Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Jun. 30, 2014 | Sep. 18, 2014 | Dec. 31, 2013 | |
Document And Entity Information | ' | ' | ' |
Entity Registrant Name | 'ALANCO TECHNOLOGIES INC | ' | ' |
Entity Central Index Key | '0000098618 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 30-Jun-14 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--06-30 | ' | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' | ' |
Is Entity a Voluntary Filer? | 'No | ' | ' |
Is Entity's Reporting Status Current? | 'Yes | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Public Float | ' | ' | $1,425,100 |
Entity Common Stock, Shares Outstanding | ' | 4,962,500 | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Document Fiscal Year Focus | '2014 | ' | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
ASSETS | ' | ' |
Cash and cash equivalents | $1,215,600 | $696,400 |
Accounts receivable - trade, net | 96,800 | 9,600 |
Other receivables - related party | 9,200 | 32,800 |
Note receivable, current - related party | 300,000 | 375,000 |
Marketable securities | 560,100 | 1,562,600 |
Prepaid expenses and other current assets | 212,700 | 121,000 |
Total current assets | 2,394,400 | 2,797,400 |
LAND, PROPERTY AND EQUIPMENT, NET | 4,163,000 | 4,339,900 |
OTHER ASSETS | ' | ' |
Note receivable, long-term - related party | 109,000 | 0 |
Trust account-Asset retirement obligation | 48,700 | 30,000 |
Prepaid royalties, long-term | 50,000 | 50,000 |
TOTAL ASSETS | 6,765,100 | 7,217,300 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ' | ' |
Accounts payable and accrued expenses | 278,000 | 220,900 |
Contingent payments, current | 50,000 | 50,000 |
Total current liabilities | 328,000 | 270,900 |
LONG-TERM LIABILITIES | ' | ' |
Contingent payments, long-term | 1,138,300 | 1,104,600 |
Asset retirement obligation, long-term | 423,700 | 417,400 |
TOTAL LIABILITIES | 1,890,000 | 1,792,900 |
SHAREHOLDERS' EQUITY | ' | ' |
Preferred Stock | 0 | 0 |
Class A - 75,000,000 no par shares authorized, 4,962,500 and 4,989,300 shares issued and outstanding at June 30, 2014 and 2013, respectively | 109,106,800 | 109,121,200 |
Accumulated Other Comprehensive Income | 121,200 | 549,900 |
Accumulated Deficit | -104,352,900 | -104,246,700 |
Total shareholders' equity | 4,875,100 | 5,424,400 |
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY | $6,765,100 | $7,217,300 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) | Jun. 30, 2014 | Jun. 30, 2013 |
Consolidated Balance Sheets | ' | ' |
Class A Common Stock, Shares Authorized | 75,000,000 | 75,000,000 |
Class A Common Stock, Shares Issued | 4,962,500 | 4,989,300 |
Class A Common Stock, Shares Outstanding | 4,962,500 | 4,989,300 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Consolidated Statements Of Operations | ' | ' |
NET REVENUES | $649,000 | $390,600 |
Cost of revenues | -447,700 | -402,000 |
GROSS PROFIT (LOSS) | 201,300 | -11,400 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | ' | ' |
Corporate expenses | 307,800 | 592,400 |
Alanco Energy Services | 810,200 | 702,300 |
Amortization of stock-based compensation | 0 | 238,600 |
Impairment charge | 160,500 | 0 |
Selling general and administrative expenses | 1,278,500 | 1,533,300 |
OPERATING LOSS | -1,077,200 | -1,544,700 |
OTHER INCOME & EXPENSES | ' | ' |
Interest income (expense), net | 37,500 | 22,900 |
Gain on sale of StarTrak | 121,700 | 0 |
Gain on sale of investments | 913,800 | 838,300 |
Other income (expense), net | -102,000 | 500 |
NET LOSS | ($106,200) | ($683,000) |
NET INCOME (LOSS) PER SHARE - BASIC AND DILUTED | ' | ' |
NET LOSS PER SHARE - BASIC AND DILUTED | ($0.02) | ($0.14) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | 4,944,600 | 5,009,000 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ' | ' |
Net Loss | ($106,200) | ($683,000) |
Reclassification adjustment for realized gain included in net loss | -913,800 | -751,500 |
Net unrealized gain (loss) on marketable securities held at June 30, | -65,600 | 428,000 |
Net unrealized gains on marketable securities sold during the year | 550,700 | 489,800 |
Comprehensive Income (Loss) | ($534,900) | ($516,700) |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (USD $) | Common Stock | Treasury Stock | Accumulated Other Comprehensive Income / Loss | Accumulated Deficit | Total |
Beginning Balance, Amount at Jun. 30, 2012 | $108,893,600 | $0 | $383,600 | ($103,563,700) | $5,713,500 |
Beginning Balance, Shares at Jun. 30, 2012 | 5,010,300 | 0 | ' | ' | ' |
Value of stock - based compensation | 238,600 | ' | ' | ' | 238,600 |
Treasury Shares retired, Shares | -21,000 | -21,000 | ' | ' | ' |
Treasury Shares retired, Amount | -11,000 | -11,000 | ' | ' | -22,000 |
Shares of Alanco common stock repurchased, Shares | ' | 21,000 | ' | ' | ' |
Shares of Alanco common stock repurchased, Amount | ' | 11,000 | ' | ' | 11,000 |
Net loss | ' | ' | ' | -683,000 | -683,000 |
Unrealized gain/(loss) on marketable securities | ' | ' | 166,300 | ' | 166,300 |
Ending Balance, Amount at Jun. 30, 2013 | 109,121,200 | ' | 549,900 | -104,246,700 | 5,424,400 |
Ending Balance, Shares at Jun. 30, 2013 | 4,989,300 | ' | ' | ' | ' |
Shares issued for services, Shares | 30,000 | ' | ' | ' | ' |
Shares issued for services, Amount | 11,700 | ' | ' | ' | 11,700 |
Value of stock - based compensation | ' | ' | ' | ' | 0 |
Treasury Shares retired, Shares | -56,800 | -56,800 | ' | ' | ' |
Treasury Shares retired, Amount | -26,100 | -26,100 | ' | ' | -52,200 |
Shares of Alanco common stock repurchased, Shares | ' | 56,800 | ' | ' | ' |
Shares of Alanco common stock repurchased, Amount | ' | 26,100 | ' | ' | 26,100 |
Net loss | ' | ' | ' | -106,200 | -106,200 |
Unrealized gain/(loss) on marketable securities | ' | ' | -428,700 | ' | -428,700 |
Ending Balance, Amount at Jun. 30, 2014 | $109,106,800 | $0 | $121,200 | ($104,352,900) | $4,875,100 |
Ending Balance, Shares at Jun. 30, 2014 | 4,962,500 | 0 | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ' | ' |
Net loss | ($106,200) | ($683,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation and amortization | 181,600 | 147,100 |
Accretion of fair value - contingent payments and asset retirement obligation | 40,000 | 37,000 |
Gain on sale of Symbius investment | 0 | -86,800 |
Gain on sale of StarTrak, excluding shares for services valued at $7,800 | -129,500 | 0 |
Gain on sale of marketable securities | -913,800 | -751,500 |
Stock issued for services | 11,700 | 0 |
Note receivable issued for ACC amendment and accounting fees | -34,000 | 0 |
Stock-based compensation for options | 0 | 238,600 |
Impairment charge | 160,500 | 0 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -87,200 | -9,600 |
Other receivables - related party | 23,600 | -16,000 |
Prepaid expenses and other current assets | -109,900 | -23,900 |
Trust account-asset retirement obligation | -18,700 | -30,000 |
Accounts payable and accrued expenses | 212,200 | -410,100 |
Net cash used in operating activities | -769,700 | -1,588,200 |
CASH FLOWS FROM INVESTING ACTIVITIES | ' | ' |
Issuance of note receivable to American Citizenship Center, LLC | -25,000 | -150,000 |
Proceeds from repayment of Symbius and ACC note | 25,000 | 175,000 |
Purchase of land, property, and equipment | -165,200 | -962,400 |
Proceeds from sale of marketable securities | 2,124,000 | 2,927,800 |
Proceeds from sale of Symbius investment, net of legal expenses | 0 | 248,900 |
Payments pursuant to StarTrak sale | -643,800 | 0 |
Net cash provided by investing activities | 1,315,000 | 2,239,300 |
CASH FLOWS FROM FINANCING ACTIVITIES | ' | ' |
Repayment on borrowings | 0 | -228,000 |
Purchase of treasury shares | -26,100 | -11,000 |
Net cash used in financing activities | -26,100 | -239,000 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 519,200 | 412,100 |
CASH AND CASH EQUIVALENTS, beginning of period | 696,400 | 284,300 |
CASH AND CASH EQUIVALENTS, end of period | 1,215,600 | 696,400 |
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION | ' | ' |
Net cash paid during the period for interest | 0 | 6,300 |
Non-Cash Activities: | ' | ' |
Unrealized gain (loss) on marketable securities | -428,700 | 166,300 |
Value of stock-based compensation | 0 | 238,600 |
Value of shares issued in payment of services | 11,700 | 0 |
ORBCOMM preferred stock converted to common stock | $18,200 | $0 |
1_NATURE_OF_OPERATIONS_AND_SIG
1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||||||||
Basis of Presentation and Recent Accounting Policies and Pronouncements | ' | ||||||||
Nature of Operations - Alanco Technologies, Inc. (Stock Symbol: ALAN) was incorporated in 1969 under the laws of the State of Arizona. Unless otherwise noted, the "Company" or “Alanco” refers to Alanco Technologies, Inc. and its wholly-owned subsidiaries. During the fiscal year ended June 30, 2012, the Company formed Alanco Energy Services, Inc. (“AES”), for the purpose of obtaining property to establish a water disposal facility near Grand Junction, CO to receive produced water generated as a byproduct from oil and natural gas production in Western Colorado. The new facility started to receive produced water in August 2012. See Note 5 - Alanco Energy Services for discussion of AES transactions. | |||||||||
Principles of Consolidation – These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP). The consolidated financial statements for the years ended June 30, 2014 and 2013 include, where appropriate, the accounts of Alanco Technologies, Inc. and its wholly-owned subsidiaries, Alanco Energy Services, Inc. and StarTrak Systems, LLC (“StarTrak”) (collectively, the “Company”). Alanco is an Arizona corporation, Alanco Energy Services, Inc. is a Colorado corporation and StarTrak is a Delaware LLC. All significant intercompany accounts and transactions have been eliminated in consolidation. | |||||||||
Reclassifications – Certain prior year numbers have been reclassified to conform to the current year presentation. During fiscal year 2013, the Company had a gain of $86,800 on the sale of its Symbius investment, which, for the current year’s presentation has been included in the $838,300 gain on sale of investments along with the $751,500 realized gains on the sale of marketable securities. This reclassification had no effect on net loss or net loss per share. | |||||||||
Cash and Cash Equivalents - The Company considers all highly liquid instruments with maturities of three months or less at the time of purchase to be cash equivalents. | |||||||||
Revenue Recognition – The Company operates the Deer Creek water disposal facility near Grand Junction, CO and bills customers (primarily in the oil and gas industry) for produced water received. The Company generally recognizes revenue at the time the produced water is received at the Deer Creek facility, filtered and billed. In addition, the Company has revenue from oil reclamation and generally recognizes oil revenue when the oil is picked up by the customer. Water and related oil revenues can be impacted by weather conditions and the prices of oil and gas which may impact drilling activities. Revenue is generally recognized when all the following have been met: | |||||||||
· | Persuasive evidence of an arrangement exists; | ||||||||
· | The service has been performed or product delivered; | ||||||||
· | The customer’s fee is deemed to be determinable and free of contingencies or significant uncertainties; and | ||||||||
· | Collectability is probable. | ||||||||
Accounts Receivable - Trade and Other – The Company provides for potentially uncollectible trade accounts receivable and other receivables by use of the allowance method. An allowance for doubtful accounts is provided based upon a review of the individual accounts outstanding, the Company’s prior history of collections and the customer’s credit worthiness. The Company charges off uncollectible receivables when all reasonable collection efforts have been exhausted. The Company does not typically accrue interest or fees on past due amounts and the receivables are generally unsecured. The Company’s allowance for doubtful accounts receivable was approximately $1,000 and $0 at June 30, 2014 and 2013, respectively. | |||||||||
Notes Receivable – The Company provides for potentially uncollectible notes receivable by use of the allowance method. An allowance for uncollectible notes receivable is provided based upon a review of the individual notes outstanding and the note holder’s credit worthiness. The Company charges off uncollectible notes receivable when all reasonable collection efforts have been exhausted. Interest income from notes receivable is recognized when earned. There was no allowance for doubtful notes receivable at June 30, 2014 and 2013. | |||||||||
Marketable Securities – The Company determines the appropriate classification of its investments in marketable equity securities at the time of acquisition and re-evaluates such determinations at each balance sheet date. Marketable securities are classified as held to maturity when the Company has the positive intent and ability to hold securities to maturity. Marketable securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value, with the unrealized gains and losses recognized in earnings. Marketable securities not classified as held to maturity or as trading, are classified as available for sale, and are carried at fair value, with the unrecognized gains and losses, net of tax, included in the determination of comprehensive income (loss) and reported in shareholders’ equity. The Company measures and discloses its investments in marketable securities, which are classified as available for sale, at fair value on a recurring basis, in accordance with the Accounting Standards Codification (“ASC”). The cost of the securities sold is based on average cost of the security. | |||||||||
The fair value of substantially all securities is determined by quoted market prices. The estimated fair value of securities for which there are no quoted market prices is based on similar types of securities that are traded in the market. | |||||||||
Fair Value of Assets and Liabilities – The estimated fair values for assets and liabilities are determined at discrete points in time based on relevant information. The ASC prioritizes inputs used in measuring fair value into a hierarchy of three levels: Level 1 – unadjusted quoted prices for identical assets or liabilities traded in active markets, Level 2 – observable inputs, other than quoted prices included within Level 1, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability; and Level 3 – unobservable inputs in which little or no market activity exists that are significant to the fair value of the assets or liabilities, therefore requiring an entity to develop its own assumptions that market participants would use in pricing. These estimates involve uncertainties and cannot be determined with precision. The Company’s policy is to recognize transfers into and out of Level 1, 2 and 3 categories as of the date of the event or change in circumstances occurs. | |||||||||
The following are the classes of assets and liabilities measured at fair value on a recurring basis at June 30, 2014, using quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3): | |||||||||
Level 1: | |||||||||
Quoted Prices | Level 2: | ||||||||
in active | Significant | Level 3: | Total | ||||||
Markets | Other | Significant | at | ||||||
for Identical | Observable | Unobservable | June 30, | ||||||
Assets | Inputs | Inputs | 2014 | ||||||
Marketable Securities - Available for Sale | $ | 560,100 | $ | - | $ | - | $ | 560,100 | |
Asset Retirement Obligation | - | - | 423,700 | 423,700 | |||||
Contigent Land Payment | - | - | 660,200 | 660,200 | |||||
Contingent Purchase Price | - | - | 528,100 | 528,100 | |||||
$ | 560,100 | $ | - | $ | 1,612,000 | $ | 2,172,100 | ||
Fair Value of Marketable Securities – The estimated fair values of Marketable Securities are determined at discrete points in time based on relevant market information. The Marketable Securities is comprised entirely of ORBCOMM Inc. (“ORBCOMM”) common shares (NASDAQ: ORBC) registered under a currently effective ORBCOMM Form S-3 registration statement. Under the terms of the Asset Purchase Agreement between the Company and ORBCOMM for the asset sale of StarTrak, the Company is limited to selling up to 279,600 shares (12 ½% of the total shares received) per month. Additionally, 166,611 shares of the ORBCOMM stock were previously held in a Product Warranty Escrow account. These shares were released on | |||||||||
February 24, 2014 pursuant to a settlement agreement as discussed further in Note 6 – Sale of Operating Segment. These sales restrictions are why the fair value measurement of Marketable Securities, prior to February 24, 2014, was based on quoted prices for similar assets in active markets that are directly observable and thus represented a Level 2 fair value measurement. However, management did not believe the restriction would interfere with any plans to market their stock holdings. As such, the trading price was used as fair value with no further adjustment. As of February 24, 2014, these sales restrictions no longer existed. As such, the fair value measurement after February 24, 2014 and at June 30, 2014 is based on unadjusted quoted prices for identical assets in active markets and thus represents a Level 1 fair value measurement. There was no change to the fair value of the shares held prior to February 24, 2014 since the trading price previously used was also fair value with no further adjustment. The remaining shares will be revalued at the end of each reporting period with per share market value fluctuations reported as Comprehensive Income (Loss) for the period. | |||||||||
Fair Value of Asset Retirement Obligation – The Deer Creek asset retirement obligation is the estimated cost to close the Deer Creek facility under terms of the lease, meeting environmental and State of Colorado regulatory requirements. The estimate is determined at discrete points in time based upon significant unobservable inputs in which little or no market activity exists that is significant to the fair value of the liability, therefore requiring the Company to develop its own assumptions. Management’s estimate of the asset retirement obligation is based upon a cost estimate developed by a consultant knowledgeable of government closure requirements and costs incurred at similar water disposal facility operations. The process used was to identify each activity in the closure process, obtain vendor estimated costs, in current dollars, to perform the closure activity and accumulating the various vendor estimates to determine the asset retirement obligation. A present value discount has not been taken as the estimated closure costs, excluding regulatory changes and inflation adjustments, are anticipated to remain fairly consistent over the operational life of the facility. The lack of an active market to validate the estimated asset retirement obligation results in the fair value of asset retirement obligation to be a Level 3 fair value measurement. ASC Topic 410-20: Asset Retirement Obligations requires the Company to review the asset retirement obligation on a recurring basis and record changes in the period incurred. | |||||||||
Fair Value of Contingent Payments – The contingent land payment and contingent purchase price liabilities are also determined at discrete points in time based upon unobservable inputs in which little or no market activity exists that is significant to the fair value of the liability, therefore requiring the Company to develop its own assumptions. In calculating the estimate of fair value for both of the contingent payments, management completed an estimate of the present value of each identified contingent liability based upon projected income, cash flows and capital expenditures for the Deer Creek facility developed under plans currently approved by the Company’s board of directors. Different assumptions relative to the expansion or alternative uses of the Deer Creek and Indian Mesa facilities could result in significantly different valuations. The projected payments have been discounted at a rate of 3% per annum to determine net present value. The lack of an active market to validate the estimated contingent land and purchase price liabilities results in the fair value of the contingent land and purchase price liabilities to be a Level 3 fair value measurement. ASC Topic 820: Fair Value Measurement requires the Company to review the contingent land and purchase price liabilities on a recurring basis and record changes in the period incurred. | |||||||||
Fair Value of Financial Instruments – The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, note receivable, accounts payable, and accrued liabilities. The fair value of these financial instruments approximates their carrying values using Level 3 inputs, based on their short maturities or their effective interest rates. | |||||||||
Land, Property and Equipment – Land, Property and Equipment are stated at cost. Depreciation is computed over the estimated useful lives of the assets using the straight-line method, generally over a 3 to 20-year period. Currently all office furniture and equipment are being depreciated over 3 years; production equipment over 7-10 years; and the water disposal facility over 15 to 20 years including 15 years for the evaporation pond liners and 20 years for the pond construction costs. Expenditures for ordinary maintenance and repairs are charged to expense as incurred while betterments or renewals are capitalized. Upon retirement or disposal of assets, the cost and accumulated depreciation are eliminated from the account and any gain or loss is reflected in the statement of operations. | |||||||||
Trust Account – Asset Retirement Obligation – The Company is required to make quarterly payments to a trust account for the closure costs of the Deer Creek facility. The Company reflects the gross amount of the trust as an asset and the gross amount of the estimated closure cost as a liability. | |||||||||
Income Taxes - The Company accounts for income taxes under the asset and liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. To the extent that the Company does not consider it more than likely than not that a future tax asset will be recovered, it provides a valuation allowance against the excess. | |||||||||
Use of Estimates - The preparation of the Company's financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company's management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. | |||||||||
The Company makes significant estimates and assumptions concerning the classification and valuation of investments, the estimated fair value of stock-based compensation, realization of deferred tax assets, collectability of accounts and note receivable, estimated useful lives and carrying values of fixed assets, the recorded values of accruals and contingencies including the estimated fair values of the Company’s asset retirement obligation and the contingent land and purchase price liabilities, and the Company’s ability to continue as a going concern. Due to the uncertainties inherent in the estimation process and the significance of these items, it is at least reasonably possible that the estimates in connection with these items could be materially revised within the next year. | |||||||||
Impairment of Intangibles and Other Long-Lived Assets - The Company’s policy is to perform an assessment for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. If the net carrying value of the asset exceeds estimated future net cash flows, then impairment is recognized to reduce the carrying value to the estimated fair value. During fiscal year ended June 30, 2014, the Company recorded an impairment charge of $160,500 for an injection well located on the Deer Creek property. No impairment charge was recorded in the fiscal year ended June 30, 2013. | |||||||||
Income (Loss) Per Share - The income (loss) per share (“EPS”) is presented in accordance with the provisions of the ASC. Basic EPS is calculated by dividing the income or loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. Basic and Diluted EPS were the same for fiscal 2014 and 2013, as the Company had net losses during both years and therefore the effect of all potential common stock equivalents is antidilutive (reduces loss per share). | |||||||||
Stock options representing 823,400 shares of Class A Common Stock were outstanding at June 30, 2014 with exercise prices ranging between $.50 and $1.50. The weighted average exercise price for all outstanding options was $0.63. Stock options representing 1,084,100 shares of Class A Common Stock were outstanding at June 30, 2013 with exercise prices ranging between $.50 and $1.50. The weighted average exercise price for all outstanding options was $.67. There were no stock warrants outstanding at June 30, 2014. Stock warrants representing 95,100 Class A Common Shares were outstanding at June 30, 2013 with exercise price of $2.64. The weighted average exercise price was $2.64. | |||||||||
Stock Options Plans - The Company has stock-based compensation plans. The value of the compensation cost is amortized on a straight-line basis over the requisite service periods of the award (the option vesting term). | |||||||||
The Company estimates the fair value of stock-based awards using the Black-Scholes valuation model. Assumptions used to estimate compensation expense are determined as follows: | |||||||||
· | Expected term is determined under the simplified method using an average of the contractual term and vesting period of the award as appropriate statistical data required to properly estimate the expected term was not available; | ||||||||
· | Expected volatility of award grants made under the Company’s plans is measured using the historical daily changes in the market price of the Company’s common stock over the expected term of the award, and contemplation of future activity; | ||||||||
· | Risk-free interest rate is to approximate the implied yield on zero-coupon U.S. Treasury bonds with a remaining maturity equal to the expected term of the awards; and, | ||||||||
· | Forfeitures are based on the history of cancellations of awards granted by the Company and management’s analysis of potential forfeitures. | ||||||||
Concentrations - The Company invests its excess cash in short term bank investments that in some cases exceeds the maximum FDIC insurance amount. At June 30, 2014 and 2013, deposits in excess of FDIC insured limits amounted to $955,900 and $487,700, respectively. The Company currently has a substantial amount of its assets invested in ORBCOMM Common Stock, received as partial consideration in the sale of the Wireless Asset Management segment during fiscal 2011. Although the Company performed due diligence during the negotiations with ORBCOMM and believes that ORBCOMM Common Stock is a good investment, no assurance can be made that the stock will maintain its value. As long as the ORBCOMM Common Stock constitutes a substantial portion of our assets, fluctuations in the market price of such stock may significantly affect our value. See Note 4 - Marketable Securities for additional discussion of the investment. | |||||||||
Approximately 87.9% of AES revenues were generated by four customers during the fiscal year 2014 and all four customer accounts were current or paid in full as of June 30, 2014. During fiscal year 2013, 96.6% of AES revenues were generated by two customers and all amounts billed to those customers were paid in full as of June 30, 2013. The significant customers represented $77,700, or 79.5% of the accounts receivable balance at June 30, 2014, while the significant customers for fiscal 2014 did not have any accounts receivable balance outstanding at June 30, 2013. | |||||||||
Recent Accounting Pronouncements | |||||||||
In July 2013, the FASB issued guidance on the presentation of unrecognized tax benefits when a net operating loss carry forward, a similar tax loss, or a tax credit carry forward exists at the reporting date. The guidance is effective for fiscal and interim periods within those years, beginning after December 15, 2013 and early adoption is permitted. The Company has adopted the guidance, which had no material impact on its financial position and results of operations. | |||||||||
In March 2014, the FASB issued technical corrections and improvements related to glossary terms. The ongoing project will facilitate clarification and improvements to glossary terms and updates are effective upon issuance as applicable to affected accounting guidance. The Company has adopted the updates, which had no material impact on its financial position and results of operations. | |||||||||
In May 2014, the FASB issued guidance regarding revenue from contracts with customers. The guidance outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes the most current revenue recognition guidance. The guidance is effective for annual reporting periods beginning after December 15, 2016 including interim periods within that reporting period and early adoption is not permitted. The Company is currently assessing the impact on its financial position and results of operations. | |||||||||
In August 2014, the FASB issued guidance regarding the presentation of financial statements relative to going concern disclosures. The guidance is effective for annual periods ending after December 15, 2016 and early application is permitted. The Company has adopted the guidance, which had no material impact on its financial position and results of operations. | |||||||||
There have been no other recent accounting pronouncements or changes in accounting pronouncements that are of significance, or potential significance, to us. | |||||||||
2_STOCKBASED_COMPENSATION
2. STOCK-BASED COMPENSATION | 12 Months Ended | |||||||||||
Jun. 30, 2014 | ||||||||||||
Equity [Abstract] | ' | |||||||||||
STOCK-BASED COMPENSATION | ' | |||||||||||
The Company has several employee stock option and officer and director stock option plans that have been approved by the shareholders of the Company. The plans require that options be granted at a price not less than market on the date of grant. | ||||||||||||
The Company uses the Black-Scholes option pricing model to estimate fair value of stock-based awards. | ||||||||||||
There were no options granted during the year ended June 30, 2014 and assumptions for the award of options granted during the year ended June 30, 2013 were: | ||||||||||||
Awards Granted in the Year Ended | ||||||||||||
Assumption | 30-Jun-13 | |||||||||||
Dividend yield | 0 | % | ||||||||||
Expected volatility | 62 | % | ||||||||||
Risk-free interest rate | 2 | % | ||||||||||
Expected life of options (in years) | 2.5 | |||||||||||
Weighted average grant-date Black Scholes calculated fair value | $ | 0.2 | ||||||||||
The following table summarizes the Company’s stock option activity during fiscal year 2014: | ||||||||||||
Weighted Average | ||||||||||||
Weighted Average | Remaining | Aggregate | Aggregate | |||||||||
Number of | Exercise Price | Contractual | Fair | Instrinsic | ||||||||
Shares | Per Share | Term (1) | Value (3) | Value (2) | ||||||||
Outstanding July 1, 2013 | 1,084,100 | $ | 0.67 | 4.18 | $ | 296,100 | $ | - | ||||
Granted | - | - | - | - | - | |||||||
Exercised | - | - | - | - | - | |||||||
Forfeited, expired or cancelled | -260,700 | 0.78 | - | -83,500 | - | |||||||
Outstanding June 30, 2014 | 823,400 | $ | 0.63 | 3.35 | $ | 212,600 | $ | - | ||||
Exercisable June 30, 2014 | 823,400 | $ | 0.63 | 3.35 | $ | 212,600 | $ | - | ||||
(1) Remaining contractual term presented in years. | ||||||||||||
(2) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards | ||||||||||||
and the closing price of the Company's common stock as of June 30, 2014, for those awards that have an | ||||||||||||
exercise price currently below the closing price as of June 30, 2014 of $0.48. | ||||||||||||
(3) Aggregate Fair Value is calculated using the Black Scholes option pricing model to estimate fair value of stock-based | ||||||||||||
compensation. | ||||||||||||
The Company did not have any option grants during the fiscal year ended June 30, 2014 and therefore there was no stock-based compensation expense for options during the period. During the fiscal year ended June 30, 2013, the Company recognized $84,800 of stock-based compensation expense for options. | ||||||||||||
As of June 30, 2014, the Company had no outstanding warrants. The following table summarizes the Company’s warrant activity during the year ended June 30, 2014: | ||||||||||||
Weighted | ||||||||||||
Number of | Average | |||||||||||
Shares | Exercise Price | |||||||||||
Warrants Outstanding, June 30, 2013 | 95,100 | $ | 2.64 | |||||||||
Granted | - | - | ||||||||||
Exercised | - | - | ||||||||||
Canceled/Expired | (95,100) | 2.64 | ||||||||||
Warrants Outstanding, June 30, 2014 | - | $ | - |
3_Notes_Receivable
3. Notes Receivable | 12 Months Ended | ||||
Jun. 30, 2014 | |||||
Receivables [Abstract] | ' | ||||
NOTES RECEIVABLE | ' | ||||
Note receivable at June 30, 2014 and 2013 represents a note due from American Citizenship Center, LLC (“ACC”), a related party. Note receivable activity for fiscal years ended June 30, 2014 and 2013 consist of the following: | |||||
2014 | 2013 | ||||
Note receivable - beginning of year | $ | 375,000 | $ | 300,000 | |
Advances | 25,000 | 150,000 | |||
Payments | (25,000) | (75,000) | |||
Accounting and loan fees added to note | 34,000 | - | |||
Total | 409,000 | 375,000 | |||
Less long-term | (109,000) | - | |||
Notes receivable - current | $ | 300,000 | $ | 375,000 | |
The $409,000 balance at June 30, 2014 represents the outstanding amount drawn on a $409,000 credit line at June 30, 2014. The note is secured by all assets of ACC and at June 30, 2014 bears interest at the rate of 9% per annum. The note was modified in February 2014 resulting in an increase to the credit limit, an assessment of a $25,000 loan fee, a reduction of monthly repayment requirements, increasing the interest rate to 9% and adding a personal guarantee for up to $50,000 of the note balance. | |||||
In September 2014, ACC and the Company again modified the loan agreement by reducing the monthly payments to more properly match ACC’s expected cash flows from operations. The terms of this modification were to reduce August 2014 through March 2015 monthly note payments from $50,000 to $25,000 per month. In addition, the interest rate was increased to 9.5%. The agreement has monthly payments starting in April 2015 of $50,000 per month until June 2015 when the note is scheduled to be paid in full. However, ACC is relying on immigration reform or an Executive Action to significantly increase cash flows, which has proven difficult to estimate when it will occur. Therefore, based on the history of the note modifications, the recent modification thereto, and ACC’s history of an ability to make monthly payments of $25,000, the Company has classified $300,000 of the note as current and $109,000 of the note as long-term. Loan activity subsequent to June 30, 2014 consisted of $25,000 payments for each of July and August 2014 and the addition of a $10,000 loan fee resulting in a new note balance of $369,000 as of September 16, 2014, which is the effective date of the most recent modified loan agreement. See Note 8 - Investments for additional discussion on the Company’s investment in ACC. | |||||
The Company has reviewed ACC’s current projections and its new business plan, and believes the new plan will provide for repayment of the ACC note under the payment terms discussed above. The main plan was to capitalize on the significant opportunity that would be created by immigration reform, initially expected to occur in late 2012. Immigration reform has not occurred as expected. In fact, immigration reform has not occurred to date and the most recent news on immigration reform was a commitment by President Obama in early September 2014 that he would act on immigration reform via “Executive Action” after the United States mid- | |||||
term elections during November 2014. The new plan is based upon the assumption that an Executive Action will be issued by December 2014. If Executive Action is taken or immigration reform is passed prior to that date, it is assumed the impact on ACC’s business plan would be positive. No provision for collectability has been recorded as of June 30, 2014 as current ACC financial projections indicate the note will be paid under the amended terms or at least at $25,000 per month until fully paid. ACC is currently in compliance with all terms of the amended note. |
4_Marketable_Securities
4. Marketable Securities | 12 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | |||||||||||||
MARKETABLE SECURITIES | ' | |||||||||||||
At June 30, 2014, the Company had Marketable Securities, which are classified as available for sale, in the amount of $560,100 representing the June 30, 2014 market value ($6.59 per share) of 85,000 ORBCOMM Common Shares (NASDAQ: ORBC) received as partial consideration in the May 2011 sale of StarTrak assets. The number of shares held as of June 30, 2013 were net of an estimated 83,306 shares to be returned to ORBCOMM for settlement of obligations under the escrow agreements more fully discussed in Note 6 – Sale of Operating Segment. During the fiscal year ended June 30, 2014, the Company settled the escrow and working capital obligations with ORBCOMM and all the shares were released to the Company. The settlement is more fully discussed in Note 6 – Sale of Operating Segment. The ORBCOMM common shares are registered under a currently effective ORBCOMM Form S-3 registration statement. | ||||||||||||||
The shares held are revalued at the end of each reporting period with per share market value fluctuations reported as Comprehensive Income (Loss) for the period. Based upon the change in market value of $4.49 per share at June 30, 2013 to $6.59 per share at June 30, 2014, the Company recorded an unrealized gain on marketable securities held at June 30, 2014 (presented in the Consolidated Statements of Comprehensive Income (Loss)), of ($65,600) and an unrealized gain on marketable securities sold during fiscal 2014 of $550,700, offset by a $913,800 adjustment for unrealized gains previously recorded related to securities sold during the period. The actual gain or loss of securities sold is reported in the Statement of Operations. At June 30, 2014 and 2013, the Accumulated Other Comprehensive Income of $121,200 and $549,900, respectively, net of tax of nil, was presented in the Shareholders’ Equity section of the Consolidated Balance Sheets. | ||||||||||||||
The Company reviews its marketable equity holdings in ORBCOMM on a regular basis to determine if its investment has experienced an other-than-temporary decline in fair value. The Company considers ORBCOMM’s cash position, earnings and revenue outlook, stock price performance, liquidity and management ownership, among other factors, in its review. If it is determined that an other-than-temporary decline exists, the Company writes down the investment to its market value and records the related impairment as an investment loss in its Statement of Operations. As of close of market on September 18, 2014, the per share value of the ORBCOMM Common Stock was $6.21, $1.05 per share above the cost basis of $5.16 per share and $0.38 below the June 30, 2014 valuation of $6.59 per share as presented on the attached balance sheet. There was no impairment as of the date of this report and no impairment related to an other-than-temporary decline was recorded during the years ended June 30, 2014 and 2013. | ||||||||||||||
During the fiscal year ended June 30, 2014, the Company sold a total of 346,317 shares of ORBCOMM, Inc. Common Stock for total proceeds of $2,124,000, and an average selling price of approximately $6.13 per share, resulting in realized gains totaling $913,800. | ||||||||||||||
The following table summarizes the activities related to investment in Marketable Securities for the year ended June 30, 2014. | ||||||||||||||
Marketable Securities | ||||||||||||||
Accumulated | ||||||||||||||
Net | Cost Basis | Market Value | Unrealized | |||||||||||
Shares | Per Share | Cost Basis | Per Share | Total Value | Gain | (Loss) | ||||||||
30-Jun-13 | 348,011 | $ | 2.91 | $ | 1,012,700 | $ | 4.49 | $ | 1,562,600 | $ | 549,900 | $ | - | |
Shares sold | (101,118) | 2.91 | (294,300) | |||||||||||
30-Sep-13 | 246,893 | $ | 2.91 | $ | 718,400 | $ | 5.24 | $ | 1,293,700 | $ | 575,300 | $ | - | |
Shares sold | (140,713) | 2.91 | (409,500) | |||||||||||
31-Dec-13 | 106,180 | $ | 2.91 | $ | 308,900 | $ | 6.34 | $ | 673,200 | $ | 364,300 | $ | - | |
Shares sold prior to 2/24/14 | -22,875 | 2.91 | (66,600) | |||||||||||
Shares recorded pursuant | ||||||||||||||
to ORBCOMM settlement | 83,306 | 7.42 | 618,100 | |||||||||||
Subtotal | 166,611 | $ | 5.16 | $ | 860,400 | |||||||||
Shares sold after 2/24/14 | (71,611) | 5.16 | (369,700) | |||||||||||
31-Mar-14 | 95,000 | $ | 5.16 | $ | 490,700 | $ | 6.85 | $ | 650,800 | $ | 160,100 | $ | - | |
Shares sold | (10,000) | 5.16 | (51,600) | |||||||||||
30-Jun-14 | 85,000 | $ | 5.16 | $ | 439,100 | $ | 6.59 | $ | 560,100 | $ | 121,200 | $ | - | |
5_ALANCO_ENERGY_SERVICES
5. ALANCO ENERGY SERVICES | 12 Months Ended |
Jun. 30, 2014 | |
Notes to Financial Statements | ' |
5. ALANCO ENERGY SERVICES | ' |
During fiscal 2012, the Company formed Alanco Energy Services, Inc. (“AES”), a wholly-owned subsidiary, and in April 2012 executed an agreement with TC Operating, LLC ("TCO") of Grand Junction, CO to transfer a land lease for approximately 24 acres near Grand Junction, CO and all related assets to AES with the intent for AES to construct facilities for the treatment and disposal of large quantities of produced water generated by oil and natural gas producers in Western Colorado. The site was chosen due to its unique ability to meet stringent government requirements for disposal of the high saline water produced as a by-product of oil and gas production, and termed "produced water". The agreement included the transfer of all related tangible and intangible assets as well as Federal, State and County permits (issued or in process) required to construct the facilities. The lease terms payable to the landlord include a minimum monthly lease payment of $100 per acre ($2,400 per month) during the initial ten year term of the lease, plus approximately $.25 per barrel of produced water received at the site. | |
The design and construction of the Deer Creek water disposal facility required certain changes to the Goodwin Solid Waste facility (“Goodwin”) resulting in extra costs to the landlord, who also owned Goodwin. As incentive for the landlord to approve the facility design, AES agreed to limit landlord construction improvement costs related to the leased land to $200,000. Included in the $200,000 limited amount was $100,000 of landlord improvement costs to be paid by AES and reimbursed through a 50% credit against the $.25 per barrel royalty payments due landlord discussed above. AES recorded the $100,000 payment as prepaid royalties. The remaining prepaid balances at June 30, 2014 and 2013 were $58,700 and $79,300, respectively. | |
TCO can also earn additional purchase price payments based upon a percentage of the net cumulative EBITDA (net of all related AES capital investments) over a period of approximately 10 years (contingent deferred payment), approximately the initial term of the lease. Under certain circumstances, the acreage covered by the lease may be expanded by up to 50 acres to allow for additional expansion at the site. See Note 9- Contingent Payments for additional discussion of the contingent deferred payment. | |
During April 2012, AES also entered into a definitive agreement with Deer Creek Disposal, LLC ("DCD") whereby AES acquired a 160 acre site near Grand Junction, CO, for additional expansion to the proposed water | |
treatment and disposal facility. As consideration for the land purchase, AES paid $500,000 at the April 13, 2012 closing and assumed a non-interest bearing, secured, $200,000 note due November 15, 2012, which was repaid upon maturity. AES has also agreed to potential additional quarterly earn-out payments to DCD up to a maximum total of $800,000, generally determined as 10% of quarterly revenues in excess of operating expenses up to $200,000 per quarter (contingent land payment). See Note 9 - Contingent Payments for additional discussion of the contingent land payment. The land, known as Indian Mesa, is currently undeveloped as the Company is in the permitting process. | |
Related to the treatment and disposal facilities, in fiscal year 2012 AES entered into a management agreement with TCO to manage the project for a monthly management fee of $10,000 initially and $20,000 after final permits for the Deer Creek operation were obtained in May 2012. The management agreement expired in January 2013 and is continuing on a month to month basis. During the fiscal year ended June 30, 2014, the Company paid TCO $221,900 under the management agreement and TCO earned an additional variable fee of approximately $4,000 for June 2014 revenues which was paid in July 2014. In addition, the Manager of TCO, was issued 10,000 shares of Alanco Common Stock in March 2014 valued at $3,900. |
6_SALE_OF_OPERATING_SEGMENT
6. SALE OF OPERATING SEGMENT | 12 Months Ended | ||
Jun. 30, 2014 | |||
Segment Reporting [Abstract] | ' | ||
6. SALE OF OPERATING SEGMENT | ' | ||
Sale of StarTrak Systems, LLC | |||
The assets of StarTrak Systems, LLC (“StarTrak”), a subsidiary comprising the Company’s Wireless Asset Management segment, were sold to ORBCOMM Inc. (“ORBCOMM”) effective in May 2011. The transaction was structured as an asset purchase whereby ORBCOMM acquired substantially all of StarTrak’s assets and liabilities. The transaction closing date was May 16, 2011. | |||
Consideration Received - Total transaction consideration payable at close, including escrowed amounts as required by the agreement, for substantially all of the assets of StarTrak is equal to an aggregate face amount of approximately $17.7 million in cash, ORBCOMM Common and Series A Preferred Stock, Alanco Common and Series E Preferred Stock and the assumption of debt. Consideration consisted of the following: | |||
1 | Cash consideration in an amount equal to two million dollars ($2,000,000) less any amount due under the secured loan referred to in 3 below; | ||
2 | ORBCOMM’s acquisition and discharge of the Anderson Trust secured debt in the principal amount of $3,900,000; | ||
3 | Cancellation and termination of all outstanding obligations of Alanco and StarTrak to ORBCOMM under the Secured Promissory Note, including the then outstanding principal amount of $300,000 plus interest and fees, if any, due thereunder as of the closing date; | ||
4 | Delivery to Alanco of 500,000 shares of Series E Convertible Preferred Stock of Alanco having a face value amount of $2,250,000; | ||
5 | Delivery to Alanco of 1,212,748 shares of Alanco Class A Common Stock with a closing value of $1.03 per share; | ||
6 | Issuance and delivery to Mellon Investor Services LLC, as escrow agent, (“Mellon”) of 249,917 shares of ORBCOMM common stock (“ORBCOMM Stock”) registered in the name of Alanco and valued at closing at $2.91 per share, which escrowed shares will be available to pay for half of the out of pocket costs incurred as a result of certain litigation currently pending against StarTrak; | ||
7 | The issuance and delivery to Mellon, as escrow agent of 166,611 shares of ORBCOMM Stock, valued at closing at $2.91 per share, registered in the name of Alanco, which escrowed shares will be available to pay for a portion of certain product warranty costs; | ||
8 | The issuance and delivery to Alanco of 1,820,583 shares of ORBCOMM Stock, valued at closing at $2.91 per share; | ||
9 | The issuance and delivery to Alanco of 183,550 shares of Series A Perpetual Convertible Preferred ORBCOMM stock (“ORBCOMM Series A”) with a face value of $10 per share, entitled to a 4% annual paid-in-kind dividend and each such share convertible into 1.666 shares of ORBCOMM Stock; and | ||
10 | Assumption by ORBCOMM of certain specified liabilities, generally consisting of liabilities arising after the closing date and liabilities reflected in the closing Working Capital Adjustment (“WCA”). | ||
Product Warranty Escrow - The escrow account for 249,917 shares (number 6 above) of ORBCOMM Common Stock, established under the escrow agreement described above, provided for the availability of ORBCOMM shares to pay for half of the out of pocket costs that may be incurred as a result of certain litigation pending against StarTrak at the time of the closing. Subsequent to the closing, a settlement was reached among the litigants and ORBCOMM notified Alanco that its half of the settlement cost, including fees and expenses, amounted to approximately $100,000. Under the escrow agreement, the shares returned to ORBCOMM in payment of the litigation costs, would be valued at $3.001 per share. Final negotiation of the litigation escrow shares was completed in May 2012 and the agreement resulted in 29,990 of the escrow shares being distributed to ORBCOMM with the 219,927 balance distributed to Alanco. | |||
The second escrow account in the amount of 166,611 shares of ORBCOMM common stock, established under item 7 above, provided for the availability of ORBCOMM shares to pay for half of certain product warranty costs incurred during the period March 1, 2011 to April 30, 2012, but only to the extent total warranty costs during the period exceed $600,000 (“fuel sensor escrow”). Under the escrow agreement, shares returned to ORBCOMM in payment of those warranty costs would again be valued at $3.001 per share. Upon distribution of the required shares to ORBCOMM, if any, from the escrow account, the remaining shares would be distributed to Alanco. To recognize at June 30, 2013 the potential return of ORBCOMM shares under this agreement, Alanco had reduced the balance of the Marketable Securities by the value of 83,306 shares. | |||
Working Capital Adjustment – The Asset Purchase Agreement also provided compensation for changes in working capital between November 30, 2010 and May 31, 2011, the measurement date, determined in accordance with GAAP consistently applied. If working capital, defined as current assets minus current liabilities less long-term deferred revenue, increased over the period, ORBCOMM was to pay the value of that increase in cash or additional ORBCOMM Common Stock under number 10 above. If the defined working capital decreased during the period, Alanco was to return that amount from ORBCOMM Common Stock, valued at $3.001 per share, issued under number 10 above. | |||
ORBCOMM delivered to Alanco on August 12, 2011, a written statement of the Current Assets, Current Liabilities and Net Working Capital Amount pursuant to the terms of the Agreement reflecting a working capital adjustment in favor of ORBCOMM of approximately $700,000. Under terms of the Agreement, Alanco submitted a “Notice of Disagreement” of the Net Working Capital Amount submitted by ORBCOMM. | |||
Settlement of Working Capital Adjustment and Product Warranty Escrow – In February 2014, the parties negotiated a general settlement for the working capital adjustment and all product warranty liabilities. The agreement, effective February 24, 2014, required a) ORBCOMM to release to Alanco all ORBCOMM Common Shares (166,611 shares) held in the warranty escrow account; b) Alanco to pay ORBCOMM $691,000; c) ORBCOMM (through its StarTrak subsidiary) to pay a past due Alanco invoice in the amount of approximately $48,000 and required both parties to agree to provisions of a general mutual release. The effect of the settlement was to give Alanco the ability to sell the 166,611 ORBCOMM shares held in escrow and increased Alanco's gain on sale of its StarTrak subsidiary, by $121,700, which is included in other income for the year ended June 30, 2014. |
7_Land_Property_and_Equipment
7. Land, Property and Equipment | 12 Months Ended | |||||
Jun. 30, 2014 | ||||||
Property, Plant and Equipment [Abstract] | ' | |||||
LAND, PROPERTY AND EQUIPMENT | ' | |||||
At June 30, 2014 and 2013, Land, Property and Equipment consist of the following: | ||||||
2014 | 2013 | |||||
Office furniture and equipment | $ | 51,300 | $ | 51,300 | ||
Water disposal facility | 2,714,600 | 2,707,700 | ||||
Production equipment | 232,000 | 207,800 | ||||
2,997,900 | 2,966,800 | |||||
Less accumulated depreciation | -371,800 | -190,200 | ||||
Land and improvements | 1,536,900 | 1,429,900 | ||||
Construction in progress | - | 133,400 | ||||
Net book value | $ | 4,163,000 | $ | 4,339,900 | ||
Land and improvements at June 30, 2014 represent costs related to the acquisition and permitting of 160 acres known as Indian Mesa. Costs include the initial payment at closing of $500,000, a $200,000 assumed notes payable due and paid in November 2012, $625,000 present value of future contingent land payments, $199,600 in permit costs and $12,300 in legal expenses. | ||||||
Water Disposal facility assets at June 30, 2014 consist of $1,804,600 in costs related to the construction and permitting of the evaporation ponds, $410,000 in asset retirement costs and $500,000 for fair value of contingent liabilities. Production equipment at June 30, 2014 of $232,000 represents the cost of equipment required to support the Deer Creek facility. | ||||||
Construction in progress at June 30, 2013 consisted of $133,400 in drilling and permitting costs incurred to date for an injection well located on the Deer Creek property. The Company incurred an additional $27,100 of costs during the fiscal year ended June 30, 2014 to pursue the permitting of the injection well. During the fourth quarter of fiscal 2014, the Company met with State of Colorado officials regarding the injection well permit and due to the length of time the process was taking and the uncertainty of a positive outcome, the Company recorded an impairment charge for the $160,500 incurred as of June 30, 2014 on the project. | ||||||
Related depreciation expense for the years ended June 30, 2014 and 2013 was $181,600 and $147,100, respectively. |
8_INVESTMENTS
8. INVESTMENTS | 12 Months Ended |
Jun. 30, 2014 | |
Schedule of Investments [Abstract] | ' |
8. INVESTMENTS | ' |
American Citizenship Center, LLC | |
The Company invested in American Citizenship Center, LLC (“ACC”) in January 2012 when the Company agreed to provide a $300,000 working capital loan to ACC, a related party company that provides self-help immigration services for undocumented youth under a new policy developed by the Department of Homeland Security designed to allow certain people who did not intentionally violate immigration law to continue to live and work in the United States. The Company received a $300,000 7.5% interest bearing note (payable quarterly) and a two year warrant to purchase 240,000 membership units of ACC at an exercise price of $1.25 per unit. The note was payable in monthly installments of $75,000 commencing on March 31, 2013 and continuing until paid in full. The note provided for Alanco to have board of director representation and is secured by all assets and properties of ACC. | |
ACC’s business plan had anticipated a level of demand for self-help services to provide revenues adequate to support a breakeven operation while ACC waited for immigration reform. The main plan was to capitalize on the significant opportunity that would be created by immigration reform, initially expected to occur in late 2012. Immigration reform has not occurred as expected. In fact, Immigration reform has not occurred to date and the most recent news on immigration reform was a commitment by President Obama in early September 2014 that he would act on immigration reform via “Executive Action” after the United States mid-term elections during November 2014. Executive Action is now expected not to occur until December 2014. Since the note repayment terms have been based upon immigration reform occurring by a projected date, the failure of immigration reform to occur has resulted in ACC’s inability to meet loan repayment obligations and requiring modified repayment terms. | |
During fiscal year ended June 30, 2013, Alanco agreed to amend the loan agreement increasing the maximum amount available under the loan to $400,000. The additional availability was granted under similar terms and conditions to the original agreement and was used by ACC to open an office in Los Angeles, CA. Under the amended promissory note, the outstanding principal shall be reduced to at least $300,000 on or before December 31, 2013 and $100,000 on or before March 31, 2014. The remaining balance was due in full on or before June 30, 2014. In consideration of the loan amendment, Alanco received an additional warrant to acquire 60,000 units of ACC at $1.25 per unit and the expiration date for all warrants issued to Alanco was extended to August 31, 2016. | |
Alanco again agreed to amend the loan agreement, during the quarter ended March 31, 2014, when ACC was unable to make the $100,000 payment due by December 31, 2013 under the note terms. The parties amended the note, delaying repayments until June 2014 when a $25,000 payment was due, followed by a July 2014 payment of $25,000 and subsequent monthly payments of $50,000 until the note is paid in full. In addition, the interest rate increased from 7.5% to 9%, an amendment fee of $25,000 and $3,000 of accounting fees per month for January 2014 through March 2014 were deferred and added to the note balance, and warrants to acquire 300,000 units of ACC held by the Company were repriced from $1.25 to $1.00 per unit. Finally, a personal guarantee for $50,000 was obtained from the founding partner of ACC. | |
In September 2014, ACC and the Company again amended the loan agreement modifying the loan repayment terms. The amended terms require minimum payments of $25,000 through March 31, 2015 and $50,000 monthly payments thereafter until June 2015 when the remaining balance must be paid in full. In the event Executive Action occurs, prior to March 31, 2015, the monthly payments will increase to $50,000 per month on the month subsequent to the occurrence of Executive Action. In addition, the interest rate was increased to 9.5% and a $10,000 amendment fee was added to the note resulting in a new note balance of $369,000 as of September 16, 2014, which is the effective date of the most recent modified loan agreement. Finally, each of the significant owners of ACC (three individuals) was required to enter into a non-compete agreement with the Company relative to self-help services. | |
The Company considered the value of the ACC warrants to be immaterial at both June 30, 2014 and 2013 due to the startup nature of ACC and the premium exercise price compared to the most recent membership unit sales. Therefore, no value has been recorded for these warrants. At June 30, 2014 and 2013, ACC had outstanding note balances under Alanco’s commitment of $409,000 and $375,000 respectively. |
9_Contingent_Payments
9. Contingent Payments | 12 Months Ended | ||||
Jun. 30, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
CONTINGENT PAYMENTS | ' | ||||
Contingent payments at June 30, 2014 and 2013 are as follows: | |||||
2014 | 2013 | ||||
Contingent land payment | $ | 660,200 | $ | 641,400 | |
Contingent purchase price | 528,100 | 513,200 | |||
1,188,300 | 1,154,600 | ||||
Less current portion | (50,000) | (50,000) | |||
Contingent payments, long-term | $ | 1,138,300 | $ | 1,104,600 | |
Contingent land payment represents the net present value of $800,000 of contingent land payments due under an agreement whereby Alanco Energy Services, Inc. (“AES”) acquired 160 acres of land known as Indian Mesa. The payment is based upon 10% of any quarterly income (defined as gross revenues less operating expenses up to a maximum of $200,000 per quarter and $800,000 cumulative) for activity at both the Deer Creek and the Indian Mesa locations. The payments were projected considering current operating plans as approved by the Alanco Board of Directors, with the payments discounted at a rate of 3% per annum. During the fiscal year ended June 30, 2014 the Company owed $16,500 in contingent land payments while zero was owed in fiscal year 2013. See Note 5 – Alanco Energy Services for additional discussion on AES operations. | |||||
Contingent purchase price of $500,000 represents the net present value of projected payments to be made to TC Operating, LLC (“TCO”) pursuant to an Asset Purchase Agreement under which TCO transferred a land lease for approximately 24 acres of land known as Deer Creek and all related tangible and intangible assets. Per the agreement, the contingent payments are determined as 28% of the Cumulative EBITDA in excess of all of AES’s capital investment for the ten (10) year period commencing on the earlier of (i) the recovery of AES’s capital investment, or (ii) January 1, 2014. AES’s Capital investment shall mean the aggregate amount incurred by AES in acquiring the Assets, the Indian Mesa Facility, and or improving either the Deer Creek Facility or the Indian Mesa Facility. Payments of said Contingent Purchase Price shall be payable quarterly. The projected payments consider current operating plans as approved by the Alanco Board of Directors, with payments discounted at a rate of 3% per annum to determine net present value. The significant unobservable inputs used in the fair value measurement of the Company fair value calculation for both the contingent land payment and contingent purchase price are the probability of the contingent payments being realized, the timing of when the payments are paid and the discount rate applied. Significant changes in any of those inputs in isolation would result in a significantly different fair value measurement. See Note 5 – Alanco Energy Services for additional discussion on AES operations. |
10_Asset_Retirement_Obligation
10. Asset Retirement Obligation | 12 Months Ended |
Jun. 30, 2014 | |
Accounting Policies [Abstract] | ' |
ASSET RETIRMENT OBLIGATIONS | ' |
The Company initially recognized estimated asset retirement obligations (closure cost) at June 30, 2012 of $410,000 to remove leasehold improvements, remediate any pollution issues and return the Deer Creek water disposal property to its natural state at the conclusion of the Company’s lease. The closure process is a requirement of both the Deer Creek lease and the State of Colorado, a permitting authority for such facilities. The initial closure cost estimate, in then current dollars, was completed by an approved independent consultant experienced in estimating closure costs for water disposal operations and the estimated amount was approved by the State of Colorado. | |
The Company reviews the contingent asset retirement obligation on a recurring basis and records changes in the period incurred. At June 30, 2014, the estimated closure costs were again reviewed and the only adjustment was a 1.015% inflation adjustment as required under agreement with the Colorado Department of Public Health and Environment, increasing the asset retirement obligation to $423,700, AES’s approximate 75% share of the $566,000 estimated closure costs for both the Deer Creek facility and the adjacent Goodwin Solid Waste facility (Goodwin is not owned by AES). At June 30, 2013, the only adjustment was a 1.8% inflation adjustment, increasing the asset retirement obligation to $417,400. The significant unobservable inputs used in the fair value measurement of the Company’s fair value calculation for the asset retirement obligation include the estimated cost to close the Deer Creek facility in accordance with state approved closure plans, the projected timing of the closure and the discount rate applied. Significant changes in any of those inputs in isolation would result in a significantly different fair value measurement. See Note 5 – Alanco Energy Services for additional discussion on AES operations. | |
The laws of the State of Colorado require companies to meet environmental and asset retirement obligations by selecting an approved payment method. The Company has elected to meet its obligation by making an initial payment of approximately $25,300 and quarterly payments of approximately $4,700 into a trust that over the expected lease period will build liquid assets to meet the asset retirement obligation. For the fiscal years ended June 30, 2014 and 2013, the trust account balance was $48,700 and $30,000, respectively. |
11_INCOME_TAXES
11. INCOME TAXES | 12 Months Ended | |||||
Jun. 30, 2014 | ||||||
Income Tax Disclosure [Abstract] | ' | |||||
11. INCOME TAXES | ' | |||||
A reconciliation of anticipated statutory rates is as follows: | ||||||
2014 | 2013 | |||||
Statutory rate | 34.00% | 34.00% | ||||
State income taxes, net of federal income | ||||||
tax benefit | 5.00% | 5.00% | ||||
Reduction in valuation allowance related | ||||||
to net operating loss carry-forwards and change | ||||||
in temporary differences | -39.00% | -39.00% | ||||
0.00% | 0.00% | |||||
The components of the net deferred tax asset (liability) recognized as of June 30, 2014 and 2013 are as follows: | ||||||
2014 | 2013 | |||||
Deferred tax asset | $ | 13,200,000 | $ | 14,000,000 | ||
Less: estimated Section 382 adjustment | (4,000,000) | (4,000,000) | ||||
Net operating loss and capital loss carryforwards | 9,200,000 | 10,000,000 | ||||
Less: Valuation allowance | -9,200,000 | -10,000,000 | ||||
Net deferred tax | $ | - | $ | - | ||
A valuation allowance is recognized if it is more likely than not that some or all of the deferred income tax assets will not be realized. A valuation allowance is used to offset the related income tax assets due to uncertainties of realizing the benefits of certain net operating loss and tax credits. The valuation allowance, which reflects a 100% reserve for all years reported above, decreased $800,000 from June 30, 2013 to June 30, 2014. At June 30, 2014, the Company had net operating loss carry-forwards for federal tax purposes of approximately $32,600,000. The loss carry-forwards, unless utilized, will expire from 2016 through 2033. With few exceptions, the Company is no longer subject to U.S. federal, state and local examinations by tax authorities for years before 2009. | ||||||
Internal Revenue Code Section 382 limits the ability to utilize net operating losses if a 50% change in ownership occurs over a three year period. Such limitation of the net operating losses may have occurred which the Company has not fully analyzed at this time as the deferred tax asset is fully reserved, however, the Company has estimated a limitation effect on deferred tax assets of approximately $4 million at June 30, 2014 and 2013. |
12_Related_Party_Transactions
12. Related Party Transactions | 12 Months Ended |
Jun. 30, 2014 | |
Related Party Transactions [Abstract] | ' |
RELATED PARTY TRANSACTIONS | ' |
American Citizenship Center, LLC | |
At June 30, 2014 and 2013 the Company had a note due from American Citizenship Center, LLC (“ACC”), a related party, with balances of $409,000 and $375,000, respectively. Refer to Note 3 – Note Receivable for further discussion. | |
During the fiscal years 2014 and 2013, the Company billed ACC a total of $73,100 and $58,800, respectively, which includes amounts for accounting services, legal services related to note modifications, and interest on the note. The Company provides accounting services to ACC which may be terminated at ACC’s request starting in October 2014. At June 30, 2014, the Company had unpaid receivables from ACC in the amount of $9,200, consisting of $6,000 in billings for accounting services and $3,200 representing one quarter of interest. Subsequent to year end, ACC made payments bringing these balances current. At June 30, 2013, the Company had unpaid receivables from ACC in the amount of $32,800, consisting of $27,000 in billings for accounting services and $5,800 representing one quarter of interest. At both June 30, 2014 and 2013, Mr. Robert Kauffman, CEO of Alanco until his death in March 2014, or his estate was an investor in the membership units and owned approximately 10% of ACC. | |
Board of Directors | |
The Company made cash payments of $2,250 to each of its independent directors during fiscal 2014. In addition, the Company accrued $15,000 as of June 30, 2014 in recognition of the estimated value of stock awards anticipated to be granted to directors, or some other form of compensation, to compensate the directors for the lack of stock options granted during fiscal year 2014. During fiscal 2013, each independent director was paid $2,250 in cash and was granted stock options valued at approximately $9,900. |
13_Commitments_and_Contingenci
13. Commitments and Contingencies | 12 Months Ended | |||
Jun. 30, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||
COMMITMENTS AND CONTINGENCIES | ' | |||
Employment agreements - On June 30, 2014, the Company entered into employment agreements, effective July 1, 2014 with the Company’s newly elected Chief Executive and Chief Financial Officers. The elections resulted due to the March 2014 death of Robert Kauffman, past President and CEO of the Company. The employment agreements provide for levels of compensation and continuation of benefit under Company benefit plans. The agreements have severance provisions and are effective until 18 months after notice of termination is given by either party. Copies of the employment agreements were attached as exhibits to the Form 8-K filed on July 1, 2014. | ||||
Leases – The Company’s corporate office is located at 7950 E. Acoma Drive, Suite 111, Scottsdale, Arizona 85260, in an approximately 1,500 square foot facility. At June 30, 2014 the facility was under a lease agreement which subsequently expired on July 31, 2014. The Company is currently under a month to month agreement requiring payment of approximately $1,700 per month (including rental tax). | ||||
The ten year land lease related to Deer Creek, was effective May 1, 2012 and has two additional ten year option periods that may be activated by AES. The initial terms of the lease requires minimum monthly lease payments of $100 per acre (increasing to $150 and $200 per acre for the second and third ten year option periods, respectively) plus additional royalty payments based upon quantities of produced water received (approximately $.25 per barrel) at the site. The design and construction of the Deer Creek water disposal facility required certain changes to the Goodwin Solid Waste facility resulting in extra costs to the landlord (owner of Goodwin Solid Waste). As incentive for the landlord to approve the facility design, AES agreed to limit landlord construction improvement costs related to the leased land to $200,000. Included in the $200,000 limited amount was $100,000 of landlord improvement costs to be paid by AES and reimbursed through a 50% credit against the $.25 per barrel royalty payments due to the landlord discussed above. Under certain circumstances, the acreage covered by the lease may be expanded by up to 50 acres to allow for additional expansion at the site. | ||||
Rent expense for the fiscal years ended June 30, 2014 and 2013 were $50,200 and $47,400, respectively. Future minimum non-contingent payments as of June 30, 2014 are as follows: | ||||
FUTURE MINIMUM PAYMENTS | ||||
FOR THE YEAR ENDED JUNE 30, | ||||
2015 | $ | 30,200 | ||
2016 | 28,600 | |||
2017 | 28,600 | |||
2018 | 28,600 | |||
2019 | 28,600 | |||
Thereafter | 81,100 | |||
TOTAL | $ | 225,700 | ||
Legal Proceedings – The Company is a defendant and counterclaimant in litigation involving its subsidiary, TSI Dissolution Corp. (formerly known as Alanco/TSI Prism, Inc. (“TSI”)) and the purchaser of TSI’s assets, Black Creek Integrated Systems Corp. Black Creek filed a complaint in the Maricopa County Superior Court against TSI and the Company, being Civil Case NO. CV2011-014175, claiming various offsets from the purchase price, primarily concerning inventory adjustments, and TSI counterclaimed for monies due from Black Creek under the purchase agreement. Following a trial during fiscal 2014, the court awarded a net judgment in favor of Black Creek in the amount of $16,800, plus attorney’s fees and accrued interest, resulting in a total judgment in the amount of $128,300. At June 30, 2014, the Company has recorded an accrued liability of $128,300 for the judgment, with the corresponding expense included in other income (expense), net. The Company believes the net judgment amount fails to address, among other matters, inventory reserves established for the specific items of inventory which were the subject of Black Creek’s concerns, which if properly addressed would result in a net judgment in favor of the Company, with an attendant award of attorney’s fees in favor of the Company. The Company has filed its Notice of Appeal and intends to vigorously pursue an appeal of the judgment. As required under the appeal process, the Company posted a bond with the court for $128,300, which is included in prepaid expenses and other current assets. | ||||
The Company may from time to time be involved in litigation arising from the normal course of business. As of June 30, 2014, other than the litigation discussed above, there was no such litigation pending deemed material by the Company. |
14_SHAREHOLDERS_EQUITY
14. SHAREHOLDERS' EQUITY | 12 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
Equity [Abstract] | ' | ||||||||||
SHAREHOLDERS' EQUITY | ' | ||||||||||
Preferred Shares – the Company has 25,000,000 authorized shares of Preferred Stock of which 5,000,000 have been allocated to Series A, 500,000 have been allocated to Series B, 400,000 have been allocated to Series C Junior Participating, 500,000 have been allocated to Series D, and 750,000 have been allocated to Series E. As of June 30, 2014 and 2013, no Preferred Stock of any series are issued or outstanding. The Board of Directors is authorized to issue preferred stock in one or more series and denominations and to fix the rights, preferences, privileges, and restrictions, including dividend, conversion, voting, redemption, liquidation rights or preferences, and the number of shares constituting any series and the designation of such series, without any further vote or action by our shareholders. | |||||||||||
Common Shares - The authorized capital stock of the Company consists of 75,000,000 shares of no par Class A Common Stock, each entitled to one vote per share, and 25,000,000 shares of Class B Common Stock, each entitled to one-one hundredth (1/100th) of one vote per share. No Class B Common Stock has been issued and none was outstanding at June 30, 2014 and 2013. | |||||||||||
During fiscal year ended June 30, 2014, the Company issued 30,000 shares of Class A Common Stock for services valued at $11,700. During the same period, the Company repurchased and retired 56,800 shares for $26,100 resulting in a 56,800 reduction in outstanding shares of Common Stock. There was no other stock-based compensation for the fiscal year ended June 30, 2014. | |||||||||||
During the fiscal year ended June 30, 2013, no shares of the Company’s Class A Common Stock were issued. During the same period, the Company repurchased and retired 21,000 shares for $11,000 resulting in a 21,000 share reduction in outstanding shares of Common Stock. The value of stock-based compensation recognized for fiscal year ended June 30, 2013 was $238,600. | |||||||||||
During the year ended June 30, 2014, the Company recognized a comprehensive income adjustment in the amount of ($428,700), reported in the Consolidated Statement of Changes in Shareholders’ Equity. During the year ended June 30, 2013, the Company recognized a comprehensive income adjustment in the amount of $166,300, reported in the Consolidated Statement of Changes in Shareholders’ Equity. See Note 4 – Marketable Securities, for additional discussion of fair value of financial instruments and marketable securities. | |||||||||||
On December 12, 2011 the Company announced that its board of directors had authorized a stock repurchase program whereby the Company could repurchase up to 2 million shares of its outstanding common stock over the next 12 months. The stock repurchase program was extended, under the same limitation, through December 31, 2013. As of December 31, 2013 the Company had repurchases under the program for a total of 122,000 shares at a cost of approximately $67,400, or $.55 per share. During the quarter ended March 31, 2014, the board of directors renewed the stock repurchase program, extending it through December 31, 2014 and establishing an aggregate future amount of shares that may be purchased under the program to 2 million shares. No shares have been repurchased since the program was renewed. | |||||||||||
Warrants - As of June 30, 2014, the Company had no warrants outstanding. The following is a table of activity related to all warrants. | |||||||||||
Weighted | |||||||||||
Number of | Average | ||||||||||
Shares | Exercise Price $ | ||||||||||
WARRANTS OUTSTANDING, June 30, 2012 | 150,400 | $ | 6.24 | ||||||||
Granted | - | - | |||||||||
Exercised | - | - | |||||||||
Canceled/Expired | -55,300 | 12.44 | |||||||||
WARRANTS OUTSTANDING, June 30, 2013 | 95,100 | 2.64 | |||||||||
Granted | - | - | |||||||||
Exercised | - | - | |||||||||
Canceled/Expired | -95,100 | 2.64 | |||||||||
WARRANTS OUTSTANDING, June 30, 2014 | - | $ | - | ||||||||
Stock Options - As of June 30, 2014, the Company had stock options outstanding to purchase a total of 823,400 shares of Class A Common Shares with a weighted average exercise price of $.63. All options outstanding were exercisable at June 30, 2014 and 2013. The tables below, as well as the narrative following, provide further information regarding the Company’s stock options. | |||||||||||
The following is a table of activity of all options: | |||||||||||
Weighted | |||||||||||
Number of | Average | ||||||||||
Shares | Exercise Price $ | ||||||||||
OPTIONS OUTSTANDING, June 30, 2012 | 674,100 | $ | 0.8 | ||||||||
Granted | 425,000 | 0.5 | |||||||||
Exercised | - | - | |||||||||
Canceled/Expired | -15,000 | 1.83 | |||||||||
OPTIONS OUTSTANDING, June 30, 2013 | 1,084,100 | 0.67 | |||||||||
Granted | - | - | |||||||||
Exercised | - | - | |||||||||
Canceled/Expired | -260,700 | 0.78 | |||||||||
OPTIONS OUTSTANDING, June 30, 2014 | 823,400 | $ | 0.63 | ||||||||
All options granted had an exercise price of not less than the market price on date of grant, as stipulated in the stock option plans, of the Company's common stock. No options were exercised during fiscal years ended June 30, 2014 and 2013. If not previously exercised, options outstanding at June 30, 2014 will expire as follows: | |||||||||||
Calendar Year | Number of | Weighted Average | |||||||||
of Expiration | Shares | Exercise Price | |||||||||
2014 | 9,400 | $ | 1.5 | ||||||||
2015 | 4,000 | 1.5 | |||||||||
2016 | - | - | |||||||||
2017 | 385,000 | 0.75 | |||||||||
2018 | 425,000 | 0.5 | |||||||||
823,400 | $ | 0.63 | |||||||||
Additional information about outstanding options to purchase the Company's Common Stock as of June 30, 2014 is as follows: | |||||||||||
Options Outstanding | Options Exercisable | ||||||||||
Weighted Avg. | Weighted | Weighted | |||||||||
Number | Remaining | Average | Number | Average | |||||||
Exercise | of | Contractual | Exercise | of | Exercise | ||||||
Price | Shares | Life (in years) | Price | Shares | Price | ||||||
$0.50 | 425,000 | 3.97 | $0.50 | 425,000 | $0.50 | ||||||
$0.75 | 385,000 | 2.78 | $0.75 | 385,000 | $0.75 | ||||||
$1.50 | 13,400 | 0.35 | $1.50 | 13,400 | $1.50 | ||||||
Totals | 823,400 | 3.35 | $0.63 | 823,400 | $0.63 | ||||||
The Company’s Stock Option Plans are administered by the Compensation/Administration Committee, currently comprised of two independent members of the Company’s Board of Directors. Company stock options are issued to employees at an exercise price of not less than the fair market value, as determined under | |||||||||||
the option plan, on the date of grant and must be granted within 10 years from the effective date of the Plan, with the term of the option not exceeding 10 years. Options granted to employees under the Stock Option Plans, which are terminated prior to exercise, are considered to be available for grant to subsequent employees. Total issued stock options for any plan may exceed those authorized due to termination of prior non-exercised grants. Under the Employee Incentive Stock Option Plans, incentive and non-qualified stock options may be granted, with the incentive stock options intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended. Unless otherwise established by the Committee, the standard vesting schedule for incentive stock options is 10% vested immediately upon grant, 15% vested after twelve months from date of grant, 25% after two years from the date of grant, 25% after three years, and 25% after four years. Stock options issued during the fiscal year ended June 30, 2013 were immediately vested upon grant and there were no options issued during the fiscal year ended June 30, 2014. All of the options have been or will be registered on Form S-8 filings. See Notes 1 and 2 for a discussion of the applicable accounting treatment of stock-based compensation for fiscal years 2014 and 2013. | |||||||||||
Alanco Stock Option Summary (1) | |||||||||||
as of June 30, 2014 | |||||||||||
Options | Issued and | Options | Options | Balance | Exercise | ||||||
Plan | Authorized | Granted | Exercised | Cancelled | Outstanding | to Issue (6) | Price Range (5) | ||||
2002 | -2 | 75,000 | 156,000 | 27,000 | 94,200 | 34,800 | -- | $0.75 | |||
2002 D&O | -3 | 25,000 | 40,800 | 5,200 | 15,800 | 19,800 | -- | $0.75 - $1.50 | |||
2004 | -2 | 100,000 | 188,500 | 67,600 | 88,500 | 32,400 | -- | $0.75 | |||
2004 D&O | -3 | 50,000 | 83,100 | 13,200 | 33,100 | 36,800 | -- | $0.75 - $1.50 | |||
2005 | -2 | 150,000 | 272,279 | 81,971 | 160,108 | 30,200 | 37,829 | $0.75 | |||
2005 D&O | -3 | 50,000 | 96,000 | 4,000 | 92,000 | -- | 46,000 | $0.75 | |||
2006 | -2 | 375,000 | 746,272 | 82,003 | 476,769 | 187,500 | 105,497 | $0.75 | |||
2006 D&O | -3 | 125,000 | 184,375 | 23,750 | 127,549 | 33,076 | 68,174 | $0.50 - $1.50 | |||
2011 | -4 | 750,000 | 769,823 | 291,024 | 30,000 | 448,799 | 10,177 | $0.50 - $0.75 | |||
Totals | 1,700,000 | 2,537,149 | 595,748 | 1,118,026 | 823,375 | 267,677 | |||||
(1) Only includes plans with options currently outstanding or having a balance available to issue. | |||||||||||
(2) Employee Incentive Stock Option Plan. | |||||||||||
(3) Directors and Officers Stock Option Plan. | |||||||||||
(4) Employee Incentive Stock Option Plan which permits granting of stock or stock options. Grants include 291,000 | |||||||||||
Common Shares issued under the plan as payment of deferred employee compensation. | |||||||||||
(5) Range of exercise prices for outstanding options only. | |||||||||||
(6) Any options not issued under the 2002 or 2002 D&O Plans are no longer available for issue as those plans were | |||||||||||
10 year plans and have expired. |
15_RETIREMENT_PLAN
15. RETIREMENT PLAN | 12 Months Ended |
Jun. 30, 2014 | |
Compensation and Retirement Disclosure [Abstract] | ' |
15. RETIREMENT PLAN | ' |
The Company provides a 401(k) retirement plan for its employees. Employees are eligible to participate in the plan on the first of the month following 90 days of continuous employment. Employee salary deferral rates are not restricted by the Company, however, IRS limits and limitations imposed by discrimination tests may affect the allowed salary deferral rate. Through the quarter ended December 31, 2013, the Company had a matching program equivalent to 25% of the amount deferred by employees, matching up to 4% of an employee’s annual compensation. Effective January 1, 2014 and due to regulations for top heavy compliance, the Company adopted Safe Harbor provision in the 401(k) retirement plan which requires all employees receive a 3% match based on gross wages. The Company’s matching contributions totaled $7,900 and $5,900 for the years ended June 30, 2014 and 2013, respectively. |
16_SELECTED_CONSOLIDATED_QUART
16. SELECTED CONSOLIDATED QUARTERLY FINANCIAL DATA (unaudited) | 12 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | ||||||||
16. SELECTED CONSOLIDATED QUARTERLY FINANCIAL DATA (unaudited) | ' | ||||||||
The following table sets forth certain unaudited selected consolidated financial information for each of the four quarters in fiscal 2014 and 2013. In management’s opinion, this unaudited consolidated quarterly selected information has been prepared on the same basis as the audited consolidated financial statements and includes all necessary adjustments, consisting only of normal recurring adjustments, that management considers necessary for a fair presentation when read in conjunction with the consolidated financial statements and notes | |||||||||
thereto. The Company believes these comparisons of consolidated quarterly selected financial data are not necessarily indicative of future performance. | |||||||||
Quarterly earnings per share may not total to the fiscal year earnings per share due to the weighted average number of shares outstanding at the end of each period reported. | |||||||||
1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | ||||||
2014 | |||||||||
Net Sales | $ | 14,800 | $ | 69,600 | $ | 180,200 | $ | 384,400 | |
Cost of sales | 68,800 | 86,700 | 137,400 | 154,800 | |||||
Gross profit (loss) | (54,000) | (17,100) | 42,800 | 229,600 | |||||
Net income (loss) | (151,200) | 132,100 | 153,100 | (240,200) | |||||
Income (loss) per share - basic & diluted | $ | (0.03) | $ | 0.03 | $ | 0.03 | $ | (0.05) | |
Weighted Average Shares | 4,944,300 | 4,941,800 | 4,932,500 | 4,962,500 | |||||
2013 | |||||||||
Net Sales | $ | 101,200 | $ | 43,800 | $ | 92,100 | $ | 153,500 | |
Cost of sales | 64,500 | 93,900 | 131,400 | 112,200 | |||||
Gross profit | 36,700 | (50,100) | (39,300) | 41,300 | |||||
Net income (loss) | 95,900 | (185,600) | (146,900) | (446,400) | |||||
Income (loss) per share - basic & diluted | $ | 0.02 | $ | (0.04) | $ | (0.03) | $ | (0.09) | |
Weighted Average Shares | 5,010,300 | 5,010,300 | 5,010,300 | 5,005,300 |
17_LIQUIDITY
17. LIQUIDITY | 12 Months Ended |
Jun. 30, 2014 | |
Liquidity | ' |
17. LIQUIDITY | ' |
During the fiscal year ended June 30, 2014 and 2013, the Company reported a net loss of ($106,200) and ($683,000), respectively. For the next year, the Company expects to meet its working capital and other cash requirements with its cash reserves, cash flows from current operations, and sales of marketable securities as required. However, if for any reason, the Company does require additional working capital to complete its business plan, there can be no assurance that the Company’s efforts to acquire the required additional working capital will be successful. The Company’s continued existence is dependent upon its ability to achieve and maintain profitable operations, identify profitable acquisition/merger candidates and/or successfully invest its capital. |
18_SUBSEQUENT_EVENTS
18. SUBSEQUENT EVENTS | 12 Months Ended |
Jun. 30, 2014 | |
Subsequent Events [Abstract] | ' |
SUBSEQUENT EVENTS | ' |
Subsequent to June 30, 2014 and through the date of this report, ACC paid $50,000 on its credit line and brought all amounts due current. In September 2014, ACC and the Company amended the loan agreement by reducing monthly payments to more properly match expected cash flows. The note was modified reducing August 2014 through March 2015 monthly note payments from $50,000 to $25,000 per month. In addition, the interest rate was increased to 9.5%. The agreement has monthly payments starting in April 2015 of $50,000 per month until June 2015 when the note is scheduled to be paid in full. However, based on the history of the note modifications, the latest modification described above, and ACC’s history of making monthly payments of $25,000, the Company has classified $300,000 of the note as current, and $109,000 of the note as long-term as of June 30, 2014. | |
Subsequent to June 30, 2014, the Company sold 45,000 shares of ORBCOMM, Inc. (presented at June 30, 2014 as Marketable Securities) for approximately $279,100, or an average of $6.20 per share. See Note 4 - Marketable Securities for additional discussion on the ORBCOMM stock held. |
1_NATURE_OF_OPERATIONS_AND_SIG1
1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||||||||
Principles of Consolidation | ' | ||||||||
These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP). The consolidated financial statements for the years ended June 30, 2014 and 2013 include, where appropriate, the accounts of Alanco Technologies, Inc. and its wholly-owned subsidiaries, Alanco Energy Services, Inc. and StarTrak Systems, LLC (“StarTrak”) (collectively, the “Company”). Alanco is an Arizona corporation, Alanco Energy Services, Inc. is a Colorado corporation and StarTrak is a Delaware LLC. All significant intercompany accounts and transactions have been eliminated in consolidation. | |||||||||
Reclassifications | ' | ||||||||
Certain prior year numbers have been reclassified to conform to the current year presentation. During fiscal year 2013, the Company had a gain of $86,800 on the sale of its Symbius investment, which, for the current year’s presentation has been included in the $838,300 gain on sale of investments along with the $751,500 realized gains on the sale of marketable securities. This reclassification had no effect on net loss or net loss per share. | |||||||||
Cash Equivalents | ' | ||||||||
The Company considers all highly liquid instruments with maturities of three months or less at the time of purchase to be cash equivalents. | |||||||||
Revenue Recognition | ' | ||||||||
The Company operates the Deer Creek water disposal facility near Grand Junction, CO and bills customers (primarily in the oil and gas industry) for produced water received. The Company generally recognizes revenue at the time the produced water is received at the Deer Creek facility, filtered and billed. In addition, the Company has revenue from oil reclamation and generally recognizes oil revenue when the oil is picked up by the customer. Water and related oil revenues can be impacted by weather conditions and the prices of oil and gas which may impact drilling activities. Revenue is generally recognized when all the following have been met: | |||||||||
· | Persuasive evidence of an arrangement exists; | ||||||||
· | The service has been performed or product delivered; | ||||||||
· | The customer’s fee is deemed to be determinable and free of contingencies or significant uncertainties; and | ||||||||
· | Collectability is probable. | ||||||||
Accounts Receivable Trade | ' | ||||||||
The Company provides for potentially uncollectible trade accounts receivable and other receivables by use of the allowance method. An allowance for doubtful accounts is provided based upon a review of the individual accounts outstanding, the Company’s prior history of collections and the customer’s credit worthiness. The Company charges off uncollectible receivables when all reasonable collection efforts have been exhausted. The Company does not typically accrue interest or fees on past due amounts and the receivables are generally unsecured. The Company’s allowance for doubtful accounts receivable was approximately $1,000 and $0 at June 30, 2014 and 2013, respectively. | |||||||||
Notes Receivable | ' | ||||||||
The Company provides for potentially uncollectible notes receivable by use of the allowance method. An allowance for uncollectible notes receivable is provided based upon a review of the individual notes outstanding and the note holder’s credit worthiness. The Company charges off uncollectible notes receivable when all reasonable collection efforts have been exhausted. Interest income from notes receivable is recognized when earned. There was no allowance for doubtful notes receivable at June 30, 2014 and 2013. | |||||||||
Marketable Securities | ' | ||||||||
The Company determines the appropriate classification of its investments in marketable equity securities at the time of acquisition and re-evaluates such determinations at each balance sheet date. Marketable securities are classified as held to maturity when the Company has the positive intent and ability to hold securities to maturity. Marketable securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value, with the unrealized gains and losses recognized in earnings. Marketable securities not classified as held to maturity or as trading, are classified as available for sale, and are carried at fair value, with the unrecognized gains and losses, net of tax, included in the determination of comprehensive income (loss) and reported in shareholders’ equity. The Company measures and discloses its investments in marketable securities, which are classified as available for sale, at fair value on a recurring basis, in accordance with the Accounting Standards Codification (“ASC”). The cost of the securities sold is based on average cost of the security. | |||||||||
The fair value of substantially all securities is determined by quoted market prices. The estimated fair value of securities for which there are no quoted market prices is based on similar types of securities that are traded in the market. | |||||||||
Fair Value of Assets and Liabilities | ' | ||||||||
The estimated fair values for assets and liabilities are determined at discrete points in time based on relevant information. The ASC prioritizes inputs used in measuring fair value into a hierarchy of three levels: Level 1 – unadjusted quoted prices for identical assets or liabilities traded in active markets, Level 2 – observable inputs, other than quoted prices included within Level 1, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability; and Level 3 – unobservable inputs in which little or no market activity exists that are significant to the fair value of the assets or liabilities, therefore requiring an entity to develop its own assumptions that market participants would use in pricing. These estimates involve uncertainties and cannot be determined with precision. The Company’s policy is to recognize transfers into and out of Level 1, 2 and 3 categories as of the date of the event or change in circumstances occurs. | |||||||||
The following are the classes of assets and liabilities measured at fair value on a recurring basis at June 30, 2014, using quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3): | |||||||||
Level 1: | |||||||||
Quoted Prices | Level 2: | ||||||||
in active | Significant | Level 3: | Total | ||||||
Markets | Other | Significant | at | ||||||
for Identical | Observable | Unobservable | June 30, | ||||||
Assets | Inputs | Inputs | 2014 | ||||||
Marketable Securities - Available for Sale | $ | 560,100 | $ | - | $ | - | $ | 560,100 | |
Asset Retirement Obligation | - | - | 423,700 | 423,700 | |||||
Contigent Land Payment | - | - | 660,200 | 660,200 | |||||
Contingent Purchase Price | - | - | 528,100 | 528,100 | |||||
$ | 560,100 | $ | - | $ | 1,612,000 | $ | 2,172,100 | ||
Fair Value of Marketable Securities | ' | ||||||||
The estimated fair values of Marketable Securities are determined at discrete points in time based on relevant market information. The Marketable Securities is comprised entirely of ORBCOMM Inc. (“ORBCOMM”) common shares (NASDAQ: ORBC) registered under a currently effective ORBCOMM Form S-3 registration statement. Under the terms of the Asset Purchase Agreement between the Company and ORBCOMM for the asset sale of StarTrak, the Company is limited to selling up to 279,600 shares (12 ½% of the total shares received) per month. Additionally, 166,611 shares of the ORBCOMM stock were previously held in a Product Warranty Escrow account. These shares were released on February 24, 2014 pursuant to a settlement agreement as discussed further in Note 6 – Sale of Operating Segment. These sales restrictions are why the fair value measurement of Marketable Securities, prior to February 24, 2014, was based on quoted prices for similar assets in active markets that are directly observable and thus represented a Level 2 fair value measurement. However, management did not believe the restriction would interfere with any plans to market their stock holdings. As such, the trading price was used as fair value with no further adjustment. As of February 24, 2014, these sales restrictions no longer existed. As such, the fair value measurement after February 24, 2014 and at June 30, 2014 is based on unadjusted quoted prices for identical assets in active markets and thus represents a Level 1 fair value measurement. There was no change to the fair value of the shares held prior to February 24, 2014 since the trading price previously used was also fair value with no further adjustment. The remaining shares will be revalued at the end of each reporting period with per share market value fluctuations reported as Comprehensive Income (Loss) for the period. | |||||||||
Fair Value of Asset Retirement Obligation | ' | ||||||||
The Deer Creek asset retirement obligation is the estimated cost to close the Deer Creek facility under terms of the lease, meeting environmental and State of Colorado regulatory requirements. The estimate is determined at discrete points in time based upon significant unobservable inputs in which little or no market activity exists that is significant to the fair value of the liability, therefore requiring the Company to develop its own assumptions. Management’s estimate of the asset retirement obligation is based upon a cost estimate developed by a consultant knowledgeable of government closure requirements and costs incurred at similar water disposal facility operations. The process used was to identify each activity in the closure process, obtain vendor estimated costs, in current dollars, to perform the closure activity and accumulating the various vendor estimates to determine the asset retirement obligation. A present value discount has not been taken as the estimated closure costs, excluding regulatory changes and inflation adjustments, are anticipated to remain fairly consistent over the operational life of the facility. The lack of an active market to validate the estimated asset retirement obligation results in the fair value of asset retirement obligation to be a Level 3 fair value measurement. ASC Topic 410-20: Asset Retirement Obligations requires the Company to review the asset retirement obligation on a recurring basis and record changes in the period incurred. | |||||||||
Fair Value of Contingent Payments | ' | ||||||||
The contingent land payment and contingent purchase price liabilities are also determined at discrete points in time based upon unobservable inputs in which little or no market activity exists that is significant to the fair value of the liability, therefore requiring the Company to develop its own assumptions. In calculating the estimate of fair value for both of the contingent payments, management completed an estimate of the present value of each identified contingent liability based upon projected income, cash flows and capital expenditures for the Deer Creek facility developed under plans currently approved by the Company’s board of directors. Different assumptions relative to the expansion or alternative uses of the Deer Creek and Indian Mesa facilities could result in significantly different valuations. The projected payments have been discounted at a rate of 3% per annum to determine net present value. The lack of an active market to validate the estimated contingent land and purchase price liabilities results in the fair value of the contingent land and purchase price liabilities to be a Level 3 fair value measurement. ASC Topic 820: Fair Value Measurement requires the Company to review the contingent land and purchase price liabilities on a recurring basis and record changes in the period incurred. | |||||||||
Fair Value of Financial Instruments | ' | ||||||||
The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, note receivable, accounts payable, and accrued liabilities. The fair value of these financial instruments approximates their carrying values using Level 3 inputs, based on their short maturities or their effective interest rates. | |||||||||
Land, Property and Equipment | ' | ||||||||
Land, Property and Equipment are stated at cost. Depreciation is computed over the estimated useful lives of the assets using the straight-line method, generally over a 3 to 20-year period. Currently all office furniture and equipment are being depreciated over 3 years; production equipment over 7-10 years; and the water disposal facility over 15 to 20 years including 15 years for the evaporation pond liners and 20 years for the pond construction costs. Expenditures for ordinary maintenance and repairs are charged to expense as incurred while betterments or renewals are capitalized. Upon retirement or disposal of assets, the cost and accumulated depreciation are eliminated from the account and any gain or loss is reflected in the statement of operations. | |||||||||
Trust Account - Asset Retirement Obligation | ' | ||||||||
The Company is required to make quarterly payments to a trust account for the closure costs of the Deer Creek facility. The Company reflects the gross amount of the trust as an asset and the gross amount of the estimated closure cost as a liability. | |||||||||
Income Taxes | ' | ||||||||
The Company accounts for income taxes under the asset and liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. To the extent that the Company does not consider it more than likely than not that a future tax asset will be recovered, it provides a valuation allowance against the excess. | |||||||||
Use of Estimates | ' | ||||||||
The preparation of the Company's financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company's management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. | |||||||||
The Company makes significant estimates and assumptions concerning the classification and valuation of investments, the estimated fair value of stock-based compensation, realization of deferred tax assets, collectability of accounts and note receivable, estimated useful lives and carrying values of fixed assets, the recorded values of accruals and contingencies including the estimated fair values of the Company’s asset retirement obligation and the contingent land and purchase price liabilities, and the Company’s ability to continue as a going concern. Due to the uncertainties inherent in the estimation process and the significance of these items, it is at least reasonably possible that the estimates in connection with these items could be materially revised within the next year. | |||||||||
Impairment of Intangibles and Other Long-Lived Assets | ' | ||||||||
The Company’s policy is to perform an assessment for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. If the net carrying value of the asset exceeds estimated future net cash flows, then impairment is recognized to reduce the carrying value to the estimated fair value. During fiscal year ended June 30, 2014, the Company recorded an impairment charge of $160,500 for an injection well located on the Deer Creek property. No impairment charge was recorded in the fiscal year ended June 30, 2013. | |||||||||
Income (Loss) Per Share | ' | ||||||||
The income (loss) per share (“EPS”) is presented in accordance with the provisions of the ASC. Basic EPS is calculated by dividing the income or loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. Basic and Diluted EPS were the same for fiscal 2014 and 2013, as the Company had net losses during both years and therefore the effect of all potential common stock equivalents is antidilutive (reduces loss per share). | |||||||||
Stock options representing 823,400 shares of Class A Common Stock were outstanding at June 30, 2014 with exercise prices ranging between $.50 and $1.50. The weighted average exercise price for all outstanding options was $0.63. Stock options representing 1,084,100 shares of Class A Common Stock were outstanding at June 30, 2013 with exercise prices ranging between $.50 and $1.50. The weighted average exercise price for all outstanding options was $.67. There were no stock warrants outstanding at June 30, 2014. Stock warrants representing 95,100 Class A Common Shares were outstanding at June 30, 2013 with exercise price of $2.64. The weighted average exercise price was $2.64. | |||||||||
Stock Options Plans | ' | ||||||||
The Company has stock-based compensation plans. The value of the compensation cost is amortized on a straight-line basis over the requisite service periods of the award (the option vesting term). | |||||||||
The Company estimates the fair value of stock-based awards using the Black-Scholes valuation model. Assumptions used to estimate compensation expense are determined as follows: | |||||||||
· | Expected term is determined under the simplified method using an average of the contractual term and vesting period of the award as appropriate statistical data required to properly estimate the expected term was not available; | ||||||||
· | Expected volatility of award grants made under the Company’s plans is measured using the historical daily changes in the market price of the Company’s common stock over the expected term of the award, and contemplation of future activity; | ||||||||
· | Risk-free interest rate is to approximate the implied yield on zero-coupon U.S. Treasury bonds with a remaining maturity equal to the expected term of the awards; and, | ||||||||
· | Forfeitures are based on the history of cancellations of awards granted by the Company and management’s analysis of potential forfeitures. | ||||||||
Concentrations of Credit Risks | ' | ||||||||
The Company invests its excess cash in short term bank investments that in some cases exceeds the maximum FDIC insurance amount. At June 30, 2014 and 2013, deposits in excess of FDIC insured limits amounted to $955,900 and $487,700, respectively. The Company currently has a substantial amount of its assets invested in ORBCOMM Common Stock, received as partial consideration in the sale of the Wireless Asset Management segment during fiscal 2011. Although the Company performed due diligence during the negotiations with ORBCOMM and believes that ORBCOMM Common Stock is a good investment, no assurance can be made that the stock will maintain its value. As long as the ORBCOMM Common Stock constitutes a substantial portion of our assets, fluctuations in the market price of such stock may significantly affect our value. See Note 4 - Marketable Securities for additional discussion of the investment. | |||||||||
Approximately 87.9% of AES revenues were generated by four customers during the fiscal year 2014 and all four customer accounts were current or paid in full as of June 30, 2014. During fiscal year 2013, 96.6% of AES revenues were generated by two customers and all amounts billed to those customers were paid in full as of June 30, 2013. The significant customers represented $77,700, or 79.5% of the accounts receivable balance at June 30, 2014, while the significant customers for fiscal 2014 did not have any accounts receivable balance outstanding at June 30, 2013. | |||||||||
Recent Accounting Pronouncements | ' | ||||||||
In July 2013, the FASB issued guidance on the presentation of unrecognized tax benefits when a net operating loss carry forward, a similar tax loss, or a tax credit carry forward exists at the reporting date. The guidance is effective for fiscal and interim periods within those years, beginning after December 15, 2013 and early adoption is permitted. The Company has adopted the guidance, which had no material impact on its financial position and results of operations. | |||||||||
In March 2014, the FASB issued technical corrections and improvements related to glossary terms. The ongoing project will facilitate clarification and improvements to glossary terms and updates are effective upon issuance as applicable to affected accounting guidance. The Company has adopted the updates, which had no material impact on its financial position and results of operations. | |||||||||
In May 2014, the FASB issued guidance regarding revenue from contracts with customers. The guidance outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes the most current revenue recognition guidance. The guidance is effective for annual reporting periods beginning after December 15, 2016 including interim periods within that reporting period and early adoption is not permitted. The Company is currently assessing the impact on its financial position and results of operations. | |||||||||
In August 2014, the FASB issued guidance regarding the presentation of financial statements relative to going concern disclosures. The guidance is effective for annual periods ending after December 15, 2016 and early application is permitted. The Company has adopted the guidance, which had no material impact on its financial position and results of operations. | |||||||||
There have been no other recent accounting pronouncements or changes in accounting pronouncements that are of significance, or potential significance, to us. |
1_NATURE_OF_OPERATIONS_AND_SIG2
1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||||||||
Assets and liabilities measured at fair value on a recurring basis | ' | ||||||||
Level 1: | |||||||||
Quoted Prices | Level 2: | ||||||||
in active | Significant | Level 3: | Total | ||||||
Markets | Other | Significant | at | ||||||
for Identical | Observable | Unobservable | June 30, | ||||||
Assets | Inputs | Inputs | 2014 | ||||||
Marketable Securities - Available for Sale | $ | 560,100 | $ | - | $ | - | $ | 560,100 | |
Asset Retirement Obligation | - | - | 423,700 | 423,700 | |||||
Contigent Land Payment | - | - | 660,200 | 660,200 | |||||
Contingent Purchase Price | - | - | 528,100 | 528,100 | |||||
$ | 560,100 | $ | - | $ | 1,612,000 | $ | 2,172,100 |
2_STOCKBASED_COMPENSATION_Tabl
2. STOCK-BASED COMPENSATION (Tables) | 12 Months Ended | |||||||||||
Jun. 30, 2014 | ||||||||||||
Equity [Abstract] | ' | |||||||||||
Assumptions for awards of options granted | ' | |||||||||||
Awards Granted in the Year Ended | ||||||||||||
Assumption | 30-Jun-13 | |||||||||||
Dividend yield | 0 | % | ||||||||||
Expected volatility | 62 | % | ||||||||||
Risk-free interest rate | 2 | % | ||||||||||
Expected life of options (in years) | 2.5 | |||||||||||
Weighted average grant-date Black Scholes calculated fair value | $ | 0.2 | ||||||||||
Stock option activity | ' | |||||||||||
Weighted Average | ||||||||||||
Weighted Average | Remaining | Aggregate | Aggregate | |||||||||
Number of | Exercise Price | Contractual | Fair | Instrinsic | ||||||||
Shares | Per Share | Term (1) | Value (3) | Value (2) | ||||||||
Outstanding July 1, 2013 | 1,084,100 | $ | 0.67 | 4.18 | $ | 296,100 | $ | - | ||||
Granted | - | - | - | - | - | |||||||
Exercised | - | - | - | - | - | |||||||
Forfeited, expired or cancelled | -260,700 | 0.78 | - | -83,500 | - | |||||||
Outstanding June 30, 2014 | 823,400 | $ | 0.63 | 3.35 | $ | 212,600 | $ | - | ||||
Exercisable June 30, 2014 | 823,400 | $ | 0.63 | 3.35 | $ | 212,600 | $ | - | ||||
(1) Remaining contractual term presented in years. | ||||||||||||
(2) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards | ||||||||||||
and the closing price of the Company's common stock as of June 30, 2014, for those awards that have an | ||||||||||||
exercise price currently below the closing price as of June 30, 2014 of $0.48. | ||||||||||||
(3) Aggregate Fair Value is calculated using the Black Scholes option pricing model to estimate fair value of stock-based | ||||||||||||
compensation. | ||||||||||||
Warrant activity | ' | |||||||||||
Weighted | ||||||||||||
Number of | Average | |||||||||||
Shares | Exercise Price | |||||||||||
Warrants Outstanding, June 30, 2013 | 95,100 | $ | 2.64 | |||||||||
Granted | - | - | ||||||||||
Exercised | - | - | ||||||||||
Canceled/Expired | (95,100) | 2.64 | ||||||||||
Warrants Outstanding, June 30, 2014 | - | $ | - |
3_NOTES_RECEIVABLE_Tables
3. NOTES RECEIVABLE (Tables) | 12 Months Ended | ||||
Jun. 30, 2014 | |||||
Receivables [Abstract] | ' | ||||
Notes receivable | ' | ||||
2014 | 2013 | ||||
Note receivable - beginning of year | $ | 375,000 | $ | 300,000 | |
Advances | 25,000 | 150,000 | |||
Payments | (25,000) | (75,000) | |||
Accounting and loan fees added to note | 34,000 | - | |||
Total | 409,000 | 375,000 | |||
Less long-term | (109,000) | - | |||
Notes receivable - current | $ | 300,000 | $ | 375,000 | |
4_MARKETABLE_SECURITIES_Tables
4. MARKETABLE SECURITIES (Tables) | 12 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | |||||||||||||
Marketable Securities | ' | |||||||||||||
Marketable Securities | ||||||||||||||
Accumulated | ||||||||||||||
Net | Cost Basis | Market Value | Unrealized | |||||||||||
Shares | Per Share | Cost Basis | Per Share | Total Value | Gain | (Loss) | ||||||||
30-Jun-13 | 348,011 | $ | 2.91 | $ | 1,012,700 | $ | 4.49 | $ | 1,562,600 | $ | 549,900 | $ | - | |
Shares sold | (101,118) | 2.91 | (294,300) | |||||||||||
30-Sep-13 | 246,893 | $ | 2.91 | $ | 718,400 | $ | 5.24 | $ | 1,293,700 | $ | 575,300 | $ | - | |
Shares sold | (140,713) | 2.91 | (409,500) | |||||||||||
31-Dec-13 | 106,180 | $ | 2.91 | $ | 308,900 | $ | 6.34 | $ | 673,200 | $ | 364,300 | $ | - | |
Shares sold prior to 2/24/14 | -22,875 | 2.91 | (66,600) | |||||||||||
Shares recorded pursuant | ||||||||||||||
to ORBCOMM settlement | 83,306 | 7.42 | 618,100 | |||||||||||
Subtotal | 166,611 | $ | 5.16 | $ | 860,400 | |||||||||
Shares sold after 2/24/14 | (71,611) | 5.16 | (369,700) | |||||||||||
31-Mar-14 | 95,000 | $ | 5.16 | $ | 490,700 | $ | 6.85 | $ | 650,800 | $ | 160,100 | $ | - | |
Shares sold | (10,000) | 5.16 | (51,600) | |||||||||||
30-Jun-14 | 85,000 | $ | 5.16 | $ | 439,100 | $ | 6.59 | $ | 560,100 | $ | 121,200 | $ | - |
7_LAND_PROPERTY_AND_EQUIPMENT_
7. LAND, PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended | |||||
Jun. 30, 2014 | ||||||
Land Property And Equipment Tables | ' | |||||
Land, Property and Equipment | ' | |||||
2014 | 2013 | |||||
Office furniture and equipment | $ | 51,300 | $ | 51,300 | ||
Water disposal facility | 2,714,600 | 2,707,700 | ||||
Production equipment | 232,000 | 207,800 | ||||
2,997,900 | 2,966,800 | |||||
Less accumulated depreciation | -371,800 | -190,200 | ||||
Land and improvements | 1,536,900 | 1,429,900 | ||||
Construction in progress | - | 133,400 | ||||
Net book value | $ | 4,163,000 | $ | 4,339,900 |
9_CONTINGENT_PAYMENTS_Tables
9. CONTINGENT PAYMENTS (Tables) | 12 Months Ended | ||||
Jun. 30, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Contingent payments | ' | ||||
2014 | 2013 | ||||
Contingent land payment | $ | 660,200 | $ | 641,400 | |
Contingent purchase price | 528,100 | 513,200 | |||
1,188,300 | 1,154,600 | ||||
Less current portion | (50,000) | (50,000) | |||
Contingent payments, long-term | $ | 1,138,300 | $ | 1,104,600 | |
11_INCOME_TAXES_Tables
11. INCOME TAXES (Tables) | 12 Months Ended | |||||
Jun. 30, 2014 | ||||||
Income Tax Disclosure [Abstract] | ' | |||||
Income tax reconciliation | ' | |||||
2014 | 2013 | |||||
Statutory rate | 34.00% | 34.00% | ||||
State income taxes, net of federal income | ||||||
tax benefit | 5.00% | 5.00% | ||||
Reduction in valuation allowance related | ||||||
to net operating loss carry-forwards and change | ||||||
in temporary differences | -39.00% | -39.00% | ||||
0.00% | 0.00% | |||||
Schedule of deferred tax asset | ' | |||||
2014 | 2013 | |||||
Deferred tax asset | $ | 13,200,000 | $ | 14,000,000 | ||
Less: estimated Section 382 adjustment | (4,000,000) | (4,000,000) | ||||
Net operating loss and capital loss carryforwards | 9,200,000 | 10,000,000 | ||||
Less: Valuation allowance | -9,200,000 | -10,000,000 | ||||
Net deferred tax | $ | - | $ | - |
Recovered_Sheet1
13. COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | |||
Jun. 30, 2014 | ||||
Commitments And Contingencies Tables | ' | |||
Future minimum non-contingent payments | ' | |||
FUTURE MINIMUM PAYMENTS | ||||
FOR THE YEAR ENDED JUNE 30, | ||||
2015 | $ | 30,200 | ||
2016 | 28,600 | |||
2017 | 28,600 | |||
2018 | 28,600 | |||
2019 | 28,600 | |||
Thereafter | 81,100 | |||
TOTAL | $ | 225,700 |
14_SHAREHOLDERS_EQUITY_Tables
14. SHAREHOLDERS EQUITY (Tables) | 12 Months Ended | ||||||||||
Jun. 30, 2014 | |||||||||||
Shareholders Equity Tables | ' | ||||||||||
Warrant activity | ' | ||||||||||
Weighted | |||||||||||
Number of | Average | ||||||||||
Shares | Exercise Price $ | ||||||||||
WARRANTS OUTSTANDING, June 30, 2012 | 150,400 | $ | 6.24 | ||||||||
Granted | - | - | |||||||||
Exercised | - | - | |||||||||
Canceled/Expired | -55,300 | 12.44 | |||||||||
WARRANTS OUTSTANDING, June 30, 2013 | 95,100 | 2.64 | |||||||||
Granted | - | - | |||||||||
Exercised | - | - | |||||||||
Canceled/Expired | -95,100 | 2.64 | |||||||||
WARRANTS OUTSTANDING, June 30, 2014 | - | $ | - | ||||||||
Option activity | ' | ||||||||||
Weighted | |||||||||||
Number of | Average | ||||||||||
Shares | Exercise Price $ | ||||||||||
OPTIONS OUTSTANDING, June 30, 2012 | 674,100 | $ | 0.8 | ||||||||
Granted | 425,000 | 0.5 | |||||||||
Exercised | - | - | |||||||||
Canceled/Expired | -15,000 | 1.83 | |||||||||
OPTIONS OUTSTANDING, June 30, 2013 | 1,084,100 | 0.67 | |||||||||
Granted | - | - | |||||||||
Exercised | - | - | |||||||||
Canceled/Expired | -260,700 | 0.78 | |||||||||
OPTIONS OUTSTANDING, June 30, 2014 | 823,400 | $ | 0.63 | ||||||||
Option expiration dates | ' | ||||||||||
Calendar Year | Number of | Weighted Average | |||||||||
of Expiration | Shares | Exercise Price | |||||||||
2014 | 9,400 | $ | 1.5 | ||||||||
2015 | 4,000 | 1.5 | |||||||||
2016 | - | - | |||||||||
2017 | 385,000 | 0.75 | |||||||||
2018 | 425,000 | 0.5 | |||||||||
823,400 | $ | 0.63 | |||||||||
Options by exercise price | ' | ||||||||||
Options Outstanding | Options Exercisable | ||||||||||
Weighted Avg. | Weighted | Weighted | |||||||||
Number | Remaining | Average | Number | Average | |||||||
Exercise | of | Contractual | Exercise | of | Exercise | ||||||
Price | Shares | Life (in years) | Price | Shares | Price | ||||||
$0.50 | 425,000 | 3.97 | $0.50 | 425,000 | $0.50 | ||||||
$0.75 | 385,000 | 2.78 | $0.75 | 385,000 | $0.75 | ||||||
$1.50 | 13,400 | 0.35 | $1.50 | 13,400 | $1.50 | ||||||
Totals | 823,400 | 3.35 | $0.63 | 823,400 | $0.63 | ||||||
Stock Option Summary | ' | ||||||||||
Alanco Stock Option Summary (1) | |||||||||||
as of June 30, 2014 | |||||||||||
Options | Issued and | Options | Options | Balance | Exercise | ||||||
Plan | Authorized | Granted | Exercised | Cancelled | Outstanding | to Issue (6) | Price Range (5) | ||||
2002 | -2 | 75,000 | 156,000 | 27,000 | 94,200 | 34,800 | -- | $0.75 | |||
2002 D&O | -3 | 25,000 | 40,800 | 5,200 | 15,800 | 19,800 | -- | $0.75 - $1.50 | |||
2004 | -2 | 100,000 | 188,500 | 67,600 | 88,500 | 32,400 | -- | $0.75 | |||
2004 D&O | -3 | 50,000 | 83,100 | 13,200 | 33,100 | 36,800 | -- | $0.75 - $1.50 | |||
2005 | -2 | 150,000 | 272,279 | 81,971 | 160,108 | 30,200 | 37,829 | $0.75 | |||
2005 D&O | -3 | 50,000 | 96,000 | 4,000 | 92,000 | -- | 46,000 | $0.75 | |||
2006 | -2 | 375,000 | 746,272 | 82,003 | 476,769 | 187,500 | 105,497 | $0.75 | |||
2006 D&O | -3 | 125,000 | 184,375 | 23,750 | 127,549 | 33,076 | 68,174 | $0.50 - $1.50 | |||
2011 | -4 | 750,000 | 769,823 | 291,024 | 30,000 | 448,799 | 10,177 | $0.50 - $0.75 | |||
Totals | 1,700,000 | 2,537,149 | 595,748 | 1,118,026 | 823,375 | 267,677 | |||||
(1) Only includes plans with options currently outstanding or having a balance available to issue. | |||||||||||
(2) Employee Incentive Stock Option Plan. | |||||||||||
(3) Directors and Officers Stock Option Plan. | |||||||||||
(4) Employee Incentive Stock Option Plan which permits granting of stock or stock options. Grants include 291,000 | |||||||||||
Common Shares issued under the plan as payment of deferred employee compensation. | |||||||||||
(5) Range of exercise prices for outstanding options only. | |||||||||||
(6) Any options not issued under the 2002 or 2002 D&O Plans are no longer available for issue as those plans were | |||||||||||
10 year plans and have expired. |
16_SELECTED_CONSOLIDATED_QUART1
16. SELECTED CONSOLIDATED QUARTERLY FINANCIAL DATA (unaudited) (Tables) | 12 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Selected Consolidated Quarterly Financial Data Tables | ' | ||||||||
Quarterly Financial Information | ' | ||||||||
1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | ||||||
2014 | |||||||||
Net Sales | $ | 14,800 | $ | 69,600 | $ | 180,200 | $ | 384,400 | |
Cost of sales | 68,800 | 86,700 | 137,400 | 154,800 | |||||
Gross profit (loss) | (54,000) | (17,100) | 42,800 | 229,600 | |||||
Net income (loss) | (151,200) | 132,100 | 153,100 | (240,200) | |||||
Income (loss) per share - basic & diluted | $ | (0.03) | $ | 0.03 | $ | 0.03 | $ | (0.05) | |
Weighted Average Shares | 4,944,300 | 4,941,800 | 4,932,500 | 4,962,500 | |||||
2013 | |||||||||
Net Sales | $ | 101,200 | $ | 43,800 | $ | 92,100 | $ | 153,500 | |
Cost of sales | 64,500 | 93,900 | 131,400 | 112,200 | |||||
Gross profit | 36,700 | (50,100) | (39,300) | 41,300 | |||||
Net income (loss) | 95,900 | (185,600) | (146,900) | (446,400) | |||||
Income (loss) per share - basic & diluted | $ | 0.02 | $ | (0.04) | $ | (0.03) | $ | (0.09) | |
Weighted Average Shares | 5,010,300 | 5,010,300 | 5,010,300 | 5,005,300 |
1_NATURE_OF_OPERATIONS_AND_SIG3
1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | Jun. 30, 2014 |
Marketable securities - available for sale | $560,100 |
Asset retirement obligation | 423,700 |
Contingent land payment | 660,200 |
Contingent purchase price | 528,100 |
Total | 2,172,100 |
Level 1 | ' |
Marketable securities - available for sale | 560,100 |
Asset retirement obligation | 0 |
Contingent land payment | 0 |
Contingent purchase price | 0 |
Total | 560,100 |
Level 2 | ' |
Marketable securities - available for sale | 0 |
Asset retirement obligation | 0 |
Contingent land payment | 0 |
Contingent purchase price | 0 |
Total | 0 |
Level 3 | ' |
Marketable securities - available for sale | 0 |
Asset retirement obligation | 423,700 |
Contingent land payment | 660,200 |
Contingent purchase price | 528,100 |
Total | $1,612,000 |
1_NATURE_OF_OPERATIONS_AND_SIG4
1. NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Nature Of Operations And Significant Accounting Policies Details Narrative | ' | ' |
Allowance for doubtful accounts receivable | $1,000 | $0 |
Impairment charge | 160,500 | 0 |
Excess of FDIC insured limits | $955,900 | $487,700 |
2_STOCKBASED_COMPENSATION_Deta
2. STOCK-BASED COMPENSATION (Details) (USD $) | 12 Months Ended |
Jun. 30, 2013 | |
Equity [Abstract] | ' |
Dividend yield | 0.00% |
Expected volatility | 62.00% |
Risk-free interest rate | 2.00% |
Expected life of options (in years) | '2 years 6 months |
Weighted average grant-date Black Scholes calculated fair value | $0.20 |
Recovered_Sheet2
2. Stock-Based Compensation (Details 1) (USD $) | 12 Months Ended |
Jun. 30, 2014 | |
Options Outstanding, Ending | 823,400 |
Number of Options Exercisable | 823,400 |
Weighted Average Exercise Price, Options Outstanding Ending | $0.63 |
Weighted Average Exercise Price Exercisable | $0.63 |
Option | ' |
Options Outstanding, Beginning | 1,084,100 |
Shares Granted | 0 |
Shares Exercised | 0 |
Shares Forfeited or expired or cancelled | -260,700 |
Options Outstanding, Ending | 823,400 |
Number of Options Exercisable | 823,400 |
Weighted Average Exercise Price, Options Outstanding Beginning | $0.67 |
Weighted average exercise price per share Granted | $0 |
Weighted average exercise price per share Exercised | $0 |
Weighted average exercise price per share Forfeited or expired or cancelled | $0.78 |
Weighted Average Exercise Price, Options Outstanding Ending | $0.63 |
Weighted Average Exercise Price Exercisable | $0.63 |
Weighted average remaining contractual term Outstanding Beginning | '4 years 2 months 5 days |
Weighted average remaining contractual term Outstanding Ending | '3 years 4 months 6 days |
Weighted average remaining contractual term Exercisable | '3 years 4 months 6 days |
Aggregate fair value outstanding Beginning | $296,100 |
Aggregate fair value Granted | 0 |
Aggregate fair value Exercised | 0 |
Aggregate fair value Forfeited or expired | -83,500 |
Aggregate fair value Outstanding Ending | 212,600 |
Aggregate fair value Exercisable | 212,600 |
Aggregate Intrinsic Value Outstanding Beginning | 0 |
Aggregate Intrinsic Value Granted | 0 |
Aggregate Intrinsic Value Exercised | 0 |
Aggregate Intrinsic Value Forfeited or expired | 0 |
Aggregate Intrinsic Value Outstanding Ending | 0 |
Aggregate Intrinsic Value Exercisable | $0 |
2_StockBased_Compensation_Deta1
2. Stock-Based Compensation (Details 2) (USD $) | 12 Months Ended |
Jun. 30, 2014 | |
Stock-Based Compensation Details 2 | ' |
Warrant Shares Outstanding July 1, 2013 | 95,100 |
Warrant Shares Granted | 0 |
Warrant Shares Exercised | 0 |
Warrant Shares canceled/expired | -95,100 |
Warrant Shares Outstanding June 30, 2014 | 0 |
Weighted average exercise price per share Warrants outstanding July 1, 2013 | $2.64 |
Weighted average exercise price per share Warrants Granted | $0 |
Weighted average exercise price per share Warrants Exercised | $0 |
Weighted average exercise price per share Warrants Cancelled or expired | $2.64 |
Weighted average exercise price per share Warrants Outstanding June 30, 2014 | $0 |
Recovered_Sheet3
2. STOCK-BASED COMPENSATION (Details Narrative) (USD $) | 12 Months Ended |
Jun. 30, 2013 | |
Stock-Based Compensation Details Narrative | ' |
Expense related to options vesting the year | $84,800 |
3_NOTES_RECEIVABLE_Details
3. NOTES RECEIVABLE (Details) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Notes Receivable Details | ' | ' |
Note receivable - beginning of year | $375,000 | $300,000 |
Advances | 25,000 | 150,000 |
Payments | -25,000 | -75,000 |
Accounting and loan fees added to note | 34,000 | 0 |
Total Notes receivable | 409,000 | 375,000 |
Less long-term | -109,000 | 0 |
Notes receivable - current | $300,000 | $375,000 |
4_MARKETABLE_SECURITIES_Detail
4. MARKETABLE SECURITIES (Details) | 3 Months Ended | |||
Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | |
Net Shares | ' | ' | ' | ' |
Beginning balance | ' 95,000 | '106,180 | '246,893 | '348,011 |
Shares sold | '(10,000) | ' | '(140,713) | ' (101,118) |
Shares sold prior to 2/24/14 | ' | ' (22,875) | ' | ' |
Shares recorded pursuant to ORBCOMM settlement | ' | ' 83,306 | ' | ' |
Subtotal | ' | ' 166,611 | ' | ' |
Shares sold after 2/24/14 | ' | ' (71,611) | ' | ' |
Ending balance | '85,000 | ' 95,000 | '106,180 | '246,893 |
Cost Basis Per Share | ' | ' | ' | ' |
Beginning balance | '$5.16 per share | '$2.91 per share | '$2.91 per share | '$2.91 per share |
Shares sold | '$5.16 per share | ' | '$2.91 per share | '$2.91 per share |
Shares sold prior to 2/24/14 | ' | '$2.91 per share | ' | ' |
Shares recorded pursuant to ORBCOMM settlement | ' | '$7.42 per share | ' | ' |
Subtotal | ' | '$5.16 per share | ' | ' |
Shares sold after 2/24/14 | ' | '$5.16 per share | ' | ' |
Ending balance | '$5.16 per share | '$5.16 per share | '$2.91 per share | '$2.91 per share |
Cost Basis Total Cost | ' | ' | ' | ' |
Beginning balance | ' 490,700 | '308,900 | ' 718,400 | '1,012,700 |
Shares sold | '(51,600) | ' | '(409,500) | ' (294,300) |
Shares sold prior to 2/24/14 | ' | ' (66,600) | ' | ' |
Shares recorded pursuant to ORBCOMM settlement | ' | ' 618,100 | ' | ' |
Subtotal | ' | ' 860,400 | ' | ' |
Shares sold after 2/24/14 | ' | ' (369,700) | ' | ' |
Ending balance | '439,100 | ' 490,700 | ' 308,900 | ' 718,400 |
Market Value Per Share | ' | ' | ' | ' |
Beginning balance | '6.85 | '6.34 | '5.24 | '4.49 |
Ending balance | '6.59 | '6.85 | '6.34 | '5.24 |
Market Value Total Value | ' | ' | ' | ' |
Beginning balance | ' 650,800 | '673,200 | '1,293,700 | '1,562,600 |
Ending balance | '560,100 | ' 650,800 | ' 673,200 | '1,293,700 |
Accumulated Unrealized Gain | ' | ' | ' | ' |
Beginning balance | ' 160,100 | '364,300 | '575,300 | '549,900 |
Ending balance | '121,200 | ' 160,100 | ' 364,300 | '575,300 |
Accumulated Unrealized Loss | ' | ' | ' | ' |
Beginning balance | '- | '- | '- | '- |
Ending balance | '- | '- | '- | '- |
Recovered_Sheet4
7. Land, Property and Equipment (Details) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Land Property And Equipment Details | ' | ' |
Office furniture and equipment | $51,300 | $51,300 |
Water disposal facility | 2,714,600 | 2,707,700 |
Production equipment | 232,000 | 207,800 |
Land, property and equipment | 2,997,900 | 2,966,800 |
Less accumulation depreciation | -371,800 | -190,200 |
Land and improvements | 1,536,900 | 1,429,900 |
Construction in progress | 0 | 133,400 |
Net book value | $4,163,000 | $4,339,900 |
7_LAND_PROPERTY_AND_EQUIPMENT_1
7. LAND, PROPERTY AND EQUIPMENT (Details Narrative) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Land Property And Equipment Details Narrative | ' | ' |
Depreciation and amortization | $181,600 | $147,100 |
Impairment charge | $160,500 | $0 |
9_CONTINGENT_PAYMENTS_Details
9. CONTINGENT PAYMENTS (Details) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Contingent Payments Details | ' | ' |
Fair value - contingent land payment | $660,200 | $641,400 |
Fair value - contingent purchase price | 528,100 | 513,200 |
Fair Value - contingent payment | 1,188,300 | 1,154,600 |
Less current portion | -50,000 | -50,000 |
Fair value - contingent payments, long-term | $1,138,300 | $1,104,600 |
10_Asset_Retirement_Obligation1
10. Asset Retirement Obligation (Details Narrative) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Asset Retirement Obligation Details Narrative | ' | ' |
Asset Retirement Obligation | $423,700 | $417,400 |
Trust account-Asset retirement obligation | $48,700 | $30,000 |
11_INCOME_TAXES_Details
11. INCOME TAXES (Details) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Income Tax Disclosure [Abstract] | ' | ' |
Statutory rate | 34.00% | 34.00% |
State income taxes, net of federal income tax benefit | 5.00% | 5.00% |
Reduction in valuation allowance related to net operating loss carry-forwards and change in temporary differences | -39.00% | -39.00% |
Income taxes | 0.00% | 0.00% |
11_INCOME_TAXES_Details_1
11. INCOME TAXES (Details 1) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Deferred tax assets (liabilities): | ' | ' |
Deferred tax asset | $13,200,000 | $14,000,000 |
Less: estimated Section 382 adjustment | -4,000,000 | -4,000,000 |
Net operating loss and capital loss carryforwards | 9,200,000 | 10,000,000 |
Less: Valuation allowance | -9,200,000 | -10,000,000 |
Net deferred tax | $0 | $0 |
11_INCOME_TAXES_Details_Narrat
11. INCOME TAXES (Details Narrative) (USD $) | 12 Months Ended |
Jun. 30, 2014 | |
Income Taxes Details Narrative | ' |
Operating loss carry-forward | $32,600,000 |
Expiration of carryforward | 'The loss carry-forwards, unless utilized, will expire from 2016 through 2033. |
13_COMMITMENTS_AND_CONTINGENCI1
13. COMMITMENTS AND CONTINGENCIES (Details) (USD $) | Jun. 30, 2014 |
FUTURE MINIMUM PAYMENTS FOR THE YEAR ENDED JUNE 30, | ' |
2015 | $30,200 |
2016 | 28,600 |
2017 | 28,600 |
2018 | 28,600 |
2019 | 28,600 |
Subsequent | 81,100 |
TOTAL | $225,700 |
13_COMMITMENTS_AND_CONTINGENCI2
13. COMMITMENTS AND CONTINGENCIES (Details Narrative) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Commitments And Contingencies Details Narrative | ' | ' |
Rent expense | $50,200 | $47,400 |
14_SHAREHOLDERS_EQUITY_Details
14. SHAREHOLDERS EQUITY (Details) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Shareholders Equity Tables | ' | ' |
WARRANTS OUTSTANDING, beginning | 95,100 | 150,400 |
WARRANTS, Granted | 0 | 0 |
WARRANTS, Exercised | 0 | 0 |
WARRANTS, Canceled/Expired | -95,100 | -55,300 |
WARRANTS OUTSTANDING, ending | 0 | 95,100 |
Weighted average exercise price, WARRANTS OUTSTANDING, beginning | $2.64 | $6.24 |
Weighted average exercise price, Granted | $0 | $0 |
Weighted average exercise price, Exercised | $0 | $0 |
Weighted average exercise price, Canceled/Expired | $2.64 | $12.44 |
Weighted average exercise price, WARRANTS OUTSTANDING, ending | $0 | $2.64 |
14_SHAREHOLDERS_EQUITY_Details1
14. SHAREHOLDERS EQUITY (Details 1) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Options Outstanding, Ending | 823,400 | ' |
Weighted Average Exercise Price, Options Outstanding Ending | $0.63 | ' |
Stock Options Class A Common | ' | ' |
Options Outstanding, Beginning | 1,084,100 | 674,100 |
Granted | 0 | 425,000 |
Exercised | 0 | 0 |
Canceled/Expired | -260,700 | -15,000 |
Options Outstanding, Ending | 823,400 | 1,084,100 |
Weighted Average Exercise Price, Options Outstanding Beginning | $0.67 | $0.80 |
Weighted average exercise price, Granted | $0 | $0.50 |
Weighted average exercise price, Exercised | $0 | $0 |
Weighted average exercise price, Canceled/Expired | $0.78 | $1.83 |
Weighted Average Exercise Price, Options Outstanding Ending | $0.63 | $0.67 |
14_SHAREHOLDERS_EQUITY_Details2
14. SHAREHOLDERS EQUITY (Details 2) (USD $) | 12 Months Ended |
Jun. 30, 2014 | |
Options Outstanding, Ending | 823,400 |
Weighted Average Exercise Price, Options Outstanding Ending | $0.63 |
Expiration Group 1 | ' |
Expiration | 1-Jan-14 |
Options Outstanding, Ending | 9,400 |
Weighted Average Exercise Price, Options Outstanding Ending | $1.50 |
Expiration Group 2 | ' |
Expiration | 1-Jan-15 |
Options Outstanding, Ending | 4,000 |
Weighted Average Exercise Price, Options Outstanding Ending | $1.50 |
Expiration Group 3 | ' |
Expiration | 1-Jan-16 |
Options Outstanding, Ending | 0 |
Weighted Average Exercise Price, Options Outstanding Ending | $0 |
Expiration Group 4 | ' |
Expiration | 1-Jan-17 |
Options Outstanding, Ending | 385,000 |
Weighted Average Exercise Price, Options Outstanding Ending | $0.75 |
Expiration Group 5 | ' |
Expiration | 1-Jan-18 |
Options Outstanding, Ending | 425,000 |
Weighted Average Exercise Price, Options Outstanding Ending | $0.50 |
14_SHAREHOLDERS_EQUITY_Details3
14. SHAREHOLDERS EQUITY (Details 3) (USD $) | 12 Months Ended |
Jun. 30, 2014 | |
Options Outstanding, Ending | 823,400 |
Weighted Average Remaining Contractual Life (in years) Outstanding | '3 years 4 months 6 days |
Weighted Average Exercise Price, Options Outstanding Ending | $0.63 |
Number of Options Exercisable | 823,400 |
Weighted Average Exercise Price Exercisable | $0.63 |
Exercise Price $0.50 | ' |
Options Outstanding, Ending | 425,000 |
Weighted Average Remaining Contractual Life (in years) Outstanding | '3 years 11 months 19 days |
Weighted Average Exercise Price, Options Outstanding Ending | $0.50 |
Number of Options Exercisable | 425,000 |
Weighted Average Exercise Price Exercisable | $0.50 |
Exercise Price $0.75 | ' |
Options Outstanding, Ending | 385,000 |
Weighted Average Remaining Contractual Life (in years) Outstanding | '2 years 9 months 11 days |
Weighted Average Exercise Price, Options Outstanding Ending | $0.75 |
Number of Options Exercisable | 385,000 |
Weighted Average Exercise Price Exercisable | $0.75 |
Exercise Price $1.50 | ' |
Options Outstanding, Ending | 13,400 |
Weighted Average Remaining Contractual Life (in years) Outstanding | '4 months 6 days |
Weighted Average Exercise Price, Options Outstanding Ending | $1.50 |
Number of Options Exercisable | 13,400 |
Weighted Average Exercise Price Exercisable | $1.50 |
15_RETIREMENT_PLAN_Details_Nar
15. RETIREMENT PLAN (Details Narrative) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Retirement Plan Details Narrative | ' | ' |
Company's matching contributions | $7,900 | $5,900 |
16_SELECTED_CONSOLIDATED_QUART2
16. SELECTED CONSOLIDATED QUARTERLY FINANCIAL DATA (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||
Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2014 | Jun. 30, 2013 | |
Selected Consolidated Quarterly Financial Data Tables | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net Sales | $384,400 | $180,200 | $69,600 | $14,800 | $153,500 | $92,100 | $43,800 | $101,200 | $649,000 | $390,600 |
Cost of sales | -154,800 | -137,400 | -86,700 | -68,800 | -112,200 | -131,400 | -93,900 | -64,500 | -447,700 | -402,000 |
GROSS PROFIT (LOSS) | 229,600 | 42,800 | -17,100 | -54,000 | 41,300 | -39,300 | -50,100 | 36,700 | 201,300 | -11,400 |
Net income (loss) | ($240,200) | $153,100 | $132,100 | ($151,200) | ($446,400) | ($146,900) | ($185,600) | $95,900 | ($106,200) | ($683,000) |
Income (loss) per share - basic & diluted | ($0.05) | $0.03 | $0.03 | ($0.03) | ($0.09) | ($0.03) | ($0.04) | $0.02 | ($0.02) | ($0.14) |
Weighted Average Shares | 4,962,500 | 4,932,500 | 4,941,800 | 4,944,300 | 5,005,300 | 5,010,300 | 5,010,300 | 5,010,300 | 4,944,600 | 5,009,000 |
17_LIQUIDITY_Details_Narrative
17. LIQUIDITY (Details Narrative) (USD $) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||
Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2014 | Jun. 30, 2013 | |
Liquidity Details Narrative Usd | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | ($240,200) | $153,100 | $132,100 | ($151,200) | ($446,400) | ($146,900) | ($185,600) | $95,900 | ($106,200) | ($683,000) |