Cantaloupe (CTLP) 10-Q 9 Nov 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Sep. 30, 2016	Nov. 02, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	USA TECHNOLOGIES INC
Entity Central Index Key	896,429
Trading Symbol	usat
Current Fiscal Year End Date	--06-30
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		40,297,208
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2016	Jun. 30, 2016
Current assets:
Cash	$ 18,198	$ 19,272
Accounts receivable, less allowance for doubtful accounts of $2,446 and $2,814, respectively	5,840	4,899
Finance receivables	3,349	3,588
Inventory, net	4,264	2,031
Prepaid expenses and other current assets	1,439	987
Deferred income taxes	2,271	2,271
Total current assets	35,361	33,048
Finance receivables, less current portion	3,962	3,718
Other assets	163	348
Property and equipment, net	9,570	9,765
Deferred income taxes	25,568	25,453
Intangibles, net	754	798
Goodwill	11,703	11,703
Total assets	87,081	84,833
Current liabilities:
Accounts payable	8,693	12,354
Accrued expenses	3,912	3,458
Line of credit, net	7,258	7,119
Current obligations under long-term debt	834	629
Income taxes payable	8	18
Warrant liabilities		3,739
Deferred gain from sale-leaseback transactions	685	860
Total current liabilities	21,390	28,177
Long-term liabilities:
Long-term debt, less current portion	1,517	1,576
Accrued expenses, less current portion	11	15
Deferred gain from sale-leaseback transactions, less current portion		40
Total long-term liabilities	1,528	1,631
Total liabilities	22,918	29,808
Commitments and contingencies (Note 11)
Shareholders' equity:
Preferred stock, no par value: Authorized shares- 1,800,000 Series A convertible preferred- Authorized shares- 900,000 Issued and outstanding shares- 445,063 with liquidation preference of $18,442 and $18,108, respectively	3,138	3,138
Common stock, no par value: Authorized shares- 640,000,000 Issued and outstanding shares- 40,295,425 and 37,783,444, respectively	244,996	233,394
Accumulated deficit	(183,971)	(181,507)
Total shareholders' equity	64,163	55,025
Total liabilities and shareholders' equity	$ 87,081	$ 84,833

Consolidated Balance Sheets (U3

Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Thousands	Sep. 30, 2016	Jun. 30, 2016
Allowance for uncollectible accounts receivable (in dollars)	$ 2,446	$ 2,814
Preferred stock, no par value (in dollars per share)	$ 0	$ 0
Preferred stock, shares authorized	1,800,000	1,800,000
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	40,295,425	37,783,444
Common stock, shares outstanding	40,295,425	37,783,444
Series A Convertible Preferred Stock
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)	$ 18,442	$ 18,108

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Revenues:
License and transaction fees	$ 16,365	$ 12,925
Equipment sales	5,223	3,675
Total revenues	21,588	16,600
Costs of sales/revenues:
Cost of services	11,243	8,705
Cost of equipment	4,178	2,848
Total costs of sales/revenues	15,421	11,553
Gross profit	6,167	5,047
Operating expenses:
Selling, general and administrative	6,909	4,796
Depreciation and amortization	208	139
Total operating expenses	7,117	4,935
Operating income (loss)	(950)	112
Other income (expense):
Interest income	73	51
Interest expense	(212)	(119)
Change in fair value of warrant liabilities	(1,490)	343
Total other income (expense), net	(1,629)	275
Income (loss) before provision for income taxes	(2,579)	387
Benefit (provision) for income taxes	115	(27)
Net income (loss)	(2,464)	360
Cumulative preferred dividends	(334)	(334)
Net income (loss) applicable to common shares	$ (2,798)	$ 26
Net earnings (loss) per common share - basic (in dollars per share)	$ (0.07)
Net earnings (loss) per common share - diluted (in dollars per share)	$ (0.07)	$ (0.01)
Basic weighted average number of common shares outstanding (in shares)	38,488,005	35,848,395
Diluted weighted average number of common shares outstanding (in shares)	38,488,005	36,487,879

Consolidated Statements of Shar

Consolidated Statements of Shareholders' Equity (Unaudited) - 3 months ended Sep. 30, 2016 - USD ($) $ in Thousands	Series A ConvertiblePreferred Stock	Common Stock	Accumulated Deficit	Total
Balance at Jul. 01, 2016	$ 3,138	$ 233,394	$ (181,507)	$ 55,025
Balance (in shares) at Jul. 01, 2016	445,063	37,783,444
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Reclass of fair value of warrant liability upon exercise of warrants		$ 5,229		5,229
Exercise of warrants		$ 6,193		6,193
Exercise of warrants (in shares)		2,376,675
Stock based compensation 2013 Stock Incentive Plan		$ 92		92
Stock based compensation 2013 Stock Incentive Plan (in shares)		141,839
Stock based compensation 2014 Stock Option Incentive Plan		$ 48		48
Stock based compensation 2015 Equity Incentive Plan		71		71
Retirement of common stock		$ (31)		(31)
Retirement of common stock (in shares)		(6,533)
Net loss			(2,464)	(2,464)
Balance at Sep. 30, 2016	$ 3,138	$ 244,996	$ (183,971)	$ 64,163
Balance (in shares) at Sep. 30, 2016	445,063	40,295,425

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
OPERATING ACTIVITIES:
Net income (loss)	$ (2,464)	$ 360
Adjustments to reconcile net income (loss) to net cash provided/(used) by operating activities:
Charges incurred in connection with the vesting and issuance of common stock and common stock options for employee and director compensation	211	272
Gain on disposal of property and equipment		(1)
Non-cash interest	105
Bad debt expense	97	236
Depreciation	1,257	1,350
Amortization of intangible assets	44
Change in fair value of warrant liabilities	1,490	(343)
Deferred income taxes, net	(115)	27
Recognition of deferred gain from sale-leaseback transactions	(215)	(215)
Changes in operating assets and liabilities:
Accounts receivable	(1,038)	38
Finance receivables	(5)	(583)
Inventory	(2,223)	219
Prepaid expenses and other assets	(224)	48
Accounts payable	(3,661)	(1,044)
Accrued expenses	486	(2)
Income taxes payable	(10)
Net cash provided/(used) by operating activities	(6,265)	362
INVESTING ACTIVITIES:
Purchase and additions of intangible assets, property and equipment	(168)	(49)
Purchase of property for rental program	(642)
Proceeds from sale of property and equipment		4
Net cash used by investing activities	(810)	(45)
FINANCING ACTIVITIES:
Cash used for the retirement of common stock	(31)
Proceeds from exercise of common stock warrants	6,193	29
Repayment of long-term debt	(161)	(128)
Net cash provided/(used) by financing activities	6,001	(99)
Net increase (decrease) in cash	(1,074)	218
Cash at beginning of period	19,272	11,374
Cash at end of period	18,198	11,592
Supplemental disclosures of cash flow information:
Interest paid in cash	87	106
Depreciation expense allocated to cost of services	1,072	1,199
Reclass of rental program property to inventory, net	(11)	(279)
Prepaid items financed with debt	54	103
Equipment and software acquired under capital lease	$ 254	35
Disposal of property and equipment		$ 99

BUSINESS

BUSINESS	3 Months Ended
	Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BUSINESS	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, 2016. 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-month period ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending June 30, 2017. The balance sheet at June 30, 2016 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.

ACCOUNTING POLICIES

ACCOUNTING POLICIES	3 Months Ended
	Sep. 30, 2016
Accounting Policies [Abstract]
ACCOUNTING POLICIES	2. ACCOUNTING POLICIES CONSOLIDATION The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. USE OF ESTIMATES The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. CASH The Company maintains its cash in bank deposit accounts, which may exceed federally insured limits at times. ACCOUNTS RECEIVABLE AND ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS Accounts receivable include amounts due to the Company for sales of equipment, other amounts due from customers, merchant service receivables, and unbilled amounts due from customers, net of the allowance for uncollectible accounts. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments, including from a shortfall in the customer transaction fund flow from which the Company would normally collect amounts due. The allowance is determined through an analysis of various factors including the aging of the accounts receivable, the strength of the relationship with the customer, the capacity of the customer transaction fund flow to satisfy the amount due from the customer, an assessment of collection costs and other factors. The allowance for doubtful accounts receivable is management’s best estimate as of the respective reporting date. The Company writes off accounts receivable against the allowance when management determines the balance is uncollectible and the Company ceases collection efforts. Management believes that the allowance recorded is adequate to provide for its estimated credit losses. FINANCE RECEIVABLES The Company offers extended payment terms to certain customers for equipment sales under its Quick Start Program. In accordance with the Financial Accounting Standards Board Accounting Standards Codification® (“ASC”) Topic 840, “Leases”, agreements under the Quick Start Program qualify for sales-type lease accounting. Accordingly, the future minimum lease payments are classified as finance receivables in the Company’s consolidated balance sheets. Finance receivables or Quick Start leases are generally for a sixty month term. Finance receivables are carried at their contractual amount and charged off against the allowance for credit losses when management determines that recovery is unlikely and the Company ceases collection efforts. The Company recognizes a portion of the note or lease payments as interest income in the accompanying consolidated financial statements based on the effective interest rate method. INVENTORY, Net Inventory consists of finished goods and packaging materials. The Company’s inventory is stated at the lower of cost (average cost basis) or market. PROPERTY AND EQUIPMENT, Net Property and equipment are recorded at cost. Property and equipment are depreciated on the straight-line basis over the estimated useful lives of the related assets. Leasehold improvements are amortized on the straight-line basis over the lesser of the estimated useful life of the asset or the respective lease term. GOODWILL AND INTANGIBLE ASSETS The Company’s intangible assets include goodwill, non-compete agreements, brand, developed technology and customer relationships. Goodwill represents the excess of cost over fair value of the net assets purchased in acquisitions. The Company accounts for goodwill in accordance with ASC 350, “Intangibles – Goodwill and Other”. Under ASC 350, goodwill is not amortized to earnings, but instead is subject to periodic testing for impairment. Testing for impairment is to be done at least annually and at other times if events or circumstances arise that indicate that impairment may have occurred. The Company has selected April 1 as its annual test date. FAIR VALUE OF FINANCIAL INSTRUMENTS The FASB issued Accounting Standards Update (“ASU”) 2010-06, “Fair Value Measurements and Disclosures (“Topic 820”): Improving Disclosures about Fair Value Measurements.” ASU 2010-06 amends certain disclosure requirements of Subtopic 820-10. This ASU provides additional disclosures for transfers in and out of Levels 1 and 2 and for activity in Level 3. This ASU also clarifies certain other existing disclosure requirements including level of desegregation and disclosures around inputs and valuation techniques. The Company’s financial assets and liabilities are accounted for in accordance with ASC 820 “Fair Value Measurement.” Under ASC 820 the Company uses inputs from the three levels of the fair value hierarchy to measure its financial assets and liabilities. The three levels are as follows: Level 1- Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2- Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). Level 3- Inputs are unobservable and reflect the Company’s assumptions that market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available. The Company’s financial instruments, principally accounts receivable, short-term finance receivables, prepaid expenses and other assets, accounts payable and accrued expenses, are carried at cost which approximates fair value due to the short-term maturity of these instruments. The fair value of the Company’s obligations under its long-term debt agreements and the long-term portion of its finance receivables approximates their carrying value as such instruments are at market rates currently available to the Company. REVENUE RECOGNITION Revenue from the sale or QuickStart lease of equipment is recognized on the terms of freight-on-board shipping point. Activation fee revenue, if applicable, is recognized when the Company’s cashless payment device is initially activated for use on the Company network. Transaction processing revenue is recognized upon the usage of the Company’s cashless payment and control network. License fees for access to the Company’s devices and network services are recognized on a monthly basis. In all cases, revenue is only recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed and determinable, and collection of the resulting receivable is reasonably assured. The Company estimates an allowance for product returns at the date of sale and license and transaction fee refunds on a monthly basis. ePort hardware is available to customers under the QuickStart program pursuant to which the customer would enter into a five-year non-cancelable lease with either the Company or a third-party financing company for the devices. The Company utilizes its best estimate of selling price when calculating the revenue to be recorded under these leases. The leases qualify for sales type lease accounting. Accordingly, the company recognizes a portion of lease payments as interest income for leases not placed with a third-party financing Company. At the end of the lease period, the customer would have the option to purchase the device at its residual value. PREFERRED STOCK The Company adopted the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-16 in determining whether the Company’s Series A Convertible Preferred Stock (“preferred stock”) is more equity-like or debt-like, and whether derivatives embedded in the preferred stock, if any, must be bifurcated and accounted for separately from its host contract. Based upon management’s review of the preferred stock features, management has determined that the preferred stock is more equity-like and that the embedded derivatives do not require bifurcation. As such, the adoption of this standard did not have a material impact on the company's financial statements. ACCOUNTING FOR EQUITY AWARDS In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification® (“ASC”) Topic 718, the cost of employee services received in exchange for an award of equity instruments is based on the grant-date fair value of the award and allocated over the vesting period of the award. INCOME TAXES The Company follows the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification® (“ASC”) Topic 740, “Accounting for Uncertainty in Income Taxes”, Income taxes are computed using the asset and liability method of accounting. Under the asset and liability method, a deferred tax asset or liability is recognized for estimated future tax effects attributable to temporary differences and carryforwards. The measurement of deferred income tax assets is adjusted by a valuation allowance, if necessary, to recognize future tax benefits only to the extent that, based on available evidence, it is more likely than not such benefits will be realized. The Company recognizes interest and penalties, if any, related to uncertain tax positions in selling, general and administrative expenses. No interest or penalties related to uncertain tax positions were accrued or incurred during the three months ended September 30, 2016 and 2015. EARNINGS (LOSS) PER COMMON SHARE Basic earnings (loss) per share are calculated by dividing income (loss) applicable to common shares by the weighted average common shares outstanding for the period. Diluted earnings per share are calculated by dividing income (loss) applicable to common shares by the weighted average common shares outstanding for the period plus the effect of potential common shares unless such effect is anti-dilutive. SOFTWARE DEVELOPMENT COSTS The Company follows the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification® (“ASC”) Topic 350-40, “Accounting for the Cost of Computer Software Developed or obtained for Internal Use”, which provides for guidance for what costs can be capitalized for internal use. Capitalized costs for internal-use software are included in fixed assets in the consolidated balance sheet and are amortized over three years. Costs incurred during the preliminary project along with post-implementation stages of internal use computer software development and costs incurred to maintain existing product offerings are expensed as incurred. The capitalization and ongoing assessment of recoverability of development costs require considerable judgment by management with respect to certain external factors, including, but not limited to, technological and economic feasibility and estimated economic life. RECLASSIFICATION Commencing with the June 30, 2016 financial statements, the Company changed the manner in which it presents certain unfunded finance receivables in its consolidated balance sheets and the related statements of cash flows. These finance receivables which have yet to be and are expected to be funded by a third-party funding source. The previous accounting classification recorded these constitute amounts as accounts receivable in the consolidated balance sheets and the related statements of cash flows. The impact of this change on the Statement of Cash Flows is as follows: Accounts Finance Per Original Statement of Cash Flows- Three months ended September 30, 2015 $ (713 ) $ 168 Impact from the reclassification 751 (751 ) Adjusted Statement of Cash Flows- Three months ended September 30, 2015 $ 38 $ (583 )

EARNINGS PER SHARE CALCULATION

EARNINGS PER SHARE CALCULATION	3 Months Ended
	Sep. 30, 2016
Earnings Per Share [Abstract]
EARNINGS PER SHARE CALCULATION	3. EARNINGS PER SHARE CALCULATION The calculation of basic earnings per share (“eps”) and diluted earnings per share are presented below: Three months ended September 30, ($ in thousands, except per share data) 2016 2015 Numerator for basic earnings per share $ (2,798 ) $ 26 Gain recorded for reduction in fair value of warrants* - (343 ) Numerator for diluted earnings per share $ (2,798 ) $ (317 ) Denominator for basic earnings per share 38,488,005 35,848,395 Effect of dilutive potential common shares* - 639,484 Denominator for diluted earnings per share 38,488,005 36,487,879 Basic earnings (loss) per share $ (0.07 ) $ - Diluted loss per share $ (0.07 ) $ (0.01 ) * No adjustment necessary for the three months ended September 30, 2016 as the effects would be anti-dilutive.

FINANCE RECEIVABLES

FINANCE RECEIVABLES	3 Months Ended
	Sep. 30, 2016
Receivables [Abstract]
FINANCE RECEIVABLES	4. FINANCE RECEIVABLES Finance receivables consist of the following: September 30, June 30, ($ in thousands) 2016 2016 (unaudited) Total finance receivables $ 7,311 $ 7,306 Less current portion 3,349 3,588 Non-current portion of finance receivables $ 3,962 $ 3,718 The Company collects monthly payments of its finance receivables from the customers’ transaction fund flow. Accordingly, as the fund flow from these customers’ transactions is generally sufficient to satisfy the amount due to the Company, the risk of loss is considered remote and the Company has not provided for an allowance for credit losses for finance receivables as of September 30, 2016 and June 30, 2016. Credit Quality Indicators Credit risk profile based on payment activity: September 30, June 30, 2016 2016 ($ in thousands) (unaudited) Performing $ 7,254 $ 7,174 Nonperforming 57 132 Total $ 7,311 $ 7,306 Age Analysis of Past Due Finance Receivables As of September 30, 2016 31 – 60 61 – 90 Greater than Total ($ in thousands) Days Past Days Past 90 Days Past Total Past Current Finance QuickStart Leases $ 2 $ 10 $ 45 $ 57 $ 7,254 $ 7,311 Age Analysis of Past Due Finance Receivables As of June 30, 2016 31 – 60 61 – 90 Greater than Total ($ in thousands) Days Past Days Past 90 Days Past Total Past Current Finance QuickStart Leases $ 98 $ 31 $ 3 $ 132 $ 7,174 $ 7,306

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS	3 Months Ended
	Sep. 30, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
GOODWILL AND INTANGIBLE ASSETS	5. GOODWILL AND INTANGIBLES There was $44 thousand of amortization expense relating to acquired intangible assets during the three months ended September 30, 2016. There was no amortization expense relating to acquired intangible assets during the three months ended September 30, 2015. Intangible asset balances consisted of the following: ($ in thousands) Balance Additions/ Balance Amortization June 30, 2016 Adjustments Amortization September 30, 2016 Period Intangible Assets: Non-compete agreements $ 1 $ - $ - $ 1 2 years Brand 79 - (8 ) 71 3 years Developed technology 576 - (32 ) 544 5 years Customer relationships 142 - (4 ) 138 10 years Total Intangible Assets $ 798 $ - $ (44 ) $ 754 Goodwill $ 11,703 $ - $ - $ 11,703 Indefinite

LINE OF CREDIT

LINE OF CREDIT	3 Months Ended
	Sep. 30, 2016
Line Of Credit Facility [Abstract]
LINE OF CREDIT	6. LINE OF CREDIT During the fiscal year ended June 30, 2016, the Company entered into a Loan and Security Agreement and other ancillary documents (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 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. The maturity date of the Heritage Line of Credit is March 29, 2017. 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 Heritage Loan Documents also require the Company to achieve a minimum Adjusted EBITDA, as defined in the Heritage Loan Documents, measured on a quarterly basis. The Heritage Loan Documents also require that the number of the Company’s connections as of the end of each fiscal quarter shall not decrease by more than five percent as compared to the number of the Company’s connections as of the end of the immediately prior fiscal quarter. As of September 30, 2016, the Company was not in compliance with the minimum Adjusted EBITDA provision of the debt covenant. The Company received a waiver from its bank for the covenant default. The balance due on the Heritage line of credit was $7.3 million and $7.2 million at September 30, 2016 and June 30, 2016, respectively. As of September 30, 2016, $4.7 million was available under our line of credit. Interest expense on the line of credit was approximately $107 thousand for the three months ended September 30, 2016.

LONG-TERM DEBT

LONG-TERM DEBT	3 Months Ended
	Sep. 30, 2016
Debt Disclosure [Abstract]
LONG-TERM DEBT	7. LONG-TERM DEBT The Company periodically enters into capital lease obligations to finance certain office, network equipment and related support for use in its daily operations. During the three-month period ended September 30, 2016 the Company commenced capital lease obligations of $308 thousand. The obligations are due in 12 and 8 quarterly installments of $15 thousand and $21 thousand, respectively. The value of the acquired equipment is included in property and equipment and amortized accordingly.

FAIR VALUE OF FINANCIAL INSTRUM

FAIR VALUE OF FINANCIAL INSTRUMENTS	3 Months Ended
	Sep. 30, 2016
Fair Value Disclosures [Abstract]
FAIR VALUE OF FINANCIAL INSTRUMENTS	8. FAIR VALUE OF FINANCIAL INSTRUMENTS As of June 30, 2016, the fair values of the Company’s Level 3 financial instrument totaled $3.739 million for 2.2 million warrants. The Level 3 financial instrument consist of common stock warrants issued by the Company in March 2011, which include features requiring liability treatment of the warrants. The fair value of warrants issued in March 2011 to purchase shares of the Company’s common stock is based on valuations performed by an independent third-party valuation firm. The fair value was determined using proprietary valuation models using the quality of the underlying securities of the warrants, restrictions on the warrants and security underlying the warrants, time restrictions and precedent sale transactions completed in the secondary market or in other private transactions. During the three months ended September 30, 2016 all of the aforementioned warrants were exercised and the then-fair value warrant liability was reclassified as Common Stock. The following table summarizes the changes in the Company’s Level 3 financial instruments for the three months ended September 30, 2016 and 2015. Three months ended ($ in thousands) September 30, 2016 2015 Beginning balance $ (3,739 ) $ (978 ) Increase due to change in fair value of warrant liabilities (1,490 ) 343 Reclass of fair value of warranty liability to common stock upon exercise of warrants 5,229 $ - Ending balance $ - $ (635 ) There were no transfers of assets or liabilities between level 1, level 2, or level 3 during the three months ended September 30, 2016 and 2015. As of September 30, 2016 and June 30, 2016, the Company held no Level 1 or Level 2 financial instruments.

INCOME TAXES

INCOME TAXES	3 Months Ended
	Sep. 30, 2016
Income Tax Disclosure [Abstract]
INCOME TAXES	9. INCOME TAXES 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 26% 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. For the three months ended September 30, 2015, an income tax provision of $27 thousand (substantially all deferred income taxes) was recorded based upon income before provision for income taxes using an estimated annual effective income tax rate of 39% for the fiscal year ending June 30, 2016 net of a benefit 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, 2016
Equity [Abstract]
EQUITY	10. EQUITY WARRANTS There were 2,376,675 warrants exercised during the three months ended September 30, 2016 at $2.6058 per share yielding proceeds of $6.2 million. Warrant activity for the three-month period ended September 30, 2016 and 2015 was as follows: Three months ended September 30, 2016 2015 Beginning balance 2,445,653 4,309,000 Issued - - Exercised (2,376,675 ) (11,000 ) Expired - - Ending balance 68,978 4,298,000 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 August 2016 stock options were awarded to purchase up to 20,080 shares of common stock at an exercise price of $4.98 per share. The options vest on August 31, 2017, and expire if not exercised prior to August 31, 2023. The options are intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended. The fair value of options granted during the three months ended September 30, 2016 and 2015 was estimated using the following weighted average assumptions: Three months ended September 30, 2016 2015 Expected volatility 50.37 % 63-66% Expected life 4 years 4-4.5 years Expected dividends 0.00 % 0.00 % Risk-free interest rate 1.06 % 1.34-1.49% Number of options granted 20,080 119,586 Weighted average exercise price $ 4.98 $ 3.38 Weighted average grant date fair value $ 1.98 $ 1.77 Stock based compensation related to stock options for the three months ended September 30, 2016 and 2015 was $48 thousand and $115 thousand, respectively. COMMON STOCK On July 1, 2016 $40 thousand of stock grants were awarded to each non-employee Director based on the prior 30-day average closing price of the Company’s Common Stock, for a total of 56,784 shares. The shares vest as follows: 18,960 on 07/01/2017, 18,960 on 07/01/2018 and 18,954 on 07/01/2019. The total expense recognized for these grants during the three months ended September 30, 2016 was $37 thousand. During the three months ended September 30, 2016, the Company awarded an aggregate of 78,711 shares to its Chief Executive Officer and Chief Services Officer under its fiscal year 2016 long term stock incentive plan and an aggregate of 6,254 shares to three non-employee Directors in satisfaction of board fees. During the three-month period, the Chief Executive Officer cancelled 6,533 shares of Common Stock awarded to him under the 2016 fiscal year long term stock incentive plan in satisfaction of $31 thousand of related payroll obligations. LTI PLANS The Board approved the Fiscal Year 2017 Long-Term Stock Incentive Plan (the “2017 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 2017 fiscal year would result in specified ranges of year-over-year percentage growth. The metrics are total number of connections as of June 30, 2017 as compared to total number of connections as of June 30, 2016 (50% weighting) and adjusted EBITDA earned during the 2017 fiscal year as compared to the adjusted EBITDA earned during the 2016 fiscal year (50% 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”) - $675,000 (150% of base salary); and Chief Services Officer (“CSO”) - $250,000 (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: CEO - $1,012,500 (225% of base salary); and CSO - $375,000 (150% of base salary). Assuming the minimum threshold year-over-year percentage target goal would be achieved for a particular metric, the number of shares to be awarded for that metric would be determined on a pro rata basis, provided that the award would not exceed the maximum distinguished award for that metric. The shares awarded under the 2017 LTI Stock Plan would vest as follows: one-third at the time of issuance; one-third on June 30, 2018; and one-third on June 30, 2019. The Company had long-term stock incentive plans (“LTI”) in prior fiscal years for its then executive officers. Stock based compensation related to the LTI plans was as follows in the three months ended September 2016 and 2015: Three months ended September 30, ($ in thousands, except per share data) 2016 2015 FY17 LTI Plan $ 71 $ - FY16 LTI Plan 3 28 FY15 LTI Plan 7 21 FY14 LTI Plan - 4 Total $ 81 $ 53

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Sep. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	11. COMMITMENTS AND CONTINGENCIES In the quarter ended September 30, 2016 the Company entered into a lease agreement for its operations in Portland, Oregon, which commenced October 1, 2016. The new location consists of 5,362 square feet and will expire in December 2019. The lease includes monthly rental payments of $11 thousand. The straight-line rent expense for this lease is $11 thousand per month. From time to time, the Company is involved in various legal proceedings arising during the normal course of business which, in the opinion of the management of the Company, will not have a material adverse effect on the Company’s financial position and results of operations or cash flows.

ACCOUNTING POLICIES (Policies)

ACCOUNTING POLICIES (Policies)	3 Months Ended
	Sep. 30, 2016
Business Description And Accounting Policies [Abstract]
CONSOLIDATION	CONSOLIDATION The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.
USE OF ESTIMATES	USE OF ESTIMATES The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
CASH	CASH The Company maintains its cash in bank deposit accounts, which may exceed federally insured limits at times.
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS	ACCOUNTS RECEIVABLE AND ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS Accounts receivable include amounts due to the Company for sales of equipment, other amounts due from customers, merchant service receivables, and unbilled amounts due from customers, net of the allowance for uncollectible accounts. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments, including from a shortfall in the customer transaction fund flow from which the Company would normally collect amounts due. The allowance is determined through an analysis of various factors including the aging of the accounts receivable, the strength of the relationship with the customer, the capacity of the customer transaction fund flow to satisfy the amount due from the customer, an assessment of collection costs and other factors. The allowance for doubtful accounts receivable is management’s best estimate as of the respective reporting date. The Company writes off accounts receivable against the allowance when management determines the balance is uncollectible and the Company ceases collection efforts. Management believes that the allowance recorded is adequate to provide for its estimated credit losses.
FINANCE RECEIVABLES	FINANCE RECEIVABLES The Company offers extended payment terms to certain customers for equipment sales under its Quick Start Program. In accordance with the Financial Accounting Standards Board Accounting Standards Codification® (“ASC”) Topic 840, “Leases”, agreements under the Quick Start Program qualify for sales-type lease accounting. Accordingly, the future minimum lease payments are classified as finance receivables in the Company’s consolidated balance sheets. Finance receivables or Quick Start leases are generally for a sixty month term. Finance receivables are carried at their contractual amount and charged off against the allowance for credit losses when management determines that recovery is unlikely and the Company ceases collection efforts. The Company recognizes a portion of the note or lease payments as interest income in the accompanying consolidated financial statements based on the effective interest rate method.
INVENTORY, Net	INVENTORY, Net Inventory consists of finished goods and packaging materials. The Company’s inventory is stated at the lower of cost (average cost basis) or market.
PROPERTY AND EQUIPMENT, Net	PROPERTY AND EQUIPMENT, Net Property and equipment are recorded at cost. Property and equipment are depreciated on the straight-line basis over the estimated useful lives of the related assets. Leasehold improvements are amortized on the straight-line basis over the lesser of the estimated useful life of the asset or the respective lease term.
GOODWILL AND INTANGIBLE ASSETS	GOODWILL AND INTANGIBLE ASSETS The Company’s intangible assets include goodwill, non-compete agreements, brand, developed technology and customer relationships. Goodwill represents the excess of cost over fair value of the net assets purchased in acquisitions. The Company accounts for goodwill in accordance with ASC 350, “Intangibles – Goodwill and Other”. Under ASC 350, goodwill is not amortized to earnings, but instead is subject to periodic testing for impairment. Testing for impairment is to be done at least annually and at other times if events or circumstances arise that indicate that impairment may have occurred. The Company has selected April 1 as its annual test date.
FAIR VALUE OF FINANCIAL INSTRUMENTS	FAIR VALUE OF FINANCIAL INSTRUMENTS The FASB issued Accounting Standards Update (“ASU”) 2010-06, “Fair Value Measurements and Disclosures (“Topic 820”): Improving Disclosures about Fair Value Measurements.” ASU 2010-06 amends certain disclosure requirements of Subtopic 820-10. This ASU provides additional disclosures for transfers in and out of Levels 1 and 2 and for activity in Level 3. This ASU also clarifies certain other existing disclosure requirements including level of desegregation and disclosures around inputs and valuation techniques. The Company’s financial assets and liabilities are accounted for in accordance with ASC 820 “Fair Value Measurement.” Under ASC 820 the Company uses inputs from the three levels of the fair value hierarchy to measure its financial assets and liabilities. The three levels are as follows: Level 1- Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2- Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). Level 3- Inputs are unobservable and reflect the Company’s assumptions that market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available. The Company’s financial instruments, principally accounts receivable, short-term finance receivables, prepaid expenses and other assets, accounts payable and accrued expenses, are carried at cost which approximates fair value due to the short-term maturity of these instruments. The fair value of the Company’s obligations under its long-term debt agreements and the long-term portion of its finance receivables approximates their carrying value as such instruments are at market rates currently available to the Company.
REVENUE RECOGNITION	REVENUE RECOGNITION Revenue from the sale or QuickStart lease of equipment is recognized on the terms of freight-on-board shipping point. Activation fee revenue, if applicable, is recognized when the Company’s cashless payment device is initially activated for use on the Company network. Transaction processing revenue is recognized upon the usage of the Company’s cashless payment and control network. License fees for access to the Company’s devices and network services are recognized on a monthly basis. In all cases, revenue is only recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed and determinable, and collection of the resulting receivable is reasonably assured. The Company estimates an allowance for product returns at the date of sale and license and transaction fee refunds on a monthly basis. ePort hardware is available to customers under the QuickStart program pursuant to which the customer would enter into a five-year non-cancelable lease with either the Company or a third-party financing company for the devices. The Company utilizes its best estimate of selling price when calculating the revenue to be recorded under these leases. The leases qualify for sales type lease accounting. Accordingly, the company recognizes a portion of lease payments as interest income for leases not placed with a third-party financing Company. At the end of the lease period, the customer would have the option to purchase the device at its residual value.
PREFERRED STOCK	PREFERRED STOCK The Company adopted the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-16 in determining whether the Company’s Series A Convertible Preferred Stock (“preferred stock”) is more equity-like or debt-like, and whether derivatives embedded in the preferred stock, if any, must be bifurcated and accounted for separately from its host contract. Based upon management’s review of the preferred stock features, management has determined that the preferred stock is more equity-like and that the embedded derivatives do not require bifurcation. As such, the adoption of this standard did not have a material impact on the company's financial statements.
ACCOUNTING FOR EQUITY AWARDS	ACCOUNTING FOR EQUITY AWARDS In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification® (“ASC”) Topic 718, the cost of employee services received in exchange for an award of equity instruments is based on the grant-date fair value of the award and allocated over the vesting period of the award.
INCOME TAXES	INCOME TAXES The Company follows the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification® (“ASC”) Topic 740, “Accounting for Uncertainty in Income Taxes”, Income taxes are computed using the asset and liability method of accounting. Under the asset and liability method, a deferred tax asset or liability is recognized for estimated future tax effects attributable to temporary differences and carryforwards. The measurement of deferred income tax assets is adjusted by a valuation allowance, if necessary, to recognize future tax benefits only to the extent that, based on available evidence, it is more likely than not such benefits will be realized. The Company recognizes interest and penalties, if any, related to uncertain tax positions in selling, general and administrative expenses. No interest or penalties related to uncertain tax positions were accrued or incurred during the three months ended September 30, 2016 and 2015.
EARNINGS (LOSS) PER COMMON SHARE	EARNINGS (LOSS) PER COMMON SHARE Basic earnings (loss) per share are calculated by dividing income (loss) applicable to common shares by the weighted average common shares outstanding for the period. Diluted earnings per share are calculated by dividing income (loss) applicable to common shares by the weighted average common shares outstanding for the period plus the effect of potential common shares unless such effect is anti-dilutive.
SOFTWARE DEVELOPMENT COSTS	SOFTWARE DEVELOPMENT COSTS The Company follows the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification® (“ASC”) Topic 350-40, “Accounting for the Cost of Computer Software Developed or obtained for Internal Use”, which provides for guidance for what costs can be capitalized for internal use. Capitalized costs for internal-use software are included in fixed assets in the consolidated balance sheet and are amortized over three years. Costs incurred during the preliminary project along with post-implementation stages of internal use computer software development and costs incurred to maintain existing product offerings are expensed as incurred. The capitalization and ongoing assessment of recoverability of development costs require considerable judgment by management with respect to certain external factors, including, but not limited to, technological and economic feasibility and estimated economic life.
RECLASSIFICATION	RECLASSIFICATION Commencing with the June 30, 2016 financial statements, the Company changed the manner in which it presents certain unfunded finance receivables in its consolidated balance sheets and the related statements of cash flows. These finance receivables which have yet to be and are expected to be funded by a third-party funding source. The previous accounting classification recorded these constitute amounts as accounts receivable in the consolidated balance sheets and the related statements of cash flows. The impact of this change on the Statement of Cash Flows is as follows: Accounts Finance Per Original Statement of Cash Flows- Three months ended September 30, 2015 $ (713 ) $ 168 Impact from the reclassification 751 (751 ) Adjusted Statement of Cash Flows- Three months ended September 30, 2015 $ 38 $ (583 )

ACCOUNTING POLICIES (Tables)

ACCOUNTING POLICIES (Tables)	3 Months Ended
	Sep. 30, 2016
Accounting Policies [Abstract]
Schedule of amounts recorded as accounts receivable in the consolidated balance sheets	Accounts Finance Per Original Statement of Cash Flows- Three months ended September 30, 2015 $ (713 ) $ 168 Impact from the reclassification 751 (751 ) Adjusted Statement of Cash Flows- Three months ended September 30, 2015 $ 38 $ (583 )

EARNINGS PER SHARE CALCULATION

EARNINGS PER SHARE CALCULATION (Tables)	3 Months Ended
	Sep. 30, 2016
Earnings Per Share [Abstract]
Schedule of basic earnings per share and diluted earnings per share	Three months ended September 30, ($ in thousands, except per share data) 2016 2015 Numerator for basic earnings per share $ (2,798 ) $ 26 Gain recorded for reduction in fair value of warrants* - (343 ) Numerator for diluted earnings per share $ (2,798 ) $ (317 ) Denominator for basic earnings per share 38,488,005 35,848,395 Effect of dilutive potential common shares* - 639,484 Denominator for diluted earnings per share 38,488,005 36,487,879 Basic earnings (loss) per share $ (0.07 ) $ - Diluted loss per share $ (0.07 ) $ (0.01 ) * No adjustment necessary for the three months ended September 30, 2016 as the effects would be anti-dilutive.

FINANCE RECEIVABLES (Tables)

FINANCE RECEIVABLES (Tables)	3 Months Ended
	Sep. 30, 2016
Receivables [Abstract]
Schedule of finance receivables	September 30, June 30, ($ in thousands) 2016 2016 (unaudited) Total finance receivables $ 7,311 $ 7,306 Less current portion 3,349 3,588 Non-current portion of finance receivables $ 3,962 $ 3,718
Schedule of credit quality indicators	Credit Quality Indicators Credit risk profile based on payment activity: September 30, June 30, 2016 2016 ($ in thousands) (unaudited) Performing $ 7,254 $ 7,174 Nonperforming 57 132 Total $ 7,311 $ 7,306
Schedule of age analysis of past due finance receivables	Age Analysis of Past Due Finance Receivables As of September 30, 2016 31 – 60 61 – 90 Greater than Total ($ in thousands) Days Past Days Past 90 Days Past Total Past Current Finance QuickStart Leases $ 2 $ 10 $ 45 $ 57 $ 7,254 $ 7,311 Age Analysis of Past Due Finance Receivables As of June 30, 2016 31 – 60 61 – 90 Greater than Total ($ in thousands) Days Past Days Past 90 Days Past Total Past Current Finance QuickStart Leases $ 98 $ 31 $ 3 $ 132 $ 7,174 $ 7,306

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS (Tables)	3 Months Ended
	Sep. 30, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of intangible asset balances	($ in thousands) Balance Additions/ Balance Amortization June 30, 2016 Adjustments Amortization September 30, 2016 Period Intangible Assets: Non-compete agreements $ 1 $ - $ - $ 1 2 years Brand 79 - (8 ) 71 3 years Developed technology 576 - (32 ) 544 5 years Customer relationships 142 - (4 ) 138 10 years Total Intangible Assets $ 798 $ - $ (44 ) $ 754 Goodwill $ 11,703 $ - $ - $ 11,703 Indefinite

FAIR VALUE OF FINANCIAL INSTR23

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)	3 Months Ended
	Sep. 30, 2016
Fair Value Disclosures [Abstract]
Schedule of changes in fair value of the company's level 3 financial instruments	Three months ended ($ in thousands) September 30, 2016 2015 Beginning balance $ (3,739 ) $ (978 ) Increase due to change in fair value of warrant liabilities (1,490 ) 343 Reclass of fair value of warranty liability to common stock upon exercise of warrants 5,229 $ - Ending balance $ - $ (635 )

EQUITY (Tables)

EQUITY (Tables)	3 Months Ended
	Sep. 30, 2016
Equity [Abstract]
Schedule of warrant activity	Three months ended September 30, 2016 2015 Beginning balance 2,445,653 4,309,000 Issued - - Exercised (2,376,675 ) (11,000 ) Expired - - Ending balance 68,978 4,298,000
Schedule of stock option granted weighted average assumptions	Three months ended September 30, 2016 2015 Expected volatility 50.37 % 63-66% Expected life 4 years 4-4.5 years Expected dividends 0.00 % 0.00 % Risk-free interest rate 1.06 % 1.34-1.49% Number of options granted 20,080 119,586 Weighted average exercise price $ 4.98 $ 3.38 Weighted average grant date fair value $ 1.98 $ 1.77
Schedule of stock based compensation related to the LTI plans	Three months ended September 30, ($ in thousands, except per share data) 2016 2015 FY17 LTI Plan $ 71 $ - FY16 LTI Plan 3 28 FY15 LTI Plan 7 21 FY14 LTI Plan - 4 Total $ 81 $ 53

ACCOUNTING POLICIES (Details)

ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
As Reported
Accounting Policies [Line Items]
Reclassification of cash provided by and included in accounts receivable	$ (713)	$ 38
Reclassification of cash provided by and included in financial receivable	168	$ (583)
Reclassification
Accounting Policies [Line Items]
Reclassification of cash provided by and included in accounts receivable	751
Reclassification of cash provided by and included in financial receivable	$ (751)

ACCOUNTING POLICIES (Detail Tex

ACCOUNTING POLICIES (Detail Textuals)	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Accounting Policies [Abstract]
Depreciation method for property and plant	straight-line basis
Term of notes receivable or quick start leases	60 months
Amortisation of capitalized software development		3 years
Description rental JumpStart program for ePort devices	The Company offers extended payment terms to certain customers for equipment sales under its Quick Start Program.
Term of non cancelable lease with agreement	5 years

EARNINGS PER SHARE CALCULATIO27

EARNINGS PER SHARE CALCULATION (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended
		Sep. 30, 2016	Sep. 30, 2015
Numerator for basic and diluted earnings per share
Numerator for basic earnings per share - Net loss available to common shareholders		$ (2,798)	$ 26
Gain recorded for reduction in fair value of warrants	[1]		(343)
Numerator for diluted earnings per share - Net loss available to common shareholders		$ (2,798)	$ (317)
Denominator for basic earnings per share - Weighted average shares outstanding		38,488,005	35,848,395
Effect of dilutive potential common shares	[1]		639,484
Denominator for diluted earnings per share - Adjusted weighted average shares outstanding		38,488,005	36,487,879
Basic earnings (loss) per share		$ (0.07)
Diluted loss per share		$ (0.07)	$ (0.01)
[1]	No adjustment necessary for the three months ended September 30, 2016 as the effects would be anti-dilutive.

FINANCE RECEIVABLES - Informati

FINANCE RECEIVABLES - Information regarding finance receivables (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Jun. 30, 2016
Receivables [Abstract]
Total finance receivables	$ 7,311	$ 7,306
Less current portion	3,349	3,588
Non-current portion of finance receivables	$ 3,962	$ 3,718

FINANCE RECEIVABLES - Credit ri

FINANCE RECEIVABLES - Credit risk profile based on payment activity (Details 1) - USD ($) $ in Thousands	Sep. 30, 2016	Jun. 30, 2016
Financing Receivable, Recorded Investment [Line Items]
Total finance receivables	$ 7,311	$ 7,306
Performing
Financing Receivable, Recorded Investment [Line Items]
Total finance receivables	7,254	7,174
Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Total finance receivables	$ 57	$ 132

FINANCE RECEIVABLES - Age analy

FINANCE RECEIVABLES - Age analysis of past due finance receivables (Details 2) - USD ($) $ in Thousands	Sep. 30, 2016	Jun. 30, 2016
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total finance receivables	$ 7,311	$ 7,306
QuickStart Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	57	132
Current	7,254	7,174
Total finance receivables	7,311	7,306
QuickStart Leases | 31- 60 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	2	98
QuickStart Leases | 61- 90 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	10	31
QuickStart Leases | Greater than 90 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 45	$ 3

GOODWILL AND INTANGIBLE ASSET31

GOODWILL AND INTANGIBLE ASSETS - Summary of intangible assets (Details) $ in Thousands	3 Months Ended
	Sep. 30, 2016USD ($)
Goodwill [Roll Forward]
Goodwill, Beginning Balance	$ 11,703
Goodwill, Additions / Adjustments
Goodwill, Amortization
Goodwill, Ending Balance	$ 11,703
Goodwill, Amortization Period	Indefinite
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Total Intangible Assets	$ 798
Additions / Adjustments
Amortization	(44)
Total Intangible Assets	754
Non-compete agreements
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Total Intangible Assets	1
Additions / Adjustments
Amortization
Total Intangible Assets	$ 1
Amortization Period	2 years
Brand
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Total Intangible Assets	$ 79
Additions / Adjustments
Amortization	(8)
Total Intangible Assets	$ 71
Amortization Period	3 years
Developed Technology
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Total Intangible Assets	$ 576
Additions / Adjustments
Amortization	(32)
Total Intangible Assets	$ 544
Amortization Period	5 years
Customer relationships
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Total Intangible Assets	$ 142
Additions / Adjustments
Amortization	(4)
Total Intangible Assets	$ 138
Amortization Period	10 years

GOODWILL AND INTANGIBLE ASSET32

GOODWILL AND INTANGIBLE ASSETS - (Detail Textuals) $ in Thousands	3 Months Ended
	Sep. 30, 2016USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense of acquired intangible assets	$ 44

LINE OF CREDIT (Detail Textuals

LINE OF CREDIT (Detail Textuals) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Jun. 30, 2016
Line of Credit Facility [Line Items]
Line of credit, net	$ 7,258		$ 7,119
Interest expense	212	$ 119
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%
Line of credit, net	7,300		$ 7,200
Interest expense	107
Line of credit facility amount available under line of credit	$ 4,700

LONG-TERM DEBT (Detail Textuals

LONG-TERM DEBT (Detail Textuals) $ in Thousands	Sep. 30, 2016USD ($)
Debt Instrument [Line Items]
Capital lease obligations	$ 254
Capital lease due in 8 quarterly installment	21
Capital lease due in 12 quarterly installment	15
Capital Lease Obligations
Debt Instrument [Line Items]
Capital lease obligations	$ 308

FAIR VALUE OF FINANCIAL INSTR35

FAIR VALUE OF FINANCIAL INSTRUMENTS - Changes in fair value of the Company level 3 financial instruments (unaudited) (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ (3,739)	$ (978)
Increase due to change in fair value of warrant liabilities	(1,490)	343
Reclass of fair value of warranty liability to common stock upon exercise of warrants	5,229
Ending balance		$ (635)

FAIR VALUE OF FINANCIAL INSTR36

FAIR VALUE OF FINANCIAL INSTRUMENTS (Detail Textuals) - Level 3 - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2016	Jun. 30, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Valuation method used to determine fair value	proprietary valuation models
Fair values of Level 3 financial instrument	$ 3,739	$ 2,200

INCOME TAXES (Detail Textuals)

INCOME TAXES (Detail Textuals) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Income Tax Disclosure [Abstract]
Income tax benefit	$ (115)	$ 27
Estimated annual effective income tax rate	26.00%	39.00%

EQUITY (Details)

EQUITY (Details) - Warrants - shares	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Class Of Warrant Or Right [Roll Forward]
Beginning balance	2,445,653	4,309,000
Issued
Exercised	(2,376,675)	(11,000)
Expired
Ending balance	68,978	4,298,000

EQUITY (Details 1)

EQUITY (Details 1) - Stock options - $ / shares	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility	50.37%
Expected life	4 years
Expected dividends	0.00%	0.00%
Risk-free interest rate	1.06%
Number of options granted	20,080	119,586
Weighted average exercise price	$ 4.98	$ 3.38
Weighted average grant date fair value	$ 1.98	$ 1.77
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility		63.00%
Expected life		4 years
Risk-free interest rate		1.34%
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility		66.00%
Expected life		4 years 6 months
Risk-free interest rate		1.49%

EQUITY (Details 2)

EQUITY (Details 2) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation	$ 81	$ 53
FY17 LTI Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation	71
FY16 LTI Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation	3	28
FY15 LTI Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation	7	21
FY14 LTI Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation		$ 4

EQUITY (Detail Textuals)

EQUITY (Detail Textuals) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Class Of Warrant Or Right [Line Items]
Proceeds from exercise of common stock warrants	$ 6,193	$ 29
Warrants
Class Of Warrant Or Right [Line Items]
Number of warrants exercised	2,376,675
Exercise price per share	$ 2.6058
Proceeds from exercise of common stock warrants	$ 6,200

EQUITY (Detail Textual 1)

EQUITY (Detail Textual 1) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation	$ 81	$ 53
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option valuation method	Black-Scholes valuation model
Granted	20,080	119,586
Exercise price of awarded options	$ 4.98
Stock based compensation	$ 49	$ 115
Description of stock options vesting rights	The options vest on August 31, 2017, and expire if not exercised prior to August 31, 2023

EQUITY (Detail Textual 2)

EQUITY (Detail Textual 2) - Common Stock - USD ($) $ in Thousands	Jul. 01, 2016	Sep. 30, 2016
Non Employee Director
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted	56,784
Share granted, amount	$ 40
Total expense recognized	$ 37
Non Employee Director | Long Term Stock Incentive Plan (LTT)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted		78,711
Non Employee Director | 07/01/2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vested	18,960
Non Employee Director | 07/01/2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vested	18,960
Non Employee Director | 07/01/2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vested	18,954
Chief Executive Officer And Chief Services Officer | Long Term Stock Incentive Plan (LTT)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted		6,254
Chief Executive Officer ("CEO") | Long Term Stock Incentive Plan (LTT)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares forfeited		6,533
Chief Executive Officer ("CEO") | Payroll Obligation
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares forfeited		31

EQUITY (Detail Textual 3)

EQUITY (Detail Textual 3) - Long Term Stock Incentive Plan (LTT)	3 Months Ended
	Sep. 30, 2016USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage total number of connections	50.00%
Percentage adjusted EBITDA earned	50.00%
Chief Executive Officer ("CEO")
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of shares awarded on target achievement	150.00%
Officers compensation	$ 675,000
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	$ 250,000
Maximum | Chief Executive Officer ("CEO")
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of shares awarded on target achievement	225.00%
Officers compensation	$ 1,012,500
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	$ 375,000

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Detail Textuals) $ in Thousands	3 Months Ended
	Sep. 30, 2016USD ($)ft²
Commitments and Contingencies Disclosure [Abstract]
Area of new premises (in square feet) | ft²	5,362
Rent expense under operating leases	$ 11
Straight-lined rent expense	$ 11