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Composition of Certain Financial Statement Items | 12 Months Ended
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Jun. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Composition of Certain Financial Statement Items | 5. Composition of Certain Financial Statement Items Investments Investments are stated at market value and consist of the following (in thousands):
|  | June 30, |
|  | 2017 |  |  | 2016 |
Marketable equity securities |  | $ | 718 |  |  | $ | — |
Investments at June 30, 2017 had an aggregate cost basis of $663,000 and gross unrealized gains of $55,000 and related tax expense of approximately $22,000 recorded in other comprehensive income. Inventory Inventory is stated at the lower of cost (first-in, first-out) or market and consists of the following (in thousands):
|  | June 30, |
|  | 2017 |  |  | 2016 |
Raw materials /purchased components |  | $ | 1,127 |  |  | $ | 1,462 |
Work in process |  |  | 747 |  |  |  | 818 |
Sub-assemblies /finished components |  |  | 1,018 |  |  |  | 1,010 |
Finished goods |  |  | 193 |  |  |  | 74 |
Total inventory |  | $ | 3,085 |  |  | $ | 3,364 |
Equipment and Leasehold Improvements Equipment and leasehold improvements consist of the following (in thousands):
|  | June 30, |
|  | 2017 |  |  | 2016 |
Office furnishings and fixtures |  | $ | 1,819 |  |  | $ | 1,761 |
Machinery and equipment |  |  | 5,289 |  |  |  | 4,796 |
Leasehold improvements |  |  | 2,119 |  |  |  | 2,088 |
Total |  |  | 9,227 |  |  |  | 8,645 |
Less: Accumulated depreciation and amortization |  |  | (7,798 | ) |  |  | (7,423 | )
|  | $ | 1,429 |  |  | $ | 1,222 |
Depreciation expense for the years ended June 30, 2017 and 2016 amounted to $505,000 and $486,000, respectively. During the current fiscal year, fully depreciated assets in the amount of approximately $130,000 were either retired or sold. In conjunction with the sale of the OMS division during the fiscal year ended June 30, 2017, assets with a cost basis of $410,000 and accumulated amortization totaling $346,000 have been eliminated from the June 30, 2016 balances above, consistent with the discontinued operations presentation previously described. Intangibles Intangibles consist of the following (in thousands):
|  | June 30, |
|  | 2017 |  |  | 2016 |
Capitalized software development costs |  | $ | — |  |  | $ | 73 |
Covenant not to compete |  |  | 52 |  |  |  | 52 |
Trade name |  |  | 50 |  |  |  | 50 |
Customer list and backlog |  |  | 167 |  |  |  | 316 |
Patent-related costs |  |  | 153 |  |  |  | 121 |
Total intangibles |  | $ | 422 |  |  | $ | 612 |
Less accumulated amortization |  |  | (102 | ) |  |  | (161 | )
|  | $ | 320 |  |  | $ | 451 |
Amortization expense for the years ended June 30, 2017 and 2016 amounted to $50,000 and $117,000 respectively. Capitalized software development costs relate to internally developed software, which was fully amortized during fiscal 2016 and both the software development costs and corresponding accumulated amortization were offset during the first quarter of fiscal 2017. Both the covenant not to compete and the customer list and backlog relate to assets acquired in conjunction with the business acquisitions described in Note 1 above and are being amortized over various periods not to exceed ten years. The customer backlog has been fully amortized and both the cost and related accumulated amortization have been offset during the current fiscal year. During the first quarter of fiscal 2017, we recognized an impairment charge for the remaining un-amortized customer list related to the Huber business in the amount of $113,000, as we do not expect there to be any significant future cash flows resulting from these customer relationships and have written-off the cost basis and accumulated amortization during the current fiscal year. The trade name relates exclusively to Fineline and has an indefinite life, subject to impairment loss assessment annually, or more frequently if certain conditions exist. Patent-related costs consist of legal fees incurred in connection with both patent applications and a patent issuance, and will be amortized over the estimated life of the product(s) that is or will be utilizing the technology, or expensed immediately in the event the patent office denies the issuance of the patent. Expected amortization expense for the next five fiscal years ending June 30, are as follows (in thousands):
|  | Amortization Expense |
Fiscal Year: |  |  |
2018 |  | $ | 48 |
2019 |  |  | 55 |
2020 |  |  | 51 |
2021 |  |  | 46 |
2022 |  |  | 36 |
Thereafter |  |  | 34 |
Total expected amortization |  | $ | 270 |
Accrued Liabilities Accrued liabilities consist of the following (in thousands):
|  | June 30, |
|  | 2017 |  |  | 2016 |
Warranty |  | $ | 159 |  |  | $ | 365 |
Payroll and related items |  |  | 417 |  |  |  | 443 |
Accrued bonuses |  |  | 390 |  |  |  | — |
Accrued legal and professional fees |  |  | 151 |  |  |  | 60 |
Deferred rent |  |  | 68 |  |  |  | 79 |
Accrued sales, use and excise taxes |  |  | 9 |  |  |  | 7 |
Accrued losses on development contracts |  |  | — |  |  |  | 28 |
Accrued inventory in transit |  |  | 52 |  |  |  | 11 |
Other |  |  | 98 |  |  |  | 83 |
|  | $ | 1,344 |  |  | $ | 1,076 |

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