Composition of Certain Financial Statement Items

12 Months Ended

Jun. 30, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Composition of Certain Financial Statement Items

4.           Composition of Certain Financial Statement Items

Inventory

Inventory is stated at the lower of cost (first-in, first-out) or market and consists of the following (in thousands): 

	June 30,
	2015		2014
Raw materials /purchased components	$	2,025	$	878
Work in process		1,030		525
Sub-assemblies /finished components		1,095		823
Finished goods		160		374
Total inventory	$	4,310	$	2,600

Investments

During the fiscal year ended June 30, 2015, we liquidated our investment portfolio to fund our working capital requirements, especially our inventory requirements, as we prepared to launch production of two new products. We recorded realized gains of $455,000 during fiscal 2015 upon the sale of our investments in marketable equity securities of publicly held companies.

Our investments at June 30, 2014 amounted to $1,058,000 which represented an aggregate cost basis of $857,000, gross unrealized gains aggregating $209,000 and unrealized losses of $7,000. During the fiscal year ended June 30, 2014, we sold certain of our investments in marketable equity securities of publicly held companies and recorded realized gains of $65,000.

Equipment and Leasehold Improvements

Equipment and leasehold improvements consist of the following (in thousands): 

	June 30,
	2015			2014
Office furnishings and fixtures	$	2,008		$	2,054
Machinery and equipment		4,803			4,574
Leasehold improvements		2,086			2,312
Total		8,897			8,940
Less: Accumulated depreciation and amortization		(7,427	)		(7,365	)
	$	1,470		$	1,575

Depreciation expense, which includes capital lease amortization, for the years ended June 30, 2015 and 2014 amounted to $534,000 and $527,000, respectively.

Intangibles

Intangibles consist of the following (in thousands): 

	June 30, 2015			June 30, 2014
Capitalized software development costs	$	73		$	37
Covenant not to compete		52			—
Trade name		54			—
Customer list and backlog		316			—
Patent-related costs		96			68
Total intangibles	$	591		$	105
Less accumulated amortization		(44	)		—
	$	547		$	105

Capitalized software development costs relate to internally developed software, which will be amortized over the estimated product life of the underlying product which was released for sale during the fourth quarter of fiscal 2015. Both the covenant not to compete and the customer list and backlog relate to assets acquired in conjunction with the business acquisitions more fully described in Note 3 above and will be amortized over various periods not to exceed ten years. The trade name relates exclusively to Fineline Molds and has an indefinite life, subject to impairment loss consideration if certain conditions exist. Patent-related costs consist of legal fees incurred in connection with patent applications, and will be amortized over the life of the applicable patent upon its issuance, 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):

Fiscal Year:	Amortization Expense
2016	$117
2017	53
2018	53
2019	53
2020	47
Total expected amortization	$323

Accrued Liabilities

Accrued liabilities consist of the following (in thousands): 

	June 30,
	2015		2014
Warranty	$	261	$	237
Payroll and related items		302		240
Accrued legal and professional fees		46		13
Accrued sales, use and excise taxes		36		8
Accrued losses on development contracts		385		468
Accrued inventory in transit		83		22
Other		89		102
	$	1,202	$	1,090

Accumulated Other Comprehensive Income

Accumulated other comprehensive income consists of the following (in thousands): 

	June 30,
	2015		2014
Unrealized gain on marketable equity securities	$	—	$	262
Less: Reclassification of gains included in net loss		—		(65	)
Unrealized gain on marketable securities, net	$	—	$	197