Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Mar. 31, 2016 | May. 13, 2016 | |
Entity Information [Line Items] | ||
Entity Registrant Name | ESCALON MEDICAL CORP. | |
Entity Central Index Key | 862,668 | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Smaller Reporting Company | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 7,526,430 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2016 | Jun. 30, 2015 | Jun. 30, 2014 |
Pension and Other Postretirement Defined Benefit Plans, Current Liabilities | $ 101,891 | $ 101,891 | |
Current assets: | |||
Cash and cash equivalents | 618,588 | 1,516,761 | $ 2,009,554 |
Accounts receivable, net | 1,677,839 | 1,785,928 | |
Inventory, net | 2,364,122 | 2,219,615 | |
Other current assets | 152,332 | 245,520 | |
Total current assets | 4,812,881 | 5,767,824 | |
Property and equipment, net | 95,406 | 48,013 | |
Goodwill | 125,027 | 125,027 | |
Trademarks and trade names | 605,006 | 605,006 | |
Patents, net | 2,000 | 3,200 | |
Total assets | 5,640,320 | 6,549,070 | |
Current liabilities: | |||
Accounts payable | 1,063,834 | 1,044,199 | |
Accrued expenses | 1,002,600 | 1,529,428 | |
Liabilities of discontinued operations | 90,510 | 86,176 | |
Total current liabilities | 2,408,835 | 2,761,694 | |
Accrued post-retirement benefits | 847,454 | 797,431 | |
Total long-term liabilities | 847,454 | 797,431 | |
Total liabilities | 3,256,289 | 3,559,125 | |
Shareholders equity: | |||
Common stock, $0.001 par value; 35,000,000 shares authorized; 7,526,430 issued and outstanding at December 31, 2012 and June 30, 2012 | 7,526 | 7,526 | |
Additional paid-in capital | 69,663,531 | 69,629,889 | |
Accumulated deficit | (67,287,026) | (66,647,470) | |
Total shareholders' equity | 2,384,031 | 2,989,945 | |
Total liabilities and shareholders' equity | 5,640,320 | $ 6,549,070 | |
Notes Payable, Related Parties, Current | $ 150,000 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2016 | Jun. 30, 2015 | Jun. 30, 2014 |
Notes Payable, Related Parties | $ 150,000 | ||
Preferred stock, par value | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 | |
Preferred stock, shares issued | 0 | 0 | |
Common stock, par value | $ 0.001 | $ 0.001 | |
Common stock, shares authorized | 35,000,000 | 35,000,000 | |
Common stock, shares issued | 7,526,430 | 7,526,430 | |
Common stock, shares outstanding | 7,526,430 | 7,526,430 |
Consolidated Statements Of Oper
Consolidated Statements Of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest | $ 0 | $ 49,102 | ||
Net revenues: | ||||
Product revenue | 3,097,022 | 3,427,564 | $ 8,867,179 | $ 9,757,538 |
Revenues, net | 3,097,022 | 3,427,564 | 8,867,179 | 9,757,538 |
Costs and expenses: | ||||
Cost of goods sold | 1,579,762 | 1,806,877 | 4,554,248 | 5,076,847 |
Marketing, general and administrative | 1,225,296 | 1,323,419 | 3,836,776 | 4,192,428 |
Research and development | 370,178 | 289,848 | 1,112,696 | 997,852 |
Total costs and expenses | 3,175,236 | 3,420,144 | 9,503,720 | 10,267,127 |
Loss from operations | (78,214) | 7,420 | (636,541) | (509,589) |
Other (expense) income: | ||||
Interest income | 51 | 20 | 88 | 85 |
Total other (expense) income | (3,052) | 20 | (3,015) | 85 |
Net income (loss) from continuing operations | (81,266) | 7,440 | (639,556) | (509,504) |
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax | 0 | 32,998 | ||
Net income (loss) | $ (81,266) | $ 56,542 | $ (639,556) | $ (476,506) |
Basic: | ||||
Continuing Operations | $ (0.01) | $ 0 | $ (0.08) | $ (0.07) |
Discontinued Operations | 0 | 0.01 | 0 | 0.01 |
Net income (loss) | (0.01) | 0.01 | (0.08) | (0.06) |
Diluted: | ||||
Continuing Operations | (0.01) | 0 | (0.08) | (0.07) |
Discontinued operations | 0 | 0.01 | 0 | 0.01 |
Net income (loss) | $ (0.01) | $ 0.01 | $ (0.08) | $ (0.06) |
Weighted Average Number of Shares Outstanding, Basic | 7,526,430 | 7,526,430 | 7,526,430 | 7,526,430 |
Weighted Average Number of Shares Outstanding, Diluted | 7,526,430 | 7,526,430 | 7,526,430 | 7,526,430 |
Interest Expense | $ (3,103) | $ 0 | $ (3,103) | $ 0 |
Consolidated Statements Of Shar
Consolidated Statements Of Shareholders' Equity and Comprehensive Loass - 9 months ended Mar. 31, 2016 - USD ($) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] |
Balance at Jun. 30, 2015 | $ 2,989,945 | $ 7,526 | $ 69,629,889 | $ (66,647,470) |
Balance, shares at Jun. 30, 2015 | 7,526,430 | |||
Net income | (639,556) | $ 0 | 0 | |
Compensation expense | 33,642 | 0 | 0 | |
Compensation expense related to stock options | 33,642 | 33,642 | ||
Balance at Mar. 31, 2016 | $ 2,384,031 | $ 7,526 | $ 69,663,531 | $ (67,287,026) |
Balance, shares at Mar. 31, 2016 | 7,526,430 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) | 9 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash Flows from Operating Activities: | ||
Net income (loss) | $ (639,556) | $ (476,506) |
Adjustments to reconcile net income (loss) to cash provided by operating activities of continuing operations: | ||
Income (loss) from discontinued operations | 0 | 32,998 |
Depreciation and amortization | 20,937 | 10,516 |
Compensation expense related to stock options | 33,642 | 51,064 |
Increase (Decrease) in Pension and Postretirement Obligations | 50,023 | (34,772) |
Increase(decrease) in liability of discontinued operations | 4,334 | 0 |
Change in operating assets and liabilities: | ||
Accounts receivable, net | 108,089 | (572,445) |
Inventory, net | (144,507) | 501,299 |
Other current and long-term assets | 93,188 | 54,113 |
Accounts payable and accrued expenses | (507,193) | (263,589) |
Net cash (used in) operating activities from continuing operations | (981,043) | (763,318) |
Net cash provided by (used in) operating activities from discontinued operations | 0 | 0 |
Net cash (used in) operating activities | (981,043) | (763,318) |
Cash Flows from Investing Activities: | ||
Purchase of fixed assets | (67,130) | (31,419) |
Net cash provided by (used in) investing activities | (67,130) | (31,419) |
Cash Flows from Financing Activities: | ||
Proceeds from related party note payable | 150,000 | 0 |
Net Cash Provided by (Used in) Financing Activities | 150,000 | 0 |
Net increase (decrease) in cash and cash equivalents | (898,173) | (794,737) |
Cash and cash equivalents, beginning of period | 1,516,761 | 2,009,554 |
Cash and cash equivalents, end of period | $ 618,588 | $ 1,214,817 |
Note 9. Composition of Certain
Note 9. Composition of Certain Financial Statement Caption Composition of Certain Assets - USD ($) | Mar. 31, 2016 | Jun. 30, 2015 |
Inventory Disclosure [Abstract] | ||
Inventory, Raw Materials, Net of Reserves | $ 993,000 | $ 1,112,000 |
Inventory, Work in Process, Net of Reserves | 450,000 | 334,000 |
Inventory, Finished Goods, Net of Reserves | 921,000 | 774,000 |
Inventory, net | $ 2,364,122 | $ 2,219,615 |
Note. 1 Basis of Presentation
Note. 1 Basis of Presentation | 9 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Description and Basis of Presentation [Text Block] | 1. Basis of Presentation Escalon Medical Corp. (“Escalon” or the “Company” ) is a Pennsylvania corporation initially incorporated in California in 1987, and reincorporated in Pennsylvania in November 2001. Within this document, the “Company” collectively shall mean Escalon and its wholly owned subsidiaries: Sonomed, Inc. (“Sonomed”), Trek, Inc. (“Trek”), Escalon Medical Europe GmbH (“EME”), Escalon Digital Solutions, Inc. (“EMI”), Escalon Pharmaceutical, Inc. (“Pharmaceutical” inactive), Escalon Holdings, Inc. (“EHI”), Escalon IP Holdings, Inc., Sonomed IP Holdings, Inc., Drew Scientific Holdings, Inc. (discontinued), Drew Scientific Inc. (discontinued), and Drew Scientific Group, Plc (“Drew”) and its subsidiaries (discontinued). All intercompany accounts and transactions have been eliminated. The Company operates in the healthcare market, specializing in the development, manufacture, marketing, and distribution of medical devices and pharmaceuticals in the area of ophthalmology. The Company and its products are subject to regulation and inspection by the United States Food and Drug Administration (the “FDA”). The FDA and other governmental authorities require extensive testing of new products prior to sale and have jurisdiction over the safety, efficacy and manufacture of products, as well as product labeling and marketing. |
Note 2. Stock-Based Compensatio
Note 2. Stock-Based Compensation | 9 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | 2. Stock-Based Compensation Valuations are based upon highly subjective assumptions about the future, including stock price volatility and exercise patterns. The fair value of share-based payment awards was estimated using the Black-Scholes option pricing model. Expected volatilities are based on the historical volatility of the Company's stock. The Company uses historical data to estimate option exercise and employee terminations. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The Company has historically granted options under the Company's option plans with an option exercise price equal to the closing market value of the stock on the date of the grant and with vesting, primarily for Company employees, either in equal annual amounts over a two- to five-year period or immediately, and, primarily for non-employee directors, immediately. As of March 31, 2016 and 2015 total unrecognized compensation cost related to non-vested share-based compensation arrangements granted to employees under the 2004 Equity Incentive Plan was $ 5,971 and $71,178 , respectively. The remaining cost is expected to be recognized over a weighted average period of 0.04 years. For the three-month periods ended March 31, 2016 and 2015 , $11,941 and $11,941 was recorded as compensation expense, respectively. For the nine-month periods ended March 31, 2016 and 2015 , $33,642 and $35,800 was recorded as compensation expense, respectively. The Company did not receive any cash from share option exercises under stock-based payment plans for the three-month and nine-month periods ended March 31, 2016 and 2015 . The Company did not realize any tax effect, which would be a reduction in its tax rate, on options due to the full valuation allowances established on its deferred tax assets. The Company measures compensation expense for non-employee stock-based compensation based on the fair value of the options issued, as this is more reliable than the fair value of the services received. Fair value is measured as the value of the Company's common stock on the date that the commitment for performance by the counterparty has been reached or the counterparty's performance is complete. The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital. There was $0 and $4,361 non-employee compensation expense for the three-month periods ended March 31, 2016 and 2015 . There was $0 and $15,264 non-employee compensation expense for the nine-month periods ended March 31, 2016 and 2015 . |
Note 3. Earning per Share
Note 3. Earning per Share | 9 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | 3. Net (Loss) earnings per Share The following table sets forth the computation of basic and diluted net (loss) per share: For the three months ended March 31, For the nine months ended March 31, 2016 2015 2016 2015 Numerator: Numerator for basic and diluted earnings per share Income (loss) from continuing operations $ (81,266 ) $ 7,440 $ (639,556 ) $ (509,504 ) Income (loss) from discontinued operations — 49,102 — 32,998 Net income (loss) $ (81,266 ) $ 56,542 $ (639,556 ) $ (476,506 ) Denominator: Denominator for basic earnings per share - weighted average shares 7,526,430 7,526,430 7,526,430 7,526,430 Effect of dilutive securities: Stock options and warrants — — — — Shares reserved for future exchange — — — — Denominator for diluted earnings per share - weighted average and assumed conversion 7,526,430 7,526,430 7,526,430 7,526,430 Net income (loss) per share Basic: Continuing operations $ (0.01 ) $ — $ (0.08 ) $ (0.07 ) Discontinued operations — 0.01 — 0.01 $ (0.01 ) $ 0.01 $ (0.08 ) $ (0.06 ) Diluted: Continuing operations $ (0.01 ) $ — $ (0.08 ) $ (0.07 ) Discontinued operations — 0.01 — 0.01 $ (0.01 ) $ 0.01 $ (0.08 ) $ (0.06 ) |
Note 4. Legal proceeding
Note 4. Legal proceeding | 9 Months Ended |
Mar. 31, 2016 | |
4. Legal Proceedings [Abstract] | |
Legal Matters and Contingencies [Text Block] | 4. Legal Proceedings The Company, from time to time, is involved in various legal proceedings and disputes that arise in the normal course of business. These matters have previously and may in the future pertain to intellectual property disputes, commercial contract disputes, employment disputes, and other matters. The Company does not believe that the resolution of any of these matters has had or is likely to have a material adverse impact on the Company's business, financial condition or results of operations. |
Note 5. Recently Issued Account
Note 5. Recently Issued Accounting Standards | 9 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | . Recently Issued Accounting Standards In April 2014 FASB issued Accounting Standards Update 2014-08 Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360) Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. Under the new provision only those disposals of components of an entity that represent a strategic shift that has (or will have) a major effect on an entity’s operations and financial results will be reported as discontinued operations in the financial statements; a business or nonprofit activity that, on acquisition, meets the criteria to be classified as held for sale is reported in discontinued operations; and a disposal of an equity method investment that meets the definition of discontinued operation is reported in discontinued operations. A public business entity and a non-for-profit entity that has issued, or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market should apply the amendments prospectively to all disposals that occur within annual periods beginning on or after December 15, 2014, and interim periods within those years. The adoption of this standard did not have a material impact to the Company’s consolidated financial statements. In May 2014 FASB issued Accounting Standards Update 2014-09 Revenue from Contracts with Customers (Topic 606). Under the new provision, an entity should apply five steps for revenue recognition 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. For a public entity, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. In August 2015 FASB issued accounting Standards Update No. 2015-13 Revenue from Contracts with Customers (Topic 606) deferral of the effective date. The amendments in this Update defer the effective date of Update 2014-09 for all entities by one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in Update 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within the reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within the reporting period. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In June 2014 FASB issued Accounting Standards Update 2014-11 Compensation-Stock Compensation (Topic 718) Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. For all entities, the amendments in this Update are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In August 2014 FASB issued Presentation of Financial Statements-Going Concern (Subtopic 205-40) Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards.The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In November 2014 FASB issued Derivatives and Hedging (Topic 815) Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity. For hybrid financial instruments issued in the form of a share, an entity should determine the nature of the host contract by considering the economic characteristics and risks of the entire hybrid financial instrument, including the embedded derivative feature that is being evaluated for separate accounting from the host contract.The amendments in this Update are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In January 2015, FASB issued Accounting Standards Update 2015-01 Income Statement - Extraordinary and Unusual Items Simplifying Income Statement presentation by eliminating the concept of extraordinary items. The amendment will be effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In February 2015, FASB issued Accounting Standards Update 2015-02 Consolidation Amendments to the Consolidation Analysis. The amendments affect those entities who are required to evaluate whether they should consolidate certain legal entities and affect the following areas: limited partnership and similar legal entities, evaluating fees paid to a decision maker or a service provider as a variable interest, the effect of fee arrangements on the primary beneficiary determination, the effect of related parties on the primary beneficiary determination, and certain investment funds. The amendments in this update are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. For all other entities, the amendments in this Update are effective for fiscal year beginning after December 15, 2016, and for interim periods within fiscal years beginning after December 15, 2017. Early adoption is permitted. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In April 2015, FASB issued Accounting Standards Update 2015-03 Interest-Imputation of Interest to simply the presentation of debt issuance costs. For public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal year. For all other entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15,2015, and interim periods within fiscal years beginning after December 15, 2016. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In April 2015, FASB issued Accounting Standards Update 2015-04 Compensation-Retirement Benefits (Topic 715) to provide practical expedient for the measurement date of an employer’s defined benefit obligation and plan assets. The amendments in this Update are effective for public business entities for financial statements issued for fiscal year beginning after December 15, 2015, and interim periods within those fiscal year. For all other entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. Earlier adoption is permitted. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In April 2015, FASB issued Accounting Standards Update 2015-05 Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) to provide guidance to customers about whether a cloud computing arrangement includes a software license. For public business entities, the amendments will be effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. For all other entities, the amendments will be effective for annual periods beginning after December 15, 2015, and interim periods in annual periods beginning after December 15, 2016. Early adoption is permitted for all entities. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In April 2015, FASB issued Accounting Standards Update 2015-06 Earnings Per Share (Topic 260). The Amendments specify that for purposes of calculating historical earnings per unit under the two-class method, the earnings (losses) of a transferred business before the date of a dropdown transaction should be allocated entirely to the general partner. Qualitative disclosures about how the rights to the earnings (losses) differ before and after the dropdown transaction occurs for purposes of computing earnings per unit under the two-class method are required. The amendments are effective for fiscal year beginning after December 15, 2015, and interim periods within those fiscal years. Earlier application is permitted. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In May 2015, FASB issued Accounting Standards Update 2015-07 Fair Value Measurement (Topic 820). The amendments remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The amendments also remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. The amendments apply to reporting entities that elect to measure the friar value of an investment within the scope of paragraph 820-10-15-4 through 15-5 using the net asset value per share (or its equivalent) practical expedient in paragraph 820-35-59. The amendments in this Update are effective for public business entities for fiscal year beginning after December 15, 2015, and interim periods within those fiscal years. For all other entities, the amendments in this update are effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In May 2015, FASB issued Accounting Standard Update 2015-08 Business Combinations (Topic 805) as amendments to various SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 115. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In May 2015, FASB issued Accounting Standard Update 2015-09 Financial Services-Insurance (Topic 944). The amendments apply to all insurance entities that issue short-duration contracts as defined in Topic 944, Financial Service-Insurance. The amendments require insurance entities to provide additional disclosure for annual reporting periods about liability for unpaid claims and claim adjustment expenses. For public entities, the amendments in this Update are effective for annual periods beginning after December 15, 2015, and interim periods within annual periods beginning after December 15, 2016. For all other entities, the amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within annual periods beginning after December 15, 2017. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In June 2015, FASB issued Accounting Standards Update 2015-10 Technical Correction and Update. The amendments affect wide variety of Topics in Codification in the following four categories: Amendments related to differences between original guidance and the codification, guidance clarification and reference corrections, simplification and minor improvements. The amendments in this Update that require transition guidance are effective for all entities for fiscal year, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In July 2015 FASB issued Accounting Standards Update No. 2015-11 Inventory simplifying the Measurement of Inventory. Inventory measured using any method other than LIFO or the retail or average cost shall be measured at the lower of cost and net realizable value. For public business entities, the amendments in this update are effective for fiscal year beginning after December 15, 2016, including interim periods within those fiscal Years. The amendments should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In July 2015 FASB issued Accounting Standards Update No. 2015-12 (Part I) Plan Accounting: Defined Contribution Pension Plans (Topic 962) Health and Welfare Benefit Plans (Topic 965) to reduce the complexity in employee benefit plan accounting. Under the amendments, fully benefit-responsive investment contracts are measured, presented, and disclosed only at contract value. The amendments in Part I of this Update are effective for fiscal years beginning after December 15, 2015. Earlier application is permitted.The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In August 2015 FASB issued Accounting Standard Update No. 2015-13 Derivatives and Hedging (Topic 815) Application of the Normal Purchases and Normal Sales Scope Exception to Certain Electricity Contracts within Nodal Energy Markets. The amendments apply to entities that enter into contracts for the purchase or sale of electricity on a forward basis and arrange for transmission through, or delivery to a location within, a nodal energy market whereby one of the contracting parties incurs charges (or credits) for the transmission of that electricity based in part on locational marginal pricing differences payable to (or receivable from) an independent system operator. The amendments specify that the use of locational marginal pricing by the independent system operator does not constitute the net settlement of the contract. If the physical delivery criterion is met, along with all of the other criteria of the normal purchase and normal scales scope exception, an entity may elect to designate that contract as a normal purchase or normal sale. The amendments in the Update are effective upon issuance and should be applied prospectively. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In August 2015 FASB issued Accounting Standards Update No. 2015-15 Interest -Imputation of Interest (Subtopic 835-30). This update adds SEC paragraphs pursuant to the SEC Staff Announcement at the June 18, 2015 Emerging Issues Task Force (EIFF) meeting about the presentation of subsequent measurement of debt issuance costs associated with line-of-credit arrangements. Given the absence of authoritative guidance within Update 2015-03 for debt issuance costs related to line-of-credit arrangements, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance cots ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In September 2015 FASB issued Accounting Standards Update No. 2015-16 Business Combinations (Topic 805) Simplifying the Accounting for Measurement-Period Adjustments. The amendments in this Update require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments require that the acquirer record in the same period’s financial statements the effect on earnings of changes in depreciation, amortization or other income effects, if any, as result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. Under this Update an entity must present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 2016, and interim periods within fiscal years beginning after December 15, 2017. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In November 2015 FASB issued Accounting Standards Update No. 2015-17 Income Taxes (Topic 740) Balance Sheet Classification of Deferred Taxes to reduce complexity in accounting standards. The amendments require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. For public business entities, the amendments in this Update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. For all other entities, the amendments in this Update are effective for financial statements issued for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In January 2016 FASB issued Accounting Standards Update No. 2016-01 Financial Instruments-Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities. Under the amendment, equity investments (with exceptions) must be evaluated at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Qualitative assessment is required for impairment assessment of equity investments without readily determinable fair values to identify impairment. When a qualitative assessment indicates that impairment exists, an entity is required to measure the investment at fair value. Public business entities are required to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. An entity must present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. Financial assets and financial liabilities must be presented separately by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. For all other entities including not-for-profit entities and employee benefit plans within the scope of Topics 960 through 965 on plan accounting, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. All entities that are not public business entities may adopt the amendments in this Update earlier as of the fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The adoption of this standard is not expected to have a material impact to the Company’s consolidated financial statements. In February 2016 FASB issued Account Standards Update No. 2016-02 Leases (Topic 842) that changes the recognition of lease assets and lease liabilities by lessess for those leases classified as operating lease. The amendments in this Update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years for a public business entity. Early adoption is permitted. In March 2016 FASB issued Account Standards Update No. 2016-03 Intangibles-Goodwill and other (Topic 350), Business Combinations (Topic 805) Consolidation (Topic 810) and Derivatives and Hedging (Topic 815) The amendments in this Update could affect all private companies within the scope of Update 2014-02; Update 2014-03; Update 2014-07, Consolidation (Topic 810): Applying Variable Interest Entities Guidance to Common Control Leasing Arrangements; or Update 2014-18, Business Combinations (Topic 805): Accounting for Identifiable Intangible Assets in a Business Combination. The amendments in this Update make the guidance in Updates 2014-02, 2014-03, 2014-07, and 2014-18 effective immediately by removing their effective dates. The amendments also include transition provisions that provide that private companies are able to forgo a preferability assessment the first time they elect the accounting alternatives within the scope of this Update. Any subsequent change to an accounting policy election requires justification that the change is preferable under Topic 250, Accounting Changes and Error Corrections. The amendments in this Update also extend the transition guidance in Updates 2014-02, 2014-03, 2014-07, and 2014-18 indefinitely. While this Update extends transition guidance for Updates 2014-07 and 2014-18, there is no intention to change how transition is applied for those two Updates. In March 2016 FASB issued Account Standards Update No. 2016-07 Investments-Equity Method and Joint Ventures (Topic 323) The amendments in this Update affect all entities that have an investment that becomes qualified for the equity method of accounting as a result of an increase in the level of ownership interest or degree of influence. It eliminates the requirement to retroactively adopt the equity method of accounting for adjustment of the investment. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The amendments should be applied prospectively upon their effective date to increases in the level of ownership interest or degree of influence that result in the adoption of the equity method. Earlier application is permitted. In March 2016 FASB issued Account Standards Update No. 2016-08 Revenue from Contracts with Customers (Topic) Principal vs. Agent Considerations. The amendments in this Update do not change the core principle of the guidance. The amendments clarify the implementation guidance on principal versus agent considerations. The amendments in this Update affect the guidance in Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), which is not yet effective. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements of Update 2014-09. Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year. The effective date is same as the date for Update No. 2014-09. In March 2016 FASB issued Account Standards Update No. 2016-09 Compensation-Stock Compensation -(Topic 718) Improvements to employee share-based payments accounting as part of simplicity initiatives. This update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Some of the areas for simplification apply only to nonpublic entities. For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. For all other entities, the amendments are effective for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. Early adoption is permitted for any entity in any interim or annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. |
Note 6. Fair Value Measurements
Note 6. Fair Value Measurements | 9 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | . Fair Value Measurements On July 1, 2008, the Company adopted the FASB-issued authoritative guidance for the fair value of financial assets and liabilities. This standard defines fair value and establishes a hierarchy for reporting the reliability of input measurements used to assess fair value for all assets and liabilities. The FASB-issued authoritative guidance defines fair value as the selling price that would be received for an asset, or paid to transfer a liability, in the principal or most advantageous market on the measurement date. The hierarchy prioritizes fair value measurements based on the types of inputs used in the valuation technique. The inputs are categorized into the following levels: Level 1—Observable inputs such as quoted prices in active markets for identical assets or liabilities. Level 2—Directly or indirectly observable inputs for quoted and other than quoted prices for identical or similar assets and liabilities in active or non-active markets. Level 3—Unobservable inputs not corroborated by market data, therefore requiring the entity to use the best available information available in the circumstances, including the entity’s own data. Certain financial instruments are carried at cost on the consolidated balance sheets, which approximates fair value due to their short-term, highly liquid nature. These instruments include cash and cash equivalents, accounts receivable, related party note payable, accounts payable, and accrued expenses. |
Note 7. Continuing Operations
Note 7. Continuing Operations | 9 Months Ended |
Mar. 31, 2016 | |
Continuing Operations [Abstract] | |
Quarterly Financial Information [Text Block] | 7. Continuing Operations The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred recurring operating losses and negative cash flows from operating activities and these conditions raise substantial doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments relating to the realization of the carrying value of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company's continuance as a going concern is dependent on its future profitability and on the on-going support of its shareholders, affiliates and creditors. In order to mitigate the going concern issues, the Company is actively pursuing business partnerships, managing our continuing operations and seeking to to sell certain assets. The Company may not be successful in any of these efforts. The Company implemented a reduction in force in October 2015 which will reduce future annual expenses by approximately $770,000 to stem the recurring losses. If the Company is unable to achieve improvement in the near term, it is likely that our existing cash and cash flow from operations will not be sufficient to fund activities throughout the next 6 to 12 months without curtailing certain business activities. On February 19, 2016 the Company received a delisting letter from Nasdaq concerning the Company's equity being approximately $2,453,000 as of December 31, 2015 which is approximately $47,000 below the NASDAQ Minimum Equity Listing Requirement. The Company submitted a plan to Nasdaq outling how it plans to regain compliance. The Company's plan was accepted by Nasdaq and the Company was given until August 17, 2016 to implement its plan and regain compliance. On March 2, 2016 the Company received a delisting letter from Nasdaq concerning the rule that listed securities must maintain a minimum bid price of $1 per share. Based upon the closing bid price for the last 30 consecutive business days, the Company no longer meets this requirement. However, the Rules also provide the Company a compliance period of 180 calendar days in which to regain compliance. The Company’s forecast of the period of time through which its financial resources will be adequate to support its operations is a forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors, including the factors discussed in “Risk Factors” included in the Company's Form 10-K for the year ended June 30, 2015. If the Company raises funds in the future, the Company may be required to raise those funds through public or private financings, strategic relationships or other arrangements at prices and other terms that may not be as favorable as they would without such qualification. The sale of additional equity and debt securities may result in additional dilution to the Company’s shareholders. Additional financing may not be available in amounts or on terms acceptable to the Company or at all. |
Note 8. Discontinued Operations
Note 8. Discontinued Operations | 9 Months Ended |
Mar. 31, 2016 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Discontinued Operations | . Discontinued Operations BH Holdings, S.A.S ("BHH") On January 12, 2012 BHH initiated the filing of an insolvency declaration with the Tribunal de Commerce de Rennes, France ("Commercial Court"). The Commercial Court on January 18, 2012 opened the liquidation proceedings with continuation of BHH's activity for 3 months and named an administrator to manage BHH . Since Drew no longer had a controlling financial interest in BHH it was deconsolidated in the December 31, 2011 quarterly condensed consolidated financial statements and prior period amounts were presented as discontinued operations. During fiscal year 2015 the Company was informed by French Counsel that the total amount claimed by the BHH landlord in the liquidation of BHH was approximately $86,000 . The Company did not have insight into the French liquidation process due to the Liquidator's reticence to communicate with the Company. As such, the Company had accrued the present value of the maximum amount potentially due under the lease guaranteed by the Company on behalf of BHH. The landlord's claim under liquidation can not be revisited by the landlord and can only be potentially increased by interest or sundry expenses. The Company recorded an expense of approximately $3,000 and $5,000 for the three month and nine month periods ended March 31, 2016 , respectively, which is included in marketing, general and administrative expense. As of March 31, 2016 and June 30, 2015, the liability was approximately $91,000 and $86,000 , respectively. Assets and liabilities of discontinued operations of BHH included in the condensed consolidated balance sheets are summarized as follows at March 31, 2016 and June 30, 2015 (in thousands): March 31, June 30, 2016 2015 Assets Total assets $ — $ — Liabilities Accrued lease termination costs 91 86 Total liabilities 91 86 Net liabilities of discontinued operations $ (91 ) $ (86 ) The following tables summarize the results of discontinued operations of BHH for the three months and nine months ended March 31, 2016 and 2015 (in thousands): For the three months ended March 31, 2016 2015 Revenue, net $ — $ — Cost of goods sold — — Marketing, general and administrative — 23 Research & development — — Total costs and expenses — 23 Other income — 72 Net income $ — $ 49 For the nine months ended March 31, 2016 2015 Revenue, net $ — $ — Cost of goods sold — — Marketing, general and administrative — 19 Research & development — — Total costs and expenses — 19 Other income — 58 Net loss $ — $ 39 There was no activity during the three months ended March 31, 2016 and 2015. The following tables summarize the results of discontinued operations of ECD for the nine months ended March 31, 2016 and 2015 (in thousands): For the nine months ended March 31, 2016 2015 Revenue, net $ — $ — Cost of goods sold — — Marketing, general and administrative 6 Research & development — — Total Costs and expenses — 6 Net loss $ — $ (6 ) |
BH Holdings, S.A.S [Member] | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Schedule of Discontinued Operations | BH Holdings, S.A.S ("BHH") On January 12, 2012 BHH initiated the filing of an insolvency declaration with the Tribunal de Commerce de Rennes, France ("Commercial Court"). The Commercial Court on January 18, 2012 opened the liquidation proceedings with continuation of BHH's activity for 3 months and named an administrator to manage BHH . Since Drew no longer had a controlling financial interest in BHH it was deconsolidated in the December 31, 2011 quarterly condensed consolidated financial statements and prior period amounts were presented as discontinued operations. During fiscal year 2015 the Company was informed by French Counsel that the total amount claimed by the BHH landlord in the liquidation of BHH was approximately $86,000 . The Company did not have insight into the French liquidation process due to the Liquidator's reticence to communicate with the Company. As such, the Company had accrued the present value of the maximum amount potentially due under the lease guaranteed by the Company on behalf of BHH. The landlord's claim under liquidation can not be revisited by the landlord and can only be potentially increased by interest or sundry expenses. The Company recorded an expense of approximately $3,000 and $5,000 for the three month and nine month periods ended March 31, 2016 , respectively, which is included in marketing, general and administrative expense. As of March 31, 2016 and June 30, 2015, the liability was approximately $91,000 and $86,000 , respectively. Assets and liabilities of discontinued operations of BHH included in the condensed consolidated balance sheets are summarized as follows at March 31, 2016 and June 30, 2015 (in thousands): March 31, June 30, 2016 2015 Assets Total assets $ — $ — Liabilities Accrued lease termination costs 91 86 Total liabilities 91 86 Net liabilities of discontinued operations $ (91 ) $ (86 ) |
ECD [Member] | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Schedule of Discontinued Operations | The following tables summarize the results of discontinued operations of BHH for the three months and nine months ended March 31, 2016 and 2015 (in thousands): For the three months ended March 31, 2016 2015 Revenue, net $ — $ — Cost of goods sold — — Marketing, general and administrative — 23 Research & development — — Total costs and expenses — 23 Other income — 72 Net income $ — $ 49 For the nine months ended March 31, 2016 2015 Revenue, net $ — $ — Cost of goods sold — — Marketing, general and administrative — 19 Research & development — — Total costs and expenses — 19 Other income — 58 Net loss $ — $ 39 |
Note 9. Composition of Certai16
Note 9. Composition of Certain Financial Statement Caption Composition of Certain Financial Statement (Notes) | 9 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventory Disclosure [Text Block] | (In thousands) March 31, June 30, 2016 2015 Inventories, net: Raw Material $ 993 $ 1,112 Work-In-Process 450 334 Finished Goods 921 774 Total $ 2,364 $ 2,220 |
Note 10. Related party note pay
Note 10. Related party note payable (Notes) | 9 Months Ended |
Mar. 31, 2016 | |
Related Party Transaction [Line Items] | |
Related Party Transactions Disclosure [Text Block] | 10. Related Party During the nine-month period ended March 31, 2016 , Richard J. DePiano, Sr., the Company’s Chairman, participated in an accounts receivable factoring program that was implemented by the Company. Under the program, Mr. DePiano advanced the Company $150,000 . Interest on the transaction was 1.25% per month, which was equal to the best price offered by the Company’s usual factoring agent. The transaction excluded fees typically charged by the factoring agent and provided much needed liquidity to the Company. Related party interest expense for the three-month periods ended March 31, 2016 and 2015 was $3,103 and $0 , respectively. Related party interest expense for the nine-month periods ended March 31, 2016 and 2015 was $3,103 and $0 , respectively. Repayment is due upon the Company receiving payment from the underlying receivables purchased by Mr. DePiano. In the near term Mr. DePiano will roll-over the original $150,000 investment as the receivables are collected and additional receivables will be assigned as collateral until such time as the Company no longer needs the liquidity. |
Sigificant accounting policies
Sigificant accounting policies Revenue Recognition (Policies) | 9 Months Ended |
Mar. 31, 2016 | |
Revenue Recognition [Abstract] | |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition The Company recognizes revenue from the sale of its products at the time of shipment, when title and risk of loss transfer. The Company provides products to its distributors at agreed upon wholesale prices and to the balance of its customers at set retail prices. Distributors can receive discounts for accepting high volume shipments. The discounts are reflected immediately in the net invoice price, which is the basis for revenue recognition. No further material discounts are given. The Company's considerations for recognizing revenue upon shipment of product to a distributor are based on the following: Persuasive evidence that an arrangement (purchase order and sales invoice) exists between a willing buyer (distributor) and the Company that outlines the terms of the sale (company information, quantity of goods, purchase price and payment terms). The buyer (distributor) does not have a right of return. Shipping terms are ex-factory shipping point. At this point the buyer (distributor) takes title to the goods and is responsible for all risks and rewards of ownership, including insuring the goods as necessary. The Company's price to the buyer (distributor) is fixed and determinable as specifically outlined on the sales invoice. The sales arrangement does not have customer cancellation or termination clauses. The buyer (distributor) places a purchase order with the Company; the terms of the sale are cash, COD or credit. Customer credit is determined based on the Company's policies and procedures related to the buyer's (distributor's) creditworthiness. Based on this determination, the Company believes that collectibility is reasonably assured. The Company assesses collectibility based on creditworthiness of the customer and past transaction history. The Company performs ongoing credit evaluations of its customers and does not require collateral from its customers. For many of the Company's international customers, the Company requires an irrevocable letter of credit to be issued by the customer before the purchase order is accepted. |
Sigificant accounting policie19
Sigificant accounting policies Valuation of Intangible Assets (Policies) | 9 Months Ended |
Mar. 31, 2016 | |
Company overview [Abstract] | |
Goodwill and Intangible Assets, Policy [Policy Text Block] | Valuation of Intangible Assets The Company annually, and as circumstances require, evaluates for impairment its intangible assets and goodwill in accordance with FASB guidance related to goodwill and other intangible assets, or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. These intangible assets include goodwill, trademarks and trade names. Recoverability of these assets is measured by comparison of their carrying amounts to future discounted cash flows the assets are expected to generate. If identifiable intangibles are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the assets exceeds its fair market value. The Company does not amortize intangible assets with indefinite useful lives, rather, such assets are required to be tested for impairment at least annually or sooner whenever events or changes in circumstances indicate that the assets may be impaired. The Company performs its intangible asset impairment tests on or about June 30, of each year. Any such impairment charge could be significant and could have a material adverse impact on the Company's financial statements if and when an impairment charge is recorded. |
Sigificant accounting policie20
Sigificant accounting policies Income (Loss) Per Share (Policies) | 9 Months Ended |
Mar. 31, 2016 | |
Income (Loss) Per Share [Abstract] | |
Earnings Per Share, Policy [Policy Text Block] | Income/(Loss) Per Share The Company computes net income/(loss) per share under the provisions of FASB issued authoritative guidance. Under the provisions of FASB issued authoritative guidance, basic and diluted net income/(loss) per share is computed by dividing the net income/(loss) for the period by the weighted average number of shares of common stock outstanding during the period. The calculation of diluted net income/(loss) per share excludes potential common shares if the impact is anti-dilutive. Basic earnings (loss) per share are computed by dividing net income/(loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share are determined in the same manner as basic earnings per share, except that the number of shares is increased by assuming exercise of dilutive stock options and warrants using the treasury stock method. |
Sigificant accounting policie21
Sigificant accounting policies Taxes (Policies) | 9 Months Ended |
Mar. 31, 2016 | |
Taxes [Abstract] | |
Income Tax, Policy [Policy Text Block] | Taxes Estimates of taxable income of the various legal entities and jurisdictions are used in the tax rate calculation. Management uses judgment in estimating what the Company's income tax will be for the year. Since judgment is involved, there is a risk that the tax rate may increase or decrease in any period. In determining income/(loss) for financial statement purposes, management must make certain estimates and judgments. These estimates and judgments occur in the calculation of certain tax liabilities and in the determination of the recoverability of certain deferred tax assets, which arise from temporary differences between the tax and financial statement recognition of revenue and expense. FASB issued authoritative guidance concerning accounting for income taxes also requires that the deferred tax assets be reduced by a valuation allowance if, based on the available evidence, it is more likely than not that all or some portion of the recorded deferred tax assets will not be realized in future periods. In evaluating the Company's ability to recover the Company's deferred tax assets, management considers all available positive and negative evidence including the Company's past operating results, the existence of cumulative losses and near-term forecasts of future taxable income that is consistent with the plans and estimates management is using to manage the underlying businesses. Through March 31, 2016 , the Company has recorded a valuation allowance against the Company's deferred tax assets arising from net operating losses due to uncertainty of their realization as a result of the Company's earnings history, the number of years the Company's net operating losses and tax credits can be carried forward, the existence of taxable temporary differences and near-term earnings expectations. The amount of the valuation allowance could decrease if facts and circumstances change that materially increase taxable income prior to the expiration of the loss carryforwards. Any reduction in the valuation allowance would result in an income tax benefit in the period such determination is made by the Company. The Company has adopted FASB issued guidance related to accounting for uncertainty in income taxes, which provides a comprehensive model for the recognition, measurement, and disclosure in financial statements of uncertain income tax positions that a company has taken or expects to take on a tax return. Under the FASB guidance a company can recognize the benefit of an income tax position only if it is more likely than not (greater than 50%) that the tax position will be sustained upon tax examination, based solely on the technical merits of the tax position. Otherwise, no benefit can be recognized. The tax benefits recognized are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Additionally, companies are required to accrue interest and related penalties, if applicable, on all tax exposures for which reserves have been established consistent with jurisdictional tax laws. The Company has elected to recognize interest expense and penalties, if any, related to uncertain tax positions as a component of its provision for income taxes. |
Sigificant accounting policie22
Sigificant accounting policies Stock-based Compensation (Policies) | 9 Months Ended |
Mar. 31, 2016 | |
Stock-based Compensation [Abstract] | |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-Based Compensation Stock-based compensation expense for all stock-based compensation awards granted after July 1, 2006 is based on the grant-date fair value estimate in accordance with the provisions of the FASB issued guidance. The Company recognizes these compensation costs on a straight-line basis over the requisite service period of the award. Valuations are based on highly subjective assumptions about the future, including stock price volatility and exercise patterns. The fair value of share-based payment awards was estimated using the Black-Scholes option pricing model. Expected volatilities are based on the historical volatility of the Company's stock. The Company uses historical data to estimate option exercise and employee terminations. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. |
Note 3. Earning per Share (Tabl
Note 3. Earning per Share (Tables) | 9 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following table sets forth the computation of basic and diluted net (loss) per share: For the three months ended March 31, For the nine months ended March 31, 2016 2015 2016 2015 Numerator: Numerator for basic and diluted earnings per share Income (loss) from continuing operations $ (81,266 ) $ 7,440 $ (639,556 ) $ (509,504 ) Income (loss) from discontinued operations — 49,102 — 32,998 Net income (loss) $ (81,266 ) $ 56,542 $ (639,556 ) $ (476,506 ) Denominator: Denominator for basic earnings per share - weighted average shares 7,526,430 7,526,430 7,526,430 7,526,430 Effect of dilutive securities: Stock options and warrants — — — — Shares reserved for future exchange — — — — Denominator for diluted earnings per share - weighted average and assumed conversion 7,526,430 7,526,430 7,526,430 7,526,430 Net income (loss) per share Basic: Continuing operations $ (0.01 ) $ — $ (0.08 ) $ (0.07 ) Discontinued operations — 0.01 — 0.01 $ (0.01 ) $ 0.01 $ (0.08 ) $ (0.06 ) Diluted: Continuing operations $ (0.01 ) $ — $ (0.08 ) $ (0.07 ) Discontinued operations — 0.01 — 0.01 $ (0.01 ) $ 0.01 $ (0.08 ) $ (0.06 ) |
Note 8. Discontinued Operatio24
Note 8. Discontinued Operations (Tables) | 9 Months Ended |
Mar. 31, 2016 | |
BH Holdings, S.A.S [Member] | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Schedule of Discontinued Operations | BH Holdings, S.A.S ("BHH") On January 12, 2012 BHH initiated the filing of an insolvency declaration with the Tribunal de Commerce de Rennes, France ("Commercial Court"). The Commercial Court on January 18, 2012 opened the liquidation proceedings with continuation of BHH's activity for 3 months and named an administrator to manage BHH . Since Drew no longer had a controlling financial interest in BHH it was deconsolidated in the December 31, 2011 quarterly condensed consolidated financial statements and prior period amounts were presented as discontinued operations. During fiscal year 2015 the Company was informed by French Counsel that the total amount claimed by the BHH landlord in the liquidation of BHH was approximately $86,000 . The Company did not have insight into the French liquidation process due to the Liquidator's reticence to communicate with the Company. As such, the Company had accrued the present value of the maximum amount potentially due under the lease guaranteed by the Company on behalf of BHH. The landlord's claim under liquidation can not be revisited by the landlord and can only be potentially increased by interest or sundry expenses. The Company recorded an expense of approximately $3,000 and $5,000 for the three month and nine month periods ended March 31, 2016 , respectively, which is included in marketing, general and administrative expense. As of March 31, 2016 and June 30, 2015, the liability was approximately $91,000 and $86,000 , respectively. Assets and liabilities of discontinued operations of BHH included in the condensed consolidated balance sheets are summarized as follows at March 31, 2016 and June 30, 2015 (in thousands): March 31, June 30, 2016 2015 Assets Total assets $ — $ — Liabilities Accrued lease termination costs 91 86 Total liabilities 91 86 Net liabilities of discontinued operations $ (91 ) $ (86 ) |
ECD [Member] | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Schedule of Discontinued Operations | The following tables summarize the results of discontinued operations of BHH for the three months and nine months ended March 31, 2016 and 2015 (in thousands): For the three months ended March 31, 2016 2015 Revenue, net $ — $ — Cost of goods sold — — Marketing, general and administrative — 23 Research & development — — Total costs and expenses — 23 Other income — 72 Net income $ — $ 49 For the nine months ended March 31, 2016 2015 Revenue, net $ — $ — Cost of goods sold — — Marketing, general and administrative — 19 Research & development — — Total costs and expenses — 19 Other income — 58 Net loss $ — $ 39 |
Note 9. Composition of Certai25
Note 9. Composition of Certain Financial Statement Caption Composition of Certain Financial Statement (Tables) | 9 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current [Table Text Block] | (In thousands) March 31, June 30, 2016 2015 Inventories, net: Raw Material $ 993 $ 1,112 Work-In-Process 450 334 Finished Goods 921 774 Total $ 2,364 $ 2,220 |
Note 2. Stock-Based Compensat26
Note 2. Stock-Based Compensation (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | Sep. 30, 2014 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized | $ 5,971 | $ 5,971 | $ 71,178 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Remaining Contractual Term | 15 days | ||||
Non-employee compensation expense | 0 | $ 4,361 | $ 0 | $ 15,264 | |
Stock Options [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Allocated Share-based Compensation Expense | $ 11,941 | $ 11,941 | $ 33,642 | $ 35,800 |
Note 3. Earning per Share (Deta
Note 3. Earning per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest | $ (81,266) | $ 7,440 | $ (639,556) | $ (509,504) |
Income(loss) from discontinued operations | 0 | 49,102 | 0 | 32,998 |
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax | 0 | 32,998 | ||
Net income (loss) | $ (81,266) | $ 56,542 | $ (639,556) | $ (476,506) |
Weighted Average Number of Shares Outstanding, Basic | 7,526,430 | 7,526,430 | 7,526,430 | 7,526,430 |
Proceeds from Stock Options Exercised | $ 0 | $ 0 | $ 0 | $ 0 |
Shares reserved for future exchange | 0 | 0 | 0 | 0 |
Weighted Average Number of Shares Outstanding, Diluted | 7,526,430 | 7,526,430 | 7,526,430 | 7,526,430 |
Continuing Operations | $ (0.01) | $ 0 | $ (0.08) | $ (0.07) |
Discontinued Operations | 0 | 0.01 | 0 | 0.01 |
Earnings Per Share, Basic | (0.01) | 0.01 | (0.08) | (0.06) |
Continuing Operations | (0.01) | 0 | (0.08) | (0.07) |
Income (Loss) from Discontinued Operations, Net of Tax, Per Diluted Share | 0 | 0.01 | 0 | 0.01 |
Earnings Per Share, Diluted | $ (0.01) | $ 0.01 | $ (0.08) | $ (0.06) |
Note 8. Discontinued Operatio28
Note 8. Discontinued Operations (BH Holdings, S.A.S) (Narrative) (Details) | Jan. 18, 2012 |
BH Holdings, S.A.S [Member] | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Liquidation period | 3 months |
Note 8. Discontinued Operatio29
Note 8. Discontinued Operations (Results of Discontinued Operations - BH Holdings, S.A.S) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2013 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Net income | $ 0 | $ 49,102 | $ 0 | $ 32,998 | |
BH Holdings, S.A.S [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Discontinued Operation, Gain (Loss) from Disposal of Discontinued Operation, before Income Tax | 0 | 72,000 | 0 | 58,000 | |
Discontinued Operation, Income (Loss) from Discontinued Operation, before Income Tax | 0 | 49,000 | 39,000 | $ 0 | |
Revenue, net | 0 | 0 | 0 | 0 | |
Cost of goods | 0 | 0 | 0 | 0 | |
Market, general and administrative | 0 | 23,000 | 0 | 19,000 | |
Disposal Group, Including Discontinued Operation, Research and Development Expense | 0 | 0 | 0 | 0 | |
Total Costs and expenses | $ 0 | $ 23,000 | $ 0 | $ 19,000 |
Note 8. Discontinued Operatio30
Note 8. Discontinued Operations (Assets and Liabilities of Discontinued Operations - BH Holdings, S.A.S) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2016 | Sep. 30, 2015 | Jun. 30, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Liabilities | $ 91,000 | $ 91,000 | $ 86,000 | $ 86,000 |
Liabilities [Abstract] | ||||
Legal Fees | 3,000 | 5,000 | ||
BH Holdings, S.A.S [Member] | ||||
Assets [Abstract] | ||||
Total assets | 0 | 0 | 0 | |
Liabilities [Abstract] | ||||
Other current liabilities | 91,000 | 91,000 | 86,000 | |
Total liabilities | 91,000 | 91,000 | 86,000 | |
Net assets of discontinued operations | $ (91,000) | $ (91,000) | $ (86,000) |
Note 8. Discontinued Operatio31
Note 8. Discontinued Operations (Results of Discontinued Operations - ECD) (Details) - BH Holdings, S.A.S [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenue, net | $ 0 | $ 0 | $ 0 | $ 0 |
Cost of goods | 0 | 0 | 0 | 0 |
Market, general and administrative | 0 | 23 | 0 | 19 |
Disposal Group, Including Discontinued Operation, Research and Development Expense | 0 | 0 | 0 | 0 |
Disposal Group, Including Discontinued Operation, Operating Expense | $ 0 | $ 23 | $ 0 | $ 19 |
Note 8. Discontinued Operatio32
Note 8. Discontinued Operations Assets and Liabilities of Discontinued Operations -ECD (Details) - USD ($) | Mar. 31, 2016 | Jun. 30, 2015 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Accounts payable | $ 1,063,834 | $ 1,044,199 |
Accrued Liabilities, Current | $ 1,002,600 | $ 1,529,428 |
Note 8. Discontinued Operatio33
Note 8. Discontinued Operations Results of discontinued operation -ECD (Details) - BH Holdings, S.A.S [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2013 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Disposal Group, Including Discontinued Operation, Revenue | $ 0 | $ 0 | $ 0 | $ 0 | |
Disposal Group, Including Discontinued Operation, Costs of Goods Sold | 0 | 0 | 0 | 0 | |
Disposal Group, Including Discontinued Operation, Selling, General and Administrative Expense | 0 | 23 | 0 | 19 | |
Disposal Group, Including Discontinued Operation, Research and Development Expense | 0 | 0 | 0 | 0 | |
Disposal Group, Including Discontinued Operation, Operating Expense | 0 | 23 | 0 | 19 | |
Discontinued Operation, Gain (Loss) from Disposal of Discontinued Operation, before Income Tax | 0 | 72 | $ 0 | 58 | |
Discontinued Operation, Income (Loss) from Discontinued Operation, before Income Tax | $ 0 | $ 49 | $ 39 | $ 0 |
Note 10. Related party note p34
Note 10. Related party note payable (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Related Party Transaction [Line Items] | ||||
Notes Payable, Related Parties | $ 150,000 | $ 150,000 | ||
Accounts Payable, Interest-bearing, Interest Rate | 1.25% | 1.25% | ||
Interest Expense, Related Party | $ 3,103 | $ 0 | $ 3,103 | $ 0 |