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5. Supplemental Financial Information

12 Months Ended

Jun. 30, 2020

5. Supplemental Financial Information

Inventories

The following table presents details of our inventories:

	June 30,
	2020		2019
	(In thousands)
Finished goods	$	7,522	$	6,084
Raw materials		6,259		4,425
Inventories, net	$	13,781	$	10,509

Property and Equipment

The following table presents details of property and equipment:

	June 30,
	2020			2019
	(In thousands)
Computer, software and office equipment	$	3,992		$	3,839
Furniture and fixtures		511			450
Production, development and warehouse equipment		4,777			4,229
Construction-in-progress		–			201
Property and equipment, gross		9,280			8,719
Less accumulated depreciation		(7,693	)		(7,520	)
Property and equipment, net	$	1,587		$	1,199

Impairment of Long-Lived Asset

During the fourth quarter of the fiscal year ended June 30, 2019, we determined that the carrying value of a software platform license we had previously purchased from a third party was impaired. This asset had been recorded as part of the “Computer, software and office equipment” category in the table above. We purchased this platform and contemplated utilizing it in connection with the development of certain of our software offerings. Based on strategic changes in our product roadmap plan, along with key changes in our executive management team that occurred during the fiscal year ended June 30, 2019, we concluded that that we would not achieve future cash flows related to this asset. Accordingly, we recorded a charge of $275,000 in the accompanying consolidated statement of operations for the year ended June 30, 2019 to write off the asset’s carrying value.

Purchased Intangible Assets

The following table presents details of purchased intangible assets:

	June 30, 2020							June 30, 2019
	Gross Carrying Amount		Accumulated Amortization			Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value
	(In thousands)
Developed technology	$	3,841	$	(497	)	$	3,344	$	–	$	–	$	–
Customer relationship		9,030		(726	)		8,304		–		–		–
Order backlog		840		(384	)		456		–		–		–
Non-compete agreements		400		(184	)		216		–		–		–
Trademark and trade name		375		(246	)		129		–		–		–
	$	14,486	$	(2,037	)	$	12,449	$	–	$	–	$	–

We do not currently have any purchased intangible assets with indefinite useful lives.

As of June 30, 2020, future estimated amortization expense is as follows:

Years Ending June 30,
(In thousands)
2021	$	3,094
2022		2,240
2023		2,240
2024		2,240
2025		1,784
Thereafter		851
	$	12,449

Goodwill

The following table presents details of our goodwill balance:

	Year Ended
	June 30, 2020
		(In thousands)
Balance at June 30, 2019	$	9,488
Acquisition of Maestro		2,876
Acquisition of Intrinsyc		3,446
Balance at June 30, 2020	$	15,810

Warranty Reserve

The following table presents details of our warranty reserve:

	Years Ended June 30,
	2020			2019
	(In thousands)
Beginning balance	$	116		$	99
Warranty reserve assumed from acquisition of Intrinsyc		118			–
Charged to cost of revenues		181			96
Usage		(234	)		(79	)
Ending balance	$	181		$	116

Other Liabilities

The following table presents details of our other liabilities:

	June 30,
	2020		2019
	(In thousands)
Current
Accrued variable consideration	$	1,462	$	1,313
Customer deposits and refunds		628		168
Accrued raw materials purchases		272		1,155
Deferred revenue		658		328
Lease liability		1,273		4
Taxes payable		395		322
Warranty reserve		181		116
Accrued operating expenses		1,439		1,290
Total other current liabilities	$	6,308	$	4,696

Non-current
Lease liability	$	1,796	$	48
Deferred revenue		166		158
Total other non-current liabilities	$	1,962	$	206

Computation of Net Loss per Share

The following table presents the computation of net loss per share:

	Years Ended June 30,
	2020			2019
		(In thousands, except per share data)
Numerator:
Net loss	$	(10,738	)	$	(408	)

Denominator:
Weighted-average shares outstanding - basic and diluted		25,281			21,580

Net loss per share - basic and diluted	$	(0.42	)	$	(0.02	)

The following table presents the common stock equivalents excluded from the diluted net loss per share calculation because they were anti-dilutive for the periods presented. These excluded common stock equivalents could be dilutive in the future.

	Years Ended June 30,
	2020		2019
		(In thousands)
Common stock equivalents		1,675		1,513

Severance and Related Charges

Current Fiscal Year

During the year ended June 30, 2020, we continued a plan to realign certain personnel resources to better fit our current business needs, which includes identifying cost savings and synergies to be gained from the acquisitions of Maestro and Intrinsyc. Additionally, the current year charges include costs incurred pursuant to change-in-control agreements for certain employees of Intrinsyc.

The following table presents details of the liability we recorded related to these activities:

	Year Ended
	June 30,
	2020
		(In thousands)
Beginning balance	$	651
Charges		3,844
Payments		(3,880	)
Ending balance	$	615

The ending balance is recorded in accrued payroll and related expenses on the accompanying consolidated balance sheet at June 30, 2020.

Prior Fiscal Year

During the prior fiscal year ended June 30, 2019, we executed several plans to realign certain personnel resources to better meet our business needs. These activities resulted in total charges of approximately $1,417,000, which included $1,146,000 in severance-related costs and $271,000 in share-based compensation expense. The share-based compensation expenses are included in the applicable functional line items within the accompanying consolidated statement of operation for the year ended June 30, 2019.

Supplemental Cash Flow Information

The following table presents non-cash investing and financing transactions excluded from the consolidated statements of cash flows:

	Years Ended June 30,
	2020		2019
	(In thousands)
Share consideration for acquisition of Intrinsyc	$	15,574	$	–
Accrued property and equipment paid for in the subsequent period	$	149	$	9
Accrued stock option exercise proceeds	$	–	$	1