Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 31, 2019 | Feb. 07, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | LANTRONIX INC | |
Entity Central Index Key | 0001114925 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 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 | 27,737,332 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2020 | |
Entity Shell Company | false | |
Entity Small Business | true | |
Entity Emerging Growth | 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 | Dec. 31, 2019 | Jun. 30, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 9,347 | $ 18,282 |
Restricted cash | 6,000 | 0 |
Accounts receivable, net | 9,379 | 7,388 |
Inventories, net | 11,024 | 10,509 |
Contract manufacturers' receivable | 373 | 1,324 |
Prepaid expenses and other current assets | 1,307 | 687 |
Total current assets | 37,430 | 38,190 |
Property and equipment, net | 1,412 | 1,199 |
Goodwill | 12,458 | 9,488 |
Purchased intangible assets, net | 1,615 | 0 |
Other assets | 2,040 | 67 |
Total assets | 54,955 | 48,944 |
Current liabilities: | ||
Accounts payable | 5,065 | 4,716 |
Accrued payroll and related expenses | 2,248 | 2,060 |
Warranty reserve | 89 | 116 |
Short-term debt, net | 1,472 | 0 |
Other current liabilities | 5,248 | 4,580 |
Total current liabilities | 14,122 | 11,472 |
Long-term debt, net | 4,418 | 0 |
Other non-current liabilities | 1,137 | 206 |
Total liabilities | 19,677 | 11,678 |
Stockholders' equity: | ||
Common stock | 2 | 2 |
Additional paid-in capital | 228,107 | 226,274 |
Accumulated deficit | (193,202) | (189,381) |
Accumulated other comprehensive income | 371 | 371 |
Total stockholders' equity | 35,278 | 37,266 |
Total liabilities and stockholders' equity | $ 54,955 | $ 48,944 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | ||||
Net revenue | $ 13,228 | $ 12,114 | $ 25,969 | $ 24,393 |
Cost of revenue | 6,451 | 5,453 | 12,997 | 10,952 |
Gross profit | 6,777 | 6,661 | 12,972 | 13,441 |
Operating expenses: | ||||
Selling, general and administrative | 4,871 | 4,159 | 9,344 | 8,430 |
Research and development | 2,336 | 2,279 | 4,957 | 4,494 |
Restructuring, severance and related charges | 354 | 0 | 1,103 | 323 |
Acquisition-related costs | 353 | 0 | 996 | 0 |
Amortization of purchased intangible assets | 151 | 0 | 295 | 0 |
Total operating expenses | 8,065 | 6,438 | 16,695 | 13,247 |
Income (loss) from operations | (1,288) | 223 | (3,723) | 194 |
Interest income (expense), net | (16) | 60 | 40 | 56 |
Other income (expense), net | (10) | 8 | (53) | (2) |
Income (loss) before income taxes | (1,314) | 291 | (3,736) | 248 |
Provision for income taxes | 37 | 14 | 85 | 54 |
Net income (loss) | $ (1,351) | $ 277 | $ (3,821) | $ 194 |
Net income (loss) per share - basic | $ (0.06) | $ 0.01 | $ (0.17) | $ 0.01 |
Net income (loss) per share - diluted | $ (0.06) | $ 0.01 | $ (0.17) | $ 0.01 |
Weighted-average common shares - basic | 23,145 | 22,091 | 23,029 | 20,721 |
Weighted-average common shares - diluted | 23,145 | 23,442 | 23,029 | 22,263 |
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 | 2,700 | ||||
Shares issued pursuant to equity offering, net, value | 9,774 | 9,774 | |||
Shares issued pursuant to stock awards, net shares | 605 | ||||
Shares issued pursuant to stock awards, net value | 893 | 893 | |||
Tax withholding paid on behalf of employees for restricted shares | (169) | (169) | |||
Share-based compensation | 929 | 929 | |||
Net income (loss) | 194 | 194 | |||
Ending balance, shares at Dec. 31, 2018 | 22,213 | ||||
Ending balance, value at Dec. 31, 2018 | $ 2 | 224,422 | (188,779) | 371 | 36,016 |
Beginning balance, shares at Sep. 30, 2018 | 21,893 | ||||
Beginning balance, value at Sep. 30, 2018 | $ 2 | 223,383 | (189,056) | 371 | 34,700 |
Shares issued pursuant to equity offering, net, shares | 100 | ||||
Shares issued pursuant to equity offering, net, value | 336 | 336 | |||
Shares issued pursuant to stock awards, net shares | 220 | ||||
Shares issued pursuant to stock awards, net value | 308 | 308 | |||
Tax withholding paid on behalf of employees for restricted shares | (56) | (56) | |||
Share-based compensation | 451 | 451 | |||
Net income (loss) | 277 | 277 | |||
Ending balance, shares at Dec. 31, 2018 | 22,213 | ||||
Ending balance, value at Dec. 31, 2018 | $ 2 | 224,422 | (188,779) | 371 | 36,016 |
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 | 505 | ||||
Shares issued pursuant to stock awards, net value | 480 | 480 | |||
Tax withholding paid on behalf of employees for restricted shares | (163) | (163) | |||
Share-based compensation | 1,516 | 1,516 | |||
Net income (loss) | (3,821) | (3,821) | |||
Ending balance, shares at Dec. 31, 2019 | 23,317 | ||||
Ending balance, value at Dec. 31, 2019 | $ 2 | 228,107 | (193,202) | 371 | 35,278 |
Beginning balance, shares at Sep. 30, 2019 | 23,038 | ||||
Beginning balance, value at Sep. 30, 2019 | $ 2 | 226,870 | (191,851) | 371 | 35,392 |
Shares issued pursuant to stock awards, net shares | 279 | ||||
Shares issued pursuant to stock awards, net value | 336 | 336 | |||
Tax withholding paid on behalf of employees for restricted shares | (37) | (37) | |||
Share-based compensation | 938 | 938 | |||
Net income (loss) | (1,351) | (1,351) | |||
Ending balance, shares at Dec. 31, 2019 | 23,317 | ||||
Ending balance, value at Dec. 31, 2019 | $ 2 | $ 228,107 | $ (193,202) | $ 371 | $ 35,278 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Operating activities | ||
Net income (loss) | $ (3,821) | $ 194 |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Share-based compensation | 1,516 | 929 |
Depreciation and amortization | 303 | 219 |
Amortization of purchased intangible assets | 295 | 0 |
Amortization of manufacturing profit in acquired inventory associated with acquisition | 171 | 0 |
Amortization of deferred debt issuance costs | 4 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (671) | (713) |
Inventories | 925 | (1,375) |
Contract manufacturers' receivable | 951 | 230 |
Prepaid expenses and other current assets | (337) | (289) |
Other assets | 338 | 0 |
Accounts payable | (1,352) | 369 |
Accrued payroll and related expenses | (61) | (77) |
Warranty reserve | (27) | 7 |
Other liabilities | (2,013) | 193 |
Net cash used in operating activities | (3,779) | (313) |
Investing activities | ||
Purchases of property and equipment | (280) | (355) |
Cash payment for acquisition of Maestro, net of cash and cash equivalents acquired | (5,073) | 0 |
Net cash used in investing activities | (5,353) | (355) |
Financing activities | ||
Net proceeds from issuances of common stock | 480 | 10,667 |
Tax withholding paid on behalf of employees for restricted shares | (163) | (169) |
Net proceeds from issuance of debt | 5,886 | 0 |
Payment of lease liabilities | (6) | (31) |
Net cash provided by financing activities | 6,197 | 10,467 |
Increase (decrease) in cash, cash equivalents, and restricted cash | (2,935) | 9,799 |
Cash, cash equivalents, and restricted cash at beginning of period | 18,282 | 9,568 |
Cash, cash equivalents, and restricted cash at end of period | $ 15,347 | $ 19,367 |
1. Summary of Significant Accou
1. Summary of Significant Accounting Policies | 6 Months Ended |
Dec. 31, 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 December 31, 2019, the consolidated results of our operations for the three and six months ended December 31, 2019 and our consolidated cash flows for the six months ended December 31, 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 and six months ended December 31, 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. We 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 our results of operations or cash flows. Refer to Note 4 |
2. Business Combinations
2. Business Combinations | 6 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Business Combinations | 2. Business Combinations Acquisition of Maestro 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 complementary cellular connectivity technologies to our portfolio of IoT solutions. July 5, 2019 (provisional) Cash and cash equivalents 282 Accounts receivable 1,320 Inventories 1,611 Prepaid expense and other current assets 283 Property and equipment 108 Amortizable intangible assets 1,910 Other non-current assets 213 Goodwill 2,970 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 were expensed in the periods in which the costs were 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 $651,000 and (iii) acquisition-related costs of $724,000, with a corresponding reduction in the fiscal 2020 supplemental proforma data. Additionally, we recorded $295,000 of amortization expense in the fiscal 2019 supplemental pro-forma data, and reversed amortization expense of $110,000 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 24% to 28% of net sales for the six months ended December 31, 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: Six Months Ended December 31, 2019 2018 (In thousands, except per share amounts) Pro forma net revenue $ 25,969 $ 29,702 Pro forma net loss $ (2,165 ) $ (2,221 ) Pro forma net loss per share Basic $ (0.09 ) $ (0.11 ) Diluted $ (0.09 ) $ (0.10 ) Acquisition of Intrinsyc On January 16, 2020 (the “Closing Date”), we completed the previously announced acquisition of Intrinsyc Technologies Corporation (“Intrinsyc”), a company existing under the laws of British Columbia, Canada. Pursuant to the terms of the agreement, dated October 30, 2019 (the “Agreement”), by and between Lantronix and Intrinsyc, all of the outstanding common shares of Intrinsyc were acquired by Lantronix. Under the Agreement, we paid $0.50 and 0.2275 of a share of our common stock for each issued and outstanding common share of Intrinsyc. Pursuant to the Agreement, we paid, in the aggregate, approximately $11,000,000 in cash and issued approximately 4,300,000 shares of Lantronix common stock to Intrinsyc shareholders. Following the acquisition, Intrinsyc shareholders owned just under 16% of the outstanding shares of Lantronix common stock. Additionally, pursuant to the Agreement, Lantronix agreed to exchange certain options to purchase Intrinsyc shares and restricted stock units (“RSUs”) for cash payments, Lantronix common stock options or RSUs or a combination thereof, as further outlined in the Agreement. The acquisition provides us with complementary IoT computing and embedded product development capabilities and expands our IoT market opportunity. We are currently evaluating the fair value of acquired assets and liabilities, including any identifiable intangible assets. We have not yet completed the initial accounting related to this acquisition as we are compiling and evaluating all the necessary information. We expect to present a preliminary allocation of the fair value of the acquired assets and liabilities and pro forma disclosure in our Form 10-Q filing for the quarter ending March 31, 2020. |
3. Revenue
3. Revenue | 6 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 3. 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 December 31, Six Months Ended December 31, 2019 2018 2019 2018 (In thousands) (In thousands) IoT $ 11,180 $ 9,070 $ 21,401 $ 18,037 IT Management 1,832 2,888 4,133 5,989 Other 216 156 435 367 $ 13,228 $ 12,114 $ 25,969 $ 24,393 Three Months Ended December 31, Six Months Ended December 31, 2019 2018 2019 2018 (In thousands) (In thousands) Americas $ 5,840 $ 6,182 $ 11,604 $ 13,096 EMEA 4,362 4,080 8,883 7,600 Asia Pacific Japan 3,026 1,852 5,482 3,697 $ 13,228 $ 12,114 $ 25,969 $ 24,393 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 six months ended December 31, 2019 (in thousands): Balance, July 1, 2019 $ 486 New performance obligations 110 Performance obligations assumed from acquisition of Maestro 178 Recognition of revenue as a result of satisfying performance obligations (202 ) Balance, December 31, 2019 $ 572 Less: non-current portion of deferred revenue (171 ) Current portion, December 31, 2019 $ 401 We expect to recognize substantially all of the non-current portion of deferred revenue over the next two to four years. |
4. Leases
4. Leases | 6 Months Ended |
Dec. 31, 2019 | |
Lessee Disclosure [Abstract] | |
Leases | 4. Leases On July 1, 2019, we 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). We also elected 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. Our leases include office buildings for facilities worldwide and car leases in Germany, which are all classified as operating leases. We also have financing leases related to office equipment and R&D equipment in the United States. On October 1, 2019 we entered into a lease agreement for an office in Hyderabad, India, which replaces and expands our existing office space there. We determine 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 we will exercise the option. As our leases generally do not provide an implicit rate, we use our 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: Six months ended December 31, 2019 (In thousands) Components of lease expense Operating lease cost $ 677 Financing lease cost $ 3 Supplemental cash flow information Cash paid for amounts included in the measurement of operating lease liabilities $ 497 Cash paid for amounts included in the measurement of financing lease liabilities $ 3 Right-of-use assets obtained in exchange for lease obligation $ 1,119 The weighted-average remaining lease term is 1.6 years. The weighted-average discount rate is 6.16 percent. Maturities of lease liabilities as of December 31, 2019 were as follows: Years ending June 30, Operating Financing (In thousands) 2020 $ 535 $ 5 2021 667 9 2022 272 9 2023 265 9 2024 274 3 Thereafter 70 Total remaining lease payments 2,083 35 less: imputed interest (197 ) – Lease liability $ 1,886 $ 35 Reported as: Current liabilities $ (946 ) $ (9 ) Non-current liabilities $ (940 ) $ (26 ) The lease liabilities and ROU assets as of December 31, 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 2 |
5. Supplemental Financial Infor
5. Supplemental Financial Information | 6 Months Ended |
Dec. 31, 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: December 31, June 30, 2019 2019 (In thousands) Finished goods $ 6,661 $ 6,084 Raw materials 4,363 4,425 Inventories, net $ 11,024 $ 10,509 Other Liabilities The following table presents details of our other liabilities: December 31, June 30, 2019 2019 (In thousands) Current Accrued variable consideration $ 1,381 $ 1,313 Customer deposits and refunds 516 168 Accrued raw materials purchases 374 1,155 Deferred revenue 401 328 Lease liability 955 4 Taxes payable 360 322 Accrued operating expenses 1,261 1,290 Total other current liabilities $ 5,248 $ 4,580 Non-current Lease liability $ 966 $ 48 Deferred revenue 171 158 Total other non-current liabilities $ 1,137 $ 206 Computation of Net Income (Loss) per Share Basic and diluted net income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the applicable period. The following table presents the computation of net income (loss) per share: Three Months Ended Six Months Ended December 31, December 31, 2019 2018 2019 2018 (In thousands, except per share data) Numerator: Net income (loss) $ (1,351 ) $ 277 $ (3,821 ) $ 194 Denominator: Weighted-average common shares outstanding - basic 23,145 22,091 23,029 20,721 Effect of dilutive securities: – 1,351 – 1,542 Denominator for net income (loss) per share - diluted 23,145 23,442 23,029 22,263 Net income (loss) per share - basic $ (0.06 ) $ 0.01 $ (0.17 ) $ 0.01 Net income (loss) per share - diluted $ (0.06 ) $ 0.01 $ (0.17 ) $ 0.01 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 Six Months Ended December 31, December 31, 2019 2018 2019 2018 (In thousands) Common stock equivalents 1,659 70 1,726 4 Severance and Related Charges Current Fiscal Year During the six months ended December 31, 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 $1,103,000. The following table presents details of the liability we recorded related to these activities: Six Months Ended December 31, 2019 (In thousands) Beginning balance $ 651 Charges 1,103 Payments (1,267 ) Ending balance $ 487 The ending balance is recorded in accrued payroll and related expenses on the accompanying unaudited condensed consolidated balance sheet at December 31, 2019. Prior Fiscal Year During the six months ended December 31, 2018, we executed a plan to realign certain personnel resources to better fit our current business needs. These activities resulted in a total charge of approximately $323,000 of severance costs during the six months ended December 31, 2018. Supplemental Cash Flow Information The following table presents non-cash investing transactions excluded from the accompanying unaudited condensed consolidated statements of cash flows: Six Months Ended December 31, 2019 2018 (In thousands) Accrued property and equipment paid for in the subsequent period $ 133 $ 6 |
6. Warranty Reserve
6. Warranty Reserve | 6 Months Ended |
Dec. 31, 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: Six Months Ended Year Ended December 31, June 30, 2019 2019 (In thousands) Beginning balance $ 116 $ 99 Charged to cost of revenue (25 ) 96 Usage (2 ) (79 ) Ending balance $ 89 $ 116 |
7. Bank Loan Agreement
7. Bank Loan Agreement | 6 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Bank Loan Agreement | 7. Bank Loan Agreement On November 12, 2019, we entered into a Second Amended and Restated Loan and Security Agreement (“Amended Agreement”) with Silicon Valley Bank (“SVB”), which amended, restated and superseded our previous agreement with SVB in its entirety. Pursuant to the Amended Agreement, SVB made available to us a senior secured revolving line of credit of up to $6,000,000 (“Revolving Facility”) and a senior secured term loan of $6,000,000 (“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 $6,000,000 proceeds of the Term Loan Facility were drawn in full in November 2019 to be used solely to fund our acquisition of Intrinsyc, which occurred in January 2020 (refer to Note 2 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 SVB on the closing date and a $10,000 anniversary fee is payable to SVB 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, and certain other allowable exclusions 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 currently in compliance with all covenants. |
8. Stockholders' Equity
8. Stockholders' Equity | 6 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | 8. Stockholders’ Equity 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 December 31, 2019, no stock appreciation rights or non-vested stock was outstanding. Stock Options The following table presents a summary of activity during the six months ended December 31, 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 79 3.06 Forfeited (146 ) 2.40 Expired (67 ) 2.21 Exercised (425 ) 1.66 Balance of options outstanding at December 31, 2019 2,588 $ 2.41 Restricted Stock Units The following table presents a summary of activity during the six months ended December 31, 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 276 3.28 Vested (168 ) 4.80 Forfeited (34 ) 4.35 Balance of RSUs outstanding at December 31, 2019 940 $ 3.85 Performance Stock Units In October 2019, we 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, revenue targets and market conditions are met. The estimate of the grant date fair value and related share-based compensation expense included the use of a Monte Carlo simulation which incorporates estimates of the potential outcomes of the market condition of these awards. 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 six months ended December 31, 2019: Number of Shares (In thousands) Shares available for issuance at June 30, 2019 517 Shares issued (64 ) Shares available for issuance at December 31, 2019 453 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 Six Months Ended December 31, December 31, 2019 2018 2019 2018 (In thousands) Cost of revenue $ 48 $ 23 $ 72 $ 40 Selling, general and administrative 777 337 1,236 737 Research and development 113 91 208 152 Total share-based compensation expense $ 938 $ 451 $ 1,516 $ 929 The following table presents the remaining unrecognized share-based compensation expense related to our outstanding share-based awards as of December 31, 2019: Remaining Remaining Unrecognized Weighted- Compensation Average Years Expense To Recognize (In thousands) Stock options $ 1,488 2.6 RSUs 3,269 3.2 PSUs 1,469 2.4 Stock purchase rights under ESPP 44 0.4 $ 6,270 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 | 6 Months Ended |
Dec. 31, 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 Six Months Ended December 31, December 31, 2019 2018 2019 2018 Effective tax rate 3% 5% 2% 22% 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 December 31, 2019 and June 30, 2019. |
10. Commitments and Contingenci
10. Commitments and Contingencies | 6 Months Ended |
Dec. 31, 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. |
1. Summary of Significant Acc_2
1. Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Dec. 31, 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 December 31, 2019, the consolidated results of our operations for the three and six months ended December 31, 2019 and our consolidated cash flows for the six months ended December 31, 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 and six months ended December 31, 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. We 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 our results of operations or cash flows. Refer to Note 4 |
2. Business Combinations (Table
2. Business Combinations (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Purchase price allocation | July 5, 2019 (provisional) Cash and cash equivalents 282 Accounts receivable 1,320 Inventories 1,611 Prepaid expense and other current assets 283 Property and equipment 108 Amortizable intangible assets 1,910 Other non-current assets 213 Goodwill 2,970 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 | Six Months Ended December 31, 2019 2018 (In thousands, except per share amounts) Pro forma net revenue $ 25,969 $ 29,702 Pro forma net loss $ (2,165 ) $ (2,221 ) Pro forma net loss per share Basic $ (0.09 ) $ (0.11 ) Diluted $ (0.09 ) $ (0.10 ) |
3. Revenue (Tables)
3. Revenue (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Net revenue by product lines | Three Months Ended December 31, Six Months Ended December 31, 2019 2018 2019 2018 (In thousands) (In thousands) IoT $ 11,180 $ 9,070 $ 21,401 $ 18,037 IT Management 1,832 2,888 4,133 5,989 Other 216 156 435 367 $ 13,228 $ 12,114 $ 25,969 $ 24,393 |
Net revenue by geographic region | Three Months Ended December 31, Six Months Ended December 31, 2019 2018 2019 2018 (In thousands) (In thousands) Americas $ 5,840 $ 6,182 $ 11,604 $ 13,096 EMEA 4,362 4,080 8,883 7,600 Asia Pacific Japan 3,026 1,852 5,482 3,697 $ 13,228 $ 12,114 $ 25,969 $ 24,393 |
Changes in deferred revenue | Balance, July 1, 2019 $ 486 New performance obligations 110 Performance obligations assumed from acquisition of Maestro 178 Recognition of revenue as a result of satisfying performance obligations (202 ) Balance, December 31, 2019 $ 572 Less: non-current portion of deferred revenue (171 ) Current portion, December 31, 2019 $ 401 |
4. Leases (Tables)
4. Leases (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Lessee Disclosure [Abstract] | |
Components of lease expense | Six months ended December 31, 2019 (In thousands) Components of lease expense Operating lease cost $ 677 Financing lease cost $ 3 Supplemental cash flow information Cash paid for amounts included in the measurement of operating lease liabilities $ 497 Cash paid for amounts included in the measurement of financing lease liabilities $ 3 Right-of-use assets obtained in exchange for lease obligation $ 1,119 |
Maturities of lease liabilities | Years ending June 30, Operating Financing (In thousands) 2020 $ 535 $ 5 2021 667 9 2022 272 9 2023 265 9 2024 274 3 Thereafter 70 Total remaining lease payments 2,083 35 less: imputed interest (197 ) – Lease liability $ 1,886 $ 35 Reported as: Current liabilities $ (946 ) $ (9 ) Non-current liabilities $ (940 ) $ (26 ) |
5. Supplemental Financial Inf_2
5. Supplemental Financial Information (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Supplemental Financial Information | |
Schedule of Inventory | December 31, June 30, 2019 2019 (In thousands) Finished goods $ 6,661 $ 6,084 Raw materials 4,363 4,425 Inventories, net $ 11,024 $ 10,509 |
Schedule of Other Liabilities | December 31, June 30, 2019 2019 (In thousands) Current Accrued variable consideration $ 1,381 $ 1,313 Customer deposits and refunds 516 168 Accrued raw materials purchases 374 1,155 Deferred revenue 401 328 Lease liability 955 4 Taxes payable 360 322 Accrued operating expenses 1,261 1,290 Total other current liabilities $ 5,248 $ 4,580 Non-current Lease liability $ 966 $ 48 Deferred revenue 171 158 Total other non-current liabilities $ 1,137 $ 206 |
Schedule of Computation of Net Income (Loss) per Share | Three Months Ended Six Months Ended December 31, December 31, 2019 2018 2019 2018 (In thousands, except per share data) Numerator: Net income (loss) $ (1,351 ) $ 277 $ (3,821 ) $ 194 Denominator: Weighted-average common shares outstanding - basic 23,145 22,091 23,029 20,721 Effect of dilutive securities: – 1,351 – 1,542 Denominator for net income (loss) per share - diluted 23,145 23,442 23,029 22,263 Net income (loss) per share - basic $ (0.06 ) $ 0.01 $ (0.17 ) $ 0.01 Net income (loss) per share - diluted $ (0.06 ) $ 0.01 $ (0.17 ) $ 0.01 |
Schedule of Common Stock Equivalents | Three Months Ended Six Months Ended December 31, December 31, 2019 2018 2019 2018 (In thousands) Common stock equivalents 1,659 70 1,726 4 |
Schedule of severance and related charges | Six Months Ended December 31, 2019 (In thousands) Beginning balance $ 651 Charges 1,103 Payments (1,267 ) Ending balance $ 487 |
Schedule of Supplemental Cash Flow Information | Six Months Ended December 31, 2019 2018 (In thousands) Accrued property and equipment paid for in the subsequent period $ 133 $ 6 |
Schedule of Warranty Reserve | Six Months Ended Year Ended December 31, June 30, 2019 2019 (In thousands) Beginning balance $ 116 $ 99 Charged to cost of revenue (25 ) 96 Usage (2 ) (79 ) Ending balance $ 89 $ 116 |
6. Warranty Reserve (Tables)
6. Warranty Reserve (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Product Warranties Disclosures [Abstract] | |
Schedule of warranty reserve | Six Months Ended Year Ended December 31, June 30, 2019 2019 (In thousands) Beginning balance $ 116 $ 99 Charged to cost of revenue (25 ) 96 Usage (2 ) (79 ) Ending balance $ 89 $ 116 |
8. Stockholders' Equity (Tables
8. Stockholders' Equity (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Schedule of share-based compensation expense by functional line item | Three Months Ended Six Months Ended December 31, December 31, 2019 2018 2019 2018 (In thousands) Cost of revenue $ 48 $ 23 $ 72 $ 40 Selling, general and administrative 777 337 1,236 737 Research and development 113 91 208 152 Total share-based compensation expense $ 938 $ 451 $ 1,516 $ 929 |
Schedule of unrecognized share-based compensation expense | Remaining Remaining Unrecognized Weighted- Compensation Average Years Expense To Recognize (In thousands) Stock options $ 1,488 2.6 RSUs 3,269 3.2 PSUs 1,469 2.4 Stock purchase rights under ESPP 44 0.4 $ 6,270 |
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 79 3.06 Forfeited (146 ) 2.40 Expired (67 ) 2.21 Exercised (425 ) 1.66 Balance of options outstanding at December 31, 2019 2,588 $ 2.41 |
Restricted Stock Units (RSUs) [Member] | |
Summary of stock 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 276 3.28 Vested (168 ) 4.80 Forfeited (34 ) 4.35 Balance of RSUs outstanding at December 31, 2019 940 $ 3.85 |
ESPP [Member] | |
Summary of stock option activity | Number of Shares (In thousands) Shares available for issuance at June 30, 2019 517 Shares issued (64 ) Shares available for issuance at December 31, 2019 453 |
9. Income Taxes (Tables)
9. Income Taxes (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Reconciliation | Three Months Ended Six Months Ended December 31, December 31, 2019 2018 2019 2018 Effective tax rate 3% 5% 2% 22% |
2. Business Combinations (Detai
2. Business Combinations (Details - Purchase price allocation) - USD ($) $ in Thousands | Dec. 31, 2019 | Jul. 05, 2019 | Jun. 30, 2019 |
Goodwill | $ 12,458 | $ 9,488 | |
Maestro Wireless Solutions [Member] | |||
Cash and cash equivalents | $ 282 | ||
Accounts receivable | 1,320 | ||
Inventories | 1,611 | ||
Prepaid expense and other current assets | 283 | ||
Property and equipment | 108 | ||
Amortizable intangible assets | 1,910 | ||
Other non-current assets | 213 | ||
Goodwill | 2,970 | ||
Accounts payable | (1,568) | ||
Accrued payroll and related expenses | (249) | ||
Other current liabilities | (1,361) | ||
Other non-current liabilities | (164) | ||
Total consideration | $ 5,355 |
2. Business Combinations (Det_2
2. Business Combinations (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 |
2. Business Combinations (Det_3
2. Business Combinations (Details - Pro forma data) - Maestro Wireless Solutions [Member] - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Pro forma net revenue | $ 25,969 | $ 29,702 |
Pro forma net loss | $ (2,165) | $ (2,221) |
Pro forma net loss per share - basic | $ (0.09) | $ (0.11) |
Pro forma net loss per share - diluted | $ (0.09) | $ (0.10) |
2. Business Combinations (Det_4
2. Business Combinations (Details Narrative) - USD ($) shares in Thousands, $ in Thousands | Jul. 05, 2019 | Dec. 31, 2019 | Jan. 16, 2020 |
Maestro Wireless Solutions [Member] | |||
Business combination amount transferred | $ 5,355 | ||
Amortization expense | $ 295 | ||
Reversed amortization expense | $ 110 | ||
Maestro Wireless Solutions [Member] | Manufacturing profit [Member] | |||
Other proforma expenses | 171 | ||
Maestro Wireless Solutions [Member] | Restructuring Costs [Member] | |||
Other proforma expenses | 651 | ||
Maestro Wireless Solutions [Member] | Acquisition Related Costs [Member] | |||
Other proforma expenses | $ 724 | ||
Intrinsyc [Member] | Subsequent Event [Member] | |||
Cash paid for acquisition | $ 11,000 | ||
Stock issued for acquisition | 4,300 |
3. Revenue (Details - Revenues
3. Revenue (Details - Revenues by product line) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues | $ 13,228 | $ 12,114 | $ 25,969 | $ 24,393 |
IoT [Member] | ||||
Revenues | 11,180 | 9,070 | 21,401 | 18,037 |
IT Management [Member] | ||||
Revenues | 1,832 | 2,888 | 4,133 | 5,989 |
Other [Member] | ||||
Revenues | $ 216 | $ 156 | $ 435 | $ 367 |
3. Revenue (Details - Revenue b
3. Revenue (Details - Revenue by Geography) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues | $ 13,228 | $ 12,114 | $ 25,969 | $ 24,393 |
Americas [Member] | ||||
Revenues | 5,840 | 6,182 | 11,604 | 13,096 |
Europe, Middle East, Africa [Member] | ||||
Revenues | 4,362 | 4,080 | 8,883 | 7,600 |
Asia Pacific [Member] | ||||
Revenues | $ 3,026 | $ 1,852 | $ 5,482 | $ 3,697 |
3. Revenue (Details - Changes i
3. Revenue (Details - Changes in Deferred Revenue) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2019 | Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Deferred revenue, beginning balance | $ 486 | |
New performance obligations | 110 | |
Performance obligations assumed from acquisition of Maestro | 178 | |
Recognition of revenue as a result of satisying performance obligations | (202) | |
Deferred revenue, ending balance | 572 | |
Less: non-current portion of deferred revenue | (171) | $ (158) |
Current portion ending balance | $ 401 | $ 328 |
4. Leases (Details - Components
4. Leases (Details - Components of lease expense) $ in Thousands | 6 Months Ended |
Dec. 31, 2019USD ($) | |
Components of lease expense | |
Operating lease cost | $ 677 |
Financing lease cost | 3 |
Supplemental cash flow information | |
Cash paid for amounts included in the measurement of operating lease liabilities | 497 |
Cash paid for amounts included in the measurement of financing lease liabilities | 3 |
Right-of-use assets obtained in exchange for lease obligation | $ 1,119 |
4. Leases (Details - Maturities
4. Leases (Details - Maturities of lease liabilities) $ in Thousands | Dec. 31, 2019USD ($) |
Operating lease maturities | |
2020 (remainder of the year) | $ 535 |
2021 | 667 |
2022 | 272 |
2023 | 265 |
2024 | 274 |
Thereafter | 70 |
Total remaining lease payments | 2,083 |
less: imputed interest | (197) |
Lease liability | 1,886 |
Current liabilities | (946) |
Long-term liabilities | (940) |
Financing lease maturities | |
2020 (remainder of the year) | 5 |
2021 | 9 |
2022 | 9 |
2023 | 9 |
2024 | 3 |
Thereafter | 0 |
Total remaining lease payments | 35 |
less: imputed interest | 0 |
Lease liability | 35 |
Current liabilities | (9) |
Long-term liabilities | $ (26) |
4. Leases (Details Narrative)
4. Leases (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2019 | Jul. 02, 2019 |
Weighted average remaining lease term | 1 year 7 months 6 days | |
Weighted average discount rate | 6.16% | |
Operating lease liability | $ 1,886 | |
Operating and finance lease asset | $ 984 | |
Finance lease liablity | 35 | |
Operating and finance lease liability | $ 1,114 | |
Maestro Wireless Solutions [Member] | ||
Right of use asset and liability | $ 1,832 |
5. Supplemental Financial Inf_3
5. Supplemental Financial Information (Details - Inventories) - USD ($) $ in Thousands | Dec. 31, 2019 | Jun. 30, 2019 |
Supplemental Financial Information | ||
Finished goods | $ 6,661 | $ 6,084 |
Raw materials | 4,363 | 4,425 |
Inventories, net | $ 11,024 | $ 10,509 |
5. Supplemental Financial Inf_4
5. Supplemental Financial Information (Details - Other liabilities) - USD ($) $ in Thousands | Dec. 31, 2019 | Jun. 30, 2019 |
Current | ||
Accrued variable consideration | $ 1,381 | $ 1,313 |
Customer deposits and refunds | 516 | 168 |
Accrued raw materials purchases | 374 | 1,155 |
Deferred revenue | 401 | 328 |
Lease liability | 4 | |
Lease liability | 955 | |
Taxes payable | 360 | 322 |
Accrued operating expenses | 1,261 | 1,290 |
Total other current liabilities | 5,248 | 4,580 |
Non-current | ||
Lease liability | 966 | 48 |
Deferred revenue | 171 | 158 |
Total other non-current liabilities | $ 1,137 | $ 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 | 6 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Numerator: | ||||
Net loss | $ (1,351) | $ 277 | $ (3,821) | $ 194 |
Denominator: | ||||
Weighted-average common shares outstanding - basic | 23,145 | 22,091 | 23,029 | 20,721 |
Effect of dilutive securities | 0 | 1,351 | 0 | 1,542 |
Demonimator for net income (loss) per share- diluted | 23,145 | 23,442 | 23,029 | 22,263 |
Net income (loss) per share - basic | $ (0.06) | $ 0.01 | $ (0.17) | $ 0.01 |
Net income (loss) per share - diluted | $ (0.06) | $ 0.01 | $ (0.17) | $ 0.01 |
5. Supplemental Financial Inf_6
5. Supplemental Financial Information (Details - Equivalents) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Supplemental Financial Information | ||||
Common stock equivalents | 1,659 | 70 | 1,726 | 4 |
5. Supplemental Financial Inf_7
5. Supplemental Financial Information (Details - Severance of Related Charges) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Supplemental Financial Information | ||
Severance payable, beginning balance | $ 651 | |
Charges | 1,103 | $ 323 |
Payments | (1,267) | |
Severance payable, ending balance | $ 487 |
5. Supplemental Financial Inf_8
5. Supplemental Financial Information (Details - Non-cash acquisition) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Supplemental Cash Flow Information | ||
Accrued property and equipment paid for in the subsequent period | $ 133 | $ 6 |
5. Supplemental Financial Inf_9
5. Supplemental Financial Information (Details Narrative) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Severance costs | $ 1,103 | $ 323 |
Maestro Wireless Solutions [Member] | ||
Severance costs | $ 1,103 |
6. Warranty Reserve (Details -
6. Warranty Reserve (Details - Warranty reserve) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Jun. 30, 2019 | |
Product Warranties Disclosures [Abstract] | ||
Beginning balance | $ 116 | $ 99 |
Charged to cost of revenue | (25) | 96 |
Usage | (2) | (79) |
Ending balance | $ 89 | $ 116 |
7. Bank Line of Credit and Debt
7. Bank Line of Credit and Debt (Details Narrative) $ in Thousands | 6 Months Ended |
Dec. 31, 2019USD ($) | |
Credit line maximum borrowing amount | $ 6,000 |
Amended Agreement SVB [Member] | Revolving Facility [Member] | |
Revolving Line | $6.0 million revolving line |
Credit line maximum borrowing amount | $ 6,000 |
Maturity date | Nov. 12, 2021 |
Interest rate description | 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. |
Amended Agreement SVB [Member] | Term Loan Facility [Member] | |
Maturity date | Jan. 1, 2024 |
Interest rate description | 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. |
8. Stockholders Equity (Details
8. Stockholders Equity (Details - Option activity) - Stock Options [Member] shares in Thousands | 6 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Number of shares | |
Number of Shares Options Outstanding, Beginning | shares | 3,147 |
Number of Shares Options Granted | shares | 79 |
Number of Shares Options Forfeited | shares | (146) |
Number of Shares Options Expired | shares | (67) |
Number of Shares Options Exercised | shares | (425) |
Number of Shares Options Outstanding, Ending | shares | 2,588 |
Weighted Average Exercise Price per share | |
Exercise Price Outstanding, Beginning | $ / shares | $ 2.29 |
Exercise Price Granted | $ / shares | 3.06 |
Exercise Price Forfeited | $ / shares | 2.40 |
Exercise Price Expired | $ / shares | 2.21 |
Exercise Price Exercised | $ / shares | 1.66 |
Exercise Price Outstanding, Ending | $ / shares | $ 2.41 |
8. Stockholders Equity (Detai_2
8. Stockholders Equity (Details - RSU activity) - Restricted Stock Units (RSUs) [Member] shares in Thousands | 6 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Number of RSU's Shares | |
Balance of RSU's, beginning | shares | 866 |
Granted | shares | 276 |
Vested | shares | (168) |
Forfeited | shares | (34) |
Balance of RSU's, ending | shares | 940 |
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 | 3.28 |
RSU Shares Vested, Weighted-Average Grant-Date Fair Value per Share | $ / shares | 4.80 |
RSU Shares Forfeited, Weighed-Average Grant Date Fair Value per Share | $ / shares | 4.35 |
RSU Shares Weighted-Average Grant-Date Fair Value per Share, ending | $ / shares | $ 3.85 |
8. Stockholders Equity (Detai_3
8. Stockholders Equity (Details - ESPP activity) - ESPP [Member] shares in Thousands | 6 Months Ended |
Dec. 31, 2019shares | |
Shares available for issuance, beginning balance | 517 |
Shares issued | (64) |
Shares available for future issuance, ending balance | 453 |
8. Stockholders Equity (Detai_4
8. Stockholders Equity (Details - Share based compensation) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Total share-based compensation | $ 938 | $ 451 | $ 1,516 | $ 929 |
Cost of revenues [Member] | ||||
Total share-based compensation | 48 | 23 | 72 | 40 |
Selling, general and administrative [Member] | ||||
Total share-based compensation | 777 | 337 | 1,236 | 737 |
Research and development [Member] | ||||
Total share-based compensation | $ 113 | $ 91 | $ 208 | $ 152 |
8. Stockholders Equity (Detai_5
8. Stockholders Equity (Details - Unrecognized expense) $ in Thousands | 6 Months Ended |
Dec. 31, 2019USD ($) | |
Unrecognized share-based compensation expense | $ 6,270 |
Stock Options [Member] | |
Unrecognized share-based compensation expense | $ 1,488 |
Weighted average years to recognize | 2 years 7 months 6 days |
Restricted Stock Units (RSUs) [Member] | |
Unrecognized share-based compensation expense | $ 3,269 |
Weighted average years to recognize | 3 years 2 months 12 days |
Performance Stock Units (PSUs) [Member] | |
Unrecognized share-based compensation expense | $ 1,469 |
Weighted average years to recognize | 2 years 4 months 24 days |
ESPP [Member] | |
Unrecognized share-based compensation expense | $ 44 |
Weighted average years to recognize | 4 months 24 days |
8. Stockholders' Equity (Detail
8. Stockholders' Equity (Details Narrative) shares in Thousands | 3 Months Ended |
Dec. 31, 2019shares | |
Restricted Stock Units (RSUs) [Member] | |
Stock options granted | 975 |
9. Income Taxes (Details)
9. Income Taxes (Details) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 3.00% | 5.00% | 2.00% | 22.00% |