Large accelerated filer
|
Accelerated filer
|
|||
Non-accelerated filer
|
Smaller reporting company
|
X
|
Yes
|
X
|
No
|
INDEX
|
|||||
Page
Number
|
|||||
PART I.
|
FINANCIAL INFORMATION
|
||||
Item 1.
|
Financial Statements
|
||||
Condensed Consolidated Balance Sheets as of December 31, 2016 (Unaudited)
|
4
|
||||
and June 30, 2016
|
|||||
Condensed Consolidated Statements of Operations (Unaudited)
|
5
|
||||
For the three months ended December 31, 2016 and 2015
|
|||||
Condensed Consolidated Statements of Operations (Unaudited)
|
6
|
||||
For the six months ended December 31, 2016 and 2015
|
|||||
Condensed Consolidated Statement of Changes in Shareholders' Equity (Unaudited)
|
7
|
||||
For the six months ended December 31, 2016
|
|||||
Condensed Consolidated Statements of Cash Flows (Unaudited)
|
|||||
For the six months ended December 31, 2016 and 2015
|
8
|
||||
Notes to Condensed Consolidated Financial Statements (Unaudited)
|
9
|
||||
Note A –
|
Basis of Presentation, Accounting Policies and Recent Accounting Pronouncements
|
||||
Note B –
|
Stock-Based Compensation and Warrants
|
||||
Note C –
|
Note Receivable – Related Party
|
||||
Note D –
|
Assets Held for Sale and Discontinued Operations
|
||||
Note E –
|
Property and Equipment
|
||||
Note F –
|
Note Payable
|
||||
Note G –
|
Earnings Per Share
|
||||
Note H –
|
Equity
|
||||
Note I –
|
Contingent Payments
|
||||
Note J -
|
Asset Retirement Obligation
|
||||
Note K -
|
Commitments and Contingencies
|
||||
Note L -
|
Related Party Transactions
|
||||
Note M -
|
Subsequent Events
|
||||
Note N –
|
Liquidity and Going Concern
|
||||
Item 2.
|
Management's Discussion and Analysis of Financial Condition
|
||||
and Results of Operations
|
20
|
||||
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
26
|
|||
Item 4.
|
Controls and Procedures
|
26
|
|||
PART II.
|
OTHER INFORMATION
|
||||
Item 1.
|
Legal Proceedings
|
26
|
|||
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
27
|
|||
Item 6.
|
Exhibits
|
27
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
||||||||
AS OF DECEMBER 31, 2016 AND JUNE 30, 2016
|
||||||||
December 31, 2016
|
June 30, 2016
|
|||||||
ASSETS
|
(unaudited)
|
|||||||
CURRENT ASSETS
|
||||||||
Cash and cash equivalents
|
$
|
5,000
|
$
|
139,600
|
||||
Accounts receivable - trade, net
|
2,600
|
3,900
|
||||||
Other receivables - related party
|
-
|
2,800
|
||||||
Assets held for sale
|
1,653,500
|
1,653,500
|
||||||
Prepaid expenses and other current assets
|
47,500
|
47,300
|
||||||
Total current assets
|
1,708,600
|
1,847,100
|
||||||
LAND, PROPERTY AND EQUIPMENT, NET
|
2,020,200
|
2,111,000
|
||||||
OTHER ASSETS
|
||||||||
Trust account - asset retirement obligation
|
96,800
|
86,100
|
||||||
TOTAL ASSETS
|
$
|
3,825,600
|
$
|
4,044,200
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
CURRENT LIABILITIES
|
||||||||
Accounts payable
|
$
|
225,900
|
$
|
251,400
|
||||
Accrued expenses
|
305,700
|
146,200
|
||||||
Total current liabilities
|
531,600
|
397,600
|
||||||
LONG-TERM LIABILITIES
|
||||||||
Note payable
|
640,000
|
200,000
|
||||||
Contingent payments, long-term
|
682,000
|
672,700
|
||||||
Asset retirement obligation
|
434,000
|
434,000
|
||||||
TOTAL LIABILITIES
|
2,287,600
|
1,704,300
|
||||||
SHAREHOLDERS' EQUITY
|
||||||||
Preferred Stock - no shares issued or outstanding
|
-
|
-
|
||||||
Common Stock
|
||||||||
Class A - 75,000,000 no par shares authorized, 4,982,400
|
||||||||
shares issued and outstanding at December 31, 2016
|
||||||||
and June 30, 2016
|
109,191,800
|
109,188,200
|
||||||
Accumulated Deficit
|
(107,653,800
|
)
|
(106,848,300
|
)
|
||||
Total shareholders' equity
|
1,538,000
|
2,339,900
|
||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
3,825,600
|
$
|
4,044,200
|
||||
See accompanying notes to the condensed consolidated financial statements
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||
FOR THE THREE MONTHS ENDED DECEMBER 31, (unaudited)
|
||||||||
2016
|
2015
|
|||||||
NET REVENUES
|
$
|
5,800
|
$
|
57,700
|
||||
Cost of revenues
|
84,900
|
132,200
|
||||||
GROSS LOSS
|
(79,100
|
)
|
(74,500
|
)
|
||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
|
||||||||
Corporate expenses
|
103,400
|
107,500
|
||||||
Alanco Energy Services
|
125,700
|
156,200
|
||||||
Stock-based compensation
|
-
|
13,900
|
||||||
229,100
|
277,600
|
|||||||
OPERATING LOSS
|
(308,200
|
)
|
(352,100
|
)
|
||||
OTHER INCOME AND (EXPENSE)
|
||||||||
Interest income
|
-
|
7,300
|
||||||
Interst expense
|
(17,700
|
)
|
-
|
|||||
NET LOSS
|
$
|
(325,900
|
)
|
$
|
(344,800
|
)
|
||
LOSS PER SHARE - BASIC AND DILUTED
|
||||||||
Net loss per share
|
$
|
(0.07
|
)
|
$
|
(0.07
|
)
|
||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED
|
4,982,400
|
4,982,400
|
||||||
See accompanying notes to the condensed consolidated financial statements
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||
FOR THE SIX MONTHS ENDED DECEMBER 31, (unaudited)
|
||||||||
2016
|
2015
|
|||||||
NET REVENUES
|
$
|
9,700
|
$
|
172,000
|
||||
Cost of revenues
|
175,400
|
392,600
|
||||||
GROSS LOSS
|
(165,700
|
)
|
(220,600
|
)
|
||||
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
|
||||||||
Corporate expenses
|
177,000
|
201,200
|
||||||
Alanco Energy Services
|
265,200
|
313,200
|
||||||
Stock-based compensation
|
-
|
27,800
|
||||||
442,200
|
542,200
|
|||||||
OPERATING LOSS
|
(607,900
|
)
|
(762,800
|
)
|
||||
OTHER INCOME AND (EXPENSE)
|
||||||||
Interest income
|
4,800
|
14,700
|
||||||
Interest expense
|
(26,400
|
)
|
-
|
|||||
LOSS FROM CONTINUING OPERATIONS
|
(629,500
|
)
|
(748,100
|
)
|
||||
DISCONTINUED OPERATIONS
|
||||||||
Loss from discontinued operations
|
(176,000
|
)
|
-
|
|||||
LOSS FROM DISCONTINUED OPERATIONS
|
(176,000
|
)
|
-
|
|||||
NET LOSS
|
$
|
(805,500
|
)
|
$
|
(748,100
|
)
|
||
NET LOSS PER SHARE - BASIC AND DILUTED
|
||||||||
Continuing operations
|
$
|
(0.12
|
)
|
$
|
(0.15
|
)
|
||
Discontinued operations
|
$
|
(0.04
|
)
|
$
|
-
|
|||
Net loss per share
|
$
|
(0.16
|
)
|
$
|
(0.15
|
)
|
||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED
|
4,982,400
|
4,982,400
|
||||||
See accompanying notes to the condensed consolidated financial statements
|
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
|
||||||||||||||||
FOR THE SIX MONTHS ENDED DECEMBER 31, 2016 (unaudited)
|
||||||||||||||||
COMMON STOCK
|
ACCUMULATED
|
|||||||||||||||
SHARES
|
AMOUNT
|
DEFICIT
|
TOTAL
|
|||||||||||||
Balances, June 30, 2016
|
4,982,400
|
$
|
109,188,200
|
$
|
(106,848,300
|
)
|
$
|
2,339,900
|
||||||||
Value of warrants
|
-
|
3,600
|
-
|
3,600
|
||||||||||||
Net loss
|
-
|
-
|
(805,500
|
)
|
(805,500
|
)
|
||||||||||
Balances, December 31, 2016
|
4,982,400
|
$
|
109,191,800
|
$
|
(107,653,800
|
)
|
$
|
1,538,000
|
||||||||
See accompanying notes to the condensed consolidated financial statements
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
FOR THE SIX MONTHS ENDED DECEMBER 31, (unaudited)
|
||||||||
2016
|
2015
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net loss
|
$
|
(805,500
|
)
|
$
|
(748,100
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation and amortization
|
91,800
|
91,900
|
||||||
Accretion of fair value - contingent payments
|
9,300
|
9,400
|
||||||
Stock-based compensation for options
|
-
|
27,800
|
||||||
Exercisable warrants issued under note payable to Anderson Family Trust
|
3,600
|
-
|
||||||
Reserve recorded for American Citizenship Center, LLC note receivable
|
-
|
50,000
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable - trade
|
1,300
|
23,800
|
||||||
Other receivables - related party
|
2,800
|
(2,900
|
)
|
|||||
Prepaid expenses and other current assets
|
(200
|
)
|
137,000
|
|||||
Trust account - asset retirement obligation
|
(10,700
|
)
|
(9,400
|
)
|
||||
Accounts payable and accrued expenses
|
134,000
|
(52,400
|
)
|
|||||
Net cash used in operating activities
|
(573,600
|
)
|
(472,900
|
)
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Proceeds from repayment of American Citizenship Center, LLC note receivable
|
-
|
22,400
|
||||||
Purchase of land, property, and equipment
|
(1,000
|
)
|
(6,800
|
)
|
||||
Net cash (used) provided by investing activities
|
(1,000
|
)
|
15,600
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Proceeds from note payable to Anderson Family Trust
|
440,000
|
-
|
||||||
Net cash provided by financing activities
|
440,000
|
-
|
||||||
NET DECREASE IN CASH AND CASH EQUIVALENTS
|
(134,600
|
)
|
(457,300
|
)
|
||||
CASH AND CASH EQUIVALENTS, beginning of period
|
139,600
|
788,900
|
||||||
CASH AND CASH EQUIVALENTS, end of period
|
$
|
5,000
|
$
|
331,600
|
||||
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION
|
||||||||
Non-cash investing & financing activities:
|
||||||||
Value of exercisable warrants issued under note payable to Anderson Family Trust
|
$
|
3,600
|
$
|
-
|
||||
Value of stock-based compensation for options
|
$
|
-
|
$
|
27,800
|
||||
See accompanying notes to the condensed consolidated financial statements
|
Fair Value at December 31, 2016
|
||||||||||||||||
Level 1:
|
||||||||||||||||
Quoted Prices
|
Level 2:
|
|||||||||||||||
in active
|
Significant
|
Level 3:
|
Total
|
|||||||||||||
Markets
|
Other
|
Significant
|
at
|
|||||||||||||
for Identical
|
Observable
|
Unobservable
|
December 31,
|
|||||||||||||
Assets
|
Inputs
|
Inputs
|
2016
|
|||||||||||||
Asset Retirement Obligation
|
$
|
-
|
$
|
-
|
$
|
434,000
|
$
|
434,000
|
||||||||
Contigent Land Payment
|
-
|
-
|
682,000
|
682,000
|
||||||||||||
$
|
-
|
$
|
-
|
$
|
1,116,000
|
$
|
1,116,000
|
Fair Value at June 30, 2016
|
||||||||||||||||
Level 1:
|
||||||||||||||||
Quoted Prices
|
Level 2:
|
|||||||||||||||
in active
|
Significant
|
Level 3:
|
Total
|
|||||||||||||
Markets
|
Other
|
Significant
|
at
|
|||||||||||||
for Identical
|
Observable
|
Unobservable
|
June 30,
|
|||||||||||||
Assets
|
Inputs
|
Inputs
|
2016
|
|||||||||||||
Asset Retirement Obligation
|
$
|
-
|
$
|
-
|
$
|
434,000
|
$
|
434,000
|
||||||||
Contigent Land Payment
|
-
|
-
|
672,700
|
672,700
|
||||||||||||
$
|
-
|
$
|
-
|
$
|
1,106,700
|
$
|
1,106,700
|
Asset
|
Contingent
|
|||||||||||
Retirement
|
Land
|
|||||||||||
Obligation
|
Payment
|
Total
|
||||||||||
Opening balance
|
$
|
434,000
|
$
|
672,700
|
$
|
1,106,700
|
||||||
Accretion expense
|
-
|
9,300
|
9,300
|
|||||||||
Closing balance
|
$
|
434,000
|
$
|
682,000
|
$
|
1,116,000
|
·
|
Expected term is determined under the simplified method using an average of the contractual term and vesting period of the award as appropriate statistical data required to properly estimate the expected term was not available;
|
·
|
Expected volatility of award grants made under the Company's plans is estimated using the historical daily changes in the market price of the Company's common stock over the expected term of the award and contemplation of future activity;
|
·
|
Risk-free interest rate is the implied yield on zero-coupon U.S. Treasury bonds with a remaining maturity equal to the expected term of the awards; and,
|
·
|
Forfeitures are based on the history of cancellations of awards granted by the Company and management's analysis of potential future forfeitures.
|
Weighted
|
|||||||||||||||||||||||
Weighted
|
Average
|
||||||||||||||||||||||
Average
|
Remaining
|
Aggregate
|
Aggregate
|
||||||||||||||||||||
Exercise Price
|
Contractual
|
Fair
|
Instrinsic
|
||||||||||||||||||||
Shares
|
Per Share
|
Term (1)
|
Value (3)
|
Value (2)
|
|||||||||||||||||||
Outstanding July 1, 2016
|
1,200,000
|
$
|
0.58
|
2.03
|
$
|
273,500
|
$
|
-
|
|||||||||||||||
Granted
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Exercised
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Forfeited or expired
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Outstanding December 31, 2016
|
1,200,000
|
$
|
0.58
|
1.53
|
$
|
273,500
|
$
|
-
|
|||||||||||||||
Exercisable December 31, 2016
|
1,200,000
|
$
|
0.58
|
1.53
|
$
|
273,500
|
$
|
-
|
|||||||||||||||
(1
|
)
|
Remaining contractual term presented in years.
|
|||||||||||||||||||||
(2
|
)
|
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying
|
|||||||||||||||||||||
awards and the closing price of the Company's common stock as of December 31, 2016, for those awards that
|
|||||||||||||||||||||||
have an exercise price currently below the closing price as of December 31, 2016 of $0.07.
|
|||||||||||||||||||||||
(3
|
)
|
Aggregate Fair Value is calculated using the Black Scholes option pricing model to estimate fair value of stock-based
|
|||||||||||||||||||||
compensation.
|
|||||||||||||||||||||||
Warrants Outstanding
|
Warrants Exercisable
|
|||||||||||||||
Weighted
|
Weighted
|
|||||||||||||||
Number of
|
Average
|
Number of
|
Average
|
|||||||||||||
Shares
|
Exercise Price
|
Shares
|
Exercise Price
|
|||||||||||||
Warrants Outstanding, July 1, 2016
|
140,000
|
$
|
0.75
|
20,000
|
$
|
0.75
|
||||||||||
Granted
|
-
|
-
|
-
|
-
|
||||||||||||
Previously Granted, Vested
|
-
|
-
|
60,000
|
0.75
|
||||||||||||
Exercised
|
-
|
-
|
-
|
-
|
||||||||||||
Canceled/Expired
|
-
|
-
|
-
|
-
|
||||||||||||
Warrants Outstanding, December 31, 2016
|
140,000
|
$
|
0.75
|
80,000
|
$
|
0.75
|
December 31,
|
June 30,
|
|||||||
2016
|
2016
|
|||||||
Note receivable, gross
|
$
|
295,400
|
$
|
295,400
|
||||
Accounting and loan fees reversed against deferred income
|
(29,000
|
)
|
(29,000
|
)
|
||||
Less reserve
|
(266,400
|
)
|
(266,400
|
)
|
||||
Note receivable, net
|
$
|
-
|
$
|
-
|
June 30, 2016
|
Additions
|
December 31, 2016
|
||||||||||
Office furniture and equipment
|
$
|
51,300
|
$
|
-
|
$
|
51,300
|
||||||
Water disposal facility
|
2,220,900
|
1,000
|
2,221,900
|
|||||||||
Production equipment
|
514,400
|
-
|
514,400
|
|||||||||
2,786,600
|
1,000
|
2,787,600
|
||||||||||
Less accumulation depreciation
|
(675,600
|
)
|
(91,800
|
)
|
(767,400
|
)
|
||||||
Net book value
|
$
|
2,111,000
|
$
|
(90,800
|
)
|
$
|
2,020,200
|
December 31,
|
June 30,
|
|||||||
2016
|
2016
|
|||||||
Note payable
|
$
|
640,000
|
$
|
200,000
|
||||
Less current
|
-
|
-
|
||||||
Note payable, long-term
|
$
|
640,000
|
$
|
200,000
|
December 31,
|
June 30,
|
|||||||
2016
|
2016
|
|||||||
Contingent land payment
|
$
|
682,000
|
$
|
672,700
|
||||
Less current portion
|
-
|
-
|
||||||
Contingent payments, long-term
|
$
|
682,000
|
$
|
672,700
|
(A)
|
Three months ended December 31, 2016 versus three months ended December 31, 2015
|
(B)
|
Six months ended December 31, 2016 versus six months ended December 31, 2015
|
31.1
|
Certification of Chief Executive Officer
|
|
31.2
|
Certification of Chief Financial Officer
|
|
32
|
Certification of Chief Executive Officer and Chief Financial Officer
|
|
101.INS
|
XBRL Instance Document
|
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
|
ALANCO TECHNOLOGIES, INC. | |||
|
By:
|
/s/ Danielle L. Haney | |
Name: Danielle L. Haney | |||
Title: Chief Financial Officer | |||
/s/ Steven P. Oman
|
________________________
|
Steven P. Oman
|
President and Chief Executive Officer
|
/s/ Danielle L. Haney
|
________________________
|
Danielle L. Haney
|
Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented.
|
/s/ Steven P. Oman
|
Steven P. Oman
|
President and Chief Executive Officer
|
Alanco Technologies, Inc.
|
/s/ Danielle L. Haney
|
Danielle L. Haney
|
Chief Financial Officer
|
Alanco Technologies, Inc.
|
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Feb. 09, 2017 |
|
Document And Entity Information | ||
Entity Registrant Name | ALANCO TECHNOLOGIES INC | |
Entity Central Index Key | 0000098618 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 4,982,400 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2017 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - shares |
Dec. 31, 2016 |
Jun. 30, 2016 |
---|---|---|
Condensed Consolidated Balance Sheets | ||
Class A Common Stock, Shares Authorized | 75,000,000 | 75,000,000 |
Class A Common Stock, Shares Issued | 4,982,400 | 4,982,400 |
Class A Common Stock, Shares Outstanding | 4,982,400 | 4,982,400 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Condensed Consolidated Statements Of Operations | ||||
NET REVENUES | $ 5,800 | $ 57,700 | $ 9,700 | $ 172,000 |
Cost of revenues | 84,900 | 132,200 | 175,400 | 392,600 |
GROSS LOSS | (79,100) | (74,500) | (165,700) | (220,600) |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | ||||
Corporate expenses | 103,400 | 107,500 | 177,000 | 201,200 |
Alanco Energy Services | 125,700 | 156,200 | 265,200 | 313,200 |
Stock-based compensation | 0 | 13,900 | 0 | 27,800 |
Selling, general and administrative expenses | 229,100 | 277,600 | 442,200 | 542,200 |
OPERATING LOSS | (308,200) | (352,100) | (607,900) | (762,800) |
OTHER INCOME AND (EXPENSE) | ||||
Interest income | 0 | 7,300 | 4,800 | 14,700 |
Interest expense | (17,700) | 0 | (26,400) | 0 |
LOSS FROM CONTINUING OPERATIONS | (629,500) | (748,100) | ||
DISCONTINUED OPERATIONS | ||||
Loss from discontinued operations | (176,000) | 0 | ||
LOSS FROM DISCONTINUED OPERATIONS | (176,000) | 0 | ||
NET LOSS | $ (325,900) | $ (344,800) | $ (805,500) | $ (748,100) |
LOSS PER SHARE - BASIC AND DILUTED | ||||
Continuing operations | $ (0.12) | $ (0.15) | ||
Discontinued operations | (0.04) | 0 | ||
Net loss per share | $ (0.07) | $ (0.07) | $ (0.16) | $ (0.15) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | 4,982,400 | 4,982,400 | 4,982,400 | 4,982,400 |
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) - 6 months ended Dec. 31, 2016 - USD ($) |
COMMON STOCK |
ACCUMULATED DEFICIT |
Total |
---|---|---|---|
Beginning balance, Amount at Jun. 30, 2016 | $ 109,188,200 | $ (106,848,300) | $ 2,339,900 |
Beginning balance, Shares at Jun. 30, 2016 | 4,982,400 | ||
Value of warrants | $ 3,600 | 3,600 | |
Net loss | (805,500) | (805,500) | |
Ending balance, Amount at Dec. 31, 2016 | $ 109,191,800 | $ (107,653,800) | $ 1,538,000 |
Ending balance, Shares at Dec. 31, 2016 | 4,982,400 |
A. Basis of Presentation, Accounting Policies and Recent Accounting Pronouncements |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation, Accounting Policies and Recent Accounting Pronouncements | Nature of Operations
Alanco Technologies, Inc. (OTCQB: ALAN) was incorporated in 1969 under the laws of the State of Arizona. Unless otherwise noted, the “Company” or “Alanco” refers to Alanco Technologies, Inc. and its wholly-owned subsidiaries. The Company’s subsidiary, Alanco Energy Services, Inc. (“AES”), operates a water disposal facility near Grand Junction, CO to receive and dispose of produced water generated as a byproduct from oil and natural gas production in Western Colorado. During the fiscal year 2016, the Company implemented a plan to divest of its 160 acre owned and undeveloped land and associated permits located near its water disposal facility and known as Indian Mesa. Refer to Note D – Assets Held for Sale and Discontinued Operations for further discussion.
The Company recently formed Alanco Behavioral Health, Inc. (“ABH”), a wholly-owned subsidiary incorporated in the State of Arizona with the expectation of pursuing a business plan to consolidate small cap private behavioral health companies through acquisition. The Company executed a letter of intent to purchase the operations of a behavioral health treatment facility located in California, but has since terminated said acquisition and currently has no plans to pursue acquisitions in the behavioral health market.
The Company is developing alternative business plans for investment of its resources.
Basis of Presentation
The unaudited condensed consolidated financial statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. In our opinion, the accompanying condensed consolidated financial statements include all adjustments necessary for a fair presentation of such condensed consolidated financial statements. Such necessary adjustments consist of normal recurring items and the elimination of all significant intercompany balances and transactions.
The condensed consolidated balance sheet as of June 30, 2016 was derived from audited financial statements, but does not include all disclosures required by GAAP. These interim condensed consolidated financial statements should be read in conjunction with the Company’s June 30, 2016 Annual Report filed on Form 10-K. Interim results are not necessarily indicative of results for a full year.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
Fair Value of Assets and Liabilities – The estimated fair value for assets and liabilities are determined at discrete points in time based on relevant information. The Accounting Standards Codification (“ASC”) prioritizes inputs used in measuring fair value into a hierarchy of three levels: Level 1 – unadjusted quoted prices for identical assets or liabilities traded in active markets, Level 2 – observable inputs other than quoted prices included within Level 1 such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability; and Level 3 – unobservable inputs in which little or no market activity exists that are significant to the fair value of the assets or liabilities, therefore requiring an entity to develop its own assumptions that market participants would use in pricing. These estimates involve uncertainties and cannot be NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
determined with precision. The Company’s policy is to recognize transfers into and out of Level 1, 2 and 3 categories as of the date of the event or change in circumstances occurs. The carrying amounts of receivables, prepaid expenses, trust account, accounts payable, accrued liabilities and note payable approximate fair value given their short-term nature or their effective interest rates, which represent Level 3 input levels.
The following are the classes of assets and liabilities measured at fair value on a recurring basis at December 31, 2016 and June 30, 2016, using quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3):
The following is a reconciliation of the opening and closing balances for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the six months ended December 31, 2016.
Fair Value of Asset Retirement Obligation – The Deer Creek asset retirement obligation is the estimated cost to close the Deer Creek facility under terms of the lease, meeting environmental and State of Colorado regulatory requirements. The estimate is determined at discrete points in time based upon significant unobservable inputs in which little or no market activity exists that is significant to the fair value of the liability, therefore requiring the Company to develop its own assumptions. Management’s estimate of the asset retirement obligation is based upon a cost estimate developed by a consultant knowledgeable of government closure requirements and costs incurred at similar water disposal facility operations. A present value discount has not been taken as the estimated closure costs, excluding regulatory changes and inflation adjustments, are anticipated to remain fairly consistent over the operational life of the facility. The lack of an active market to validate the estimated asset retirement obligation results in the fair value of the asset retirement obligation to be a Level 3 fair value measurement. ASC Topic 410-20: Asset Retirement Obligations requires the Company to review the asset retirement obligation on a recurring basis and record changes in the period incurred.
Fair Value of Contingent Payments – The contingent land payment liability is also determined at discrete points in time based upon unobservable inputs in which little or no market activity exists that is significant to the fair value of the liability, therefore requiring the Company to develop its own assumptions. In calculating the estimate of fair value for the contingent land payment, management completed an estimate of the present value of the contingent liability based upon projected income, cash flows and capital expenditures for the Deer Creek facility developed under plans currently approved by the Company’s board of directors. Different assumptions relative to the expansion or alternative uses of the Deer Creek and Indian Mesa facilities could result in significantly different valuations. The projected payments have been discounted at a rate of 3% per annum to determine net present value. The lack of an active market to validate the estimated contingent land liability results in the fair value of the contingent land liability to be a Level 3 fair value measurement. ASC Topic 820: Fair Value Measurement requires the Company to review the contingent land liability on a recurring basis and record changes in the period incurred.
Assets Held for Sale – The Company has implemented a plan to divest of its 160 acre owned and undeveloped land and associated permits located in Whitewater, Colorado and known as Indian Mesa. As a result, the value of the land and associated permits has been classified as Assets Held for Sale at December 31, 2016. A long-lived asset classified as held for sale shall be measured at the lower of its carrying amount or fair value less cost to sell. The value of Assets Held for Sale represents the carrying amount.
Recent Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board (“FASB”) issued guidance regarding revenue from contracts with customers. The guidance outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes the most current revenue recognition guidance. In August 2015, this accounting pronouncement was deferred for one year, and is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of reporting periods beginning after December 15, 2016. The Company is currently assessing the impact on its financial position and results of operations.
In January 2016, the FASB issued guidance regarding the enhancement of reporting financial instruments including aspects of recognition, measurement, presentation and disclosure. The guidance is effective for periods beginning after December 15, 2017 including interim periods within those fiscal years. While a portion of the guidance allows for early application, it does not permit complete early adoption. The Company is currently assessing the impact on its financial position and results of operations.
In February 2016, the FASB issued guidance regarding lease reporting. The guidance requires a lessee to record on the balance sheet the assets and liabilities for the rights and obligations created by leases with terms of more than 12 months. The guidance is effective for periods beginning after December 15, 2018 including interim periods within those fiscal years and early adoption is permitted. The Company is currently assessing the impact on its financial position and results of operations.
In March 2016, the FASB issued guidance under the simplification initiative regarding stock compensation. The guidance is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted provided that all amendments are adopted in the same period. The Company is currently assessing the impact on its financial position and results of operations.
In June 2016, the FASB issued guidance regarding credit losses on financial instruments including loans. The guidance is effective for annual periods beginning after December 15, 2019 including interim periods within those annual periods. The Company is currently assessing the impact on its financial position and results of operations.
In August 2016, the FASB issued guidance regarding the classification of certain cash receipts and cash payments in the statement of cash flows. The guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those years. Early adoption is permitted provided that all amendments are adopted in the same period. The Company has adopted the guidance, which had no material impact on its financial position, results of operations or presentation of the statement of cash flows.
In October 2016, the FASB issued guidance regarding the treatment of intra-entity transfers of assets other than inventory. The guidance is effective for annual periods beginning after December 15, 2017, including interim reporting periods. Early adoption is permitted at the beginning of an annual period. The Company is currently assessing the impact on its financial position and results of operations.
In October 2016, the FASB issued guidance regarding consolidation and variable interest entities. The guidance is effective for annual reporting periods beginning after December 15, 2016 including interim periods within that reporting period and early adoption is permitted. The Company has adopted the guidance, which had no material impact on its financial position and results of operations.
In December 2016, the FASB issued technical corrections and improvements on various topics. The guidance is effective upon issuance. The Company has adopted the guidance, which had no material impact on its financial position and results of operations.
There have been no other recent accounting pronouncements or changes in accounting pronouncements during the six months ended December 31, 2016, that are of significance, or potential significance, to us. |
B. Stock-Based Compensation and Warrants |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation and Warrants | The Company has stock-based compensation plans and reports stock-based compensation expense for all stock-based compensation awards based on the estimated grant date fair value. The value of the compensation cost is amortized on a straight-line basis over the requisite service periods of the award (generally the option vesting term).
The Company estimates fair value using the Black-Scholes valuation model. Assumptions used to estimate compensation expense are determined as follows:
The Company has several employee stock option and officer and director stock option plans that have been approved by the shareholders of the Company. The plans require that options be granted at a price not less than market on the date of grant and are more fully discussed in our Form 10-K for the year ended June 30, 2016.
The following table summarizes the Company’s stock option activity during the first six months of fiscal 2017:
As of December 31, 2016, there was no unamortized Black Scholes value remaining to be recognized as stock-based compensation expense.
As of December 31, 2016, the Company had 140,000 outstanding warrants. The following table summarizes the Company’s warrant activity during the six months ended December 31, 2016:
|
C. Note Receivable - Related Party |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Note Receivable - Related Party | Note receivable at December 31, 2016 and June 30, 2016 represents a note due from American Citizenship Center, LLC (“ACC”), a related party. Note receivable at December 31, 2016 and June 30, 2016 consists of the following:
The gross balance of $295,400 at December 31, 2016 and June 30, 2016 represents the outstanding amount drawn by ACC on a $295,400 credit line provided by the Company. The note is secured by all assets of ACC and bears interest at the rate of 9.5% per annum. Interest of $9,400 is unpaid and fully reserved at December 31, 2016.
ACC’s business plan is based on the Executive Action, known as DAPA, issued by President Obama in November 2014. In February 2015, twenty-six states filed a lawsuit to stop the program and the court granted an injunction meaning that the U.S. Government cannot proceed with rolling out the program. The U.S. government appealed the lawsuit which went to the 5th Circuit Court of Appeals. The appeal was unsuccessful and in January 2016, the Supreme Court granted an oral hearing which was held in April 2016. In June 2016, the Supreme Court announced that the justice votes were even for and against the DAPA case, effectively a no decision. As a result, it is presumed that the case will go back to trial at the District Court in Texas. Due to the uncertainty of the court case, a change in administration and overall immigration reform, the Company has fully reserved for the amount of the note as of December 31, 2016 and June 30, 2016. |
D. Assets Held for Sale and Discontinued Operations |
6 Months Ended |
---|---|
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Assets Held for Sale and Discontinued Operations | During the fiscal year 2016, Alanco’s Board of Directors approved a formal plan to sell its 160 acre owned and undeveloped land and associated permits known as Indian Mesa. The plan was contemplated because the Company intends to expand into other markets that are unrelated to waste disposal. The Company expects the sale to occur within one year. Accordingly, the Assets Held for Sale of $1,653,500 presented in the attached condensed consolidated balance sheet as of December 31, 2016 and June 30, 2016 represents the Indian Mesa land and associated permits. The classification of the assets to Assets Held for Sale does not affect the Consolidated Statements of Operations as the Indian Mesa land is undeveloped and has no associated discontinued operations.
During the six months ended December 31, 2016, the Company recorded a loss from discontinued operations in the amount of $176,000 which represents an accrual related to the judgment received from litigation whereby the Company is a defendant and counterclaimant involving the Company’s former subsidiary known as Alanco/TSI Prism, Inc. (“TSI”) and the purchaser of TSI’s assets, Black Creek Systems Corp. (“Black Creek”). 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 case is more fully described in Note K – Commitments and Contingencies. |
E. Property and Equipment |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment | Property and Equipment, net at December 31, 2016 and June 30, 2016 consist of the following:
|
F. Note Payable |
6 Months Ended | ||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | |||||||||||||||||||||||||||||||
F. Note Payable | |||||||||||||||||||||||||||||||
Note Payable | Note payable at December 31, 2016 and June 30, 2016 consists of the following:
At December 31, 2016, the Note Payable balance of $640,000 represents the amount drawn against a $750,000 line of credit with the Anderson Family Trust (“Trust”) entered into on June 28, 2016 and amended on November 14, 2016 at which time the credit limit was increased to $750,000 and the maturity date was revised to January 1, 2018. As of December 31, 2016, the line of credit has an available balance of $110,000. The line of credit matures on January 1, 2018 when the full outstanding balance is due. The balance accrues interest at 7% per annum payable monthly and is collateralized by all assets of the Company. At loan inception, the Trust was paid a loan fee of $10,000 plus a warrant to purchase 140,000 shares of Alanco Common Stock of which 20,000 warrants vested immediately and 10,000 warrants vest each month thereafter. The exercise price per share for the warrants is $0.50 per share for one half of each vested group and $1.00 for the other half of each vested group with a five year term following the issuance date. The Company uses the Black-Scholes option pricing model to estimate fair value of stock-based awards.
During the six months ended December 31, 2016, the Company expensed approximately $15,200, in interest related to the note, approximately $7,600 related to amortization of deferred loan costs, and approximately $3,600 related to the value of 60,000 warrants which vested during the six month period. The line of credit has a provision allowing the lender, at the lender’s option, to convert up to the full amount of the credit line into shares of a then available class of preferred stock outstanding any time prior to the full repayment of the line of credit. There is currently no such preferred stock outstanding and the rights and privileges of preferred stock have not been determined. |
G. Earnings Per Share |
6 Months Ended |
---|---|
Dec. 31, 2016 | |
LOSS PER SHARE - BASIC AND DILUTED | |
Earnings Per Share | Basic and diluted loss per share of common stock was computed by dividing net loss, loss from continuing operations and loss from discontinued operations by the weighted average number of shares of common stock outstanding.
Diluted earnings per share are computed based on the weighted average number of shares of common stock and dilutive securities outstanding during the period. Dilutive securities are options, warrants, convertible debt, and preferred stock that are freely exercisable into common stock at less than the prevailing market price. Dilutive securities are not included in the weighted average number of shares when inclusion would increase the earnings per share or decrease the loss per share. For the six months ended December 31, 2016 and 2015, there were no dilutive securities included in the loss per share calculation as the effect would be antidilutive.
Considering all holders’ rights, total common stock equivalents issuable under these potentially dilutive securities are approximately 1,340,000 and 1,200,000 at December 31, 2016 and 2015, respectively. |
H. Equity |
6 Months Ended |
---|---|
Dec. 31, 2016 | |
Equity [Abstract] | |
Equity | The Company did not issue any shares of Common Stock during the six months ended December 31, 2016.
During the six months ended December 31, 2016, the Company recognized the value of exercisable detachable warrants issued with debt in the amount of $3,600.
The Company has authorized 25,000,000 shares of Preferred Stock of which 5,000,000 shares have been allocated to Series A, 500,000 have been allocated to Series B, 400,000 have been allocated to Series C Junior Participating, 500,000 have been allocated to Series D, and 750,000 have been allocated to Series E. At December 31, 2016 and June 30, 2016, no Preferred Stock of any series was issued or outstanding. |
I. Contingent Payments |
6 Months Ended | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | ||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||
Contingent Payments | Contingent payments at December 31, 2016 and June 30, 2016 are as follows:
Contingent land payment of $682,000 at December 31, 2016 represents the net present value of $800,000 of estimated contingent land payments due under an agreement whereby Alanco Energy Services, Inc. (“AES”) acquired 160 acres of land known as Indian Mesa. The maximum total of $800,000 of contingent land payments is based upon 10% of quarterly revenues in excess of operating expenses up to $200,000 per quarter for activity at both the Deer Creek and Indian Mesa locations. The payments were projected considering current operating plans as approved by the Alanco Board of Directors, with the payments discounted at a rate of 3% per annum. Accretion expense is being imputed at 3% per annum, increasing the fair value of the contingent land payment during the six months ended December 31, 2016 by $9,300. During the six months ended December 31, 2016, no contingent land payment was earned or payable under the contingency formula. The contingent land payment is an obligation of the Company which will not be transferred to the buyer of the Indian Mesa land and associated permits discussed in Note D – Assets Held for Sale and Discontinued Operations. The Company will maintain the liability for contingent payments resulting from future revenues on the Indian Mesa land resulting from the buyer’s operations.
The Company also has a contingent purchase price liability with TC Operating, LLC (“TCO”) under the original agreement executed in April 2012 which transferred the Deer Creek facility land lease to the Company. TCO can earn additional purchase price payments based upon a percentage of the net cumulative EBITDA (net of all related AES capital investments) over a period of approximately 10 years (contingent purchase price), approximately the initial term of the lease. As of December 31, 2016 and June 30, 2016, the Company had no liability recorded for the contingent purchase price based on the probability of the contingent payment being realized.
|
J. Asset Retirement Obligation |
6 Months Ended |
---|---|
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Asset Retirement Obligation | The Company has recognized estimated asset retirement obligations (closure cost) of $434,000 at December 31, 2016 to remove leasehold improvements, remediate any pollution issues and return the Deer Creek water disposal property to its natural state at the conclusion of the Company’s lease. The closure process is a requirement of both the Deer Creek lease and the State of Colorado, a permitting authority for such facilities. The closure cost estimate, in current dollars, was completed by an approved independent consultant experienced in estimating closure costs for water disposal operations and the estimated amount was approved by the State of Colorado. A present value discount has not been taken as the estimated closure costs, excluding regulatory changes and inflation adjustments, are anticipated to remain fairly consistent over the operational life of the facility.
The Company reviews the asset retirement obligation quarterly and performs a formal annual assessment of its estimates to determine if an adjustment to the value of the asset retirement obligation is required.
The laws of the State of Colorado require companies to meet environmental and asset retirement obligations by selecting an approved payment method. The Company has elected to meet its obligation by making quarterly payments of approximately $4,700 into a trust that, over the expected lease period, will build liquid assets to meet the asset retirement obligation. During the six months ended December 31, 2016, the Company made the required quarterly payments. The balances in the trust account for the asset retirement obligation as of December 31, 2016 and June 30, 2016 were $96,800 and $86,100, respectively. |
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. |
L. Related Party Transactions |
6 Months Ended |
---|---|
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | At December 31, 2016 and June 30, 2016, the Company had a note due from American Citizenship Center, LLC (“ACC”), a related party, with a gross balance of $295,400 which has been fully reserved. During the six months ended December 31, 2016, the Company billed ACC a total of approximately $14,200 for interest of which $9,400 is unpaid and fully reserved at December 31, 2016.
At December 31, 2016 and June 30, 2016, the Company had accrued board fees in the total amount of $41,000 and $14,000, respectively.
Effective as of December 15, 2016, the Board of Directors accepted the resignation of John Carlson, Chief Executive Officer and a Director of the Company. Mr. Carlson will remain on the Company’s Board of Directors. At December 31, 2016 and June 30, 2016, the Company had accrued deferred compensation of $69,100 and $58,400, respectively, payable to John Carlson, the Company’s former Chief Executive Officer and a current Director of the Company. The Company’s compensation committee approved a Severance and Employment Agreement with Mr. Carlson whereby he will provide ongoing services to the Company and the deferred compensation will be repaid in addition to other incentive based compensation related to the potential sale of the Company’s AES Indian Mesa and Deer Creek sites.
Also effective as of December 15, 2016, the Company’s Board of Directors elected Steven Oman to serve as the interim President and Chief Executive Officer of the Company. In addition, the Board of Directors accepted the resignation of Harold Carpenter from the board and elected Steven Oman, Donald Anderson and Rebecca Anderson to the Board of Directors. |
M. Subsequent Events |
6 Months Ended |
---|---|
Dec. 31, 2016 | |
M. Subsequent Events | |
Subsequent Events | Subsequent to December 31, 2016, the Company drew an additional $75,000 from its line of credit with the Anderson Family Trust resulting in a current balance of $715,000, with $35,000 remaining available. |
N. Liquidity and Going Concern |
6 Months Ended |
---|---|
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity and Going Concern | During the six months ended December 31, 2016, the Company reported a net loss of ($805,500) and for fiscal year ended June 30, 2016, the Company reported a net loss of ($1,594,800). The Company’s fiscal 2017 operating plan includes divestiture of the undeveloped AES Indian Mesa site which is currently classified as Assets Held for Sale. Management cannot assure that the sale of Indian Mesa will be finalized which would provide additional cash flow to the Company. The Company is continuing to analyze options to monetize current and future operations of Deer Creek. There is no assurance that the Company will be able to execute options for Deer Creek. The Company recently announced it was entering the behavioral health market and the business plan included the acquisition of behavioral health businesses. The Company has since terminated the business development activities related to behavioral health and has no plans to pursue acquisitions in that market. The Company is developing alternative business plans for investment of its resources. Future business plans may require additional capital. There is no assurance the Company will be able to raise additional financing which may be in the form of public or private debt or equity financing, or both. If adequate funds are not available or are not available on acceptable terms, the Company’s business, operating results, financial condition and ability to continue operations may be materially adversely affected. Management has historically been successful in obtaining financing and has demonstrated the ability to implement a number of cost-cutting initiatives to reduce working capital needs. The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue to operate and do not include any adjustment that might be necessary if the Company is unable to continue as a going concern. The Company’s independent registered public accounting firm has included an explanatory paragraph in their audit opinion on the consolidated financial statements of the Company for the fiscal year ended June 30, 2016 discussing the substantial doubt of the Company’s ability to continue as a going concern. |
A. Basis of Presentation, Accounting Policies and Recent Accounting Pronouncements (Policies) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nature of Operations | Alanco Technologies, Inc. (OTCQB: ALAN) was incorporated in 1969 under the laws of the State of Arizona. Unless otherwise noted, the “Company” or “Alanco” refers to Alanco Technologies, Inc. and its wholly-owned subsidiaries. The Company’s subsidiary, Alanco Energy Services, Inc. (“AES”), operates a water disposal facility near Grand Junction, CO to receive and dispose of produced water generated as a byproduct from oil and natural gas production in Western Colorado. During the fiscal year 2016, the Company implemented a plan to divest of its 160 acre owned and undeveloped land and associated permits located near its water disposal facility and known as Indian Mesa. Refer to Note D – Assets Held for Sale and Discontinued Operations for further discussion.
The Company recently formed Alanco Behavioral Health, Inc. (“ABH”), a wholly-owned subsidiary incorporated in the State of Arizona with the expectation of pursuing a business plan to consolidate small cap private behavioral health companies through acquisition. The Company executed a letter of intent to purchase the operations of a behavioral health treatment facility located in California, but has since terminated said acquisition and currently has no plans to pursue acquisitions in the behavioral health market.
The Company is developing alternative business plans for investment of its resources. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | The unaudited condensed consolidated financial statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. In our opinion, the accompanying condensed consolidated financial statements include all adjustments necessary for a fair presentation of such condensed consolidated financial statements. Such necessary adjustments consist of normal recurring items and the elimination of all significant intercompany balances and transactions.
The condensed consolidated balance sheet as of June 30, 2016 was derived from audited financial statements, but does not include all disclosures required by GAAP. These interim condensed consolidated financial statements should be read in conjunction with the Company’s June 30, 2016 Annual Report filed on Form 10-K. Interim results are not necessarily indicative of results for a full year.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Assets and Liabilities | The estimated fair value for assets and liabilities are determined at discrete points in time based on relevant information. The Accounting Standards Codification (“ASC”) prioritizes inputs used in measuring fair value into a hierarchy of three levels: Level 1 – unadjusted quoted prices for identical assets or liabilities traded in active markets, Level 2 – observable inputs other than quoted prices included within Level 1 such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability; and Level 3 – unobservable inputs in which little or no market activity exists that are significant to the fair value of the assets or liabilities, therefore requiring an entity to develop its own assumptions that market participants would use in pricing. These estimates involve uncertainties and cannot be determined with precision. The Company’s policy is to recognize transfers into and out of Level 1, 2 and 3 categories as of the date of the event or change in circumstances occurs. The carrying amounts of receivables, prepaid expenses, trust account, accounts payable, accrued liabilities and note payable approximate fair value given their short-term nature or their effective interest rates, which represent Level 3 input levels.
The following are the classes of assets and liabilities measured at fair value on a recurring basis at December 31, 2016 and June 30, 2016, using quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3):
The following is a reconciliation of the opening and closing balances for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the six months ended December 31, 2016.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Asset Retirement Obligation | The Deer Creek asset retirement obligation is the estimated cost to close the Deer Creek facility under terms of the lease, meeting environmental and State of Colorado regulatory requirements. The estimate is determined at discrete points in time based upon significant unobservable inputs in which little or no market activity exists that is significant to the fair value of the liability, therefore requiring the Company to develop its own assumptions. Management’s estimate of the asset retirement obligation is based upon a cost estimate developed by a consultant knowledgeable of government closure requirements and costs incurred at similar water disposal facility operations. A present value discount has not been taken as the estimated closure costs, excluding regulatory changes and inflation adjustments, are anticipated to remain fairly consistent over the operational life of the facility. The lack of an active market to validate the estimated asset retirement obligation results in the fair value of the asset retirement obligation to be a Level 3 fair value measurement. ASC Topic 410-20: Asset Retirement Obligations requires the Company to review the asset retirement obligation on a recurring basis and record changes in the period incurred. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Contingent Payments | The contingent land payment liability is also determined at discrete points in time based upon unobservable inputs in which little or no market activity exists that is significant to the fair value of the liability, therefore requiring the Company to develop its own assumptions. In calculating the estimate of fair value for the contingent land payment, management completed an estimate of the present value of the contingent liability based upon projected income, cash flows and capital expenditures for the Deer Creek facility developed under plans currently approved by the Company’s board of directors. Different assumptions relative to the expansion or alternative uses of the Deer Creek and Indian Mesa facilities could result in significantly different valuations. The projected payments have been discounted at a rate of 3% per annum to determine net present value. The lack of an active market to validate the estimated contingent land liability results in the fair value of the contingent land liability to be a Level 3 fair value measurement. ASC Topic 820: Fair Value Measurement requires the Company to review the contingent land liability on a recurring basis and record changes in the period incurred. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets Held for Sale | The Company has implemented a plan to divest of its 160 acre owned and undeveloped land and associated permits located in Whitewater, Colorado and known as Indian Mesa. As a result, the value of the land and associated permits has been classified as Assets Held for Sale at December 31, 2016. A long-lived asset classified as held for sale shall be measured at the lower of its carrying amount or fair value less cost to sell. The value of Assets Held for Sale represents the carrying amount. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recent Accounting Pronouncements | In May 2014, the Financial Accounting Standards Board (“FASB”) issued guidance regarding revenue from contracts with customers. The guidance outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes the most current revenue recognition guidance. In August 2015, this accounting pronouncement was deferred for one year, and is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of reporting periods beginning after December 15, 2016. The Company is currently assessing the impact on its financial position and results of operations.
In January 2016, the FASB issued guidance regarding the enhancement of reporting financial instruments including aspects of recognition, measurement, presentation and disclosure. The guidance is effective for periods beginning after December 15, 2017 including interim periods within those fiscal years. While a portion of the guidance allows for early application, it does not permit complete early adoption. The Company is currently assessing the impact on its financial position and results of operations.
In February 2016, the FASB issued guidance regarding lease reporting. The guidance requires a lessee to record on the balance sheet the assets and liabilities for the rights and obligations created by leases with terms of more than 12 months. The guidance is effective for periods beginning after December 15, 2018 including interim periods within those fiscal years and early adoption is permitted. The Company is currently assessing the impact on its financial position and results of operations.
In March 2016, the FASB issued guidance under the simplification initiative regarding stock compensation. The guidance is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted provided that all amendments are adopted in the same period. The Company is currently assessing the impact on its financial position and results of operations.
In June 2016, the FASB issued guidance regarding credit losses on financial instruments including loans. The guidance is effective for annual periods beginning after December 15, 2019 including interim periods within those annual periods. The Company is currently assessing the impact on its financial position and results of operations.
In August 2016, the FASB issued guidance regarding the classification of certain cash receipts and cash payments in the statement of cash flows. The guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those years. Early adoption is permitted provided that all amendments are adopted in the same period. The Company has adopted the guidance, which had no material impact on its financial position, results of operations or presentation of the statement of cash flows.
In October 2016, the FASB issued guidance regarding the treatment of intra-entity transfers of assets other than inventory. The guidance is effective for annual periods beginning after December 15, 2017, including interim reporting periods. Early adoption is permitted at the beginning of an annual period. The Company is currently assessing the impact on its financial position and results of operations.
In October 2016, the FASB issued guidance regarding consolidation and variable interest entities. The guidance is effective for annual reporting periods beginning after December 15, 2016 including interim periods within that reporting period and early adoption is permitted. The Company has adopted the guidance, which had no material impact on its financial position and results of operations.
In December 2016, the FASB issued technical corrections and improvements on various topics. The guidance is effective upon issuance. The Company has adopted the guidance, which had no material impact on its financial position and results of operations.
There have been no other recent accounting pronouncements or changes in accounting pronouncements during the six months ended December 31, 2016, that are of significance, or potential significance, to us.
|
A. Basis of Presentation, Accounting Policies and Recent Accounting Pronouncements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and liabilities measured at fair value on a recurring basis |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Assets and liabilities measured at fair value on a recurring basis |
|
B. Stock-Based Compensation and Warrants (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock option activity |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrant activity |
|
C. Note Receivable - Related Party (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||
C. Note Receivable - Related Party Tables | |||||||||||||||||||||||||||||||||||||||||||
Summary of Note receivable |
|
E. Property and Equipment (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||
E. Property And Equipment Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment |
|
F. Note Payable (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | |||||||||||||||||||||||||||||||
F. Note Payable Tables | |||||||||||||||||||||||||||||||
Notes Payable |
|
I. Contingent Payments (Tables) |
6 Months Ended | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | ||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||
Contingent payments |
|
A. Basis of Presentation, Accounting Policies and Recent Accounting Pronouncements (Details) - USD ($) |
Dec. 31, 2016 |
Jun. 30, 2016 |
---|---|---|
Asset retirement obligation | $ 434,000 | $ 434,000 |
Contingent land payment | 682,000 | 672,700 |
Total | 1,116,000 | 1,106,700 |
Level 1: Quoted Prices Quoted Prices in active Markets for Identical Assets [Member] | ||
Asset retirement obligation | 0 | |
Contingent land payment | 0 | |
Total | 0 | |
Level 2: Significant Other Observable Inputs [Member] | ||
Asset retirement obligation | 0 | |
Contingent land payment | 0 | |
Total | 0 | |
Level 3: Significant Unobservable Inputs [Member] | ||
Asset retirement obligation | 434,000 | 434,000 |
Contingent land payment | 682,000 | 672,700 |
Total | $ 1,116,000 | $ 1,106,700 |
A. Basis of Presentation, Accounting Policies and Recent Accounting Pronouncements (Details 1) |
Dec. 31, 2016
USD ($)
|
---|---|
Opening balance | $ 1,106,700 |
Accretion expense | 9,300 |
Closing balance | 1,116,000 |
Asset Retirement Obligation [Member] | |
Opening balance | 434,000 |
Accretion expense | 0 |
Closing balance | 434,000 |
Contingent Land Payment [Member] | |
Opening balance | 672,700 |
Accretion expense | 9,300 |
Closing balance | $ 682,000 |
B. Stock-Based Compensation and Warrants (Details Narrative) |
Dec. 31, 2016
USD ($)
|
---|---|
Equity [Abstract] | |
Unamortized Black Scholes value | $ 0 |
C. Note Receivable - Related Party (Details) - USD ($) |
Dec. 31, 2016 |
Jun. 30, 2016 |
---|---|---|
C. Note Receivable - Related Party Tables | ||
Note receivable, gross | $ 295,400 | $ 295,400 |
Accounting and loan fees reversed against deferred income | (29,000) | (29,000) |
Less reserve | (266,400) | (266,400) |
Note receivable, net | $ 0 | $ 0 |
D. Assets Held for Sale and Discontinued Operations (Details Narrative) - USD ($) |
6 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
D. Assets Held For Sale And Discontinued Operations Details Narrative | ||
Loss from discontinued operations | $ (176,000) | $ 0 |
E. Property and Equipment (Details) - USD ($) |
6 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Jun. 30, 2016 |
|
Property and equipment | $ 2,787,600 | $ 2,786,600 |
Additions | 1,000 | |
Less accumulation depreciation | (767,400) | (675,600) |
Net book value | 2,020,200 | 2,111,000 |
Office furniture and equipment [Member] | ||
Property and equipment | 51,300 | 51,300 |
Additions | 0 | |
Water disposal facility [Member | ||
Property and equipment | 2,221,900 | 2,220,900 |
Additions | 1,000 | |
Production equipment [Member | ||
Property and equipment | 514,400 | $ 514,400 |
Additions | 0 | |
Less accumulation depreciation [Member] | ||
Less accumulation depreciation | (91,800) | |
Net book value | $ (90,800) |
F. Note Payable (Details) - USD ($) |
Dec. 31, 2016 |
Jun. 30, 2016 |
---|---|---|
F. Note Payable Details | ||
Note payable | $ 640,000 | $ 200,000 |
Less current | 0 | 0 |
Note payable, long-term | $ 640,000 | $ 200,000 |
G. Earnings Per Share (Details Narrative) - shares |
6 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
LOSS PER SHARE - BASIC AND DILUTED | ||
Total common stock equivalents issuable under these potentially dilutive securities | 1,340,000 | 1,200,000 |
H. Equity (Details Narrative) - shares |
Dec. 31, 2016 |
Jun. 30, 2016 |
---|---|---|
Preferred Stock, authorized | 25,000,000 | 25,000,000 |
Preferred Stock, issued | 0 | 0 |
Preferred Stock, outstanding | 0 | 0 |
Series A Preferred Stock [Member] | ||
Preferred Stock, authorized | 5,000,000 | 5,000,000 |
Series B Preferred Stock [Member] | ||
Preferred Stock, authorized | 500,000 | 500,000 |
Series C Preferred Stock [Member] | ||
Preferred Stock, authorized | 400,000 | 400,000 |
Series D Preferred Stock [Member] | ||
Preferred Stock, authorized | 500,000 | 500,000 |
Series E Preferred Stock [Member] | ||
Preferred Stock, authorized | 750,000 | 750,000 |
I. Contingent Payments (Details) - USD ($) |
Dec. 31, 2016 |
Jun. 30, 2016 |
---|---|---|
I. Contingent Payments Details | ||
Contingent land payment | $ 682,000 | $ 672,700 |
Less current portion | 0 | 0 |
Contingent payments, long-term | $ 682,000 | $ 672,700 |
J. Asset Retirement Obligation (Details Narrative) - USD ($) |
Dec. 31, 2016 |
Jun. 30, 2016 |
---|---|---|
Accounting Policies [Abstract] | ||
Payment made for asset retirement obligation | $ 4,700 | |
Balance at trust account for asset retirement obligation | $ 96,800 | $ 86,100 |
K. Commitments and Contingencies (Details Narrative) - USD ($) |
12 Months Ended | |
---|---|---|
Jun. 30, 2015 |
Dec. 31, 2016 |
|
Commitments and Contingencies Disclosure [Abstract] | ||
Attorney fees and accrued interest | $ 128,300 | |
Accrued liability | $ 176,000 | |
Reversed accrual | $ 128,300 |
L. Related Party Transactions (Details Narrative) - American Citizenship Center, LLC - USD ($) |
6 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Jun. 30, 2016 |
|
Due from related party | $ 295,400 | |
Unpaid receivables | 9,400 | |
Interest from notes receivable | 14,200 | |
Accrued board fees | 41,000 | $ 14,000 |
Accrued deferred compensation | $ 69,100 | $ 58,400 |
N. Liquidity and Going Concern (Details Narrative) - USD ($) |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Jun. 30, 2016 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Net loss | $ (325,900) | $ (344,800) | $ (805,500) | $ (748,100) | $ (1,594,800) |
&PO=V]R:W-H
M965T M_=/M[Y3DCQ&T8Y@2V#0-;%;0-SZS7VK9;68?&
MUO7PS_7&LYU=T?-NP+JC_?+I'?R_Q6S^,7V+^3I.\UM,O>G0OR$X.G%CAW<4
MW3I]U]6KSWD@H12#@9Y%#]_LE8V-U2<><*VH(V.S_P;O7PO8!NVV>OJ9M6NP
MLKXMY+:;X2L6\H7[\:T$.V_%>UB(P%9C[17?:G3;!=[JP2\$;'.AV\%T9]Z[
M24S9Q';;S K;C.GIM]:SVL5<-O'4-8:2KDW9*#&\F<[:B9M'PN%(9N'0K_@IQJ24(YF50V.>84S*/I+9/F0E4GV\