Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Sep. 30, 2015 | Nov. 10, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | ALANCO TECHNOLOGIES INC | |
Entity Central Index Key | 98,618 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
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 Common Stock, Shares Outstanding | 4,982,400 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,016 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2015 | Jun. 30, 2015 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 525,200 | $ 788,900 |
Accounts receivable - trade, net | 54,700 | 45,900 |
Other receivables - related party | 6,600 | 4,200 |
Note receivable, current - related party | 60,000 | 60,000 |
Prepaid expenses and other current assets | 33,200 | 164,500 |
Total current assets | 679,700 | 1,063,500 |
LAND, PROPERTY AND EQUIPMENT, NET | 3,893,100 | 3,938,600 |
OTHER ASSETS | ||
Note receivable, long-term - related party | 245,600 | 262,800 |
Trust account - asset retirement obligation | 72,100 | 67,400 |
TOTAL ASSETS | 4,890,500 | 5,332,300 |
CURRENT LIABILITIES | ||
Accounts payable | 118,100 | 151,100 |
Accrued expenses | 167,700 | 191,800 |
Contingent payments, current | 25,000 | 50,000 |
Total current liabilities | 310,800 | 392,900 |
LONG-TERM LIABILITIES | ||
Contingent payments, long-term | 633,600 | 603,900 |
Asset retirement obligation | 429,700 | 429,700 |
TOTAL LIABILITIES | $ 1,374,100 | $ 1,426,500 |
SHAREHOLDERS' EQUITY | ||
Preferred Stock - no shares issued or outstanding | ||
Common Stock Class A - 75,000,000 no par shares authorized, 4,982,400 shares issued and outstanding at September 30, 2015 and June 30, 2015 | $ 109,173,200 | $ 109,159,300 |
Accumulated Deficit | (105,656,800) | (105,253,500) |
Total shareholders' equity | 3,516,400 | 3,905,800 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 4,890,500 | $ 5,332,300 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - shares | Sep. 30, 2015 | Jun. 30, 2015 |
Condensed Consolidated Balance Sheets | ||
Class A Common Stock, Shares Authorized | 75,000,000 | 75,000,000 |
Class A Common Stock, Shares Issued | 4,982,400 | 4,982,400 |
Class A Common Stock, Shares Outstanding | 4,982,400 | 4,982,400 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Condensed Consolidated Statements Of Operations | ||
NET REVENUES | $ 114,300 | $ 225,300 |
Cost of revenues | 260,400 | 186,300 |
GROSS PROFIT (LOSS) | (146,100) | 39,000 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | ||
Corporate expenses | 93,700 | 61,100 |
Alanco Energy Services | 157,000 | 199,500 |
Stock-based compensation | 13,900 | 15,000 |
Selling general and administrative expenses | 264,600 | 275,600 |
OPERATING LOSS | (410,700) | (236,600) |
OTHER INCOME | ||
Interest income | $ 7,400 | 11,500 |
Gain on sale of marketable securities | 46,700 | |
Other income | 200 | |
NET LOSS | $ (403,300) | $ (178,200) |
NET LOSS PER SHARE - BASIC AND DILUTED | $ (0.08) | $ (0.04) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | 4,982,400 | 4,962,500 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) - 3 months ended Sep. 30, 2015 - USD ($) | COMMON STOCK | ACCUMULATED DEFICIT | Total |
Beginning balance, Amount at Jun. 30, 2015 | $ 109,159,300 | $ (105,253,500) | $ 3,905,800 |
Beginning balance, Shares at Jun. 30, 2015 | 4,982,400 | ||
Value of stock-based compensation | $ 13,900 | 13,900 | |
Net loss | $ (403,300) | (403,300) | |
Ending balance, Amount at Sep. 30, 2015 | $ 109,173,200 | $ (105,656,800) | $ 3,516,400 |
Ending balance, Shares at Sep. 30, 2015 | 4,982,400 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (403,300) | $ (178,200) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 46,100 | 45,100 |
Accretion of fair value - contingent payments | $ 4,700 | 8,400 |
Gain on sale of marketable securities | $ (46,700) | |
Stock-based compensation for options | $ 13,900 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (8,800) | $ 9,500 |
Other receivables - related party | (2,400) | 5,000 |
Prepaid expenses and other current assets | 131,300 | 22,600 |
Trust account - asset retirement obligation | (4,700) | (4,700) |
Accounts payable and accrued expenses | $ (57,100) | 128,800 |
Contingent land payment | (16,400) | |
Net cash used in operating activities | $ (280,300) | (26,600) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Proceeds from repayment of American Citizenship Center, LLC note receivable | 17,200 | 50,000 |
Purchase of land, property, and equipment | $ (600) | (163,300) |
Proceeds from sale of marketable securities | 279,100 | |
Net cash provided by investing activities | $ 16,600 | $ 165,800 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Net cash used in financing activities | ||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | $ (263,700) | $ 139,200 |
CASH AND CASH EQUIVALENTS, beginning of period | 788,900 | 1,215,600 |
CASH AND CASH EQUIVALENTS, end of period | $ 525,200 | 1,354,800 |
Non-cash investing & financing activities: | ||
Unrealized gain (loss) on marketable securities | (97,700) | |
Note receivable issued for ACC amendment fee | $ (10,000) | |
Value of stock-based compensation for options | $ 13,900 |
A. Basis of Presentation, Accou
A. Basis of Presentation, Accounting Policies and Recent Accounting Pronouncements | 3 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation, Accounting Policies and Recent Accounting 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. Basis of Presentation The unaudited condensed consolidated financial statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and in accordance with the instructions to Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. In our opinion, the accompanying condensed consolidated financial statements include all adjustments necessary for a fair presentation of such condensed consolidated financial statements. Such necessary adjustments consist of normal recurring items and the elimination of all significant intercompany balances and transactions. These interim condensed consolidated financial statements should be read in conjunction with the Companys June 30, 2015 Annual Report filed on Form 10-K. Interim results are not necessarily indicative of results for a full year. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Certain prior year numbers have been reclassified to conform to the current year presentation. Sales tax on certain revenues for the fiscal year 2015 that were classified as cost of revenues has been reclassified in the Condensed Consolidated Statement of Operations to offset revenues to conform to the current years presentation. In addition, the value of stock-based compensation for the fiscal year 2015 which was included in corporate expenses has been reclassified in the Condensed Consolidated Statement of Operations to a separate line item. These reclassifications had no effect on net loss or net loss per share. Fair Value of Assets and Liabilities The following are the classes of assets and liabilities measured at fair value on a recurring basis at September 30, 2015 and 2014, using quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3): Fair Value at September 30, 2015 Level 1: Quoted Prices Level 2: in active Significant Level 3: Total Markets Other Significant at for Identical Observable Unobservable September 30, Assets Inputs Inputs 2015 Asset Retirement Obligation $ - $ - $ 429,700 $ 429,700 Contigent Land Payment - - 658,600 658,600 $ - $ - $ 1,088,300 $ 1,088,300 Fair Value at June 30, 2015 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 2015 Asset Retirement Obligation $ - $ - $ 429,700 $ 429,700 Contigent Land Payment - - 653,900 653,900 $ - $ - $ 1,083,600 $ 1,083,600 The following is a reconciliation of the opening and closing balances for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the quarter ended September 30, 2015. Asset Contingent Retirement Land Obligation Payment Total Opening balance $ 429,700 $ 653,900 $ 1,083,600 Accretion expense - 4,700 4,700 Closing balance $ 429,700 $ 658,600 $ 1,088,300 Fair Value of Asset Retirement Obligation Fair Value of Contingent Payments Recent Accounting Pronouncements 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. In August 2015, this accounting pronouncement was deferred for one year, and is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of reporting periods beginning after December 15, 2016. The Company is currently assessing the impact on its financial position and results of operations. In September 2015, the FASB issued guidance regarding the simplification of accounting for measurement period adjustments for business combinations. The guidance is effective for annual reporting periods beginning after December 15, 2015, including interim reporting periods within that reporting period and early adoption is permitted. The Company has early 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 during the three months ended September 30, 2015, that are of significance, or potential significance, to us. |
B. Stock-Based Compensation
B. Stock-Based Compensation | 3 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Stock-Based Compensation | The Company has stock-based compensation plans and reports stock-based compensation expense for all stock-based compensation awards based on the estimated grant date fair value. The value of the compensation cost is amortized on a straight-line basis over the requisite service periods of the award (generally the option vesting term). The Company estimates fair value 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 Companys plans is measured using the historical daily changes in the market price of the Companys common stock over the expected term of the award and contemplation of future activity; Risk-free interest rate is 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 managements analysis of potential future forfeitures. 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 and are more fully discussed in our Form 10-K for the year ended June 30, 2015. The following table summarizes the Companys stock option activity during the first three months of fiscal 2016: Weighted Weighted Average Average Remaining Aggregate Aggregate Exercise Price Contractual Fair Instrinsic Shares Per Share Term (1) Value (3) Value (2) Outstanding July 1, 2015 1,203,200 $0.58 3.03 $ 275,800 $ - Granted - - - - - Exercised - - - - - Forfeited or expired (3,200) $1.50 - (2,300) - Outstanding September 30, 2015 1,200,000 $0.58 2.78 $ 273,500 $ - Exercisable September 30, 2015 1,122,000 $0.59 2.69 $ 259,800 $ - (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 September 30, 2015, for those awards that have an exercise price currently below the closing price as of September 30, 2015 of $0.19. (3) Aggregate Fair Value is calculated using the Black Scholes option pricing model to estimate fair value of stock-based compensation. As of September 30, 2015, the Company had approximately $13,800 of unamortized Black Scholes value related to outstanding stock options. The unamortized amount is scheduled to be expensed in the next quarter. There were no new grants during the current quarter. |
C. Note Receivable
C. Note Receivable | 3 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Note Receivable | Note receivable of $305,600 and $322,800 at September 30, 2015 and June 30, 2015, respectively, represents a note due from American Citizenship Center, LLC (ACC), a related party. In August 2015, ACC and the Company modified the loan agreement by revising the maturity data to August 31, 2017. All other terms of the note, including the interest rate of 9.5% and minimum monthly required payments of the greater of $5,000 or 10% of ACCs gross monthly revenues remained the same. Based on the minimum monthly payments of $5,000, the Company has classified $60,000 of the note as current and $245,600 of the note as long-term as of September 30, 2015. ACC is currently in compliance with all terms of the August 2015 amendment. No provision for collectability has been recorded as of September 30, 2015 and June 30, 2015. |
D. Land, Property and Equipment
D. Land, Property and Equipment | 3 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Land, Property and Equipment | Land, Property and Equipment at September 30, 2015 and June 30, 2015 consist of the following: June 30, 2015 Additions September 30, 2015 Office furniture and equipment $ 51,300 $ - $ 51,300 Water disposal facility 2,219,200 - 2,219,200 Production equipment 514,400 - 514,400 2,784,900 - 2,784,900 Less accumulation depreciation (491,900) (46,100) (538,000) Land and permit costs 1,645,600 600 1,646,200 Net book value $ 3,938,600 $ (45,500) $ 3,893,100 |
E. Earnings Per Share
E. Earnings Per Share | 3 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Basic and diluted loss per share of common stock was computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding. Diluted earnings per share are computed based on the weighted average number of shares of common stock and dilutive securities outstanding during the period using the treasury stock method. Dilutive securities are options, warrants, convertible debt, and preferred stock that are freely exercisable into common stock at less than the prevailing market price. Dilutive securities are not included in the weighted average number of shares when inclusion would increase the earnings per share or decrease the loss per share. For the three months ended September 30, 2015 and 2014, there were no dilutive securities included in the loss per share calculation as the effect would be antidilutive. Considering all holders rights, total common stock equivalents issuable under these potentially dilutive securities are approximately 1,200,000 and 814,000 at September 30, 2015 and 2014, respectively. |
F. Equity
F. Equity | 3 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Equity | The Company did not issue any shares of Common Stock during the three months ended September 30, 2015. During the three months ended September 30, 2015, the Company recognized the value of stock-based compensation in the amount of $13,900. In December 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. During the quarter ended December 31, 2014, the board of directors renewed the stock repurchase program, extending it through December 31, 2015. There were no shares repurchased under the program in the current quarter. The Company has authorized 25,000,000 shares of Preferred Stock of which 5,000,000 shares 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. At September 30, 2015 and June 30, 2015, no Preferred Stock of any series was issued or outstanding. |
G. Contingent Payments
G. Contingent Payments | 3 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingent Payments | Contingent payments September 30, June 30, 2015 2015 Contingent land payment $ 658,600 $ 653,900 Less current portion (25,000) (50,000) Contingent payments, long-term $ 633,600 $ 603,900 Contingent land payment |
H. Asset Retirement Obligation
H. Asset Retirement Obligation | 3 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Asset Retirement Obligation | The Company has recognized estimated asset retirement obligations (closure cost) of $429,700 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 Companys 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 closure cost estimate, in 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. 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 Company reviews the asset retirement obligation quarterly and performs a formal annual assessment of its estimates to determine if an adjustment to the value of the asset retirement obligation is required. 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 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. During the three months ended September 30, 2015, the Company made the required quarterly payments. The balances in the trust account for the asset retirement obligation as of September 30, 2015 and June 30, 2015 were $72,100 and $67,400, respectively. |
I. Commitments and Contingencie
I. Commitments and Contingencies | 3 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 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 TSIs 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 attorneys fees and accrued interest, resulting in a total judgment in the amount of $128,300 for which the Company recorded an accrued liability at June 30, 2014. In addition, the Company posted a bond with the court in conjunction with the Companys appeal of the judgment. In May 2015, the State of Arizona Division One Court of Appeals vacated the trial courts damages award and remanded to the trial court to direct the parties to follow dispute guidelines defined in the asset purchase agreement. In addition, the appellate courts decision vacated the trial courts attorneys fee award and stated that TSI is entitled to an award of fees on appeal. As a result, at June 30, 2015, the Company reversed the accrual of $128,300 for the prior judgment. The Company is currently following the courts direction and working under the dispute guidelines defined in the asset purchase agreement. The Company believes that the lower courts judgment failed to address, among other matters, inventory reserves established for the specific items of inventory which were the subject of Black Creeks concerns, which if properly addressed would result in a net judgment in favor of the Company, with an attendant award of attorneys fees in favor of the Company. Therefore, no accrual for the loss contingency was deemed necessary at September 30, 2015. The Company may from time to time be involved in litigation arising from the normal course of business. As of September 30, 2015, there was no such litigation pending deemed material by the Company. |
J. Related Party Transactions
J. Related Party Transactions | 3 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | At September 30, 2015 and June 30, 2015 the Company had a note due from American Citizenship Center, LLC (ACC), a related party, with balances of $305,600 and $322,800, respectively. Refer to Note C Note Receivable for further discussion. During the three months ended September 30, 2015 the Company billed ACC a total of approximately $7,500 for interest on the note. At September 30, 2015, the Company had unpaid receivables from ACC in the amount of $6,600, consisting of $4,900 representing two months of interest and $1,700 of legal fees. All required payments have been subsequently paid. |
K. Subsequent Events
K. Subsequent Events | 3 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | There have been no significant subsequent events. |
L. Liquidity and Going Concern
L. Liquidity and Going Concern | 3 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity and Going Concern | During the three months ended September 30, 2015, the Company reported a net loss of ($403,300) and for fiscal year ended June 30, 2015, the Company reported a net loss of ($900,600). Historically, the Company had relied on the liquidation of its investment in Marketable Securities to fund working capital needs. The Company sold all remaining marketable securities during fiscal 2015. These factors raise doubt about the Companys ability to continue as a going concern for the next year. The Companys fiscal 2016 operating plan contemplates development of the AES Indian Mesa site. In order to develop the Indian Mesa site, the Company will need additional financing which may be in the form of public or private debt or equity financing, or both. Management cannot assure that it will secure additional financing in order to achieve projections. If adequate funds are not available or are not available on acceptable terms, the Companys business, operating results, financial condition and ability to continue operations may be materially adversely affected. Management has historically been successful in obtaining financing and has demonstrated the ability to implement a number of cost-cutting initiatives to reduce working capital needs or the Company may seek to sell assets. Accordingly, the accompanying consolidated financial statements have been prepared assuming the Company will continue to operate and do not include any adjustment that might be necessary if the Company is unable to continue as a going concern. As a result, the Companys independent registered public accounting firm included an explanatory paragraph in their audit opinion on the consolidated financial statements of the Company for the fiscal year ended June 30, 2015 discussing the substantial doubt of the Companys ability to continue as a going concern. |
A. Basis of Presentation, Acc19
A. Basis of Presentation, Accounting Policies and Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | 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. |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and in accordance with the instructions to Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. In our opinion, the accompanying condensed consolidated financial statements include all adjustments necessary for a fair presentation of such condensed consolidated financial statements. Such necessary adjustments consist of normal recurring items and the elimination of all significant intercompany balances and transactions. These interim condensed consolidated financial statements should be read in conjunction with the Companys June 30, 2015 Annual Report filed on Form 10-K. Interim results are not necessarily indicative of results for a full year. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Certain prior year numbers have been reclassified to conform to the current year presentation. Sales tax on certain revenues for the fiscal year 2015 that were classified as cost of revenues has been reclassified in the Condensed Consolidated Statement of Operations to offset revenues to conform to the current years presentation. In addition, the value of stock-based compensation for the fiscal year 2015 which was included in corporate expenses has been reclassified in the Condensed Consolidated Statement of Operations to a separate line item. These reclassifications had no effect on net loss or net loss per share. |
Fair Value of Assets and Liabilities | Fair Value of Assets and Liabilities The following are the classes of assets and liabilities measured at fair value on a recurring basis at September 30, 2015 and 2014, using quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3): Fair Value at September 30, 2015 Level 1: Quoted Prices Level 2: in active Significant Level 3: Total Markets Other Significant at for Identical Observable Unobservable September 30, Assets Inputs Inputs 2015 Asset Retirement Obligation $ - $ - $ 429,700 $ 429,700 Contigent Land Payment - - 658,600 658,600 $ - $ - $ 1,088,300 $ 1,088,300 Fair Value at June 30, 2015 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 2015 Asset Retirement Obligation $ - $ - $ 429,700 $ 429,700 Contigent Land Payment - - 653,900 653,900 $ - $ - $ 1,083,600 $ 1,083,600 The following is a reconciliation of the opening and closing balances for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the quarter ended September 30, 2015. Asset Contingent Retirement Land Obligation Payment Total Opening balance $ 429,700 $ 653,900 $ 1,083,600 Accretion expense - 4,700 4,700 Closing balance $ 429,700 $ 658,600 $ 1,088,300 |
Fair Value of Asset Retirement Obligation | Fair Value of Asset Retirement Obligation |
Fair Value of Contingent Payments | Fair Value of Contingent Payments |
Recent Accounting Pronouncements | Recent Accounting Pronouncements 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. In August 2015, this accounting pronouncement was deferred for one year, and is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of reporting periods beginning after December 15, 2016. The Company is currently assessing the impact on its financial position and results of operations. In September 2015, the FASB issued guidance regarding the simplification of accounting for measurement period adjustments for business combinations. The guidance is effective for annual reporting periods beginning after December 15, 2015, including interim reporting periods within that reporting period and early adoption is permitted. The Company has early 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 during the three months ended September 30, 2015, that are of significance, or potential significance, to us. |
A. Basis of Presentation, Acc20
A. Basis of Presentation, Accounting Policies and Recent Accounting Pronouncements (Tables) | 3 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Assets and liabilities measured at fair value on a recurring basis | Fair Value at September 30, 2015 Level 1: Quoted Prices Level 2: in active Significant Level 3: Total Markets Other Significant at for Identical Observable Unobservable September 30, Assets Inputs Inputs 2015 Asset Retirement Obligation $ - $ - $ 429,700 $ 429,700 Contigent Land Payment - - 658,600 658,600 $ - $ - $ 1,088,300 $ 1,088,300 Fair Value at June 30, 2015 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 2015 Asset Retirement Obligation $ - $ - $ 429,700 $ 429,700 Contigent Land Payment - - 653,900 653,900 $ - $ - $ 1,083,600 $ 1,083,600 |
Reconciliation of Assets and liabilities measured at fair value on a recurring basis | Asset Contingent Retirement Land Obligation Payment Total Opening balance $ 429,700 $ 653,900 $ 1,083,600 Accretion expense - 4,700 4,700 Closing balance $ 429,700 $ 658,600 $ 1,088,300 |
B. Stock-Based Compensation (Ta
B. Stock-Based Compensation (Tables) | 3 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Stock option activity | Weighted Weighted Average Average Remaining Aggregate Aggregate Exercise Price Contractual Fair Instrinsic Shares Per Share Term (1) Value (3) Value (2) Outstanding July 1, 2015 1,203,200 $0.58 3.03 $ 275,800 $ - Granted - - - - - Exercised - - - - - Forfeited or expired (3,200) $1.50 - (2,300) - Outstanding September 30, 2015 1,200,000 $0.58 2.78 $ 273,500 $ - Exercisable September 30, 2015 1,122,000 $0.59 2.69 $ 259,800 $ - (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 September 30, 2015, for those awards that have an exercise price currently below the closing price as of September 30, 2015 of $0.19. (3) Aggregate Fair Value is calculated using the Black Scholes option pricing model to estimate fair value of stock-based compensation. |
D. Land, Property and Equipme22
D. Land, Property and Equipment (Tables) | 3 Months Ended |
Sep. 30, 2015 | |
D. Land Property And Equipment Tables | |
Land, Property and Equipment | June 30, 2015 Additions September 30, 2015 Office furniture and equipment $ 51,300 $ - $ 51,300 Water disposal facility 2,219,200 - 2,219,200 Production equipment 514,400 - 514,400 2,784,900 - 2,784,900 Less accumulation depreciation (491,900) (46,100) (538,000) Land and permit costs 1,645,600 600 1,646,200 Net book value $ 3,938,600 $ (45,500) $ 3,893,100 |
G. Contingent Payments (Tables)
G. Contingent Payments (Tables) | 3 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingent payments | September 30, June 30, 2015 2015 Contingent land payment $ 658,600 $ 653,900 Less current portion (25,000) (50,000) Contingent payments, long-term $ 633,600 $ 603,900 |
A. Basis of Presentation, Acc24
A. Basis of Presentation, Accounting Policies and Recent AccountingPronouncements (Details) - USD ($) | Sep. 30, 2015 | Jun. 30, 2015 |
Asset retirement obligation | $ 429,700 | $ 429,700 |
Contingent land payment | 658,600 | 653,900 |
Total | $ 1,088,300 | $ 1,083,600 |
Level 1: Quoted Prices Quoted Prices in active Markets for Identical Assets [Member] | ||
Asset retirement obligation | ||
Contingent land payment | ||
Total | ||
Level 2: Significant Other Observable Inputs [Member] | ||
Asset retirement obligation | ||
Contingent land payment | ||
Total | ||
Level 3: Significant Unobservable Inputs [Member] | ||
Asset retirement obligation | $ 429,700 | $ 429,700 |
Contingent land payment | 658,600 | 653,900 |
Total | $ 1,088,300 | $ 1,083,600 |
A. Basis of Presentation, Acc25
A. Basis of Presentation, Accounting Policies and Recent AccountingPronouncements (Details 1) | Sep. 30, 2015USD ($) |
Opening balance | $ 1,083,600 |
Accretion expense | 4,700 |
Closing balance | 1,088,300 |
Asset Retirement Obligation [Member] | |
Opening balance | $ 429,700 |
Accretion expense | |
Closing balance | $ 429,700 |
Contingent Land Payment [Member] | |
Opening balance | 653,900 |
Accretion expense | 4,700 |
Closing balance | $ 658,600 |
B. Stock-Based Compensation (De
B. Stock-Based Compensation (Details) | 3 Months Ended | |
Sep. 30, 2015USD ($)$ / sharesshares | ||
B. Stock-based Compensation Details | ||
Shares Outstanding July 1, 2015 | shares | 1,203,200 | |
Shares Granted | shares | ||
Shares Exercised | shares | ||
Shares Forfeited or expired | shares | (3,200) | |
Shares Outstanding September 30, 2015 | shares | 1,200,000 | |
Shares Exercisable September 30, 2015 | shares | 1,122,000 | |
Weighted average exercise price per share outstanding July 1, 2015 | $ / shares | $ 0.58 | |
Weighted average exercise price per share Granted | $ / shares | ||
Weighted average exercise price per share Exercised | $ / shares | ||
Weighted average exercise price per share Forfeited or expired | $ / shares | $ 1.50 | |
Weighted average exercise price per share Outstanding September 30, 2015 | $ / shares | 0.58 | |
Weighted average exercise price per share Exercisable September 30, 2015 | $ / shares | $ 0.59 | |
Weighted average remaining contractual term Outstanding July 1, 2015 | 3 years 11 days | [1] |
Weighted average remaining contractual term Outstanding September 30, 2015 | 2 years 9 months 11 days | [1] |
Weighted average remaining contractual term Exercisable September 30, 2015 | 2 years 8 months 9 days | [1] |
Aggregate fair value outstanding July 1, 2015 | $ 275,800 | [2] |
Aggregate fair value Granted | ||
Aggregate fair value Exercised | ||
Aggregate fair value Forfeited or expired | $ (2,300) | [2] |
Aggregate fair value Outstanding September 30, 2015 | 273,500 | [2] |
Aggregate fair value Exercisable September 30, 2015 | $ 259,800 | [2] |
Aggregate Intrinsic Value Outstanding July 1, 2015 | ||
Aggregate Intrinsic Value Granted | ||
Aggregate Intrinsic Value Exercised | ||
Aggregate Intrinsic Value Forfeited or expired | ||
Aggregate Intrinsic Value Outstanding September 30, 2015 | ||
Aggregate Intrinsic Value Exercisable September 30, 2015 | ||
[1] | Remaining contractual term presented in years. | |
[2] | Aggregate Fair Value is calculated using the Black Scholes option pricing model to estimate fair value of stock-based compensation |
B. Stock-Based Compensation (27
B. Stock-Based Compensation (Details Narrative) | Sep. 30, 2015USD ($) |
Equity [Abstract] | |
Unamortized Black Scholes value | $ 13,800 |
C. Note Receivable (Details Nar
C. Note Receivable (Details Narrative) - USD ($) | Sep. 30, 2015 | Jun. 30, 2015 |
Receivables [Abstract] | ||
Note receivable | $ 305,600 | $ 322,800 |
Minimum monthly payments | 5,000 | |
Note Receivable, current | 60,000 | |
Note Receivable, noncurrent | $ 245,600 |
D. Land, Property and Equipme29
D. Land, Property and Equipment (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2015 | Jun. 30, 2015 | |
Land, property and equipment | $ 2,784,900 | $ 2,784,900 |
Additions | ||
Less accumulation depreciation | $ (538,000) | (491,900) |
Land and permit costs | 1,646,200 | 1,645,600 |
Net book value | 3,893,100 | 3,938,600 |
Office furniture and equipment [Member] | ||
Land, property and equipment | $ 51,300 | 51,300 |
Additions | ||
Water disposal facility [Member | ||
Land, property and equipment | $ 2,219,200 | 2,219,200 |
Additions | ||
Production equipment [Member | ||
Land, property and equipment | $ 514,400 | $ 514,400 |
Less accumulation depreciation [Member] | ||
Additions | (46,100) | |
Land and permit costs [Member] | ||
Additions | 600 | |
Net book value [Member] | ||
Additions | $ (45,500) |
E. Earnings Per Share (Details
E. Earnings Per Share (Details Narrative) - shares | 3 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Earnings Per Share [Abstract] | ||
Total common stock equivalents issuable under these potentially dilutive securities | 1,200,000 | 814,000 |
E. Equity (Details Narrative)
E. Equity (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2015 | Jun. 30, 2015 | |
Stock-based compensation | $ 13,900 | |
Preferred Stock, authorized | 25,000,000 | 25,000,000 |
Preferred Stock, issued | 0 | 0 |
Preferred Stock, outstanding | 0 | 0 |
Series A Preferred Stock [Member] | ||
Preferred Stock, authorized | 5,000,000 | 5,000,000 |
Series B Preferred Stock [Member] | ||
Preferred Stock, authorized | 500,000 | 500,000 |
Series C Preferred Stock [Member] | ||
Preferred Stock, authorized | 400,000 | 400,000 |
Series D Preferred Stock [Member] | ||
Preferred Stock, authorized | 500,000 | 500,000 |
Series E Preferred Stock [Member] | ||
Preferred Stock, authorized | 750,000 | 750,000 |
G. Contingent Payments (Details
G. Contingent Payments (Details) - USD ($) | Sep. 30, 2015 | Jun. 30, 2015 |
G. Contingent Payments Details | ||
Contingent land payment | $ 658,600 | $ 653,900 |
Less current portion | (25,000) | (50,000) |
Contingent payments, long-term | $ 633,600 | $ 603,900 |
H. Asset Retirement Obligation
H. Asset Retirement Obligation (Details Narrative) - USD ($) | Sep. 30, 2015 | Jun. 30, 2015 |
Accounting Policies [Abstract] | ||
Payment made for asset retirement obligation | $ 4,700 | |
Balance at trust account for asset retirement obligation | $ 72,100 | $ 67,400 |
I. Commitments and Contingenc34
I. Commitments and Contingencies (Details Narrative) - USD ($) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Attorney fees and accrued interest | $ 16,800 | |
Accrued liability | $ 128,300 | |
Reversed accrual | $ 128,300 |
J. Related Party Transactions (
J. Related Party Transactions (Details Narrative) - American Citizenship Center, LLC - USD ($) | 3 Months Ended | |
Sep. 30, 2015 | Jun. 30, 2015 | |
Due from related party | $ 305,600 | $ 322,800 |
Interest on note | 7,500 | |
Unpaid receivables | 6,600 | |
Interest expense | 4,900 | |
legal fees | $ 1,700 |
L. Liquidity and Going Concern
L. Liquidity and Going Concern (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Net loss | $ (403,300) | $ (178,200) | $ (900,600) |