantronix Common Stock. Certain shareholders of Intrinsyc that collectively own approximately 14.5% of the outstanding Intrinsyc Shares have entered into voting agreements to vote in favor of the transaction. Performance Stock Units On October 18, 2019 the Company granted 975,000 RSUs with performance-based vesting requirements (“performance stock units” or “PSUs”) to certain executive employees. One third of the PSUs will be eligible to vest in each of the three years beginning in fiscal 2020 if certain earnings per share and revenue targets are met. Lease Agreement On October 1, 2019 we entered into a lease agreement for an office in Hyderabad, India. The initial term of the lease is five years, with the option to renew the lease under the terms of a new agreement after the initial term has expired. Initially, monthly rent is $19,000 for the first year, after which time the monthly rent will increase 5 percent per year. We took possession of the property on October 1, 2019. Debt Agreement On November 12, 2019, we entered into a Second Amended and Restated Loan and Security Agreement (“Amended Agreement”) with Silicon Valley Bank. Refer to Note 7 above for further information regarding the Amended Agreement. |
1. Summary of Significant Acc_2
1. Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
The Company | The Company Lantronix, Inc., which we refer to herein as the Company, Lantronix, we, our, or us, is a global provider of secure data access and management solutions for Internet of Things (“IoT”) assets. Our mission is to be the leading supplier of IoT and related Information Technology (“IT”) management solutions that enable companies to dramatically simplify the creation, deployment, and management of IoT projects while providing secure access to data for applications and people. |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of Lantronix have been prepared in accordance with United States generally accepted accounting principles 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, 2019, included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2019, which was filed with the SEC on September 11, 2019. 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, 2019, and the consolidated results of our operations and cash flows for the three months ended September 30, 2019. All intercompany accounts and transactions have been eliminated. 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, 2019 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 fiscal year financial information to conform with the current fiscal year presentation. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Shared-Based Compensation On July 1, 2019 Lantronix adopted Accounting Standard Update No. 2018-07 that expands the scope of existing share-based compensation guidance for employees. The standard includes share-based payment transactions for acquiring goods and services from nonemployees, whereby share-based payments to nonemployees will be measured and recorded at the fair value of the equity instruments that an entity is obligated to issue on the grant date. The adoption of the standard did not have a material impact on our financial statements. Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-02 (“ASU 2016-02” or “Topic 842”) that revises lease accounting guidance. Most prominent among the changes in the standard is the recognition of right-of-use (“ROU”) assets and lease liabilities based on the present value of lease payments over the lease term by lessees for those leases classified as operating leases under the existing guidance. The Company adopted Topic 842 on July 1, 2019 using the modified retrospective approach by applying the new standard to leases existing at the date of adoption and not restating comparative prior periods. The adoption did not have a material impact on the Company’s results of operations or cash flows. Refer to Note 3 below for additional information. |
2. Revenue (Tables)
2. Revenue (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Net revenue by product lines | Three Months Ended September 30, 2019 2018 (In thousands) IoT $ 10,221 $ 8,967 IT Management 2,301 3,101 Other 219 211 $ 12,741 $ 12,279 |
Net revenue by geographic region | Three Months Ended September 30, 2019 2018 (In thousands) Americas $ 5,764 $ 6,914 EMEA 4,521 3,520 Asia Pacific Japan 2,456 1,845 $ 12,741 $ 12,279 |
Changes in deferred revenue | Balance, July 1, 2019 $ 486 New performance obligations 286 Performance obligations assumed from acquisition of Maestro 178 Recognition of revenue as a result of satisfying performance obligations (346 ) Balance, September 30, 2019 $ 604 Less: non-current portion of deferred revenue (159 ) Current portion, September 30, 2019 $ 445 |
3. Business Combination (Tables
3. Business Combination (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Purchase price allocation | July 5, 2019 (provisional) Cash and cash equivalents 282 Accounts receivable, net 1,320 Inventories, net 1,611 Prepaid expense and other current assets 283 Property and equipment, net 108 Amortizable intangible assets 1,910 Other non-current assets 214 Goodwill 2,969 Accounts payable (1,568 ) Accrued payroll and related expenses (249 ) Other current liabilities (1,361 ) Other non-current liabilities (164 ) Total consideration $ 5,355 |
Valuation of identifiable intangible assets | Asset Fair Value Weighted Average Useful Life (years) (In thousands, except for useful life) Developed technology $ 1,530 5.0 Customer relationship 100 2.0 Order backlog 110 1.0 Non-compete agreements 30 2.0 Trade name $ 140 1.0 |
Supplemental Pro Forma Information | Three Months Ended September 30, 2019 2018 (In thousands) Pro forma net revenue $ 12,741 $ 15,799 Pro forma net loss $ (1,198 ) $ (1,576 ) Pro forma net loss per share Basic $ (0.05 ) $ (0.08 ) Diluted $ (0.05 ) $ (0.08 ) |
4. Leases (Tables)
4. Leases (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Lessee Disclosure [Abstract] | |
Components of lease expense | Three months ended September 30, 2019 (In thousands) Components of lease expense Operating lease cost $ 306 Financing lease cost $ 2 Supplemental cash flow information Cash paid for amounts included in the measurement of operating lease liabilities $ 246 Cash paid for amounts included in the measurement of financing lease liabilities $ 3 Right-of-use assets obtained in exchange for lease obligation $ 984 |
Maturities of lease liabilities | Operating Financing (In thousands) 2020 (remainder of the year) $ 646 $ 2 2021 430 – 2022 24 – 2023 4 – Thereafter – – Total remaining lease payments 1,104 2 less: imputed interest 49 – Lease liability $ 1,055 $ 2 Reported as: Current liabilities $ (830 ) $ (2 ) Long-term liabilities $ (225 ) $ – |
5. Supplemental Financial Inf_2
5. Supplemental Financial Information (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Supplemental Financial Information | |
Schedule of Inventory | September 30, June 30, 2019 2019 (In thousands) Finished goods $ 7,144 $ 6,084 Raw materials 5,279 4,425 Inventories, net $ 12,423 $ 10,509 |
Schedule of Other Liabilities | September 30, June 30, 2019 2019 (In thousands) Current Accrued variable consideration $ 1,196 $ 1,313 Customer deposits and refunds 290 168 Accrued raw materials purchases 1,111 1,155 Deferred revenue 445 328 Lease liability 832 4 Taxes payable 389 322 Accrued operating expenses 2,033 1,290 Total other current liabilities $ 6,296 $ 4,580 Non-current Lease liability $ 225 $ 48 Deferred revenue 159 158 Total other non-current liabilities $ 384 $ 206 |
Schedule of Computation of Net Income (Loss) per Share | Three Months Ended September 30, 2019 2018 (In thousands, except per share data) Numerator: Net loss $ (2,470 ) $ (83 ) Denominator: Weighted-average common shares outstanding - basic 22,913 19,323 Net loss per share - basic and diluted $ (0.11 ) $ (0.00 ) |
Schedule of Common Stock Equivalents | Three Months Ended September 30, 2019 2018 (In thousands) Common stock equivalents 1,769 1,828 |
Schedule of severance and related charges | Three Months Ended September 30, 2019 (In thousands) Beginning balance $ 651 Charges 749 Payments (580 ) Ending balance $ 820 |
Schedule of Supplemental Cash Flow Information | Three Months Ended September 30, 2019 2018 (In thousands) Accrued property and equipment paid for in the subsequent period $ 83 $ 33 |
Schedule of Warranty Reserve | Three Months Ended Year Ended September 30, June 30, 2019 2019 (In thousands) Beginning balance $ 116 $ 99 Charged to cost of revenue 8 96 Usage (16 ) (79 ) Ending balance $ 108 $ 116 |
6. Warranty Reserve (Tables)
6. Warranty Reserve (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Product Warranties Disclosures [Abstract] | |
Schedule of warranty reserve | Three Months Ended Year Ended September 30, June 30, 2019 2019 (In thousands) Beginning balance $ 116 $ 99 Charged to cost of revenue 8 96 Usage (16 ) (79 ) Ending balance $ 108 $ 116 |
8. Stockholders' Equity (Tables
8. Stockholders' Equity (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Stock Options [Member] | |
Summary of stock option activity | Weighted- Average Number of Exercise Price Shares per Share (In thousands) Balance of options outstanding at June 30, 2019 3,147 $ 2.29 Granted 3 3.36 Forfeited (8 ) 2.75 Exercised (218 ) 1.85 Balance of options outstanding at September 30, 2019 2,924 $ 2.32 |
Schedule of share-based compensation expense by functional line item | Three Months Ended September 30, 2019 2018 (In thousands) Cost of revenue $ 24 $ 17 Selling, general and administrative 459 400 Research and development 95 61 Total share-based compensation expense $ 578 $ 478 |
Schedule of unrecognized share-based compensation expense | Remaining Remaining Unrecognized Weighted- Compensation Average Years Expense To Recognize (In thousands) Stock options $ 1,805 2.7 RSUs $ 3,515 3.4 Stock purchase rights under ESPP $ 23 0.1 $ 5,343 |
Restricted Stock Units (RSUs) [Member] | |
Summary of other-than-option activity | Weighted- Average Grant Date Number of Fair Value Shares per Share (In thousands) Balance of RSUs outstanding at June 30, 2019 866 $ 4.24 Granted 217 3.34 Vested (120 ) 5.06 Forfeited (1 ) 5.32 Balance of RSUs outstanding at September 30, 2019 962 $ 3.93 |
ESPP [Member] | |
Summary of other-than-option activity | Number of Shares (In thousands) Shares available for issuance at June 30, 2019 517 Shares issued – Shares available for issuance at September 30, 2019 517 |
9. Income Taxes (Tables)
9. Income Taxes (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Reconciliation | Three Months Ended September 30, 2019 2018 Effective tax rate 2% 93% |
2. Revenue (Details - Revenues
2. Revenue (Details - Revenues by product line) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues | $ 12,741 | $ 12,279 |
IoT [Member] | ||
Revenues | 10,221 | 8,967 |
IT Management [Member] | ||
Revenues | 2,301 | 3,101 |
Other [Member] | ||
Revenues | $ 219 | $ 211 |
2. Revenue (Details - Revenue b
2. Revenue (Details - Revenue by Geography) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues | $ 12,741 | $ 12,279 |
Americas [Member] | ||
Revenues | 5,764 | 6,914 |
EMEA [Member] | ||
Revenues | 4,521 | 3,520 |
Asia Pacific [Member] | ||
Revenues | $ 2,456 | $ 1,845 |
2. Revenue (Details - Changes i
2. Revenue (Details - Changes in Deferred Revenue) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2019 | Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Deferred revenue, beginning balance | $ 486 | |
New performance obligations | 286 | |
Performance obligations assumed from acquisition of Maestro | 178 | |
Recognition of revenue as a result of satisying performance obligations | (346) | |
Deferred revenue, ending balance | 604 | |
Less: non-current portion of deferred revenue | (159) | $ (158) |
Current portion ending balance | $ 445 | $ 328 |
3. Business Combination (Detail
3. Business Combination (Details - Purchase price allocation) - USD ($) $ in Thousands | Sep. 30, 2019 | Jul. 05, 2019 | Jun. 30, 2019 |
Goodwill | $ 12,458 | $ 9,488 | |
Maestro Wireless Solutions [Member] | |||
Cash and cash equivalents | $ 282 | ||
Accounts receivable, net | 1,320 | ||
Inventories, net | 1,611 | ||
Prepaid expense and other current assets | 283 | ||
Property and equipment, net | 108 | ||
Amortizable intangible assets | 1,910 | ||
Other non-current assets | 214 | ||
Goodwill | 2,969 | ||
Accounts payable | (1,568) | ||
Accrued payroll and related expenses | (249) | ||
Other current liabilities | (1,361) | ||
Other non-current liabilities | (164) | ||
Total consideration | $ 5,355 |
3. Business Combination (Deta_2
3. Business Combination (Details - Intangible asset valuation) - Maestro Wireless Solutions [Member] $ in Thousands | Jul. 05, 2019USD ($) |
Asset Fair Value | $ 1,910 |
Developed Technology [Member] | |
Asset Fair Value | $ 1,530 |
Weighted Average Useful Life (years) | 5 years |
Customer Relationships [Member] | |
Asset Fair Value | $ 100 |
Weighted Average Useful Life (years) | 2 years |
Order Backlog [Member] | |
Asset Fair Value | $ 110 |
Weighted Average Useful Life (years) | 1 year |
Noncompete Agreements [Member] | |
Asset Fair Value | $ 30 |
Weighted Average Useful Life (years) | 2 years |
Trade Names [Member] | |
Asset Fair Value | $ 140 |
Weighted Average Useful Life (years) | 1 year |
3. Business Combination (Deta_3
3. Business Combination (Details - Pro forma data) - Maestro Wireless Solutions [Member] - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Pro forma net revenue | $ 12,741 | $ 15,799 |
Pro forma net loss | $ (1,198) | $ (1,576) |
Pro forma net loss per share - basic | $ (0.05) | $ (0.08) |
Pro forma net loss per share - diluted | $ (0.05) | $ (0.08) |
3. Business Combination (Deta_4
3. Business Combination (Details Narrative) - Maestro Wireless Solutions [Member] - USD ($) $ in Thousands | Jul. 05, 2019 | Sep. 30, 2019 |
Business combination amount transferred | $ 5,355 | |
Amortization expense | $ 144 | |
Manufacturing profit [Member] | ||
Proforma cost of goods sold | 171 | |
Restructuring Costs [Member] | ||
Proforma cost of goods sold | 469 | |
Acquisition Related Costs [Member] | ||
Proforma cost of goods sold | $ 581 |
4. Leases (Details - Components
4. Leases (Details - Components of lease expense) $ in Thousands | 3 Months Ended |
Sep. 30, 2019USD ($) | |
Components of lease expense | |
Operating lease cost | $ 306 |
Financing lease cost | 2 |
Supplemental cash flow information | |
Cash paid for amounts included in the measurement of operating lease liabilities | 246 |
Cash paid for amounts included in the measurement of financing lease liabilities | 3 |
Right-of-use assets obtained in exchange for lease obligation | $ 984 |
4. Leases (Details - Maturities
4. Leases (Details - Maturities of lease liabilities) $ in Thousands | Sep. 30, 2019USD ($) |
Operating lease maturities | |
2020 (remainder of the year) | $ 646 |
2021 | 430 |
2022 | 24 |
2023 | 4 |
Thereafter | 0 |
Total remaining lease payments | 1,104 |
less: imputed interest | (49) |
Lease liability | 1,055 |
Current liabilities | (830) |
Long-term liabilities | (225) |
Financing lease maturities | |
2020 (remainder of the year) | 2 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
Thereafter | 0 |
Total remaining lease payments | 2 |
less: imputed interest | 0 |
Lease liability | 2 |
Current liabilities | (2) |
Long-term liabilities | $ 0 |
4. Leases (Details Narrative)
4. Leases (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2019 | Jun. 30, 2019 |
Lessee Disclosure [Abstract] | ||
Weighted average remaining lease term | 1 year 8 months 12 days | |
Weighted average discount rate | 6.39% | |
Right of use operating assets | $ 957 | $ 984 |
Right of use finance assets | $ 1,114 |
5. Supplemental Financial Inf_3
5. Supplemental Financial Information (Details - Inventories) - USD ($) $ in Thousands | Sep. 30, 2019 | Jun. 30, 2019 |
Supplemental Financial Information | ||
Finished goods | $ 7,144 | $ 6,084 |
Raw materials | 5,279 | 4,425 |
Inventories, net | $ 12,423 | $ 10,509 |
5. Supplemental Financial Inf_4
5. Supplemental Financial Information (Details - Other liabilities) - USD ($) $ in Thousands | Sep. 30, 2019 | Jun. 30, 2019 |
Current | ||
Accrued variable consideration | $ 1,196 | $ 1,313 |
Customer deposits and refunds | 290 | 168 |
Accrued raw materials purchases | 1,111 | 1,155 |
Deferred revenue | 445 | 328 |
Capital lease obligations | 832 | 4 |
Taxes payable | 389 | 322 |
Other accrued liabilities | 2,033 | 1,290 |
Total other current liabilities | 6,296 | 4,580 |
Non-current | ||
Deferred rent | 225 | 48 |
Deferred revenue | 159 | 158 |
Total other non-current liabilities | $ 384 | $ 206 |
5. Supplemental Financial Inf_5
5. Supplemental Financial Information (Details - Net Loss per Share) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator: | ||
Net loss | $ (2,470) | $ (83) |
Denominator: | ||
Weighted-average common shares outstanding - basic and diluted | 22,913 | 19,323 |
Effect of dilutive securities: | ||
Net loss per share - basic and diluted | $ (0.11) | $ 0 |
5. Supplemental Financial Inf_6
5. Supplemental Financial Information (Details - Equivalents) - shares shares in Thousands | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Supplemental Financial Information | ||
Common stock equivalents | 1,769 | 1,828 |
5. Supplemental Financial Inf_7
5. Supplemental Financial Information (Details - Severance of Related Charges) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Supplemental Financial Information | ||
Severance payable, beginning balance | $ 651 | |
Charges | 749 | $ 323 |
Payments | (580) | |
Severance payable, ending balance | $ 820 |
5. Supplemental Financial Inf_8
5. Supplemental Financial Information (Details - Non-cash acquisition) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Supplemental Cash Flow Information | ||
Accrued property and equipment paid for in the subsequent period | $ 83 | $ 33 |
5. Supplemental Financial Inf_9
5. Supplemental Financial Information (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Supplemental Financial Information | ||
Severance costs | $ 749 | $ 323 |
6. Warranty Reserve (Details -
6. Warranty Reserve (Details - Warranty reserve) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Jun. 30, 2019 | |
Product Warranties Disclosures [Abstract] | ||
Beginning balance | $ 116 | $ 99 |
Charged to cost of revenue | 8 | 96 |
Usage | (16) | (79) |
Ending balance | $ 108 | $ 116 |
7. Bank Line of Credit and Debt
7. Bank Line of Credit and Debt (Details Narrative) $ in Thousands | 3 Months Ended |
Sep. 30, 2019USD ($) | |
Debt Disclosure [Abstract] | |
Revolving Line | $4.0 million revolving line |
Credit line maximum borrowing amount | $ 4,000 |
Maturity date | Sep. 30, 2020 |
Interest rate description | The Loan Agreement provides for an interest rate per annum equal to the greater of (i) the prime rate plus 0.50% or (ii) 5.00%, provided that we maintain a monthly quick ratio of 1.0 to 1.0 or greater. |
Minimum TNW | $ 7,750 |
Actual TNW | $ 21,166 |
8. Stockholders Equity (Details
8. Stockholders Equity (Details - Option activity) - Stock Options [Member] shares in Thousands | 3 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Number of shares | |
Number of Shares Options Outstanding, Beginning | shares | 3,147 |
Number of Shares Options Granted | shares | 3 |
Number of Shares Options Forfeited | shares | (8) |
Number of Shares Options Exercised | shares | (218) |
Number of Shares Options Outstanding, Ending | shares | 2,924 |
Weighted Average Exercise Price per share | |
Exercise Price Outstanding, Beginning | $ / shares | $ 2.29 |
Exercise Price Granted | $ / shares | 3.36 |
Exercise Price Forfeited | $ / shares | 2.75 |
Exercise Price Exercised | $ / shares | 1.85 |
Exercise Price Outstanding, Ending | $ / shares | $ 2.32 |
8. Stockholders Equity (Detai_2
8. Stockholders Equity (Details - RSU activity) - Restricted Stock Units (RSUs) [Member] shares in Thousands | 3 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Number of RSU's Shares | |
Balance of RSU's, beginning | shares | 866 |
Granted | shares | 217 |
Vested | shares | (120) |
Forfeited | shares | (1) |
Balance of RSU's, ending | shares | 962 |
Weighted Average Grant Date Fair Value per share | |
RSU Shares Weighted-Average Grant-Date Fair Value per Share, beginning | $ / shares | $ 4.24 |
RSU Shares Granted, Weighted-Average Grant-Date Fair Value per Share | $ / shares | 3.34 |
RSU Shares Vested, Weighted-Average Grant-Date Fair Value per Share | $ / shares | 5.06 |
RSU Shares Forfeited, Weighed-Average Grant Date Fair Value per Share | $ / shares | 5.32 |
RSU Shares Weighted-Average Grant-Date Fair Value per Share, ending | $ / shares | $ 3.93 |
8. Stockholders Equity (Detai_3
8. Stockholders Equity (Details - ESPP activity) - ESPP [Member] shares in Thousands | 3 Months Ended |
Sep. 30, 2019shares | |
Shares available for issuance, beginning balance | 517 |
Shares issued | 0 |
Shares available for future issuance, ending balance | 517 |
8. Stockholders Equity (Detai_4
8. Stockholders Equity (Details - Share based compensation) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Total share-based compensation | $ 578 | $ 478 |
Cost of revenues [Member] | ||
Total share-based compensation | 24 | 17 |
Selling, general and administrative [Member] | ||
Total share-based compensation | 459 | 400 |
Research and development [Member] | ||
Total share-based compensation | $ 95 | $ 61 |
8. Stockholders Equity (Detai_5
8. Stockholders Equity (Details - Unrecognized expense) $ in Thousands | 3 Months Ended |
Sep. 30, 2019USD ($) | |
Unrecognized share-based compensation expense | $ 343 |
Stock Options [Member] | |
Unrecognized share-based compensation expense | $ 1,805 |
Weighted average years to recognize | 2 years 8 months 12 days |
Restricted Stock Units (RSUs) [Member] | |
Unrecognized share-based compensation expense | $ 3,515 |
Weighted average years to recognize | 3 years 4 months 24 days |
ESPP [Member] | |
Unrecognized share-based compensation expense | $ 23 |
Weighted average years to recognize | 1 month 6 days |
8. Stockholders' Equity (Detail
8. Stockholders' Equity (Details Narrative) - Public Offering [Member] shares in Thousands, $ in Thousands | 3 Months Ended |
Sep. 18, 2018USD ($)shares | |
Stock issued new, shares | 2,700 |
Proceeds from sale of stock | $ | $ 9,774 |
Stock options granted | 200 |
9. Income Taxes (Details Narrat
9. Income Taxes (Details Narrative) | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 2.00% | 93.00% |