Document_and_Entity_Informatio
Document and Entity Information Document (USD $) | 9 Months Ended | ||
Mar. 31, 2015 | 4-May-15 | Dec. 31, 2013 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | KOSS CORP | ||
Entity Central Index Key | 56701 | ||
Current Fiscal Year End Date | -24 | ||
Entity Filer Category | Smaller Reporting Company | ||
Document Type | 10-Q | ||
Document Period End Date | 31-Mar-15 | ||
Document Fiscal Year Focus | 2015 | ||
Document Fiscal Period Focus | Q3 | ||
Amendment Flag | FALSE | ||
Entity Common Stock, Shares Outstanding | 7,382,706 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $13,728,925 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | |
Net sales | $6,001,556 | $4,300,373 | $18,511,192 | $17,648,927 |
Cost of goods sold | 3,886,443 | 3,206,738 | 12,143,055 | 12,145,820 |
Impairment of capitalized software, inventory and related items | 0 | 0 | 0 | 4,535,747 |
Gross profit | 2,115,113 | 1,093,635 | 6,368,137 | 967,360 |
Operating expenses: | ||||
Selling, general and administrative expenses | 1,998,231 | 2,354,337 | 6,006,970 | 8,100,477 |
Unauthorized transaction related costs and (recoveries), net | 1,078 | -231,162 | 78,570 | -827,707 |
Total operating expenses | 1,999,309 | 2,123,175 | 6,085,540 | 7,272,770 |
Income (loss) from operations | 115,804 | -1,029,540 | 282,597 | -6,305,410 |
Other expense (income): | ||||
Interest expense (income) | 0 | -65,536 | 12,813 | -49,737 |
Income (loss) before income tax provision (benefit) | 115,804 | -964,004 | 269,784 | -6,255,673 |
Income tax provision (benefit) | 58,586 | -938,883 | 141,978 | -2,857,113 |
Net income (loss) | $57,218 | ($25,121) | $127,806 | ($3,398,560) |
Income (loss) per common share: | ||||
Basic (in dollars per share) | $0.01 | $0 | $0.02 | ($0.46) |
Diluted (in dollars per share) | $0.01 | $0 | $0.02 | ($0.46) |
Dividends declared per common share (in dollars per share) | $0 | $0.06 | $0 | $0.18 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
Current assets: | ||
Cash and cash equivalents | $1,044,578 | $1,899,411 |
Accounts receivable, less allowance for doubtful accounts of $35,865 and $20,501, respectively | 2,776,760 | 3,160,887 |
Inventories | 6,070,438 | 7,054,932 |
Prepaid expenses and other current assets | 531,884 | 148,200 |
Income taxes receivable | 277,914 | 1,109,276 |
Deferred income taxes | 2,019,218 | 2,576,023 |
Total current assets | 12,720,792 | 15,948,729 |
Equipment and leasehold improvements, net | 1,651,768 | 1,840,491 |
Other assets: | ||
Deferred income taxes | 1,870,165 | 1,623,329 |
Cash surrender value of life insurance | 5,324,142 | 4,977,409 |
Total other assets | 7,194,307 | 6,600,738 |
Total assets | 21,566,867 | 24,389,958 |
Current liabilities: | ||
Accounts payable | 1,377,609 | 2,464,755 |
Accrued liabilities | 1,780,750 | 3,853,473 |
Income taxes payable | 175,000 | 175,000 |
Total current liabilities | 3,333,359 | 6,493,228 |
Long-term liabilities: | ||
Deferred compensation | 2,144,255 | 2,320,091 |
Other liabilities | 247,079 | 336,772 |
Total long-term liabilities | 2,391,334 | 2,656,863 |
Total liabilities | 5,724,693 | 9,150,091 |
Stockholders' equity: | ||
Common stock, $0.005 par value, authorized 20,000,000 shares; issued and outstanding 7,382,706 shares | 36,914 | 36,914 |
Paid in capital | 4,470,743 | 3,996,242 |
Retained earnings | 11,334,517 | 11,206,711 |
Total stockholders' equity | 15,842,174 | 15,239,867 |
Total liabilities and stockholders' equity | $21,566,867 | $24,389,958 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) (USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
Allowance for doubtful accounts | $35,865 | $20,501 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 7,382,706 | 7,382,706 |
Common stock, shares outstanding | 7,382,706 | 7,382,706 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Operating activities: | ||
Net income (loss) | $127,806 | ($3,398,560) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Provision for (recoveries of previously written off) doubtful accounts | 43,278 | -102,567 |
Loss on disposals of fixed assets | -14,953 | 0 |
Impairment of capitalized software, inventory and related items | 0 | 4,535,747 |
Depreciation of equipment and leasehold improvements | 437,344 | 569,027 |
Amortization of product software development expenditures | 0 | 364,539 |
Stock-based compensation expense | 474,501 | 516,829 |
Deferred income taxes | 309,969 | -2,434,674 |
Change in cash surrender value of life insurance | -114,952 | -86,486 |
Deferred compensation | -25,836 | -357,923 |
Net changes in operating assets and liabilities (see note 10) | -1,626,541 | 4,336,319 |
Cash provided by (used in) operating activities | -359,478 | 3,942,251 |
Investing activities: | ||
Life insurance premiums paid | -231,781 | -243,299 |
Purchase of equipment and leasehold improvements | -263,574 | -480,497 |
Cash used in investing activities | -495,355 | -723,796 |
Financing activities: | ||
Dividends paid to stockholders | 0 | -1,328,887 |
Cash used in financing activities | 0 | -1,328,887 |
Net increase (decrease) in cash and cash equivalents | -854,833 | 1,889,568 |
Cash and cash equivalents at beginning of period | 1,899,411 | 859,636 |
Cash and cash equivalents at end of period | $1,044,578 | $2,749,204 |
CONDENSED_CONSOLIDATED_FINANCI
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Notes) | 9 Months Ended |
Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Condensed Consolidated Financial Statements | CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
The condensed consolidated balance sheets of Koss Corporation (the "Company") as of June 30, 2014 have been derived from audited financial statements. The unaudited condensed consolidated financial statements presented herein are based on interim amounts. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position, results of operations and cash flows for all periods presented have been made. The operating results for the nine months ended March 31, 2015 are not necessarily indicative of the operating results that may be experienced for the full fiscal year ending June 30, 2015. | |
These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 30, 2014. |
UNAUTHORIZED_TRANSACTION_RELAT
UNAUTHORIZED TRANSACTION RELATED COSTS AND RECOVERIES (Notes) | 9 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Unauthorized Transactions, Costs and Related Recoveries, Net [Abstract] | |||||||||||||||||
Unauthorized Transaction Related Costs and Recoveries | UNAUTHORIZED TRANSACTION RELATED COSTS AND RECOVERIES | ||||||||||||||||
In December 2009, the Company learned of significant unauthorized transactions as previously reported. The Company has ongoing costs and recoveries associated with the unauthorized transactions. For the three and nine months ended March 31, 2015 and 2014, the costs incurred were for legal fees related to claims initiated against third parties (see Note 12). For the three and nine months ended March 31, 2015 and 2014, the costs and recoveries were as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
31-Mar | 31-Mar | ||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Legal fees incurred | $ | 37,500 | $ | 86,391 | $ | 114,992 | $ | 306,375 | |||||||||
Proceeds from asset forfeitures | (36,422 | ) | (317,553 | ) | (36,422 | ) | (1,134,082 | ) | |||||||||
Unauthorized transaction related costs and (recoveries), net | $ | 1,078 | $ | (231,162 | ) | $ | 78,570 | $ | (827,707 | ) | |||||||
IMPAIRMENT_OF_CAPITALIZED_SOFT
IMPAIRMENT OF CAPITALIZED SOFTWARE, INVENTORY AND RELATED ITEMS (Notes) | 9 Months Ended | ||||
Mar. 31, 2014 | |||||
Impairment of Capitalized Software, Inventory and Related Items [Abstract] | |||||
Impairment of Capitalized Software, Inventory and Related Items | IMPAIRMENT OF CAPITALIZED SOFTWARE, INVENTORY AND RELATED ITEMS | ||||
The Company recorded an impairment charge to the condensed consolidated statements of operations line item titled "Impairment of capitalized software, inventory and related items" in the three months ended December 31, 2013. The impairment charge is detailed in the following table: | |||||
Nine Months Ended | |||||
March 31, 2014 | |||||
Product software development expenditures | $ | 2,308,752 | |||
Inventories | 1,759,710 | ||||
Product design costs | 263,503 | ||||
Tooling | 203,782 | ||||
Impairment of capitalized software, inventory and related items | $ | 4,535,747 | |||
The Company determined that the capitalized software needed to be replaced by a new architecture under development, which began in the three months ended December 31, 2013. As a result, the remaining value was expensed for the three months ended December 31, 2013. The Company continues to believe in the viability of this technology but has temporarily suspended its research and development effort until the base business is restored to more profitable levels. | |||||
In conjunction with the review of the capitalized software, it was determined that certain inventory items were obsolete or the Company had quantities that are not expected to be used over the product forecast period. These inventory items are included net of expected recoveries. Product design costs and assumed liabilities to wrap up the current architecture design were expensed. Tooling related to products that are no longer expected to be launched was expensed. To the extent the Company incurs future costs for the continued development, software code and product launch of the WiFi-based products, then those costs will be expensed as incurred. Refer to the Company's 10-K dated June 30, 2014 for a detail of additional impairment charges recorded in the three months ended June 30, 2014. |
INVENTORIES_Notes
INVENTORIES (Notes) | 9 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Inventories | INVENTORIES | ||||||||
The components of inventories at March 31, 2015 and June 30, 2014 were as follows: | |||||||||
March 31, 2015 | June 30, 2014 | ||||||||
Raw materials | $ | 5,329,231 | $ | 5,593,159 | |||||
Finished goods | 5,268,877 | 6,327,221 | |||||||
10,598,108 | 11,920,380 | ||||||||
Allowance for obsolete inventory | (4,527,670 | ) | (4,865,448 | ) | |||||
Total inventories | $ | 6,070,438 | $ | 7,054,932 | |||||
INCOME_TAXES_Notes
INCOME TAXES (Notes) | 9 Months Ended |
Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES |
The Company files income tax returns in the United States federal jurisdiction and in several state jurisdictions. The Company’s federal tax returns for tax years beginning July 1, 2011 or later are open. During the quarter ended December 31, 2014, the Company's federal return for the fiscal year ended June 30, 2013 was under examination. That examination closed during the same quarter with no adjustments to the return. For states in which the Company files state income tax returns, the statute of limitations is generally open for tax years ended June 30, 2011 and forward. | |
For the nine months ended March 31, 2015, the Company recorded an income tax expense of $141,978, compared to an income tax benefit of $2,857,113 for the nine months ended March 31, 2014. The increase in the Company's tax expense for the nine months ended March 31, 2015 relative to the prior year primarily resulted from pre-tax book income compared to a pre-tax loss after the impairment charge in the prior year period. | |
The Company’s unrecognized tax benefits, including interest and penalties, were $175,000 as of March 31, 2015 and as of June 30, 2014. All of the Company’s unrecognized tax benefits as of March 31, 2015, if recognized, would impact the effective tax rate. |
CREDIT_FACILITY_Notes
CREDIT FACILITY (Notes) | 9 Months Ended |
Mar. 31, 2015 | |
Debt Disclosure [Abstract] | |
Credit Facility | CREDIT FACILITY |
On May 12, 2010, the Company entered into a secured credit facility (“Credit Agreement”) with JPMorgan Chase Bank, N.A. (“Lender”). The Credit Agreement provided for an $8,000,000 revolving secured credit facility with interest rates either ranging from 0.0% to 0.75% over the Lender’s most recently publicly announced prime rate or 2.0% to 3.0% over LIBOR, depending on the Company’s leverage ratio. The Company pays a fee of 0.3% to 0.45% for unused amounts committed in the credit facility. On July 24, 2013, the Credit Agreement was amended to extend the expiration to July 31, 2015. On July 23, 2014 the Credit Agreement was amended to reduce the facility to $5,000,000, subject to a borrowing base calculation as defined in the Credit Agreement, and to amend certain financial covenants. In addition to the revolving loans, the Credit Agreement also provides that the Company may, from time to time, request the Lender to issue letters of credit for the benefit of the Company of up to a sublimit of $2,000,000 and subject to certain other limitations. The loans may be used only for general corporate purposes of the Company. | |
The Credit Agreement contains certain affirmative, negative and financial covenants customary for financings of this type. The negative covenants include restrictions on other indebtedness, liens, fundamental changes, certain investments, asset sales, sale and leaseback transactions and transactions with affiliates, among other restrictions. The financial covenants include minimum EBITDA and minimum tangible net worth requirements. The Company and the Lender also entered into the Pledge and Security Agreement dated May 12, 2010 under which the Company granted the Lender a security interest in substantially all of the Company’s assets in connection with the Company’s obligations under the Credit Agreement. |
INTEREST_EXPENSE_Notes
INTEREST EXPENSE (Notes) | 9 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Interest Expense [Abstract] | |||||||||||||||||
Interest Expense | INTEREST EXPENSE | ||||||||||||||||
The Company incurs interest expense primarily related to its secured credit facility (see Note 6) and to its liabilities for its tax positions related to the unauthorized transactions. As the tax returns have been settled and statute of limitations have expired, the accrued interest expense on certain items has been reversed. Interest expense detail was as follows for the three and nine months ended March 31, 2015 and 2014, respectively: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
31-Mar | 31-Mar | ||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Interest expense (benefit) on secured credit facility | $ | — | $ | — | $ | 12,813 | $ | (587 | ) | ||||||||
Interest expense for tax positions related to unauthorized transactions | — | — | — | 16,386 | |||||||||||||
Interest reversals for tax positions related to unauthorized transactions | — | (65,536 | ) | — | (65,536 | ) | |||||||||||
Interest expense (income) | $ | — | $ | (65,536 | ) | $ | 12,813 | $ | (49,737 | ) | |||||||
INCOME_LOSS_PER_COMMON_AND_COM
INCOME (LOSS) PER COMMON AND COMMON STOCK EQUIVALENT SHARE (Notes) | 9 Months Ended |
Mar. 31, 2015 | |
Earnings Per Share, Basic and Diluted [Abstract] | |
Income (Loss) Per Common and Common Stock Equivalent Share | INCOME (LOSS) PER COMMON AND COMMON STOCK EQUIVALENT SHARE |
Basic income (loss) per share is computed based on the weighted-average number of common shares outstanding. The weighted-average number of common shares outstanding was 7,382,706 for the quarters ended March 31, 2015 and 2014. When dilutive, stock options are included in income (loss) per share as share equivalents using the treasury stock method. For the periods ended March 31, 2015 and 2014, there were no common stock equivalents related to stock option grants that were included in the computation of the weighted-average number of shares outstanding for diluted income (loss) per share. Shares issuable upon the exercise of outstanding options of 2,280,000 and 2,186,000 were excluded from the diluted weighted-average common shares outstanding for the periods ended March 31, 2015 and 2014, respectively, as they would be anti-dilutive. |
STOCK_OPTIONS_Notes
STOCK OPTIONS (Notes) | 9 Months Ended |
Mar. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options | STOCK OPTIONS |
The Company recognizes stock-based compensation expense for options granted under both the 1990 Flexible Incentive Plan and the 2012 Omnibus Incentive Plan. The stock-based compensation relates to stock options granted to employees, non-employee directors and non-employee consultants. In the nine months ended March 31, 2015, options to purchase 445,000 shares were granted under the 2012 Omnibus Incentive Plan at a weighted average exercise price of $3.19. In the nine months ended March 31, 2014, options to purchase 445,000 shares were granted under the 2012 Omnibus Incentive Plan at a weighted average exercise price of $5.64. Stock-based compensation expense during the three and nine months ended March 31, 2015 was $156,010 and $474,501, respectively. Stock-based compensation expense during the three and nine months ended March 31, 2014 was $172,477 and $516,829, respectively. |
ADDITIONAL_CASH_FLOW_INFORMATI
ADDITIONAL CASH FLOW INFORMATION (Notes) | 9 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||
Additional Cash Flow Information | ADDITIONAL CASH FLOW INFORMATION | ||||||||
The net changes in cash as a result of changes in operating assets and liabilities consist of the following: | |||||||||
Nine Months Ended | |||||||||
31-Mar | |||||||||
2015 | 2014 | ||||||||
Accounts receivable | $ | 340,849 | $ | 9,938,339 | |||||
Inventories | 984,494 | (926,239 | ) | ||||||
Income taxes receivable | 831,362 | — | |||||||
Prepaid expenses and other current assets | (383,684 | ) | 125,794 | ||||||
Income taxes payable | — | (2,447,939 | ) | ||||||
Accounts payable | (1,087,146 | ) | (904,445 | ) | |||||
Accrued liabilities | (2,222,723 | ) | (1,158,181 | ) | |||||
Other liabilities | (89,693 | ) | (291,010 | ) | |||||
Net change | $ | (1,626,541 | ) | $ | 4,336,319 | ||||
Net cash (refunded) paid during the period for: | |||||||||
Income taxes | $ | (988,785 | ) | $ | 2,029,000 | ||||
Interest | $ | 12,813 | $ | 2,185 | |||||
STOCKHOLDERS_EQUITY_Notes
STOCKHOLDERS' EQUITY (Notes) | 9 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Stockholders' Equity Attributable to Parent [Abstract] | |||||||||
Stockholders' Equity | STOCKHOLDERS' EQUITY | ||||||||
The following table summarizes the changes in stockholders’ equity for the nine months ended March 31, 2015 and 2014: | |||||||||
Nine Months Ended | |||||||||
31-Mar | |||||||||
2015 | 2014 | ||||||||
Net income (loss) | $ | 127,806 | $ | (3,398,560 | ) | ||||
Dividends declared | — | (1,328,887 | ) | ||||||
Stock-based compensation expense | 474,501 | 516,829 | |||||||
Income tax benefit from dividends paid to employee stock ownership plan | — | 12,432 | |||||||
Increase (decrease) in stockholders' equity | $ | 602,307 | $ | (4,198,186 | ) | ||||
LEGAL_MATTERS_Notes
LEGAL MATTERS (Notes) | 9 Months Ended | |
Mar. 31, 2015 | ||
Commitments and Contingencies Disclosure [Abstract] | ||
Legal Matters | LEGAL MATTERS | |
As of March 31, 2015, the Company is party to the matters described below: | ||
• | On February 18, 2010, the Company filed an action against American Express Company, American Express Travel Related Services Company, Inc., AMEX Card Services Company, Decision Science, and Pamela S. Hopkins in Superior Court of Maricopa County, Arizona, case no. CV2010-006631. The claims alleged include aiding and abetting breach of fiduciary duty, aiding and abetting fraud, and conversion relating to the unauthorized transactions. The case is proceeding in the Superior Court with respect to those claims. | |
• | On December 17, 2010, the Company filed an action against Park Bank in Circuit Court of Milwaukee County, Wisconsin alleging claims of negligence and breach of fiduciary duty relating to the unauthorized transactions. The Company voluntarily dismissed the negligence claim and the case is proceeding in the Circuit Court. | |
• | On March 6, 2014, the Company filed an action against Red Fusion Studios, Inc. ("Red Fusion") in Circuit Court of Milwaukee County, Wisconsin, Case No. 14CV001885, seeking the return of the Company's property and damages following the termination of the agreement that the Company had with Red Fusion for the development of the Company's STRIVA Technology. Red Fusion filed counterclaims relating to fees that Red Fusion alleges it is owed as a result of the termination. The Parties reached a confidential settlement that dismissed all claims involved in this action. | |
• | On January 26, 2015, Sapphire Dolphin, LLC filed a patent infringement case against the Company in the United States District Court for the District of Delaware, Case No. 1-15-cv-00085. The Company is planning to file an Answer and defend the case. | |
The ultimate resolution of these matters is not determinable unless otherwise noted. | ||
We also are subject to a variety of other claims and suits that arise from time to time in the ordinary course of our business. Although management currently believes that resolving these claims against us, individually or in aggregate, will not have a material adverse impact on our consolidated financial statements, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future. |
UNAUTHORIZED_TRANSACTION_RELAT1
UNAUTHORIZED TRANSACTION RELATED COSTS AND RECOVERIES (Tables) | 9 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Unauthorized Transactions, Costs and Related Recoveries, Net [Abstract] | |||||||||||||||||
Unauthorized Transaction Related Costs and Recoveries | For the three and nine months ended March 31, 2015 and 2014, the costs and recoveries were as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
31-Mar | 31-Mar | ||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Legal fees incurred | $ | 37,500 | $ | 86,391 | $ | 114,992 | $ | 306,375 | |||||||||
Proceeds from asset forfeitures | (36,422 | ) | (317,553 | ) | (36,422 | ) | (1,134,082 | ) | |||||||||
Unauthorized transaction related costs and (recoveries), net | $ | 1,078 | $ | (231,162 | ) | $ | 78,570 | $ | (827,707 | ) | |||||||
IMPAIRMENT_OF_CAPITALIZED_SOFT1
IMPAIRMENT OF CAPITALIZED SOFTWARE, INVENTORY AND RELATED ITEMS (Tables) | 9 Months Ended | ||||
Mar. 31, 2014 | |||||
Impairment of Capitalized Software, Inventory and Related Items [Abstract] | |||||
Impairment of Capitalized Software, Inventory and Related Items | The impairment charge is detailed in the following table: | ||||
Nine Months Ended | |||||
March 31, 2014 | |||||
Product software development expenditures | $ | 2,308,752 | |||
Inventories | 1,759,710 | ||||
Product design costs | 263,503 | ||||
Tooling | 203,782 | ||||
Impairment of capitalized software, inventory and related items | $ | 4,535,747 | |||
INVENTORIES_Tables
INVENTORIES (Tables) | 9 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Inventories | The components of inventories at March 31, 2015 and June 30, 2014 were as follows: | ||||||||
March 31, 2015 | June 30, 2014 | ||||||||
Raw materials | $ | 5,329,231 | $ | 5,593,159 | |||||
Finished goods | 5,268,877 | 6,327,221 | |||||||
10,598,108 | 11,920,380 | ||||||||
Allowance for obsolete inventory | (4,527,670 | ) | (4,865,448 | ) | |||||
Total inventories | $ | 6,070,438 | $ | 7,054,932 | |||||
INTEREST_EXPENSE_Tables
INTEREST EXPENSE (Tables) | 9 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Interest Expense [Abstract] | |||||||||||||||||
Interest Expense | Interest expense detail was as follows for the three and nine months ended March 31, 2015 and 2014, respectively: | ||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
31-Mar | 31-Mar | ||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
Interest expense (benefit) on secured credit facility | $ | — | $ | — | $ | 12,813 | $ | (587 | ) | ||||||||
Interest expense for tax positions related to unauthorized transactions | — | — | — | 16,386 | |||||||||||||
Interest reversals for tax positions related to unauthorized transactions | — | (65,536 | ) | — | (65,536 | ) | |||||||||||
Interest expense (income) | $ | — | $ | (65,536 | ) | $ | 12,813 | $ | (49,737 | ) | |||||||
ADDITIONAL_CASH_FLOW_INFORMATI1
ADDITIONAL CASH FLOW INFORMATION (Tables) | 9 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||
Additional Cash Flow Information | The net changes in cash as a result of changes in operating assets and liabilities consist of the following: | ||||||||
Nine Months Ended | |||||||||
31-Mar | |||||||||
2015 | 2014 | ||||||||
Accounts receivable | $ | 340,849 | $ | 9,938,339 | |||||
Inventories | 984,494 | (926,239 | ) | ||||||
Income taxes receivable | 831,362 | — | |||||||
Prepaid expenses and other current assets | (383,684 | ) | 125,794 | ||||||
Income taxes payable | — | (2,447,939 | ) | ||||||
Accounts payable | (1,087,146 | ) | (904,445 | ) | |||||
Accrued liabilities | (2,222,723 | ) | (1,158,181 | ) | |||||
Other liabilities | (89,693 | ) | (291,010 | ) | |||||
Net change | $ | (1,626,541 | ) | $ | 4,336,319 | ||||
Net cash (refunded) paid during the period for: | |||||||||
Income taxes | $ | (988,785 | ) | $ | 2,029,000 | ||||
Interest | $ | 12,813 | $ | 2,185 | |||||
STOCKHOLDERS_EQUITY_Tables
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Stockholders' Equity Attributable to Parent [Abstract] | |||||||||
Stockholders' Equity | The following table summarizes the changes in stockholders’ equity for the nine months ended March 31, 2015 and 2014: | ||||||||
Nine Months Ended | |||||||||
31-Mar | |||||||||
2015 | 2014 | ||||||||
Net income (loss) | $ | 127,806 | $ | (3,398,560 | ) | ||||
Dividends declared | — | (1,328,887 | ) | ||||||
Stock-based compensation expense | 474,501 | 516,829 | |||||||
Income tax benefit from dividends paid to employee stock ownership plan | — | 12,432 | |||||||
Increase (decrease) in stockholders' equity | $ | 602,307 | $ | (4,198,186 | ) | ||||
UNAUTHORIZED_TRANSACTION_RELAT2
UNAUTHORIZED TRANSACTION RELATED COSTS AND RECOVERIES (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | |
Unauthorized Transactions, Costs and Related Recoveries, Net [Abstract] | ||||
Legal fees incurred | $37,500 | $86,391 | $114,992 | $306,375 |
Proceeds from asset forfeitures | -36,422 | -317,553 | -36,422 | -1,134,082 |
Unauthorized transaction related costs and (recoveries), net | $1,078 | ($231,162) | $78,570 | ($827,707) |
IMPAIRMENT_OF_CAPITALIZED_SOFT2
IMPAIRMENT OF CAPITALIZED SOFTWARE, INVENTORY AND RELATED ITEMS (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | |
Impairment of Capitalized Software, Inventory and Related Items [Abstract] | ||||
Product software development expenditures | $2,308,752 | |||
Inventories | 1,759,710 | |||
Product design costs | 263,503 | |||
Tooling | 203,782 | |||
Impairment of capitalized software, inventory and related items | $0 | $0 | $0 | $4,535,747 |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
Inventory Disclosure [Abstract] | ||
Raw materials | $5,329,231 | $5,593,159 |
Finished goods | 5,268,877 | 6,327,221 |
Gross inventory | 10,598,108 | 11,920,380 |
Allowance for obsolete inventory | -4,527,670 | -4,865,448 |
Total inventories | $6,070,438 | $7,054,932 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Jun. 30, 2014 | |
Income Tax Disclosure [Abstract] | |||||
Income tax provision (benefit) | $58,586 | ($938,883) | $141,978 | ($2,857,113) | |
Unrecognized tax benefits | 175,000 | 175,000 | 175,000 | ||
Amount of the Companybs unrecognized tax benefits that if recognized, would impact the effective tax rate | $175,000 | $175,000 |
CREDIT_FACILITY_Details
CREDIT FACILITY (Details) (USD $) | 0 Months Ended | |
12-May-10 | Jul. 23, 2014 | |
Rate | ||
Line of Credit Facility [Line Items] | ||
Revolving secured credit facility, maximum borrowing available | 8,000,000 | $5,000,000 |
Line of credit sublimit | 2,000,000 | |
Minimum [Member] | ||
Line of Credit Facility [Line Items] | ||
Unused capacity, commitment fee percentage | 0.30% | |
Minimum [Member] | Prime Rate [Member] | ||
Line of Credit Facility [Line Items] | ||
Interest rate, percentage spread, depending on Company's leverage ratio | 0.00% | |
Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Line of Credit Facility [Line Items] | ||
Interest rate, percentage spread, depending on Company's leverage ratio | 2.00% | |
Maximum [Member] | ||
Line of Credit Facility [Line Items] | ||
Unused capacity, commitment fee percentage | 0.45% | |
Maximum [Member] | Prime Rate [Member] | ||
Line of Credit Facility [Line Items] | ||
Interest rate, percentage spread, depending on Company's leverage ratio | 0.75% | |
Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Line of Credit Facility [Line Items] | ||
Interest rate, percentage spread, depending on Company's leverage ratio | 3.00% |
INTEREST_EXPENSE_Details
INTEREST EXPENSE (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | |
Interest Expense [Abstract] | ||||
Interest expense (benefit) on secured credit facility | $0 | $0 | $12,813 | ($587) |
Interest expense for tax positions related to unauthorized transactions | 0 | 0 | 0 | 16,386 |
Interest reversals for tax positions related to unauthorized transactions | 0 | -65,536 | 0 | -65,536 |
Interest expense (income) | $0 | ($65,536) | $12,813 | ($49,737) |
INCOME_LOSS_PER_COMMON_AND_COM1
INCOME (LOSS) PER COMMON AND COMMON STOCK EQUIVALENT SHARE (Details) | 9 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Earnings Per Share, Basic and Diluted [Abstract] | ||
Weighted average number of shares outstanding | 7,382,706 | 7,382,706 |
Common stock equivalents related to stock option grants that were included in the computation of the weighted-average number of shares outstanding | 0 | 0 |
Shares issuable upon the exercise of outstanding options, excluded from the diluted weighted-average common shares outstanding as they would be anti-dilutive | 2,280,000 | 2,186,000 |
STOCK_OPTIONS_Details
STOCK OPTIONS (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Granted (in shares) | 445,000 | 445,000 | ||
Weighted average exercise price of shares granted in period | $3.19 | $5.64 | ||
Stock-based compensation expense | $156,010 | $172,477 | $474,501 | $516,829 |
ADDITIONAL_CASH_FLOW_INFORMATI2
ADDITIONAL CASH FLOW INFORMATION (Details) (USD $) | 9 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Supplemental Cash Flow Elements [Abstract] | ||
Accounts receivable | $340,849 | $9,938,339 |
Inventories | 984,494 | -926,239 |
Income taxes receivable | 831,362 | 0 |
Prepaid expenses and other current assets | -383,684 | 125,794 |
Income taxes payable | 0 | -2,447,939 |
Accounts payable | -1,087,146 | -904,445 |
Accrued liabilities | -2,222,723 | -1,158,181 |
Other liabilities | -89,693 | -291,010 |
Net change | 1,626,541 | -4,336,319 |
Net cash (refunded) paid during the period for: | ||
Income taxes | -988,785 | 2,029,000 |
Interest | $12,813 | $2,185 |
STOCKHOLDERS_EQUITY_Details
STOCKHOLDERS' EQUITY (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | |
Stockholders' Equity Attributable to Parent [Abstract] | ||||
Net income (loss) | $57,218 | ($25,121) | $127,806 | ($3,398,560) |
Dividends declared | 0 | -1,328,887 | ||
Stock-based compensation expense | 156,010 | 172,477 | 474,501 | 516,829 |
Income tax benefit from dividends paid to employee stock ownership plan | 0 | 12,432 | ||
Increase (decrease) in stockholders' equity | $602,307 | ($4,198,186) |