Significant Accounting Policies [Text Block] | Note 1 Business Qualstar Corporation and Subsidiary (collectively, “Qualstar”, the “Company”, “we”, “us” or “our”), was incorporated in California in 1984. N2Power 1995, July 2002, N2Power, N2Power We design our products at our location in California, and we sell our products globally through authorized resellers and directly to original equipment manufacturers (“OEMs”). N2Power June 30, 2014, The consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiary in Singapore. All significant intercompany accounts and transactions have been eliminated in consolidation. On January 4, 2016, June 30 December 31. twelve December 31, 2015. July 1, 2015 December 31, 2015, twelve December 31, 2016, twelve December 31, 2015, Accounting Principles The consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Estimates and Assumptions Preparing financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Examples include estimates of loss contingencies, product life cycles and inventory obsolescence, bad debts, sales returns, warranty costs, share-based compensation forfeiture rates, the potential outcome of future tax consequences of events that have been recognized in our consolidated financial statements or tax returns, and determining when investment impairments are other-than-temporary. Actual results and outcomes may Revenue Recognition We recognize revenue when there is persuasive evidence that an arrangement exists, title and risk of loss have passed, delivery has occurred or the services have been rendered, the sales price is fixed or determinable and collection of the related receivable is reasonably assured. Title and risk of loss generally pass to our customers upon shipment. In limited circumstances where either title or risk of loss pass upon destination or acceptance or when collection is not reasonably assured, we defer revenue recognition until such events occur. In general, customers are allowed to return the product, free of penalty, within thirty We record an allowance for estimated sales returns based on past experience and current knowledge of our customer base. Our experience has been such that only a very small percentage of products are returned. Should our experience change, however, we may Revenue for established products that have previously satisfied a customer’s acceptance requirements and provide for full payment tied to shipment is generally recognized upon shipment and passage of title. In limited cases where a prior history of customer acceptance cannot be demonstrated or sales where customer payment dates are not determinable or when collection is not reasonably assured, revenue is deferred until customer acceptance occurs or payment has been received. On the limited shipments where sales are not recognized, gross profit is generally recorded as deferred profit in our balance sheet representing the difference between the receivable recorded and the inventory shipped. At December 31, 2016, $892 ,000 no December 31, 2015, $1,098,000 no Cash and Cash Equivalents Qualstar classifies as cash equivalents only cash and those investments that are highly liquid, interest-earning investments with original maturities of three Restricted Cash At December 31, 2016 2015, $100,000 Concentration of Credit Risk, Other Concentration Risks and Significant Customers Qualstar sells its products primarily through value added resellers located worldwide. Ongoing credit evaluations of customers’ financial condition are performed by Qualstar, and generally, collateral is not required. Potential uncollectible accounts have been provided for in the financial statements. We are exposed to foreign currency and interest rate risks. Our interest income is sensitive to changes in the general level of U.S. interest rates, particularly since all of our investments are in US fixed income securities. We have no outstanding debt nor do we utilize auction rate securities or derivative financial instruments in our investment portfolio. Cash and other investments may Our financial results could be affected by changes in foreign currency exchange rates or weak economic conditions in foreign markets. As all sales are currently made in U.S. dollars, a strengthening of the dollar could make our products less competitive in foreign markets. Sales outside North America represented approximately 46.1% twelve December 31, 2016, 50.3% twelve December 31, 2015, 41.9% six December 31, 2015, 54.0% twelve June 30, 2015. Revenues from Qualstar’s largest customer totaled approximately 10.6% 14.8% twelve December 31, 2016 2015, 10.7% 11.1% six December 31, 2015 June 30, 2015 , respectively. At December 31, 2016, 22.3% December 31, 2015, 8.2% Suppliers The primary suppliers of our power supplies segment, N2Power, Allowance for Doubtful Accounts The allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. We determine the allowance based on known troubled accounts, historical experience, and other currently available evidence. Activity in the allowance for doubtful accounts was as follows (in thousands): Description Balance at Beginning of Period Charged to Costs and Expenses Charged to Other Accounts Deductions (1) Balance at End of Period Twelve months ended December 31, 2016 $ 99 (38 ) — — $ 61 Twelve months ended December 31, 2015 (unaudited) $ 73 71 — (45 ) $ 99 Six months ended December 31, 2015 $ 15 84 — — $ 99 Twelve months ended June 30, 2015 $ 92 — — (77 ) $ 15 (1) Uncollectible accounts written off, net of recoveries. Inventories, net Inventories are stated at the lower of cost (first first Property and Equipment, net Property and equipment are recorded at cost less accumulated depreciation and amortization. Depreciation expense is computed using the straight-line method. Leasehold improvements are amortized over the shorter of the estimated useful life of the asset or the term of the lease. Estimated useful lives are as follows: Machinery and equipment (in years) 5 - 7 Furniture and fixtures (in years) 5 - 7 Leasehold Improvements (in years) 3 - 5 Computer equipment (in years) 3 - 5 Expenditures for normal maintenance and repairs are charged to expense as incurred, and improvements are capitalized. Upon the sale or retirement of property or equipment, the asset cost and related accumulated depreciation are removed from the respective accounts and any gain or loss is included in the results of operations. Long-Lived Assets Qualstar reviews the impairment of long-lived assets whenever events or changes in circumstances indicate the carrying amount of any asset may No Shipping and Handling Costs Qualstar records all customer charges for outbound shipping and handling to freight revenue. All inbound and outbound shipping and fulfillment costs are classified as costs of goods sold. Warranty Obligations We provide a three one may may three We provide a three A provision for costs related to warranty expense is recorded when revenue is recognized, which is estimated based on historical warranty costs incurred. Customers may Activity in the liability for product warranty (included in other accrued liabilities) for the periods presented is as follows (in thousands): December 31, 2016 2015 Audited Unaudited Beginning balance $ 187 $ 168 Cost of warranty claims (157 ) (141 ) Accruals for product warranties 206 160 Ending balance $ 236 $ 187 Engineering All engineering costs are charged to expense as incurred. These costs consist primarily of engineering salaries, benefits, outside consultant fees, purchased parts and supplies directly involved in the design and development of new products, and facilities and other internal costs. Advertising Advertising and promotion expenses include costs associated with direct and indirect marketing, trade shows and public relations. Qualstar expenses all costs of advertising and promotion as incurred. Advertising and promotion expenses for the years ended December 31, 2016 2015 $73,000 $69,000, six December 31, 2015 $58,000 June 30, 2015 $150 ,000. Fair Value of Financial Instruments All financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis (at least annually). ASC 820 ASC 820 In addition to defining fair value, ASC 820 three one three • Level 1 • Level 2 • Level 3 In general, and where applicable, we use quoted prices in active markets for identical assets to determine fair value. This pricing methodology applies to our Level 1 2 Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table presents our assets and liabilities measured at fair value on a recurring basis at December 31, 2016 2015 December 31, 2016 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Cash & Cash Equivalents Level 1: Cash $ 3,691 $ - $ - $ 3,691 $ 3,691 Restricted Cash 100 - - 100 100 Money Market Funds - - - - - Total $ 3,791 $ - $ - $ 3,791 $ 3,791 December 31, 2015 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Cash & Cash Equivalents Level 1: Cash $ 828 $ - $ - $ 828 $ 828 Restricted Cash 100 - - 100 100 Money Market Funds 3,035 - - 3,035 3,035 Total $ 3,963 $ - $ - $ 3,963 $ 3,963 The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, restricted cash and short-term marketable securities approximate their fair values due to the short term nature of these financial instruments. Share-Based Compensation Share-based compensation cost is measured at the grant date based on fair value of the award and is recognized as expense over the applicable vesting period of the stock award (generally four Income Taxes Income taxes are accounted for using the liability method. Under this method, deferred tax liabilities and assets are recognized for the expected future tax consequences of temporary differences between the financial statement and tax bases of assets and liabilities, and for the expected future tax benefit to be derived from tax credits and loss carry forwards. Current income tax expense or benefit represents the amount of income taxes expected to be payable or refundable for the current year. A valuation allowance is established when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Comprehensive Loss Comprehensive loss includes unrealized gains and losses on debt and equity securities classified as available-for-sale and included as a component of shareholders’ equity. Net Loss per Share Basic net loss per share has been computed by dividing net loss by the weighted average number of common shares outstanding. Diluted net loss per share has been computed by dividing net loss by the weighted average common shares outstanding plus dilutive securities or other contracts to issue common stock as if these securities were exercised or converted to common stock. Shares issuable under stock options of 23,333, 40,000 43,000 December 31, 2016, 2015 June 30, 2015, Reclassifications Certain prior year amounts have been reclassified to conform to the current period presentation, with no changes to previously reported stockholders equity or comprehensive loss. Recent Accounting Guidance Recent accounting guidance not yet adopted In May 2014, 2014 09 August 2015, 2015 14 2014 09. 2014 09. 2014 09 December 15, 2017. In July 2015, 2015 11 December 15, 2016 , and is not expected to impact our consolidated financial statements . In February 2016, 2016 02 December 15, 2018. may In August 2016, 2016 15 December 15, 2017, In October 2016, 2016 16 December 15, 2017, In January 2017, 2017 01 December 15, 2017, Recent accounting guidance adopted In November 2016, 2016 18 |