Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Dec. 31, 2017 | Feb. 13, 2018 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2017 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | EnSync, Inc. | |
Entity Central Index Key | 1,140,310 | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | ESNC | |
Entity Common Stock, Shares Outstanding | 56,061,961 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Dec. 31, 2017 | Jun. 30, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 5,871,135 | $ 11,782,962 |
Accounts receivable, net | 416,830 | 469,906 |
Inventories, net | 1,566,273 | 2,482,013 |
Costs and estimated earnings in excess of billings | 2,299,876 | 87,318 |
Prepaid expenses and other current assets | 849,338 | 630,998 |
Total current assets | 11,003,452 | 15,453,197 |
Long-term assets: | ||
Property, plant and equipment, net | 2,830,849 | 3,446,253 |
Investment in investee company | 1,809,265 | 1,947,728 |
Goodwill | 809,363 | 809,363 |
Right of use assets-operating leases | 1,170,793 | 150,214 |
Other assets | 93,862 | 7,502 |
Total assets | 17,717,584 | 21,814,257 |
Current liabilities: | ||
Current maturities of long-term debt | 556,950 | 726,256 |
Accounts payable | 1,884,332 | 487,185 |
Billings in excess of costs and estimated earnings | 50,888 | 456,950 |
Accrued expenses | 1,341,678 | 1,231,714 |
Total current liabilities | 3,833,848 | 2,902,105 |
Long-term liabilities: | ||
Long-term debt, net of current maturities | 331,827 | 331,827 |
Deferred revenue | 422,638 | 422,638 |
Other long-term liabilities | 1,156,124 | 249,920 |
Total liabilities | 5,744,437 | 3,906,490 |
Commitments and contingencies | ||
Equity | ||
Series B redeemable convertible preferred stock ($0.01 par value, $1,000 face value), 3,000 shares authorized and issued, 2,300 shares outstanding, preference in liquidation of $5,799,722 and $5,631,086 as of December 31, 2017 and June 30, 2017, respectively | 23 | 23 |
Series C convertible preferred stock ($0.01 par value, $1,000 face value), 28,048 shares authorized, issued, and outstanding, preference in liquidation of $6,173,422 and $12,276,682 as of December 31, 2017 and June 30, 2017, respectively | 280 | 280 |
Common stock ($0.01 par value), 300,000,000 authorized, 56,061,961 and 55,200,963 shares issued and outstanding as of December 31, 2017 and June 30, 2017, respectively | 1,268,934 | 1,260,324 |
Additional paid-in capital | 142,473,190 | 141,822,317 |
Accumulated deficit | (131,067,121) | (124,639,644) |
Accumulated other comprehensive loss | (1,584,169) | (1,584,578) |
Total EnSync, Inc. equity | 11,091,137 | 16,858,722 |
Noncontrolling interest | 882,010 | 1,049,045 |
Total equity | 11,973,147 | 17,907,767 |
Total liabilities and equity | $ 17,717,584 | $ 21,814,257 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2017 | Jun. 30, 2017 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, Authorized | 300,000,000 | 300,000,000 |
Common stock, Issued | 56,061,961 | 55,200,963 |
Common stock, outstanding | 56,061,961 | 55,200,963 |
Series B Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, face value | $ 1,000 | $ 1,000 |
Preferred stock, authorized shares | 3,000 | 3,000 |
Preferred stock, issued shares | 3,000 | 3,000 |
Preferred stock, outstanding shares | 2,300 | 2,300 |
Preferred stock, liquidation preference | $ 5,799,722 | $ 5,631,086 |
Series C Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, face value | $ 1,000 | $ 1,000 |
Preferred stock, authorized shares | 28,048 | 28,048 |
Preferred stock, issued shares | 28,048 | 28,048 |
Preferred stock, outstanding shares | 28,048 | 28,048 |
Preferred stock, liquidation preference | $ 6,173,422 | $ 12,276,682 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues | $ 4,846,707 | $ 1,736,569 | $ 7,208,755 | $ 9,393,130 |
Costs and expenses | ||||
Cost of product sales | 3,672,506 | 1,731,558 | 5,739,416 | 9,497,701 |
Cost of engineering and development | 0 | 0 | 0 | 937,725 |
Advanced engineering and development | 1,178,584 | 1,077,140 | 2,285,928 | 2,078,468 |
Selling, general and administrative | 2,435,077 | 3,035,704 | 5,079,351 | 5,588,155 |
Depreciation and amortization | 86,018 | 201,712 | 183,410 | 356,069 |
Impairment of long-lived assets | 0 | 0 | 447,000 | 0 |
Total costs and expenses | 7,372,185 | 6,046,114 | 13,735,105 | 18,458,118 |
Loss from operations | (2,525,478) | (4,309,545) | (6,526,350) | (9,064,988) |
Other income (expense) | ||||
Equity in loss of investee company | (88,438) | (25,387) | (138,463) | (1,732) |
Interest income | 6,862 | 11,269 | 13,995 | 22,627 |
Interest expense | (10,917) | (13,107) | (22,175) | (26,104) |
Other income | 6,527 | 0 | 76,525 | 8,432 |
Total other income (expense) | (85,966) | (27,225) | (70,118) | 3,223 |
Loss before benefit for income taxes | (2,611,444) | (4,336,770) | (6,596,468) | (9,061,765) |
Benefit for income taxes | 0 | 0 | 0 | 0 |
Net loss | (2,611,444) | (4,336,770) | (6,596,468) | (9,061,765) |
Net loss attributable to noncontrolling interest | 75,761 | 60,065 | 168,991 | 142,338 |
Net loss attributable to EnSync, Inc. | (2,535,683) | (4,276,705) | (6,427,477) | (8,919,427) |
Preferred stock dividend | (85,359) | (77,331) | (168,636) | (152,776) |
Net loss attributable to common shareholders | $ (2,621,042) | $ (4,354,036) | $ (6,596,113) | $ (9,072,203) |
Net loss per share Basic and diluted | $ (0.05) | $ (0.09) | $ (0.12) | $ (0.19) |
Weighted average shares - basic and diluted | 55,854,270 | 47,849,343 | 55,702,381 | 47,801,474 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Loss - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Net loss | $ (2,611,444) | $ (4,336,770) | $ (6,596,468) | $ (9,061,765) |
Foreign exchange translation adjustments | (223) | (1,517) | 409 | (750) |
Comprehensive loss | (2,611,667) | (4,338,287) | (6,596,059) | (9,062,515) |
Net loss attributable to noncontrolling interest | 75,761 | 60,065 | 168,991 | 142,338 |
Comprehensive loss attributable to EnSync, Inc. | $ (2,535,906) | $ (4,278,222) | $ (6,427,068) | $ (8,920,177) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Changes in Equity - USD ($) | Total | Series B Preferred Stock [Member] | Series C Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest |
Balance at Jun. 30, 2016 | $ 23 | $ 280 | $ 1,185,843 | $ 137,585,233 | $ (120,550,108) | $ (1,585,583) | $ 1,401,372 | |
Balance (Shares) at Jun. 30, 2016 | 2,300 | 28,048 | 47,752,821 | |||||
Net loss | $ 0 | $ 0 | $ 0 | 0 | (4,089,536) | 0 | (352,327) | |
Net currency translation adjustment | 0 | 0 | 0 | 0 | 0 | 1,005 | 0 | |
Issuance of common stock, net of costs and underwriting fees | $ 0 | $ 0 | $ 71,500 | 2,024,340 | 0 | 0 | 0 | |
Issuance of common stock, net of costs and underwriting fees (Shares) | 0 | 0 | 7,150,000 | |||||
Stock-based compensation | $ 0 | $ 0 | $ 1,447 | 2,144,318 | 0 | 0 | 0 | |
Stock-based compensation (Shares) | 0 | 0 | 144,728 | |||||
Exercise of stock options | $ 0 | $ 0 | $ 1,242 | 68,718 | 0 | 0 | 0 | |
Exercise of stock options (Shares) | 124,252 | 0 | 0 | 124,252 | ||||
Exercise of warrants | $ 0 | $ 0 | $ 292 | (292) | 0 | 0 | 0 | |
Exercise of warrants (Shares) | 0 | 0 | 29,162 | |||||
Balance at Jun. 30, 2017 | $ 16,858,722 | $ 23 | $ 280 | $ 1,260,324 | 141,822,317 | (124,639,644) | (1,584,578) | 1,049,045 |
Balance (Shares) at Jun. 30, 2017 | 2,300 | 28,048 | 55,200,963 | |||||
Net loss | (6,427,477) | $ 0 | $ 0 | $ 0 | 0 | (6,427,477) | 0 | (168,991) |
Net currency translation adjustment | 0 | 0 | 0 | 0 | 0 | 409 | 0 | |
Issuance of common stock, net of costs and underwriting fees | $ 0 | $ 0 | $ 3,670 | 93,004 | 0 | 0 | 0 | |
Issuance of common stock, net of costs and underwriting fees (Shares) | 0 | 0 | 367,000 | |||||
Contribution of capital from noncontrolling interest | 1,956 | $ 0 | $ 0 | $ 0 | 0 | 0 | 0 | 1,956 |
Stock-based compensation | $ 0 | $ 0 | $ 4,940 | 557,869 | 0 | 0 | 0 | |
Stock-based compensation (Shares) | 0 | 0 | 493,998 | |||||
Balance at Dec. 31, 2017 | $ 11,091,137 | $ 23 | $ 280 | $ 1,268,934 | $ 142,473,190 | $ (131,067,121) | $ (1,584,169) | $ 882,010 |
Balance (Shares) at Dec. 31, 2017 | 2,300 | 28,048 | 56,061,961 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities | ||
Net loss | $ (6,596,468) | $ (9,061,765) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation of property, plant and equipment | 180,080 | 290,132 |
Amortization of customer intangible assets | 3,330 | 68,044 |
Stock-based compensation, net | 601,472 | 1,055,105 |
Equity in loss of investee company | 138,463 | 1,732 |
Provision for inventory reserve | 57,988 | 181,197 |
Gain on sale of property and equipment | (76,521) | (8,432) |
Interest accreted on note receivable | (6,049) | (6,049) |
Impairment of long-lived assets | 447,000 | 0 |
Changes in assets and liabilities | ||
Accounts receivable | 53,076 | (203,639) |
Inventories | 857,752 | (150,332) |
Costs and estimated earnings in excess of billings | (2,212,558) | 0 |
Prepaids and other current assets | (227,821) | 1,785,328 |
Deferred PPA project costs | 0 | 5,690,307 |
Other assets | (86,360) | 0 |
Accounts payable | 1,397,147 | 112 |
Billings in excess of costs and estimated earnings | (406,062) | 0 |
Accrued expenses | (4,897) | 271,467 |
Deferred revenue | 0 | 422,638 |
Other long-term liabilities | 0 | 137,983 |
Net cash provided by (used in) operating activities | (5,880,428) | 473,828 |
Cash flows from investing activities | ||
Expenditures for property and equipment | (16,169) | (9,149) |
Proceeds from sale of property and equipment | 81,500 | 9,754 |
Payments from note receivable | 12,000 | 0 |
Net cash provided by investing activities | 77,331 | 605 |
Cash flows from financing activities | ||
Repayments of long term debt | (169,306) | (165,083) |
Proceeds from issuance of common stock | 96,674 | 0 |
Proceeds from the exercise of stock options | 0 | 68,400 |
Payments of tax withholding related to stock-based compensation | (38,663) | 0 |
Contribution of capital from noncontrolling interest | 1,956 | 0 |
Net cash used in financing activities | (109,339) | (96,683) |
Effect of exchange rate changes on cash and cash equivalents | 609 | (568) |
Net increase (decrease) in cash and cash equivalents | (5,911,827) | 377,182 |
Cash and cash equivalents - beginning of period | 11,782,962 | 17,189,089 |
Cash and cash equivalents - end of period | 5,871,135 | 17,566,271 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 22,543 | 26,332 |
Supplemental noncash information: | ||
Right of use asset obtained in exchange for new operating lease | $ 1,020,579 | $ 102,943 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business EnSync, Inc. and its subsidiaries, which are often referenced as EnSync Energy for marketing and branding purposes (“EnSync Energy,” “we,” “us,” “our,” or the “Company”) is an energy innovation company whose technologies and capabilities are designed to deliver the least expensive, highest value and most reliable electricity. EnSync Energy’s modular technologies and services synchronize power sources to meet dynamic and evolving energy environments, enable real-time prioritization of distributed energy resources and provide grid stability and economic optimization. EnSync Energy offers integrated solutions from concept through design, project finance, commissioning, and operating and maintenance, serving the commercial and industrial (“C&;I”) and multi-tenant building, utility and off-grid markets. Incorporated in 1998, EnSync Energy is headquartered in Menomonee Falls, Wisconsin, USA, with offices in Madison, Wisconsin, Petaluma, California, Honolulu, Hawaii and Shanghai, China. EnSync Energy develops and commercializes product and service solutions for the distributed energy generation market, including energy management systems, energy storage systems, applications and internet of energy platforms that link distributed energy resources with the grid network. These solutions are critical to the transition from a “coal-centric economy” to one reliant on renewable energy sources. EnSync Energy synchronizes conventional utility, distributed generation and storage assets to seamlessly ensure the least expensive and most reliable electricity available, thus enabling the future of energy networks. EnSync Energy delivers fully integrated systems utilizing proprietary direct current power control hardware, energy management software and extensive experience with energy storage technologies. Our internet of energy control platform adapts to ever-changing generation and load variables, as well as changes in utility prices and programs, aiming to ensure the means to make and/or save money behind-the-meter while concurrently providing utilities the opportunity to use distributed energy resource systems for various grid enhancing services. EnSync Energy’s systems can easily integrate distributed energy resources with the grid, island from the grid and serve as a microgrid, and be deployed as self-contained microgrids, delivering electricity to sites for which no grid exists. EnSync Energy brings vital power control and energy storage solutions to problems caused by the incorporation of increasingly pervasive renewable energy generating assets that are part of the grid power transmission and distribution network used in commercial, industrial and multi-tenant buildings. In addition to ensuring resilient and high-value electricity to off-takers, utilities can benefit from EnSync Energy’s systems by relying on such assets for visibility, aggregation and control as they begin to use distributed energy resources to ensure a more fortified grid via grid services. The Company also develops and commercializes energy management systems for off-grid applications such as island or remote power. Power Purchase Agreements In addition to customer-direct systems sales, we are addressing our target markets as a developer and a financial packager through the use of power purchase agreements (“PPAs”). Navigant Research forecasts the annual market for solar plus energy storage distributed energy systems to grow to nearly $50 billion by 2026, with a 2017 to 2026 compound annual growth rate of more than 40 percent. Under this PPA structure, we agree to develop and supply a system that uses our and other companies’ products and the offtaker agrees to purchase electricity from the completed system at a fixed rate for typically a 20-year period. Through these arrangements, the offtaker receives the benefit of a low and fixed price for electricity without incurring the capital expenditures required to develop and build the system. Because building these PPA projects requires significant long-term capital outlays, we do not intend to own the PPA systems and seek to sell them to third parties once we have completed the site development process. Site development activities include: (i) finalizing the engineering design of the system, (ii) applying for and receiving the necessary permits for construction of the system and (iii) negotiation of an interconnection agreement with the local utility. This site development process typically takes three to four months. We typically do not begin construction of a specific project until it has been sold to a third party. Accordingly, during the site development process, we engage in a sale process and provide interested purchasers with information related to the system. The purchase price for a particular system is determined through a formula that we believe is customary in the solar industry that takes into account the revenue stream to be received from the offtaker discounted to present value based on customary internal rates of return for similar projects, the costs of completing, maintaining and administering the system and certain other factors. Once the system has been sold, we begin construction which includes procurement of the necessary equipment, physical construction and commissioning of the system. The construction period varies based on many internal and external factors, but is typically completed within six to nine months. Our sales agreement with the buyer of the system typically provides for us to receive an upfront payment and additional progress payments to be made based upon achievement of certain key construction and commissioning milestones. We recognize revenue from these PPA arrangements on a percentage of completion basis as we build out and commission the system. Any excess cash received from the system purchaser in excess of recognized revenue is recorded as billings in excess of costs and estimated earnings and carried as a liability on our condensed consolidated financial statements. Based on our experience to date, we expect to recognize all revenue from a particular PPA system typically within 12 months of the signing of the related PPA agreement. We may also enter into a service agreement with the owner of a PPA system pursuant to which we provide ongoing administrative, operating and maintenance services. These agreements usually have a term which matches the PPA term. We recognize revenue from a service agreement ratably over the life of the related agreement. The condensed consolidated financial statements include the accounts of the Company and those of its wholly-owned subsidiaries ZBB Energy Pty Ltd. (formerly known as ZBB Technologies, Ltd.), DCfusion, LLC (“DCfusion”), various PPA project subsidiaries, its eighty-five percent owned subsidiary Holu Energy LLC (“Holu”), and its sixty percent owned subsidiary ZBB PowerSav Holdings Limited (“Holdco”) located in Hong Kong, which was formed in connection with the Company’s investment in a China joint venture. Interim Financial Data The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial data and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of adjustments of a normal and recurring nature) considered necessary for fair presentation of the results of operations have been included. Operating results for the three and six months ended December 31, 2017 are not necessarily indicative of the results that might be expected for the year ending June 30, 2018. The condensed consolidated balance sheet at June 30, 2017 has been derived from audited financial statements at that date, but does not include all of the information and disclosures required by US GAAP. For a more complete discussion of accounting policies and certain other information, refer to the Company’s Annual Report filed on Form 10-K for the fiscal year ended June 30, 2017 filed with the Securities and Exchange Commission (“SEC”) on September 27, 2017. Basis of Presentation and Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly and majority-owned subsidiaries and have been prepared in accordance with US GAAP and are reported in US dollars. For subsidiaries in which the Company’s ownership interest is less than 100%, the noncontrolling interests are reported in stockholders’ equity in the condensed consolidated balance sheets. The noncontrolling interests in net income (loss), net of tax, are classified separately in the condensed consolidated statements of operations. All significant intercompany accounts and transactions have been eliminated in consolidation. The Company’s fiscal year end is June 30. Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. It is reasonably possible that the estimates we have made may change in the near future. Significant estimates underlying the accompanying condensed consolidated financial statements include those related to: ⋅ going concern assessment; ⋅ the timing of revenue recognition; ⋅ allocation of purchase price in a business combination; ⋅ the allowance for doubtful accounts; ⋅ provisions for excess and obsolete inventory; ⋅ the lives and recoverability of property, plant and equipment and other long-lived assets, including the testing for impairment; ⋅ testing of goodwill for impairment; ⋅ contract costs, losses and reserves; ⋅ warranty obligations; ⋅ income tax valuation allowances; ⋅ discount rates for finance and operating lease liabilities; ⋅ stock-based compensation; and ⋅ valuation of equity instruments and warrants. Fair Value of Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, a note receivable, accounts payable, bank loans, notes payable, equipment financing, equity instruments and warrants. The carrying amounts of the Company’s financial instruments approximate their respective fair values due to the relatively short-term nature of these instruments, except for the bank loans, notes payable, equipment financing, equity instruments and warrants. The carrying amounts of the bank loans and notes payable approximate fair value due to the interest rate and terms approximating those available to us for similar obligations. The interest rate on the equipment financing obligation was imputed based on the requirements described in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 842-40-30-6. The fair value of the nonconvertible attribute and conversion option of the Series C convertible preferred stock (the “Series C Preferred Stock”) and related warrant was determined using the Option-Pricing Method (“OPM”) as described in the AICPA Accounting and Valuation Guide entitled Valuation of Privately-Held-Company Equity Securities Issued as Compensation and a “with” and “without” methodology to bifurcate the Series C Preferred Stock conversion feature. The OPM model treats the various equity securities as call options on the total equity value contingent upon each security’s strike price or participation rights. The Black-Scholes inputs utilized for the OPM model were: (i) an aggregate equity value estimated based on the back-solve methodology to reconcile the closing common stock price as of the valuation date; (ii) a term in alignment with the terms of our supply agreement with SPI Energy Co., LTD. (“SPI”) (formerly known as Solar Power, Inc.); (iii) a risk free rate from the Federal Reserve Board’s H.15 release as of the transaction date; (iv) the volatility of the price of the Company’s publicly traded stock; and (v) the performance vesting requirements of the equity instruments that were expected to be met. The Company accounts for the fair value of financial instruments in accordance with FASB ASC Topic 820, “Fair Value Measurements and Disclosures.” Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The degree of judgment utilized in measuring the fair value of assets and liabilities generally correlate to the level or pricing observability. FASB ASC Topic 820 describes a fair value hierarchy based on the following three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. Level 2 inputs are inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly, for similar assets or liabilities in active markets. Level 3 inputs are unobservable inputs for the asset or liability. As such, the prices or valuation techniques require inputs that are both significant to the fair value measurement and are unobservable. Cash and Cash Equivalents The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents. The Company maintains its cash deposits at financial institutions predominately in the United States, Australia, Hong Kong and China. The Company has not experienced any losses in such accounts. Accounts Receivable Credit is extended based on an evaluation of a customer’s financial condition. Accounts receivable are stated at the amount the Company expects to collect from outstanding balances. The Company records allowances for doubtful accounts based on customer-specific analysis and general matters such as current assessments of past due balances and economic conditions. The Company writes off accounts receivable against the allowance when they become uncollectible. The Company had no allowance for doubtful accounts as of December 31, 2017. Accounts receivable are stated net of an allowance for doubtful accounts of $47,307 as of June 30, 2017. The composition of accounts receivable by aging category is as follows as of: December 31, 2017 June 30, 2017 Current $ 396,909 $ 309,156 30-60 days 1,450 - 60-90 days 9,343 - Over 90 days 9,128 160,750 Total $ 416,830 $ 469,906 Inventories Inventories are stated at the lower of cost or net realizable value, defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Cost is computed using standard cost, which approximates actual cost, on a first-in, first-out basis. The Company provides inventory write-downs on excess and obsolete inventories based on historical usage. The write-down is measured as the difference between the cost of the inventory and net realizable value based upon assumptions about usage and charged to the provision for inventory, which is a component of cost of sales. Costs and Estimated Earnings in Excess of Billings/Billings in Excess of Costs and Estimated Earnings Costs and estimated earnings in excess of billings represent amounts earned and reimbursable under contracts accounted for under the percentage of completion method. The timing of when we bill our customers is generally dependent upon advance billing terms, milestone billings based on the completion of certain phases of the work, or when services are provided. Based on our historical experience, we generally consider the collection risk related to these amounts to be low. When events or conditions indicate that the amounts outstanding may become uncollectible, an allowance is estimated and recorded. We anticipate that substantially all of such amounts will be billed and collected over the next twelve months. Billings in excess of costs and estimated earnings represents amounts billed to customers in advance of being earned under contracts accounted for under the percentage of completion method. We anticipate that substantially all such amounts will be earned over the next twelve months. Other Current Assets Note Receivable The Company has a note receivable from an unrelated party. We regularly evaluate the financial condition of the borrower to determine if any reserve for an uncollectible amount should be established. To date, no such reserve is required. Deferred Customer Project Costs Deferred customer project costs consist primarily of the costs of products delivered and services performed that are subject to additional performance obligations or customer acceptance. These deferred customer project costs are expensed at the time the related revenue is recognized. Project Assets Project assets consist primarily of capitalized costs which are incurred by the Company prior to the sale of the photovoltaic, storage or energy management systems and PPA to a third-party. These costs are typically for the construction, installation and development of these projects. Construction and installation costs include primarily material and labor costs. Development fees can include legal, consulting, permitting and other similar costs. Property, Plant and Equipment Land, building, equipment, computers, furniture and fixtures are recorded at cost. Maintenance, repairs and betterments are charged to expense as incurred. Depreciation is provided for all plant and equipment on a straight-line basis over the estimated useful lives of the assets. The estimated useful lives used for each class of depreciable asset are: Estimated Useful Lives Manufacturing equipment 3 - 7 years Office equipment 3 - 7 years Building and improvements 7 - 40 years The Company completed a review of the estimated useful lives of specific assets for the six months ended December 31, 2017 and determined that there were no changes in the estimated useful lives of assets. Impairment of Long-Lived Assets In accordance with FASB ASC Topic 360, "Impairment or Disposal of Long-Lived Assets," the Company assesses potential impairments to its long-lived assets including property, plant and equipment and intangible assets when there is evidence that events or changes in circumstances indicate that the carrying value may not be recoverable. If such an indication exists, the recoverable amount of the asset is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed in the statement of operations. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate. On October 12, 2017, the Company accepted an offer to sell its corporate headquarters for $2,340,000, less commissions and other customary closing costs. As a result, we recorded an impairment charge of $447,000 on the building and land in our condensed consolidated statements of operation during the three months ended September 30, 2017. The sale of the Company’s corporate headquarters closed in the third quarter of fiscal 2018 pursuant to which we received net proceeds of $2,187,317. Investment in Investee Company Investee companies that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity method of accounting. Whether or not the Company exercises significant influence with respect to an investee depends on an evaluation of several factors including, among others, representation on the investee company’s board of directors and ownership level, which is generally a 20% to 50% interest in the voting securities of the investee company. Under the equity method of accounting, an investee company’s accounts are not reported in the Company’s condensed consolidated balance sheets and statements of operations; however, the Company’s share of the earnings or losses of the investee company is reflected in the caption ‘‘Equity in gain (loss) of investee company” in the condensed consolidated statements of operations. The Company’s carrying value in an equity method investee company is reported in the caption ‘‘Investment in investee company’’ in the Company’s condensed consolidated balance sheets. When the Company’s carrying value in an equity method investee company is reduced to zero, no further losses are recorded in the Company’s condensed consolidated financial statements unless the Company guaranteed obligations of the investee company or has committed additional funding. When the investee company subsequently reports income, the Company will not record its share of such income until it equals or exceeds the amount of its share of losses not previously recognized. Goodwill Goodwill is recognized as the excess cost of an acquired entity over the net amount assigned to assets acquired and liabilities assumed. Goodwill is not amortized but reviewed for impairment annually as of June 30 or more frequently if events or changes in circumstances indicate that its carrying value may be impaired. These conditions could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit. The Company has one reporting unit. The first step of the impairment test requires the comparing of a reporting unit’s fair value to its carrying value. If the carrying value is less than the fair value, no impairment exists and the second step is not performed. If the carrying value is higher than the fair value, there is an indication that impairment may exist and the second step must be performed to compute the amount of the impairment. In the second step, the impairment is computed by estimating the fair values of all recognized and unrecognized assets and liabilities of the reporting unit and comparing the implied fair value of reporting unit goodwill with the carrying amount of that unit’s goodwill. The Company determined fair value as evidenced by market capitalization, and concluded that there was no need for an impairment charge as of December 31, 2017 and June 30, 2017. Warranty Obligations The Company typically warrants its products for the shorter of twelve months after installation or eighteen months after date of shipment. Warranty costs are provided for estimated claims and charged to cost of product sales as revenue is recognized. Warranty obligations are also evaluated quarterly to determine a reasonable estimate for the replacement of potentially defective materials of all energy storage systems that have been shipped to customers within the warranty period. While the Company actively engages in monitoring and improving its evolving battery and production technologies, there is only a limited product history and relatively short time frame available to test and evaluate the rate of product failure. Should actual product failure rates differ from the Company’s estimates, revisions are made to the estimated rate of product failures and resulting changes to the liability for warranty obligations. In addition, from time to time, specific warranty accruals may be made if unforeseen technical problems arise. The following is a summary of accrued warranty activity: Three months ended December 31, Six months ended December 31, 2017 2016 2017 2016 Beginning balance $ 196,691 $ 24,273 $ 239,173 $ 27,207 Accruals for warranties during the period 9,340 21,224 10,192 27,139 Net settlements during the period (30,130 ) (13,350 ) (64,740 ) (170,680 ) Adjustments relating to preexisting warranties 5,724 6,007 (3,000 ) 154,488 Ending balance $ 181,625 $ 38,154 $ 181,625 $ 38,154 The Company offers extended warranty contracts to its customers. These contracts typically cover a period up to twenty years and include advance payments that are recorded initially as long-term deferred revenue. Revenue is recognized in the same manner as the costs incurred to perform under the extended warranty contracts. Costs associated with these extended warranty contracts are expensed to cost of product sales as incurred. A summary of changes to long-term deferred revenue for extended warranty contracts is as follows: Three months ended December 31, Six months ended December 31, 2017 2016 2017 2016 Beginning balance $ 430,762 $ 422,638 $ 431,700 $ - Deferred revenue for new extended warranty contracts - - - 422,638 Deferred revenue recognized (937 ) - (1,875 ) - Ending balance 429,825 422,638 429,825 422,638 Less: current portion of deferred revenue for extended warranty contracts 7,187 - 7,187 - Long-term deferred revenue for extended warranty contracts $ 422,638 $ 422,638 $ 422,638 $ 422,638 Revenue Recognition Revenues are recognized when persuasive evidence of a contractual arrangement exists, delivery has occurred or services have been rendered, the seller’s price to buyer is fixed and determinable and collectability is reasonably assured. The portion of revenue related to installation and final acceptance, is deferred until such installation and final customer acceptance are completed. From time to time, the Company may enter into separate agreements at or near the same time with the same customer. The Company evaluates such agreements to determine whether they should be accounted for individually as distinct arrangements or whether the separate agreements are, in substance, a single multiple element arrangement. The Company evaluates whether the negotiations are conducted jointly as part of a single negotiation, whether the deliverables are interrelated or interdependent, whether the fees in one arrangement are tied to performance in another arrangement, and whether elements in one arrangement are essential to another arrangement. The Company’s evaluation involves significant judgment to determine whether a group of agreements might be so closely related that they are, in effect, part of a single arrangement. Our collaboration agreements typically involve multiple elements or deliverables, including upfront fees, contract research and development, milestone payments, technology licenses or options to obtain technology licenses and royalties. For these arrangements, revenues are recognized in accordance with FASB ASC Topic 605-25, “Revenue Recognition Multiple Element Arrangements.” The Company’s revenues associated with multiple element contracts is based on the selling price hierarchy, which utilizes vendor-specific objective evidence (“VSOE”) when available, third-party evidence (“TPE”) if VSOE is not available, and if neither is available then the best estimate of the selling price is used. The Company utilizes best estimate for its multiple deliverable transactions as VSOE and TPE do not exist. To be considered a separate element, the product or service in question must represent a separate unit under SEC Staff Accounting Bulletin 104, and fulfill the following criteria: the delivered item(s) has value to the customer on a standalone basis; there is objective and reliable evidence of the fair value of the undelivered item(s); and if the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in our control. For arrangements containing multiple elements, revenue from time and materials based service arrangements is recognized as the service is performed. Revenue relating to undelivered elements is deferred at the estimated fair value until delivery of the deferred elements. If the arrangement does not meet all criteria above, the entire amount of the transaction is deferred until all elements are delivered. The portion of revenue related to engineering and development is recognized ratably upon delivery of the goods or services pertaining to the underlying contractual arrangement or revenue is recognized as certain activities are performed by the Company over the estimated performance period. For PPA projects with no identified buyer until at or near the completion of the project, the Company recognizes revenue for the sales of PPA projects following the guidance in FASB ASC Topic 360, “Accounting for Sales of Real Estate.” We record the sale as revenue after the initial and continuing investment requirements have been met and whether collectability from the buyer is reasonably assured, which generally occurs at the end of a project. We may align our revenue recognition and release our project assets or deferred PPA project costs to cost of sales with the receipt of payment from the buyer if the sale has been consummated and we have transferred the usual risks and rewards of ownership to the buyer. For PPA projects with an identified buyer, the Company recognizes revenue for the sales of PPA projects using the percentage of completion method for recording revenues on long term contracts under FASB ASC Topic 605-35, “Construction-Type and Production-Type Contracts,” measured by the percentage of cost incurred to date to estimated total cost for each contract. That method is used because management considers total cost to be the best available measure of progress on contracts. Because of inherent uncertainties in estimating costs, it is at least reasonably possible that the estimates used will change within the near term. The Company charges shipping and handling fees when products are shipped or delivered to a customer, and includes such amounts in product revenues and shipping costs in cost of sales. The Company reports its revenues net of estimated returns and allowances. Revenues for the three and six months ended December 31, 2017 were comprised of five significant customers (92% of revenues) and four significant customers (83% of revenues), respectively. Revenues for the three and six months ended December 31, 2016 were both comprised of three significant customers (95.6% and 89.9% of revenues, respectively). The Company had three significant customers with an aggregate outstanding receivable balance of $370,571 (89% of accounts receivable, net) as of December 31, 2017. The Company had three significant customers with an aggregate outstanding receivable balance of $336,685 (72% of accounts receivable, net) as of June 30, 2017. Engineering, Development, and License Revenues We assess whether a substantive milestone exists at the inception of our agreements. In evaluating if a milestone is substantive we consider whether: ⋅ Substantive uncertainty exists as to the achievement of the milestone event at the inception of the arrangement; ⋅ The achievement of the milestone involves substantive effort and can only be achieved based in whole or in part on our performance or the occurrence of a specific outcome resulting from our performance; ⋅ The amount of the milestone payment appears reasonable either in relation to the effort expended or the enhancement of the value of the delivered item(s); ⋅ There is no future performance required to earn the milestone; and ⋅ The consideration is reasonable relative to all deliverables and payment terms in the arrangement. If any of these conditions are not met, we do not consider the milestone to be substantive and we defer recognition of the milestone payment and recognize it as revenue over the estimated period of performance, if any. The Company recorded Engineering and development costs for a total of $0 and $937,725 related to a Research and Development Agreement (the “R&;D Agreement”) with Lotte Chemical Corporation (“Lotte”) for the three and six months ended December 31, 2016. Pursuant to the R&;D Agreement, the Company agreed to develop and provide to Lotte a 500kWh zinc bromide flow battery system, including a zinc bromide chemical flow battery module and related software, on the terms and conditions set forth in the R&;D Agreement. The Company does not expect to receive any additional cash payments under the R&;D Agreement and Amended License Agreement with Lotte. As of December 31, 2017, and June 30, 2017, the Company had no billed or unbilled amounts from engineering and development contracts in process. Advanced Engineering and Development Expenses In accordance with FASB ASC Topic 73 |
MANAGEMENT'S PLANS AND FUTURE O
MANAGEMENT'S PLANS AND FUTURE OPERATIONS | 6 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
MANAGEMENT'S PLANS AND FUTURE OPERATIONS | NOTE 2 - MANAGEMENT'S PLANS AND FUTURE OPERATIONS The accompanying condensed consolidated financial statements have been prepared on the basis of a going concern which contemplates that the Company will be able to realize assets and discharge its liabilities in the normal course of business. Accordingly, they do not give effect to any adjustments that would be necessary should the Company be required to liquidate its assets. The Company incurred a net loss of $ 2,535,683 6,427,477 11,973,147 5,744,437 We believe that cash and cash equivalents on hand at December 31, 2017, and other potential sources of cash, including net cash we generate from closing on projects in our backlog and the sale of our corporate headquarters in the third quarter of fiscal 2018, will be sufficient to fund our current operations through the third quarter of fiscal 2019. While we believe our pipeline of projects is deep, there can be no assurances that projects will close in a timely manner to meet our cash requirements. We are also working to improve operations and enhance cash balances by continuing to drive cost improvements and reducing our spend on research and development. Also, we are currently exploring potential financing options that may be available to us, including strategic partnership transactions, PPA project financing facilities, and if necessary, additional sales of Common Stock under our current and future shelf registrations with the SEC. However, we have no commitments to obtain any additional funds, and there can be no assurance such funds will be available on acceptable terms or at all. If the Company is unable to increase revenues and achieve profitability in a timely fashion or obtain additional required funding, the Company’s financial condition and results of operations may be materially adversely affected and the Company may not be able to continue operations, execute our growth plan, take advantage of future opportunities or respond to customers and competition. |
CHINA JOINT VENTURE
CHINA JOINT VENTURE | 6 Months Ended |
Dec. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
CHINA JOINT VENTURE | NOTE 3 - CHINA JOINT VENTURE On August 30, 2011, the Company entered into agreements providing for the establishment of a joint venture to develop, produce, sell, distribute and service advanced storage batteries and power electronics in China (the “China Joint Venture”). The China Joint Venture was established upon receipt of certain governmental approvals from China which were received in November 2011. China Joint Venture partners include Holdco, AnHui XinLong Electrical Co., Wuhu Huarui Power Transmission and Transformation Engineering Co. and Wuhu Fuhai-Haoyan Venture Investment, L.P., a branch of Shenzhen Oriental Fortune Capital Co., Ltd. The China Joint Venture operates through a jointly-owned Chinese company located in Wuhu City, Anhui Province named Anhui Meineng Store Energy Co., Ltd. (“Meineng Energy”). Meineng Energy assembles and manufactures the Company’s products for sale in the power management industry on an exclusive basis in mainland China and on a non-exclusive basis in Hong Kong and Taiwan. In addition, Meineng Energy manufactures certain products for EnSync pursuant to a supply agreement under which we pay Meineng Energy 120% of its direct costs incurred in manufacturing such products. Pursuant to a Joint Venture Agreement between Holdco and Anhui Xinrui Investment Co., Ltd, a Chinese limited liability company, and subsequent investment agreements, Meineng Energy has been capitalized with approximately $ 14.8 The Company’s investment in Meineng Energy was made through Holdco. Pursuant to a Limited Liability Company Agreement of Holdco between ZBB Cayman Corporation and PowerSav New Energy Holdings Limited (“PowerSav”), the Company contributed technology to Holdco via a license agreement with an agreed upon value of approximately $4.1 million and $ 200,000 60 3.3 40 40 830,069 814,546 30 The Company’s basis in the technology contributed to Holdco was $ 0 4.1 The Company’s President and Chief Executive Officer (“President and CEO”) has served as the Chief Executive Officer of Meineng Energy since December 2011. The President and CEO owns an indirect 6 The Company has the right to appoint a majority of the members of the Board of Directors of Holdco and Holdco has the right to appoint a majority of the members of the Board of Directors of Meineng Energy. Pursuant to a Management Services Agreement between Holdco and Meineng Energy (the “Management Services Agreement”), Holdco will provide certain management services to Meineng Energy in exchange for a management services fee equal to five percent of Meineng Energy’s net sales for the five year period beginning on the first day of the first quarter in which the Meineng Energy achieves operational breakeven results, and three percent of Meineng Energy’s net sales for the subsequent three years, provided the payment of such fees will terminate upon Meineng Energy completing an initial public offering on a nationally recognized securities exchange. To date, no management service fee revenues have been recognized by Holdco under the Management Services Agreement. Pursuant to a License Agreement (as amended on July 1, 2014) between Holdco and Meineng Energy, Holdco granted to Meineng Energy (1) an exclusive royalty-free license to manufacture and distribute the Company’s ZBB EnerStore, zinc bromide flow battery, version three (V3) (50KW) (and any other zinc bromide flow battery product developed internally by us based on the V3 EnerStore, ranging from 50kWh to 500kWh module design) and ZBB EnerSection, power and energy control center (up to 250KW) (the “Products”) in mainland China in the power supply management industry and (2) a non-exclusive royalty-free license to manufacture and distribute the Products in Hong Kong and Taiwan in the power supply management industry. Pursuant to a Research and Development Agreement with Meineng Energy, Meineng Energy may request the Company to provide research and development services upon commercially reasonable terms and conditions. Meineng Energy would pay the Company’s fully-loaded costs and expenses incurred in providing such services. Three months ended December 31, Six months ended December 31, 2017 2016 2017 2016 Product sales to Meineng Energy $ 10,293 $ 9,447 $ 23,301 $ 68,594 Cost of product sales to Meineng Energy 8,000 10,242 19,211 72,056 Product purchases from Meineng Energy 185,701 41,609 198,601 752,190 Decemebr 31, 2017 June 30, 2017 Net amount payable (due) to Meineng Energy $ 11,003 $ (12,299) Three months ended December 31, Six months ended December 31, 2017 2016 2017 2016 Revenues $ 462,186 $ 359,676 $ 466,832 $ 1,138,831 Gross profit (loss) (60,494) 5,431 (61,580) 108,852 Loss from operations (438,601) (301,164) (812,527) (504,051) Net loss (426,114) (291,537) (773,019) (479,010) |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 6 Months Ended |
Dec. 31, 2017 | |
Business Combination [Abstract] | |
BUSINESS COMBINATIONS | NOTE 4 - BUSINESS COMBINATIONS DCfusion On February 28, 2017, EnSync formed and became the controlling owner of DCfusion, partnering with two industry veteran consultants (the “DCfusion Founders”) who are highly regarded leaders in direct current (“DC”) system engineering design and consulting. Each DCfusion Founder became an employee of DCfusion upon the closing of the DCfusion transaction on February 28, 2017. The transaction was accounted for as a business combination under US GAAP. The primary reason for the business acquisition was to benefit from the DCfusion Founders’ decades of customer applied DC system design and consulting experience, which complements EnSync Energy's application engineering. DCfusion also brings a unique and substantial pipeline of potential projects in vertical markets that rely on the consultative expertise of the DCfusion Founders, and the authoritative voice of policies, programs and standards shaping the DC-centric technical and market landscape. No cash was required to complete the transaction. The Company incurred approximately $ 31,700 |
INVENTORIES
INVENTORIES | 6 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 5 - INVENTORIES Net inventories are comprised of the following as of: December 31, 2017 June 30, 2017 Raw materials and subassemblies $ 1,566,273 $ 2,477,418 Work in progress - 4,595 Total $ 1,566,273 $ 2,482,013 |
NOTE RECEIVABLE
NOTE RECEIVABLE | 6 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
NOTES RECEIVABLE | NOTE 6 - NOTE RECEIVABLE On September 23, 2014, the Company was issued a $ 150,000 8 500,000 |
PROPERTY, PLANT & EQUIPMENT
PROPERTY, PLANT & EQUIPMENT | 6 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT & EQUIPMENT | NOTE 7 - PROPERTY, PLANT & EQUIPMENT December 31, 2017 June 30, 2017 Land $ 179,713 $ 217,000 Building and improvements 3,122,662 3,532,375 Manufacturing equipment 3,169,597 4,255,385 Office equipment 454,562 454,562 Total, at cost 6,926,534 8,459,322 Less: accumulated depreciation (4,095,685) (5,013,069) Property, plant and equipment, net $ 2,830,849 $ 3,446,253 The Company recorded depreciation expense of $ 82,688 180,080 133,668 290,132 See Impairment of Long-Lived Assets under Note 1 of the Notes to Condensed Consolidated Financial Statements for a discussion of the impairment charge related to the sale of the Company’s corporate headquarters. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 6 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | NOTE 8 - ACCRUED EXPENSES December 31, 2017 June 30, 2017 Accrued compensation and benefits $ 535,546 $ 403,140 Accrued warranty 181,625 239,173 Right of use liability 179,865 65,004 Other 444,642 524,397 Total $ 1,341,678 $ 1,231,714 |
LONG-TERM DEBT
LONG-TERM DEBT | 6 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 9 - LONG-TERM DEBT December 31, 2017 June 30, 2017 Note payable to Wisconsin Econcomic Development Corporation payable in monthly installments of $23,685, including interest at 2%, with the final payment due May 1, 2018; collateralized by equipment purchased with the loan proceeds and substantially all assets of the Company not otherwise collateralized. $ 117,856 $ 257,959 Bank loan payable in fixed monthly installments of $6,800 of principal and interest at a rate of 0.25% below prime, as defined, subject to a floor of 5% with any remaining principal and interest due at maturity on June 1, 2018; collateralized by the building and land. 439,094 468,297 Equipment finance obligation under sale-leaseback, interest payable in quarterly installments ranging between $1,510 and $2,555 at an imputed interest rate of approximately 2.44% over 20 years ending March 31, 2036. 331,827 331,827 Long-term debt 888,777 1,058,083 Less: current maturities of long-term debt (556,950) (726,256) Long-term debt, net of current maturities $ 331,827 $ 331,827 2018 $ 556,950 2019 - 2020 - 2021 - 2022 - Thereafter 331,827 $ 888,777 In connection with the closing of the sale of the Company’s corporate headquarters in the third quarter of fiscal 2018, the Company’s current outstanding mortgage balance of $434,184 plus accrued interest was paid in full. Refer to Note 1 of the Notes to Condensed Consolidated Financial Statements for further detail related to the sale of the Company’s headquarters. |
EMPLOYEE AND DIRECTOR EQUITY IN
EMPLOYEE AND DIRECTOR EQUITY INCENTIVE PLANS | 6 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
EMPLOYEE AND DIRECTOR EQUITY INCENTIVE PLANS | NOTE 10 - EMPLOYEE AND DIRECTOR EQUITY INCENTIVE PLANS The Company previously adopted the 2002 Stock Option Plan (“2002 Plan”) in which a stock option committee could grant up to 1,000,000 The Company also previously adopted the 2007 Equity Incentive Plan (“2007 Plan”) that authorized the board of directors or a committee to grant up to 300,000 In November 2010, the Company adopted the 2010 Omnibus Long-Term Incentive Plan (“2010 Omnibus Plan”) which authorizes a committee of the board of directors to grant stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, other stock-based awards and cash awards. The 2010 Omnibus Plan, as amended, authorizes up to 13,950,000 8 2,000,000 13,950,000 In November 2012, the Company adopted the 2012 Non-Employee Director Equity Compensation Plan, as amended (“2012 Director Equity Plan”), under which the Company may issue up to 4,400,000 restricted stock unit awards and other equity awards to our non-employee directors pursuant to the Company’s director compensation policy. At the annual meeting of shareholders held on November 14, 2016, the Company’s shareholders approved an amendment of the 2012 Director Equity Plan which increased the number of shares of the Company’s Common Stock available for issuance pursuant to awards under the 2012 Director Equity Plan by 1,200,000 4,400,000 As of December 31, 2017, there were a total of 1,403,860 566,095 The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing method. The Company uses historical data to estimate the expected price volatility, the expected option life and the expected forfeiture rate. The Company has not made any dividend payments nor does it have plans to pay dividends in the foreseeable future. Six months ended December 31, 2017 2016 Expected life of option (years) 4 4 Risk-free interest rate 1.59 - 2.09% 0.93 - 1.14% Assumed volatility 108.66 - 113.98% 104.69 - 108.35% Expected dividend rate 0.00% 0.00% Expected forfeiture rate 6.15 - 7.46% 7.42 - 9.18% Time-vested and performance-based stock awards, including stock options and RSUs are accounted for at fair value at date of grant. Compensation expense is recognized over the requisite service and performance periods. During the three and six months ended December 31, 2017 and December 31, 2016, the Company’s results of operations include compensation expense for stock options and RSUs granted under its various equity incentive plans. The amount recognized in the condensed consolidated financial statements related to stock-based compensation was $ 165,864 601,472 782,452 1,055,105 Number Weighted Average Balance at June 30, 2016 6,111,360 $ 0.88 6.96 Options granted 2,654,100 0.59 Options exercised (124,252) 0.56 Options forfeited (391,910) 2.55 Balance at June 30, 2017 8,249,298 0.71 6.50 Options granted 933,500 0.41 Options forfeited (516,150) 1.43 Balance at December 31, 2017 8,666,648 0.64 6.25 Outstanding Exercisable Range of Exercise Prices Number Average Weighted Number Average Weighted $0.28 to $1.00 7,892,198 6.45 $ 0.50 2,648,962 5.84 $ 0.53 $1.01 to $2.50 645,000 4.81 1.47 493,000 4.51 1.61 $2.51 to $5.00 60,200 1.39 3.87 60,200 1.39 3.87 $5.01 to $6.95 69,250 1.27 5.91 69,250 1.27 5.91 Balance at December 31, 2017 8,666,648 6.25 0.64 3,271,412 5.46 0.86 During the six months ended December 31, 2017, options to purchase 933,500 0.34 0.51 1,022,500 0.35 1.02 The aggregate intrinsic value of outstanding options totaled $ 102,842 0.40 Number Weighted Average Balance at June 30, 2016 4,852,367 $ 0.54 7.42 Options granted 2,654,100 0.59 Options vested (2,110,085) 0.57 Options forfeited (199,284) 0.80 Balance at June 30, 2017 5,197,098 0.54 6.93 Options granted 933,500 0.41 Options vested (434,329) 0.73 Options forfeited (301,033) 0.62 Balance at December 31, 2017 5,395,236 0.50 6.73 Total fair value of options granted for the six months ended December 31, 2017 and December 31, 2016 was $ 282,559 420,680 799,896 1.5 The Company compensates its directors with RSUs and cash. On November 14, 2017, 1,163,075 290,770 On November 14, 2016, 581,816 563,635 18,181 On November 17, 2015, 864,000 As of December 31, 2017, there were 4,142,305 2,071,276 Number of Weighted Balance at June 30, 2016 4,029,244 $ 1.03 RSUs granted 1,671,816 1.15 Shares issued (144,728) 0.75 Balance at June 30, 2017 5,556,332 1.07 RSUs granted 3,343,075 0.43 RSUs forfeited (852,231) 0.87 Shares issued (493,998) 1.20 Balance at December 31, 2017 7,553,178 0.80 |
WARRANTS
WARRANTS | 6 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
WARRANTS | NOTE 11 - WARRANTS On August 7, 2017, 220,000 0.40 On June 22, 2017, 357,500 2.5 0.42 On February 28, 2016, 45,000 0.37 45,000 29,162 On June 19, 2012, 579,061 12 2.375 306,902 On May 1, 2012, 511,604 2,465,000 2.65 On September 26, 2013, 3,157,894 3.0 0.95 1,710,525 On September 26, 2013, 81,579 3.0 0.95 Number of Weighted Balance at June 30, 2016 2,655,610 $ 1.43 Warrants granted 357,500 0.42 Warrants exercised (45,000) 0.37 Warrants expired (2,610,610) 1.45 Balance at June 30, 2017 357,500 0.42 Warrants granted 220,000 0.40 Balance at December 31, 2017 577,500 0.41 |
BASIC AND DILUTED NET LOSS PER
BASIC AND DILUTED NET LOSS PER SHARE | 6 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
BASIC AND DILUTED NET LOSS PER SHARE | NOTE 12 - BASIC AND DILUTED NET LOSS PER SHARE Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period reported. Diluted net loss per common share is computed giving effect to all dilutive potential common shares that were outstanding for the period reported. Diluted potential common shares consist of incremental shares issuable upon exercise of stock options and warrants and conversion of preferred stock. In computing diluted net loss per share for the three and six months ended December 31, 2017 and December 30, 2016, no adjustment has been made to the weighted average outstanding common shares as the assumed exercise of outstanding options and warrants and conversion of preferred stock is anti-dilutive. December 31, 2017 December 31, 2016 Stock options and restricted stock units 16,219,826 12,383,113 Stock warrants 577,500 818,506 Series B preferred shares 3,683,918 3,337,448 Total 20,481,244 16,539,067 |
EQUITY
EQUITY | 6 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
EQUITY | NOTE 13 - EQUITY Series B Convertible Preferred Stock On September 26, 2013, the Company entered into a Securities Purchase Agreement with certain investors providing for the sale of 3,000 500 700 822,867 1,000 10 2,909,873 2,300 3,683,918 0.95 5,799,722 3,157,895 0.95 Series C Convertible Preferred Stock On July 13, 2015, we entered into a Securities Purchase Agreement with SPI in connection with entering into a global strategic partnership, which includes a Securities Purchase Agreement, a Supply Agreement and a Governance Agreement. Pursuant to the Securities Purchase Agreement, we sold SPI for an aggregate purchase price of $ 33,390,000 8,000,000 0.6678 28,048 0.6678 42,000,600 50,000,000 36,729,000 0.7346 At closing of the SPI transaction on July 13, 2015, the Company recognized the fair value of $6.8 million for the Common Stock (determined by reference to the closing price of the Company’s Common Stock on the NYSE American) as an increase to equity. The Company also recognized as equity the fair value of $ 13.3 13,290,000 Pursuant to the Supply Agreement, the Company agreed to sell and SPI agreed to purchase products and services offered by the Company from time to time, including energy management system solutions for solar projects. Under the Supply Agreement, SPI agreed to purchase energy storage systems with a total combined power output of 40 megawatts over a four-year period, as provided for in the Supply Agreement. SPI never made any purchases under the Supply Agreement. Due to SPI’s failure to meet its purchase obligations, on May 4, 2017 the Company terminated the Supply Agreement. As a result of the termination of the Supply Agreement, it is no longer possible for SPI to satisfy the conditions that would have enabled it to convert the Series C Preferred Stock or exercise the Warrant, and for the Company to recognize revenue as sales occurred under the Supply Agreement. Applying guidance from ASC 405-20, liabilities should be derecognized only when the obligor is legally released from the obligation, which occurred for the Company upon the exercise of the termination rights. Since the Supply Agreement termination was not standard operating revenues of the Company, the derecognition of the deferred revenue liability of $13,290,000 resulted in a gain and was recorded as other income in the fourth quarter of fiscal 2017. The Series C Preferred Stock are non-voting, are perpetual, are not eligible for dividends, and are not redeemable. Upon any liquidation, dissolution, or winding up of the Company (a “Liquidation”) or a Fundamental Transaction (as defined in the Certificate of Designation for the Series C Preferred Stock), holders of the Series C Preferred Stock are entitled to receive out of the assets of the Company an amount equal to the higher of (1) the Stated Value, which was $ 28,048,000 6,173,422 100,000 In connection with the closing of the SPI transaction and pursuant to the Securities Purchase Agreement, the Company entered into the Governance Agreement. Under the Governance Agreement, for so long as SPI holds at least 10,000 25 The Governance Agreement provides that for so long as SPI holds the Requisite Shares, the Company will not take any of the following actions without the affirmative vote of SPI: (a) change the conduct by the Company’s business; (b) change the number or manner of appointment of the directors on the board; (c) cause the dissolution, liquidation or winding-up of the Company or the commencement of a voluntary proceeding seeking reorganization or other similar relief; (d) other than in the ordinary course of conducting the Company’s business, cause the incurrence, issuance, assumption, guarantee or refinancing of any debt if the aggregate amount of such debt and all other outstanding debt of the Company exceeds $ 10 2 120,000 7 5 On August 30, 2016, SPI entered into a Share Purchase Agreement with Melodious Investments Company Limited (“Melodious”) pursuant to which SPI sold to Melodious the 8,000,000 Common Stock June 22, 2017 Underwritten Public Offering On June 22, 2017, the Company completed an underwritten public offering of its Common Stock at a price to the public of $ 0.35 7,150,000 2,073,055 1,072,500 367,000 119,459 |
COMMITMENTS
COMMITMENTS | 6 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS | NOTE 14 - COMMITMENTS Leasing Activities Operating Leases Operating lease expense recognized during the three and six months ended December 31, 2017 was $ 20,356 41,620 14,539 29,077 In December 2017, the Company entered into a seven-year office lease agreement to replace the Company’s former headquarters, which was sold in the third quarter of fiscal 2018. Monthly rent for the first twelve months of the lease is $ 13,845 1.5 As of December 31, 2017, and June 30, 2017, the carrying value of the right of use asset was $ 1,170,793 150,214 179,865 990,928 65,004 85,210 December 31, 2017 June 30, 2017 Weighted-average remaining lease term (in years) Operating leases 6.42 2.37 Weighted-average discount rate Operating leases 5.0 % 5.0 % 2018 $ 109,405 2019 248,148 2020 210,260 2021 172,317 2022 174,873 Thereafter 463,275 Total undiscounted lease payments 1,378,278 Present value adjustment (207,485) Net operating lease liabilities $ 1,170,793 Short-term Leases The Company leases facilities in Honolulu, Hawaii, Milwaukee and Madison, Wisconsin and Shanghai, China from unrelated parties under lease terms that will expire over the next twelve months. Monthly rent for the twelve-month rental periods is between $400 and $2,010 per month. Rent expense of $ 12,213 21,135 22,529 46,290 |
RETIREMENT PLANS
RETIREMENT PLANS | 6 Months Ended |
Dec. 31, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
RETIREMENT PLANS | NOTE 15 - RETIREMENT PLANS The Company sponsors a defined contribution retirement plan under Section 401(k) of the Internal Revenue Code, the EnSync, Inc. 401(k) Savings Plan. Employees may elect to contribute up to the IRS annual contribution limit. The Company matches employees’ contributions up to 4 100 Total employer contributions recognized in the condensed consolidated statements of operations under this plan were $ 49,160 100,913 35,740 84,558 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 16 - INCOME TAXES The Company had no current or deferred provision (benefit) for income taxes for the three and six months ended December 31, 2017 or December 31, 2016. The income tax provision for the three and six months ended December 31, 2017 and December 31, 2016 was determined by applying an estimated annual effective tax rate of 0.0 On December 22, 2017, the President of the U.S. signed the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) into law. The Tax Act includes several changes to existing tax law, including a permanent reduction in the U.S. federal statutory tax rate from 35 21 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 17 - RELATED PARTY TRANSACTIONS On September 7, 2016, the Company entered into a Membership Interest Purchase Agreement (“MIPA”) with Theodore Peck, the CEO of the Company’s 85 592,000 592,000 573,353 |
SUMMARY OF SIGNIFICANT ACCOUN25
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business EnSync, Inc. and its subsidiaries, which are often referenced as EnSync Energy for marketing and branding purposes (“EnSync Energy,” “we,” “us,” “our,” or the “Company”) is an energy innovation company whose technologies and capabilities are designed to deliver the least expensive, highest value and most reliable electricity. EnSync Energy’s modular technologies and services synchronize power sources to meet dynamic and evolving energy environments, enable real-time prioritization of distributed energy resources and provide grid stability and economic optimization. EnSync Energy offers integrated solutions from concept through design, project finance, commissioning, and operating and maintenance, serving the commercial and industrial (“C&;I”) and multi-tenant building, utility and off-grid markets. Incorporated in 1998, EnSync Energy is headquartered in Menomonee Falls, Wisconsin, USA, with offices in Madison, Wisconsin, Petaluma, California, Honolulu, Hawaii and Shanghai, China. EnSync Energy develops and commercializes product and service solutions for the distributed energy generation market, including energy management systems, energy storage systems, applications and internet of energy platforms that link distributed energy resources with the grid network. These solutions are critical to the transition from a “coal-centric economy” to one reliant on renewable energy sources. EnSync Energy synchronizes conventional utility, distributed generation and storage assets to seamlessly ensure the least expensive and most reliable electricity available, thus enabling the future of energy networks. EnSync Energy delivers fully integrated systems utilizing proprietary direct current power control hardware, energy management software and extensive experience with energy storage technologies. Our internet of energy control platform adapts to ever-changing generation and load variables, as well as changes in utility prices and programs, aiming to ensure the means to make and/or save money behind-the-meter while concurrently providing utilities the opportunity to use distributed energy resource systems for various grid enhancing services. EnSync Energy’s systems can easily integrate distributed energy resources with the grid, island from the grid and serve as a microgrid, and be deployed as self-contained microgrids, delivering electricity to sites for which no grid exists. EnSync Energy brings vital power control and energy storage solutions to problems caused by the incorporation of increasingly pervasive renewable energy generating assets that are part of the grid power transmission and distribution network used in commercial, industrial and multi-tenant buildings. In addition to ensuring resilient and high-value electricity to off-takers, utilities can benefit from EnSync Energy’s systems by relying on such assets for visibility, aggregation and control as they begin to use distributed energy resources to ensure a more fortified grid via grid services. The Company also develops and commercializes energy management systems for off-grid applications such as island or remote power. |
Power Purchase Agreements | Power Purchase Agreements In addition to customer-direct systems sales, we are addressing our target markets as a developer and a financial packager through the use of power purchase agreements (“PPAs”). Navigant Research forecasts the annual market for solar plus energy storage distributed energy systems to grow to nearly $50 billion by 2026, with a 2017 to 2026 compound annual growth rate of more than 40 percent. Under this PPA structure, we agree to develop and supply a system that uses our and other companies’ products and the offtaker agrees to purchase electricity from the completed system at a fixed rate for typically a 20-year period. Through these arrangements, the offtaker receives the benefit of a low and fixed price for electricity without incurring the capital expenditures required to develop and build the system. Because building these PPA projects requires significant long-term capital outlays, we do not intend to own the PPA systems and seek to sell them to third parties once we have completed the site development process. Site development activities include: (i) finalizing the engineering design of the system, (ii) applying for and receiving the necessary permits for construction of the system and (iii) negotiation of an interconnection agreement with the local utility. This site development process typically takes three to four months. We typically do not begin construction of a specific project until it has been sold to a third party. Accordingly, during the site development process, we engage in a sale process and provide interested purchasers with information related to the system. The purchase price for a particular system is determined through a formula that we believe is customary in the solar industry that takes into account the revenue stream to be received from the offtaker discounted to present value based on customary internal rates of return for similar projects, the costs of completing, maintaining and administering the system and certain other factors. Once the system has been sold, we begin construction which includes procurement of the necessary equipment, physical construction and commissioning of the system. The construction period varies based on many internal and external factors, but is typically completed within six to nine months. Our sales agreement with the buyer of the system typically provides for us to receive an upfront payment and additional progress payments to be made based upon achievement of certain key construction and commissioning milestones. We recognize revenue from these PPA arrangements on a percentage of completion basis as we build out and commission the system. Any excess cash received from the system purchaser in excess of recognized revenue is recorded as billings in excess of costs and estimated earnings and carried as a liability on our condensed consolidated financial statements. Based on our experience to date, we expect to recognize all revenue from a particular PPA system typically within 12 months of the signing of the related PPA agreement. We may also enter into a service agreement with the owner of a PPA system pursuant to which we provide ongoing administrative, operating and maintenance services. These agreements usually have a term which matches the PPA term. We recognize revenue from a service agreement ratably over the life of the related agreement. The condensed consolidated financial statements include the accounts of the Company and those of its wholly-owned subsidiaries ZBB Energy Pty Ltd. (formerly known as ZBB Technologies, Ltd.), DCfusion, LLC (“DCfusion”), various PPA project subsidiaries, its eighty-five percent owned subsidiary Holu Energy LLC (“Holu”), and its sixty percent owned subsidiary ZBB PowerSav Holdings Limited (“Holdco”) located in Hong Kong, which was formed in connection with the Company’s investment in a China joint venture. |
Interim Financial Data | Interim Financial Data The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial data and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of adjustments of a normal and recurring nature) considered necessary for fair presentation of the results of operations have been included. Operating results for the three and six months ended December 31, 2017 are not necessarily indicative of the results that might be expected for the year ending June 30, 2018. The condensed consolidated balance sheet at June 30, 2017 has been derived from audited financial statements at that date, but does not include all of the information and disclosures required by US GAAP. For a more complete discussion of accounting policies and certain other information, refer to the Company’s Annual Report filed on Form 10-K for the fiscal year ended June 30, 2017 filed with the Securities and Exchange Commission (“SEC”) on September 27, 2017. |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly and majority-owned subsidiaries and have been prepared in accordance with US GAAP and are reported in US dollars. For subsidiaries in which the Company’s ownership interest is less than 100%, the noncontrolling interests are reported in stockholders’ equity in the condensed consolidated balance sheets. The noncontrolling interests in net income (loss), net of tax, are classified separately in the condensed consolidated statements of operations. All significant intercompany accounts and transactions have been eliminated in consolidation. The Company’s fiscal year end is June 30. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. It is reasonably possible that the estimates we have made may change in the near future. Significant estimates underlying the accompanying condensed consolidated financial statements include those related to: · going concern assessment; · the timing of revenue recognition; · allocation of purchase price in a business combination; · the allowance for doubtful accounts; · provisions for excess and obsolete inventory; · the lives and recoverability of property, plant and equipment and other long-lived assets, including the testing for impairment; · testing of goodwill for impairment; · contract costs, losses and reserves; · warranty obligations; · income tax valuation allowances; · discount rates for finance and operating lease liabilities; · stock-based compensation; and · valuation of equity instruments and warrants. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, a note receivable, accounts payable, bank loans, notes payable, equipment financing, equity instruments and warrants. The carrying amounts of the Company’s financial instruments approximate their respective fair values due to the relatively short-term nature of these instruments, except for the bank loans, notes payable, equipment financing, equity instruments and warrants. The carrying amounts of the bank loans and notes payable approximate fair value due to the interest rate and terms approximating those available to us for similar obligations. The interest rate on the equipment financing obligation was imputed based on the requirements described in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 842-40-30-6. The fair value of the nonconvertible attribute and conversion option of the Series C convertible preferred stock (the “Series C Preferred Stock”) and related warrant was determined using the Option-Pricing Method (“OPM”) as described in the AICPA Accounting and Valuation Guide entitled Valuation of Privately-Held-Company Equity Securities Issued as Compensation and a “with” and “without” methodology to bifurcate the Series C Preferred Stock conversion feature. The OPM model treats the various equity securities as call options on the total equity value contingent upon each security’s strike price or participation rights. The Black-Scholes inputs utilized for the OPM model were: (i) an aggregate equity value estimated based on the back-solve methodology to reconcile the closing common stock price as of the valuation date; (ii) a term in alignment with the terms of our supply agreement with SPI Energy Co., LTD. (“SPI”) (formerly known as Solar Power, Inc.); (iii) a risk free rate from the Federal Reserve Board’s H.15 release as of the transaction date; (iv) the volatility of the price of the Company’s publicly traded stock; and (v) the performance vesting requirements of the equity instruments that were expected to be met. The Company accounts for the fair value of financial instruments in accordance with FASB ASC Topic 820, “Fair Value Measurements and Disclosures.” Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The degree of judgment utilized in measuring the fair value of assets and liabilities generally correlate to the level or pricing observability. FASB ASC Topic 820 describes a fair value hierarchy based on the following three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. Level 2 inputs are inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly, for similar assets or liabilities in active markets. Level 3 inputs are unobservable inputs for the asset or liability. As such, the prices or valuation techniques require inputs that are both significant to the fair value measurement and are unobservable. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents. The Company maintains its cash deposits at financial institutions predominately in the United States, Australia, Hong Kong and China. The Company has not experienced any losses in such accounts. |
Accounts Receivable | Accounts Receivable Credit is extended based on an evaluation of a customer’s financial condition. Accounts receivable are stated at the amount the Company expects to collect from outstanding balances. The Company records allowances for doubtful accounts based on customer-specific analysis and general matters such as current assessments of past due balances and economic conditions. The Company writes off accounts receivable against the allowance when they become uncollectible. The Company had no allowance for doubtful accounts as of December 31, 2017. Accounts receivable are stated net of an allowance for doubtful accounts of $ 47,307 December 31, 2017 June 30, 2017 Current $ 396,909 $ 309,156 30-60 days 1,450 - 60-90 days 9,343 - Over 90 days 9,128 160,750 Total $ 416,830 $ 469,906 |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value, defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Cost is computed using standard cost, which approximates actual cost, on a first-in, first-out basis. The Company provides inventory write-downs on excess and obsolete inventories based on historical usage. The write-down is measured as the difference between the cost of the inventory and net realizable value based upon assumptions about usage and charged to the provision for inventory, which is a component of cost of sales. |
Costs and Estimated Earnings in Excess of Billings/Billings in Excess of Costs and Estimated Earnings | Costs and Estimated Earnings in Excess of Billings/Billings in Excess of Costs and Estimated Earnings Costs and estimated earnings in excess of billings represent amounts earned and reimbursable under contracts accounted for under the percentage of completion method. The timing of when we bill our customers is generally dependent upon advance billing terms, milestone billings based on the completion of certain phases of the work, or when services are provided. Based on our historical experience, we generally consider the collection risk related to these amounts to be low. When events or conditions indicate that the amounts outstanding may become uncollectible, an allowance is estimated and recorded. We anticipate that substantially all of such amounts will be billed and collected over the next twelve months. Billings in excess of costs and estimated earnings represents amounts billed to customers in advance of being earned under contracts accounted for under the percentage of completion method. We anticipate that substantially all such amounts will be earned over the next twelve months. |
Other Current Assets | Note Receivable The Company has a note receivable from an unrelated party. We regularly evaluate the financial condition of the borrower to determine if any reserve for an uncollectible amount should be established. To date, no such reserve is required. Deferred Customer Project Costs Deferred customer project costs consist primarily of the costs of products delivered and services performed that are subject to additional performance obligations or customer acceptance. These deferred customer project costs are expensed at the time the related revenue is recognized. Project Assets Project assets consist primarily of capitalized costs which are incurred by the Company prior to the sale of the photovoltaic, storage or energy management systems and PPA to a third-party. These costs are typically for the construction, installation and development of these projects. Construction and installation costs include primarily material and labor costs. Development fees can include legal, consulting, permitting and other similar costs. |
Property, Plant and Equipment | Estimated Useful Lives Manufacturing equipment 3 - 7 years Office equipment 3 - 7 years Building and improvements 7 - 40 years |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets In accordance with FASB ASC Topic 360, "Impairment or Disposal of Long-Lived Assets," the Company assesses potential impairments to its long-lived assets including property, plant and equipment and intangible assets when there is evidence that events or changes in circumstances indicate that the carrying value may not be recoverable. If such an indication exists, the recoverable amount of the asset is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed in the statement of operations. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate. On October 12, 2017, the Company accepted an offer to sell its corporate headquarters for $ 2,340,000 447,000 2,187,317 |
Investment in Investee Company | Investment in Investee Company Investee companies that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity method of accounting. Whether or not the Company exercises significant influence with respect to an investee depends on an evaluation of several factors including, among others, representation on the investee company’s board of directors and ownership level, which is generally a 20 50 When the Company’s carrying value in an equity method investee company is reduced to zero, no further losses are recorded in the Company’s condensed consolidated financial statements unless the Company guaranteed obligations of the investee company or has committed additional funding. When the investee company subsequently reports income, the Company will not record its share of such income until it equals or exceeds the amount of its share of losses not previously recognized. |
Goodwill | Goodwill Goodwill is recognized as the excess cost of an acquired entity over the net amount assigned to assets acquired and liabilities assumed. Goodwill is not amortized but reviewed for impairment annually as of June 30 or more frequently if events or changes in circumstances indicate that its carrying value may be impaired. These conditions could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit. The Company has one reporting unit. The first step of the impairment test requires the comparing of a reporting unit’s fair value to its carrying value. If the carrying value is less than the fair value, no impairment exists and the second step is not performed. If the carrying value is higher than the fair value, there is an indication that impairment may exist and the second step must be performed to compute the amount of the impairment. In the second step, the impairment is computed by estimating the fair values of all recognized and unrecognized assets and liabilities of the reporting unit and comparing the implied fair value of reporting unit goodwill with the carrying amount of that unit’s goodwill. The Company determined fair value as evidenced by market capitalization, and concluded that there was no need for an impairment charge as of December 31, 2017 and June 30, 2017. |
Warranty Obligations | Warranty Obligations The Company typically warrants its products for the shorter of twelve months after installation or eighteen months after date of shipment. Warranty costs are provided for estimated claims and charged to cost of product sales as revenue is recognized. Warranty obligations are also evaluated quarterly to determine a reasonable estimate for the replacement of potentially defective materials of all energy storage systems that have been shipped to customers within the warranty period. While the Company actively engages in monitoring and improving its evolving battery and production technologies, there is only a limited product history and relatively short time frame available to test and evaluate the rate of product failure. Should actual product failure rates differ from the Company’s estimates, revisions are made to the estimated rate of product failures and resulting changes to the liability for warranty obligations. In addition, from time to time, specific warranty accruals may be made if unforeseen technical problems arise. Three months ended December 31, Six months ended December 31, 2017 2016 2017 2016 Beginning balance $ 196,691 $ 24,273 $ 239,173 $ 27,207 Accruals for warranties during the period 9,340 21,224 10,192 27,139 Net settlements during the period (30,130) (13,350) (64,740) (170,680) Adjustments relating to preexisting warranties 5,724 6,007 (3,000) 154,488 Ending balance $ 181,625 $ 38,154 $ 181,625 $ 38,154 The Company offers extended warranty contracts to its customers. These contracts typically cover a period up to twenty years and include advance payments that are recorded initially as long-term deferred revenue. Revenue is recognized in the same manner as the costs incurred to perform under the extended warranty contracts. Costs associated with these extended warranty contracts are expensed to cost of product sales as incurred. Three months ended December 31, Six months ended December 31, 2017 2016 2017 2016 Beginning balance $ 430,762 $ 422,638 $ 431,700 $ - Deferred revenue for new extended warranty contracts - - - 422,638 Deferred revenue recognized (937) - (1,875) - Ending balance 429,825 422,638 429,825 422,638 Less: current portion of deferred revenue for extended warranty contracts 7,187 - 7,187 - Long-term deferred revenue for extended warranty contracts $ 422,638 $ 422,638 $ 422,638 $ 422,638 |
Revenue Recognition | Revenue Recognition Revenues are recognized when persuasive evidence of a contractual arrangement exists, delivery has occurred or services have been rendered, the seller’s price to buyer is fixed and determinable and collectability is reasonably assured. The portion of revenue related to installation and final acceptance, is deferred until such installation and final customer acceptance are completed. From time to time, the Company may enter into separate agreements at or near the same time with the same customer. The Company evaluates such agreements to determine whether they should be accounted for individually as distinct arrangements or whether the separate agreements are, in substance, a single multiple element arrangement. The Company evaluates whether the negotiations are conducted jointly as part of a single negotiation, whether the deliverables are interrelated or interdependent, whether the fees in one arrangement are tied to performance in another arrangement, and whether elements in one arrangement are essential to another arrangement. The Company’s evaluation involves significant judgment to determine whether a group of agreements might be so closely related that they are, in effect, part of a single arrangement. Our collaboration agreements typically involve multiple elements or deliverables, including upfront fees, contract research and development, milestone payments, technology licenses or options to obtain technology licenses and royalties. For these arrangements, revenues are recognized in accordance with FASB ASC Topic 605-25, “Revenue Recognition Multiple Element Arrangements.” The Company’s revenues associated with multiple element contracts is based on the selling price hierarchy, which utilizes vendor-specific objective evidence (“VSOE”) when available, third-party evidence (“TPE”) if VSOE is not available, and if neither is available then the best estimate of the selling price is used. The Company utilizes best estimate for its multiple deliverable transactions as VSOE and TPE do not exist. To be considered a separate element, the product or service in question must represent a separate unit under SEC Staff Accounting Bulletin 104, and fulfill the following criteria: the delivered item(s) has value to the customer on a standalone basis; there is objective and reliable evidence of the fair value of the undelivered item(s); and if the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in our control. For arrangements containing multiple elements, revenue from time and materials based service arrangements is recognized as the service is performed. Revenue relating to undelivered elements is deferred at the estimated fair value until delivery of the deferred elements. If the arrangement does not meet all criteria above, the entire amount of the transaction is deferred until all elements are delivered. The portion of revenue related to engineering and development is recognized ratably upon delivery of the goods or services pertaining to the underlying contractual arrangement or revenue is recognized as certain activities are performed by the Company over the estimated performance period. For PPA projects with no identified buyer until at or near the completion of the project, the Company recognizes revenue for the sales of PPA projects following the guidance in FASB ASC Topic 360, “Accounting for Sales of Real Estate.” We record the sale as revenue after the initial and continuing investment requirements have been met and whether collectability from the buyer is reasonably assured, which generally occurs at the end of a project. We may align our revenue recognition and release our project assets or deferred PPA project costs to cost of sales with the receipt of payment from the buyer if the sale has been consummated and we have transferred the usual risks and rewards of ownership to the buyer. For PPA projects with an identified buyer, the Company recognizes revenue for the sales of PPA projects using the percentage of completion method for recording revenues on long term contracts under FASB ASC Topic 605-35, “Construction-Type and Production-Type Contracts,” measured by the percentage of cost incurred to date to estimated total cost for each contract. That method is used because management considers total cost to be the best available measure of progress on contracts. Because of inherent uncertainties in estimating costs, it is at least reasonably possible that the estimates used will change within the near term. The Company charges shipping and handling fees when products are shipped or delivered to a customer, and includes such amounts in product revenues and shipping costs in cost of sales. The Company reports its revenues net of estimated returns and allowances. Revenues for the three and six months ended December 31, 2017 were comprised of five significant customers ( 92 83 95.6 89.9 The Company had three significant customers with an aggregate outstanding receivable balance of $ 370,571 89 336,685 72 |
Engineering, Development, and License Revenues | Engineering, Development, and License Revenues We assess whether a substantive milestone exists at the inception of our agreements. In evaluating if a milestone is substantive we consider whether: · Substantive uncertainty exists as to the achievement of the milestone event at the inception of the arrangement; · The achievement of the milestone involves substantive effort and can only be achieved based in whole or in part on our performance or the occurrence of a specific outcome resulting from our performance; · The amount of the milestone payment appears reasonable either in relation to the effort expended or the enhancement of the value of the delivered item(s); · There is no future performance required to earn the milestone; and · The consideration is reasonable relative to all deliverables and payment terms in the arrangement. If any of these conditions are not met, we do not consider the milestone to be substantive and we defer recognition of the milestone payment and recognize it as revenue over the estimated period of performance, if any. The Company recorded Engineering and development costs for a total of $ 0 937,725 |
Advanced Engineering and Development Expenses | Advanced Engineering and Development Expenses In accordance with FASB ASC Topic 730, “Research and Development,” the Company expenses advanced engineering and development costs as incurred. These costs consist primarily of materials, labor and allocable indirect costs incurred to design, build and test prototype units, as well as the development of manufacturing processes for these units. Advanced engineering and development costs also include consulting fees and other costs. To the extent these costs are separately identifiable, incurred and funded by advanced engineering and development type agreements with outside parties, they are shown separately on the condensed consolidated statements of operations as a “Cost of engineering and development.” |
Stock-Based Compensation | Stock-Based Compensation The Company measures all “Share-Based Payments," including grants of stock options, restricted shares and restricted stock units (“RSUs”) in its condensed consolidated statements of operations based on their fair values on the grant date, which is consistent with FASB ASC Topic 718, “Stock Compensation,” guidelines. Accordingly, the Company measures share-based compensation cost for all share-based awards at the fair value on the grant date and recognizes share-based compensation over the service period for awards that are expected to vest. The fair value of stock options is determined based on the number of shares granted and the price of the shares at grant, and calculated based on the Black-Scholes valuation model. The Company compensates its outside directors with RSUs and cash. The grant date fair value of the RSU awards is determined using the closing stock price of the Company’s common stock (the “Common Stock”) on the day prior to the date of the grant, with the compensation expense amortized over the vesting period of RSU awards, net of estimated forfeitures. The Company only recognizes expense for those options or shares that are expected ultimately to vest, using two attribution methods to record expense, the straight-line method for grants with only service-based vesting or the graded-vesting method, which considers each performance period, for all other awards. See further discussion of stock-based compensation in Note 10. |
Advertising Expense | Advertising Expense Advertising costs were charged to selling, general, and administrative expenses as incurred. Advertising costs of $ 28,925 121,621 13,663 55,606 |
Income Taxes | Income Taxes The Company records deferred income taxes in accordance with FASB ASC Topic 740, “Accounting for Income Taxes.” FASB ASC Topic 740 requires recognition of deferred income tax assets and liabilities for temporary differences between the tax basis of assets and liabilities and the amounts at which they are carried in the financial statements, based upon the enacted tax rates in effect for the year in which the differences are expected to reverse. In addition, a valuation allowance is recognized if it is more likely than not that some or all of the deferred income tax assets will not be realized in the foreseeable future. Deferred income tax assets are reviewed for recoverability based on historical taxable income, the expected reversals of existing temporary differences, tax planning strategies and projections of future taxable income. As a result of this analysis, the Company has provided for a valuation allowance against its net deferred income tax assets as of December 31, 2017 and June 30, 2017. The Company applies a more-likely-than-not recognition threshold for all tax uncertainties as required under FASB ASC Topic 740, which only allows the recognition of those tax benefits that have a greater than fifty percent likelihood of being sustained upon examination by the taxing authorities. The Company’s U.S. Federal income tax returns for the years ended June 30, 2014 through June 30, 2017 and the Company’s Wisconsin income tax returns for the years ended June 30, 2013 through June 30, 2017 are subject to examination by taxing authorities. On August 2, 2017, the United States Internal Revenue Service (“IRS”) notified the Company of an income tax audit for the tax period ended June 30, 2015. The Company cannot reasonably estimate the ultimate outcome of the IRS audit; however, it believes that it has followed applicable U.S. tax laws and will defend its income tax positions. |
Foreign Currency | Foreign Currency The Company uses the United States dollar as its functional and reporting currency, while the Australian dollar and Hong Kong dollar are the functional currencies of its foreign subsidiaries. Assets and liabilities of the Company’s foreign subsidiaries are translated into United States dollars at exchange rates that are in effect at the balance sheet date while equity accounts are translated at historical exchange rates. Income and expense items are translated at average exchange rates which were applicable during the reporting period. Translation adjustments are recorded in accumulated other comprehensive loss as a separate component of equity in the condensed consolidated balance sheets. |
Loss per Share | Loss per Share The Company follows the FASB ASC Topic 260, “Earnings per Share,” provisions which require the reporting of both basic and diluted earnings (loss) per share. Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings (net loss) per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. In accordance with the FASB ASC Topic 260, any anti-dilutive effects on net income (loss) per share are excluded. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, accounts receivable and costs and estimated earnings in excess of billings. The Company maintains significant cash deposits primarily with one financial institution. The Company has not previously experienced any losses on such deposits. Additionally, the Company performs periodic evaluations of the relative credit rating of the institution as part of its banking strategy. Concentrations of credit risk with respect to accounts receivable and costs and estimated earnings in excess of billings are limited due to accelerated payment terms in current customer contracts and creditworthiness of the current customer base. |
Reclassifications | Reclassifications Certain amounts previously reported have been reclassified to conform to the current presentation. The reclassifications did not impact prior period results of operations, cash flows, total assets, total liabilities, or total equity. |
Segment Information | Segment Information The Company has determined that it operates as one reportable segment. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective and not included below will not have a material impact on our financial position or results of operations upon adoption. In May 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-09 Compensation Stock Compensation (Topic 718): Scope of Modification Accounting. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. The guidance is effective prospectively for all companies for annual periods beginning on or after December 15, 2017, including interim periods within those annual periods. The Company does not expect adoption of this guidance to have a significant impact on its condensed consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04 Intangibles Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. To simplify the subsequent measurement of goodwill, the amendments eliminate Step 2 from the goodwill impairment test, under which in computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Under the amendments in ASU 2017-04, the annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. The guidance is effective prospectively for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect adoption of this guidance to have a significant impact on its condensed consolidated financial statements. In August 2016, the FASB issued ASU 2016-15 Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force). The amendments in ASU 2016-15 addresses eight specific cash flow issues and is intended to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted. The Company does not expect adoption of this guidance to have a significant impact on its condensed consolidated financial statements. In May 2016, the FASB issued ASU 2016-11 Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 EITF Meeting (SEC Update). ASU 2016-11 rescinds the certain SEC Staff Observer comments that are codified in Topic 605, Revenue Recognition, and Topic 932, Extractive Activities Oil and Gas, effective upon the adoption of Topic 606. Specifically, registrants should not rely on the following SEC Staff Observer comments upon adoption of Topic 606: (a) Revenue and Expense Recognition for Freight Services in Process, (b) Accounting for Shipping and Handling Fees and Costs, (c) Accounting for Consideration Given by a Vendor to a Customer (including Reseller of the Vendor’s Products), (d) Accounting for Gas-Balancing Arrangements (that is, use of the “entitlements method”). In addition, as a result of the amendments in Update 2014-16, the SEC staff is rescinding its SEC Staff Announcement, “Determining the Nature of a Host Contract Related to a Hybrid Instrument Issued in the Form of a Share under Topic 815,” effective concurrently with ASU 2014-16. The effective dates in ASU 2016-11 coincide with the effective dates of Topic 606 (ASU 2014-09) and ASU 2014-16. The Company previously reviewed ASU 2014-16 and determined that it is not applicable. As of December 31, 2017, and subject to the potential effects of any new related ASUs issued by the FASB, as well as the Company’s ongoing evaluation of transactions and contracts, the Company does not expect adoption of this guidance to have a significant impact on its condensed consolidated financial statements. In March 2016, the FASB issued ASU 2016-09 Compensation Stock Compensation (Topic 780): Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 modifies US GAAP by requiring the following, among others: (1) all excess tax benefits and tax deficiencies are to be recognized as income tax expense or benefit on the income statement (excess tax benefits are recognized regardless of whether the benefit reduces taxes payable in the current period); (2) excess tax benefits are to be classified along with other income tax cash flows as an operating activity in the statement of cash flows; (3) in the area of forfeitures, an entity can still follow the current US GAAP practice of making an entity-wide accounting policy election to estimate the number of awards that are expected to vest or may instead account for forfeitures when they occur; and (4) classification as a financing activity in the statement of cash flows of cash paid by an employer to the taxing authorities when directly withholding shares for tax withholding purposes. ASU 2016-09 is effective for annual periods beginning after January 1, 2017, including interim periods within those annual periods. Early adoption is permitted. The Company was required to adopt this standard beginning July 1, 2017. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements. In July 2015, the FASB issued ASU 2015-11 Inventory (Topic 330): Simplifying the Measurement of Inventory. The amendment was issued to modify the process in which entities measure inventory. The amendment does not apply to inventory measured using last-in, first-out (“LIFO”) or the retail inventory method. This amendment requires entities to measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments are effective for fiscal years beginning after December 31, 2016, including interim periods within those annual periods on a prospective basis with earlier application permitted as of the beginning of an interim or annual reporting period. The Company was required to adopt this standard beginning July 1, 2017. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements. In August 2014, the FASB issued ASU 2014-15 Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40). The update requires management to perform a going concern assessment if there is substantial doubt about an entity’s ability to continue as a going concern within one year of the financial statement issuance date. Under the new standard, the definition of substantial doubt incorporates a likeliness threshold of “probable” that is consistent with the current use of the term defined in US GAAP for loss contingencies (Topic 450 Contingencies). Management will need to consider conditions that are known and reasonably knowable at the financial statement issuance date and determine whether the entity will be able to meet its obligations within the one-year period. Additional disclosures are required if it is probable that the entity will be unable to meet its current obligations. The amendments in this ASU will be effective for annual periods ending after December 15, 2016. Early adoption is permitted. The Company was required to adopt this standard beginning July 1, 2017. The adoption of this guidance did not have a material impact on the Company’s condensed consolidated financial statements. In May 2014, the FASB issued ASU 2014-09 Revenue from Contracts with Customers (Topic 606). The amendment outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying the revenue model to contracts within its scope, an entity identifies the contract(s) with a customer, identifies the performance obligations in the contract, determines the transaction price, allocates the transaction price to the performance obligations in the contract and recognizes revenue when the entity satisfies a performance obligation. ASU 2014-09 also includes additional disclosure requirements regarding revenue, cash flows and obligations related to contracts with customers. In addition, the FASB issued ASU 2015-14 Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (issued August 2015); ASU 2016-08 Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (issued March 2016); ASU 2016-10 Revenue from Contracts with Customers Identifying Performance Obligations and Licensing (issued April 2016); ASU 2016-12 Revenue from Contracts with Customers Narrow-Scope Improvements and Practical Expedients (issued May 2016); ASU 2016-20 Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers (issued December 2016); and ASU 2017-13 - Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842) Amendments to SEC Paragraphs Pursuant to the Staff Announcement at the July 20, 2017 EITF Meeting and Rescission of Prior SEC Staff Announcements and Observer Comments (issued September 2017), which deferred the effective date of ASU 2014-09 for all entities by one year and clarified the guidance on certain items such as reporting revenue as a principal versus agent, identifying performance obligations, accounting for intellectual property licenses, assessing collectability, presentation of sales taxes, impairment testing for contract costs, disclosure of performance obligations, and provided additional implementation guidance. Public business entities should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim periods within those annual periods. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim periods within those annual periods. The guidance permits companies to either apply the requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a cumulative adjustment. The Company has begun the assessment of this guidance through review of customer contracts and identification of any performance obligations. Based on our preliminary results as of December 31, 2017, and subject to the potential effects of any new related ASUs issued by the FASB, as well as the Company’s ongoing evaluation of transactions and contracts, the Company does not expect adoption of this guidance to have a significant impact on its condensed consolidated financial statements. The Company anticipates adopting this guidance at the beginning of fiscal 2019 using the full retrospective approach. |
SUMMARY OF SIGNIFICANT ACCOUN26
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Accounts Receivable | The composition of accounts receivable by aging category is as follows as of: December 31, 2017 June 30, 2017 Current $ 396,909 $ 309,156 30-60 days 1,450 - 60-90 days 9,343 - Over 90 days 9,128 160,750 Total $ 416,830 $ 469,906 |
Estimated Useful Lives Used For Each Class of Depreciable Assets | Estimated Useful Lives Manufacturing equipment 3 - 7 years Office equipment 3 - 7 years Building and improvements 7 - 40 years |
Schedule Of Accrued Warranty Liability | The following is a summary of accrued warranty activity: Three months ended December 31, Six months ended December 31, 2017 2016 2017 2016 Beginning balance $ 196,691 $ 24,273 $ 239,173 $ 27,207 Accruals for warranties during the period 9,340 21,224 10,192 27,139 Net settlements during the period (30,130) (13,350) (64,740) (170,680) Adjustments relating to preexisting warranties 5,724 6,007 (3,000) 154,488 Ending balance $ 181,625 $ 38,154 $ 181,625 $ 38,154 |
Deferred Revenue, by Arrangement, Disclosure | A summary of changes to long-term deferred revenue for extended warranty contracts is as follows: Three months ended December 31, Six months ended December 31, 2017 2016 2017 2016 Beginning balance $ 430,762 $ 422,638 $ 431,700 $ - Deferred revenue for new extended warranty contracts - - - 422,638 Deferred revenue recognized (937) - (1,875) - Ending balance 429,825 422,638 429,825 422,638 Less: current portion of deferred revenue for extended warranty contracts 7,187 - 7,187 - Long-term deferred revenue for extended warranty contracts $ 422,638 $ 422,638 $ 422,638 $ 422,638 |
CHINA JOINT VENTURE (Tables)
CHINA JOINT VENTURE (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Related Party Sales and Purchase Activity | Activity with Meineng Energy is summarized as follows: Three months ended December 31, Six months ended December 31, 2017 2016 2017 2016 Product sales to Meineng Energy $ 10,293 $ 9,447 $ 23,301 $ 68,594 Cost of product sales to Meineng Energy 8,000 10,242 19,211 72,056 Product purchases from Meineng Energy 185,701 41,609 198,601 752,190 |
Schedule of Related Party Transactions | The total amount due to Meineng Energy is as follows: Decemebr 31, 2017 June 30, 2017 Net amount payable (due) to Meineng Energy $ 11,003 $ (12,299) |
Equity Method Investments | The operating results for Meineng Energy are summarized as follows: Three months ended December 31, Six months ended December 31, 2017 2016 2017 2016 Revenues $ 462,186 $ 359,676 $ 466,832 $ 1,138,831 Gross profit (loss) (60,494) 5,431 (61,580) 108,852 Loss from operations (438,601) (301,164) (812,527) (504,051) Net loss (426,114) (291,537) (773,019) (479,010) |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Net inventories are comprised of the following as of: December 31, 2017 June 30, 2017 Raw materials and subassemblies $ 1,566,273 $ 2,477,418 Work in progress - 4,595 Total $ 1,566,273 $ 2,482,013 |
PROPERTY, PLANT & EQUIPMENT (Ta
PROPERTY, PLANT & EQUIPMENT (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, plant, and equipment | Property, plant and equipment are comprised of the following: December 31, 2017 June 30, 2017 Land $ 179,713 $ 217,000 Building and improvements 3,122,662 3,532,375 Manufacturing equipment 3,169,597 4,255,385 Office equipment 454,562 454,562 Total, at cost 6,926,534 8,459,322 Less: accumulated depreciation (4,095,685) (5,013,069) Property, plant and equipment, net $ 2,830,849 $ 3,446,253 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | Accrued expenses are comprised of the following as of: December 31, 2017 June 30, 2017 Accrued compensation and benefits $ 535,546 $ 403,140 Accrued warranty 181,625 239,173 Right of use liability 179,865 65,004 Other 444,642 524,397 Total $ 1,341,678 $ 1,231,714 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Bank loans and notes payable | The Company’s long-term debt consisted of the following: December 31, 2017 June 30, 2017 Note payable to Wisconsin Econcomic Development Corporation payable in monthly installments of $23,685, including interest at 2%, with the final payment due May 1, 2018; collateralized by equipment purchased with the loan proceeds and substantially all assets of the Company not otherwise collateralized. $ 117,856 $ 257,959 Bank loan payable in fixed monthly installments of $6,800 of principal and interest at a rate of 0.25% below prime, as defined, subject to a floor of 5% with any remaining principal and interest due at maturity on June 1, 2018; collateralized by the building and land. 439,094 468,297 Equipment finance obligation under sale-leaseback, interest payable in quarterly installments ranging between $1,510 and $2,555 at an imputed interest rate of approximately 2.44% over 20 years ending March 31, 2036. 331,827 331,827 Long-term debt 888,777 1,058,083 Less: current maturities of long-term debt (556,950) (726,256) Long-term debt, net of current maturities $ 331,827 $ 331,827 |
Maximum aggregate annual principal payments for fiscal periods | Maximum aggregate annual principal payments as of December 31, 2017 are as follows: 2018 $ 556,950 2019 - 2020 - 2021 - 2022 - Thereafter 331,827 $ 888,777 |
EMPLOYEE AND DIRECTOR EQUITY 32
EMPLOYEE AND DIRECTOR EQUITY INCENTIVE PLANS (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule Of Share Based Payment Award Stock Options Valuation Assumptions | The following assumptions were used to estimate the fair value of options granted during the six months ended December 31, 2017 and December 31, 2016 using the Black-Scholes option-pricing model: Six months ended December 31, 2017 2016 Expected life of option (years) 4 4 Risk-free interest rate 1.59 - 2.09% 0.93 - 1.14% Assumed volatility 108.66 - 113.98% 104.69 - 108.35% Expected dividend rate 0.00% 0.00% Expected forfeiture rate 6.15 - 7.46% 7.42 - 9.18% |
Schedule Of Share Based Compensation Stock Options Activity | Information with respect to stock option activity is as follows: Number Weighted Average Balance at June 30, 2016 6,111,360 $ 0.88 6.96 Options granted 2,654,100 0.59 Options exercised (124,252) 0.56 Options forfeited (391,910) 2.55 Balance at June 30, 2017 8,249,298 0.71 6.50 Options granted 933,500 0.41 Options forfeited (516,150) 1.43 Balance at December 31, 2017 8,666,648 0.64 6.25 |
Disclosure Of Share Based Compensation Arrangements By Share Based Payment Award | The following table summarizes information relating to the stock options outstanding as of December 31, 2017: Outstanding Exercisable Range of Exercise Prices Number Average Weighted Number Average Weighted $0.28 to $1.00 7,892,198 6.45 $ 0.50 2,648,962 5.84 $ 0.53 $1.01 to $2.50 645,000 4.81 1.47 493,000 4.51 1.61 $2.51 to $5.00 60,200 1.39 3.87 60,200 1.39 3.87 $5.01 to $6.95 69,250 1.27 5.91 69,250 1.27 5.91 Balance at December 31, 2017 8,666,648 6.25 0.64 3,271,412 5.46 0.86 |
Schedule Of Unrecognized Compensation Cost Nonvested Awards | Information with respect to unvested employee stock option activity is as follows: Number Weighted Average Balance at June 30, 2016 4,852,367 $ 0.54 7.42 Options granted 2,654,100 0.59 Options vested (2,110,085) 0.57 Options forfeited (199,284) 0.80 Balance at June 30, 2017 5,197,098 0.54 6.93 Options granted 933,500 0.41 Options vested (434,329) 0.73 Options forfeited (301,033) 0.62 Balance at December 31, 2017 5,395,236 0.50 6.73 |
Schedule Of Share Based Compensation Restricted Stock Units Award Activity | Information with respect to RSU activity is as follows: Number of Weighted Balance at June 30, 2016 4,029,244 $ 1.03 RSUs granted 1,671,816 1.15 Shares issued (144,728) 0.75 Balance at June 30, 2017 5,556,332 1.07 RSUs granted 3,343,075 0.43 RSUs forfeited (852,231) 0.87 Shares issued (493,998) 1.20 Balance at December 31, 2017 7,553,178 0.80 |
WARRANTS (Tables)
WARRANTS (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
WARRANTS [Abstract] | |
Schedule of Stockholders' Equity Note, Warrants or Rights | Information with respect to warrant activity is as follows: Number of Weighted Balance at June 30, 2016 2,655,610 $ 1.43 Warrants granted 357,500 0.42 Warrants exercised (45,000) 0.37 Warrants expired (2,610,610) 1.45 Balance at June 30, 2017 357,500 0.42 Warrants granted 220,000 0.40 Balance at December 31, 2017 577,500 0.41 |
BASIC AND DILUTED NET LOSS PE34
BASIC AND DILUTED NET LOSS PER SHARE (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Potential common shares not included in calculating diluted net loss per share are as follows: December 31, 2017 December 31, 2016 Stock options and restricted stock units 16,219,826 12,383,113 Stock warrants 577,500 818,506 Series B preferred shares 3,683,918 3,337,448 Total 20,481,244 16,539,067 |
COMMITMENTS (Tables)
COMMITMENTS (Tables) | 6 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary Of Weighted average Discount Rate For Finance And Operating Leases | Information regarding the weighted-average remaining lease term and the weighted-average discount rate for operating leases are summarized below: December 31, 2017 June 30, 2017 Weighted-average remaining lease term (in years) Operating leases 6.42 2.37 Weighted-average discount rate Operating leases 5.0 % 5.0 % |
Schedule Of Future Minimum Rental Payments For Operating Leases | The table below reconciles the undiscounted cash flows for the first five years and total of the remaining years to the operating lease liabilities recorded in the condensed consolidated balance sheet as of December 31, 2017: 2018 $ 109,405 2019 248,148 2020 210,260 2021 172,317 2022 174,873 Thereafter 463,275 Total undiscounted lease payments 1,378,278 Present value adjustment (207,485) Net operating lease liabilities $ 1,170,793 |
SUMMARY OF SIGNIFICANT ACCOUN36
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Dec. 31, 2017 | Jun. 30, 2017 |
Current | $ 396,909 | $ 309,156 |
30-60 days | 1,450 | 0 |
60-90 days | 9,343 | 0 |
Over 90 days | 9,128 | 160,750 |
Total | $ 416,830 | $ 469,906 |
SUMMARY OF SIGNIFICANT ACCOUN37
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) | 6 Months Ended |
Dec. 31, 2017 | |
Maximum [Member] | ManufacturingEquipment [Member] | |
Estimated Useful Lives of Property, Plant and Equipment | 7 years |
Maximum [Member] | OfficeEquipment [Member] | |
Estimated Useful Lives of Property, Plant and Equipment | 7 years |
Maximum [Member] | Building and improvements [Member] | |
Estimated Useful Lives of Property, Plant and Equipment | 40 years |
Minimum [Member] | ManufacturingEquipment [Member] | |
Estimated Useful Lives of Property, Plant and Equipment | 3 years |
Minimum [Member] | OfficeEquipment [Member] | |
Estimated Useful Lives of Property, Plant and Equipment | 3 years |
Minimum [Member] | Building and improvements [Member] | |
Estimated Useful Lives of Property, Plant and Equipment | 7 years |
SUMMARY OF SIGNIFICANT ACCOUN38
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Beginning balance | $ 196,691 | $ 24,273 | $ 239,173 | $ 27,207 |
Accruals for warranties during the period | 9,340 | 21,224 | 10,192 | 27,139 |
Net settlements during the period | (30,130) | (13,350) | (64,740) | (170,680) |
Adjustments relating to preexisting warranties | 5,724 | 6,007 | (3,000) | 154,488 |
Ending balance | $ 181,625 | $ 38,154 | $ 181,625 | $ 38,154 |
SUMMARY OF SIGNIFICANT ACCOUN39
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2017 | Jul. 13, 2015 | |
Deferred Revenue Arrangement [Line Items] | ||||||
Deferred revenue for new extended warranty contracts | $ 0 | $ 422,638 | ||||
Long-term deferred revenue for extended warranty contracts | $ 422,638 | 422,638 | $ 422,638 | $ 13,290,000 | ||
Extended Warranty Contracts [Member] | ||||||
Deferred Revenue Arrangement [Line Items] | ||||||
Beginning balance | 430,762 | $ 422,638 | 431,700 | 0 | ||
Deferred revenue for new extended warranty contracts | 0 | 0 | 0 | 422,638 | ||
Deferred revenue recognized | (937) | 0 | (1,875) | 0 | ||
Ending balance | 429,825 | 422,638 | 429,825 | 422,638 | ||
Less: current portion of deferred revenue for extended warranty contracts | 7,187 | 0 | 7,187 | 0 | ||
Long-term deferred revenue for extended warranty contracts | $ 422,638 | $ 422,638 | $ 422,638 | $ 422,638 |
SUMMARY OF SIGNIFICANT ACCOUN40
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($) | Oct. 12, 2017 | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2017 |
Expected Future Annual Market Growth | $ 50,000,000,000 | $ 50,000,000,000 | |||||
Fair Value Inputs, Long-term Revenue Growth Rate | 40.00% | ||||||
Allowance for doubtful accounts | $ 47,307 | ||||||
Cost of engineering and development | 0 | $ 0 | $ 0 | $ 937,725 | |||
Advertising costs | 28,925 | 13,663 | 121,621 | 55,606 | |||
Accounts Receivable, Net, Current | 416,830 | 416,830 | $ 469,906 | ||||
Proceeds from Sale of Property, Plant, and Equipment | $ 2,340,000 | 81,500 | 9,754 | ||||
Impairment of Long-Lived Assets to be Disposed of | $ 0 | $ 0 | $ 447,000 | $ 0 | |||
Scenario, Forecast [Member] | |||||||
Proceeds from Sale of Buildings | $ 2,187,317 | ||||||
Investee Company's [Member] | Maximum [Member] | |||||||
Equity Method Investment, Ownership Percentage | 50.00% | 50.00% | |||||
Investee Company's [Member] | Minimum [Member] | |||||||
Equity Method Investment, Ownership Percentage | 20.00% | 20.00% | |||||
Customer One Concentration Risk [Member] | |||||||
Accounts Receivable, Net, Current | $ 370,571 | $ 370,571 | |||||
Customer Three Concentration Risk [Member] | |||||||
Concentration Risk, Percentage | 72.00% | ||||||
Accounts Receivable, Net, Current | $ 336,685 | ||||||
Sales Revenue, Net [Member] | |||||||
Concentration Risk, Percentage | 92.00% | 95.60% | 83.00% | 89.90% | |||
Accounts Receivable [Member] | Customer Three Concentration Risk [Member] | |||||||
Concentration Risk, Percentage | 89.00% |
MANAGEMENT'S PLANS AND FUTURE41
MANAGEMENT'S PLANS AND FUTURE OPERATIONS (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2017 | |
Net Loss | $ (2,535,683) | $ (4,276,705) | $ (6,427,477) | $ (8,919,427) | |
Accumulated deficit | (131,067,121) | (131,067,121) | $ (124,639,644) | ||
Total EnSync, Inc. Equity | 11,091,137 | 11,091,137 | 16,858,722 | ||
Liabilities | $ 5,744,437 | $ 5,744,437 | $ 3,906,490 |
CHINA JOINT VENTURE (Details)
CHINA JOINT VENTURE (Details) - Meineng Energy [Member] - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2017 | |
Product sales to Meineng Energy | $ 10,293 | $ 9,447 | $ 23,301 | $ 68,594 | |
Cost of product sales to Meineng Energy | 8,000 | 10,242 | 19,211 | 72,056 | |
Product purchases from Meineng Energy | 185,701 | $ 41,609 | 198,601 | $ 752,190 | |
Net amount payable (due) to Meineng Energy | $ 11,003 | $ 11,003 | $ (12,299) |
CHINA JOINT VENTURE (Details 1)
CHINA JOINT VENTURE (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues | $ 462,186 | $ 359,676 | $ 466,832 | $ 1,138,831 |
Gross profit (loss) | (60,494) | 5,431 | (61,580) | 108,852 |
Loss from operations | (438,601) | (301,164) | (812,527) | (504,051) |
Net loss | $ (426,114) | $ (291,537) | $ (773,019) | $ (479,010) |
CHINA JOINT VENTURE (Details Te
CHINA JOINT VENTURE (Details Textual) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2011 | Dec. 31, 2017 | Jun. 30, 2017 | Aug. 30, 2011 | |
Gain (Loss) on Investments | $ 830,069 | $ 814,546 | ||
Chief Executive Officer [Member] | ||||
Equity Method Investment, Ownership Percentage | 6.00% | |||
Power Sav [Member] | ||||
Equity Method Investment, Ownership Percentage | 40.00% | 40.00% | ||
Payments to Acquire Interest in Joint Venture | $ 3,300,000 | |||
Ensync Inc [Member] | ||||
Equity Method Investment, Ownership Percentage | 60.00% | |||
Payments to Acquire Interest in Joint Venture | $ 200,000 | |||
Anhui Meineng Store Energy Co Ltd [Member] | ||||
Capitalization, Amount of Equity | $ 14,800,000 | $ 14,800,000 | ||
Holdco [Member] | ||||
Contribution Of Technology Upon License Agreement | $ 4,100,000 | |||
Basis In The Technology Contributed Related To Research And Development Expenditures | $ 0 |
BUSINESS COMBINATIONS (Details
BUSINESS COMBINATIONS (Details Textual) | 3 Months Ended |
Sep. 30, 2017USD ($) | |
DCfusion, LLC [Member] | |
Business Combination, Acquisition Related Costs | $ 31,700 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Dec. 31, 2017 | Jun. 30, 2017 |
Raw materials and subassemblies | $ 1,566,273 | $ 2,477,418 |
Work in progress | 0 | 4,595 |
Total | $ 1,566,273 | $ 2,482,013 |
NOTE RECEIVABLE (Details Textua
NOTE RECEIVABLE (Details Textual) - Unrelated Party [Member] | Sep. 23, 2014USD ($) |
Receivable with Imputed Interest, Face Amount | $ 150,000 |
Notes receivable percentage | 8.00% |
Notes Receivable Additional Secured Financing | $ 500,000 |
PROPERTY, PLANT & EQUIPMENT (De
PROPERTY, PLANT & EQUIPMENT (Details) - USD ($) | Dec. 31, 2017 | Jun. 30, 2017 |
Land | $ 179,713 | $ 217,000 |
Building and improvements | 3,122,662 | 3,532,375 |
Manufacturing equipment | 3,169,597 | 4,255,385 |
Office equipment | 454,562 | 454,562 |
Total, at cost | 6,926,534 | 8,459,322 |
Less: accumulated depreciation | (4,095,685) | (5,013,069) |
Property, plant and equipment, net | $ 2,830,849 | $ 3,446,253 |
PROPERTY, PLANT & EQUIPMENT (49
PROPERTY, PLANT & EQUIPMENT (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Depreciation of property, plant and equipment | $ 82,688 | $ 133,668 | $ 180,080 | $ 290,132 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) | Dec. 31, 2017 | Jun. 30, 2017 |
Accrued compensation and benefits | $ 535,546 | $ 403,140 |
Accrued warranty | 181,625 | 239,173 |
Right of use liability | 179,865 | 65,004 |
Other | 444,642 | 524,397 |
Total | $ 1,341,678 | $ 1,231,714 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) | 6 Months Ended | |
Dec. 31, 2017 | Jun. 30, 2017 | |
Note payable to Wisconsin Economic Development Corporation payable in monthly installments of $23,685, including interest at 2%, with the final payment due May 1, 2018; collateralized by equipment purchased with the loan proceeds and substantially all assets of the Company not otherwise collateralized. | $ 117,856 | $ 257,959 |
Bank loan payable in fixed monthly installments of $6,800 of principal and interest at a rate of 0.25% below prime, as defined, subject to a floor of 5% with any remaining principal and interest due at maturity on June 1, 2018; collateralized by the building and land. | 439,094 | 468,297 |
Equipment finance obligation under sale-leaseback, interest payable in quarterly installments ranging between $1,510 and $2,555 at an imputed interest rate of approximately 2.44% over 20 years ending March 31, 2036. | $ 331,827 | 331,827 |
Sale Leaseback Transaction, Lease Terms In Years | 20 years | |
Debt Instrument, Maturity Date | Mar. 31, 2036 | |
Sale Leaseback Transaction, Imputed Interest Rate | 2.44% | |
Long-term debt | $ 888,777 | 1,058,083 |
Less: current maturities of long-term debt | (556,950) | (726,256) |
Long-term debt, net of current maturities | 331,827 | $ 331,827 |
Minimum [Member] | ||
Sale Leaseback Transaction, Quarterly Rental Payments | 1,510 | |
Maximum [Member] | ||
Sale Leaseback Transaction, Quarterly Rental Payments | 2,555 | |
Note payable [Member] | ||
Debt Instrument, Periodic Payment | $ 23,685 | |
Debt Instrument, Interest Rate, Stated Percentage | 2.00% | |
Debt Instrument, Maturity Date | May 1, 2018 | |
Bank Loan Payable [Member] | ||
Debt Instrument, Periodic Payment | $ 6,800 | |
Debt Instrument, Interest Rate, Stated Percentage | 0.25% | |
Debt Instrument, Maturity Date | Jun. 1, 2018 | |
Debt Instrument Floor Rate | 5.00% |
LONG-TERM DEBT (Details 1)
LONG-TERM DEBT (Details 1) | Dec. 31, 2017USD ($) |
2,018 | $ 556,950 |
2,019 | 0 |
2,020 | 0 |
2,021 | 0 |
2,022 | 0 |
Thereafter | 331,827 |
Notes Payable | $ 888,777 |
LONG-TERM DEBT (Details Textual
LONG-TERM DEBT (Details Textual) | Dec. 31, 2017USD ($) |
Mortgage Loans on Real Estate, Carrying Amount of Mortgages | $ 434,184 |
EMPLOYEE AND DIRECTOR EQUITY 54
EMPLOYEE AND DIRECTOR EQUITY INCENTIVE PLANS (Details) | 6 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Expected life of option (years) | 4 years | 4 years |
Risk-free interest rate, minimum | 1.59% | 0.93% |
Risk-free interest rate, maximum | 2.09% | 1.14% |
Assumed volatility, minimum | 108.66% | 104.69% |
Assumed volatility, maximum | 113.98% | 108.35% |
Expected dividend rate | 0.00% | 0.00% |
Expected forfeiture rate, minimum | 6.15% | 7.42% |
Expected forfeiture rate, maximum | 7.46% | 9.18% |
EMPLOYEE AND DIRECTOR EQUITY 55
EMPLOYEE AND DIRECTOR EQUITY INCENTIVE PLANS (Details 1) - $ / shares | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | |
Number of Options outstanding, Beginning | 8,249,298 | 6,111,360 | |
Number of Options granted | 933,500 | 2,654,100 | |
Number of Options exercised | (124,252) | ||
Number of Options forfeited | (516,150) | (391,910) | |
Number of Options outstanding, Ending | 8,666,648 | 8,249,298 | 6,111,360 |
Outstanding beginning, Weighted-Average Exercise Price | $ 0.71 | $ 0.88 | |
Options granted, Weighted-Average Exercise Price | 0.41 | 0.59 | |
Options exercised, Weighted-Average Exercise Price | 0.56 | ||
Options forfeited, Weighted-Average Exercise Price | 1.43 | 2.55 | |
Outstanding ending, Weighted-Average Exercise Price | $ 0.64 | $ 0.71 | $ 0.88 |
Average Remaining Contractual Life (in years) | 6 years 3 months | 6 years 6 months | 6 years 11 months 16 days |
EMPLOYEE AND DIRECTOR EQUITY 56
EMPLOYEE AND DIRECTOR EQUITY INCENTIVE PLANS (Details 2) - $ / shares | 6 Months Ended | ||
Dec. 31, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | |
Outstanding Number of Options | 8,666,648 | 8,249,298 | 6,111,360 |
Outstanding Average Remaining Contractual Life (in years) | 6 years 3 months | ||
Outstanding Weighted-Average Exercise Price | $ 0.64 | $ 0.71 | $ 0.88 |
Exercisable Number of Options | 3,271,412 | ||
Exercisable Average Remaining Contractual Life (in years) | 5 years 5 months 16 days | ||
Exercisable Weighted Average Exercise Price | $ 0.86 | ||
Range 0.28 To 1.00 [Member] | |||
Outstanding Number of Options | 7,892,198 | ||
Outstanding Average Remaining Contractual Life (in years) | 6 years 5 months 12 days | ||
Outstanding Weighted-Average Exercise Price | $ 0.5 | ||
Exercisable Number of Options | 2,648,962 | ||
Exercisable Average Remaining Contractual Life (in years) | 5 years 10 months 2 days | ||
Exercisable Weighted Average Exercise Price | $ 0.53 | ||
Range 1.01 To 2.50 [Member] | |||
Outstanding Number of Options | 645,000 | ||
Outstanding Average Remaining Contractual Life (in years) | 4 years 9 months 22 days | ||
Outstanding Weighted-Average Exercise Price | $ 1.47 | ||
Exercisable Number of Options | 493,000 | ||
Exercisable Average Remaining Contractual Life (in years) | 4 years 6 months 4 days | ||
Exercisable Weighted Average Exercise Price | $ 1.61 | ||
Range 2.51 To 5.00 [Member] | |||
Outstanding Number of Options | 60,200 | ||
Outstanding Average Remaining Contractual Life (in years) | 1 year 4 months 20 days | ||
Outstanding Weighted-Average Exercise Price | $ 3.87 | ||
Exercisable Number of Options | 60,200 | ||
Exercisable Average Remaining Contractual Life (in years) | 1 year 4 months 20 days | ||
Exercisable Weighted Average Exercise Price | $ 3.87 | ||
Range 5.01 To 6.95 [Member] | |||
Outstanding Number of Options | 69,250 | ||
Outstanding Average Remaining Contractual Life (in years) | 1 year 3 months 7 days | ||
Outstanding Weighted-Average Exercise Price | $ 5.91 | ||
Exercisable Number of Options | 69,250 | ||
Exercisable Average Remaining Contractual Life (in years) | 1 year 3 months 7 days | ||
Exercisable Weighted Average Exercise Price | $ 5.91 |
EMPLOYEE AND DIRECTOR EQUITY 57
EMPLOYEE AND DIRECTOR EQUITY INCENTIVE PLANS (Details 3) - $ / shares | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | |
Number of Options | |||
Beginning Balance, Number of Options | 5,197,098 | 4,852,367 | |
Granted | 933,500 | 2,654,100 | |
Vested | (434,329) | (2,110,085) | |
Forfeited | (301,033) | (199,284) | |
Ending Balance, number of options | 5,395,236 | 5,197,098 | 4,852,367 |
Weighted Average Grant Date Fair Value Per Share | |||
Beginning Balance, grant date fair value | $ 0.54 | $ 0.54 | |
Granted | 0.41 | 0.59 | |
Vested | 0.73 | 0.57 | |
Forfeited | 0.62 | 0.8 | |
Ending Balance, grant date fair value | $ 0.5 | $ 0.54 | $ 0.54 |
Average Remaining Contractual Life (in years) | 6 years 8 months 23 days | 6 years 11 months 5 days | 7 years 5 months 1 day |
EMPLOYEE AND DIRECTOR EQUITY 58
EMPLOYEE AND DIRECTOR EQUITY INCENTIVE PLANS (Details 4) - Restricted Stock Unit [Member] - $ / shares | 6 Months Ended | 12 Months Ended |
Dec. 31, 2017 | Jun. 30, 2017 | |
Number of Restricted Stock Units, Beginning Balance | 5,556,332 | 4,029,244 |
Number of Restricted Stock Units, RSUs granted | 3,343,075 | 1,671,816 |
Number of Restricted Stock Units, RSUs forfeited | (852,231) | |
Number of Restricted Stock Units, Shares issued | (493,998) | (144,728) |
Number of Restricted Stock Units, Ending balance | 7,553,178 | 5,556,332 |
Weighted-Average Valuation Price Per Unit, Outstanding Beginning | $ 1.07 | $ 1.03 |
Weighted-Average Valuation Price Per Unit, RSUs granted | 0.43 | 1.15 |
Weighted-Average Valuation Price Per Unit, RSUs forfeited | 0.87 | |
Weighted-Average Valuation Price Per Unit, Shares issued | 1.2 | 0.75 |
Weighted-Average Valuation Price Per Unit, Outstanding Ending | $ 0.8 | $ 1.07 |
EMPLOYEE AND DIRECTOR EQUITY 59
EMPLOYEE AND DIRECTOR EQUITY INCENTIVE PLANS (Details Textual) - USD ($) | Nov. 14, 2017 | Nov. 14, 2016 | Nov. 17, 2015 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Nov. 30, 2012 | Nov. 30, 2010 |
Stock-based compensation, net | $ 165,864 | $ 782,452 | $ 601,472 | $ 1,055,105 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 933,500 | 1,022,500 | ||||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit | $ 0.34 | $ 0.35 | ||||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit | $ 0.51 | $ 1.02 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 102,842 | $ 102,842 | ||||||||||
Share Price | $ 0.40 | $ 0.40 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $ 282,559 | $ 420,680 | ||||||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 1 year 6 months | |||||||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 799,896 | $ 799,896 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 434,329 | 2,110,085 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 5,395,236 | 5,395,236 | 5,197,098 | 4,852,367 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | 301,033 | 199,284 | ||||||||||
Restricted Stock Units (RSUs) [Member] | ||||||||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 2,071,276 | $ 2,071,276 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 4,142,305 | 4,142,305 | ||||||||||
2002 Stock Option Plan [Member] | Key Employees Or Non Employee [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 1,000,000 | 1,000,000 | ||||||||||
2007 Equity Incentive Plan [Member] | Employees And Directors [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 300,000 | 300,000 | ||||||||||
2010 Omnibus Long-Term Incentive Plan [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 13,950,000 | 13,950,000 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 8 years | |||||||||||
Common Stock, Capital Shares Reserved for Future Issuance | 1,403,860 | 1,403,860 | ||||||||||
2010 Omnibus Long-Term Incentive Plan [Member] | Maximum [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 13,950,000 | |||||||||||
2010 Omnibus Long-Term Incentive Plan [Member] | Minimum [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 2,000,000 | |||||||||||
2012 Director Equity Plan [Member] | ||||||||||||
Common Stock, Capital Shares Reserved for Future Issuance | 566,095 | 566,095 | ||||||||||
2012 Director Equity Plan [Member] | Maximum [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 4,400,000 | |||||||||||
2012 Director Equity Plan [Member] | Minimum [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 1,200,000 | |||||||||||
2012 Director Equity Plan [Member] | Director [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 1,163,075 | 581,816 | 864,000 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 290,770 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | 18,181 |
WARRANTS (Details)
WARRANTS (Details) - Warrant Member - $ / shares | 6 Months Ended | 12 Months Ended |
Dec. 31, 2017 | Jun. 30, 2017 | |
Warrants Beginning Balance | 357,500 | 2,655,610 |
Warrants granted | 220,000 | 357,500 |
Warrants exercised | (45,000) | |
Warrants expired | (2,610,610) | |
Ending balance | 577,500 | 357,500 |
Warrants outstanding beginning weighted average exercise price | $ 0.42 | $ 1.43 |
Warrants granted weighted average exercise price | 0.4 | 0.42 |
Warrants exercised weighted average exercise price | 0.37 | |
Warrants expired weighted average exercise price | 1.45 | |
Warrants outstanding ending weighted average exercise price | $ 0.41 | $ 0.42 |
WARRANTS (Details Textual)
WARRANTS (Details Textual) - USD ($) | Aug. 07, 2017 | Jun. 22, 2017 | Oct. 31, 2016 | Sep. 30, 2016 | Sep. 26, 2013 | Jun. 19, 2012 | Dec. 31, 2017 | Feb. 28, 2016 | May 01, 2012 |
Securities Purchase Agreements Two [Member] | Preferred Stock [Member] | |||||||||
WARRANTS [Line Items] | |||||||||
Issuance of common stock, net of costs and underwriting fees, Amount | $ 3,000,000 | ||||||||
Professional Services Agreement [Member] | |||||||||
WARRANTS [Line Items] | |||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 220,000 | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.40 | ||||||||
Class Of Warrant Or Rights Date From Which Warrants Or Rights Expired | Mar. 31, 2017 | ||||||||
Investor [Member] | |||||||||
WARRANTS [Line Items] | |||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 3,157,894 | 3,157,895 | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.95 | $ 0.95 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Expirations | 1,710,525 | ||||||||
Investor [Member] | Securities Purchase Agreements [Member] | |||||||||
WARRANTS [Line Items] | |||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 511,604 | ||||||||
Debt Instrument, Face Amount | $ 2,465,000 | ||||||||
Investor [Member] | Securities Purchase Agreements [Member] | Zero Coupon Convertible Subordinated Notes [Member] | |||||||||
WARRANTS [Line Items] | |||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 2.65 | ||||||||
Placement Agent [Member] | |||||||||
WARRANTS [Line Items] | |||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 81,579 | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.95 | ||||||||
Issuance of common stock, net of costs and underwriting fees, Amount | $ 3,000,000 | ||||||||
Roth Capital Partners Lic [Member] | |||||||||
WARRANTS [Line Items] | |||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 357,500 | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.42 | ||||||||
Issuance of common stock, net of costs and underwriting fees, Amount | $ 2,500,000 | ||||||||
Class Of Warrant Or Rights Date From Which Warrants Or Rights Expired | Jun. 30, 2022 | ||||||||
MDB Capital Group, LLC [Member] | |||||||||
WARRANTS [Line Items] | |||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 579,061 | ||||||||
Warrant For Service [Member] | |||||||||
WARRANTS [Line Items] | |||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 45,000 | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.37 | ||||||||
Shares Issued During Period Shares Upon Exercise Of Warrants | 29,162 | ||||||||
Number Of Warrants Exercised | 45,000 | ||||||||
Warrant [Member] | MDB Capital Group, LLC [Member] | |||||||||
WARRANTS [Line Items] | |||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 2.375 | ||||||||
Issuance of common stock, net of costs and underwriting fees, Amount | $ 12,000,000 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Expirations | 306,902 |
BASIC AND DILUTED NET LOSS PE62
BASIC AND DILUTED NET LOSS PER SHARE (Details) - shares | 6 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Stock options and restricted stock units | 16,219,826 | 12,383,113 |
Stock warrants | 577,500 | 818,506 |
Series B preferred shares | 3,683,918 | 3,337,448 |
Total | 20,481,244 | 16,539,067 |
EQUITY (Details Textual)
EQUITY (Details Textual) - USD ($) | Jul. 13, 2015 | Jul. 31, 2017 | Jun. 22, 2017 | Aug. 30, 2016 | Sep. 26, 2013 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2017 |
Proceeds from issuance of common stock | $ 96,674 | $ 0 | ||||||
Deferred Revenue, Noncurrent | $ 13,290,000 | 422,638 | $ 422,638 | |||||
Preferred C Stock Value | 280 | 280 | ||||||
Common Stock Subject to Mandatory Redemption [Member] | Maximum [Member] | ||||||||
Financial Instruments Subject to Mandatory Redemption, Settlement Terms, Fair Value of Shares | $ 100,000 | |||||||
Investor [Member] | ||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 3,157,894 | 3,157,895 | ||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.95 | $ 0.95 | ||||||
Underwritten Public Offering [Member] | ||||||||
Shares Issued, Price Per Share | $ 0.35 | |||||||
Proceeds from issuance of common stock | $ 119,459 | $ 2,073,055 | ||||||
Issuance of common stock, net of costs and underwriting fees, Shares | 367,000 | 7,150,000 | ||||||
SPI Energy Co., Ltd Securities Purchase Agreement [Member] | ||||||||
Issuance of common stock, net of costs and underwriting fees, Amount | $ 33,390,000 | |||||||
Convertible Preferred Stock, Shares Issued upon Conversion | 42,000,600 | |||||||
Shares Issued, Price Per Share | $ 0.6678 | |||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 50,000,000 | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.7346 | |||||||
Issuance of common stock, net of costs and underwriting fees, Shares | 8,000,000 | |||||||
Class Of Warrant Or Right aggregate purchase price of Number Of Securities Called By Warrants Or Rights | $ 36,729,000 | |||||||
SPI Energy Co., Ltd Securities Purchase Agreement [Member] | Minimum [Member] | ||||||||
Long-term Debt, Gross | 10,000,000 | |||||||
Business Combination, Consideration Transferred | 2,000,000 | |||||||
Related Party Transaction, Amounts of Transaction | 120,000 | |||||||
Capital Expenditure Commitment | 7,000,000 | |||||||
Other Commitment | 5,000,000 | |||||||
Over-Allotment Option [Member] | ||||||||
Issuance of common stock, net of costs and underwriting fees, Shares | 1,072,500 | |||||||
Common Stock [Member] | ||||||||
Issuance of common stock, net of costs and underwriting fees, Amount | $ 3,000 | $ 3,670 | $ 71,500 | |||||
Issuance of common stock, net of costs and underwriting fees, Shares | 367,000 | 7,150,000 | ||||||
Conversion of Stock, Shares Converted | 822,867 | |||||||
Common Stock [Member] | SPI Energy Co., Ltd Securities Purchase Agreement [Member] | ||||||||
Number Of Shares Held | 25,000,000 | |||||||
Melodious Investments Company Limited [Member] | Common Stock [Member] | ||||||||
Issuance of common stock, net of costs and underwriting fees, Shares | 8,000,000 | |||||||
Series C Preferred Stock [Member] | ||||||||
Issuance of common stock, net of costs and underwriting fees, Amount | $ 13,300,000 | $ 0 | $ 0 | |||||
Shares Issued, Price Per Share | $ 0.6678 | |||||||
Issuance of common stock, net of costs and underwriting fees, Shares | 28,048 | 0 | 0 | |||||
Preferred Stock, Liquidation Preference, Value | $ 6,173,422 | |||||||
Preferred stock, issued shares | 28,048 | 28,048 | ||||||
Series C Preferred Stock [Member] | SPI Energy Co., Ltd Securities Purchase Agreement [Member] | ||||||||
Number Of Shares Held | 10,000 | |||||||
Series B Convertible Preferred Stock [Member] | ||||||||
Preferred Stock, Conversion Price Per Share | $ 0.95 | |||||||
Preferred Stock, Dividend Rate, Percentage | 10.00% | |||||||
Proceeds from Issuance of Convertible Preferred Stock | $ 2,909,873 | |||||||
Conversion of Stock, Shares Converted | 700 | 2,300 | ||||||
Conversion of Stock, Shares Issued | 3,683,918 | |||||||
Preferred Stock, Liquidation Preference, Value | $ 5,799,722 | |||||||
Sale of Stock, Price Per Share | $ 1,000 | |||||||
Series B Convertible Preferred Stock [Member] | Director [Member] | ||||||||
Preferred stock, issued shares | 500 | |||||||
Series B Convertible Preferred Stock [Member] | Investor [Member] | ||||||||
Preferred stock, issued shares | 3,000 |
COMMITMENTS (Details)
COMMITMENTS (Details) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2017 | Jun. 30, 2017 | |
Weighted-average remaining lease term (in years) Operating leases | 6 years 5 months 1 day | 2 years 4 months 13 days |
Weighted-average discount rate Operating leases | 5.00% | 5.00% |
COMMITMENTS (Details 1)
COMMITMENTS (Details 1) | Dec. 31, 2017USD ($) |
2,018 | $ 109,405 |
2,019 | 248,148 |
2,020 | 210,260 |
2,021 | 172,317 |
2,022 | 174,873 |
Thereafter | 463,275 |
Total undiscounted lease payments | 1,378,278 |
Present value adjustment | (207,485) |
Net operating lease liabilities | $ 1,170,793 |
COMMITMENTS (Details Textual)
COMMITMENTS (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2017 | |
Operating Leases, Rent Expense, Minimum Rentals | $ 13,845 | |||||
Carrying Value Of Right Of Use Asset | $ 1,170,793 | $ 1,170,793 | $ 150,214 | |||
Short-term lease Rent Expense | 12,213 | $ 22,529 | 21,135 | $ 46,290 | ||
Operating Leases, Rent Expense | 20,356 | $ 14,539 | $ 41,620 | $ 29,077 | ||
Short Term Lease Monthly Rent Expense Description | rent for the twelve-month rental periods is between $400 and $2,010 per month. | |||||
Operating Leases of Lessee, Contingent Rentals, Basis Spread on Variable Rate | 1.50% | |||||
Accrued Liabilities [Member] | ||||||
Operating Lease Liability Short Term | 179,865 | $ 179,865 | 65,004 | |||
Other Noncurrent Liabilities [Member] | ||||||
Operating Lease Liability Long Term | $ 990,928 | $ 990,928 | $ 85,210 |
RETIREMENT PLANS (Details Textu
RETIREMENT PLANS (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | |
Pension And Other Postretirement Benefit, Vested Percentage Of Eligible Employees | 100.00% | |||
Retirement plan expense | $ 49,160 | $ 35,740 | $ 100,913 | $ 84,558 |
Defined Contribution Plan, Employer Matching Contribution, Percent of Match | 4.00% |
INCOME TAXES (Details Textual)
INCOME TAXES (Details Textual) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 22, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | |
Effective Income Tax Rate Reconciliation, Percent | 0.00% | 0.00% | 0.00% | 0.00% | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | |||||
Scenario, Forecast [Member] | ||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 07, 2016 | |
Related Party Transaction [Line Items] | |||||
Revenue, Net | $ 4,846,707 | $ 1,736,569 | $ 7,208,755 | $ 9,393,130 | |
Costs and Expenses | $ 7,372,185 | $ 6,046,114 | 13,735,105 | $ 18,458,118 | |
Ensync Inc [Member] | |||||
Related Party Transaction [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 85.00% | ||||
Theodore Peck [Member] | |||||
Related Party Transaction [Line Items] | |||||
Related Party Transaction, ship Interests, Sale Amount | $ 592,000 | ||||
Revenue, Net | 592,000 | ||||
Costs and Expenses | $ 573,353 |