Cover
Cover - shares | 6 Months Ended | |
Dec. 31, 2021 | Feb. 03, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Dec. 31, 2021 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --06-30 | |
Entity File Number | 1-16027 | |
Entity Registrant Name | LANTRONIX, INC. | |
Entity Central Index Key | 0001114925 | |
Entity Tax Identification Number | 33-0362767 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 7535 Irvine Center Drive | |
Entity Address, Address Line Two | Suite 100 | |
Entity Address, City or Town | Irvine | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92618 | |
City Area Code | (949) | |
Local Phone Number | 453-3990 | |
Title of 12(b) Security | Common Stock, $0.0001 par value | |
Trading Symbol | LTRX | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 34,645,850 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Dec. 31, 2021 | Jun. 30, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 36,364 | $ 9,739 |
Accounts receivable, net | 23,865 | 13,515 |
Inventories | 29,369 | 15,059 |
Contract manufacturers' receivables | 1,752 | 1,960 |
Prepaid expenses and other current assets | 2,987 | 2,880 |
Total current assets | 94,337 | 43,153 |
Property and equipment, net | 1,829 | 1,577 |
Goodwill | 18,757 | 15,810 |
Purchased intangible assets, net | 17,516 | 9,355 |
Lease right-of-use assets | 1,788 | 2,431 |
Other assets | 251 | 240 |
Total assets | 134,478 | 72,566 |
Current liabilities: | ||
Accounts payable | 13,306 | 9,122 |
Accrued payroll and related expenses | 5,103 | 4,942 |
Current portion of long-term debt, net | 1,466 | 1,472 |
Other current liabilities | 10,288 | 7,328 |
Total current liabilities | 30,163 | 22,864 |
Long-term debt, net | 26,520 | 2,210 |
Other non-current liabilities | 1,286 | 1,396 |
Total liabilities | 57,969 | 26,470 |
Commitments and contingencies (Note 9) | ||
Stockholders' equity: | ||
Common stock | 3 | 3 |
Additional paid-in capital | 284,976 | 249,885 |
Accumulated deficit | (208,841) | (204,163) |
Accumulated other comprehensive income | 371 | 371 |
Total stockholders' equity | 76,509 | 46,096 |
Total liabilities and stockholders' equity | $ 134,478 | $ 72,566 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||||
Net revenue | $ 33,681 | $ 16,585 | $ 61,386 | $ 33,731 |
Cost of revenue | 19,241 | 9,589 | 34,483 | 18,496 |
Gross profit | 14,440 | 6,996 | 26,903 | 15,235 |
Operating expenses: | ||||
Selling, general and administrative | 8,935 | 4,853 | 16,841 | 9,752 |
Research and development | 4,310 | 2,449 | 8,351 | 5,021 |
Restructuring, severance and related charges | 167 | 137 | 709 | 229 |
Acquisition-related costs | 68 | 0 | 609 | 0 |
Fair value remeasurement of earnout consideration | 1,259 | 0 | 1,259 | 0 |
Amortization of purchased intangible assets | 1,440 | 879 | 2,633 | 1,761 |
Total operating expenses | 16,179 | 8,318 | 30,402 | 16,763 |
Loss from operations | (1,739) | (1,322) | (3,499) | (1,528) |
Interest expense, net | (595) | (82) | (974) | (167) |
Other income (expense), net | 45 | 2 | (57) | 41 |
Loss before income taxes | (2,289) | (1,402) | (4,530) | (1,654) |
Provision for income taxes | 106 | 57 | 148 | 107 |
Net loss | $ (2,395) | $ (1,459) | $ (4,678) | $ (1,761) |
Net loss per share - basic and diluted | $ (0.08) | $ (0.05) | $ (0.15) | $ (0.06) |
Weighted-average common shares - basic and diluted | 31,848 | 28,661 | 30,540 | 28,516 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Total |
Beginning balance, value at Jun. 30, 2020 | $ 3 | $ 246,265 | $ (200,119) | $ 371 | $ 46,520 |
Beginning balance, shares at Jun. 30, 2020 | 28,231 | ||||
Shares issued pursuant to stock awards, net | 435 | 435 | |||
Shares issued pursuant to stock awards, net shares, shares | 536 | ||||
Tax withholding paid on behalf of employees for restricted shares | (575) | (575) | |||
Share-based compensation | 1,494 | 1,494 | |||
Net loss | (1,761) | (1,761) | |||
Ending balance, value at Dec. 31, 2020 | $ 3 | 247,619 | (201,880) | 371 | 46,113 |
Ending balance, shares at Dec. 31, 2020 | 28,767 | ||||
Beginning balance, value at Sep. 30, 2020 | $ 3 | 246,546 | (200,421) | 371 | 46,499 |
Beginning balance, shares at Sep. 30, 2020 | 28,585 | ||||
Shares issued pursuant to stock awards, net | 268 | 268 | |||
Shares issued pursuant to stock awards, net shares, shares | 182 | ||||
Tax withholding paid on behalf of employees for restricted shares | (86) | (86) | |||
Share-based compensation | 891 | 891 | |||
Net loss | (1,459) | (1,459) | |||
Ending balance, value at Dec. 31, 2020 | $ 3 | 247,619 | (201,880) | 371 | 46,113 |
Ending balance, shares at Dec. 31, 2020 | 28,767 | ||||
Beginning balance, value at Jun. 30, 2021 | $ 3 | 249,885 | (204,163) | 371 | 46,096 |
Beginning balance, shares at Jun. 30, 2021 | 29,088 | ||||
Shares issued pursuant to equity offering, net | 32,593 | 32,593 | |||
Shares issued pursuant to equity offering, net, shares | 4,700 | ||||
Shares issued pursuant to stock awards, net | 663 | 663 | |||
Shares issued pursuant to stock awards, net shares, shares | 856 | ||||
Tax withholding paid on behalf of employees for restricted shares | (1,646) | (1,646) | |||
Fair value of warrants to purchase common stock issued with bank credit facility | 500 | 500 | |||
Share-based compensation | 2,981 | 2,981 | |||
Net loss | (4,678) | (4,678) | |||
Ending balance, value at Dec. 31, 2021 | $ 3 | 284,976 | (208,841) | 371 | 76,509 |
Ending balance, shares at Dec. 31, 2021 | 34,644 | ||||
Beginning balance, value at Sep. 30, 2021 | $ 3 | 251,706 | (206,446) | 371 | 45,634 |
Beginning balance, shares at Sep. 30, 2021 | 29,724 | ||||
Shares issued pursuant to equity offering, net | 32,593 | 32,593 | |||
Shares issued pursuant to equity offering, net, shares | 4,700 | ||||
Shares issued pursuant to stock awards, net | 367 | 367 | |||
Shares issued pursuant to stock awards, net shares, shares | 220 | ||||
Tax withholding paid on behalf of employees for restricted shares | (1,440) | (1,440) | |||
Fair value of warrants to purchase common stock issued with bank credit facility | 250 | 250 | |||
Share-based compensation | 1,500 | 1,500 | |||
Net loss | (2,395) | (2,395) | |||
Ending balance, value at Dec. 31, 2021 | $ 3 | $ 284,976 | $ (208,841) | $ 371 | $ 76,509 |
Ending balance, shares at Dec. 31, 2021 | 34,644 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating activities | ||
Net loss | $ (4,678) | $ (1,761) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Share-based compensation | 2,981 | 1,494 |
Depreciation and amortization | 463 | 442 |
Amortization of purchased intangible assets | 2,633 | 1,761 |
Amortization of manufacturing profit in acquired inventory associated with acquisitions | 380 | 7 |
Loss on disposal of property and equipment | 3 | 0 |
Amortization of deferred debt issuance costs | 191 | 14 |
Fair value remeasurement of earnout consideration | 1,259 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (5,194) | (1,887) |
Inventories | (6,860) | (309) |
Contract manufacturers’ receivable | 208 | (530) |
Prepaid expenses and other current assets | 247 | (332) |
Lease right-of-use assets | 821 | 746 |
Other assets | (13) | (12) |
Accounts payable | 2,277 | 1,986 |
Accrued payroll and related expenses | 152 | (341) |
Warranty reserve | 0 | 0 |
Other liabilities | (275) | (165) |
Net cash (used in) provided by operating activities | (5,405) | 1,113 |
Investing activities | ||
Purchases of property and equipment | (560) | (289) |
Cash payment for acquisitions, net of cash and cash equivalents acquired | (23,629) | 0 |
Net cash used in investing activities | (24,189) | (289) |
Financing activities | ||
Net proceeds from issuances of common stock | 33,256 | 435 |
Tax withholding paid on behalf of employees for restricted shares | (1,646) | (575) |
Net proceeds from issuance of debt | 28,800 | 0 |
Payment of borrowings on term loan | (4,187) | (750) |
Payment of lease liabilities | (4) | (4) |
Net cash provided by (used in) financing activities | 56,219 | (894) |
Increase (decrease) in cash and cash equivalents | 26,625 | (70) |
Cash and cash equivalents at beginning of period | 9,739 | 7,691 |
Cash and cash equivalents at end of period | $ 36,364 | $ 7,621 |
Overview, Basis of Presentation
Overview, Basis of Presentation and Significant Accounting Policies | 6 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Overview, Basis of Presentation and Significant Accounting Policies | 1. Overview, Basis of Presentation and Significant Accounting Policies Overview Lantronix, Inc., which we refer to herein as the Company, Lantronix, we, our, or us, is a global provider of software as a service (“SaaS”), engineering services, and hardware for Edge Computing, the Internet of Things (“IoT”), and Remote Environment Management (“REM”). Lantronix enables its customers to provide reliable and secure solutions while accelerating their time to market. Lantronix’s products and services dramatically simplify operations through the creation, development, deployment and management of customer projects at scale while providing quality, reliability and security. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of Lantronix have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Securities and Exchange Commission (“SEC”) Regulation S-X. Accordingly, they should be read in conjunction with the audited consolidated financial statements and notes thereto for the fiscal year ended June 30, 2021, included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2021, which was filed with the SEC on August 27, 2021. 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, 2021, the consolidated results of our operations for the three and six months ended December 31, 2021 and our consolidated cash flows for the six months ended December 31, 2021. All intercompany accounts and transactions have been eliminated. Significant Accounting Policies Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year-end. The inputs into certain of these estimates and assumptions include the consideration of the economic impact of the COVID-19 pandemic. Actual results could differ materially from these estimates, and such differences could affect the results of operations reported in future periods. As the impact of the COVID-19 pandemic continues to develop, many of these estimates could require increased judgment and carry a higher degree of variability and volatility, and may change materially in future periods. The results of operations for the three and six months ended December 31, 2021 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 Revenue Contracts In October 2021, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity and inconsistency related to i) recognition of an acquired contract liability and ii) payment terms and their effect on subsequent revenue recognized by the acquirer. The amendments in this ASU require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with existing revenue recognition guidance under Accounting Standard Codification Topic (“ASC”) 606. At the acquisition date, an acquirer would assess how the acquiree applied ASC 606 to determine what to record for the acquired revenue contracts. Generally, this would result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements. The standard is effective for Lantronix beginning in the first quarter of our fiscal year 2024, however early adoption is permitted. Current Expected Credit Losses In June 2016, the FASB issued a new standard requiring financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The standard eliminates the threshold for initial recognition in current U.S. GAAP and reflects an entity’s current estimate of all expected credit losses. The measurement of expected credit losses is based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the financial assets. The standard is effective for Lantronix beginning in the first quarter of our fiscal year 2024. The adoption of this guidance is not expected to have a material effect on our consolidated financial statements. |
Revenue
Revenue | 6 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 2. Revenue Revenue is recognized upon the transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. We apply the following five-step approach in determining the amount and timing of revenue to be recognized: (i) identifying the contract with a customer, (ii) identifying the performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the performance obligations in the contract and (v) recognizing revenue when the performance obligation is satisfied. On occasion we enter into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of (i) any taxes collected from customers, which are subsequently remitted to governmental authorities and (ii) shipping and handling costs collected from customers. Products Most of our product revenue is recognized as a distinct single performance obligation when products are tendered to a carrier for delivery, which represents the point in time that our customer obtains control of the promised products. A smaller portion of our product revenue is recognized when our customer receives delivery of the promised products. A significant portion of our products are sold to distributors under agreements which contain (i) limited rights to return unsold products and (ii) price adjustment provisions, both of which are accounted for as variable consideration when estimating the amount of revenue to recognize. We base our estimates for returns and price adjustments primarily on historical experience; however, we also consider contractual allowances, approved pricing adjustments and other known or anticipated returns and price adjustments in a given period. Such estimates are generally made at the time of shipment to the customer and updated at the end of each reporting period as additional information becomes available and only to the extent that it is probable that a significant reversal of any incremental revenue will not occur. Our estimates of accrued variable consideration are included in other current liabilities in the accompanying unaudited condensed consolidated balance sheets. Services Revenues from our extended warranty and related services are generally recognized ratably over the applicable service period. Although not significant to date, revenues from sales of our SaaS solutions are recognized ratably over the applicable service period as well. We derive a portion of our revenues from engineering and related consulting service contracts with customers. Revenues from professional engineering services are generally recognized as services are performed. These contracts generally include performance obligations in which control is transferred over time because the customer either simultaneously receives and consumes the benefits provided or our performance on the contract creates or enhances an asset that the customer controls. These contracts typically provide services on the following basis: · Time & Materials (“T&M”) – services consist of revenues from software modification, consulting implementation, training and integration services. These services are set forth separately in the contractual arrangements such that the total price of the customer arrangement is expected to vary depending on the actual time and materials incurred based on the customer’s needs. · Fixed Price – arrangements to render specific consulting and software modification services which tend to be more complex. Performance obligations for T&M contracts qualify for the "Right to Invoice" practical expedient within the revenue guidance. Under this practical expedient, we may recognize revenue, over time, in the amount to which we have a right to invoice. In addition, we are not required to estimate variable consideration upon inception of the contract and reassess the estimate each reporting period. We have determined that this method best represents the transfer of services as, upon billing, we have a right to consideration from a customer in an amount that directly corresponds with the value to the customer of our performance completed to date. We recognize revenue on fixed price contracts, over time, using an input method based on the proportion of our actual costs incurred (generally labor hours expended) to the total costs expected to complete the contract performance obligation. We determined that this method best represents the transfer of services as the proportion closely depicts the efforts or inputs completed towards the satisfaction of a fixed price contract performance obligation. Multiple Performance Obligations From time to time, we may enter into contracts with customers that include promises to transfer multiple deliverables that may include sales of products, professional engineering services and other product qualification or certification services. Determining whether the deliverables in such arrangements are considered distinct performance obligations that should be accounted for separately versus together often requires judgment. We consider performance obligations to be distinct when the customer can benefit from the promised good or service on its own or by combining it with other resources readily available and when the promised good or service is separately identifiable from other promised goods or services in the contract. In such arrangements, we allocate revenue on a relative standalone selling price basis by maximizing the use of observable inputs to determine the standalone selling price for each performance obligation. Net Revenue by Product Line and Geographic Region We organize our products and solutions into three product lines: IoT, REM and Other. Our IoT products typically connect to one or more existing machines or are built into new industrial devices to provide network connectivity. Our REM product line includes out-of-band management, console management, power management, and IP connected keyboard-video-mouse (commonly referred to as “IPKVM”) products that provide remote access to Information Technology (“IT”) and networking infrastructure deployed in test labs, data centers, branch offices and server rooms. We categorize products that are non-focus or end-of-life as Other. We conduct our business globally and manage our sales teams by three geographic regions: the Americas; Europe, Middle East, and Africa (“EMEA”); and Asia Pacific Japan (“APJ”). 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: Net revenue by product lines Three Months Ended December 31, Six Months Ended December 31, 2021 2020 2021 2020 (In thousands) IoT $ 28,521 $ 13,402 $ 51,352 $ 28,022 REM 4,977 3,095 9,743 5,497 Other 183 88 291 212 $ 33,681 $ 16,585 $ 61,386 $ 33,731 Net revenue by geographic region Three Months Ended December 31, Six Months Ended December 31, 2021 2020 2021 2020 (In thousands) Americas $ 20,073 $ 8,023 $ 38,300 $ 18,952 EMEA 5,751 4,740 10,410 7,379 Asia Pacific Japan 7,857 3,822 12,676 7,400 $ 33,681 $ 16,585 $ 61,386 $ 33,731 The following table presents product revenues and service revenues as a percentage of our total net revenue: Schedule of percentage total net revenues Three Months Ended December 31, Six Months Ended December 31, 2021 2020 2021 2020 Product revenues 96 % 93 % 95 % 93 % Service revenues 4 % 7 % 5 % 7 % Service revenue is comprised primarily of professional services, software license subscriptions, and extended warranties. 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 primarily comprised of unearned revenue related to our extended warranty services and certain software 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 unaudited condensed consolidated balance sheets. The following table presents the changes in our deferred revenue balance for the six months ended December 31, 2021 (in thousands): Changes in deferred revenue Balance, June 30, 2021 $ 1,091 New performance obligations 491 Performance obligations acquired from acquisition 42 Recognition of revenue from satisfying performance obligations (653 ) Balance, December 31, 2021 971 Less: non-current portion of deferred revenue (366 ) Current portion, December 31, 2021 $ 605 We currently expect to recognize substantially all of the non-current portion of deferred revenue over the next 2 to 4 years. |
Acquisition
Acquisition | 6 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisition | 3. Acquisition On April 28, 2021, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Communications Systems, Inc., a Minnesota corporation (“CSI”), pursuant to which we agreed to purchase from CSI the Transition Networks (“TNI”) and Net2Edge businesses of CSI (the “Transaction”). The Transaction closed on August 2, 2021 (the “Closing Date”), with Lantronix acquiring all outstanding shares of the common stock of TNI and all of the outstanding ordinary shares of Transition Networks Europe Limited (such entity, together with TNI, the “TN Companies”) for an aggregate purchase price of up to approximately $ 32,028,000 25,028,000 7,000,000 24,160,000 23,651,000 Concurrently with the closing of the Purchase Agreement, CSI and Lantronix entered in a Transition Services Agreement under which CSI will perform administrative and IT services, and lease office, warehouse and production space to Lantronix for the TN Companies for a period of up to twelve months. The acquisition of the TN Companies provides Lantronix with complementary IoT connectivity products and capabilities, including switching, power over ethernet and media conversion and adapter products. A summary of the purchase consideration for the TN Companies is as follows (in thousands): Summary of purchase consideration Cash consideration paid to CSI $ 23,651 Preliminary estimated fair value of earnout consideration 393 Total purchase consideration $ 24,044 We recorded the TN Companies’ tangible and intangible assets and liabilities based on their estimated fair values as of the Closing Date and allocated the remaining purchase consideration to goodwill. Our valuation assumptions of acquired assets and assumed liabilities require significant estimates, especially with respect to intangible assets. Updates to the valuation of certain assets acquired and liabilities assumed, including our evaluation of certain income tax positions, may result in changes to the recorded amounts of assets and liabilities, with corresponding adjustments to goodwill in subsequent periods. We expect to complete the purchase price allocation within 12 months of the Closing Date. During the three months ended December 31, 2021, based on additional analysis and refinements to our estimates, we adjusted the preliminary purchase price allocation as of the Closing Date to (i) increase the estimated fair value of earnout consideration by $ 47,000 440,000 487,000 The updated preliminary purchase price allocation is as follows (in thousands): Schedule of purchase price allocation Cash and cash equivalents $ 22 Accounts receivable, net 5,156 Inventories, net 7,830 Prepaid expense and other current assets 355 Property and equipment, net 121 Goodwill 2,947 Amortizable intangible assets 10,794 Accounts payable (1,872 ) Accrued Payroll (9 ) Other current liabilities (1,300 ) Total consideration $ 24,044 The factors that contributed to a purchase price resulting in the recognition of goodwill include our belief that the Transaction 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. Depending on the structure of a particular acquisition, goodwill and identifiable intangible assets may not be deductible for tax purposes. We have determined that goodwill and identifiable intangible assets related to the Transaction are not deductible. 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: Schedule of acquired indefinite -lived intangible assets of useful lives Asset Fair Value Weighted Average Useful Life (In thousands) (In years) Customer relationships $ 7,467 3.5 Developed technology 1,890 3.5 Order backlog 567 1.0 Trademarks and trade names 870 2.0 The intangible assets are amortized on a straight-line basis over the estimated weighted-average useful lives. Valuation Methodology The customer relationships and order backlog were valued using the multi-period excess earnings method, which estimates revenues and cash flows derived from this asset and also considers portions of the cash flows that can be attributed to the use of other supporting assets. The useful lives of customer relationships are estimated based primarily upon customer turnover data. Order backlog was estimated to be substantially fulfilled within a year of the Closing Date. Developed technology and trademarks and trades names were valued using the relief-from-royalty method. This method is an income approach that estimates the portion of a company’s earnings attributable to an asset based on the royalty rate the company would have paid for the use of the asset if it did not own it. Royalty payments are estimated by applying a royalty rate to the prospective revenue attributable to the intangible asset. The resulting annual royalty payments are tax-affected and then discounted to present value. Assumptions used in forecasting cash flows for each of the identified intangible assets included consideration of the following: · Historical performance including sales and profitability · Business prospects and industry expectations · Estimated economic life of the asset · Development of new technologies · Acquisition of new customers · Attrition of existing customers · Obsolescence of technology over time The fair value of earnout consideration was estimated based on applying a Monte Carlo simulation method to forecast achievement of the revenue targets. This method involves many possible value outcomes which are evaluated to establish an estimated value. Key inputs in the valuation include forecasted revenue, revenue volatility and discount rate. Remeasurement of Earnout Consideration During the three months ended December 31, 2021, the estimated fair value of the earnout consideration was remeasured to $ 1,652,000 1,259,000 Supplemental Pro Forma Information The following supplemental pro forma data summarizes our results of operations for the periods presented, as if we completed the acquisition of the TN Companies as of the first day of our fiscal year ended June 30, 2021. The supplemental pro forma data reports actual operating results adjusted to include the pro forma effect and timing of the impact of 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 six months ended December 31, 2020 supplemental pro forma data (i) cost of goods sold from manufacturing profit in acquired inventory of $ 380,000 503,000 609,000 1,838,000 88,000 Net sales related to products from the acquisition of the TN Companies contributed slightly over 25% of our total net sales for the six months ended December 31, 2021. Post-acquisition net sales and earnings on a standalone basis are generally impracticable to determine, as on the Closing Date, we began to immediately integrate the acquisition into existing operations, engineering groups, sales distribution networks and management structure. Supplemental pro forma data is as follows: Schedule of supplemental pro forma data Six Months Ended December 31, 2021 2020 (In thousands, except per share amounts) Pro forma net revenue $ 64,173 $ 51,404 Pro forma net loss $ (3,386 ) $ (3,392 ) Pro forma net loss per share Basic and Diluted $ (0.11 ) $ (0.12 ) |
Supplemental Financial Informat
Supplemental Financial Information | 6 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Financial Information | 4. 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: Schedule of Inventory December 31, June 30, 2021 2021 (In thousands) Finished goods $ 16,309 $ 7,738 Raw materials 13,060 7,321 Inventories $ 29,369 $ 15,059 Other Liabilities The following table presents details of our other liabilities: Schedule of Other Liabilities December 31, June 30, 2021 2021 (In thousands) Current Accrued variable consideration $ 1,984 $ 1,347 Customer deposits and refunds 1,130 1,133 Accrued raw materials purchases 123 176 Deferred revenue 605 850 Lease liability 801 1,174 Taxes payable 428 388 Warranty reserve 635 197 Other accrued operating expenses 4,582 2,063 Total other current liabilities $ 10,288 $ 7,328 Non-current Lease liability $ 920 $ 1,155 Deferred revenue 366 241 Total other non-current liabilities $ 1,286 $ 1,396 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: Schedule of Computation of Net Income (Loss) per Share Three Months Ended Six Months Ended December 31, December 31, 2021 2020 2021 2020 (In thousands, except per share data) Numerator: Net loss $ (2,395 ) $ (1,459 ) $ (4,678 ) $ (1,761 ) Denominator: Weighted-average common shares outstanding - basic and diluted 31,848 28,661 30,540 28,516 Net loss per share - basic and diluted $ (0.08 ) $ (0.05 ) $ (0.15 ) $ (0.06 ) 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. Schedule of antidilutive securities Three Months Ended Six Months Ended December 31, December 31, 2021 2020 2021 2020 (In thousands) Common stock equivalents 1,334 693 1,137 917 Purchased Intangible Assets The following table presents details of purchased intangible assets: Schedule of purchased intangible assets December 31, 2021 June 30, 2021 Gross Carrying Amount Accumulated Amortization Net Book Value Gross Carrying Amount Accumulated Amortization Net Book Value (In thousands) Developed technology $ 5,731 $ (1,847 ) $ 3,884 $ 3,841 $ (1,249 ) $ 2,592 Customer relationships 16,498 (3,890 ) 12,608 9,030 (2,267 ) 6,763 Order backlog 1,406 (1,073 ) 333 840 (840 ) – Non-compete agreements 400 (400 ) – 400 (400 ) – Trademark and trade name 1,245 (554 ) 691 375 (375 ) – $ 25,280 $ (7,764 ) $ 17,516 $ 14,486 $ (5,131 ) $ 9,355 We do not currently have any purchased intangible assets with indefinite useful lives. As of December 31, 2021, future estimated amortization expense is as follows: Schedule of future estimated amortization expense Years Ending June 30, (In thousands) 2022 (remainder) $ 2,958 2023 5,400 2024 4,952 2025 3,358 2026 848 Total amortization expense $ 17,516 Restructuring, Severance and Related Charges The following table presents details of the liability we recorded related to restructuring, severance and related activities: Schedule of severance and related charges Six Months Ended December 31, 2021 (In thousands) Beginning balance $ 88 Charges 709 Payments (507 ) Ending balance $ 290 The ending balance is recorded in accrued payroll and related expenses in the accompanying unaudited condensed consolidated balance sheet at December 31, 2021. Supplemental Cash Flow Information The following table presents non-cash investing transactions excluded from the accompanying unaudited condensed consolidated statements of cash flows: Schedule of non-cash investing transactions Six Months Ended December 31, 2021 2020 (In thousands) Accrued property and equipment paid for in the subsequent period $ 35 $ 155 Fair value of warrants to purchase common stock issued with bank credit facility $ 500 $ – Fair value of earnout consideration from TNI acquisition at the Closing Date $ 393 $ – |
Warranty Reserve
Warranty Reserve | 6 Months Ended |
Dec. 31, 2021 | |
Guarantees and Product Warranties [Abstract] | |
Warranty Reserve | 5. Warranty Reserve The standard warranty periods we provide for our products typically range from one to five years. The majority of products acquired through the acquisition of the TN Companies carry a limited lifetime warranty, which requires us to repair or replace a defective product, or offer a refund of a portion of the purchase price based on a depreciated value at our option. 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, which is included in other current liabilities in the unaudited condensed consolidated balance sheet: Schedule of Warranty Reserve Six Months Ended Year Ended December 31, June 30, 2021 2021 (In thousands) Beginning balance $ 197 $ 181 Warranty reserve assumed from acquisition of TN Companies 483 – Charged to cost of revenue 169 226 Usage (214 ) (210 ) Ending balance $ 635 $ 197 |
Bank Loan Agreements
Bank Loan Agreements | 6 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Bank Loan Agreements | 6. Bank Loan Agreements In connection with the Transaction on the Closing Date (refer to Note 3 17,500,000 2,500,000 12,000,000 64,000 The proceeds of the Senior Credit Facilities were used to refinance our outstanding obligations owing to SVB under our prior Second Amended and Restated Loan and Security Agreement with SVB, and the remaining proceeds of the Senior Credit Facilities and the proceeds from the Mezzanine Credit Facility were used to fund the purchase price of the TN Companies, to pay related fees and expenses, and also separately for working capital and general corporate purposes. The Senior Credit Facilities mature on August 2, 2025 and the Mezzanine Credit Facility matures on February 2, 2026 Advances under the Senior Credit Facilities bear interest at LIBOR or the Prime Rate, at the option of Lantronix, plus a margin that ranges from 3.00% to 4.00% in the case of LIBOR and 1.50% to 2.50% in the case of the Prime Rate, depending on our total leverage with a LIBOR floor of 0.50% and a Prime Rate floor of 3.25%. Advances under the Mezzanine Credit Facility bear interest at LIBOR or the Prime Rate, at the option of Lantronix, plus a margin of 9.00% with a floor of 1.00% in the case of LIBOR and a margin of 7.50% with a floor of 3.50% in the case of the Prime Rate. The following table summarizes our outstanding debt: Summary of outstanding debt December 31, June 30, 2021 2021 (In thousands) Outstanding borrowings on credit facilities $ 29,062 $ 3,750 Less: Unamortized debt issuance costs (1,076 ) (68 ) Net Carrying amount of debt 27,986 3,682 Less: Current portion (1,466 ) (1,472 ) Non-current portion $ 26,520 $ 2,210 During the three and six months ended December 31, 2021, we recognized $ 565,000 920,000 Financial Covenants The Senior Credit Facilities and Mezzanine Credit Facility require Lantronix to comply with a minimum liquidity test, a maximum leverage ratio and a minimum fixed charge coverage ratio. We are currently in compliance with all financial covenants. Liquidity The Senior Credit Facilities and Mezzanine Credit Facility require that we maintain a minimum liquidity of $ 5,000,000 3,000,000 Maximum leverage ratio The Senior Credit Facilities require that we maintain 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) 2.50 to 1.00 for each calendar quarter ending June 30, 2021 through and including September 30, 2022, (ii) 2.25 to 1.00 for each calendar quarter ending December 31, 2022 through and including September 30, 2023, and (iii) 2.00 to 1.00 for the calendar quarter December 31, 2023 and each calendar quarter thereafter. The Mezzanine Credit Facility requires that we maintain 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) 4.25 to 1.00 for each calendar quarter ending June 30, 2021 through and including March 31, 2022, (ii) 3.75 to 1.00 for each calendar quarter ending June 30, 2022 through and including March 31, 2023, and (iii) 3.50 to 1.00 for the calendar quarter June 30, 2023 and each calendar quarter thereafter. Minimum fixed charge coverage ratio The Senior Credit Facilities require that we maintain a minimum fixed charge coverage ratio, calculated as the ratio of consolidated trailing 12 month earnings before interest, taxes, depreciation and amortization, and certain other allowable exclusions, less capital expenditures and taxes paid, to the trailing twelve month principal and interest payments on all funded debt of 1.25 to 1.00 as measured at the end of each calendar quarter. The Mezzanine Credit Facility requires that we maintain a minimum fixed charge coverage ratio, calculated as the ratio of consolidated trailing 12 month earnings before interest, taxes, depreciation and amortization, and certain other allowable exclusions, less capital expenditures and taxes paid, to the trailing twelve month principal and interest payments on all funded debt of 1.10 to 1.00 as measured at the end of each calendar quarter. In addition, both the Senior Credit Facilities and the Mezzanine Credit Facility contain customary representations and warranties, affirmative and negative covenants, including covenants that limit or restrict Lantronix and its subsidiaries’ ability to incur liens, incur indebtedness, dispose of assets, make investments, make certain restricted payments, merge or consolidate and enter into certain speculative hedging arrangements. The Senior Credit Facilities and Mezzanine Credit Facility include a number of events of default, including, among other things, non-payment defaults, covenant defaults, cross-defaults to other materials indebtedness, bankruptcy and insolvency defaults and material judgment defaults. If any event of default occurs (subject, in certain instances, to specified grace periods), the principal, premium, if any, interest and any other monetary obligations on all the then outstanding amounts under the Senior Credit Facilities and Mezzanine Credit Facility may become due and payable immediately. |
Stockholders_ Equity
Stockholders’ Equity | 6 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Stockholders’ Equity | 7. Stockholders’ Equity Public Offering On November 18, 2021, we entered into an underwriting agreement (the “Underwriting Agreement”) with TL Investment GmbH (“TL Investment”) and Canaccord Genuity LLC, as representative of the several underwriters named therein (together, the “Underwriters”), relating to the Company’s offer and sale of 4,700,000 0.0001 7.50 705,000 Net proceeds to Lantronix from the offering of the Firm Shares, after deducting the underwriting discount and offering expenses, were approximately $ 32,600,000 Stock Options The following table presents a summary of activity during the six months ended December 31, 2021 with respect to our stock options: Schedule of option activity Weighted- Average Number of Exercise Price Shares per Share (In thousands) Balance of options outstanding at June 30, 2021 1,697 $ 2.98 Granted 100 5.46 Expired (11 ) 2.04 Exercised (210 ) 2.13 Balance of options outstanding at December 31, 2021 1,576 $ 3.26 Restricted Stock Units (RSUs) The following table presents a summary of activity during the six months ended December 31, 2021 with respect to our RSUs: Schedule 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, 2021 918 $ 4.14 Granted 533 6.62 Vested (10 ) 4.54 Forfeited (231 ) 4.18 Balance of RSUs outstanding at December 31, 2021 1,210 $ 5.20 Performance Stock Units (PSUs) The following table presents a summary of activity during the six months ended December 31, 2021 with respect to our PSUs: Schedule of other-than-option activity Number of Shares (In thousands) Balance of PSUs outstanding at June 30, 2021 1,084 Granted 575 Vested (629 ) Balance of PSUs outstanding at December 31, 2021 1,030 Employee Stock Purchase Plan (ESPP) The following table presents a summary of activity during the six months ended December 31, 2021 under our ESPP: Schedule of other-than-option activity Number of Shares (In thousands) Shares available for issuance at June 30, 2021 250 Shares issued (64 ) Shares available for issuance at December 31, 2021 186 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: Schedule of share-based compensation expense Three Months Ended Six Months Ended December 31, December 31, 2021 2020 2021 2020 (In thousands) Cost of revenue $ 100 $ 85 $ 200 $ 143 Selling, general and administrative 1,178 671 2,304 1,116 Research and development 222 135 477 235 Total share-based compensation expense $ 1,500 $ 891 $ 2,981 $ 1,494 The following table presents the remaining unrecognized share-based compensation expense related to our outstanding share-based awards as of December 31, 2021: Schedule of unrecognized share-based compensation expense Remaining Remaining Unrecognized Weighted- Compensation Average Years Expense To Recognize (In thousands) Stock options $ 889 2.0 RSUs 4,985 2.8 PSUs 2,141 1.5 Stock purchase rights under ESPP 141 0.4 $ 8,156 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. |
Income Taxes
Income Taxes | 6 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. 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: Schedule of effective income tax rate reconciliation Three Months Ended Six Months Ended December 31, December 31, 2021 2020 2021 2020 Effective tax rate 5% 4% 3% 6% 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, 2021 and June 30, 2021. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. 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. Lease Agreement In November 2021, we entered into a building lease agreement (the “Lease”) in which we will lease approximately 13,767 square feet of office space for our corporate headquarters in Irvine, California. The Lease is to commence on the date which is the earlier to occur of: (a) the date we take possession of the premises following the completion of certain tenant improvements to the premises, but not earlier than February 1, 2022, or (b) the date we commence our regular business activities on the premises. We currently expect to take possession of the premises, and commence the lease, during our fourth fiscal quarter ending June 30, 2022. The term of the lease will be 84 months from the commencement date, with an option to extend the lease for one 60-month extension period at a basic rent to be agreed upon by the parties or determined pursuant to the Lease. The initial basic rent payable under the Lease will be $28,900 per month. The basic rent is subject to customary annual rent increases. The aggregate basic rent payable under the Lease during the 84-month term is $ 2,700,000 50,000 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 10. Subsequent Events Minnesota Facility Lease On January 20, 2022, we entered into a lease agreement (the “Lease”) to lease approximately 66,000 square feet in a building in Plymouth, Minnesota (the “Premises”) to house the operations of the Transition Networks businesses purchased from Communications Systems, Inc. in August 2021 and to serve as a central warehouse and shipping hub for all USA-based business of Lantronix. We will take possession of the Premises commencing on the date of the Lease. Beginning on May 1, 2022 (the “Rent Commencement Date”), the initial basic rent payable under the Lease will be $46,738 per month (with the first three months of rent abated), subject to annualized rent increases of three percent (3%) over the period of the Lease. The initial term of the Lease (the “Initial Term”) commences on the date of the Lease and ends on July 31, 2032. The aggregate basic rent payable under the Lease during the Initial Term is approximately $6,500,000. We are also obligated to pay as additional rent our proportionate share of operating expenses, including property taxes. The Lease contains an option to extend the lease for one 60-month extension period at the net rent rate for the last year of the Initial Term or the then-market net rent, as determined pursuant to the Lease, as well as a right of first offer for Lantronix on any space adjacent to the Premises during the Initial Term. We also have the right to terminate the Lease at the end of the 87th full calendar month after the Rent Commencement Date (the “Early Termination Date”) by delivery of a written notice at least six months prior to the Early Termination Date and payment of a termination fee. In addition, the landlord will reimburse Lantronix for its actual out-of-pocket costs for certain tenant improvements to the Premises, with an allowance of up to $1,500,000 to be paid in three installments in accordance with the Lease. Termination of Credit Facility On January 20, 2022, we terminated the Mezzanine Credit Facility with the Lender pursuant to which the Lender had funded a $12,000,000 term loan facility in August 2021. We repaid a total of $12,152,500 in connection with the termination to pay off the Mezzanine Credit Facility in full. There was no requirement to pay a termination fee. |
Overview, Basis of Presentati_2
Overview, Basis of Presentation and Significant Accounting Policies (Policies) | 6 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Overview | Overview Lantronix, Inc., which we refer to herein as the Company, Lantronix, we, our, or us, is a global provider of software as a service (“SaaS”), engineering services, and hardware for Edge Computing, the Internet of Things (“IoT”), and Remote Environment Management (“REM”). Lantronix enables its customers to provide reliable and secure solutions while accelerating their time to market. Lantronix’s products and services dramatically simplify operations through the creation, development, deployment and management of customer projects at scale while providing quality, reliability and security. |
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 (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Securities and Exchange Commission (“SEC”) Regulation S-X. Accordingly, they should be read in conjunction with the audited consolidated financial statements and notes thereto for the fiscal year ended June 30, 2021, included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2021, which was filed with the SEC on August 27, 2021. 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, 2021, the consolidated results of our operations for the three and six months ended December 31, 2021 and our consolidated cash flows for the six months ended December 31, 2021. All intercompany accounts and transactions have been eliminated. Significant Accounting Policies |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year-end. The inputs into certain of these estimates and assumptions include the consideration of the economic impact of the COVID-19 pandemic. Actual results could differ materially from these estimates, and such differences could affect the results of operations reported in future periods. As the impact of the COVID-19 pandemic continues to develop, many of these estimates could require increased judgment and carry a higher degree of variability and volatility, and may change materially in future periods. The results of operations for the three and six months ended December 31, 2021 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 Revenue Contracts In October 2021, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity and inconsistency related to i) recognition of an acquired contract liability and ii) payment terms and their effect on subsequent revenue recognized by the acquirer. The amendments in this ASU require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with existing revenue recognition guidance under Accounting Standard Codification Topic (“ASC”) 606. At the acquisition date, an acquirer would assess how the acquiree applied ASC 606 to determine what to record for the acquired revenue contracts. Generally, this would result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements. The standard is effective for Lantronix beginning in the first quarter of our fiscal year 2024, however early adoption is permitted. Current Expected Credit Losses In June 2016, the FASB issued a new standard requiring financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The standard eliminates the threshold for initial recognition in current U.S. GAAP and reflects an entity’s current estimate of all expected credit losses. The measurement of expected credit losses is based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the financial assets. The standard is effective for Lantronix beginning in the first quarter of our fiscal year 2024. The adoption of this guidance is not expected to have a material effect on our consolidated financial statements. |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Net revenue by product lines | Net revenue by product lines Three Months Ended December 31, Six Months Ended December 31, 2021 2020 2021 2020 (In thousands) IoT $ 28,521 $ 13,402 $ 51,352 $ 28,022 REM 4,977 3,095 9,743 5,497 Other 183 88 291 212 $ 33,681 $ 16,585 $ 61,386 $ 33,731 |
Net revenue by geographic region | Net revenue by geographic region Three Months Ended December 31, Six Months Ended December 31, 2021 2020 2021 2020 (In thousands) Americas $ 20,073 $ 8,023 $ 38,300 $ 18,952 EMEA 5,751 4,740 10,410 7,379 Asia Pacific Japan 7,857 3,822 12,676 7,400 $ 33,681 $ 16,585 $ 61,386 $ 33,731 |
Schedule of percentage total net revenues | Schedule of percentage total net revenues Three Months Ended December 31, Six Months Ended December 31, 2021 2020 2021 2020 Product revenues 96 % 93 % 95 % 93 % Service revenues 4 % 7 % 5 % 7 % |
Changes in deferred revenue | Changes in deferred revenue Balance, June 30, 2021 $ 1,091 New performance obligations 491 Performance obligations acquired from acquisition 42 Recognition of revenue from satisfying performance obligations (653 ) Balance, December 31, 2021 971 Less: non-current portion of deferred revenue (366 ) Current portion, December 31, 2021 $ 605 |
Acquisition (Tables)
Acquisition (Tables) | 6 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Summary of purchase consideration | Summary of purchase consideration Cash consideration paid to CSI $ 23,651 Preliminary estimated fair value of earnout consideration 393 Total purchase consideration $ 24,044 |
Schedule of purchase price allocation | Schedule of purchase price allocation Cash and cash equivalents $ 22 Accounts receivable, net 5,156 Inventories, net 7,830 Prepaid expense and other current assets 355 Property and equipment, net 121 Goodwill 2,947 Amortizable intangible assets 10,794 Accounts payable (1,872 ) Accrued Payroll (9 ) Other current liabilities (1,300 ) Total consideration $ 24,044 |
Schedule of acquired indefinite -lived intangible assets of useful lives | Schedule of acquired indefinite -lived intangible assets of useful lives Asset Fair Value Weighted Average Useful Life (In thousands) (In years) Customer relationships $ 7,467 3.5 Developed technology 1,890 3.5 Order backlog 567 1.0 Trademarks and trade names 870 2.0 |
Schedule of supplemental pro forma data | Schedule of supplemental pro forma data Six Months Ended December 31, 2021 2020 (In thousands, except per share amounts) Pro forma net revenue $ 64,173 $ 51,404 Pro forma net loss $ (3,386 ) $ (3,392 ) Pro forma net loss per share Basic and Diluted $ (0.11 ) $ (0.12 ) |
Supplemental Financial Inform_2
Supplemental Financial Information (Tables) | 6 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Inventory | Schedule of Inventory December 31, June 30, 2021 2021 (In thousands) Finished goods $ 16,309 $ 7,738 Raw materials 13,060 7,321 Inventories $ 29,369 $ 15,059 |
Schedule of Other Liabilities | Schedule of Other Liabilities December 31, June 30, 2021 2021 (In thousands) Current Accrued variable consideration $ 1,984 $ 1,347 Customer deposits and refunds 1,130 1,133 Accrued raw materials purchases 123 176 Deferred revenue 605 850 Lease liability 801 1,174 Taxes payable 428 388 Warranty reserve 635 197 Other accrued operating expenses 4,582 2,063 Total other current liabilities $ 10,288 $ 7,328 Non-current Lease liability $ 920 $ 1,155 Deferred revenue 366 241 Total other non-current liabilities $ 1,286 $ 1,396 |
Schedule of Computation of Net Income (Loss) per Share | Schedule of Computation of Net Income (Loss) per Share Three Months Ended Six Months Ended December 31, December 31, 2021 2020 2021 2020 (In thousands, except per share data) Numerator: Net loss $ (2,395 ) $ (1,459 ) $ (4,678 ) $ (1,761 ) Denominator: Weighted-average common shares outstanding - basic and diluted 31,848 28,661 30,540 28,516 Net loss per share - basic and diluted $ (0.08 ) $ (0.05 ) $ (0.15 ) $ (0.06 ) |
Schedule of antidilutive securities | Schedule of antidilutive securities Three Months Ended Six Months Ended December 31, December 31, 2021 2020 2021 2020 (In thousands) Common stock equivalents 1,334 693 1,137 917 |
Schedule of purchased intangible assets | Schedule of purchased intangible assets December 31, 2021 June 30, 2021 Gross Carrying Amount Accumulated Amortization Net Book Value Gross Carrying Amount Accumulated Amortization Net Book Value (In thousands) Developed technology $ 5,731 $ (1,847 ) $ 3,884 $ 3,841 $ (1,249 ) $ 2,592 Customer relationships 16,498 (3,890 ) 12,608 9,030 (2,267 ) 6,763 Order backlog 1,406 (1,073 ) 333 840 (840 ) – Non-compete agreements 400 (400 ) – 400 (400 ) – Trademark and trade name 1,245 (554 ) 691 375 (375 ) – $ 25,280 $ (7,764 ) $ 17,516 $ 14,486 $ (5,131 ) $ 9,355 |
Schedule of future estimated amortization expense | Schedule of future estimated amortization expense Years Ending June 30, (In thousands) 2022 (remainder) $ 2,958 2023 5,400 2024 4,952 2025 3,358 2026 848 Total amortization expense $ 17,516 |
Schedule of severance and related charges | Schedule of severance and related charges Six Months Ended December 31, 2021 (In thousands) Beginning balance $ 88 Charges 709 Payments (507 ) Ending balance $ 290 |
Schedule of non-cash investing transactions | Schedule of non-cash investing transactions Six Months Ended December 31, 2021 2020 (In thousands) Accrued property and equipment paid for in the subsequent period $ 35 $ 155 Fair value of warrants to purchase common stock issued with bank credit facility $ 500 $ – Fair value of earnout consideration from TNI acquisition at the Closing Date $ 393 $ – |
Warranty Reserve (Tables)
Warranty Reserve (Tables) | 6 Months Ended |
Dec. 31, 2021 | |
Guarantees and Product Warranties [Abstract] | |
Schedule of Warranty Reserve | Schedule of Warranty Reserve Six Months Ended Year Ended December 31, June 30, 2021 2021 (In thousands) Beginning balance $ 197 $ 181 Warranty reserve assumed from acquisition of TN Companies 483 – Charged to cost of revenue 169 226 Usage (214 ) (210 ) Ending balance $ 635 $ 197 |
Bank Loan Agreements (Tables)
Bank Loan Agreements (Tables) | 6 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Summary of outstanding debt | Summary of outstanding debt December 31, June 30, 2021 2021 (In thousands) Outstanding borrowings on credit facilities $ 29,062 $ 3,750 Less: Unamortized debt issuance costs (1,076 ) (68 ) Net Carrying amount of debt 27,986 3,682 Less: Current portion (1,466 ) (1,472 ) Non-current portion $ 26,520 $ 2,210 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 6 Months Ended |
Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of option activity | Schedule of option activity Weighted- Average Number of Exercise Price Shares per Share (In thousands) Balance of options outstanding at June 30, 2021 1,697 $ 2.98 Granted 100 5.46 Expired (11 ) 2.04 Exercised (210 ) 2.13 Balance of options outstanding at December 31, 2021 1,576 $ 3.26 |
Schedule of share-based compensation expense | Schedule of share-based compensation expense Three Months Ended Six Months Ended December 31, December 31, 2021 2020 2021 2020 (In thousands) Cost of revenue $ 100 $ 85 $ 200 $ 143 Selling, general and administrative 1,178 671 2,304 1,116 Research and development 222 135 477 235 Total share-based compensation expense $ 1,500 $ 891 $ 2,981 $ 1,494 |
Schedule of unrecognized share-based compensation expense | Schedule of unrecognized share-based compensation expense Remaining Remaining Unrecognized Weighted- Compensation Average Years Expense To Recognize (In thousands) Stock options $ 889 2.0 RSUs 4,985 2.8 PSUs 2,141 1.5 Stock purchase rights under ESPP 141 0.4 $ 8,156 |
Restricted Stock Units (RSUs) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of other-than-option activity | Schedule 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, 2021 918 $ 4.14 Granted 533 6.62 Vested (10 ) 4.54 Forfeited (231 ) 4.18 Balance of RSUs outstanding at December 31, 2021 1,210 $ 5.20 |
Performance Stock Units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of other-than-option activity | Schedule of other-than-option activity Number of Shares (In thousands) Balance of PSUs outstanding at June 30, 2021 1,084 Granted 575 Vested (629 ) Balance of PSUs outstanding at December 31, 2021 1,030 |
Espp [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of other-than-option activity | Schedule of other-than-option activity Number of Shares (In thousands) Shares available for issuance at June 30, 2021 250 Shares issued (64 ) Shares available for issuance at December 31, 2021 186 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of effective income tax rate reconciliation | Schedule of effective income tax rate reconciliation Three Months Ended Six Months Ended December 31, December 31, 2021 2020 2021 2020 Effective tax rate 5% 4% 3% 6% |
Revenue (Details - Revenues by
Revenue (Details - Revenues by product line) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 33,681 | $ 16,585 | $ 61,386 | $ 33,731 |
Iot [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 28,521 | 13,402 | 51,352 | 28,022 |
R E M [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 4,977 | 3,095 | 9,743 | 5,497 |
Other Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 183 | $ 88 | $ 291 | $ 212 |
Revenue (Details - Revenue by G
Revenue (Details - Revenue by Geography) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 33,681 | $ 16,585 | $ 61,386 | $ 33,731 |
Americas [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 20,073 | 8,023 | 38,300 | 18,952 |
EMEA [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 5,751 | 4,740 | 10,410 | 7,379 |
A P J [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 7,857 | $ 3,822 | $ 12,676 | $ 7,400 |
Revenue (Details - Percentage o
Revenue (Details - Percentage of total net revenue) - Revenue Benchmark [Member] - Customer Concentration Risk [Member] | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Product [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration Risk, Percentage | 96.00% | 93.00% | 95.00% | 93.00% |
Service [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration Risk, Percentage | 4.00% | 7.00% | 5.00% | 7.00% |
Revenue (Details - Changes in D
Revenue (Details - Changes in Deferred Revenue) $ in Thousands | 6 Months Ended |
Dec. 31, 2021USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Deferred revenue, beginning balance | $ 1,091 |
New performance obligations | 491 |
Performance obligations acquired from acquisition | 42 |
Recognition of revenue from satisfying performance obligations | (653) |
Deferred revenue, ending balance | 971 |
Non-current portion of deferred revenue | (366) |
Current portion ending balance | $ 605 |
Acquisition (Details-Purchase C
Acquisition (Details-Purchase Consideration) - Transition Networks [Member] $ in Thousands | 10 Months Ended |
Apr. 28, 2021USD ($) | |
Business Acquisition [Line Items] | |
Cash consideration paid to CSI | $ 23,651 |
Preliminary estimated fair value of earnout consideration | 393 |
Total purchase consideration | $ 24,044 |
Acquisition (Details-Purchase P
Acquisition (Details-Purchase Price Allocation) - USD ($) $ in Thousands | Dec. 31, 2021 | Jun. 30, 2021 |
Business Acquisition [Line Items] | ||
Goodwill | $ 18,757 | $ 15,810 |
Transition Networks [Member] | ||
Business Acquisition [Line Items] | ||
Cash and cash equivalents | 22 | |
Accounts receivable, net | 5,156 | |
Inventories, net | 7,830 | |
Prepaid expense and other current assets | 355 | |
Property and equipment, net | 121 | |
Goodwill | 2,947 | |
Amortizable intangible assets | 10,794 | |
Accounts payable | (1,872) | |
Accrued Payroll | (9) | |
Other current liabilities | (1,300) | |
Total consideration | $ 24,044 |
Acquisition (Details-Estimated
Acquisition (Details-Estimated Useful Lives) - Transition Networks [Member] $ in Thousands | 6 Months Ended |
Dec. 31, 2021USD ($) | |
Customer Relationships [Member] | |
Business Acquisition [Line Items] | |
Trademarks and trade names | $ 7,467 |
Weighted Average Useful Life | 3 years 6 months |
Developed Technology Rights [Member] | |
Business Acquisition [Line Items] | |
Trademarks and trade names | $ 1,890 |
Weighted Average Useful Life | 3 years 6 months |
Order Backlog [Member] | |
Business Acquisition [Line Items] | |
Trademarks and trade names | $ 567 |
Weighted Average Useful Life | 1 year |
Trademarks and Trade Names [Member] | |
Business Acquisition [Line Items] | |
Trademarks and trade names | $ 870 |
Weighted Average Useful Life | 2 years |
Acquisition (Details-supplement
Acquisition (Details-supplemental Pro Forma Data) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Business Combination and Asset Acquisition [Abstract] | ||
Pro forma net revenue | $ 64,173 | $ 51,404 |
Pro forma net loss | $ (3,386) | $ (3,392) |
Pro forma net loss per share | ||
Basic and Diluted | $ (0.11) | $ (0.12) |
Acquisition (Details Narrative)
Acquisition (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 10 Months Ended | |||
Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Apr. 28, 2021 | |
Business Acquisition [Line Items] | ||||||
Net cash consideration paid | $ 23,651,000 | |||||
Remeasurement Consideration | $ 1,652,000 | |||||
Operating expenses | 1,259,000 | |||||
Acquired inventory | 380,000 | |||||
Restructuring costs | 503,000 | |||||
Business Combination, Acquisition Related Costs | 68,000 | $ 0 | 609,000 | $ 0 | ||
Amortization expense | $ 1,838,000 | |||||
Additional amortization expense | $ 88,000 | |||||
TN Companies [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Business Combination, Consideration Transferred | $ 32,028,000 | |||||
Cash paid for acquisition | 25,028,000 | |||||
Earnout payments | $ 7,000,000 | |||||
Cash consideration | $ 24,160,000 | |||||
Net cash consideration paid | $ 23,651,000 | |||||
Fair value consideration | 47,000 | |||||
Amortizable intangible assets | 440,000 | |||||
Goodwill | $ 487,000 |
Supplemental Financial Inform_3
Supplemental Financial Information (Details - Inventories) - USD ($) $ in Thousands | Dec. 31, 2021 | Jun. 30, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Finished goods | $ 16,309 | $ 7,738 |
Raw materials | 13,060 | 7,321 |
Inventories | $ 29,369 | $ 15,059 |
Supplemental Financial Inform_4
Supplemental Financial Information (Details - Other Liabilities) - USD ($) $ in Thousands | Dec. 31, 2021 | Jun. 30, 2021 |
Current | ||
Accrued variable consideration | $ 1,984 | $ 1,347 |
Customer deposits and refunds | 1,130 | 1,133 |
Accrued raw materials purchases | 123 | 176 |
Deferred revenue | 605 | 850 |
Lease liability | 801 | 1,174 |
Taxes payable | 428 | 388 |
Warranty reserve | 635 | 197 |
Other accrued operating expenses | 4,582 | 2,063 |
Total other current liabilities | 10,288 | 7,328 |
Non-current | ||
Lease liability | 920 | 1,155 |
Deferred revenue | 366 | 241 |
Total other non-current liabilities | $ 1,286 | $ 1,396 |
Supplemental Financial Inform_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, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | ||||
Net loss | $ (2,395) | $ (1,459) | $ (4,678) | $ (1,761) |
Denominator: | ||||
Weighted-average common shares outstanding - basic and diluted | 31,848 | 28,661 | 30,540 | 28,516 |
Net loss per share - basic and diluted | $ (0.08) | $ (0.05) | $ (0.15) | $ (0.06) |
Supplemental Financial Inform_6
Supplemental Financial Information (Details - Equivalents) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Common stock equivalents | 1,334 | 693 | 1,137 | 917 |
Supplemental Financial Inform_7
Supplemental Financial Information (Details - Purchased intangible assets) - USD ($) $ in Thousands | Dec. 31, 2021 | Jun. 30, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 25,280 | $ 14,486 |
Accumulated Amortization | (7,764) | (5,131) |
Net Book Value | 17,516 | 9,355 |
Developed Technology Rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 5,731 | 3,841 |
Accumulated Amortization | (1,847) | (1,249) |
Net Book Value | 3,884 | 2,592 |
Customer Contracts [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 16,498 | 9,030 |
Accumulated Amortization | (3,890) | (2,267) |
Net Book Value | 12,608 | 6,763 |
Order or Production Backlog [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,406 | 840 |
Accumulated Amortization | (1,073) | (840) |
Net Book Value | 333 | |
Noncompete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 400 | 400 |
Accumulated Amortization | (400) | (400) |
Net Book Value | ||
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,245 | 375 |
Accumulated Amortization | (554) | (375) |
Net Book Value | $ 691 |
Supplemental Financial Inform_8
Supplemental Financial Information (Details - Amortization expense) - USD ($) $ in Thousands | Dec. 31, 2021 | Jun. 30, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
2022 (remainder) | $ 2,958 | |
2023 | 5,400 | |
2024 | 4,952 | |
2025 | 3,358 | |
2026 | 848 | |
Total amortization expense | $ 17,516 | $ 9,355 |
Supplemental Financial Inform_9
Supplemental Financial Information (Details - Severance of Related Charges) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Beginning balance | $ 88 | |||
Charges | $ 167 | $ 137 | 709 | $ 229 |
Payments | (507) | |||
Ending balance | $ 290 | $ 290 |
Supplemental Financial Infor_10
Supplemental Financial Information (Details - Non-cash acquisition) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued property and equipment paid for in the subsequent period | $ 35 | $ 155 |
Fair value of warrants to purchase common stock issued with bank credit facility | 500 | |
Fair value of earnout consideration from TNI acquisition at the Closing Date | $ 393 | $ 0 |
Warranty Reserve (Details)
Warranty Reserve (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Jun. 30, 2021 | |
Guarantees and Product Warranties [Abstract] | ||
Beginning balance | $ 197 | $ 181 |
Warranty reserve assumed from acquisition of TN Companies | 483 | 0 |
Charged to cost of revenues | 169 | 226 |
Usage | (214) | (210) |
Ending balance | $ 635 | $ 197 |
Bank Loan Agreements (Details -
Bank Loan Agreements (Details - Summarizes our outstanding debt) - USD ($) $ in Thousands | Dec. 31, 2021 | Jun. 30, 2021 |
Debt Disclosure [Abstract] | ||
Outstanding borrowings on credit facilities | $ 29,062 | $ 3,750 |
Less: Unamortized debt issuance costs | (1,076) | (68) |
Net Carrying amount of debt | 27,986 | 3,682 |
Less: Current portion | (1,466) | (1,472) |
Non-current portion | $ 26,520 | $ 2,210 |
Bank Loan Agreements (Details N
Bank Loan Agreements (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2021 | Jun. 30, 2021 | Apr. 28, 2021 | |
Debt Instrument [Line Items] | ||||
Revolving credit facility | $ 29,062,000 | $ 29,062,000 | $ 3,750,000 | |
Interest expense | 565,000 | 920,000 | ||
Silicon Valley Bank [Member] | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | 2,500,000 | $ 2,500,000 | ||
Maturity date | Feb. 2, 2026 | |||
Silicon Valley Bank [Member] | Senior Credit Facilities [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate description | Advances under the Senior Credit Facilities bear interest at LIBOR or the Prime Rate, at the option of Lantronix, plus a margin that ranges from 3.00% to 4.00% in the case of LIBOR and 1.50% to 2.50% in the case of the Prime Rate, depending on our total leverage with a LIBOR floor of 0.50% and a Prime Rate floor of 3.25%. | |||
Minimum liquidity | 5,000,000 | $ 5,000,000 | ||
Silicon Valley Bank [Member] | Mezzanine Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate description | Advances under the Mezzanine Credit Facility bear interest at LIBOR or the Prime Rate, at the option of Lantronix, plus a margin of 9.00% with a floor of 1.00% in the case of LIBOR and a margin of 7.50% with a floor of 3.50% in the case of the Prime Rate. | |||
Minimum liquidity | $ 3,000,000 | $ 3,000,000 | ||
Term Loan Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Term loan | $ 17,500,000 | |||
Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Revolving credit facility | 2,500,000 | |||
Mezzanine Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Mezzanine credit facility | $ 12,000,000 | |||
Warrants issued to purchase common stock | 64,000 |
Stockholders Equity (Details -
Stockholders Equity (Details - Option assumptions) - Options Held [Member] shares in Thousands | 6 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares Options Outstanding, Beginning | shares | 1,697 |
Exercise Price Outstanding, Beginning | $ / shares | $ 2.98 |
Number of Shares Options Granted | shares | 100 |
Exercise Price Granted | $ / shares | $ 5.46 |
Number of Shares Options Expired | shares | (11) |
Exercise Price Expired | $ / shares | $ 2.04 |
Number of Shares Options Exercised | shares | (210) |
Exercise Price Exercised | $ / shares | $ 2.13 |
Number of Shares Options Outstanding, Ending | shares | 1,576 |
Exercise Price Outstanding, Ending | $ / shares | $ 3.26 |
Stockholders Equity (Details _2
Stockholders Equity (Details - RSU activity) - Restricted Stock Units (RSUs) [Member] shares in Thousands | 6 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Balance at beginning | shares | 918 |
RSU Shares Weighted-Average Grant-Date Fair Value per Share, beginning | $ / shares | $ 4.14 |
Granted | shares | 533 |
RSU Shares Granted, Weighted-Average Grant-Date Fair Value per Share | $ / shares | $ 6.62 |
Vested | shares | (10) |
RSU Shares Vested, Weighted-Average Grant-Date Fair Value per Share | $ / shares | $ 4.54 |
Forfeited | shares | (231) |
RSU Shares Forfeited, Weighed-Average Grant Date Fair Value per Share | $ / shares | $ 4.18 |
Balance at ending | shares | 1,210 |
RSU Shares Weighted-Average Grant-Date Fair Value per Share, ending | $ / shares | $ 5.20 |
Stockholders Equity (Details _3
Stockholders Equity (Details - PSUs) - PSU [Member] shares in Thousands | 6 Months Ended |
Dec. 31, 2021shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number, Beginning Balance | 1,084 |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted | 575 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | (629) |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number, Ending Balance | 1,030 |
Stockholders Equity (Details-ES
Stockholders Equity (Details-ESPP) - Espp [Member] shares in Thousands | 6 Months Ended |
Dec. 31, 2021shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 250 |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted | (64) |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 186 |
Stockholders Equity (Details _4
Stockholders Equity (Details - Share based compensation) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Total share-based compensation | $ 1,500 | $ 891 | $ 2,981 | $ 1,494 |
Cost of Sales [Member] | ||||
Total share-based compensation | 100 | 85 | 200 | 143 |
Selling, General and Administrative Expenses [Member] | ||||
Total share-based compensation | 1,178 | 671 | 2,304 | 1,116 |
Research and Development Expense [Member] | ||||
Total share-based compensation | $ 222 | $ 135 | $ 477 | $ 235 |
Stockholders Equity (Details _5
Stockholders Equity (Details - Unrecognized expense) $ in Thousands | 6 Months Ended |
Dec. 31, 2021USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized share-based compensation expense | $ 8,156 |
Options Held [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized share-based compensation expense | $ 889 |
Weighted average years to recognize | 2 years |
Restricted Stock Units (RSUs) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized share-based compensation expense | $ 4,985 |
Weighted average years to recognize | 2 years 9 months 18 days |
Performance Stock Units P S U [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized share-based compensation expense | $ 2,141 |
Weighted average years to recognize | 1 year 6 months |
Employee Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized share-based compensation expense | $ 141 |
Weighted average years to recognize | 4 months 24 days |
Stockholders_ Equity (Details N
Stockholders’ Equity (Details Narrative) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 1 Months Ended | 6 Months Ended |
Nov. 18, 2021 | Dec. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Underwriting discount and offering expenses | $ 32,600,000 | |
Underwriting Agreement [Member] | Firm Shares [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Sale of stock | 4,700,000 | |
Par value | $ 0.0001 | |
Price per share | $ 7.50 | |
Underwriting Agreement [Member] | Option Shares [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Sale of stock | 705,000 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 5.00% | 4.00% | 3.00% | 6.00% |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | Dec. 31, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Basic rent payable | $ 2,700,000 |
Security | $ 50,000 |