Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Sep. 30, 2017 | Oct. 31, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | USA TECHNOLOGIES INC | |
Entity Central Index Key | 896,429 | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 50,196,531 | |
Entity Current Reporting Status | Yes | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2017 | Jun. 30, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 51,870 | $ 12,745 |
Accounts receivable, less allowance for doubtful accounts of $3,445 and $3,149, respectively | 10,288 | 7,193 |
Finance receivables, less allowance for doubtful accounts of $22 and $19, respectively | 3,082 | 11,010 |
Inventory | 8,240 | 4,586 |
Prepaid expenses and other current assets | 1,122 | 968 |
Total current assets | 74,602 | 36,502 |
Non-current assets: | ||
Finance receivables, less current portion | 7,742 | 8,607 |
Other assets | 750 | 687 |
Property and equipment, net | 11,850 | 12,111 |
Deferred income taxes | 28,205 | 27,670 |
Intangibles, net | 578 | 622 |
Goodwill, Net | 11,492 | 11,492 |
Total non-current assets | 60,617 | 61,189 |
Total assets | 135,219 | 97,691 |
Current liabilities: | ||
Accounts payable | 14,211 | 16,054 |
Accrued expenses | 3,795 | 4,130 |
Line of credit, net | 7,051 | 7,036 |
Capital lease obligations and current obligations under long-term debt | 2,649 | 3,230 |
Income taxes payable | 10 | 10 |
Deferred gain from sale-leaseback transactions | 197 | 239 |
Total current liabilities | 27,913 | 30,699 |
Long-term liabilities: | ||
Capital lease obligations and long-term debt, less current portion | 1,049 | 1,061 |
Accrued expenses, less current portion | 62 | 53 |
Deferred gain from sale-leaseback transactions, less current portion | 99 | 100 |
Total long-term liabilities | 1,210 | 1,214 |
Total liabilities | 29,123 | 31,913 |
Commitments and contingencies (Note 12) | ||
Shareholders' equity: | ||
Preferred stock, no par value, 1,800,000 shares authorized, no shares issued | 3,138 | 3,138 |
Common stock, no par value, 640,000,000 shares authorized, 50,194,731 and 40,331,645 shares issued and outstanding at September 30, 2017 and June 30, 2017, respectively | 286,463 | 245,999 |
Accumulated deficit | (183,505) | (183,359) |
Total shareholders' equity | 106,096 | 65,778 |
Total liabilities and shareholders' equity | $ 135,219 | $ 97,691 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Thousands | Sep. 30, 2017 | Jun. 30, 2017 |
Allowance for uncollectible accounts receivable (in dollars) | $ 3,445 | $ 3,149 |
Allowance for uncollectible finance receivables (in dollars) | $ 22 | $ 19 |
Preferred stock, no par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized | 1,800,000 | 1,800,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 640,000,000 | 640,000,000 |
Common stock, shares issued | 50,194,731 | 40,331,645 |
Common stock, shares outstanding | 50,194,731 | 40,331,645 |
Series A Convertible | ||
Preferred stock, shares authorized | 900,000 | 900,000 |
Preferred stock, shares issued | 445,063 | 445,063 |
Preferred stock, shares outstanding | 445,063 | 445,063 |
Preferred stock, liquidation preference value (in dollars) | $ 19,109 | $ 18,775 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues: | ||
License and transaction fees | $ 19,944 | $ 16,365 |
Equipment sales | 5,673 | 5,223 |
Total revenues | 25,617 | 21,588 |
Costs of sales: | ||
Cost of services | 13,326 | 11,243 |
Cost of equipment | 5,090 | 4,178 |
Total costs of sales | 18,416 | 15,421 |
Gross profit | 7,201 | 6,167 |
Operating expenses: | ||
Selling, general and administrative | 6,746 | 6,808 |
Integration and acquisition costs | 762 | 101 |
Depreciation and amortization | 245 | 208 |
Total operating expenses | 7,753 | 7,117 |
Operating loss | (552) | (950) |
Other income (expense): | ||
Interest income | 80 | 73 |
Interest expense | (209) | (212) |
Change in fair value of warrant liabilities | (1,490) | |
Total other expense, net | (129) | (1,629) |
Loss before income taxes | (681) | (2,579) |
Benefit for income taxes | 468 | 115 |
Net loss | (213) | (2,464) |
Preferred dividends | (334) | (334) |
Net loss applicable to common shares | $ (547) | $ (2,798) |
Net loss per common share - basic and diluted (in dollars per share) | $ (0.01) | $ (0.07) |
Weighted average number of common shares outstanding - basic and diluted | 47,573,364 | 38,488,005 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity (Unaudited) - 3 months ended Sep. 30, 2017 - USD ($) $ in Thousands | Series A ConvertiblePreferred stock | Common Stock | Accumulated Deficit | Total |
Balance at Jun. 30, 2017 | $ 3,138 | $ 245,999 | $ (183,359) | $ 65,778 |
Balance (in shares) at Jun. 30, 2017 | 445,063 | 40,331,645 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common stock in relation to public offering, net of offering costs incurred of $3,237 | $ 39,888 | 39,888 | ||
Issuance of common stock in relation to public offering, net of offering costs incurred of $3,237 (in shares) | 9,583,332 | |||
Stock based compensation | $ 576 | 576 | ||
Stock based compensation (in shares) | 279,754 | |||
Excess tax benefit from stock plans(b) | 67 | 67 | ||
Net loss | (213) | (213) | ||
Balance at Sep. 30, 2017 | $ 3,138 | $ 286,463 | $ (183,505) | $ 106,096 |
Balance (in shares) at Sep. 30, 2017 | 445,063 | 50,194,731 |
Consolidated Statements of Sha6
Consolidated Statements of Shareholders' Equity (Unaudited) (Parenthetical) $ in Thousands | 3 Months Ended |
Sep. 30, 2017USD ($) | |
Statement Of Stockholders Equity [Abstract] | |
Offering costs incurred | $ 3,237 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
OPERATING ACTIVITIES: | ||
Net loss | $ (213) | $ (2,464) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Non-cash stock based compensation | 576 | 211 |
Gain on disposal of property and equipment | (18) | |
Non-cash interest and amortization of debt discount | 15 | 105 |
Bad debt expense | 118 | 97 |
Depreciation and amortization | 1,492 | 1,301 |
Change in fair value of warrant liabilities | 1,490 | |
Excess tax benefits | 67 | |
Deferred income taxes, net | (535) | (115) |
Recognition of deferred gain from sale-leaseback transactions | (43) | (215) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (3,192) | (1,038) |
Finance receivables | 8,771 | (5) |
Inventory | (3,648) | (2,223) |
Prepaid expenses and other current assets | (217) | (224) |
Accounts payable and accrued expenses | (2,168) | (3,175) |
Income taxes payable | (10) | |
Net cash provided by (used in) operating activities | 1,005 | (6,265) |
INVESTING ACTIVITIES: | ||
Purchase of property and equipment, including rentals | (992) | (810) |
Proceeds from sale of property and equipment, including rentals | 45 | |
Net cash used in investing activities | (947) | (810) |
FINANCING ACTIVITIES: | ||
Cash used in retirement of common stock | (31) | |
Proceeds from exercise of common stock warrants | 6,193 | |
Issuance of common stock in public offering, net | 39,888 | |
Repayment of capital lease obligations and long-term debt | (821) | (161) |
Net cash provided by financing activities | 39,067 | 6,001 |
Net increase (decrease) in cash and cash equivalents | 39,125 | (1,074) |
Cash and cash equivalents at beginning of period | 12,745 | 12,745 |
Cash and cash equivalents at end of period | 51,870 | 18,198 |
Supplemental disclosures of cash flow information: | ||
Interest paid in cash | 107 | 87 |
Supplemental disclosures of noncash financing and investing activities: | ||
Equipment and software acquired under capital lease | $ 227 | $ 254 |
BUSINESS
BUSINESS | 3 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS | USA Technologies, Inc. Notes to Consolidated Financial Statements (Unaudited) 1. BUSINESS USA Technologies, Inc. (the “Company”, “We”, “USAT”, or “Our”) was incorporated in the Commonwealth of Pennsylvania in January 1992. We are a provider of technology-enabled solutions and value-added services that facilitate electronic payment transactions primarily within the unattended Point of Sale (“POS”) market. We are a leading provider in the small ticket, beverage and food vending industry and are expanding our solutions and services to other unattended market segments, such as amusement, commercial laundry, kiosk and others. Since our founding, we have designed and marketed systems and solutions that facilitate electronic payment options, as well as telemetry Internet of Things (“IoT”) and machine-to-machine (“M2M”) services, which include the ability to remotely monitor, control, and report on the results of distributed assets containing our electronic payment solutions. Historically, these distributed assets have relied on cash for payment in the form of coins or bills, whereas, our systems allow them to accept cashless payments such as through the use of credit or debit cards or other emerging contactless forms, such as mobile payment. INTERIM FINANCIAL INFORMATION The accompanying unaudited consolidated financial statements of USA Technologies, Inc. have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements and therefore should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended June 30, 2017. In the opinion of management, all adjustments considered necessary for a fair presentation, consisting of normal recurring adjustments, have been included. Operating results for the three months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the year ending June 30, 2018. The balance sheet at June 30, 2017 has been derived from the audited consolidated financial statements at that date, but does not include all disclosures required by accounting principles generally accepted in the United States of America. BASIS OF PRESENTATION Certain reclassifications of prior year’s data have been made to conform to current year’s presentation. As disclosed in Note 13, the Company incurred integration and acquisition expenses during the current period and deemed it appropriate to have such costs individually captioned within the statement of operations. Accordingly, the Company retrospectively reclassified integration and acquisition costs incurred in the corresponding period from the previous fiscal year to conform to the current period’s presentation. |
ACCOUNTING POLICIES
ACCOUNTING POLICIES | 3 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
ACCOUNTING POLICIES | 2. ACCOUNTING POLICIES RECENT ACCOUNTING PRONOUNCEMENTS Accounting pronouncements adopted in fiscal year 2018 In January 2017, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update No. 2017-04 ("ASU 2017-04"), which eliminates Step 2 from the goodwill impairment test. Under ASU 2017-04, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. We early adopted ASU 2017-04 for impairment tests to be performed on testing dates after July 1, 2017, which did not impact our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting, which modifies the accounting for certain aspects of share-based payments to employees. The new guidance requires excess tax benefits and tax deficiencies to be recorded in the income statement when stock awards vest or are settled. In addition, cash flows related to excess tax benefits are to be separately classified as an operating activity apart from other income tax cash flows. The standard also allows the Company to repurchase more of an employee’s vested shares for tax withholding purposes without triggering liability accounting, and clarifies that all cash payments made to tax authorities on an employee’s behalf for withheld shares should be presented as a financing activity on the statement of cash flows. The Company adopted this standard as of July 1, 2017. The primary impact of adoption was the recognition of excess tax benefits in the Company's provision for income taxes which is applied prospectively starting July 1, 2017 in accordance with the guidance. Adoption of the new standard resulted in the recognition of $65 thousand of excess tax benefits in the Company's provision for income taxes for the three months ended September 30, 2017. Through June 30, 2017 excess tax benefits were reflected as a reduction of deferred tax assets via reducing actual operating loss carryforwards because such benefits had not reduced income taxes payable. Under the new standard the treatment of excess tax benefits changed and the cumulative excess tax benefits as of June 30, 2017 amounting to $67 thousand were credited to accumulated deficit. The adoption of ASU No. 2016-09 did not impact our statement of cash flows for the quarters ended September 30, 2017 and 2016. Accounting pronouncements to be adopted. The Company is evaluating whether the effects of the following recent accounting pronouncements or any other recently issued, but not yet effective accounting standards, will have a material effect on the Company’s consolidated financial position, results of operations or cash flows. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” This ASU was amended by ASU No. 2015-14, issued in August 2015, which deferred the original effective date by one year. The new guidance provides a single model for entities to use in accounting for revenue arising from contracts with customers and will supersede most current revenue recognition guidance. The new standard also requires expanded qualitative and quantitative disclosures about the nature, timing and uncertainty of revenue and cash flows rising from contracts with customers. The ASU is now effective for fiscal years, and interim reporting periods within those years, beginning with the year ending June 30, 2019. The Company’s project plan includes a three-phase approach to implementing this standard update. The company has commenced phase one, which includes the following activities: conducting internal surveys of the business, holding revenue recognition workshops with sales and business unit finance leadership, and reviewing a representative sample of revenue arrangements across the business to initially identify a set of applicable qualitative revenue recognition changes related to the new standard update. The objectives for the second phase of the project will be to establish and document key accounting policies, assess disclosure, business process and control impacts. Lastly, the objectives of phase three will comprise effectively implementing the new standard update and embedding the new accounting treatment into the Company’s business processes and controls to support the financial reporting requirements. Phase three is expected to be completed in the fourth quarter of 2018. The Company is still evaluating the impact that the new standard will have on the Company’s consolidated financial statements and will be unable to quantify its impact until the third phase of the project has been completed. The standard is expected to impact the Company’s revenue recognition processes, primarily in the areas of the allocation of contract revenues. An entity can elect to apply the guidance under one of the following two methods: (i) retrospectively to each prior reporting period presented – referred to as the full retrospective method or (ii) retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial application in retained earning – referred to as the modified retrospective method. The method of adoption has not yet been determined and is not expected to be finalized until the second phase of the project plan has been completed. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The company is the lessee under various agreements which are accounted for as operating leases. This amendment will be effective for the Company beginning with the year ending June 30, 2020, including interim periods within those fiscal years. Early application is permitted. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326).” The new guidance introduces the accounting for estimated credit losses pertaining to certain types of financial instruments, including but not limited to, trade and lease receivables. This pronouncement will be effective for fiscal years beginning after December 15, 2019. Early adoption of the guidance is permitted for fiscal years beginning after December 15, 2018. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments.” The new guidance makes eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. This pronouncement will be effective for the Company beginning with the year ending June 30, 2019, and interim periods within that fiscal year. Early adoption is permitted, including adoption in an interim 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. The new guidance requires adoption on a retrospective basis unless it is impracticable to apply, in which case the company would be required to apply the amendments prospectively as of the earliest date practicable. Upon adoption, the Company does not anticipate significant changes to the Company's existing accounting policies or presentation of the Statement of Cash Flows. In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805), Clarifying the Definition of a Business.” ASU 2017-01 provides guidance in ascertaining whether a collection of assets and activities is considered a business. Adoption of the amendment will be applied prospectively effective for annual periods beginning after December 15, 2017 with early adoption permissible for specific transactions. Adoption is not expected to have a material effect on the Company’s consolidated financial statements. |
FINANCE RECEIVABLES
FINANCE RECEIVABLES | 3 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
FINANCE RECEIVABLES | 3. FINANCE RECEIVABLES Finance receivables consist of the following: September 30, June 30, ($ in thousands) 2017 2017 Total finance receivables $ 10,824 $ 19,617 Less current portion 3,082 11,010 Non-current portion of finance receivables $ 7,742 $ 8,607 The Company accounts for their finance receivables using delinquency and nonaccrual data as key performance indicators. The Company classified $248 thousand and $102 thousand as outstanding and nonperforming as of September 30, 2017 and June 30, 2017, respectively. The Company expects to collect on their outstanding finance receivables, less any portion currently reserved, without the contracting of third parties. At September 30, 2017 and June 30, 2017, credit quality indicators consisted of the following: Credit risk profile based on payment activity: September 30, June 30, ($ in thousands) 2017 2017 Performing $ 10,576 $ 19,515 Nonperforming 248 102 Total $ 10,824 $ 19,617 Age Analysis of Past Due Finance Receivables As of September 30, 2017 30 and under 31 – 60 61 – 90 Greater than Total Days Past Days Past Days Past 90 Days Past Total Finance ($ in thousands) Due Due Due Due Non-Performing Performing Receivables QuickStart Leases $ 103 $ 3 $ 58 $ 84 $ 248 $ 10,576 $ 10,824 Age Analysis of Past Due Finance Receivables As of June 30, 2017 30 and under 31 – 60 61 – 90 Greater than Total Days Past Days Past Days Past 90 Days Past Total Finance ($ in thousands) Due Due Due Due Non-Performing Performing Receivables QuickStart Leases $ 29 $ 3 $ 35 $ 35 $ 102 $ 19,515 $ 19,617 |
INVENTORY
INVENTORY | 3 Months Ended |
Sep. 30, 2017 | |
INVENTORY | |
INVENTORY | 4. INVENTORY Inventory, net of reserves, was $8.2 million and $4.6 million as of September 30, 2017 and June 30, 2017, respectively. Inventory consists of finished goods. The company's inventories are valued at the lower of cost or net realizable value. The Company establishes allowances for obsolescence of inventory based upon quality considerations and assumptions about future demand and market conditions. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 5. EARNINGS PER SHARE The calculation of basic earnings per share (“EPS”) and diluted EPS are presented below: For the three months ended September 30, 2017 Net Loss Shares Per-Share (Numerator) (Denominator) Amount Net loss from continuing operations $ (213) Less: Preferred stock dividends (334) Basic EPS Net loss available to common shareholders (547) 47,573,364 $ (0.01) Effect of Dilutive Securities Incremental shares - - (a) Diluted EPS Net loss available to common shareholders plus assumed conversions $ (547) 47,573,364 $ (0.01) For the three months ended September 30, 2016 Net Loss Shares Per-Share (Numerator) (Denominator) Amount Net loss from continuing operations $ (2,464) Less: Preferred stock dividends (334) Basic EPS Net loss available to common shareholders (2,798) 38,488,005 $ (0.07) Effect of Dilutive Securities Incremental shares - - (a) Diluted EPS Net loss available to common shareholders plus assumed conversions $ (2,798) 38,488,005 $ (0.07) ____________________ (a) 517,825 and 1,281,035 shares were excluded for the three months ended September 30, 2017 and 2016, respectively, as the effects would be anti-dilutive. The change in the average number of shares that were anti-dilutive in the three months ended September 30, 2017 compared to the same period last year, was due to warrants exercised in connection with our common stock during September 2016. |
GOODWILL AND INTANGIBLES
GOODWILL AND INTANGIBLES | 3 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLES | 6. GOODWILL AND INTANGIBLES Intangible asset balances and goodwill consisted of the following: As of September 30, 2017 Accumulated Amortization ($ in thousands) Gross Amortization Net Period Intangible Assets: Non-compete agreements 2 (2) — 2 years Brand 95 (55) 40 3 years Developed technology 639 (224) 415 5 years Customer relationships 149 (26) 123 10 years Total Intangible Assets $ 885 $ (307) $ 578 Goodwill 11,492 — 11,492 Indefinite Total Intangible Assets & Goodwill $ 12,377 (307) $ 12,070 As of June 30, 2017 Accumulated Amortization ($ in thousands) Gross Amortization Net Period Intangible Assets: Non-compete agreements 2 (2) — 2 years Brand 95 (48) 47 3 years Developed technology 639 (191) 448 5 years Customer relationships 149 (22) 127 10 years Total Intangible Assets $ 885 $ (263) $ 622 Goodwill 11,492 — 11,492 Indefinite Total Intangible Assets & Goodwill $ 12,377 (263) $ 12,114 For both the three months ended September 30, 2017 and 2016, there was $44 thousand in amortization expense related to intangible assets. |
LINE OF CREDIT
LINE OF CREDIT | 3 Months Ended |
Sep. 30, 2017 | |
Line Of Credit Facility [Abstract] | |
LINE OF CREDIT | 7. LINE OF CREDIT During the fiscal year ended June 30, 2016, the Company entered into a Loan and Security Agreement and other ancillary documents (as amended, the “Heritage Loan Documents”) with Heritage Bank of Commerce (“Heritage Bank”), providing for a secured asset-based revolving line of credit in an amount of up to $12.0 million (the “Heritage Line of Credit”) at an interest rate calculated based on the Federal Reserves’ Prime, which was 4.25% at September 30, 2017, plus 2.25%. The Heritage Line of Credit and the Company’s obligations under the Heritage Loan Documents are secured by substantially all of the Company’s assets, including its intellectual property. During March 2017, the Company entered into the third amendment with Heritage Bank that extended the maturity date of the Heritage Line of Credit from March 29, 2017 to September 30, 2018. At the time of maturity, all outstanding advances under the Heritage Line of Credit as well as any unpaid interest are due and payable. Prior to maturity of the Heritage Line of Credit, the Company may prepay amounts due under the Heritage Line of Credit without penalty, and subject to the terms of the Heritage Loan Documents, may re-borrow any such amounts. The Heritage Loan Documents contain customary representations and warranties and affirmative and negative covenants applicable to the Company. The balance due on the Heritage Line of Credit was $7.1 million at September 30, 2017 and at June 30, 2017. Included in the Heritage Line of Credit balance is $60 thousand and $75 thousand of unamortized debt issuance costs, which is reflected in our net liability of $7.1 million and $7.0 million as of September 30, 2017 and June 30, 2017, respectively. As of September 30, 2017, $4.9 million was available under our line of credit. Interest expense on the line of credit was approximately $118 thousand and $107 thousand for the three months ended September 30, 2017 and 2016, respectively. |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | 8. LONG-TERM DEBT The Company periodically enters into capital lease obligations to finance network servers, computers, office furniture and equipment related support for use in its daily operations. During the three months ended September 30, 2017, the Company entered into capital lease obligations totaling $227 thousand, comprised of monthly installments of $7 thousand due within three years. The value of the acquired equipment is included in property and equipment and depreciated accordingly. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | 9. FAIR VALUE OF FINANCIAL INSTRUMENTS As of September 30, 2017 the Company held no level 1, level 2, or level 3 financial instruments. As of June 30, 2016, 2.2 million warrants with a fair value of $3.7 million comprised the Company’s Level 3 financial instruments. The Level 3 financial instruments consisted of common stock warrants issued by the Company in March 2011 to purchase shares of the Company’s common stock. The Level 3 financial instruments included features requiring liability treatment of the warrants, with the fair value of the common stock based on valuations performed by an independent third-party valuation firm. The fair value was determined using proprietary valuation models using the quality of the underlying securities of the warrants, restrictions on the warrants and security underlying the warrants, time restrictions and precedent sale transactions completed in the secondary market or in other private transactions. During the three months ended September 30, 2016, all of the aforementioned warrants were exercised resulting in a $5.2 million reclassification to Common Stock and the net difference of $1.5 million was recorded as a loss on fair value associated with the warrant liability. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 10. INCOME TAXES For the three months ended September 30, 2017, an income tax benefit of $468 thousand (substantially all deferred income taxes) was recorded based upon loss before benefit for income taxes using an estimated annual effective income tax rate of 59.2% for the fiscal year ending June 30, 2018 plus an income tax benefit for excess tax benefits recognized during the three months which were treated discretely. For the three months ended September 30, 2016, an income tax benefit of $115 thousand (substantially all deferred income taxes) was recorded based upon loss before benefit for income taxes using an estimated annual effective income tax rate of 25.7% for the fiscal year ending June 30, 2017 net of a provision for the tax effect of the change in the fair value of warrant liabilities which was treated discretely. |
EQUITY
EQUITY | 3 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
EQUITY | 11. EQUITY On July 25, 2017, the Company closed its underwritten public offering of 9,583,332 shares of its common stock at a public offering price of $4.50 per share. The foregoing included the full exercise of the underwriters' option to purchase 1,249,999 additional shares from the Company. The gross proceeds to the Company from the offering, before deducting underwriting discounts and commissions and other offering expenses, was approximately $43.1 million. WARRANTS During the three months ended September 30, 2017, no warrants were exercised as compared to the three months ended September 30, 2016 where 2.4 million warrants were exercised at $2.6058 per share, yielding proceeds of $6.2 million. The following table summarizes warrant activity for the three months ended September 30, 2017 and 2016: Three months ended September 30, 2017 2016 Beginning balance 23,978 2,445,653 Issued — — Exercised — (2,376,675) Expired — — Cancelled — — Ending balance 23,978 68,978 STOCK OPTIONS The Company estimates the grant date fair value of the stock options it grants using a Black-Scholes valuation model. The Company’s assumption for expected volatility is based on its historical volatility data related to market trading of its own common stock. The Company bases its assumptions for expected life of the new stock option grants on the life of the option granted, and if relevant, its analysis of the historical exercise patterns of its stock options. The dividend yield assumption is based on dividends expected to be paid over the expected life of the stock option. The risk-free interest rate assumption is determined by using the U.S. Treasury rates of the same period as the expected option term of each stock option. In July 2017, 135,000 stock options were granted for 11 employees vesting 1/3 on July 26, 2018, 1/3 on July 26, 2019 and 1/3 on July 26, 2020 expiring if not exercised prior to July 26, 2022. The options are intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended. In August 2017, the Company awarded stock options to its Chief Executive Officer (CEO) and Chief Financial Officer (CFO) to purchase up to 19,047 and 25,000 shares respectively of common stock at an exercise price of $5.25 per share. The CEO options vest on August 16, 2018, expiring if not exercised prior to August 16, 2024. The CFO options vest 1/3 on August 16, 2018, 1/3 on August 16, 2019 and 1/3 on August 16, 2020, expiring if not exercised prior to August 16, 2024. The CEO options are intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended, and the CFO options are non-qualified stock options. The fair value of options granted during the three months ended September 30, 2017 and 2016 was determined using the following weighted average assumptions: Three months ended September 30, 2017 2016 Expected volatility 50.21 - 50.89 % 50.37 % Expected life (years) 4.0 - 4.5 4.0 Expected dividends — % — % Risk-free interest rate 1.64 - 1.72 % 1.06 % Number of options granted 179,047 20,080 Weighted average exercise price $ 5.66 $ 4.98 Weighted average grant date fair value $ 2.42 $ 1.98 Stock based compensation related to all stock options for the three months ended September 30, 2017 and 2016 was $149 thousand and $48 thousand, respectively. COMMON STOCK On July 1, 2017, $90 thousand of stock grants were awarded to each non-employee Director based on the closing price of the Company’s Common Stock on June 8, 2017 (the date for which the stock grants were initially approved), for a total of 98,184 shares. The shares vest ratably on a monthly basis over the two year period following July 1, 2017. The total expense recognized for these grants for the three months ending September 30, 2017 was $101 thousand. During the three months ended September 30, 2017, the Company awarded an aggregate of 177,363 shares to its Chief Executive Officer, Chief Financial Officer and Chief Services Officer under its fiscal year 2017 long term stock incentive plan and an aggregate of 4,207 shares to two non-employee Directors in satisfaction of board fees. LONG TERM INCENTIVE PLANS The Board approved the Fiscal Year 2018 Long-Term Stock Incentive Plan (the “2018 LTI Stock Plan”) which provides that executive officers would be awarded shares of common stock of the Company in the event that certain metrics relating to the Company’s 2018 fiscal year would result in specified ranges of year-over-year percentage growth. The metrics are total number of connections as of June 30, 2018 as compared to total number of connections as of June 30, 2017 (40% weighting) and adjusted EBITDA earned during the 2018 fiscal year as compared to the adjusted EBITDA earned during the 2017 fiscal year (60% weighting). If none of the minimum threshold year-over-year percentage target goals are achieved, the executive officers would not be awarded any shares. If all of the year-over-year percentage target goals are achieved, the executive officers would be awarded shares having the following value: Chief Executive Officer (“CEO”) - $840,000 (160% of base salary), Chief Financial Officer (“CFO”) - $300,000 (100% of base salary), Chief Services Officer (“CSO”) - $275,000 (100% of base salary). If all of the maximum distinguished year over year percentage target goals are achieved, the executive officers would be awarded shares having the following value: Chief Executive Officer (“CEO”) - $1,260,000 (240% of base salary), Chief Financial Officer (“CFO”) - $450,000 (150% of base salary), Chief Services Officer (“CSO”) - $412,500 (150% of base salary). Assuming the minimum threshold year-over-year percentage target goal would be achieved for a particular metric, the number of shares to be awarded for that metric would be determined on a pro rata basis, provided that the award would not exceed the maximum distinguished award for that metric. The shares awarded under the 2018 LTI Stock Plan would vest as follows: one-third at the time of issuance; one-third on June 30, 2019; and one-third on June 30, 2020. The Company had long-term stock incentive plans (“LTI”) in prior fiscal years for its then executive officers. Stock based compensation related to the LTI plans was as follows in the three months ended September 30, 2017 and 2016: Three months ended September 30, ($ in thousands, except per share data) 2017 2016 FY18 LTI Plan $ 216 $ — FY17 LTI Plan 64 71 FY16 LTI Plan 9 3 FY15 LTI Plan — 7 Total $ 289 $ 81 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 12. COMMITMENTS AND CONTINGENCIES During the quarter ended September 30, 2017, the Company expanded the leased space for its headquarters in Malvern, Pennsylvania to a total of 23,138 square feet. The company’s monthly base rent now is approximately $47 thousand with a lease expiration date of November 30, 2023. From time to time, the Company is involved in various legal proceedings arising during the normal course of business. In the opinion of the Company’s management, these proceedings will not have a material adverse effect on the Company’s financial position, results of operations or cash flows. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Sep. 30, 2017 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 13. SUBSEQUENT EVENTS On November 7, 2017, the Company announced that it had signed a definitive agreement to acquire Cantaloupe Systems, Inc. (“Cantaloupe”) in a transaction valued at approximately $85 million. Pursuant to the agreement, the Company will pay $65 million cash and issue $19.8 million in common stock of the Company for the acquisition. The Company will also assume up to $1.8 million of Cantaloupe’s notes payable. The purchase price is subject to a working capital adjustment and certain other adjustments to be settled following the closing. Integration and acquisition costs related to the planned Cantaloupe acquisition were $762 thousand for the three months ended September 30, 2017. |
ACCOUNTING POLICIES (Policies)
ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Sep. 30, 2017 | |
ACCOUNTING POLICIES | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS Accounting pronouncements adopted in fiscal year 2018 In January 2017, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update No. 2017-04 ("ASU 2017-04"), which eliminates Step 2 from the goodwill impairment test. Under ASU 2017-04, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. ASU 2017-04 is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. We early adopted ASU 2017-04 for impairment tests to be performed on testing dates after July 1, 2017, which did not impact our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting, which modifies the accounting for certain aspects of share-based payments to employees. The new guidance requires excess tax benefits and tax deficiencies to be recorded in the income statement when stock awards vest or are settled. In addition, cash flows related to excess tax benefits are to be separately classified as an operating activity apart from other income tax cash flows. The standard also allows the Company to repurchase more of an employee’s vested shares for tax withholding purposes without triggering liability accounting, and clarifies that all cash payments made to tax authorities on an employee’s behalf for withheld shares should be presented as a financing activity on the statement of cash flows. The Company adopted this standard as of July 1, 2017. The primary impact of adoption was the recognition of excess tax benefits in the Company's provision for income taxes which is applied prospectively starting July 1, 2017 in accordance with the guidance. Adoption of the new standard resulted in the recognition of $65 thousand of excess tax benefits in the Company's provision for income taxes for the three months ended September 30, 2017. Through June 30, 2017 excess tax benefits were reflected as a reduction of deferred tax assets via reducing actual operating loss carryforwards because such benefits had not reduced income taxes payable. Under the new standard the treatment of excess tax benefits changed and the cumulative excess tax benefits as of June 30, 2017 amounting to $67 thousand were credited to accumulated deficit. The adoption of ASU No. 2016-09 did not impact our statement of cash flows for the quarters ended September 30, 2017 and 2016. Accounting pronouncements to be adopted. The Company is evaluating whether the effects of the following recent accounting pronouncements or any other recently issued, but not yet effective accounting standards, will have a material effect on the Company’s consolidated financial position, results of operations or cash flows. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” This ASU was amended by ASU No. 2015-14, issued in August 2015, which deferred the original effective date by one year. The new guidance provides a single model for entities to use in accounting for revenue arising from contracts with customers and will supersede most current revenue recognition guidance. The new standard also requires expanded qualitative and quantitative disclosures about the nature, timing and uncertainty of revenue and cash flows rising from contracts with customers. The ASU is now effective for fiscal years, and interim reporting periods within those years, beginning with the year ending June 30, 2019. The Company’s project plan includes a three-phase approach to implementing this standard update. The company has commenced phase one, which includes the following activities: conducting internal surveys of the business, holding revenue recognition workshops with sales and business unit finance leadership, and reviewing a representative sample of revenue arrangements across the business to initially identify a set of applicable qualitative revenue recognition changes related to the new standard update. The objectives for the second phase of the project will be to establish and document key accounting policies, assess disclosure, business process and control impacts. Lastly, the objectives of phase three will comprise effectively implementing the new standard update and embedding the new accounting treatment into the Company’s business processes and controls to support the financial reporting requirements. Phase three is expected to be completed in the fourth quarter of 2018. The Company is still evaluating the impact that the new standard will have on the Company’s consolidated financial statements and will be unable to quantify its impact until the third phase of the project has been completed. The standard is expected to impact the Company’s revenue recognition processes, primarily in the areas of the allocation of contract revenues. An entity can elect to apply the guidance under one of the following two methods: (i) retrospectively to each prior reporting period presented – referred to as the full retrospective method or (ii) retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial application in retained earning – referred to as the modified retrospective method. The method of adoption has not yet been determined and is not expected to be finalized until the second phase of the project plan has been completed. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The company is the lessee under various agreements which are accounted for as operating leases. This amendment will be effective for the Company beginning with the year ending June 30, 2020, including interim periods within those fiscal years. Early application is permitted. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326).” The new guidance introduces the accounting for estimated credit losses pertaining to certain types of financial instruments, including but not limited to, trade and lease receivables. This pronouncement will be effective for fiscal years beginning after December 15, 2019. Early adoption of the guidance is permitted for fiscal years beginning after December 15, 2018. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments.” The new guidance makes eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. This pronouncement will be effective for the Company beginning with the year ending June 30, 2019, and interim periods within that fiscal year. Early adoption is permitted, including adoption in an interim 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. The new guidance requires adoption on a retrospective basis unless it is impracticable to apply, in which case the company would be required to apply the amendments prospectively as of the earliest date practicable. Upon adoption, the Company does not anticipate significant changes to the Company's existing accounting policies or presentation of the Statement of Cash Flows. In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805), Clarifying the Definition of a Business.” ASU 2017-01 provides guidance in ascertaining whether a collection of assets and activities is considered a business. Adoption of the amendment will be applied prospectively effective for annual periods beginning after December 15, 2017 with early adoption permissible for specific transactions. Adoption is not expected to have a material effect on the Company’s consolidated financial statements. |
FINANCE RECEIVABLES (Tables)
FINANCE RECEIVABLES (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
Schedule of finance receivables | September 30, June 30, ($ in thousands) 2017 2017 Total finance receivables $ 10,824 $ 19,617 Less current portion 3,082 11,010 Non-current portion of finance receivables $ 7,742 $ 8,607 |
Schedule of credit quality indicators | Credit risk profile based on payment activity: September 30, June 30, ($ in thousands) 2017 2017 Performing $ 10,576 $ 19,515 Nonperforming 248 102 Total $ 10,824 $ 19,617 |
Schedule of age analysis of past due finance receivables | Age Analysis of Past Due Finance Receivables As of September 30, 2017 30 and under 31 – 60 61 – 90 Greater than Total Days Past Days Past Days Past 90 Days Past Total Finance ($ in thousands) Due Due Due Due Non-Performing Performing Receivables QuickStart Leases $ 103 $ 3 $ 58 $ 84 $ 248 $ 10,576 $ 10,824 Age Analysis of Past Due Finance Receivables As of June 30, 2017 30 and under 31 – 60 61 – 90 Greater than Total Days Past Days Past Days Past 90 Days Past Total Finance ($ in thousands) Due Due Due Due Non-Performing Performing Receivables QuickStart Leases $ 29 $ 3 $ 35 $ 35 $ 102 $ 19,515 $ 19,617 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of basic earnings per share and diluted earnings per share | For the three months ended September 30, 2017 Net Loss Shares Per-Share (Numerator) (Denominator) Amount Net loss from continuing operations $ (213) Less: Preferred stock dividends (334) Basic EPS Net loss available to common shareholders (547) 47,573,364 $ (0.01) Effect of Dilutive Securities Incremental shares - - (a) Diluted EPS Net loss available to common shareholders plus assumed conversions $ (547) 47,573,364 $ (0.01) For the three months ended September 30, 2016 Net Loss Shares Per-Share (Numerator) (Denominator) Amount Net loss from continuing operations $ (2,464) Less: Preferred stock dividends (334) Basic EPS Net loss available to common shareholders (2,798) 38,488,005 $ (0.07) Effect of Dilutive Securities Incremental shares - - (a) Diluted EPS Net loss available to common shareholders plus assumed conversions $ (2,798) 38,488,005 $ (0.07) ____________________ (a) 517,825 and 1,281,035 shares were excluded for the three months ended September 30, 2017 and 2016, respectively, as the effects would be anti-dilutive. |
GOODWILL AND INTANGIBLES (Table
GOODWILL AND INTANGIBLES (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible asset balances | As of September 30, 2017 Accumulated Amortization ($ in thousands) Gross Amortization Net Period Intangible Assets: Non-compete agreements 2 (2) — 2 years Brand 95 (55) 40 3 years Developed technology 639 (224) 415 5 years Customer relationships 149 (26) 123 10 years Total Intangible Assets $ 885 $ (307) $ 578 Goodwill 11,492 — 11,492 Indefinite Total Intangible Assets & Goodwill $ 12,377 (307) $ 12,070 As of June 30, 2017 Accumulated Amortization ($ in thousands) Gross Amortization Net Period Intangible Assets: Non-compete agreements 2 (2) — 2 years Brand 95 (48) 47 3 years Developed technology 639 (191) 448 5 years Customer relationships 149 (22) 127 10 years Total Intangible Assets $ 885 $ (263) $ 622 Goodwill 11,492 — 11,492 Indefinite Total Intangible Assets & Goodwill $ 12,377 (263) $ 12,114 |
EQUITY (Tables)
EQUITY (Tables) | 3 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Schedule of warrant activity | Three months ended September 30, 2017 2016 Beginning balance 23,978 2,445,653 Issued — — Exercised — (2,376,675) Expired — — Cancelled — — Ending balance 23,978 68,978 |
Schedule of stock option granted weighted average assumptions | Three months ended September 30, 2017 2016 Expected volatility 50.21 - 50.89 % 50.37 % Expected life (years) 4.0 - 4.5 4.0 Expected dividends — % — % Risk-free interest rate 1.64 - 1.72 % 1.06 % Number of options granted 179,047 20,080 Weighted average exercise price $ 5.66 $ 4.98 Weighted average grant date fair value $ 2.42 $ 1.98 |
Schedule of stock based compensation related to the LTI plans | Three months ended September 30, ($ in thousands, except per share data) 2017 2016 FY18 LTI Plan $ 216 $ — FY17 LTI Plan 64 71 FY16 LTI Plan 9 3 FY15 LTI Plan — 7 Total $ 289 $ 81 |
ACCOUNTING POLICIES (Details)
ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2017 | |
Accounting Policies [Line Items] | |||
Income tax expense (benefit) | $ (468) | $ (115) | |
Accounting standards update 2016-09 | |||
Accounting Policies [Line Items] | |||
Income tax expense (benefit) | $ 65 | ||
Cumulative excess tax benefits | $ 67 |
FINANCE RECEIVABLES - Informati
FINANCE RECEIVABLES - Information regarding finance receivables (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Jun. 30, 2017 |
Receivables [Abstract] | ||
Total finance receivables | $ 10,824 | $ 19,617 |
Less current portion | 3,082 | 11,010 |
Non-current portion of finance receivables | $ 7,742 | $ 8,607 |
FINANCE RECEIVABLES - Credit ri
FINANCE RECEIVABLES - Credit risk profile based on payment activity (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Jun. 30, 2017 |
Financing Receivable, Recorded Investment [Line Items] | ||
Total finance receivables | $ 10,824 | $ 19,617 |
Performing | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total finance receivables | 10,576 | 19,515 |
Nonperforming | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total finance receivables | $ 248 | $ 102 |
FINANCE RECEIVABLES - Age analy
FINANCE RECEIVABLES - Age analysis of past due finance receivables (Details) - QuickStart Leases - USD ($) $ in Thousands | Sep. 30, 2017 | Jun. 30, 2017 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | $ 10,824 | $ 19,617 |
30 and under Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 103 | 29 |
31 - 60 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 3 | 3 |
61 - 90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 58 | 35 |
Greater than 90 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 84 | 35 |
Performing | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 10,576 | 19,515 |
Nonperforming | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | $ 248 | $ 102 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Jun. 30, 2017 |
INVENTORY | ||
Inventory, Net | $ 8,240 | $ 4,586 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings per share | ||
Net loss from continuing operations | $ (213) | $ (2,464) |
Less: Preferred stock dividends | (334) | (334) |
Numerator for basic earnings per share - Income available to common shareholders | (547) | (2,798) |
Numerator for diluted earnings per share - Net loss available to common shareholders | $ (547) | $ (2,798) |
Denominator for basic earnings per share - Weighted average shares outstanding | 47,573,364 | 38,488,005 |
Denominator for diluted earnings per share - Adjusted weighted average shares outstanding | 47,573,364 | 38,488,005 |
Basic earnings (loss) per share | $ (0.01) | $ (0.07) |
Diluted earnings (loss) per share | $ (0.01) | $ (0.07) |
Antidilutive shares excluded from the calculation of diluted earnings per shares | 517,825 | 1,281,035 |
GOODWILL AND INTANGIBLES - Summ
GOODWILL AND INTANGIBLES - Summary of intangible assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Intangible Assets Gross | $ 885 | $ 885 | |
Accumulated Amortization | (307) | (263) | |
Intangible Assets Net | 578 | 622 | |
Goodwill, Gross | 11,492 | 11,492 | |
Goodwill, Net | 11,492 | 11,492 | |
Intangible Assets, Net (Including Goodwill) [Abstract] | |||
Total Intangible Assets & Goodwill gross | 12,377 | 12,377 | |
Total Intangible Assets & Goodwill Net | 12,070 | 12,114 | |
Amortization expense related to intangible assets | 44 | $ 44 | |
Non-compete agreements | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible Assets Gross | 2 | 2 | |
Accumulated Amortization | $ (2) | $ (2) | |
Amortization Period | 2 years | 2 years | |
Brand | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible Assets Gross | $ 95 | $ 95 | |
Accumulated Amortization | (55) | (48) | |
Intangible Assets Net | $ 40 | $ 47 | |
Amortization Period | 3 years | 3 years | |
Developed technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible Assets Gross | $ 639 | $ 639 | |
Accumulated Amortization | (224) | (191) | |
Intangible Assets Net | $ 415 | $ 448 | |
Amortization Period | 5 years | 5 years | |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible Assets Gross | $ 149 | $ 149 | |
Accumulated Amortization | (26) | (22) | |
Intangible Assets Net | $ 123 | $ 127 | |
Amortization Period | 10 years | 10 years |
LINE OF CREDIT (Textuals) (Deta
LINE OF CREDIT (Textuals) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2016 | Jun. 30, 2017 | |
Line of Credit Facility [Line Items] | ||||
Line of credit, net | $ 7,051 | $ 7,036 | ||
Line of credit facility amount available under line of credit | 4,900 | |||
Interest expense | $ 209 | $ 212 | ||
Prime Rate [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate | 4.25% | |||
Heritage Bank of Commerce | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit, gross | $ 7,100 | 7,100 | ||
Debt issuance costs | 60 | 75 | ||
Line of credit, net | 7,100 | $ 7,000 | ||
Revolving line of credit facility | Heritage Bank of Commerce | Loan and Security Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Maximum limit of amount under line of credit | $ 12,000 | |||
Line of credit facility, basis of measurement | Federal Reserves' Prime | |||
Percentage of interest rate above prime rate | 2.25% | |||
Interest expense | $ 118 | $ 107 |
LONG-TERM DEBT (Textuals) (Deta
LONG-TERM DEBT (Textuals) (Details) $ in Thousands | 3 Months Ended |
Sep. 30, 2017USD ($) | |
Debt Instrument [Line Items] | |
Capital lease due in 3 monthly installments | $ 7 |
Term of capital lease | 3 years |
Capital Lease Obligations | |
Debt Instrument [Line Items] | |
Capital lease obligations | $ 227 |
FAIR VALUE OF FINANCIAL INSTR35
FAIR VALUE OF FINANCIAL INSTRUMENTS (Textuals) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2017 | Jun. 30, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value transfers assets, Level 1 to Level 2 | $ 0 | |
Fair value transfers assets, Level 2 to Level 1 | 0 | |
Fair Value transfers liabilities, Level 1 to Level 2 | 0 | |
Fair Value transfers liabilities, Level 2 to Level 1 | 0 | |
Fair value of common stock warrants | $ 2,200 | |
Fair values of Level 3 financial instrument | $ 3,700 | |
Warrants exercised | 5,200 | |
Loss on fair value associated with the warrant liability | $ 1,500 | |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Valuation method used to determine fair value | proprietary valuation models |
INCOME TAXES (Textuals) (Detail
INCOME TAXES (Textuals) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense (benefit) | $ (468) | $ (115) |
Estimated annual effective income tax rate | 59.20% | 25.70% |
EQUITY (Details)
EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 25, 2017 | Sep. 30, 2017 | Sep. 30, 2016 |
Class of Warrant or Right [Line Items] | |||
Net proceeds | $ 39,888 | ||
Proceeds from exercise of common stock warrants | $ 6,193 | ||
Warrants | |||
Class of Warrant or Right [Line Items] | |||
Exercise price per share | $ 2.6058 | ||
Proceeds from exercise of common stock warrants | $ 6,200 | ||
Class Of Warrant Or Right [Roll Forward] | |||
Beginning balance | 23,978 | 2,445,653 | |
Exercised | 0 | (2,376,675) | |
Ending balance | 23,978 | 68,978 | |
Underwriting | |||
Class of Warrant or Right [Line Items] | |||
Issuance of common stock in relation to initial public offering | 9,583,332 | ||
Public offering price | $ 4.50 | ||
Option to purchase additional shares | 1,249,999 | ||
Gross proceeds | $ 43,100 |
EQUITY (Detail Textual 1)
EQUITY (Detail Textual 1) - Stock options | 1 Months Ended | 3 Months Ended | ||
Aug. 31, 2017$ / sharesshares | Jul. 31, 2017employeeshares | Sep. 30, 2017shares | Sep. 30, 2016shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock option valuation method | Black-Scholes valuation model | |||
Granted | 135,000 | 179,047 | 20,080 | |
Number of employees | employee | 11 | |||
2,018 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 0.33% | |||
2,019 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 0.33% | |||
2,020 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 0.33% | |||
Chief Executive Officer ("CEO") | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted | 19,047 | |||
Exercise price of awarded options | $ / shares | $ 5.25 | |||
Chief Financial Officer ("CFO") | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted | 25,000 | |||
Exercise price of awarded options | $ / shares | $ 5.25 | |||
Chief Financial Officer ("CFO") | 2018 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 0.33% | |||
Chief Financial Officer ("CFO") | 2019 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 0.33% | |||
Chief Financial Officer ("CFO") | 2020 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 0.33% |
EQUITY (Details 1)
EQUITY (Details 1) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | |
Jul. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock based compensation | $ 289 | $ 81 | |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 50.37% | ||
Expected life (years) | 4 years | ||
Risk-free interest rate | 1.06% | ||
Number of options granted | 135,000 | 179,047 | 20,080 |
Weighted average exercise price | $ 5.66 | $ 4.98 | |
Weighted average grant date fair value | $ 2.42 | $ 1.98 | |
Stock based compensation | $ 149 | $ 48 | |
Stock options | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 50.21% | ||
Expected life (years) | 4 years | ||
Risk-free interest rate | 1.64% | ||
Stock options | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 50.89% | ||
Expected life (years) | 4 years 6 months | ||
Risk-free interest rate | 1.72% |
EQUITY (Detail Textual 2)
EQUITY (Detail Textual 2) $ in Thousands | Jul. 01, 2017USD ($)shares | Sep. 30, 2017employeeshares |
Non Employee Director | Long Term Stock Incentive Plan (LTT) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares granted | 177,363 | |
Common Stock | Non Employee Director | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share granted, amount | $ | $ 90 | |
Number of shares granted | 98,184 | |
Vesting period | 2 years | |
Total expense recognized | $ | $ 101 | |
Common Stock | Non Employee Director | Long Term Stock Incentive Plan (LTT) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of non-employee | employee | 2 | |
Common Stock | Chief Executive Officer And Chief Services Officer [Member] | Long Term Stock Incentive Plan (LTT) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares granted | 4,207 |
EQUITY (Detail Textual 3)
EQUITY (Detail Textual 3) - Long Term Stock Incentive Plan (LTT) - USD ($) | 3 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Jun. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage total number of connections | 40.00% | |
Percentage adjusted EBITDA earned | 60.00% | |
Chief Executive Officer ("CEO") | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of shares awarded on target achievement | 160.00% | |
Officers compensation | $ 840,000 | |
Chief Services Officer ("CSO") | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of shares awarded on target achievement | 100.00% | |
Officers compensation | $ 275,000 | |
Chief Financial Officer ("CFO") | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of shares awarded on target achievement | 100.00% | |
Officers compensation | $ 300,000 | |
Maximum | Chief Executive Officer ("CEO") | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of shares awarded on target achievement | 240.00% | |
Officers compensation | $ 1,260,000 | |
Maximum | Chief Services Officer ("CSO") | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of shares awarded on target achievement | 150.00% | |
Officers compensation | $ 412,500 | |
Maximum | Chief Financial Officer ("CFO") | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of shares awarded on target achievement | 150.00% | |
Officers compensation | $ 450,000 | |
2,018 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 0.33% | |
2,019 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 0.33% | |
2,020 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting percentage | 0.33% |
EQUITY (Details 2)
EQUITY (Details 2) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation | $ 289 | $ 81 |
FY18 LTI Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation | 216 | |
FY17 LTI Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation | 64 | 71 |
FY16 LTI Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation | $ 9 | 3 |
FY15 LTI Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation | $ 7 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Textuals) (Details) $ in Thousands | 3 Months Ended |
Sep. 30, 2017USD ($)ft² | |
Commitments and Contingencies Disclosure [Abstract] | |
Area of new premises (in square feet) | ft² | 23,138 |
Rent expense under operating leases | $ | $ 47 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ in Thousands | Nov. 07, 2017 | Sep. 30, 2017 |
Subsequent Event [Line Items] | ||
Integration and acquisition costs | $ 762 | |
Cantaloupe | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Aggregate purchase price | $ 85,000 | |
Consideration in cash | 65,000 | |
Consideration in shares | 19,800 | |
Consideration in the form of assumed debt | $ 1,800 |