View Filing Data

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Dec. 31, 2016	Feb. 01, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	USA TECHNOLOGIES INC
Entity Central Index Key	0000896429
Current Fiscal Year End Date	--06-30
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		40,327,675
Document Type	10-Q
Document Period End Date	Dec. 31, 2016
Amendment Flag	false
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Dec. 31, 2016	Jun. 30, 2016
Current assets:
Cash	$ 18,034	$ 19,272
Accounts receivable, less allowance for doubtful accounts of $2,546 and $2,814, respectively	6,796	4,899
Finance receivables, less allowance for credit losses of $29 and $0, respectively	1,442	3,588
Inventory, net	4,786	2,031
Prepaid expenses and other current assets	1,764	987
Deferred income taxes	2,271	2,271
Total current assets	35,093	33,048
Finance receivables, less current portion	3,956	3,718
Other assets	145	348
Property and equipment, net	9,433	9,765
Deferred income taxes	25,568	25,453
Intangibles, net	711	798
Goodwill	11,492	11,703
Total assets	86,398	84,833
Current liabilities:
Accounts payable	9,090	12,354
Accrued expenses	2,912	3,458
Line of credit, net	7,078	7,119
Current obligations under long-term debt	766	629
Income taxes payable	6	18
Warrant liabilities		3,739
Deferred gain from sale-leaseback transactions	470	860
Total current liabilities	20,322	28,177
Long-term liabilities:
Long-term debt, less current portion	1,394	1,576
Accrued expenses, less current portion	52	15
Deferred gain from sale-leaseback transactions, less current portion		40
Total long-term liabilities	1,446	1,631
Total liabilities	21,768	29,808
Commitments and contingencies (Note 11)
Shareholders' equity:
Preferred stock, no par value: Authorized shares- 1,800,000 Series A convertible preferred- Authorized shares- 900,000 Issued and outstanding shares- 445,063 with liquidation preference of $18,442 and $18,108, respectively	3,138	3,138
Common stock, no par value: Authorized shares- 640,000,000 Issued and outstanding shares- 40,321,941 and 37,783,444, respectively	245,230	233,394
Accumulated deficit	(183,738)	(181,507)
Total shareholders' equity	64,630	55,025
Total liabilities and shareholders' equity	$ 86,398	$ 84,833

Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Thousands	Dec. 31, 2016	Jun. 30, 2016
Allowance for uncollectible accounts receivable (in dollars)	$ 2,546	$ 2,814
Finance receivables, less allowance for credit losses	$ 29	$ 0
Preferred stock, no par value (in dollars per share)	$ 0	$ 0
Preferred stock, shares authorized	1,800,000	1,800,000
Common stock, no par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized	640,000,000	640,000,000
Common stock, shares issued	40,321,941	37,783,444
Common stock, shares outstanding	40,321,941	37,783,444
Series A Convertible
Preferred stock, shares authorized	900,000	900,000
Preferred stock, shares issued	445,063	445,063
Preferred stock, shares outstanding	445,063	445,063
Preferred stock, liquidation preference value (in dollars)	$ 18,442	$ 18,108

Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Revenues:
License and transaction fees	$ 16,639	$ 13,674	$ 33,004	$ 26,599
Equipment sales	5,117	4,829	10,340	8,504
Total revenues	21,756	18,503	43,344	35,103
Costs of sales/revenues:
Cost of services	11,389	9,067	22,632	17,772
Cost of equipment	4,033	3,953	8,211	6,801
Total costs of sales/revenues	15,422	13,020	30,843	24,573
Gross profit	6,334	5,483	12,501	10,530
Operating expenses:
Selling, general and administrative	5,793	4,762	12,702	9,558
Depreciation and amortization	307	127	515	266
Total operating expenses	6,100	4,889	13,217	9,824
Operating income (loss)	234	594	(716)	706
Other income (expense):
Interest income	200	20	273	71
Interest expense	(201)	(104)	(413)	(223)
Change in fair value of warrant liabilities		(1,230)	(1,490)	(887)
Total other income (expense), net	(1)	(1,314)	(1,630)	(1,039)
Income (loss) before income taxes	233	(720)	(2,346)	(333)
Benefit (provision) for income taxes		(154)	115	(181)
Net income (loss)	233	(874)	(2,231)	(514)
Cumulative preferred dividends			(334)	(334)
Net income (loss) applicable to common shares	$ 233	$ (874)	$ (2,565)	$ (848)
Net earnings (loss) per common share - basic (in dollars per share)	$ 0.01	$ (0.02)	$ (0.07)	$ (0.02)
Net earnings (loss) per common share - diluted (in dollars per share)	$ 0.01	$ (0.02)	$ (0.07)	$ (0.02)
Basic weighted average number of common shares outstanding (in shares)	40,308,934	35,909,933	39,398,469	35,879,164
Diluted weighted average number of common shares outstanding (in shares)	40,730,712	35,909,933	39,398,469	35,879,164

Consolidated Statements of Shareholders' Equity (Unaudited) - 6 months ended Dec. 31, 2016 - USD ($) $ in Thousands	Series A Convertible Preferred stock	Common Stock	Accumulated Deficit	Total
Balance at Jun. 30, 2016	$ 3,138	$ 233,394	$ (181,507)	$ 55,025
Balance (in shares) at Jun. 30, 2016	445,063	37,783,444
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Reclass of fair value of warrant liability upon exercise of warrants		$ 5,229		5,229
Exercise of warrants		$ 6,193		6,193
Exercise of warrants (in shares)		2,401,408
Stock based compensation 2013 Stock Incentive Plan		$ 194		194
Stock based compensation 2013 Stock Incentive Plan (in shares)		143,622
Stock based compensation 2014 Stock Option Incentive Plan		$ 95		95
Stock based compensation 2015 Equity Incentive Plan		156		156
Retirement of common stock		$ (31)		(31)
Retirement of common stock (in shares)		(6,533)
Net loss			(2,231)	(2,231)
Balance at Dec. 31, 2016	$ 3,138	$ 245,230	$ (183,738)	$ 64,630
Balance (in shares) at Dec. 31, 2016	445,063	40,321,941

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
OPERATING ACTIVITIES:
Net income (loss)	$ 233	$ (874)	$ (2,231)	$ (514)
Adjustments to reconcile net income (loss) to net cash provided/(used) by operating activities:
Charges incurred in connection with the vesting and issuance of common stock and common stock options for employee and director compensation	233	237	445	509
Gain on disposal of property and equipment	(31)	(41)	(31)	(42)
Non-cash interest	(79)		26
Bad debt expense	352	238	450	474
Depreciation	1,220	1,323	2,477	2,673
Amortization of intangible assets	43		87
Change in fair value of warrant liabilities		1,230	1,490	887
Deferred income taxes, net		154	(115)	181
Recognition of deferred gain from sale-leaseback transactions	(215)	(215)	(430)	(430)
Changes in operating assets and liabilities:
Accounts receivable	(1,309)	(448)	(2,347)	(409)
Finance receivables	2,125	214	2,119	(370)
Inventory	(467)	649	(2,689)	868
Prepaid expenses and other assets	(318)	(254)	(542)	(206)
Accounts payable	397	(1,623)	(3,266)	(2,667)
Accrued expenses	(1,061)	(13)	(574)	(15)
Income taxes payable	(1)	(70)	(12)	(70)
Net cash provided/(used) by operating activities	1,122	507	(5,143)	869
INVESTING ACTIVITIES:
Purchase and additions of property and equipment	(441)	(118)	(609)	(167)
Purchase of property for rental program	(693)		(1,335)
Proceeds from sale of property and equipment	61	101	61	105
Net cash used by investing activities	(1,073)	(17)	(1,883)	(62)
FINANCING ACTIVITIES:
Cash used for the retirement of common stock		(40)	(31)	(11)
Proceeds from exercise of common stock warrants			6,193
Proceeds (payments) from line of credit, net		3,000		3,000
Repayment of long-term debt	(213)	(233)	(374)	(361)
Net cash provided/(used) by financing activities	(213)	2,727	5,788	2,628
Net increase (decrease) in cash	(164)	3,217	(1,238)	3,435
Cash at beginning of period	18,198	11,592	19,272	11,374
Cash at end of period	18,034	14,809	18,034	14,809
Supplemental disclosures of cash flow information:
Interest paid in cash	382	107	469	213
Depreciation expense allocated to cost of services	967	1,186	2,050	2,385
Reclass of rental program property to inventory, net	(55)	777	(66)	498
Prepaid items financed with debt			54	103
Equipment and property acquired under capital lease	18		272	35
Disposal of property and equipment	$ 570	$ 238	$ 570	$ 337

BUSINESS	6 Months Ended
BUSINESS	Dec. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BUSINESS	USA Technologies, Inc. Notes to Consolidated Financial Statements (Unaudited) 1. BUSINESS USA Technologies, Inc. (the “Company”, “We”, “USAT”, or “Our”) was incorporated in the Commonwealth of Pennsylvania in January 1992. We are a provider of technology-enabled solutions and value-added services that facilitate electronic payment transactions primarily within the unattended Point of Sale (“POS”) market. We are a leading provider in the small ticket, beverage and food vending industry and are expanding our solutions and services to other unattended market segments, such as amusement, commercial laundry, kiosk and others. Since our founding, we have designed and marketed systems and solutions that facilitate electronic payment options, as well as telemetry Internet of Things (“IoT”) and machine-to-machine (“M2M”) services, which include the ability to remotely monitor, control, and report on the results of distributed assets containing our electronic payment solutions. Historically, these distributed assets have relied on cash for payment in the form of coins or bills, whereas, our systems allow them to accept cashless payments such as through the use of credit or debit cards or other emerging contactless forms, such as mobile payment. INTERIM FINANCIAL INFORMATION The accompanying unaudited consolidated financial statements of USA Technologies, Inc. have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements and therefore should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended June 30, 2016. In the opinion of management, all adjustments considered necessary for a fair presentation, consisting of normal recurring adjustments, have been included. Operating results for the three and six-month periods ended December 31, 2016 are not necessarily indicative of the results that may be expected for the year ending June 30, 2017. The balance sheet at June 30, 2016 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.

ACCOUNTING POLICIES

6 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

ACCOUNTING POLICIES

2. ACCOUNTING POLICIES

CONSOLIDATION

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

USE OF ESTIMATES

The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

CASH

The Company maintains its cash in bank deposit accounts, which may exceed federally insured limits at times.

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS

Accounts receivable include amounts due to the Company for sales of equipment, other amounts due from customers, merchant service receivables, and unbilled amounts due from customers, net of the allowance for uncollectible accounts.

The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments, including from a shortfall in the customer transaction fund flow from which the Company would normally collect amounts due.

The allowance is determined through an analysis of various factors including the aging of the accounts receivable, the strength of the relationship with the customer, the capacity of the customer transaction fund flow to satisfy the amount due from the customer, an assessment of collection costs and other factors. The allowance for doubtful accounts receivable is management’s best estimate as of the respective reporting date. The Company writes off accounts receivable against the allowance when management determines the balance is uncollectible and the Company ceases collection efforts. Management believes that the allowance recorded is adequate to provide for its estimated credit losses.

FINANCE RECEIVABLES

The Company offers extended payment terms to certain customers for equipment sales under its Quick Start Program. In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification® (“ASC”) Topic 840, “Leases”, agreements under the Quick Start Program qualify for sales-type lease accounting. Accordingly, the future minimum lease payments are classified as finance receivables in the Company’s consolidated balance sheets. Finance receivables for Quick Start leases are generally for a sixty month term. Finance receivables are carried at their contractual amount and charged off against the allowance for credit losses when management determines that recovery is unlikely and the Company ceases collection efforts. The Company recognizes a portion of the note or lease payments as interest income in the accompanying consolidated financial statements based on the effective interest rate method.

INVENTORY, Net

Inventory consists of finished goods and packaging materials. The Company’s inventory is stated at the lower of cost (average cost basis) or market.

PROPERTY AND EQUIPMENT, Net

Property and equipment are recorded at cost. Property and equipment are depreciated on the straight-line basis over the estimated useful lives of the related assets. Leasehold improvements are amortized on the straight-line basis over the lesser of the estimated useful life of the asset or the respective lease term.

GOODWILL AND INTANGIBLE ASSETS

The Company’s intangible assets include goodwill, non-compete agreements, brand, developed technology and customer relationships.

Goodwill represents the excess of cost over fair value of the net assets purchased in acquisitions. The Company accounts for goodwill in accordance with (“ASC”) 350, “Intangibles – Goodwill and Other”. Under (“ASC”) 350, goodwill is not amortized to earnings, but instead is subject to periodic testing for impairment. Testing for impairment is to be done at least annually and at other times if events or circumstances arise that indicate that impairment may have occurred. The Company has selected April 1 as its annual test date.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The (“FASB”) issued Accounting Standards Update (“ASU”) 2010-06, “Fair Value Measurements and Disclosures (“Topic 820”): Improving Disclosures about Fair Value Measurements.” (“ASU”) 2010-06 amends certain disclosure requirements of Subtopic 820-10. This (“ASU”) provides additional disclosures for transfers in and out of Levels 1 and 2 and for activity in Level 3. This (“ASU”) also clarifies certain other existing disclosure requirements including level of desegregation and disclosures around inputs and valuation techniques.

The Company’s financial assets and liabilities are accounted for in accordance with (“ASC”) 820 “Fair Value Measurement.” Under (“ASC”) 820 the Company uses inputs from the three levels of the fair value hierarchy to measure its financial assets and liabilities. The three levels are as follows:

Level 1- Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2- Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

Level 3- Inputs are unobservable and reflect the Company’s assumptions that market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available.

The Company’s financial instruments, principally accounts receivable, short-term finance receivables, prepaid expenses and other assets, accounts payable and accrued expenses, are carried at cost which approximates fair value due to the short-term maturity of these instruments. The fair value of the Company’s obligations under its long-term debt agreements and the long-term portion of its finance receivables approximates their carrying value as such instruments are at market rates currently available to the Company.

REVENUE RECOGNITION

Revenue from the sale or QuickStart lease of equipment is recognized on the terms of freight-on-board shipping point. Activation fee revenue, if applicable, is recognized when the Company’s cashless payment device is initially activated for use on the Company network. Transaction processing revenue is recognized upon the usage of the Company’s cashless payment and control network. License fees for access to the Company’s devices and network services are recognized on a monthly basis. In all cases, revenue is only recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed and determinable, and collection of the resulting receivable is reasonably assured. The Company estimates an allowance for product returns at the date of sale and license and transaction fee refunds on a monthly basis. The company makes an adjustment for rebates and product returns.

ePort hardware is available to customers under the QuickStart program pursuant to which the customer would enter into a five-year non-cancelable lease with either the Company or a third-party financing company for the devices. The Company utilizes its best estimate of selling price when calculating the revenue to be recorded under these leases. The leases qualify for sales type lease accounting. Accordingly, the Company recognizes a portion of lease payments as interest income for leases not placed with a third-party financing company. At the end of the lease period, the customer would have the option to purchase the device at its residual value.

PREFERRED STOCK

The Company adopted the provisions of (“ASU”) 2014-16 in determining whether the Company’s Series A Convertible Preferred Stock (“preferred stock”) is more equity-like or debt-like, and whether derivatives embedded in the preferred stock, if any, must be bifurcated and accounted for separately from its host contract. Based upon management’s review of the preferred stock features, management has determined that the preferred stock is more equity-like and that the embedded derivatives do not require bifurcation. As such, the adoption of this standard did not have a material impact on the company's financial statements.

ACCOUNTING FOR EQUITY AWARDS

In accordance with the (“ASC”) Topic 718, the cost of employee services received in exchange for an award of equity instruments is based on the grant-date fair value of the award and allocated over the vesting period of the award.

INCOME TAXES

The Company follows the (“ASC”) Topic 740, “Accounting for Uncertainty in Income Taxes”, which provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in the consolidated financial statements. Accordingly, tax positions must meet a “more-likely-than-not” recognition threshold at the effective date to be recognized upon the adoption of (“ASC”) Topic 740 and in subsequent periods.

Income taxes are computed using the asset and liability method of accounting. Under the asset and liability method, a deferred tax asset or liability is recognized for estimated future tax effects attributable to temporary differences and carryforwards. The measurement of deferred income tax assets is adjusted by a valuation allowance, if necessary, to recognize future tax benefits only to the extent that, based on available evidence, it is more likely than not such benefits will be realized. The Company recognizes interest and penalties, if any, related to uncertain tax positions in selling, general and administrative expenses. No interest or penalties related to uncertain tax positions were accrued or incurred during the three and six months ended December 31, 2016 and 2015.

EARNINGS (LOSS) PER COMMON SHARE

Basic earnings (loss) per share are calculated by dividing income (loss) applicable to common shares by the weighted average common shares outstanding for the period. Diluted earnings per share are calculated by dividing income (loss) applicable to common shares by the weighted average common shares outstanding for the period plus the effect of potential common shares unless such effect is anti-dilutive.

SOFTWARE DEVELOPMENT COSTS

The Company follows the (“ASC”) Topic 350-40, “Accounting for the Cost of Computer Software Developed or obtained for Internal Use”, which provides for guidance for what costs can be capitalized for internal use.

Capitalized costs for internal-use software are included in fixed assets in the consolidated balance sheet and are amortized over three years. Costs incurred during the preliminary project along with post-implementation stages of internal use computer software development and costs incurred to maintain existing product offerings are expensed as incurred. The capitalization and ongoing assessment of recoverability of development costs require considerable judgment by management with respect to certain external factors, including, but not limited to, technological and economic feasibility and estimated economic life.

RECENT ACCOUNTING PRONOUNCEMENTS

The Company is evaluating whether the effects of the following recent accounting will have a material effect on the Company’s consolidated financial position, results of operations or cash flows.

In October 2016, the (“FASB”) issued (“ASU”) 2016-19 – “Technical Corrections and Improvements”.

In January 2017, the (“FASB”) issued (“ASU”) 2017-04 – “Intangibles-Goodwill and Other (Topic 350): Simplifying the test for Goodwill Impairment.

RECLASSIFICATION

Commencing with the June 30, 2016 financial statements, the Company changed the manner in which it presents certain unfunded finance receivables in its consolidated balance sheets and the related statements of cash flows. These finance receivables have yet to be and are expected to be funded by a third-party funding source. The previous accounting classification recorded these amounts as accounts receivable in the consolidated balance sheets and the related statements of cash flows. The impact of this change on the Statement of Cash Flows is as follows:


	Three months ended				Six months ended
	December 31, 2015				December 31, 2015
	Accounts		Finance		Accounts			Finance
	Receivable		Receivables			Receivable		Receivables
Per Original Statement of Cash Flows	$	(767)	$	533	$	(1,480)	$	701

Impact from the reclassification		319		(319)		1,071		(1,071)
Adjusted Statement of Cash Flows	$	(448)	$	214	$	(409)	$	(370)

EARNINGS PER SHARE CALCULATION

6 Months Ended

Dec. 31, 2016

Earnings Per Share [Abstract]

EARNINGS PER SHARE CALCULATION

3. EARNINGS PER SHARE CALCULATION

The calculation of basic earnings per share (“eps”) and diluted earnings per share are presented below:


	Three months ended				Six months ended
	December 31,				December 31,
($ in thousands, except per share data)	2016		2015		2016		2015

Numerator for basic earnings per share - Net income (loss) available to common shareholders	$	233	$	(874)	$	(2,565)	$	(848)
Gain recorded for reduction in fair value of warrants*		—		—		—		—
Numerator for diluted earnings per share - Net income (loss) available to common shareholders	$	233	$	(874)	$	(2,565)	$	(848)

Denominator for basic earnings per share - Weighted average shares outstanding		40,308,934		35,909,933		39,398,469		35,879,164
Effect of dilutive potential common shares*		421,778		—		—		—
Denominator for diluted earnings per share - Adjusted weighted average shares outstanding		40,730,712		35,909,933		39,398,469		35,879,164

Basic earnings (loss) per share	$	0.01	$	(0.02)	$	(0.07)	$	(0.02)
Diluted earnings (loss) per share	$	0.01	$	(0.02)	$	(0.07)	$	(0.02)

* No adjustment necessary for the three months ended December 31, 2015 and the six months ended December 31, 2016 and 2015 as the effects would be anti-dilutive.

FINANCE RECEIVABLES

6 Months Ended

Dec. 31, 2016

Receivables [Abstract]

FINANCE RECEIVABLES

4. FINANCE RECEIVABLES

Finance receivables consist of the following:


	December 31,		June 30,
($ in thousands)	2016		2016
	(unaudited)
Total finance receivables	$	5,398	$	7,306
Less current portion		1,442		3,588
Non-current portion of finance receivables	$	3,956	$	3,718

The Company collects monthly payments of its finance receivables from the customers’ transaction fund flow. Accordingly, as the fund flow from these customers’ transactions is generally sufficient to satisfy the amount due to the Company, the risk of loss is considered low and the Company has provided for an allowance for credit losses for finance receivables of $29 thousand and $0 as of December 31, 2016 and June 30, 2016, respectively. The aggregate amount of unrealized losses on Finance Receivables was $33 thousand and $0 as of December 31, 2016 and June 30, 2016, respectively. The number of Finance Receivables that are in a loss position is twelve and zero as of December 31, 2016 and June 30, 2016 respectively.

Credit Quality Indicators


Credit risk profile based on payment activity:	December 31,		June 30,
($ in thousands)	2016		2016
	(unaudited)
Performing	$	5,309	$	7,174
Nonperforming		89		132
Total	$	5,398	$	7,306

Age Analysis of Past Due Finance Receivables

As of December 31, 2016


	31 – 60		61 – 90		Greater than						Total
	Days Past		Days Past		90 Days Past		Total Past				Finance
($ in thousands)	Due		Due		Due		Due		Current		Receivables
QuickStart Leases	$	5	$	5	$	46	$	56	$	5,342	$	5,398

Age Analysis of Past Due Finance Receivables

As of June 30, 2016


	31 – 60		61 – 90		Greater than						Total
	Days Past		Days Past		90 Days Past		Total Past				Finance
($ in thousands)	Due		Due		Due		Due		Current		Receivables
QuickStart Leases	$	98	$	31	$	3	$	132	$	7,174	$	7,306

GOODWILL AND INTANGIBLE ASSETS

6 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

5. GOODWILL AND INTANGIBLES

On January 15, 2016, the Company executed an Asset Purchase Agreement with VendScreen, Inc (“VendScreen”) a Portland, Oregon based developer of vending industry cashless payment technology, by which it acquired substantially all of VendScreen’s assets and assumed specified liabilities, for a cash payment of $5.625 million and the corresponding goodwill recorded was $4.040 million. In December 2016, the company finalized the opening balance sheet of VendScreen and recorded a reduction of goodwill for $211 thousand and increase finance receivables for the same amount. The final goodwill amount related to VendScreen opening balance sheet is $3.829 million.

The following table summarizes the final purchase price allocation to reflect the fair values of the assets acquired and liabilities assumed at the date of acquisition.



Consideration:
Fair value of total consideration paid in cash	$	5,625

Acquisition related costs:	$	842

Recognized amounts of identifiable assets acquired and liabilities assumed:

Financial Assets:
Accounts Receivable		3
Finance Receivables		839
Other Current Assets		20
Deferred Income Taxes		18
		880

Property, Plant & Equipment		81

Identifiable Intangible Assets:
Developed Technology		639
Customer Relationships		149
Brand		95
Noncompete Agreement		2
Fair Value of Intangible Assets		885

Financial Liabilities
Accrued Liabilities	$	(50)

Total identifiable net assets	$	1,796

Goodwill	$	3,829

Total Fair Value	$	5,625

During the three and six months ended December 31, 2016, there was $43 thousand and $87 thousand, respectively, of amortization expense relating to acquired intangible assets. There was no amortization expense relating to acquired intangible assets during the three and six months ended December 31, 2015. Intangible asset balances consisted of the following:


	Balance		Additions/				Balance		Amortization
($ in thousands)	June 30, 2016		Adjustments		Amortization		December 31, 2016		Period
Intangible Assets:
Non-compete agreements	$	1	$	—	$	—	$	1	2 years
Brand		79		—		(16)		63	3 years
Developed technology		576		—		(63)		513	5 years
Customer relationships		142		—		(8)		134	10 years
Total Intangible Assets	$	798	$	—	$	(87)	$	711

Goodwill	$	11,703	$	(211)	$	—	$	11,492	Indefinite

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

LINE OF CREDIT	6 Months Ended
LINE OF CREDIT	Dec. 31, 2016
Line Of Credit Facility [Abstract]
LINE OF CREDIT	6. LINE OF CREDIT During the fiscal year ended June 30, 2016, the Company entered into a Loan and Security Agreement and other ancillary documents (as amended, the “Heritage Loan Documents”) with Heritage Bank of Commerce (“Heritage Bank”), providing for a secured asset-based revolving line of credit in an amount of up to $12.0 million (the “Heritage Line of Credit”) at an interest rate calculated based on the Federal Reserves’ Prime, which was 3.75% at 12/31/2016, plus 2.25%. The Heritage Line of Credit and the Company’s obligations under the Heritage Loan Documents are secured by substantially all of the Company’s assets, including its intellectual property. The maturity date of the Heritage Line of Credit is March 29, 2017. At the time of maturity, all outstanding advances under the Heritage Line of Credit as well as any unpaid interest are due and payable. Prior to maturity of the Heritage Line of Credit, the Company may prepay amounts due under the Heritage Line of Credit without penalty, and subject to the terms of the Heritage Loan Documents, may re-borrow any such amounts. The Company and Heritage Bank entered into a Second Amendment as of September 30, 2016 to the Loan and Security Agreement. The Heritage Loan Documents contain customary representations and warranties and affirmative and negative covenants applicable to the Company. The Heritage Loan Documents also require the Company to achieve a minimum Adjusted EBITDA, as defined in the Heritage Loan Documents, measured on a quarterly basis; that the number of the Company’s connections as of the end of each fiscal quarter shall not decrease below a specified number or by more than five percent as compared to the number of the Company’s connections as of the end of the immediately prior fiscal quarter; and that the Company shall maintain a minimum balance of unrestricted cash at the Bank. The balance due on the Heritage line of credit was $7.1 million at December 31, 2016 and June 30, 2016. As of December 31, 2016, $4.9 million was available under our line of credit. Interest expense on the line of credit was approximately $200 thousand and $100 thousand for the three and six months ended December 31, 2016, respectively.

LONG-TERM DEBT	6 Months Ended
LONG-TERM DEBT	Dec. 31, 2016
Debt Disclosure [Abstract]
LONG-TERM DEBT	7. LONG-TERM DEBT The Company periodically enters into capital lease obligations to finance certain office, network equipment and related support for use in its daily operations. During the six-month period ended December 31, 2016 the Company commenced capital lease obligations of $326 thousand. The obligations are due in two to five years in monthly or quarterly installments of $1 thousand to $21 thousand. The value of the acquired equipment is included in property and equipment and amortized accordingly.

FAIR VALUE OF FINANCIAL INSTRUMENTS

6 Months Ended

Dec. 31, 2016

Fair Value Disclosures [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

8. FAIR VALUE OF FINANCIAL INSTRUMENTS

As of June 30, 2016, the fair values of the Company’s Level 3 financial instrument totaled $3.7 million for 2.2 million warrants. The Level 3 financial instrument consist of common stock warrants issued by the Company in March 2011, which include features requiring liability treatment of the warrants. The fair value of warrants issued in March 2011 to purchase shares of the Company’s common stock is based on valuations performed by an independent third-party valuation firm. The fair value was determined using proprietary valuation models using the quality of the underlying securities of the warrants, restrictions on the warrants and security underlying the warrants, time restrictions and precedent sale transactions completed in the secondary market or in other private transactions. During the six months ended December 31, 2016 all of the aforementioned warrants were exercised and the then-fair value warrant liability was reclassified as Common Stock.

The following table summarizes the changes in the Company’s Level 3 financial instruments for the three and six months ended December 31, 2016 and 2015.


	Three months ended				Six months ended
	December 31,				December 31,
($ in thousands)	2016		2015		2016		2015
Beginning balance	$	—	$	(635)	$	(3,739)	$	(978)
Increase due to change in fair value of warrant liabilities		—		(1,230)		(1,490)		(887)
Reclass of fair value of warranty liability to common stock upon exercise of warrants		—		—		5,229		—
Ending balance	$	—	$	(1,865)	$	—	$	(1,865)

There were no transfers of assets or liabilities between level 1, level 2, or level 3 during the three and six months ended December 31, 2016 and December 31, 2015. As of December 31, 2016 and June 30, 2016, the Company held no Level 1 or Level 2 financial instruments.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

INCOME TAXES	6 Months Ended
INCOME TAXES	Dec. 31, 2016
Income Tax Disclosure [Abstract]
INCOME TAXES	9. INCOME TAXES For the three and six months ended December 31, 2016, income tax benefits of $0 and $0.1 million, respectively, (substantially all deferred income taxes) were recorded. The benefits are based upon income (loss) before income taxes using an estimated annual effective income tax rate of 30% for the fiscal year ending June 30, 2017. However, such benefits actually calculated have been limited to $0.1 million pending the materialization of additional income before income taxes resulting in an increase of $0.03 million in valuation allowances for the calculated additional benefits. The benefits for the six months ended December 31, 2016 were reduced by a provision for the tax effect of the change in the fair value of warrant liabilities which was treated discretely. All of those warrants were exercised as of September 30, 2016. For the three and six months ended December 31, 2015, income tax provisions of $0.2 million were recorded (substantially all deferred income taxes). The provisions consist of the tax effect of the change in the fair value of warrant liabilities which was treated discreetly offset by a tax benefit based upon loss before provision before income taxes using an estimated annual effective income tax rate of 41% for the fiscal year ending June 30, 2016.

EQUITY

6 Months Ended

Dec. 31, 2016

Equity [Abstract]

EQUITY

10. EQUITY

WARRANTS

During the three months ended December 31, 2016, 24,733 warrants were exercised at $2.10 per share in a cashless exercise. There was no warrant activity during the three months ended December 31, 2015. During the six months ended December 31, 2016, 2,376,675 warrants were exercised at $2.6058 per share yielding proceeds of $6.2 million, and 24,733 warrants were exercised at $2.10 per share in a cashless exercise. The following table summarizes warrant activity for the three and six months ended December 31, 2016 and 2015:


	Three months ended		Six months ended
	December 31,		December 31,
	2016	2015	2016	2015
Beginning balance	68,978	4,298,000	2,445,653	4,309,000
Issued	—	—	—	—
Exercised	(24,733)	—	(2,401,408)	(11,000)
Expired	—	—	—	—
Cancelled	(20,267)		(20,267)
Ending balance	23,978	4,298,000	23,978	4,298,000

STOCK OPTIONS

The Company estimates the grant date fair value of the stock options it grants using a Black-Scholes valuation model. The Company’s assumption for expected volatility is based on its historical volatility data related to market trading of its own common stock. The Company bases its assumptions for expected life of the new stock option grants on the life of the option granted, and if relevant, its analysis of the historical exercise patterns of its stock options. The dividend yield assumption is based on dividends expected to be paid over the expected life of the stock option. The risk-free interest rate assumption is determined by using the U.S. Treasury rates of the same period as the expected option term of each stock option.

In August 2016 stock options were awarded to purchase up to 20,080 shares of common stock at an exercise price of $4.98 per share. The options vest on August 31, 2017, and expire if not exercised prior to August 31, 2023. The options are intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended. The fair value of options granted during the three and six months ended December 31, 2016 and 2015 was estimated using the following weighted average assumptions:


	Six months ended
	December 31,
	2016			2015
Expected volatility		50	%		63-66	%
Expected life		4 years			4-4.5 years
Expected dividends		—	%		—	%
Risk-free interest rate		1.06	%		1.34-1.49	%
Number of options granted		20,080			119,586
Weighted average exercise price	$	4.98		$	3.38
Weighted average grant date fair value	$	1.98		$	1.77

Stock based compensation related to stock options for the three months ended December 31, 2016 and December 31, 2015 was $47 thousand and $92 thousand, respectively and $95 thousand and $207 thousand, respectively for the six months ended December 31, 2016 and December 31, 2015.

COMMON STOCK

On July 1, 2016 $40 thousand of stock grants were awarded to each non-employee Director based on the prior 30-day average closing price of the Company’s Common Stock, for a total of 56,784 shares. The shares vest as follows: 18,960 on 07/01/2017, 18,960 on 07/01/2018 and 18,954 on 07/01/2019. The total expense recognized for these grants during the three and six months ended December 31, 2016 was $37 thousand and $73 thousand.

During the six months ended December 31, 2016, the Company awarded an aggregate of 78,711 shares to its Chief Executive Officer and Chief Services Officer under its fiscal year 2016 long term stock incentive plan and an aggregate of 6,254 shares to three non-employee Directors in satisfaction of board fees. During the six-month period, the Chief Executive Officer cancelled 6,533 shares of Common Stock awarded to him under the 2016 fiscal year long term stock incentive plan in satisfaction of $31 thousand of related payroll obligations.

During the six months ended December 31, 2016, the Company issued an aggregate of 2,401,408 shares upon the exercise of outstanding warrants.

LTI PLANS

The Board approved the Fiscal Year 2017 Long-Term Stock Incentive Plan (the “2017 LTI Stock Plan”) which provides that executive officers would be awarded shares of common stock of the Company in the event that certain metrics relating to the Company’s 2017 fiscal year would result in specified ranges of year-over-year percentage growth. The metrics are total number of connections as of June 30, 2017 as compared to total number of connections as of June 30, 2016 (50% weighting) and adjusted EBITDA earned during the 2017 fiscal year as compared to the adjusted EBITDA earned during the 2016 fiscal year (50% weighting).

If none of the minimum threshold year-over-year percentage target goals are achieved, the executive officers would not be awarded any shares. If all of the year-over-year percentage target goals are achieved, the executive officers would be awarded shares having the following value: Chief Executive Officer (“CEO”) - $675,000 (150% of base salary); and Chief Services Officer (“CSO”) - $250,000 (100% of base salary). If all of the maximum distinguished year-over-year percentage target goals are achieved, the executive officers would be awarded shares having the following value: CEO - $1,012,500 (225% of base salary); and CSO - $375,000 (150% of base salary). Assuming the minimum threshold year-over-year percentage target goal would be achieved for a particular metric, the number of shares to be awarded for that metric would be determined on a pro rata basis, provided that the award would not exceed the maximum distinguished award for that metric. The shares awarded under the 2017 LTI Stock Plan would vest as follows: one-third at the time of issuance; one-third on June 30, 2018; and one-third on June 30, 2019.

The Company had long-term stock incentive plans (“LTI”) in prior fiscal years for its then executive officers. Stock based compensation related to the LTI plans was as follows in the three and six months ended December 31, 2016 and 2015:


	Three months ended				Six months ended
	December 31,				December 31,
($ in thousands, except per share data)	2016		2015		2016		2015
FY17 LTI Plan	$	85	$	—	$	155	$	—
FY16 LTI Plan		23		25		50		110
FY15 LTI Plan		3		26		3		39
FY14 LTI Plan		—		5		—		8
Total	$	111	$	56	$	208	$	157

COMMITMENTS AND CONTINGENCIES	6 Months Ended
COMMITMENTS AND CONTINGENCIES	Dec. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	11. COMMITMENTS AND CONTINGENCIES In the six months ended December 31, 2016 the Company entered into a lease agreement for its operations in Portland, Oregon, which commenced October 1, 2016. The new location consists of 5,362 square feet and will expire in December 2019. The lease includes monthly rental payments of $11 thousand. The straight-line rent expense for this lease is $11 thousand per month. From time to time, the Company is involved in various legal proceedings arising during the normal course of business which, in the opinion of the management of the Company, will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.

ACCOUNTING POLICIES (Policies)

6 Months Ended

Dec. 31, 2016

Business Description And Accounting Policies [Abstract]

CONSOLIDATION

USE OF ESTIMATES

CASH

The Company maintains its cash in bank deposit accounts, which may exceed federally insured limits at times.

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS

FINANCE RECEIVABLES

INVENTORY, Net

Inventory consists of finished goods and packaging materials. The Company’s inventory is stated at the lower of cost (average cost basis) or market.

PROPERTY AND EQUIPMENT, Net

GOODWILL AND INTANGIBLE ASSETS

The Company’s intangible assets include goodwill, non-compete agreements, brand, developed technology and customer relationships.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Level 1- Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

REVENUE RECOGNITION

PREFERRED STOCK

ACCOUNTING FOR EQUITY AWARDS

INCOME TAXES

EARNINGS (LOSS) PER COMMON SHARE

SOFTWARE DEVELOPMENT COSTS

RECENT ACCOUNTING PRONOUNCEMENTS

The Company is evaluating whether the effects of the following recent accounting will have a material effect on the Company’s consolidated financial position, results of operations or cash flows.

In October 2016, the (“FASB”) issued (“ASU”) 2016-19 – “Technical Corrections and Improvements”.

In January 2017, the (“FASB”) issued (“ASU”) 2017-04 – “Intangibles-Goodwill and Other (Topic 350): Simplifying the test for Goodwill Impairment.

RECLASSIFICATION


	Three months ended				Six months ended
	December 31, 2015				December 31, 2015
	Accounts		Finance		Accounts			Finance
	Receivable		Receivables			Receivable		Receivables
Per Original Statement of Cash Flows	$	(767)	$	533	$	(1,480)	$	701

Impact from the reclassification		319		(319)		1,071		(1,071)
Adjusted Statement of Cash Flows	$	(448)	$	214	$	(409)	$	(370)

ACCOUNTING POLICIES (Tables)

6 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

Schedule of amounts recorded as accounts receivable in the consolidated balance sheets


	Three months ended				Six months ended
	December 31, 2015				December 31, 2015
	Accounts		Finance		Accounts			Finance
	Receivable		Receivables			Receivable		Receivables
Per Original Statement of Cash Flows	$	(767)	$	533	$	(1,480)	$	701

Impact from the reclassification		319		(319)		1,071		(1,071)
Adjusted Statement of Cash Flows	$	(448)	$	214	$	(409)	$	(370)

EARNINGS PER SHARE CALCULATION (Tables)

6 Months Ended

Dec. 31, 2016

Earnings Per Share [Abstract]

Schedule of basic earnings per share and diluted earnings per share


	Three months ended				Six months ended
	December 31,				December 31,
($ in thousands, except per share data)	2016		2015		2016		2015

Numerator for basic earnings per share - Net income (loss) available to common shareholders	$	233	$	(874)	$	(2,565)	$	(848)
Gain recorded for reduction in fair value of warrants*		—		—		—		—
Numerator for diluted earnings per share - Net income (loss) available to common shareholders	$	233	$	(874)	$	(2,565)	$	(848)

Denominator for basic earnings per share - Weighted average shares outstanding		40,308,934		35,909,933		39,398,469		35,879,164
Effect of dilutive potential common shares*		421,778		—		—		—
Denominator for diluted earnings per share - Adjusted weighted average shares outstanding		40,730,712		35,909,933		39,398,469		35,879,164

Basic earnings (loss) per share	$	0.01	$	(0.02)	$	(0.07)	$	(0.02)
Diluted earnings (loss) per share	$	0.01	$	(0.02)	$	(0.07)	$	(0.02)

FINANCE RECEIVABLES (Tables)

6 Months Ended

Dec. 31, 2016

Receivables [Abstract]

Schedule of finance receivables


	December 31,		June 30,
($ in thousands)	2016		2016
	(unaudited)
Total finance receivables	$	5,398	$	7,306
Less current portion		1,442		3,588
Non-current portion of finance receivables	$	3,956	$	3,718

Schedule of credit quality indicators

Credit Quality Indicators


Credit risk profile based on payment activity:	December 31,		June 30,
($ in thousands)	2016		2016
	(unaudited)
Performing	$	5,309	$	7,174
Nonperforming		89		132
Total	$	5,398	$	7,306

Schedule of age analysis of past due finance receivables

Age Analysis of Past Due Finance Receivables

As of December 31, 2016


	31 – 60		61 – 90		Greater than						Total
	Days Past		Days Past		90 Days Past		Total Past				Finance
($ in thousands)	Due		Due		Due		Due		Current		Receivables
QuickStart Leases	$	5	$	5	$	46	$	56	$	5,342	$	5,398

Age Analysis of Past Due Finance Receivables

As of June 30, 2016


	31 – 60		61 – 90		Greater than						Total
	Days Past		Days Past		90 Days Past		Total Past				Finance
($ in thousands)	Due		Due		Due		Due		Current		Receivables
QuickStart Leases	$	98	$	31	$	3	$	132	$	7,174	$	7,306

GOODWILL AND INTANGIBLE ASSETS (Tables)

6 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of final purchase price allocation



Consideration:
Fair value of total consideration paid in cash	$	5,625

Acquisition related costs:	$	842

Recognized amounts of identifiable assets acquired and liabilities assumed:

Financial Assets:
Accounts Receivable		3
Finance Receivables		839
Other Current Assets		20
Deferred Income Taxes		18
		880

Property, Plant & Equipment		81

Identifiable Intangible Assets:
Developed Technology		639
Customer Relationships		149
Brand		95
Noncompete Agreement		2
Fair Value of Intangible Assets		885

Financial Liabilities
Accrued Liabilities	$	(50)

Total identifiable net assets	$	1,796

Goodwill	$	3,829

Total Fair Value	$	5,625

Schedule of intangible asset balances


	Balance		Additions/				Balance		Amortization
($ in thousands)	June 30, 2016		Adjustments		Amortization		December 31, 2016		Period
Intangible Assets:
Non-compete agreements	$	1	$	—	$	—	$	1	2 years
Brand		79		—		(16)		63	3 years
Developed technology		576		—		(63)		513	5 years
Customer relationships		142		—		(8)		134	10 years
Total Intangible Assets	$	798	$	—	$	(87)	$	711

Goodwill	$	11,703	$	(211)	$	—	$	11,492	Indefinite

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Dec. 31, 2016

Fair Value Disclosures [Abstract]

Schedule of changes in fair value of the company's level 3 financial instruments


	Three months ended				Six months ended
	December 31,				December 31,
($ in thousands)	2016		2015		2016		2015
Beginning balance	$	—	$	(635)	$	(3,739)	$	(978)
Increase due to change in fair value of warrant liabilities		—		(1,230)		(1,490)		(887)
Reclass of fair value of warranty liability to common stock upon exercise of warrants		—		—		5,229		—
Ending balance	$	—	$	(1,865)	$	—	$	(1,865)

EQUITY (Tables)

6 Months Ended

Dec. 31, 2016

Equity [Abstract]

Schedule of warrant activity


	Three months ended		Six months ended
	December 31,		December 31,
	2016	2015	2016	2015
Beginning balance	68,978	4,298,000	2,445,653	4,309,000
Issued	—	—	—	—
Exercised	(24,733)	—	(2,401,408)	(11,000)
Expired	—	—	—	—
Cancelled	(20,267)		(20,267)
Ending balance	23,978	4,298,000	23,978	4,298,000

Schedule of stock option granted weighted average assumptions


	Six months ended
	December 31,
	2016			2015
Expected volatility		50	%		63-66	%
Expected life		4 years			4-4.5 years
Expected dividends		—	%		—	%
Risk-free interest rate		1.06	%		1.34-1.49	%
Number of options granted		20,080			119,586
Weighted average exercise price	$	4.98		$	3.38
Weighted average grant date fair value	$	1.98		$	1.77

Schedule of stock based compensation related to the LTI plans


	Three months ended				Six months ended
	December 31,				December 31,
($ in thousands, except per share data)	2016		2015		2016		2015
FY17 LTI Plan	$	85	$	—	$	155	$	—
FY16 LTI Plan		23		25		50		110
FY15 LTI Plan		3		26		3		39
FY14 LTI Plan		—		5		—		8
Total	$	111	$	56	$	208	$	157

ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Accounting Policies [Line Items]
Accounts receivable	$ (1,309)	$ (448)	$ (2,347)	$ (409)
Finance receivables	$ 2,125	214	$ 2,119	(370)
As Reported
Accounting Policies [Line Items]
Reclassification of cash provided by and included in accounts receivable		(767)		(1,480)
Reclassification of cash provided by and included in financial receivable		533		701
Reclassification
Accounting Policies [Line Items]
Reclassification of cash provided by and included in accounts receivable		319		1,071
Reclassification of cash provided by and included in financial receivable		$ (319)		$ (1,071)

ACCOUNTING POLICIES (Textuals) (Details) - USD ($) $ in Thousands	6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Accounting Policies [Abstract]
Depreciation method for property and plant	straight-line basis
Term of notes receivable or quick start leases	60 months
Interest or penalties related to uncertain tax positions	$ 0	$ 0
Amortization of capitalized software development	3 years
Description rental JumpStart program for ePort devices	The Company offers extended payment terms to certain customers for equipment sales under its Quick Start Program
Term of non cancelable lease with agreement	5 years

EARNINGS PER SHARE CALCULATION (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Numerator for basic and diluted earnings per share
Numerator for basic earnings per share - Net income (loss) available to common shareholders	$ 233	$ (874)	$ (2,565)	$ (848)
Gain recorded for reduction in fair value of warrants
Numerator for diluted earnings per share - Net income (loss) available to common shareholders	$ 233	$ (874)	$ (2,565)	$ (848)
Denominator for basic earnings per share - Weighted average shares outstanding	40,308,934	35,909,933	39,398,469	35,879,164
Effect of dilutive potential common shares	421,778
Denominator for diluted earnings per share - Adjusted weighted average shares outstanding	40,730,712	35,909,933	39,398,469	35,879,164
Basic earnings (loss) per share	$ 0.01	$ (0.02)	$ (0.07)	$ (0.02)
Diluted earnings (loss) per share	$ 0.01	$ (0.02)	$ (0.07)	$ (0.02)

FINANCE RECEIVABLES - Information regarding finance receivables (Details) $ in Thousands	6 Months Ended	12 Months Ended
	Dec. 31, 2016 USD ($) item	Jun. 30, 2016 USD ($) item
Receivables [Abstract]
Total finance receivables	$ 5,398	$ 7,306
Less current portion	1,442	3,588
Non-current portion of finance receivables	3,956	3,718
Finance receivables, less allowance for credit losses	29	0
Finance receivables, unrealized losses	$ 33	$ 0
Finance receivables, unrealized loss position \| item	12	0

FINANCE RECEIVABLES - Credit risk profile based on payment activity (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Jun. 30, 2016
Financing Receivable, Recorded Investment [Line Items]
Total finance receivables	$ 5,398	$ 7,306
Performing
Financing Receivable, Recorded Investment [Line Items]
Total finance receivables	5,309	7,174
Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Total finance receivables	$ 89	$ 132

FINANCE RECEIVABLES - Age analysis of past due finance receivables (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Jun. 30, 2016
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total finance receivables	$ 5,398	$ 7,306
QuickStart Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	56	132
Current	5,342	7,174
Total finance receivables	5,398	7,306
QuickStart Leases \| 31 - 60 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	5	98
QuickStart Leases \| 61 - 90 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	5	31
QuickStart Leases \| Greater than 90 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Past Due	$ 46	$ 3

GOODWILL AND INTANGIBLE ASSETS - Summary of final purchase price allocation (Details) - USD ($) $ in Thousands	Jan. 15, 2016	Dec. 31, 2016	Jun. 30, 2016	Jan. 14, 2016
Financial Liabilities
Goodwill		$ 11,492	$ 11,703
VendScreen, Inc
Consideration:
Fair value of total consideration paid in cash	$ 5,625
Acquisition related costs:	842
Financial Assets:
Accounts Receivable	3
Finance Receivables	839
Other Current Assets	20
Deferred Income Taxes	18
Current Assets	880
Property, Plant & Equipment	81
Fair Value of Intangible Assets	885
Financial Liabilities
Accrued Liabilities	(50)
Total identifiable net assets	1,796
Goodwill	3,829	$ 3,829		$ 4,040
Total Fair Value	5,625
Developed Technology \| VendScreen, Inc
Financial Assets:
Fair Value of Intangible Assets	639
Customer relationships \| VendScreen, Inc
Financial Assets:
Fair Value of Intangible Assets	149
Brand \| VendScreen, Inc
Financial Assets:
Fair Value of Intangible Assets	95
Non-compete agreements \| VendScreen, Inc
Financial Assets:
Fair Value of Intangible Assets	$ 2

GOODWILL AND INTANGIBLE ASSETS - Summary of intangible assets (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
	Jan. 15, 2016	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Goodwill [Roll Forward]
Goodwill, Beginning Balance				$ 11,703
Goodwill, Additions / Adjustments				(211)
Goodwill, Ending Balance		$ 11,492		11,492
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Total Intangible Assets				798
Amortization		(4)	$ 0	(87)	$ 0
Total Intangible Assets		711		711
Non-compete agreements
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Total Intangible Assets				1
Total Intangible Assets		1		$ 1
Amortization Period				2 years
Brand
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Total Intangible Assets				$ 79
Amortization				(16)
Total Intangible Assets		63		$ 63
Amortization Period				3 years
Developed Technology
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Total Intangible Assets				$ 576
Amortization				(63)
Total Intangible Assets		513		$ 513
Amortization Period				5 years
Customer relationships
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Total Intangible Assets				$ 142
Amortization				(8)
Total Intangible Assets		134		$ 134
Amortization Period				10 years
VendScreen, Inc
Goodwill [Roll Forward]
Goodwill, Beginning Balance	$ 4,040
Goodwill, Additions / Adjustments				$ 211
Goodwill, Ending Balance	3,829	$ 3,829		$ 3,829
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Assets and assumed specified liabilities, cash payment	$ 5,625

GOODWILL AND INTANGIBLE ASSETS (Textuals) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense of acquired intangible assets	$ 4	$ 0	$ 87	$ 0

LINE OF CREDIT (Textuals) (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended		12 Months Ended
	Dec. 31, 2016	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Jun. 30, 2016
Line of Credit Facility [Line Items]
Line of credit, net	$ 7,078	$ 7,078		$ 7,078		$ 7,119
Interest expense		201	$ 104	413	$ 223
Prime Rate [Member]
Line of Credit Facility [Line Items]
Interest rate	3.75%
Revolving line of credit facility \| Heritage Bank of Commerce \| Loan and Security Agreement
Line of Credit Facility [Line Items]
Maximum limit of amount under line of credit						$ 12,000
Line of credit facility, basis of measurement						Federal Reserves' Prime
Percentage of interest rate above prime rate						2.25%
Line of credit, net	$ 7,100	7,100		7,100		$ 7,100
Line of credit facility amount available under line of credit						$ 4,900
Interest expense		$ 200		$ 100

LONG-TERM DEBT (Textuals) (Details) $ in Thousands	Dec. 31, 2016 USD ($)
Debt Instrument [Line Items]
Capital lease due in 12 monthly installment	$ 1
Capital lease due in 8 quarterly installment	21
Capital Lease Obligations
Debt Instrument [Line Items]
Capital lease obligations	$ 326

FAIR VALUE OF FINANCIAL INSTRUMENTS - Changes in fair value of the Company level 3 financial instruments (unaudited) (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ (635)	$ (3,739)	$ (978)
Increase due to change in fair value of warrant liabilities	(1,230)	(1,490)	(887)
Reclass of fair value of warranty liability to common stock upon exercise of warrants		$ 5,229
Ending balance	$ (1,865)		$ (1,865)

FAIR VALUE OF FINANCIAL INSTRUMENTS (Textuals) (Details) - USD ($) $ in Thousands	6 Months Ended
	Dec. 31, 2016	Jun. 30, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value transfers assets, Level 1 to Level 2	$ 0		$ 0
Fair value transfers assets, Level 2 to Level 1	0		0
Fair Value transfers liabilities, Level 1 to Level 2	0		0
Fair Value transfers liabilities, Level 2 to Level 1	0		$ 0
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
The held of financial instruments	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
The held of financial instruments	$ 0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Valuation method used to determine fair value	proprietary valuation models
Fair values of Level 3 financial instrument		$ 2,200

INCOME TAXES (Textuals) (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended		12 Months Ended
INCOME TAXES (Textuals) (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Jun. 30, 2016
Income Tax Disclosure [Abstract]
Income tax benefit	$ 154	$ (115)	$ 181
Estimated annual effective income tax rate		30.00%		41.00%
Maximum income tax (benefits) considered before additional income before taxes		$ 100
Valuation allowances		$ 30

EQUITY (Details) - Warrants - shares	3 Months Ended		6 Months Ended
EQUITY (Details) - Warrants - shares	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Class Of Warrant Or Right [Roll Forward]
Beginning balance	68,978	4,298,000	2,445,653	4,309,000
Exercised	(24,733)		(2,401,408)	(11,000)
Cancelled	(20,267)		(20,267)
Ending balance	23,978	4,298,000	23,978	4,298,000

EQUITY (Details 1) - Stock options - $ / shares	6 Months Ended
EQUITY (Details 1) - Stock options - $ / shares	Dec. 31, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility	50.00%
Expected life	4 years
Risk-free interest rate	1.06%
Number of options granted	20,080	119,586
Weighted average exercise price	$ 4.98	$ 3.38
Weighted average grant date fair value	$ 1.98	$ 1.77
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility		63.00%
Expected life		4 years
Risk-free interest rate		1.34%
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility		66.00%
Expected life		4 years 6 months
Risk-free interest rate		1.49%

EQUITY (Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
EQUITY (Details 2) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation	$ 111	$ 56	$ 208	$ 157
FY17 LTI Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation	85		155
FY16 LTI Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation	23	25	50	110
FY15 LTI Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation	3	26	3	39
FY14 LTI Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation		$ 5		$ 8

EQUITY (Detail Textuals) $ / shares in Units, $ in Thousands	3 Months Ended	6 Months Ended
	Dec. 31, 2016 $ / shares shares	Dec. 31, 2016 USD ($) $ / shares shares
Class Of Warrant Or Right [Line Items]
Proceeds from exercise of common stock warrants \| $		$ 6,193
Warrants
Class Of Warrant Or Right [Line Items]
Number of warrants issued subject to cashless exercise \| shares	24,733	24,733
Number of warrants exercised \| shares		2,376,675
Exercise price per share \| $ / shares	$ 2.6058	$ 2.6058
Cashless exercise price per share \| $ / shares	$ 2.10	$ 2.10
Proceeds from exercise of common stock warrants \| $		$ 6,200

EQUITY (Detail Textual 1) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended			6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Jun. 30, 2015	Dec. 31, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation	$ 111	$ 56		$ 208	$ 157
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option valuation method				Black-Scholes valuation model
Granted				20,080	119,586
Exercise price of awarded options				$ 4.98
Stock based compensation	$ 47		$ 92	$ 95	$ 207
Description of stock options vesting rights				The options vest on August 31, 2017, and expire if not exercised prior to August 31, 2023

EQUITY (Detail Textual 2) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
EQUITY (Detail Textual 2) - USD ($) $ in Thousands	Jul. 01, 2016	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Common Stock \| Non Employee Director
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted	56,784
Share granted, amount	$ 40
Total expense recognized		$ 37		$ 73
Common Stock \| Non Employee Director \| Long Term Stock Incentive Plan (LTT)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted				78,711
Common Stock \| Non Employee Director \| 07/01/2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vested	18,960
Common Stock \| Non Employee Director \| 07/01/2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vested	18,960
Common Stock \| Non Employee Director \| 07/01/2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vested	18,954
Common Stock \| Chief Executive Officer And Chief Services Officer [Member] \| Long Term Stock Incentive Plan (LTT)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted				6,254
Common Stock \| Chief Executive Officer ("CEO") \| Long Term Stock Incentive Plan (LTT)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares forfeited				6,533
Common Stock \| Chief Executive Officer ("CEO") \| Payroll Obligation
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares forfeited				31
Warrants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercised of outstanding warrants		24,733		2,401,408	11,000

EQUITY (Detail Textual 3) - Long Term Stock Incentive Plan (LTT)	6 Months Ended
	Dec. 31, 2016 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage total number of connections	50.00%
Percentage adjusted EBITDA earned	50.00%
Chief Executive Officer ("CEO")
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of shares awarded on target achievement	150.00%
Officers compensation	$ 675,000
Chief Services Officer ("CSO")
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of shares awarded on target achievement	100.00%
Officers compensation	$ 250,000
Maximum \| Chief Executive Officer ("CEO")
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of shares awarded on target achievement	225.00%
Officers compensation	$ 1,012,500
Maximum \| Chief Services Officer ("CSO")
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of shares awarded on target achievement	150.00%
Officers compensation	$ 375,000

COMMITMENTS AND CONTINGENCIES (Textuals) (Details) $ in Thousands	6 Months Ended
	Dec. 31, 2016 USD ($) ft²
Commitments and Contingencies Disclosure [Abstract]
Area of new premises (in square feet) \| ft²	5,362
Rent expense under operating leases	$ 11
Straight-lined rent expense	$ 11