Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2018 | Sep. 25, 2018 | Dec. 31, 2017 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Jun. 30, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | EnSync, Inc. | ||
Entity Central Index Key | 1,140,310 | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 14,244,368 | ||
Trading Symbol | ESNC | ||
Entity Common Stock, Shares Outstanding | 68,014,385 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2018 | Jun. 30, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 2,984,532 | $ 11,782,962 |
Accounts receivable, net | 215,009 | 469,906 |
Inventories, net | 1,220,448 | 2,482,013 |
Costs and estimated earnings in excess of billings | 528,266 | 87,318 |
Prepaid expenses and other current assets | 929,379 | 630,998 |
Total current assets | 5,877,634 | 15,453,197 |
Long-term assets: | ||
Property, plant and equipment, net | 775,545 | 3,446,253 |
Investment in investee company | 1,640,054 | 1,947,728 |
Goodwill | 809,363 | 809,363 |
Right of use assets-operating leases | 1,087,249 | 150,214 |
Other assets | 91,087 | 7,502 |
Total assets | 10,280,932 | 21,814,257 |
Current liabilities: | ||
Current maturities of long-term debt | 0 | 726,256 |
Accounts payable | 1,142,256 | 487,185 |
Billings in excess of costs and estimated earnings | 176,294 | 456,950 |
Accrued expenses | 1,236,680 | 1,231,714 |
Total current liabilities | 2,555,230 | 2,902,105 |
Long-term liabilities: | ||
Long-term debt, net of current maturities | 331,827 | 331,827 |
Deferred revenue | 538,937 | 422,638 |
Other long-term liabilities | 1,072,120 | 249,920 |
Total liabilities | 4,498,114 | 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 $5,976,896 and $5,631,086 as of June 30, 2018 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 $0 and $12,276,682 as of June 30, 2018 and June 30, 2017, respectively | 280 | 280 |
Common stock ($0.01 par value), 300,000,000 authorized, 56,609,115 and 55,200,963 shares issued and outstanding as of June 30, 2018 and June 30, 2017, respectively | 1,274,406 | 1,260,324 |
Additional paid-in capital | 143,008,995 | 141,822,317 |
Accumulated deficit | (137,609,659) | (124,639,644) |
Accumulated other comprehensive loss | (1,587,702) | (1,584,578) |
Total EnSync, Inc. equity | 5,086,343 | 16,858,722 |
Noncontrolling interest | 696,475 | 1,049,045 |
Total equity | 5,782,818 | 17,907,767 |
Total liabilities and equity | $ 10,280,932 | $ 21,814,257 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2018 | Jun. 30, 2017 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, Authorized | 300,000,000 | 300,000,000 |
Common stock, Issued | 56,609,115 | 55,200,963 |
Common stock, outstanding | 56,609,115 | 55,200,963 |
Series B Redeemable Convertible 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 | $ 5,976,896 | $ 5,631,086 |
Series C Convertible 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 | $ 0 | $ 12,276,682 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues | $ 11,932,328 | $ 12,494,184 |
Costs and expenses | ||
Cost of product sales | 9,562,472 | 12,586,458 |
Cost of engineering and development | 0 | 937,725 |
Advanced engineering and development | 4,449,974 | 4,829,840 |
Selling, general and administrative | 10,252,674 | 11,109,038 |
Depreciation and amortization | 296,417 | 551,680 |
Impairment of long-lived assets | 447,000 | 0 |
Total costs and expenses | 25,008,537 | 30,014,741 |
Loss from operations | (13,076,209) | (17,520,557) |
Other income (expense) | ||
Equity in loss of investee company | (307,674) | (217,898) |
Interest income | 23,795 | 41,661 |
Interest expense | (38,484) | (50,474) |
Other income | 74,031 | 15,405 |
Gain on termination of SPI Supply Agreement | 0 | 13,290,000 |
Total other income (expense) | (248,332) | 13,078,694 |
Loss before benefit for income taxes | (13,324,541) | (4,441,863) |
Benefit for income taxes | 0 | 0 |
Net loss | (13,324,541) | (4,441,863) |
Net loss attributable to noncontrolling interest | 354,526 | 352,327 |
Net loss attributable to EnSync, Inc. | (12,970,015) | (4,089,536) |
Preferred stock dividend | (345,810) | (313,286) |
Net loss attributable to common shareholders | $ (13,315,825) | $ (4,402,822) |
Net loss per share | ||
Basic and diluted | $ (0.24) | $ (0.09) |
Weighted average shares - basic and diluted | 56,003,019 | 48,070,993 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Net loss | $ (13,324,541) | $ (4,441,863) |
Foreign exchange translation adjustments | (3,124) | 1,005 |
Comprehensive loss | (13,327,665) | (4,440,858) |
Net loss attributable to noncontrolling interest | 354,526 | 352,327 |
Comprehensive loss attributable to EnSync, Inc. | $ (12,973,139) | $ (4,088,531) |
Consolidated Statements of Chan
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 [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Noncontrolling Interest [Member] |
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 | $ (4,089,536) | $ 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 | |||||
Contribution of capital from noncontrolling interest | $ 0 | |||||||
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 | (12,970,015) | $ 0 | $ 0 | $ 0 | 0 | (12,970,015) | 0 | (354,526) |
Net currency translation adjustment | 0 | 0 | 0 | 0 | 0 | (3,124) | 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 | $ 10,412 | 1,093,674 | 0 | 0 | 0 | |
Stock-based compensation (Shares) | 0 | 0 | 1,041,152 | |||||
Balance at Jun. 30, 2018 | $ 5,086,343 | $ 23 | $ 280 | $ 1,274,406 | $ 143,008,995 | $ (137,609,659) | $ (1,587,702) | $ 696,475 |
Balance (Shares) at Jun. 30, 2018 | 2,300 | 28,048 | 56,609,115 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities | ||
Net loss | $ (13,324,541) | $ (4,441,863) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation of property, plant and equipment | 288,168 | 483,636 |
Amortization of customer intangible assets | 8,249 | 68,044 |
Stock-based compensation, net | 1,142,749 | 2,145,765 |
Equity in loss of investee company | 307,674 | 217,898 |
Provision for inventory reserve | 354,000 | 182,647 |
Gain on sale of property, plant and equipment | (73,647) | (1,911) |
Interest accreted on note receivable | (10,981) | (12,000) |
Allowance for note receivable | 162,121 | 0 |
Gain on termination of SPI Supply Agreement | 0 | (13,290,000) |
Impairment of long-lived assets | 447,000 | 0 |
Changes in assets and liabilities | ||
Accounts receivable | 254,897 | (297,273) |
Inventories | 907,565 | (794,718) |
Costs and estimated earnings in excess of billings | (440,948) | (87,318) |
Prepaids and other current assets | (478,119) | 1,756,979 |
Deferred PPA project costs | 0 | 5,690,307 |
Other assets | (86,360) | (4,727) |
Accounts payable | 655,071 | (82,041) |
Billings in excess of costs and estimated earnings | (280,656) | 456,950 |
Accrued expenses | (127,646) | 227,474 |
Deferred revenue | 116,299 | 422,638 |
Other long-term liabilities | 16,793 | 145,013 |
Net cash used in operating activities | (10,162,312) | (7,214,500) |
Cash flows from investing activities | ||
Expenditures for property and equipment | (288,846) | (46,366) |
Proceeds from sale of property, plant and equipment | 2,299,017 | 8,432 |
Payments from note receivable | 20,000 | 12,000 |
Net cash provided by (used in) investing activities | 2,030,171 | (25,934) |
Cash flows from financing activities | ||
Repayments of long term debt | (726,256) | (332,344) |
Proceeds from issuance of common stock | 96,674 | 2,095,840 |
Proceeds from the exercise of stock options | 0 | 69,960 |
Payments of tax withholding related to stock-based compensation | (38,663) | 0 |
Contribution of capital from noncontrolling interest | 1,956 | 0 |
Net cash provided by (used in) financing activities | (666,289) | 1,833,456 |
Effect of exchange rate changes on cash and cash equivalents | 0 | 851 |
Net decrease in cash and cash equivalents | (8,798,430) | (5,406,127) |
Cash and cash equivalents - beginning of period | 11,782,962 | 17,189,089 |
Cash and cash equivalents - end of period | 2,984,532 | 11,782,962 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 40,888 | 51,134 |
Supplemental noncash information: | ||
Right of use asset obtained in exchange for new operating lease | $ 937,035 | $ 122,950 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business EnSync, Inc. and its subsidiaries (the “Company”) is a renewable energy systems and services company whose innovative and differentiated technologies and capabilities are designed to deliver the least expensive, highest value and most reliable electricity. With the Company’s May 2018 announcement of the EnSync Home Energy System, the Company now serves all three major markets in the renewable energy space: Residential Energy Systems, Commercial Energy Systems and Independent Utility Energy Systems. The Company’s systems utilize highly configurable modules, that together with the Auto-Sync DC Bus and DER Flex TM Incorporated in 1998, the Company is headquartered in Menomonee Falls, Wisconsin, USA, with offices in Madison, Wisconsin, Petaluma, California, Honolulu, Hawaii and Shanghai, China. The consolidated financial statements include the accounts of the Company and those of its wholly-owned subsidiaries, including its 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. Basis of Presentation and Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly and majority-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and are reported in U.S. dollars. For subsidiaries in which the Company’s ownership interest is less than 100%, the noncontrolling interests are reported in stockholders’ equity in the consolidated balance sheets. The noncontrolling interests in net income (loss), net of tax, are classified separately in the 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 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 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 the Company 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 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 of 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 U.S., Philippines, 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. Accounts receivable are stated net of an allowance for doubtful accounts of $2,575 as of June 30, 2018 and $47,307 as of June 30, 2017. 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 the Company bills its 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 the Company’s historical experience, the Company generally considers 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. The Company anticipates 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. The Company anticipates 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 of $162,121 and $171,140 as of June 30, 2018 and June 30, 2017, respectively. The Company regularly evaluates the financial condition of the borrower to determine if any reserve for an uncollectible amount should be established. The note receivable is stated net of an allowance for doubtful accounts of $162,121 as of June 30, 2018. As of June 30, 2017, no such allowance was 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 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 year ended June 30, 2018 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 consolidated statements 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 the consolidated statements of operations during the year ended June 30, 2018. The sale of the Company’s corporate headquarters closed on January 31, 2018, pursuant to which we received net proceeds of $2,187,317, after payment of customary closing costs, and recorded a gain on sale of $61,129. 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 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 comparing 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 June 30, 2018 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 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: Year ended June 30, 2018 2017 Beginning balance $ 239,173 $ 27,207 Accruals for warranties 28,462 276,855 Net settlements (228,547 ) (321,098 ) Adjustments relating to preexisting warranties 82,611 256,209 Ending balance $ 121,699 $ 239,173 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: Year ended June 30, 2018 2017 Beginning balance $ 431,700 $ - Deferred revenue for new extended warranty contracts 116,299 435,450 Deferred revenue recognized (3,750 ) (3,750 ) Ending balance 544,249 431,700 Less: current portion of deferred revenue for extended warranty contracts 5,312 9,062 Long-term deferred revenue for extended warranty contracts $ 538,937 $ 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. The Company’s 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 Securities and Exchange Commission (“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 the Company’s 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 when collectability from the buyer is reasonably assured, which generally occurs at the end of a project. We may align the Company’s revenue recognition and release its project assets or deferred PPA project costs to cost of product 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 product sales. The Company reports its revenues net of estimated returns and allowances. Revenues for the year ended June 30, 2018 were comprised of four significant customers (81% of revenues). Revenues for the year ended June 30, 2017 were comprised of two significant customers (71% of revenues). The Company had two significant customers with an outstanding receivable balance of $173,849 (81% of accounts receivable, net) as of June 30, 2018. The Company had three significant customers with an outstanding receivable balance of $336,685 (72% of accounts receivable, net) as of June 30, 2017. Engineering, Development and License Revenues The Company assesses whether a substantive milestone exists at the inception of its 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 the Company’s performance or the occurrence of a specific outcome resulting from the Company’s 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 of $937,725 related to a Research and Development Agreement (the “R&D Agreement”) with Lotte Chemical Corporation (“Lotte”) for the year ended June 30, 2017. Pursuant to the R&D Agreement, the Company agreed to develop and provide to Lotte a 500 kWh 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 recognized $175,000 of revenue under the R&D Agreement for the year ended June 30, 2017. The Company does not expect to receive any additional cash payments under the R&D Agreement and other related agreements with Lotte. As of June 30, 2018, 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 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 consolidated statements of operations as a “Cost of engineering and development.” Stock-Based Compensation The Company measures all “Share-Based Payments," including grants of stock options, restricted shares and restricted stock units (“RSUs”) in its 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 9. Advertising Expense Advertising costs were charged to selling, general and administrative expenses as incurred. Advertising costs of $197,744 and $145,285 were incurred for the years ended June 30, 2018 and June 30, 2017, respectively. 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 consolidated 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 full valuation allowance against its net deferred income tax assets as of June 30, 2018 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 U.S. Internal Revenue Service (“IRS”) notified the Company of an income tax audit for the tax period ended June 30, 2015. On March 15, 2018, the audit was completed by the IRS resulting in no changes to U.S. federal income tax returns. Foreign Currency The Company uses the U.S. dollar as its functional and reporting currency, while the Philippines peso and Hong Kong dollar are the functional currencies of its foreign subsidiaries. Assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. 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 consolidated balance sheets. 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 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. Segment Information The Company has determined that it operates as one reportable segment. Reclassifications Certain amounts previously reported have been reclassified to conform to the current presentation. The reclassifications did not impact prior period consolidated results of operations, cash flows, total assets, total liabilities, or total equity. 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 the Company’s financial position or results of operations upon adoption. In February 2018, the FASB issued Accounting Standard Update (“ASU”) 2018-02 – Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. Under the new guidance, entities will have the option to reclassify tax effects within other comprehensive income (referred to as stranded tax effects) to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) is recorded. The amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those annual periods. The Company does not expect adoption of this guidance to have a significant impact on its consolidated financial statements. In May 2017, the FASB issued 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 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 i |
MANAGEMENT'S PLANS AND FUTURE O
MANAGEMENT'S PLANS AND FUTURE OPERATIONS | 12 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
MANAGEMENT'S PLANS AND FUTURE OPERATIONS | NOTE 2 - MANAGEMENT'S PLANS AND FUTURE OPERATIONS The accompanying 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 $12,970,015 attributable to EnSync, Inc. for the year ended June 30, 2018, and as of June 30, 2018 has an accumulated deficit of $137,609,659 and total equity of $5,782,818. The ability of the Company to settle its total liabilities of $4,498,114 and to continue as a going concern is dependent upon raising additional investment capital to fund the Company’s business plan, increasing revenues and achieving profitability. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. The Company believes that cash and cash equivalents on hand at June 30, 2018 and other potential sources of cash, including net cash it generates from closing projects in backlog and pipeline and potential financing options, will be sufficient to fund the Company’s current operations through the first quarter of fiscal 2020. While the Company believes its pipeline of projects is deep, there can be no assurances that projects will close in a timely manner to meet the Company’s cash requirements. The Company is also working to improve operations and enhance cash balances by continuing to drive cost improvements and reducing its spend on research and development. Also, the Company is currently exploring potential financing options that may be available to the Company, including strategic partnership transactions, PPA project financing facilities, and if necessary, additional sales of Common Stock or other debt or equity securities. However, the Company has 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 its growth plan, take advantage of future opportunities or respond to customers and competition. |
CHINA JOINT VENTURE
CHINA JOINT VENTURE | 12 Months Ended |
Jun. 30, 2018 | |
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 the Company pursuant to a supply agreement under which the Company pays 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 million of equity capital as of June 30, 2018 and June 30, 2017. The Company’s investment in Meineng Energy was made through Holdco. Pursuant to a Limited Liability Company Agreement of Holdco between ZBB Cayman Corporation, the Company’s wholly-owned subsidiary, 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 in cash in exchange for a 60% equity interest. PowerSav agreed to contribute to Holdco $3.3 million in cash in exchange for a 40% equity interest. For financial reporting purposes, Holdco’s assets and liabilities are consolidated with those of the Company and PowerSav’s 40% interest in Holdco is included in the Company’s consolidated financial statements as a noncontrolling interest. As of June 30, 2018, and June 30, 2017, the Company’s indirect investment in Meineng Energy, after accounting for the Company’s share of the earnings or losses, was $831,433 and $814,546, respectively. As of June 30, 2018, and June 30, 2017, the Company’s indirect investment percentage in Meineng Energy equals approximately 30%. The Company’s basis in the technology contributed to Holdco was $0 due to US GAAP requirements related to research and development expenditures. The difference between the Company’s basis in this technology and the valuation of the technology by Meineng Energy of approximately $4.1 million is accounted for by the Company through the elimination of the amortization expense recognized by Meineng Energy related to the technology. 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% equity interest in Meineng Energy. 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 exclusive and non-exclusive royalty-free licenses to manufacture and distribute certain of the Company’s products in mainland China, 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. Activity with Meineng Energy is summarized as follows: Year ended June 30, 2018 2017 Product sales to Meineng Energy $ 22,133 $ 72,712 Cost of product sales to Meineng Energy 17,537 76,109 Product purchases from Meineng Energy 430,802 1,300,892 The total amount due to Meineng Energy is as follows: June 30, 2018 June 30, 2017 Net amount due to Meineng Energy $ (33,822 ) $ (12,298 ) The operating results for Meineng Energy are summarized as follows: Year ended June 30, 2018 2017 Revenues $ 719,302 $ 1,447,243 Gross profit (loss) (8,481 ) 135,228 Loss from operations (1,673,022 ) (1,425,564 ) Net loss (1,629,316 ) (1,391,295 ) |
INVENTORIES
INVENTORIES | 12 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 4 - INVENTORIES Net inventories are comprised of the following as of: June 30, 2018 June 30, 2017 Raw materials and subassemblies $ 1,587,454 $ 3,343,233 Work in progress - 4,595 Less: inventory reserve (367,006 ) (865,815 ) Total $ 1,220,448 $ 2,482,013 |
NOTE RECEIVABLE
NOTE RECEIVABLE | 12 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
NOTE RECEIVABLE | NOTE 5 – NOTE RECEIVABLE On September 23, 2014, the Company was issued a $150,000 convertible promissory note, as amended, from an unrelated party. The note accrues interest at 8% per annum on the outstanding principal amount. On January 27, 2017, the Company negotiated new repayment terms with the unrelated party and extended the maturity date to the earlier of (a) the date on which the borrower has secured a total of $500,000 or more in additional financing from any source or (b) December 31, 2022. If at the maturity date the note and accrued interest has not been paid in full, the Company may convert the principal and interest outstanding into shares of the unrelated party’s convertible preferred stock at the then-current valuation. As referenced in Note 1, an allowance for doubtful accounts has been established for the full amount outstanding as of June 30, 2018. |
PROPERTY, PLANT & EQUIPMENT
PROPERTY, PLANT & EQUIPMENT | 12 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT & EQUIPMENT | NOTE 6 - PROPERTY, PLANT & EQUIPMENT Property, plant and equipment are comprised of the following: June 30, 2018 June 30, 2017 Land $ - $ 217,000 Building and improvements 44,975 3,532,375 Manufacturing equipment 2,977,579 4,255,385 Office equipment 470,731 454,562 Construction in process 227,702 - Total, at cost 3,720,987 8,459,322 Less: accumulated depreciation (2,945,442 ) (5,013,069 ) Property, plant and equipment, net $ 775,545 $ 3,446,253 The Company recorded depreciation expense of $288,168 and $483,636 for the years ended June 30, 2018 and June 30, 2017, respectively. See Impairment of Long-Lived Assets under Note 1 of the Notes to Consolidated Financial Statements for a discussion of the impairment charge related to the sale of the Company’s corporate headquarters. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 12 Months Ended |
Jun. 30, 2018 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | NOTE 7 - ACCRUED EXPENSES Accrued expenses are comprised of the following as of: June 30, 2018 June 30, 2017 Accrued compensation and benefits $ 441,222 $ 403,140 Accrued warranty 121,699 239,173 Right of use liability-operating leases 197,616 65,004 Customer deposits 104,724 90,877 Other 371,419 433,520 Total $ 1,236,680 $ 1,231,714 |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | NOTE 8 - LONG-TERM DEBT The Company’s debt consisted of the following: Bank loans, notes payable and other debt consisted of the following: June 30, 2018 June 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. $ - $ 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%; collateralized by the building and land. Outstanding mortgage balance of $434,184 plus accrued interest was paid in full in connection with the sale of the Company's corporate headquarters on January 31, 2018. Refer to Note 1 of the Notes to Consolidated Financial Statements for further detail related to the sale of the Company’s headquarters. - 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 331,827 1,058,083 Less: current maturities of long-term debt - (726,256 ) Long-term debt, net of current maturities $ 331,827 $ 331,827 Maximum aggregate annual principal payments as of June 30, 2018 are as follows: 2019 $ - 2020 - 2021 - 2022 - 2023 - Thereafter 331,827 $ 331,827 |
EMPLOYEE AND DIRECTOR EQUITY IN
EMPLOYEE AND DIRECTOR EQUITY INCENTIVE PLANS | 12 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
EMPLOYEE AND DIRECTOR EQUITY INCENTIVE PLANS | NOTE 9 - EMPLOYEE AND DIRECTOR EQUITY INCENTIVE PLANS The Company previously adopted the 2007 Equity Incentive Plan (“2007 Plan”) that authorized the board of directors or a committee to grant up to 300,000 shares to employees and directors of the Company. Unless defined in an employment agreement or otherwise determined, the stock options vest ratably over a three-year period. Stock options expire 10 years after the date of grant. No shares are available to be issued for future awards under the 2007 Plan. 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, RSUs, unrestricted stock, other stock-based awards and cash awards. The 2010 Omnibus Plan, as amended, authorizes up to 13,950,000 shares plus shares of Common Stock underlying any outstanding stock option of other awards granted by any predecessor employee stock plan of the Company that is forfeited, terminated, or cancelled without issuance of shares, to employees, officers, non-employee members of the board of directors, consultants and advisors. Unless otherwise determined, options vest ratably over a three-year period and expire eight years after the date of grant. At the annual meeting of shareholders held on December 19, 2017, the Company’s shareholders approved an amendment of the 2010 Omnibus Plan which increased the number of shares of the Company’s Common Stock available for issuance pursuant to awards under the 2010 Omnibus Plan by 2,000,000 to 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 RSUs 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 to 4,400,000. As of June 30, 2018, there were a total of 2,980,693 shares available to be issued for future awards under the 2010 Omnibus Plan and 446,651 shares available to be issued for future awards under the 2012 Director Equity Plan. Stock Options The fair value of each stock 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. The following assumptions were used to estimate the fair value of stock options granted during the years ended June 30, 2018 and June 30, 2017 using the Black-Scholes option-pricing model: Year ended June 30, 2018 2017 Expected life of option (years) 4 4 Risk-free interest rate 1.59 - 2.71% 1.14 - 1.7% Assumed volatility 95.51 - 113.98% 107.7 - 113.55% Expected dividend rate 0.00 % 0.00 % Expected forfeiture rate 6.15 - 21.29% 6.23 - 9.18% Time-vested and performance-based stock options are accounted for at fair value at date of grant. Total fair value of stock options granted for the years ended June 30, 2018 and June 30, 2017 was $414,795 and $1,142,187, respectively. Compensation expense is recognized over the requisite service and performance periods. The amount recognized in the consolidated financial statements related to stock options was $353,584 and $1,017,330, based on the amortized grant date fair value of stock options granted under its various equity incentive plans, during the years ended June 30, 2018 and June 30, 2017, respectively. At June 30, 2018, there was $428,513 in unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted average period of 1.4 years. Information with respect to stock option activity is as follows: Number of Options Weighted Average Exercise Price Average Remaining Contractual Life (in years) 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 1,407,000 0.40 Options forfeited (2,781,483 ) 0.71 Balance at June 30, 2018 6,874,815 0.65 5.87 The following table summarizes information relating to the stock options outstanding as of June 30, 2018: Outstanding Exercisable Range of Exercise Prices Number of Options Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number of Options Average Remaining Contractual Life (in years) Weighted Average Exercise Price $0.28 to $1.00 6,140,365 6.10 $ 0.50 3,070,032 5.57 $ 0.52 $1.01 to $2.50 645,000 4.31 1.47 533,000 4.17 1.56 $2.51 to $5.00 40,200 1.42 3.93 40,200 1.42 3.93 $5.01 to $6.95 49,250 1.24 5.71 49,250 1.24 5.71 Balance at June 30, 2018 6,874,815 5.87 0.65 3,692,482 5.26 0.77 During the year ended June 30, 2018, stock options to purchase 1,407,000 shares were granted to employees exercisable at $0.34 to $0.51 per share based on various service-based vesting terms from July 2017 through June 2021 and exercisable at various dates through June 2026. During the year ended June 30, 2017, stock options to purchase 2,654,100 shares were granted to employees exercisable at $0.35 to $1.02 per share based on service-based and performance-based vesting terms from July 2016 through June 2020 and exercisable at various dates through June 2025. The aggregate intrinsic value of outstanding stock options totaled $14,779 and was based on the Company’s adjusted closing stock price of $0.37 as of June 30, 2018. Information with respect to unvested employee stock option activity is as follows: Number of Options Weighted Average Grant Date Fair Value Per Share Average Remaining Contractual Life (in years) 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 1,407,000 0.40 Options vested (1,581,266 ) 0.56 Options forfeited (1,840,499 ) 0.48 Balance at June 30, 2018 3,182,333 0.51 6.57 RSUs The Company compensates its directors with time-vested RSUs and cash. On June 26, 2018, 119,444 RSUs were granted to the Company’s directors in lieu of cash based directors fee payments of $43,000 for services rendered during the fourth quarter of fiscal 2018. The RSUs vested immediately on the date of grant. On November 14, 2017, 1,163,075 RSUs were granted to the Company’s directors in partial payment of director’s fees through November 2018 under the 2012 Director Equity Plan. As of June 30, 2018, 872,310 of the RSUs from the November 14, 2017 grant had vested. On November 14, 2016, 581,816 RSUs were granted to the Company’s directors in partial payment of director’s fees through November 2017 under the 2012 Director Equity Plan. As of September 30, 2017, 563,635 of the RSUs from the November 14, 2016 grant had vested and 18,181 had forfeited. On November 17, 2015, 864,000 RSUs were granted to the Company's directors in partial payment of director's fees through November 2016 under the 2012 Director Equity Plan. As of September 30, 2016, all of the RSUs from the November 17, 2015 grant had vested. The Company also compensates its key employees with time-vested and performance-based RSUs. 3,060,000 and 1,090,000 RSUs were granted to the Company’s employees under the 2010 Omnibus Plan and inducement awards during the years ended June 30, 2018 and June 30, 2017, respectively. Time-vested and performance-based RSUs are accounted for at fair value at date of grant. Total fair value of RSUs granted for the years ended June 30, 2018 and June 30, 2017 was $1,785,400 and $1,917,598, respectively. Compensation expense is recognized over the requisite service and performance periods. The amount recognized in the consolidated financial statements related to RSUs was $789,165 and $1,128,435, based on the amortized grant date fair value of RSUs granted under its various equity incentive plans, during the years ended June 30, 2018 and June 30, 2017, respectively. As of June 30, 2018, there were 4,145,765 of unvested RSUs and $1,748,243 in unrecognized compensation cost. Generally, shares of Common Stock related to vested RSUs are to be issued six months after the holder’s separation from service with the Company. Information with respect to RSU activity is as follows: Number of Restricted Stock Units Weighted Average Valuation Price Per Unit 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 4,342,519 0.41 RSUs forfeited (1,147,231 ) 0.75 Shares issued (1,041,152 ) 1.42 Balance at June 30, 2018 7,710,468 0.70 |
WARRANTS
WARRANTS | 12 Months Ended |
Jun. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
WARRANTS | NOTE 10 - WARRANTS On August 7, 2017, 220,000 warrants were issued in connection with a professional services agreement. The warrants are exercisable at $0.40 per share and vest upon the satisfaction of certain performance targets prior to March 31, 2018. As of March 31, 2018, 40,000 warrants vested and expire in March 2021, and the remaining 180,000 warrants did not vest as the result of not achieving certain performance targets, and therefore expired in March 2018. On June 22, 2017, 357,500 warrants were issued in connection with the Underwriting Agreement entered into with Roth Capital Partners, LLC as part of underwriting compensation which provided for the sale of $2.5 million of Common Stock on June 22, 2017. The warrants are exercisable at $0.42 per share and expire in June 2022. Information with respect to warrant activity is as follows: Number of Warrants Weighted Average Exercise Price Per Share 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 Warrants expired (180,000 ) 0.40 Balance at June 30, 2018 397,500 0.42 |
BASIC AND DILUTED NET LOSS PER
BASIC AND DILUTED NET LOSS PER SHARE | 12 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
BASIC AND DILUTED NET LOSS PER SHARE | NOTE 11 – 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 and RSUs. In computing diluted net loss per share for the years ended June 30, 2018 and June 30, 2017, no adjustment has been made to the weighted average outstanding common shares as the assumed exercise of outstanding stock options, RSUs and warrants and conversion of preferred stock is anti-dilutive. Potential common shares not included in calculating diluted net loss per share are as follows: June 30, 2018 June 30, 2017 Stock options and RSUs 14,585,283 13,805,630 Stock warrants 397,500 357,500 Series B preferred shares 3,870,416 3,506,404 Total 18,853,199 17,669,534 |
EQUITY
EQUITY | 12 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
EQUITY | NOTE 12 - 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 shares of Series B Convertible Preferred Stock (the “Series B Preferred Stock”). Certain Directors of the Company purchased 500 shares. Shares of Series B Preferred Stock have a $1,000 per share stated value (the “Stated Value”) and accrue dividends on the Stated Value at an annual rate of 10%. At June 30, 2018, 2,300 shares of Series B Preferred Stock remain outstanding and were convertible, along with accrued and unpaid dividends, into 3,870,416 shares of Common Stock of the Company at a conversion price equal to $0.95. Upon any liquidation, dissolution or winding up of the Company, holders of the Series B Preferred Stock are entitled to receive out of the assets of the Company an amount equal to two times the Stated Value, plus any accrued and unpaid dividends thereon. At June 30, 2018, the liquidation preference of the Series B Preferred Stock was $5,976,896. In connection with the purchase of the Series B Preferred Stock, investors received warrants to purchase a total of 3,157,895 shares of Common Stock at an exercise price of $0.95. These warrants expired on September 27, 2016. Series C Convertible Preferred Stock On July 13, 2015, the Company entered into a Securities Purchase Agreement with SPI Energy Co., LTD. (“SPI”) in connection with entering into a global strategic partnership, which included a Securities Purchase Agreement, a Supply Agreement and a Governance Agreement. Pursuant to the Securities Purchase Agreement, the Company sold to SPI for an aggregate purchase price of $33,390,000 a total of (i) 8,000,000 shares of Common Stock based on a purchase price per share of $0.6678 and (ii) 28,048 shares Series C convertible preferred stock (the “Series C Preferred Stock”) based on a price of $0.6678 per common equivalent. The Series C Preferred Stock were potentially convertible, subject to the completion of projects under the Supply Agreement with SPI, into a total of up to 42,000,600 shares of Common Stock. At the closing of the SPI transaction, the Company recognized the fair value of (i) $6,800,000 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; (ii) $13,300,000 for the Series C Preferred Stock, ignoring the contingent convertibility on the closing date, as an increase to equity; and (iii) $13,290,000 as deferred revenue for the cash received by the Company in excess of the fair value of the Common Stock and the nonconvertible attribute of the Series C Preferred Stock, which was allocated to the Supply Agreement, and under which the Company was expected to perform in the future and would be recognized as revenue as sales occurred under the Supply Agreement. Pursuant to the Securities Purchase Agreement, the Company also issued to SPI a warrant to purchase 50,000,000 shares of Common Stock for an aggregate purchase price of $36,729,000 (the “Warrant”), at a per share exercise price of $0.7346. The Warrant would have become exercisable only once SPI purchased and paid for 40 megawatts of projects, as defined in the Supply Agreement. 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 Topic 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 as of June 30, 2018 and (2) the amount payable to the holder if it had converted the shares into Common Stock immediately prior to the Liquidation or Fundamental Transaction, for each share of the Series C Preferred Stock after any distribution or payment to the holders of the Series B Preferred Stock and before any distribution or payment shall be made to the holders of the Company’s existing Common Stock, and if the assets of the Company shall be insufficient to pay in full such amounts, then the entire assets to be distributed shall be ratably distributed in accordance with respective amount that would be payable on such shares if all amounts payable thereon were paid in full. At June 30, 2018, the liquidation preference of the Series C Preferred Stock was $0. While the Series C Preferred Stock is outstanding, the Company may not pay dividends on its Common Stock and may not redeem more than $100,000 in Common Stock per year. 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 Series C Preferred Stock or 25 million shares of Common Stock or Common Stock equivalents, SPI has certain governance rights, as defined in the Governance Agreement. 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 outstanding shares of Common Stock. On May 8, 2018, the Company filed a lawsuit against SPI in the Circuit Court for Waukesha County in the State of Wisconsin seeking a declaratory judgment releasing the Company from its obligations under the Governance Agreement between the Company and SPI dated July 13, 2015 (the “SPI Dispute”). The Company’s complaint in the SPI Dispute asserted, among other things, that the Company should be released from its obligations under the Governance Agreement due to the Doctrine of Frustration of Purpose. As detailed in the complaint, the basis for this claim was that the Company’s principle purpose for entering into the Governance Agreement was as a condition and inducement to SPI to enter into the Supply Agreement between the Company and SPI dated July 13, 2015, and that due to SPI’s failure to perform its obligations under the Supply Agreement, that purpose was frustrated. On June 19, 2018, the Circuit Court for Waukesha County in the State of Wisconsin granted the Company’s motion for a default judgment in the SPI Dispute. Pursuant to this default judgment, the Court ordered that the Governance Agreement was terminated and unenforceable, and the Company was completely and fully released from its obligations, covenants and agreements thereunder. 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 per share. The Company sold a total of 7,150,000 shares of its Common Stock in the offering for net proceeds of $2,073,055, after deducting the underwriting discount and expenses. The Company granted the underwriter an option to purchase up to 1,072,500 additional shares of Common Stock to cover over-allotments, if any. In July 2017, the Company sold an additional 367,000 shares of its Common Stock under the over-allotment option for net proceeds of $119,459, after deducting the underwriting discount and expenses. |
COMMITMENTS
COMMITMENTS | 12 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS | NOTE 13 - COMMITMENTS Leasing Activities Operating Leases Operating lease expense recognized during the year ended June 30, 2018 and June 30, 2017 was $150,797 and $67,888, respectively. Operating lease expense is included in operating expenses in the consolidated statements of operations. In December 2017, the Company entered into a seven-year office lease agreement to replace the Company’s former headquarters, which was sold on January 31, 2018. Monthly rent for the first twelve months of the lease is $13,845 and increases by approximately 1.5% for each succeeding 12-month period. Refer to Note 1 of the Notes to Consolidated Financial Statements for further detail related to the sale of the Company’s headquarters. As of June 30, 2018, and June 30, 2017, the carrying value of the right of use asset was $1,087,249 and $150,214, respectively, and is separately stated on the consolidated balance sheets. The related short-term and long-term liabilities as of June 30, 2018 were $197,616 and $889,633 and as of June 30, 2017 were $65,004 and $85,210, respectively. The short-term and long-term liabilities are included in “Accrued expenses” and “Other long-term liabilities,” respectively, in the consolidated balance sheets. Information regarding the weighted-average remaining lease term and the weighted-average discount rate for operating leases are summarized below: June 30, 2018 June 30, 2017 Weighted-average remaining lease term (in years) Operating leases 6.05 2.37 Weighted-average discount rate Operating leases 5.0 % 5.0 % 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 consolidated balance sheets as of June 30, 2018: 2019 $ 248,148 2020 210,260 2021 172,317 2022 174,873 2023 177,429 Thereafter 285,846 Total undiscounted lease payments 1,268,873 Present value adjustment (181,624 ) Net operating lease liabilities $ 1,087,249 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 $54,300 and $79,179 was recognized during the years ended June 30, 2018 and June 30, 2017, respectively. Short-term rent expense is included in operating expenses in the consolidated statements of operations. |
RETIREMENT PLANS
RETIREMENT PLANS | 12 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [Abstract] | |
RETIREMENT PLANS | NOTE 14 - RETIREMENT PLANS The Company sponsors a defined contribution retirement plan under Section 401(k) of the Internal Revenue Code (“IRC”), 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% of eligible compensation and Company contributions are limited in any year to the amount allowable by government tax authorities. Eligible employees are 100% immediately vested. Total employer contributions recognized in the consolidated statements of operations under this plan were $193,899 and $190,585 for the years ended June 30, 2018 and June 30, 2017, respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 15 - INCOME TAXES The Company had no current or deferred provision (benefit) for income taxes for the years ended June 30, 2018 and June 30, 2017. The Company’s combined effective income tax rate differed from the U.S. federal statutory income rate as Year ended June 30, 2018 2017 Income tax benefit computed at the U.S. federal statutory rate -28% -34% Change in valuation allowance 28% 34% Total 0% 0% Significant components of the Company’s net deferred income tax assets as of June 30, 2018 and June 30, 2017 were as June 30, 2018 June 30, 2017 Federal net operating loss carryforwards $ 14,209,723 $ 18,557,615 Federal - other 2,722,072 3,794,302 Wisconsin net operating loss carryforwards 3,779,643 3,116,946 Australia net operating loss carryforwards 1,280,966 1,334,725 Deferred income tax asset valuation allowance (21,992,404 ) (26,803,588 ) Total deferred income tax assets $ - $ - The Company has U.S. federal net operating loss carryforwards of approximately $54.7 million as of June 30, 2018 that expire at various dates between 2019 and 2037 and $13.0 million that has an indefinite carryforward period. The Company has U.S. federal research and development tax credit carryforwards of approximately $340,000 as of June 30, 2018 that expire at various dates through 2036. As of June 30, 2018, the Company has approximately $64.3 million of Wisconsin net operating loss carryforwards that expire at various dates between 2026 and 2038. As of June 30, 2018, the Company also has approximately $4.3 million of Australian net operating loss carryforwards available to reduce future taxable income of its Australian subsidiaries with an indefinite carryforward period. The Company’s issuance of additional shares of Common Stock has constituted an ownership change under Section 382 of the IRC which places an annual dollar limit on the use of net operating loss carryforwards and other tax attributes that may be utilized in the future. The calculation of the annual limitation of usage is based on a percentage of the equity value immediately after any ownership change. The annual amount of tax attributes that may be utilized after the change in ownership is limited. Previous issuances of additional shares of Common Stock also resulted in ownership changes and the annual amount of tax attributes from previous years is limited as well. The estimated U.S. federal net operating loss carryforward expected to expire due to the Section 382 limitation is $44.5 million and the estimated state net operating losses expected to expire due to the limitation is $28.2 million. The net operating loss deferred tax assets reflect this limitation. On December 22, 2017, the President of the U.S. signed 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% to 21%, further limitations on the deductibility of interest expense and certain executive compensation, repeal of the corporate Alternative Minimum Tax and imposition of a territorial tax system. While some of the new provisions of the Tax Act will impact the Company in fiscal 2019 and beyond, the change in the U.S. federal statutory tax rate was effective January 1, 2018. During the second quarter of fiscal 2018, the Company was required to revalue its U.S. federal deferred tax assets and liabilities at the new U.S. federal statutory tax rate in the period of enactment. As the Company has provided for a full valuation allowance against all of its net deferred income taxes, the revaluation resulted in no charge to income tax expense for the year ended June 30, 2018. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 16 – 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% owned subsidiary, Holu. Pursuant to the MIPA, the Company will sell to Theodore Peck all of the issued and outstanding membership interests of a PPA entity for $592,000, subject to the terms of a Promissory Note, a Security Agreement and a Pledge Agreement. The transaction is considered to be executed upon terms that are in the normal course of operations. Revenues for the total contract of $592,000 and expenses of $573,353 were recognized in the Company’s consolidated statement of operations for the year ended June 30, 2017. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | NOTE 17 – SUBSEQUENT EVENT On Se The following table sets forth total EnSync, Inc. equity as of June 30, 2018 on an actual basis and on a pro forma basis giving effect to the registered direct offering: Total Ensync, Inc. equity as of June 30, 2018: As reported $ 5,086,343 Net proceeds from registered direct offering 2,715,710 Pro forma as of June 30, 2018 $ 7,802,053 |
SUMMARY OF SIGNIFICANT ACCOUN25
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business EnSync, Inc. and its subsidiaries (the “Company”) is a renewable energy systems and services company whose innovative and differentiated technologies and capabilities are designed to deliver the least expensive, highest value and most reliable electricity. With the Company’s May 2018 announcement of the EnSync Home Energy System, the Company now serves all three major markets in the renewable energy space: Residential Energy Systems, Commercial Energy Systems and Independent Utility Energy Systems. The Company’s systems utilize highly configurable modules, that together with the Auto-Sync DC Bus and DER Flex TM Incorporated in 1998, the Company is headquartered in Menomonee Falls, Wisconsin, USA, with offices in Madison, Wisconsin, Petaluma, California, Honolulu, Hawaii and Shanghai, China. The consolidated financial statements include the accounts of the Company and those of its wholly-owned subsidiaries, including its 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. |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly and majority-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and are reported in U.S. dollars. For subsidiaries in which the Company’s ownership interest is less than 100%, the noncontrolling interests are reported in stockholders’ equity in the consolidated balance sheets. The noncontrolling interests in net income (loss), net of tax, are classified separately in the 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 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 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 the Company 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 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 of 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 U.S., Philippines, 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. Accounts receivable are stated net of an allowance for doubtful accounts of $2,575 as of June 30, 2018 and $47,307 as of June 30, 2017. |
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 the Company bills its 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 the Company’s historical experience, the Company generally considers 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. The Company anticipates 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. The Company anticipates that substantially all such amounts will be earned over the next twelve months. |
Other Current Assets | Other Current Assets Note Receivable The Company has a note receivable from an unrelated party of $162,121 and $171,140 as of June 30, 2018 and June 30, 2017, respectively. The Company regularly evaluates the financial condition of the borrower to determine if any reserve for an uncollectible amount should be established. The note receivable is stated net of an allowance for doubtful accounts of $162,121 as of June 30, 2018. As of June 30, 2017, no such allowance was 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 | 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 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 year ended June 30, 2018 and determined that there were no changes in the estimated useful lives of assets. |
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 consolidated statements 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 the consolidated statements of operations during the year ended June 30, 2018. The sale of the Company’s corporate headquarters closed on January 31, 2018, pursuant to which we received net proceeds of $2,187,317, after payment of customary closing costs, and recorded a gain on sale of $61,129. |
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 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 comparing 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 June 30, 2018 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 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: Year ended June 30, 2018 2017 Beginning balance $ 239,173 $ 27,207 Accruals for warranties 28,462 276,855 Net settlements (228,547 ) (321,098 ) Adjustments relating to preexisting warranties 82,611 256,209 Ending balance $ 121,699 $ 239,173 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: Year ended June 30, 2018 2017 Beginning balance $ 431,700 $ - Deferred revenue for new extended warranty contracts 116,299 435,450 Deferred revenue recognized (3,750 ) (3,750 ) Ending balance 544,249 431,700 Less: current portion of deferred revenue for extended warranty contracts 5,312 9,062 Long-term deferred revenue for extended warranty contracts $ 538,937 $ 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. The Company’s 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 Securities and Exchange Commission (“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 the Company’s 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 when collectability from the buyer is reasonably assured, which generally occurs at the end of a project. We may align the Company’s revenue recognition and release its project assets or deferred PPA project costs to cost of product 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 product sales. The Company reports its revenues net of estimated returns and allowances. Revenues for the year ended June 30, 2018 were comprised of four significant customers (81% of revenues). Revenues for the year ended June 30, 2017 were comprised of two significant customers (71% of revenues). The Company had two significant customers with an outstanding receivable balance of $173,849 (81% of accounts receivable, net) as of June 30, 2018. The Company had three significant customers with an outstanding receivable balance of $336,685 (72% of accounts receivable, net) as of June 30, 2017. |
Engineering, Development and License Revenues | Engineering, Development and License Revenues The Company assesses whether a substantive milestone exists at the inception of its 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 the Company’s performance or the occurrence of a specific outcome resulting from the Company’s 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 of $937,725 related to a Research and Development Agreement (the “R&D Agreement”) with Lotte Chemical Corporation (“Lotte”) for the year ended June 30, 2017. Pursuant to the R&D Agreement, the Company agreed to develop and provide to Lotte a 500 kWh 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 recognized $175,000 of revenue under the R&D Agreement for the year ended June 30, 2017. The Company does not expect to receive any additional cash payments under the R&D Agreement and other related agreements with Lotte. As of June 30, 2018, and June 30, 2017, the Company had no billed or unbilled amounts from engineering and development contracts in process. |
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 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 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 9. |
Advertising Expense | Advertising Expense Advertising costs were charged to selling, general and administrative expenses as incurred. Advertising costs of $197,744 and $145,285 were incurred for the years ended June 30, 2018 and June 30, 2017, respectively. |
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 consolidated 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 full valuation allowance against its net deferred income tax assets as of June 30, 2018 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 U.S. Internal Revenue Service (“IRS”) notified the Company of an income tax audit for the tax period ended June 30, 2015. On March 15, 2018, the audit was completed by the IRS resulting in no changes to U.S. federal income tax returns. |
Foreign Currency | Foreign Currency The Company uses the U.S. dollar as its functional and reporting currency, while the Philippines peso and Hong Kong dollar are the functional currencies of its foreign subsidiaries. Assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. 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 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. |
Segment Information | Segment Information The Company has determined that it operates as one reportable segment. |
Reclassifications | Reclassifications Certain amounts previously reported have been reclassified to conform to the current presentation. The reclassifications did not impact prior period consolidated results of operations, cash flows, total assets, total liabilities, or total equity. |
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 the Company’s financial position or results of operations upon adoption. In February 2018, the FASB issued Accounting Standard Update (“ASU”) 2018-02 – Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. Under the new guidance, entities will have the option to reclassify tax effects within other comprehensive income (referred to as stranded tax effects) to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) is recorded. The amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those annual periods. The Company does not expect adoption of this guidance to have a significant impact on its consolidated financial statements. In May 2017, the FASB issued 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 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 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 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. 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 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 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 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. Additional ASUs have also been issued as part of the overall new revenue 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. The guidance also requires expanded disclosures relating to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. 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 substantially completed its evaluation of the impacts of ASU 2014-09, and concluded that the adoption of the new revenue standard is not expected to have a significant impact on its consolidated financial statements. The effect is not significant because the Company’s analysis of contracts under the new revenue standard supports the recognition of revenue over time for the majority of contracts, which is consistent with the Company’s current revenue recognition model. Where a performance obligation is satisfied over time, the related revenue is also recognized over time. The Company this guidance in the first quarter of fiscal 2019 using the full retrospective approach. |
SUMMARY OF SIGNIFICANT ACCOUN26
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Estimated Useful Lives Used For Each Class of Depreciable Assets | The estimated useful lives used for each class of depreciable asset are: Estimated Useful Manufacturing equipment 3 - 7 years Office equipment 3 - 7 years Building and improvements 7 - 40 years |
Schedule Of Accrued Warranty Liability | The Year ended June 30, 2018 2017 Beginning balance $ 239,173 $ 27,207 Accruals for warranties 28,462 276,855 Net settlements (228,547 ) (321,098 ) Adjustments relating to preexisting warranties 82,611 256,209 Ending balance $ 121,699 $ 239,173 |
Deferred Revenue, by Arrangement, Disclosure | A summary of changes to long-term deferred revenue for extended warranty contracts is as follows: Year ended June 30, 2018 2017 Beginning balance $ 431,700 $ - Deferred revenue for new extended warranty contracts 116,299 435,450 Deferred revenue recognized (3,750 ) (3,750 ) Ending balance 544,249 431,700 Less: current portion of deferred revenue for extended warranty contracts 5,312 9,062 Long-term deferred revenue for extended warranty contracts $ 538,937 $ 422,638 |
CHINA JOINT VENTURE (Tables)
CHINA JOINT VENTURE (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Related Party Sales and Purchase Activity | Activity with Meineng Energy is summarized as follows: Year ended June 30, 2018 2017 Product sales to Meineng Energy $ 22,133 $ 72,712 Cost of product sales to Meineng Energy 17,537 76,109 Product purchases from Meineng Energy 430,802 1,300,892 |
Schedule of Related Party Transactions | The total amount due to Meineng Energy is as follows: June 30, 2018 June 30, 2017 Net amount due to Meineng Energy $ (33,822 ) $ (12,298 ) |
Equity Method Investments | The operating results for Meineng Energy are summarized as follows: Year ended June 30, 2018 2017 Revenues $ 719,302 $ 1,447,243 Gross profit (loss) (8,481 ) 135,228 Loss from operations (1,673,022 ) (1,425,564 ) Net loss (1,629,316 ) (1,391,295 ) |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Net inventories are comprised of the following as of: June 30, 2018 June 30, 2017 Raw materials and subassemblies $ 1,587,454 $ 3,343,233 Work in progress - 4,595 Less: inventory reserve (367,006 ) (865,815 ) Total $ 1,220,448 $ 2,482,013 |
PROPERTY, PLANT & EQUIPMENT (Ta
PROPERTY, PLANT & EQUIPMENT (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, plant and equipment are comprised of the following: June 30, 2018 June 30, 2017 Land $ - $ 217,000 Building and improvements 44,975 3,532,375 Manufacturing equipment 2,977,579 4,255,385 Office equipment 470,731 454,562 Construction in process 227,702 - Total, at cost 3,720,987 8,459,322 Less: accumulated depreciation (2,945,442 ) (5,013,069 ) Property, plant and equipment, net $ 775,545 $ 3,446,253 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | Accrued expenses are comprised of the following as of: June 30, 2018 June 30, 2017 Accrued compensation and benefits $ 441,222 $ 403,140 Accrued warranty 121,699 239,173 Right of use liability-operating leases 197,616 65,004 Customer deposits 104,724 90,877 Other 371,419 433,520 Total $ 1,236,680 $ 1,231,714 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Bank loans and notes payable | Bank loans, notes payable and other debt consisted of the following: June 30, 2018 June 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. $ - $ 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%; collateralized by the building and land. Outstanding mortgage balance of $434,184 plus accrued interest was paid in full in connection with the sale of the Company's corporate headquarters on January 31, 2018. Refer to Note 1 of the Notes to Consolidated Financial Statements for further detail related to the sale of the Company’s headquarters. - 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 331,827 1,058,083 Less: current maturities of long-term debt - (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 June 30, 2018 are as follows: 2019 $ - 2020 - 2021 - 2022 - 2023 - Thereafter 331,827 $ 331,827 |
EMPLOYEE AND DIRECTOR EQUITY 32
EMPLOYEE AND DIRECTOR EQUITY INCENTIVE PLANS (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
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 stock options granted during the years ended June 30, 2018 and June 30, 2017 using the Black-Scholes option-pricing model: Year ended June 30, 2018 2017 Expected life of option (years) 4 4 Risk-free interest rate 1.59 - 2.71% 1.14 - 1.7% Assumed volatility 95.51 - 113.98% 107.7 - 113.55% Expected dividend rate 0.00 % 0.00 % Expected forfeiture rate 6.15 - 21.29% 6.23 - 9.18% |
Schedule Of Share Based Compensation Stock Options Activity | Information with respect to stock option activity is as follows: Number of Options Weighted Average Exercise Price Average Remaining Contractual Life (in years) 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 1,407,000 0.40 Options forfeited (2,781,483 ) 0.71 Balance at June 30, 2018 6,874,815 0.65 5.87 |
Disclosure Of Share Based Compensation Arrangements By Share Based Payment Award | The following table summarizes information relating to the stock options outstanding as of June 30, 2018: Outstanding Exercisable Range of Exercise Prices Number of Options Average Remaining Contractual Life (in years) Weighted Average Exercise Price Number of Options Average Remaining Contractual Life (in years) Weighted Average Exercise Price $0.28 to $1.00 6,140,365 6.10 $ 0.50 3,070,032 5.57 $ 0.52 $1.01 to $2.50 645,000 4.31 1.47 533,000 4.17 1.56 $2.51 to $5.00 40,200 1.42 3.93 40,200 1.42 3.93 $5.01 to $6.95 49,250 1.24 5.71 49,250 1.24 5.71 Balance at June 30, 2018 6,874,815 5.87 0.65 3,692,482 5.26 0.77 |
Schedule Of Unrecognized Compensation Cost Nonvested Awards | Information with respect to unvested employee stock option activity is as follows: Number of Options Weighted Average Grant Date Fair Value Per Share Average Remaining Contractual Life (in years) 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 1,407,000 0.40 Options vested (1,581,266 ) 0.56 Options forfeited (1,840,499 ) 0.48 Balance at June 30, 2018 3,182,333 0.51 6.57 |
Schedule Of Share Based Compensation Restricted Stock Units Award Activity | Information with respect to RSU activity is as follows: Number of Restricted Stock Units Weighted Average Valuation Price Per Unit 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 4,342,519 0.41 RSUs forfeited (1,147,231 ) 0.75 Shares issued (1,041,152 ) 1.42 Balance at June 30, 2018 7,710,468 0.70 |
WARRANTS (Tables)
WARRANTS (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
WARRANTS [Abstract] | |
Schedule of Stockholders' Equity Note, Warrants or Rights | Information with respect to warrant activity is as follows: Number of Warrants Weighted Average Exercise Price Per Share 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 Warrants expired (180,000 ) 0.40 Balance at June 30, 2018 397,500 0.42 |
BASIC AND DILUTED NET LOSS PE34
BASIC AND DILUTED NET LOSS PER SHARE (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
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: June 30, 2018 June 30, 2017 Stock options and RSUs 14,585,283 13,805,630 Stock warrants 397,500 357,500 Series B preferred shares 3,870,416 3,506,404 Total 18,853,199 17,669,534 |
COMMITMENTS (Tables)
COMMITMENTS (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
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: June 30, 2018 June 30, 2017 Weighted-average remaining lease term (in years) Operating leases 6.05 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 consolidated balance sheets as of June 30, 2018: 2019 $ 248,148 2020 210,260 2021 172,317 2022 174,873 2023 177,429 Thereafter 285,846 Total undiscounted lease payments 1,268,873 Present value adjustment (181,624 ) Net operating lease liabilities $ 1,087,249 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Effective income tax rate reconciliation | The Company’s combined effective income tax rate differed from the U.S. federal statutory income rate as Year ended June 30, 2018 2017 Income tax benefit computed at the U.S. federal statutory rate -28% -34% Change in valuation allowance 28% 34% Total 0% 0% |
Significant components of the Company's net deferred income tax assets | Significant components of the Company’s net deferred income tax assets as of June 30, 2018 and June 30, 2017 were as June 30, 2018 June 30, 2017 Federal net operating loss carryforwards $ 14,209,723 $ 18,557,615 Federal - other 2,722,072 3,794,302 Wisconsin net operating loss carryforwards 3,779,643 3,116,946 Australia net operating loss carryforwards 1,280,966 1,334,725 Deferred income tax asset valuation allowance (21,992,404 ) (26,803,588 ) Total deferred income tax assets $ - $ - |
SUBSEQUENT EVENT (Tables)
SUBSEQUENT EVENT (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Actual Basis and On A Pro Forma Basis Giving Effect to the Registered Direct Offering | The following table sets forth total EnSync, Inc. equity as of June 30, 2018 on an actual basis and on a pro forma basis giving effect to the registered direct offering: Total Ensync, Inc. equity as of June 30, 2018: As reported $ 5,086,343 Net proceeds from registered direct offering 2,715,710 Pro forma as of June 30, 2018 $ 7,802,053 |
SUMMARY OF SIGNIFICANT ACCOUN38
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
Jun. 30, 2018 | |
Manufacturing Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment, Useful Life | 7 years |
Manufacturing Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment, Useful Life | 3 years |
Office Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment, Useful Life | 7 years |
Office Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment, Useful Life | 3 years |
Building and improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment, Useful Life | 40 years |
Building and improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment, Useful Life | 7 years |
SUMMARY OF SIGNIFICANT ACCOUN39
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Beginning balance | $ 239,173 | $ 27,207 |
Accruals for warranties | 28,462 | 276,855 |
Net settlements | (228,547) | (321,098) |
Adjustments relating to preexisting warranties | 82,611 | 256,209 |
Ending balance | $ 121,699 | $ 239,173 |
SUMMARY OF SIGNIFICANT ACCOUN40
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) | 12 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | May 04, 2017 | Jul. 13, 2015 | |
Deferred Revenue Arrangement [Line Items] | ||||
Deferred revenue for new extended warranty contracts | $ 116,299 | $ 422,638 | ||
Long-term deferred revenue for extended warranty contracts | 538,937 | 422,638 | $ 13,290,000 | $ 13,290,000 |
Extended Warranty Contracts [Member] | ||||
Deferred Revenue Arrangement [Line Items] | ||||
Beginning balance | 431,700 | 0 | ||
Deferred revenue for new extended warranty contracts | 116,299 | 435,450 | ||
Deferred revenue recognized | (3,750) | (3,750) | ||
Ending balance | 544,249 | 431,700 | ||
Less: current portion of deferred revenue for extended warranty contracts | 5,312 | 9,062 | ||
Long-term deferred revenue for extended warranty contracts | $ 538,937 | $ 422,638 |
SUMMARY OF SIGNIFICANT ACCOUN41
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($) | Oct. 12, 2017 | Jan. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2017 |
Allowance for Doubtful Accounts Receivable | $ 2,575 | $ 47,307 | ||
Cost of engineering and development | 0 | 937,725 | ||
Advertising Expense | 197,744 | 145,285 | ||
Accounts Receivable, Net, Current | 215,009 | 469,906 | ||
Proceeds from Sale of Property, Plant, and Equipment | $ 2,340,000 | 2,299,017 | 8,432 | |
Impairment of Long-Lived Assets to be Disposed of | 447,000 | 0 | ||
Proceeds from Sale of Buildings | $ 2,187,317 | |||
Gain (Loss) on Disposition of Property Plant Equipment, Excluding Oil and Gas Property and Timber Property | $ 61,129 | |||
Financing Receivable, Net | 162,121 | 171,140 | ||
Provision for Doubtful Accounts | $ 162,121 | 0 | ||
Research And Development Agreement [Member] | ||||
Cost of engineering and development | 175,000 | |||
Investee Company's [Member] | Maximum [Member] | ||||
Equity Method Investment, Ownership Percentage | 50.00% | |||
Investee Company's [Member] | Minimum [Member] | ||||
Equity Method Investment, Ownership Percentage | 20.00% | |||
Customer Concentration Risk [Member] | ||||
Accounts Receivable, Net, Current | $ 173,849 | $ 336,685 | ||
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | ||||
Concentration Risk, Percentage | 81.00% | 71.00% | ||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||
Concentration Risk, Percentage | 81.00% | 72.00% |
MANAGEMENT'S PLANS AND FUTURE42
MANAGEMENT'S PLANS AND FUTURE OPERATIONS (Details Textual) - USD ($) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Net Loss | $ (12,970,015) | $ (4,089,536) |
Retained Earnings (Accumulated Deficit) | (137,609,659) | (124,639,644) |
Total equity | 5,782,818 | 17,907,767 |
Liabilities | $ 4,498,114 | $ 3,906,490 |
CHINA JOINT VENTURE (Details)
CHINA JOINT VENTURE (Details) - Meineng Energy [Member] - USD ($) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Product sales to Meineng Energy | $ 22,133 | $ 72,712 |
Cost of product sales to Meineng Energy | 17,537 | 76,109 |
Product purchases from Meineng Energy | 430,802 | 1,300,892 |
Net amount due to Meineng Energy | $ (33,822) | $ (12,298) |
CHINA JOINT VENTURE (Details 1)
CHINA JOINT VENTURE (Details 1) - USD ($) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues | $ 719,302 | $ 1,447,243 |
Gross profit (loss) | (8,481) | 135,228 |
Loss from operations | (1,673,022) | (1,425,564) |
Net loss | $ (1,629,316) | $ (1,391,295) |
CHINA JOINT VENTURE (Details Te
CHINA JOINT VENTURE (Details Textual) - USD ($) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Gain (Loss) on Investments | $ 831,433 | $ 814,546 |
Chief Executive Officer [Member] | ||
Equity Method Investment, Ownership Percentage | 6.00% | |
Power Sav [Member] | ||
Equity Method Investment, Ownership Percentage | 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] | ||
Equity Method Investment, Ownership Percentage | 40.00% | |
Contribution Of Technology Upon License Agreement | $ 4,100,000 | |
Basis In The Technology Contributed Related To Research And Development Expenditures | $ 0 | |
Meineng Energy [Member] | ||
Equity Method Investment, Ownership Percentage | 30.00% | 30.00% |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Jun. 30, 2018 | Jun. 30, 2017 |
Raw materials and subassemblies | $ 1,587,454 | $ 3,343,233 |
Work in progress | 0 | 4,595 |
Less: inventory reserve | (367,006) | (865,815) |
Total | $ 1,220,448 | $ 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 ($) | Jun. 30, 2018 | Jun. 30, 2017 |
Land | $ 0 | $ 217,000 |
Building and improvements | 44,975 | 3,532,375 |
Manufacturing equipment | 2,977,579 | 4,255,385 |
Office equipment | 470,731 | 454,562 |
Construction in process | 227,702 | 0 |
Total, at cost | 3,720,987 | 8,459,322 |
Less: accumulated depreciation | (2,945,442) | (5,013,069) |
Property, plant and equipment, net | $ 775,545 | $ 3,446,253 |
PROPERTY, PLANT & EQUIPMENT (49
PROPERTY, PLANT & EQUIPMENT (Details Textual) - USD ($) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Depreciation of property, plant and equipment | $ 288,168 | $ 483,636 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) | Jun. 30, 2018 | Jun. 30, 2017 |
Accrued compensation and benefits | $ 441,222 | $ 403,140 |
Accrued warranty | 121,699 | 239,173 |
Right of use liability-operating leases | 197,616 | 65,004 |
Customer deposits | 104,724 | 90,877 |
Other | 371,419 | 433,520 |
Total | $ 1,236,680 | $ 1,231,714 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2018 | 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. | $ 0 | $ 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%; collateralized by the building and land. Outstanding mortgage balance of $434,184 plus accrued interest was paid in full in connection with the sale of the Company's corporate headquarters on January 31, 2018. Refer to Note 1 of the Notes to Consolidated Financial Statements for further detail related to the sale of the Company's headquarters. | 0 | 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 | $ 331,827 | 1,058,083 |
Less: current maturities of long-term debt | 0 | (726,256) |
Long-term debt, net of current maturities | $ 331,827 | $ 331,827 |
Debt Instrument Floor Rate | 5.00% | |
Maximum [Member] | ||
Sale Leaseback Transaction, Quarterly Rental Payments | $ 2,555 | |
Minimum [Member] | ||
Sale Leaseback Transaction, Quarterly Rental Payments | 1,510 | |
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 | Jan. 31, 2018 |
LONG-TERM DEBT (Details 1)
LONG-TERM DEBT (Details 1) | Jun. 30, 2018USD ($) |
2,019 | $ 0 |
2,020 | 0 |
2,021 | 0 |
2,022 | 0 |
2,023 | 0 |
Thereafter | 331,827 |
Notes Payable | $ 331,827 |
EMPLOYEE AND DIRECTOR EQUITY 53
EMPLOYEE AND DIRECTOR EQUITY INCENTIVE PLANS (Details) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 4 years | 4 years |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Minimum | 1.59% | 1.14% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Maximum | 2.71% | 1.70% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Minimum | 95.51% | 107.70% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Maximum | 113.98% | 113.55% |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% |
Expected forfeiture rate, minimum | 6.15% | 6.23% |
Expected forfeiture rate, maximum | 21.29% | 9.18% |
EMPLOYEE AND DIRECTOR EQUITY 54
EMPLOYEE AND DIRECTOR EQUITY INCENTIVE PLANS (Details 1) - $ / shares | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Number of Options outstanding, Beginning | 8,249,298 | 6,111,360 | |
Number of Options granted | 1,407,000 | 2,654,100 | |
Number of Options exercised | (124,252) | ||
Number of Options forfeited | (2,781,483) | (391,910) | |
Number of Options outstanding, Ending | 6,874,815 | 8,249,298 | 6,111,360 |
Outstanding beginning, Weighted-Average Exercise Price | $ 0.71 | $ 0.88 | |
Options granted, Weighted-Average Exercise Price | 0.40 | 0.59 | |
Options exercised, Weighted-Average Exercise Price | 0.56 | ||
Options forfeited, Weighted-Average Exercise Price | 0.71 | 2.55 | |
Outstanding ending, Weighted-Average Exercise Price | $ 0.65 | $ 0.71 | $ 0.88 |
Average Remaining Contractual Life (in years) | 5 years 10 months 13 days | 6 years 6 months | 6 years 11 months 16 days |
EMPLOYEE AND DIRECTOR EQUITY 55
EMPLOYEE AND DIRECTOR EQUITY INCENTIVE PLANS (Details 2) - $ / shares | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Outstanding Number of Options | 6,874,815 | 8,249,298 | 6,111,360 |
Outstanding Average Remaining Contractual Life (in years) | 5 years 10 months 13 days | ||
Outstanding Weighted-Average Exercise Price | $ 0.65 | $ 0.71 | $ 0.88 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 3,692,482 | ||
Exercisable Average Remaining Contractual Life (in years) | 5 years 3 months 4 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 0.77 | ||
Range 0.28 To 1.00 [Member] | |||
Outstanding Number of Options | 6,140,365 | ||
Outstanding Average Remaining Contractual Life (in years) | 6 years 1 month 6 days | ||
Outstanding Weighted-Average Exercise Price | $ 0.50 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 3,070,032 | ||
Exercisable Average Remaining Contractual Life (in years) | 5 years 6 months 25 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 0.52 | ||
Range 1.01 To 2.50 [Member] | |||
Outstanding Number of Options | 645,000 | ||
Outstanding Average Remaining Contractual Life (in years) | 4 years 3 months 22 days | ||
Outstanding Weighted-Average Exercise Price | $ 1.47 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 533,000 | ||
Exercisable Average Remaining Contractual Life (in years) | 4 years 2 months 1 day | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 1.56 | ||
Range 2.51 To 5.00 [Member] | |||
Outstanding Number of Options | 40,200 | ||
Outstanding Average Remaining Contractual Life (in years) | 1 year 5 months 1 day | ||
Outstanding Weighted-Average Exercise Price | $ 3.93 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 40,200 | ||
Exercisable Average Remaining Contractual Life (in years) | 1 year 5 months 1 day | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 3.93 | ||
Range 5.01 To 6.95 [Member] | |||
Outstanding Number of Options | 49,250 | ||
Outstanding Average Remaining Contractual Life (in years) | 1 year 2 months 26 days | ||
Outstanding Weighted-Average Exercise Price | $ 5.71 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 49,250 | ||
Exercisable Average Remaining Contractual Life (in years) | 1 year 2 months 26 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 5.71 |
EMPLOYEE AND DIRECTOR EQUITY 56
EMPLOYEE AND DIRECTOR EQUITY INCENTIVE PLANS (Details 3) - $ / shares | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Number of Options | |||
Beginning Balance, Number of Options | 5,197,098 | 4,852,367 | |
Granted | 1,407,000 | 2,654,100 | |
Vested | (1,581,266) | (2,110,085) | |
Forfeited | (1,840,499) | (199,284) | |
Ending Balance, number of options | 3,182,333 | 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 | 0.40 | 0.59 | |
Vested | 0.56 | 0.57 | |
Forfeited | 0.48 | 0.80 | |
Ending Balance, grant date fair value | $ 0.51 | $ 0.54 | $ 0.54 |
Average Remaining Contractual Life (in years) | 6 years 6 months 25 days | 6 years 11 months 5 days | 7 years 5 months 1 day |
EMPLOYEE AND DIRECTOR EQUITY 57
EMPLOYEE AND DIRECTOR EQUITY INCENTIVE PLANS (Details 4) - Restricted Stock Unit [Member] - $ / shares | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Number of Restricted Stock Units, Beginning Balance | 5,556,332 | 4,029,244 |
Number of Restricted Stock Units, RSUs granted | 4,342,519 | 1,671,816 |
Number of Restricted Stock Units, RSUs forfeited | (1,147,231) | |
Number of Restricted Stock Units, Shares issued | (1,041,152) | (144,728) |
Number of Restricted Stock Units, Ending balance | 7,710,468 | 5,556,332 |
Weighted-Average Valuation Price Per Unit, Outstanding Beginning | $ 1.07 | $ 1.03 |
Weighted-Average Valuation Price Per Unit, RSUs granted | 0.41 | 1.15 |
Weighted-Average Valuation Price Per Unit, RSUs forfeited | 0.75 | |
Weighted-Average Valuation Price Per Unit, Shares issued | 1.42 | 0.75 |
Weighted-Average Valuation Price Per Unit, Outstanding Ending | $ 0.70 | $ 1.07 |
EMPLOYEE AND DIRECTOR EQUITY 58
EMPLOYEE AND DIRECTOR EQUITY INCENTIVE PLANS (Details Textual) - USD ($) | Nov. 14, 2017 | Nov. 14, 2016 | Nov. 17, 2015 | Sep. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Nov. 30, 2012 | Nov. 30, 2010 |
Share-based Compensation | $ 1,142,749 | $ 2,145,765 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 1,407,000 | 2,654,100 | ||||||
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 | $ 14,779 | |||||||
Share Price | $ 0.37 | |||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 1 year 4 months 24 days | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 1,581,266 | 2,110,085 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | 1,840,499 | 199,284 | ||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 428,513 | |||||||
Sharebased Compensation Arrangement by Sharebased Payment Award Options Granted in Period Fair Value | 414,795 | $ 1,142,187 | ||||||
Restricted Stock or Unit Expense | 789,165 | 1,128,435 | ||||||
Stock Option [Member] | ||||||||
Share-based Compensation | $ 353,584 | 1,017,330 | ||||||
Restricted Stock Units (RSUs) [Member] | ||||||||
Unvested Rsus Outstanding | 4,145,765 | |||||||
Unrecognized compensation cost related to unvested RSUs | $ 1,748,243 | |||||||
Restricted Stock [Member] | ||||||||
Sharebased Compensation Arrangement by Sharebased Payment Award Options Granted in Period Fair Value | $ 1,785,400 | $ 1,917,598 | ||||||
2007 Stock Option Plan [Member] | Key Employees Or Non Employee [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 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 | |||||||
Common Stock, Capital Shares Reserved for Future Issuance | 2,980,693 | |||||||
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 | 446,651 | |||||||
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] | Restricted Stock Units (RSUs) [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 563,635 | |||||||
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 | 872,310 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | 18,181 | |||||||
2012 Director Equity Plan [Member] | Director [Member] | Restricted Stock [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 119,444 | |||||||
Stock Granted, Value, Share-based Compensation, Gross | $ 43,000 | |||||||
2010 Omnibus Plan [Member] | Key Employees Or Non Employee [Member] | Restricted Stock [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 3,060,000 | 1,090,000 |
WARRANTS (Details)
WARRANTS (Details) - $ / shares | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Warrants Beginning Balance | 357,500 | 2,655,610 |
Warrants granted | 220,000 | 357,500 |
Warrants exercised | (45,000) | |
Warrants expired | (180,000) | (2,610,610) |
Ending balance | 397,500 | 357,500 |
Warrants outstanding beginning weighted average exercise price | $ 0.42 | $ 1.43 |
Warrants granted weighted average exercise price | 0.40 | 0.42 |
Warrants exercised weighted average exercise price | 0.37 | |
Warrants expired weighted average exercise price | 0.40 | 1.45 |
Warrants outstanding ending weighted average exercise price | $ 0.42 | $ 0.42 |
WARRANTS (Details Textual)
WARRANTS (Details Textual) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 22, 2017 | Mar. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Aug. 07, 2017 | |
WARRANTS [Line Items] | |||||
Warrants expired | 180,000 | 2,610,610 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 1,581,266 | 2,110,085 | |||
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 | ||||
Warrants expired | 180,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 40,000 | ||||
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 | ||||
Stock Issued During Period, Value, New Issues | $ 2.5 |
BASIC AND DILUTED NET LOSS PE61
BASIC AND DILUTED NET LOSS PER SHARE (Details) - shares | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Stock options and RSUs | 14,585,283 | 13,805,630 |
Stock warrants | 397,500 | 357,500 |
Series B preferred shares | 3,870,416 | 3,506,404 |
Total | 18,853,199 | 17,669,534 |
EQUITY (Details Textual)
EQUITY (Details Textual) - USD ($) | Jul. 13, 2015 | Jul. 31, 2017 | Jun. 22, 2017 | Aug. 30, 2016 | Sep. 26, 2013 | Jun. 30, 2018 | Jun. 30, 2017 | May 04, 2017 | Sep. 27, 2016 |
Proceeds from Issuance of Common Stock | $ 96,674 | $ 2,095,840 | |||||||
Deferred Revenue, Noncurrent | $ 13,290,000 | 538,937 | 422,638 | $ 13,290,000 | |||||
Melodious Investments Company Limited [Member] | |||||||||
Stock Issued During Period, Value, New Issues | $ 8,000,000 | ||||||||
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 | 3,157,895 | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.95 | ||||||||
Underwritten Public Offering [Member] | |||||||||
Shares Issued, Price Per Share | $ 0.35 | ||||||||
Proceeds from Issuance of Common Stock | $ 119,459 | $ 2,073,055 | |||||||
Stock Issued During Period, Shares, New Issues | 367,000 | 7,150,000 | |||||||
SPI Energy Co., Ltd Securities Purchase Agreement [Member] | |||||||||
Stock Issued During Period, Value, New Issues | $ 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 | ||||||||
Stock Issued During Period, Shares, New Issues | 8,000,000 | ||||||||
Class Of Warrant Or Right aggregate purchase price of Number Of Securities Called By Warrants Or Rights | $ 36,729,000 | ||||||||
Over-Allotment Option [Member] | |||||||||
Stock Issued During Period, Shares, New Issues | 1,072,500 | ||||||||
Common Stock [Member] | |||||||||
Stock Issued During Period, Value, New Issues | $ 3,670 | $ 71,500 | |||||||
Stock Issued During Period, Shares, New Issues | 6,800,000 | 367,000 | 7,150,000 | ||||||
Common Stock [Member] | SPI Energy Co., Ltd Securities Purchase Agreement [Member] | |||||||||
Number Of Shares Held | 25,000,000 | ||||||||
Series C Preferred Stock [Member] | |||||||||
Stock Issued During Period, Value, New Issues | $ 0 | $ 0 | |||||||
Shares Issued, Price Per Share | $ 0.6678 | ||||||||
Proceeds from Issuance of Common Stock | $ 0 | ||||||||
Stock Issued During Period, Shares, New Issues | 28,048 | 0 | 0 | ||||||
Preferred Stock, Liquidation Preference, Value | $ 28,048,000 | ||||||||
Preferred Stock, Shares Issued | 28,048 | 28,048 | |||||||
Series C Preferred Stock [Member] | SPI Energy Co., Ltd Securities Purchase Agreement [Member] | |||||||||
Number Of Shares Held | 10,000 | ||||||||
Series C Preferred Stock [Member] | Common Stock [Member] | |||||||||
Stock Issued During Period, Shares, New Issues | 13,300,000 | ||||||||
Series B Convertible Preferred Stock [Member] | |||||||||
Preferred Stock, Conversion Price Per Share | $ 0.95 | ||||||||
Preferred Stock, Dividend Rate, Percentage | 10.00% | ||||||||
Conversion of Stock, Shares Converted | 2,300 | ||||||||
Conversion of Stock, Shares Issued | 3,870,416 | ||||||||
Preferred Stock, Liquidation Preference, Value | $ 5,976,896 | ||||||||
Sale of Stock, Price Per Share | $ 1,000 | ||||||||
Series B Convertible Preferred Stock [Member] | Director [Member] | |||||||||
Preferred Stock, Shares Issued | 500 | ||||||||
Series B Convertible Preferred Stock [Member] | Investor [Member] | |||||||||
Preferred Stock, Shares Issued | 3,000 |
COMMITMENTS (Details)
COMMITMENTS (Details) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Weighted-average remaining lease term (in years) Operating leases | 6 years 18 days | 2 years 4 months 13 days |
Weighted-average discount rate Operating leases | 5.00% | 5.00% |
COMMITMENTS (Details 1)
COMMITMENTS (Details 1) | Jun. 30, 2018USD ($) |
2,019 | $ 248,148 |
2,020 | 210,260 |
2,021 | 172,317 |
2,022 | 174,873 |
2,023 | 177,429 |
Thereafter | 285,846 |
Total undiscounted lease payments | 1,268,873 |
Present value adjustment | (181,624) |
Net operating lease liabilities | $ 1,087,249 |
COMMITMENTS (Details Textual)
COMMITMENTS (Details Textual) - USD ($) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Operating Leases, Rent Expense, Minimum Rentals | $ 13,845 | |
Carrying Value Of Right Of Use Asset | 1,087,249 | $ 150,214 |
Short-term lease Rent Expense | $ 54,300 | 79,179 |
Operating Leases of Lessee, Contingent Rentals, Basis Spread on Variable Rate | 1.50% | |
Operating Leases, Rent Expense | $ 150,797 | 67,888 |
Short Term Lease Monthly Rent Expense Description | rent for the twelve-month rental periods is between $400 and $2,010 per month. | |
Accrued Liabilities [Member] | ||
Operating Lease Liability Short Term | $ 197,616 | 65,004 |
Other Noncurrent Liabilities [Member] | ||
Operating Lease Liability Long Term | $ 889,633 | $ 85,210 |
RETIREMENT PLANS (Details Textu
RETIREMENT PLANS (Details Textual) - USD ($) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Pension And Other Postretirement Benefit, Vested Percentage Of Eligible Employees | 100.00% | |
Pension and Other Postretirement Benefits Cost (Reversal of Cost) | $ 193,899 | $ 190,585 |
Defined Contribution Plan, Employer Matching Contribution, Percent of Match | 4.00% |
INCOME TAXES (Details)
INCOME TAXES (Details) | 1 Months Ended | 12 Months Ended | |
Dec. 22, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income tax benefit computed at the U.S. federal statutory rate | (35.00%) | (28.00%) | (34.00%) |
Change in valuation allowance | 28.00% | 34.00% | |
Total | 0.00% | 0.00% |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | Jun. 30, 2018 | Jun. 30, 2017 |
Federal net operating loss carryforwards | $ 14,209,723 | $ 18,557,615 |
Federal - other | 2,722,072 | 3,794,302 |
Wisconsin net operating loss carryforwards | 3,779,643 | 3,116,946 |
Australia net operating loss carryforwards | 1,280,966 | 1,334,725 |
Deferred income tax asset valuation allowance | (21,992,404) | (26,803,588) |
Total deferred income tax assets | $ 0 | $ 0 |
INCOME TAXES (Details Textual)
INCOME TAXES (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Dec. 22, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | 28.00% | 34.00% | |
Tax Credit Carryforward, Amount | $ 340,000 | |||
Scenario, Plan [Member] | ||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | |||
Domestic Tax Authority [Member] | ||||
Operating Loss Carryforwards | 54,700,000 | |||
Operating Loss Carryforwards Estimated Limitations Due To Ownership Change | 44,500,000 | |||
Domestic Tax Authority [Member] | Indefinite Carry forward Period [Member] | ||||
Operating Loss Carryforwards | 13,000,000 | |||
State and Local Jurisdiction [Member] | ||||
Operating Loss Carryforwards | 64,300,000 | |||
Deferred Tax Assets Operating Loss Carry forwards Estimated Limitation Due To Ownership Change | 28,200,000 | |||
Foreign Tax Authority [Member] | ||||
Operating Loss Carryforwards | $ 4,300,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Textual) - USD ($) | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Sep. 07, 2016 | |
Related Party Transaction [Line Items] | |||
Revenues | $ 11,932,328 | $ 12,494,184 | |
Costs and Expenses | $ 25,008,537 | 30,014,741 | |
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 | ||
Revenues | 592,000 | ||
Costs and Expenses | $ 573,353 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Subsequent Event [Line Items] | ||
As reported | $ 5,086,343 | $ 16,858,722 |
Net proceeds from registered direct offering | 2,715,710 | |
Pro Forma [Member] | ||
Subsequent Event [Line Items] | ||
As reported | $ 7,802,053 |
SUBSEQUENT EVENT (Details Textu
SUBSEQUENT EVENT (Details Textual) - USD ($) | Sep. 05, 2018 | Jun. 30, 2018 | Jun. 30, 2017 |
Proceeds from Issuance of Common Stock | $ 96,674 | $ 2,095,840 | |
Subsequent Event [Member] | |||
Stock Issued During Period, Shares, New Issues | 11,334,616 | ||
Shares Issued, Price Per Share | $ 0.26 | ||
Proceeds from Issuance of Common Stock | $ 2,700,000 | ||
Subsequent Event [Member] | Board of Directors Chairman [Member] | |||
Stock Issued During Period, Value, Other | $ 600,000 |