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K. Commitments and Contingencies
6 Months Ended
Dec. 31, 2016
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

Legal Proceedings

 

The Company is a defendant and counterclaimant in litigation involving its former subsidiary known as Alanco/TSI Prism, Inc. (“TSI”) and the purchaser of TSI’s assets, Black Creek Integrated Systems Corp. (“Black Creek”). 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 recorded an accrued liability of $128,300 for the judgment and had posted a bond with the court in conjunction with the Company’s appeal of the judgment. In May 2015, the State of Arizona Division One Court of Appeals vacated the trial court’s 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 court’s decision vacated the trial court’s attorney’s fees award and awarded TSI approximately $21,900 of its fees on appeal. At June 30, 2015, the Company reversed the accrual of $128,300 for the prior judgment. Under the court’s direction, the Company followed the dispute guidelines defined in the asset purchase agreement which resulted in an award to Black Creek of approximately $13,000. The Company has previously stipulated that it owed Black Creek approximately $9,600 for shared expenses incurred from 2010 - 2011. In October 2016, the court ruled on Black Creek’s attorney’s fees application and the Company’s answer to said application. The court granted Black Creek a fee award which, when combined with the judgment amount of approximately $22,600 plus interest, results in a potential liability to the Company of approximately $176,000 which has been accrued at December 31, 2016 and reported as a loss from discontinued operations in the six month period. The Company vehemently disagrees with Black Creek’s attorney’s fees claim and the Court ruling and intends to vigorously pursue an appeal of the judgment.

 

The Company may from time to time be involved in litigation arising from the normal course of business.  As of December 31, 2016, other than the litigation discussed above, there was no other such litigation pending deemed material by the Company.