0001493152-20-016754 | 10-K | XBRL Viewer

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2020	Jun. 30, 2019
Current assets:
Cash and cash equivalents	$ 28,640	$ 19,225
Accounts receivable, net of allowance of $98 in 2020 and $72 in 2019	2,324	2,408
Inventories, net	2,512	1,965
Prepaid expenses and other current assets	1,872	1,400
Total current assets	35,348	24,998
Property and equipment, net	6,762	7,259
Operating lease right-of-use assets	8,214
Goodwill	1,110	1,110
Intangible assets, net	2,446	2,329
Deferred income tax assets	623	561
Other assets	464	463
Total assets	55,482	37,693
Current liabilities:
Accounts payable	3,381	2,540
Accrued liabilities	2,713	1,873
Accrued compensation and benefits	4,854	4,095
Current portion of long-term debt	750	750
Operating lease liabilities, current	2,274
Income taxes payable	1,142	608
Deferred revenue	4,968	3,428
Total current liabilities	20,082	13,294
Deferred rent		3,764
Long-Term Debt	938	1,688
Operating lease liabilities, non-current	9,450
Commitments and contingencies (Note 13)
Stockholders' equity:
Preferred stock, $.001 par value; 3,000 shares authorized; no shares issued or outstanding
Common stock, $.001 par value; 20,000 shares authorized; shares outstanding: 9,240 in 2020 and 9,153 in 2019	9	9
Additional paid-in capital	88,918	87,343
Accumulated deficit	(63,915)	(68,405)
Total stockholders' equity	25,012	18,947
Total liabilities and stockholders' equity	$ 55,482	$ 37,693

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2020	Jun. 30, 2019
Statement of Financial Position [Abstract]
Net of allowance in accounts receivable	$ 98	$ 72
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	3,000,000	3,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares issued	9,240,000	9,153,000
Common stock, shares outstanding	9,240,000	9,153,000

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2018
Income Statement [Abstract]
Grading, authentication and related services revenues	$ 78,891	$ 72,453	$ 68,449
Cost of grading, authentication and related services	33,655	30,153	29,471
Gross profit	45,236	42,300	38,978
Operating expenses:
Selling and marketing expenses	9,436	10,361	10,137
General and administrative expenses	21,212	17,597	19,864
Impairment charge	486
Total operating expenses	31,134	27,958	30,001
Operating income	14,102	14,342	8,977
Interest expense, net	78	(69)	(114)
Other income (expense), net	15	(148)	29
Income before provision for income taxes	14,195	14,125	8,892
Provision for income taxes	3,409	4,148	2,760
Income from continuing operations	10,786	9,977	6,132
Income from discontinued operations, (net of income taxes)			104
Net income	$ 10,786	$ 9,977	$ 6,236
Net income per basic share:
Income from continuing operations	$ 1.20	$ 1.12	$ 0.71
Income from discontinued operations, (net of income taxes)			0.01
Net income per share	1.20	1.12	0.72
Net income per diluted share:
Income from continuing operations	1.19	1.11	0.70
Income from discontinued operations, (net of income taxes)			0.01
Net income per share	$ 1.19	$ 1.11	$ 0.71
Weighted average shares outstanding:
Basic	8,984,000	8,937,000	8,662,000
Diluted	9,068,000	8,970,000	8,817,000
Dividends declared per common share	$ 0.70	$ 0.70	$ 1.05

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Total
Beginning balance at Jun. 30, 2017	$ 9	$ 84,948	$ (69,040)	$ 15,917
Beginning balance, shares at Jun. 30, 2017	8,921,000
Stock-based compensation - restricted stock		1,421		1,421
Stock-based compensation - restricted stock, shares	94,000
Net income			6,236	6,236
Dividends paid and accrued			(9,306)	(9,306)
Ending balance at Jun. 30, 2018	$ 9	86,369	(72,110)	14,268
Ending balance, shares at Jun. 30, 2018	9,015,000
Stock-based compensation - restricted stock		974		974
Stock-based compensation - restricted stock, shares	138,000
Net income			9,977	9,977
Dividends paid and accrued			(6,272)	(6,272)
Ending balance at Jun. 30, 2019	$ 9	87,343	(68,405)	18,947
Ending balance, shares at Jun. 30, 2019	9,153,000
Stock-based compensation - restricted stock		1,575		1,575
Stock-based compensation - restricted stock, shares	87,000
Net income			10,786	10,786
Dividends paid and accrued			(6,296)	(6,296)
Ending balance at Jun. 30, 2020	$ 9	$ 88,918	$ (63,915)	$ 25,012
Ending balance, shares at Jun. 30, 2020	9,240,000

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

+ References + Details

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 10,786	$ 9,977	$ 6,236
Adjustments to reconcile net income to net cash provided by operating activities:
(Income) loss from discontinued operations			(104)
Depreciation and amortization expense	3,040	2,812	2,306
Stock-based compensation expense	1,575	974	1,421
Non-cash lease expenses	(255)
Impairment charge	486
Provision for bad debts	26	8	33
Provision for inventory write-down	252	178	502
Provision for warranty	462	568	764
Loss on sale of property and equipment	13	71	94
Changes in operating assets and liabilities:
Accounts receivable	59	188	1,001
Inventories	(800)	437	(359)
Prepaid expenses and other	(472)	641	(305)
Deferred income taxes	(62)	661	1,642
Other assets	(1)	15	(66)
Accounts payable and accrued liabilities	1,223	(433)	(815)
Accrued compensation and benefits	760	694	(972)
Income taxes payable	534	296	(353)
Deferred revenue	1,540	215	537
Deferred rent		228	310
Net cash provided by operating activities of continuing operations	19,166	17,530	11,872
Net cash used in operating activities of discontinued operations		(10)	(215)
Net cash provided by operating activities	19,166	17,520	11,657
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(1,370)	(915)	(3,923)
Capitalized software development costs	(1,330)	(1,055)	(911)
Proceeds from sale of property and equipment		124	14
Patents and other intangibles	(1)		(5)
Proceeds from sale of business		12	6
Net cash used in investing activities	(2,701)	(1,834)	(4,819)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Paycheck Protection Program Loan	4,204
Repayments of Paycheck Protection Program Loan	(4,204)
Borrowings under term loan			3,000
Repayments under term loan	(750)	(563)
Dividends paid to common stockholders	(6,300)	(6,479)	(9,083)
Net cash used in financing activities	(7,050)	(7,042)	(6,083)
Increase (decrease) in cash and cash equivalents	9,415	8,644	755
Cash and cash equivalents at beginning of year	19,225	10,581	9,826
Cash and cash equivalents at end of year	28,640	19,225	10,581
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Income taxes paid, net	2,880	2,852	1,805
Interest paid	116	157	108
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING ACTIVITIES:
Leasehold Improvements contributed by landlord			$ 2,949

Nature of Business

12 Months Ended

Jun. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Business

1. Nature of Business

Collectors Universe, Inc. (“we,” “us,” the “Company,” “we”, “Collectors Universe” or “CUI”) is engaged in the business of providing third-party authentication, grading and related services for collectibles consisting of coins, trading cards, sports memorabilia and autographs. We authenticate and grade the quality of such collectibles for dealers, collectors and retail buyers and sellers of these collectibles. We also publish magazines that provide market prices and information for certain collectibles and high-value assets that are accessible on our websites. We sell advertising and earn commissions on those websites, and sell advertising in the magazines that we publish; own the CCE subscription business, which operates an online market for graded collectible coins for dealers who subscribe to this service; and promote, manage and operate the Long Beach Coin shows.

Summary of Significant Accounting Policies

12 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Collectors Universe, Inc. and its wholly owned subsidiaries. At June 30, 2020, such operating subsidiaries were Certified Asset Exchange, Inc. (CAE), Collectors Universe (Hong Kong) Limited, Collectors Universe (Shanghai) Limited, Collectors Universe (Japan) Limited and Expos Unlimited, LLC. (Expos), all of which are ultimately 100% owned by Collectors Universe, Inc. All significant inter-company accounts and transactions have been eliminated in consolidation.

Reclassification

Certain prior period amounts have been reclassified to conform to the current year presentation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that can affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results from continuing operations could differ from results expected on the basis of those estimates, and such differences could be material to our future results of operations and financial condition. Examples of such estimates that could be material include determinations made with respect to the capitalization and recovery of software development costs, the valuation of stock-based compensation awards and the timing of the recognition of related stock-based compensation expense, the valuation of coin and grading consumable inventory, the amount and assessment of goodwill for impairment, the sufficiency of warranty reserves, and the provisions or benefit for income taxes and the timing of related valuation allowances.

Cash and Cash Equivalents

We consider all highly liquid investments with original maturities of three months or less at the date of purchase to be cash and cash equivalents.

At June 30, 2020, substantially all of our cash was deposited at one FDIC insured financial institution. Those deposits exceeded the bank’s FDIC insured deposit limits by approximately $25,622,000 at June 30, 2020. Cash in overseas bank accounts was approximately $1,713,000 at June 30, 2020, of which $1,102,000 was in China. We repatriate cash back from China to the United States, as considered necessary and in accordance with China exchange control regulations.

Concentrations

Credit Risks. Financial instruments that potentially subject the Company to significant concentrations of credit risk at June 30, 2020 and 2019, consisted primarily of cash and cash equivalents and accounts receivables.

Cash Balances. At June 30, 2020 and 2019, the Company had funds of approximately $24,121,000 and $14,768,000 respectively, in money market accounts and money market funds. In addition, at June 30, 2020 and 2019, the Company had approximately $4,519,000 and $4,457,000 respectively, in a non-interest bearing bank account for general day-to-day operations.

Accounts Receivable. A substantial portion of our accounts receivable is due from collectibles dealers. No individual customer’s account receivable balance was in excess of 10% of the Company’s total gross accounts receivable balances at June 30, 2020. There was one individual customer’s account receivable balance was approximately 11% of the Company’s total gross accounts at June 30, 2019. The Company performs an analysis of the expected collectability of accounts receivable based on several factors, including the age and extent of significant past due accounts and economic conditions or trends that may adversely affect the ability of the debtors to pay their accounts receivable balances. Based on that review, we establish an allowance for doubtful accounts, when deemed necessary. The allowance for doubtful accounts receivable was $98,000 and $72,000 at June 30, 2020 and June 30, 2019, respectively. We write-off accounts receivable balances when it is determined that there is no possibility of collection.

Customers. The authentication and grading of collectible coins and related revenues accounted for approximately 53%, 57%, and 63% of our net revenues in the years ended June 30, 2020, 2019 and 2018, respectively. In addition, our cards and autograph revenues and related revenues accounted for 43%, 36% and 31% of total revenues in the years ended June 30, 2020, 2019 and 2018, respectively. In fiscal 2020, 2019 and 2018, five customers accounted for 10%, 11%, and 16% of our net authentication and grading services, respectively.

Suppliers. In order to obtain volume discounts, we have chosen to purchase the injection-molded critical high-volume plastic parts for our clear plastic holders from a limited number of suppliers. We typically concentrate the purchase of holders through one supplier when developing new holders. We now have back up suppliers and dies for our critical parts. If it became necessary for us to obtain parts from an additional supplier, we would have to arrange for the fabrication of a die for that new supplier, which can be a lengthy process. However, as we own the dies used to manufacture the parts, they should be able to be moved to replacement suppliers. We believe the inventory of parts we maintain and the availability of back-up suppliers (including overseas suppliers) is sufficient to give us the time to change suppliers, if considered necessary.

Fair Value of Financial Instruments

The carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their estimated fair values due to the short-term nature of such instruments.

Leases

Effective July 1, 2019 the Company adopted Accounting Standards Codification (“ASC”) 842 Accounting for Leases and recognized lease obligations and corresponding right-of-use (ROU) assets for its existing non-cancelable operating leases. The core principle of this guidance is that a lessee should recognize the assets and liabilities that arise from leases. Therefore, the Consolidated Balance Sheet at June 30, 2020, included elsewhere in this report, includes the liability to make lease payments (the lease liability) and a right-of-use asset, representing our right to use the underlying asset for the lease term. We elected not to recognize lease assets and liabilities for leases with a term of 12 months or less and are recognizing lease expenses for such leases on a straight-line basis over the lease term. The Company adopted this new accounting guidance, utilizing the current period adoption method without revising comparative periods and elected not to reassess existing leases. The new standard provides a number of optional practical expedients in transition. The Company elected to use the package of practical expedients that allows us to not reassess: (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases and (iii) initial direct costs for any expired or existing leases. In addition, the new standard provides for an accounting election that permits a lessee to elect not to apply the recognition requirements of Topic 842 to short-term leases by class of underlying asset. The Company adopted this accounting election for all classes of assets. The Company’s leases consist primarily of office facilities and the adoption of the new lease standard on July 1, 2019 resulted in the recognition of right-of-use assets of approximately $9.8 million and lease liabilities for operating leases of approximately $13.6 million on the consolidated balance sheets, with no material impact on the consolidated statements of operations or consolidated statements of cash flows. See “Note 9-Leases” for additional information. As a result of COVID-19, we reviewed our lease obligations for impairment and potential excess space reserve requirements and concluded there were no impairments or charges, required at June 30, 2020.

Revenue Recognition

The core principle of ASC 606, Revenue from Contracts with Customers, is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying ASC 606, all revenue transactions must be evaluated using a five-step approach to determine the amount and timing of revenue to be recognized. The five-step approach requires (1) identifying the contract with the customer, (2) identifying the performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations in the contract and (5) recognizing revenue when performance obligations are satisfied.

Our primary source of revenue is the authentication and grading of collectibles, which represented about 90% of our consolidated revenues in the fiscal year ended June 30, 2020. Our other sources of revenues represent the balance of our revenues which are small and individually account for less than 5% of total revenues.

In accordance with ASC 606 we recognize revenue for our main revenue streams as follows:

Authentication and Grading Revenues: As the time it takes to authenticate and grade the collectible is short, we recognize revenue at the time of shipment (i.e. point of time) of the authenticated graded collectible to the customer, net of any taxes collected. Due to the insignificant delay between the completion of our authentication and grading services and the shipment of the collectible back to the customer, the time of shipment corresponds to the completion of our services. We recognize revenue from the sale of special coin inserts at the time the customer takes legal title to the insert. Many of our authentication and grading customers prepay our authentication and grading fees when they submit their collectibles to us for authentication and grading. We record those prepayments as deferred revenue until the collectibles have been authenticated and graded and shipped back to the customer. At that time, we record the revenues from the authentication and grading services we have performed for the customer and deduct this amount from deferred revenue. For certain dealers to whom we extend credit, we record revenue at the time of shipment of the authenticated and graded collectible to the dealer. We provide a limited warranty covering the coins and trading cards that we authenticate and grade. See Warranty Costs below.

Collectors Club Revenues: These revenues represent membership fees paid by customers for annual memberships in our Collectors Club. Those membership fees entitle members to access our on-line and printed publications and, depending on their membership level, to receive vouchers for authentication and grading services during the membership period. We allocate revenue between the vouchers and the membership. We recognize revenue attributable to the authentication and grading vouchers consistent with our authentication and grading services above. The balance of the membership fees is recognized ratably over the life of the membership. Memberships are paid in advance of the membership period and prepaid memberships fees are classified as deferred revenue. In the event vouchers expire unused (i.e. there are unexercised customer rights), we consider the guidance under ASC 606 in determining when to recognize revenue.

Certified Coin Exchanges Subscription Revenues: We recognize subscription revenues related to our CCE exchange for certified coins, ratably over the relevant subscription period. Subscriptions are typically billed and paid on a monthly basis, although certain quarterly and annual subscriptions can be paid in advance. Prepaid subscriptions are classified as part of deferred revenue.

Expos Trade Show Revenue: We recognize fees earned from promoting, managing, and operating trade shows in the periods in which the shows take place. Trade show booth fees are typically paid to us in advance. Certain fees that are paid to conduct auctions at the show are paid to us at the end of the show. Prepaid show fees are classified as part of deferred revenue.

Advertising and Commission Revenues: Advertising revenues are recognized in the period when an advertisement is displayed in our publications or websites and customers typically have 30 day credit terms. Click-through commission revenues earned through our websites from third party affiliate programs are recognized in the period in which the commissions are earned, and such commissions are paid in the following month.

Product Sales: Product sales consist primarily of sales of collectibles coins that we have purchased pursuant to our coin authentication and grading warranty program. We recognize revenues from coin sales when the coins are shipped or delivered to customers or if the coins are sold through auction, when the auction settles. However, those sales are not considered to be the focus of nor an integral part of the Company’s ongoing revenue generating activities.

Contract Balances. As discussed above, the timing of revenue recognition can differ from the timing of invoicing to customers. Contract liabilities are comprised of billings or payments received from our customers in advance of performance under the contract. We refer to these contract liabilities as “Deferred Revenue” in the accompanying consolidated balance sheets. During fiscal 2020, we recognized revenue for substantially all of the deferred revenue balance of $3,428,000 at June 30, 2019.

Shipping and Handling Costs

Shipping and handling costs incurred to process and return customer collectibles submitted to us for grading or authentication are recorded as costs of revenues, net of amounts received from customers, in accordance with the guidance for Principals versus Agents as set out in ASC 606.

Inventories

Our inventories consist primarily of (i) collectible coin inventories, and (ii) consumable supplies that we use in our authentication and grading businesses. Collectible coin inventories are recorded at estimated market value using the specific identification method. Consumable supplies are recorded at the lower of cost (using the first-in, first-out method) or net realizable value. Inventories are periodically reviewed to identify slow-moving items, and an allowance for inventory loss is recognized, as necessary. The allowance for inventory losses was $1,072,000 and $1,278,000 at June 30, 2020 and 2019, respectively. It is possible that our estimates of market value could change in the near term due to changes in market conditions in the various collectibles markets served by the Company, which could require us to increase that allowance.

Property and Equipment

Property and equipment are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful lives ranging from three to five years. Leasehold improvements are amortized over the shorter of the estimated useful lives of the improvements or the term of the related lease. Depreciation and amortization expense are classified as part of general and administrative expenses. Coin reference sets are non-depreciable assets. Repair and maintenance costs are expensed as incurred.

Goodwill and Other Intangible Assets

The Company evaluates the carrying value of its goodwill and certain indefinite-lived intangible assets at least annually for impairment, or more frequently if facts and circumstances indicate that impairment may have occurred. We formally evaluate the carrying value of goodwill and other indefinite-lived intangible assets for impairment on the anniversary date of each of the acquisitions that gave rise to the recording of such assets or more frequently if a triggering event has occurred. We consider qualitative factors as part of the formal evaluation of the carrying value of goodwill. If qualitative factors are not applicable and the carrying value of a “reporting unit,” is determined to be less than the fair value of the reporting unit, there exists the possibility of impairment of goodwill. An impairment loss of goodwill is measured by comparing the current fair value of the reporting unit to the carrying value of the reporting unit, and, if the implied fair value of goodwill is less than the carrying value of goodwill, we would record an impairment loss of goodwill calculated as the difference between the implied fair value and carrying values in the consolidated statements of operations in the period in which the impairment is determined. At June 30, 2020 we recognized an impairment charge of $458,000 for the remaining goodwill of our Expos business.

Capitalized Software

Software development costs are capitalized as part of intangible assets and amortized on a straight-line basis over its useful life of three years. Through June 30, 2020 and 2019, we had capitalized software costs of approximately $8,622,000 and $7,292,000 respectively, as capitalized software and we recognized related accumulated amortization expense of $6,373,000 and $5,334,000, respectively. During fiscal years 2020, 2019 and 2018, the Company recorded amortization expense for capitalized software of approximately $1,039,000, $892,000, and $701,000, respectively. Planning, training, support and maintenance costs incurred either prior to or following the implementation phase of a project are recognized as expense in the period in which they occur. We evaluate the carrying value of capitalized software to determine if the carrying value is impaired, and, if necessary, an impairment loss is recorded in the period in which the impairment is determined to have occurred.

Long-Lived Assets

The Company regularly reviews property and equipment and other long-lived assets, including certain identifiable intangibles, for possible impairment. This review occurs annually, or more frequently if events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable in full. If there is an indication of impairment to property, equipment or definite lived intangible assets, then we prepare an estimate of future undiscounted cash flows expected to result from the use of that asset and its eventual disposition. If these cash flows are less than the carrying amount of the asset, an impairment loss would be recognized to write-down the asset to its estimated fair value. Fair value is estimated using the present value of the future cash flows discounted at a rate commensurate with our estimate of the business risks of the related asset. As a result of the impairment of the Expos recorded at June 30, 2011, the tradename was determined to have a finite life and was being amortized over a period of 10 years. However, as part of the impairment charge for Expos at June 30, 2020 we wrote down the remaining carrying value of the tradename from $28,000 to zero at June 30, 2020.

Warranty Costs

We offer a warranty covering the coins and trading cards that we authenticate and grade. Under the warranty, if any coin or trading card that was previously authenticated and graded by us is later submitted to us for re-grading and either (i) receives a lower grade upon that re-submittal or (ii) is determined not to have been authentic, we will offer to purchase the collectible, or, in the alternative, at the customer’s option, pay the difference in value of the item at its original grade, as compared with its lower grade. However, this warranty is voided if the collectible, upon re-submittal to us, is not in the same tamper-evident holder in which it was placed at the time we last graded it, or there is evidence that there was tampering with the holder. We accrue for estimated warranty costs based on historical trends and related experience. We monitor the adequacy of our warranty reserves on an on-going basis. Net warranty expense recognized was $462,000, $568,000 and $764,000 in fiscal 2020, 2019 and 2018, respectively. Our warranty reserves were $698,000 and $852,000 at June 30, 2020 and 2019, respectively.

Advertising Costs

Advertising costs are expensed as incurred and amounted to approximately $250,000, $260,000, and $286,000 in the fiscal years ended June 30, 2020, 2019 and 2018, respectively.

Income Taxes

Deferred tax assets and liabilities are recorded for the future consequences of events that have been recognized in the Company’s financial statements or tax returns. Measurement of the deferred tax items is based on enacted tax laws. In the event the future consequences of differences between financial reporting bases and tax bases of the Company’s assets or liabilities result in a deferred tax asset, we evaluate the probability of realizing the future benefits comprising that asset and record a valuation allowance if considered necessary.

Accounting standards prescribe a recognition threshold and a measurement attribute for the financial statement recognition and measurement of the positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. A “more likely than not” tax position is measured as the largest amount of benefit that is greater than a fifty percent likelihood of being realized upon ultimate settlement, or else a full reserve is established against the tax asset or a liability is recorded. Interest and penalties accrued on uncertain tax positions are recorded as income tax expense.

Foreign Currency

The Company has determined that the U.S. dollar is the functional currency for its French branch office and its Hong Kong, Japan and China subsidiaries. Based on this determination, the Company’s foreign operations are re-measured by reflecting the financial results of those foreign operations as if they had taken place within a U.S. dollar-based economic environment. Fixed assets and other non-monetary assets and liabilities are re-measured from foreign currencies to U.S. dollars at historical exchange rates; whereas cash, accounts receivable and other monetary assets and liabilities are re-measured at current exchange rates. Gains and losses resulting from those re-measurements, which are included in income for the respective current periods, were not material.

Stock-Based Compensation

Stock-based compensation expense is measured at the grant date fair value of an equity-incentive award and is recognized as expense over the employee or non-employee director’s requisite service period, which is generally the vesting period of the award. However, if the vesting of a stock-based compensation award is subject to satisfaction of a performance goal or condition, the stock-based compensation expense is recognized if, and when, (i) performance goals have been established and (ii) it is determined that the achievement of the performance requirement or condition (and therefore the vesting of the award) has become probable. If stock-based compensation is recognized due to a determination that a performance goal or condition is probable of being achieved, but it is subsequently determined that the performance goal or condition was not met in the expected vesting period, then if the shares can vest in future periods, we will extend the period over which the remaining expense would be recognized. If the award ultimately fails to vest, or management conclude that it is not probable the shares will vest, then all previously recognized expense with respect to the performance condition would be reversed.

Net Income Per Share

Basic net income per share is computed by dividing net income attributable to common stockholders by the weighted-average number of common shares outstanding during the periods presented. Diluted net income per share is computed by dividing net income attributable to common stockholders by the weighted-average number of common and common equivalent shares outstanding during the period presented assuming the vesting of all outstanding restricted shares. However, anti-dilutive restricted shares and performance based restricted shares, for which the performance goal has not been achieved at the end of the period are disregarded.

The following table sets forth the computation of basic and diluted net income (loss) per common share (in thousands except per share data):

	Year Ended June 30,
	2020		2019		2018
Income from continuing operations	$	10,786	$	9,977	$	6,132
Income (loss) from discontinued operations (net of income taxes)		-		-		104
Net income	$	10,786	$	9,977	$	6,236

Net income per basic share:
From continuing operations	$	1.20	$	1.12	$	0.71
From discontinued operations (net of income taxes)		-		-		0.01
Net income per share	$	1.20	$	1.12	$	0.72

Net income per diluted share:
From continuing operations	$	1.19	$	1.11	$	0.70
From discontinued operations (net of income taxes)		-		-		0.01
Net income per share	$	1.19	$	1.11	$	0.71

Weighted-average shares outstanding:
Basic		8,984		8,937		8,662
Effect of dilutive shares		84		33		155
Diluted		9,068		8,970		8,817

There were approximately 21,000 and 5,000 anti-dilutive restricted shares excluded from the computation of diluted income per share at June 30, 2020 and 2019, respectively.

At June 30, 2020 and 2019 approximately 52,000, 30,000 and 40,000 performance-based restricted shares were excluded from the computation of diluted earnings per share, respectively, because we had not reached the performance goals for those shares to vest.

Recent Accounting Pronouncements

In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instrument. Subsequent to the issuance of ASU 2016-13, the FASB clarified the guidance through several ASUs. The collective new guidance (ASC 326) generally requires entities to use a current expected credit loss model, which is a new impairment model based on expected losses rather than incurred losses. Under this model, an entity would recognize an impairment allowance equal to its current estimate of all contractual cash flows that the entity does not expect to collect. The entity’s estimate would consider relevant information about past events, current conditions, and reasonable and supportable forecasts. ASC 326 is effective for annual and interim fiscal reporting periods beginning after December 15, 2022, with early adoption permitted for annual reporting periods beginning after December 15, 2018. The Company is continuing to evaluate the expected impact of this ASC 326 but does not expect it to have a material impact on its consolidated financial statements upon adoption.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. (“ASU 2017-04”) The new guidance eliminates Step 2 of the goodwill impairment test. Instead, the updated guidance requires an entity to perform its annual or interim goodwill impairment test by comparing the fair value of the reporting unit to its carrying value, and recognizing a non-cash impairment charge for the amount by which the carrying value exceeds the reporting unit’s fair value with the loss not exceeding the total amount of goodwill allocated to that reporting unit. ASU 2017-04 is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company early adopted this guidance in the current fiscal year on a prospective basis and we applied this guidance in calculating the goodwill impairment charge recognized in fiscal 2020.

Inventories

12 Months Ended

Jun. 30, 2020

Inventory Disclosure [Abstract]

Inventories

3. Inventories

Inventories consist of the following at June 30 (in thousands):

	2020			2019
Coins	$	195		$	173
Grading raw materials consumable inventory		3,389			3,070
		3,584			3,243
Less inventory reserve		(1,072	)		(1,278	)
	$	2,512		$	1,965

The inventory reserve represents a valuation allowance on certain items of our coins inventory based on the current market value of those coins and for our consumables inventories, based upon our review of the expected future usage of that inventory.

Estimated market values of coins can be subjective and can vary depending on market conditions for precious metals, the number of qualified buyers for a particular coin and the uniqueness and special features of a particular coin.

Property and Equipment

12 Months Ended

Jun. 30, 2020

Property, Plant and Equipment [Abstract]

Property and Equipment

4. Property and Equipment

Property and equipment consist of the following at June 30 (in thousands):

	2020			2019
Coin reference sets	$	68		$	68
Computer hardware and equipment		2,844			2,325
Computer software		1,752			1,606
Equipment		5,566			5,131
Furniture and office equipment		1,113			944
Leasehold improvements		4,801			4,741
Trading card reference library		52			52
		16,196			14,867
Less accumulated depreciation and amortization		(9,434	)		(7,608	)
Property and equipment, net	$	6,762		$	7,259

Depreciation and amortization expense relating to property and equipment for fiscal 2020, 2019 and 2018 was $1,853,000, $1,839,000, and $1,527,000, respectively.

Goodwill and Intangible Assets

12 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

5. Goodwill and Intangible Assets

During the first quarter of fiscal year 2020, we completed our annual review of the carrying value of the goodwill acquired with the acquisitions of CoinFacts, Inc. (“CFI”) and Certified Coin Exchange (“CCE”), and, on the basis of those reviews, we determined that no goodwill impairments had occurred. No impairment triggering events were identified for those businesses through June 30, 2020.

At June 30, 2020, the Expos goodwill and tradename were determined to be impaired and were written down to zero.

The following table sets forth the carrying values of goodwill for those acquired businesses that are classified as continuing operations as of June 30 (in thousands):

	2020		2019
CoinFacts	$	515	$	515
Expos Unlimited		-		458
CCE		1,110		1,110
	$	1,625	$	2,083

Approximately $1.0 million relating to CCE, classified as goodwill on the consolidated balance sheets at June 30, 2020 and 2019, respectively, is amortizable and deductible for income tax purposes over a period of 15 years.

The following table sets forth, by asset class, the amounts classified as other intangible assets, net, on the consolidated balance sheets as of June 30, 2020 and 2019 (in thousands):

	As of June 30, 2020							As of June 30, 2019
	Gross Book Value		Accumulated Amortization			Net Book Value		Gross Book Value		Accumulated Amortization			Net Book Value
Amortized Intangible Assets:

Capitalized Software	$	8,622	$	(6,373	)	$	2,249	$	7,292	$	(5,334	)	$	1,958

Other:		2,470		(2,312	)		158		2,269		(2,137	)		132

Indefinite lived Intangible Assets:		39		-			39		239		-			239
	$	11,131	$	(8,685	)	$	2,446	$	9,800	$	(7,471	)	$	2,329

Amortization expense was $1,187,000, $973,000, and $779,000, for the fiscal years ended June 30, 2020, 2019 and 2018, respectively. Estimated amortization expense for each of the five succeeding years and thereafter relating to amortizable intangible assets, is as follows (in thousands):

Fiscal Year Ending June 30,
2021	$	1,216
2022		818
2023		373
	$	2,407

The weighted average amortization period remaining as of June 30, 2020, is approximately 2.2 years.

Amortizable intangible assets are amortized on a straight-line basis over their estimated useful lives of those assets, which is 3 years for capitalized software and a range of 5-15 years for other intangibles.

Accrued Liabilities

12 Months Ended

Jun. 30, 2020

Payables and Accruals [Abstract]

Accrued Liabilities

6. Accrued Liabilities

Accrued liabilities consisted of the following at June 30 (in thousands):

	2020		2019
Warranty reserve	$	698	$	852
Professional fees and legal settlements accruals		975		141
Other		1,040		880
	$	2,713	$	1,873

Warranty reserve activity and balances related to fiscal years 2020, 2019 and 2018, were as follows (in thousands):

Warranty reserve at June 30, 2017	$	834
Charged to cost of revenues		764
Payments		(736	)
Warranty reserve at June 30, 2018		862
Charged to cost of revenues		568
Payments		(578	)
Warranty reserve at June 30, 2019		852
Charged to cost of revenues		462
Payments		(616	)
Warranty reserve at June 30, 2020	$	698

Borrowings

12 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Borrowings

7. Borrowings

Term Loan. As previously reported, on September 15, 2017 the Company obtained a five-year, $3,500,000 unsecured term loan from a commercial bank. The Company borrowed $3,000,000 under this loan to fund the Company’s share of the construction and related facility costs for its new operations and headquarter facility, as well as its moving costs, and lease exit costs for its former operations and headquarters facility. During that first year the Company was only required to make monthly payments of interest on the borrowings.

In September 2018, the loan balance outstanding was automatically converted into a four-year term loan in the principal amount of the borrowings then outstanding, which was $3,000,000. In October 2018, the Company began repaying the loan in 48 equal monthly principal payments of $62,500 or $750,000 on an annual basis, through September 2022. There are no prepayment penalties on loan repayments, as the Company chose a 90-day LIBOR rate to apply to the outstanding balance upon conversion to the four-year term loan.

The agreement governing the term loan contains two financial covenants, which require the Company to maintain (a) a funded debt coverage ratio and (b) a debt service coverage ratio, respectively. The loan agreement also contains certain other covenants typical for this type of loan, including a covenant which provides that, without the bank’s consent, the Company may not incur additional indebtedness for borrowed money, except for (i) borrowings under the Company’s revolving credit line, (see below) (ii) purchase money indebtedness and (iii) capitalized lease obligations.

At June 30, 2020, the Company had $1,688,000 of outstanding borrowings under this term loan, of which $750,000 was classified as a current liability and $938,000 was classified as a long-term liability in the Consolidated Balance Sheet at June 30, 2020. The Company was in compliance with the term loan covenants at June 30, 2020.

Revolving Credit Line. On March 10, 2020 the Company amended and increased its $10 million unsecured revolving credit line (the “Credit Line”) to $15 million and extended the term for two years through March 2022. The Company is entitled to obtain borrowings at such times and in amounts as it may request, as supported by and EBITDA calculation for the last four quarters, provided that the maximum principal amount of the borrowings that may be outstanding at any one time under the Credit Line may not exceed $15 million and each year there must be a period of 30 consecutive days during which no borrowings are outstanding. The Company also may, at any time or from time to time and at its option, repay outstanding borrowings, in whole or in part, and may reborrow amounts so repaid at such times and in such amounts as it deems appropriate.

Credit Line borrowings will bear interest, at the Company’s option, at LIBOR plus 2.25% or at 0.25% below the highest prime lending rate published from time to time by the Wall Street Journal. The Company is required to pay a quarterly unused commitment fee of 0.0625% of the amount by which (if any) that the average of the borrowings outstanding under the Credit Line in any calendar quarter is less than $6 million.

The Credit Line agreement contains a financial covenant that requires the Company to maintain a funded debt coverage ratio, similar to the debt coverage ratio that is applicable to the term loan and certain other covenants typical for this type of credit. At June 30, 2020 the Company was in compliance with those covenants. Availability to borrow under the line of credit was $15,000,000 at June 30, 2020 however, there were no borrowings outstanding under the line of credit at June 30, 2020 or 2019.

Taxes

12 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Taxes

8. Taxes

For fiscal years ended June 30, 2020, 2019 and 2018, pre-tax income (loss) was attributed to the following jurisdictions (in thousands):

	2020		2019			2018
Domestic operations	$	13,845	$	15,691		$	8,015
Foreign operations		350		(1,566	)		877
	$	14,195	$	14,125		$	8,892

Set forth below is the (benefit) provision for income taxes for continuing operations for the years ended June 30 (in thousands):

	2020			2019		2018
Current:
Federal	$	3,008		$	2,951	$	816
State		381			251		44
International		82			285		258
		3,471			3,487		1,118
Deferred:
Federal		(261	)		193		1,470
State		199			378		157
International		-			90		15
		(62	)		661		1,642
Total provision for income taxes	$	3,409		$	4,148	$	2,760

The reconciliation of the provision (benefit) for income taxes computed at federal statutory rates to the provision for income taxes for the years ended June 30 was as follows (in thousands):

	2020			2019			2018
Provision at federal statutory rates	$	2,981		$	2,966		$	2,530
State income taxes, net		458			497			142
Permanent differences		123			130			246
International, including change in valuation allowances		(82	)		590			127
Other		(34	)		(55	)		25
Impact of federal law change		-			-			280
Deficiency (Excess) tax deduction for stock compensation		(37	)		20			(590	)
	$	3,409		$	4,148		$	2,760

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of deferred taxes as of June 30, 2020 and 2019 were as follows (in thousands):

	2020			2019
Deferred tax assets:
Stock compensation costs	$	405		$	256
Reserves and accruals		823			1,771
Net operating loss carryforward		1,449			1,409
Operating lease liabilities		2,528			-
Credits		206			394
Other		166			132
		5,577			3,962
Less: valuation allowance		(1,679	)		(1,669	)
Total deferred tax assets		3,898			2,293
Deferred tax liabilities:
Property and equipment		(1,075	)		(1,237	)
Operating lease right-of-use assets		(1,679	)		-
Intangibles		(335	)		(333	)
Other		(186	)		(162	)
Total deferred tax liabilities		(3,275	)		(1,732	)
Net deferred tax assets	$	623		$	561

The Tax Cuts and Jobs Act (“the Tax Act”) significantly revised the U.S. corporate income tax laws by, among other things, reducing the corporate income tax rate from 35% to 21% and implementing a modified territorial tax system that included a one-time transition tax on accumulated undistributed foreign earnings. Other provisions included in the Tax Act include limitations on deductible executive compensation, a repeal of the domestic production activity deduction and several new international provisions.

The Company completed the accounting for the tax effects of the Tax Act at June 30, 2018. The statutory federal corporate tax rate for fiscal 2019 was 21% and for fiscal 2018 was 28%, representing in fiscal 2018, a blended tax rate based on the reduced tax rate being only in effect for six months in that year. In addition, in fiscal 2018 the Company recorded a one-time tax expense associated with the Tax Act in the amount of $281,000. That tax expense was comprised of $384,000 for the re-measurement of the Company’s net deferred tax assets to reflect the new lower U.S. tax rate of 21%, partially offset by a one-time benefit of $103,000 associated with the estimated impact of the Company’s foreign subsidiaries earnings and profits and the impact of our Hong Kong’s subsidiary’s accumulated deficit.

Realization of the above gross deferred tax assets is dependent on generating sufficient taxable income in future periods and, in the case of the net operating losses, we must generate sufficient income primarily in China, France, Hong Kong and Japan. For the California Enterprise Zone Credits, we must continue to generate taxable income in the California Enterprise Zone. The valuation allowances of $1,679,000 and $1,669,000 at June 30, 2020 and 2019, respectively, primarily relate to the Company’s foreign operations, and such valuation allowances have been established due to the uncertainty of realizing our foreign tax benefits. The Company recognized a valuation allowance of $581,000 against the deferred tax asset of the China operation at June 30, 2019.

The Company files income tax returns in the U.S. federal jurisdiction, various states and overseas in France, Hong Kong, China and Japan and has open tax periods for federal income taxes for the years ended June 30, 2017 through June 30, 2019 and for certain state tax jurisdictions for the years ended June 30, 2000 through June 30, 2019.

As of June 30, 2020, and June 30, 2019, the Company had $260,000 and $499,000, respectively, of California Enterprise Zone Credits. These credits can only be utilized to offset taxable income generated in the California Enterprise Zone. Carryovers of existing California Enterprise Zone Credits (earned before June 30, 2017) expire in tax year 2025. The Company has foreign net operating loss carryforwards in France, China, Japan and Hong Kong of $2,371,000, $781,000, $271,000 and $2,432,000, respectively. Net operating losses can be carried forward indefinitely in France and Hong Kong whereas in China they can be carried forward for five years and in Japan for ten years. Therefore, in China net operating losses will begin to expire in 2023 and in Japan in 2029.

As of June 30, 2020, the liability for income taxes associated with uncertain tax positions was $465,000, including accrued penalties and interest of $177,000. If recognized, $416,000 of the liability for uncertain tax positions would favorably affect the Company’s effective tax rate.

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows (in thousands):

Unrecognized tax benefits balance at June 30, 2018	$	288
Gross increases for tax positions of prior years		-
Gross decreases for tax positions of prior years		-
Gross increases for tax positions of current year		-
Settlements		-
Lapse of statute of limitations		-
Unrecognized tax benefits balance at June 30, 2019		288
Gross increases for tax positions of prior years		-
Gross decreases for tax positions of prior years		-
Gross increases for tax positions of current year		-
Settlements		-
Lapse of statute of limitations		-
Unrecognized tax benefits balance at June 30, 2020	$	288

The liability for uncertain tax positions is reviewed quarterly and adjusted as events occur that affect potential liabilities for additional taxes, such as lapsing of applicable statutes of limitations, proposed assessments by tax authorities, negotiations with taxing authorities, identification of new issues, and enactment of new legislation, regulations or promulgation of new case law. We believe that adequate amounts of tax and related interest, if any, have been provided for any adjustments that may result from the examinations of uncertain tax positions. The Company does not expect the liability for uncertain tax positions to change significantly over the next year.

The Company has analyzed the impact of the provisions of the Tax Reform Act which will be effective in future years. The Company’s selection of an accounting policy with respect the Global Intangible Low-Taxed Income (“GILTI”) tax rules is to treat the GILTI tax as a period cost.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Leases

12 Months Ended

Jun. 30, 2020

Leases [Abstract]

Leases

9. Leases

(i) Leases under ASC 842

The Company has operating leases for office facilities and certain equipment. Our leases have remaining terms ranging from 1 year to 8 years, some of which included options to extend. We did not include options to extend in our determination of the valuation of our right-of-use (ROU) assets and lease liabilities, as it was not considered reasonably certain that we will exercise those options. Lease expense is recognized on a straight-line basis over the lease term. Some of our leases have variable payments of property taxes, insurance and common area maintenance, in addition to base rent. These variable payments are expensed when incurred and are recorded as variable rent expense.

Operating lease right-of-use assets and liabilities are measured using the present value of future minimum lease payments over the lease term. We applied our incremental borrowing rate based on the information available at the adoption date. This rate was applied to the entire portfolio of leases on the basis that any adjustments to the rate due to lease terms or asset classifications would not have a material effect to the valuation of the lease liabilities or ROU assets.

Information related to the Company’s total lease costs were as follows (in thousands):

	Year Ended June 30, 2020
Operating lease cost	$	2,133
Variable lease cost		551
Total lease cost	$	2,684

Information related to the Company’s ROU assets and related lease liabilities were as follows (in thousands):

	Year Ended June 30, 2020
Cash paid for operating lease liabilities	$	2,337
Weighted-average remaining lease term		7.3 years
Weighted-average discount rate		4.8	%

The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under noncancellable operating leases with terms of more than one year to the total operating lease liabilities recognized on the condensed consolidated balance sheet as of June 30, 2020 (in thousands):

Year Ending June 30,
2021	$	2,324
2022		1,986
2023		1,647
2024		1,473
2025		1,468
Thereafter		5,070
Total undiscounted future minimum lease payments	$	13,968
Less: Imputed interest		(2,244	)
Total operating lease liabilities	$	11,724
Current operating lease liabilities	$	2,274
Long-term operating lease liabilities		9,450
Total operating lease liabilities	$	11,724

As of June 30, 2020, we did not have additional finance or operating leases that have not yet commenced that would create significant obligations for us.

(ii) Leases under ASC 840

Prior to the adoption of ASC 842 the Company’s rent expense for its occupied facilities at June 30, 2019 was recognized on a straight-line basis over the lease period. Total rent expense for the fiscal years ended June 30, 2019 and 2018 for those leases was approximately $2,366,000 and $2,401,000, respectively.

Future minimum lease payments under those agreements at June 30, 2019, were as follows (in thousands):

Year Ending June 30,	Gross Amount
2020	$	2,457
2021		2,424
2022		2,044
2023		1,660
2024		1,465
Thereafter		6,535
	$	16,585

Employee Benefit Plans

12 Months Ended

Jun. 30, 2020

Retirement Benefits [Abstract]

Employee Benefit Plans

10. Employee Benefit Plans

We have an employee benefit plan that contains a 401(k) salary deduction provision covering all employees who meet the eligibility requirements of the plan. Eligible employees are able to defer up to the lesser of 75% of their base compensation or the statutorily prescribed annual limit. Effective January 1, 2020, the Company began providing matching contributions to the plan and the current match is 50% of up to 6% of a participant’s compensation that is contributed to the plan. Total Company contributions for the period January 1, 2020 through June 30, 2020 were approximately $224,000.

Stockholders' Equity

12 Months Ended

Jun. 30, 2020

Equity [Abstract]

Stockholders' Equity

11. Stockholders’ Equity

Dividends

During the fiscal years ended June 30, 2020, 2019 and 2018, the Company paid cash dividends to our stockholders in the aggregate amounts of approximately $6,300,000, $6,479,000, and $9,083,000, respectively.

In February 2018, the Company reduced its quarterly cash dividend rate to $0.175 per share from $0.35 per share.

The declaration of cash dividends in the future, pursuant to the Company’s dividend policy, is subject to final determination each quarter by the Board of Directors based on a number of factors, including the Company’s financial performance and its available cash resources, its cash requirements and alternative uses of cash that the Board may conclude would represent an opportunity to generate a greater return on investment for the Company.

Stock Incentive Plans

12 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Abstract]

Stock Incentive Plans

12. Stock Incentive Plans

On October 3, 2017, the Board of Directors adopted and on December 5, 2017, our stockholders approved the 2017 Equity Incentive Plan (“2017 Plan”), which authorizes the issuance of up to 400,000 shares of common stock for the grant of stock options, stock appreciation rights (commonly referred to as “SARS”), restricted stock and restricted stock units (collectively, “stock awards”), to officers and other employees of and non-employee directors or consultants to the Company or its subsidiaries. At the time of the adoption of the 2017 Plan, a total of 308,670 shares of common stock remained available for the grant of stock awards under previously adopted stock incentive plans that had been approved by our stockholders. The total number of shares remaining shares available for future issuances at June 30, 2020, under all equity incentive plans was 390,000 shares.

Stock Awards

In recent years, to create incentives for management, to remain in the service of the Company and to drive cash generation, restricted stock awards are made on an annual basis to officers and key employees under Long Term Incentive Plans (“LTIPs”) comprising service-based awards (“RSUs”) and performance based-awards (“PSUs”). In addition, there are annual RSU awards to directors for their annual services as directors and special awards to certain officers or employees, at the discretion of the Compensation Committee of the Board of Directors.

In all instances for the awards to vest the employee or outside director must provide continuous service through the vesting date of the award. In the event of a termination of continuous service, for any reason, prior to its vesting date, the award is forfeited.

Fiscal 2020, 2019 and 2018 LTIP Awards

RSUs

One Time Award. A total, net of forfeitures, of 17,505 RSUs were awarded in December 2017, which vested in two installments, on June 30, 2019 and 2018, respectively. Through June 30, 2019 these service shares were fully vested.

Annual Awards. A total, net of forfeitures, of 25,952, 44,763 and 16,731 RSUs were awarded in fiscal 2020, 2019 and 2018, respectively, with vesting in three annual installments on the last day of the fiscal years following the grants.

At June 30, 2020 17,303 and 15,519 of the fiscal 2020 and 2019 awards remained unvested.

Fiscal 2020 and 2019 PSUs

To focus management’s efforts on the achievement of increases in net cash flows (defined as net cash generated by the Company’s continuing activities, minus capital expenditures and capitalized software costs), during the three years ending June 30, 2022 and 2021, (the “Performance Periods”), in fiscal 2020 and 2019, the Compensation Committee granted 51,905 and 89,542 PSUs (at maximum) to LTIP Participants. Provisional vesting of the PSUs was made contingent on the achievement of net cash flows on an annual basis with final vesting, subject to possible upward or downward adjustment of 20% of the PSUs, based on a comparison of the Company’s total shareholder return (“TSR”) for the three year Performance Period, to the TSR of the Russell 2000 Index, for the same Performance Period. Threshold, target and maximum net cash flow goals were established for fiscal 2020 and 2019 and grant dates were established for that year’s PSUs, for expense recognition purposes. In fiscal 2019 and 2020, the Company achieved the maximum net cash flows performance under the targets established for those years and as a result 14,426 and 49,121 shares are provisionally vested under the fiscal 2020 and 2019 LTIP, respectively.

For any of the PSUs to fully vest, a Participant must provide continuous service through the end of the respective three year Performance Periods. Stock-based compensation expense of $610,000 and $80,000 was recognized in fiscal 2020 and 2019, respectively, for these PSUs, and such expenses includes an estimate for the Company’s expected TSR performance as compared to the Russell 2000 Index, over the respective performance periods to date.

Fiscal 2018 PSUs

Through June 30, 2020 no stock-based compensation expense was recognized for 30,370 2018 PSUs awards, as the 2018 Performance Goal was not achieved, and those shares were forfeited as of June 30, 2020.

The net cash flows goals for fiscal years 2021 and 2022 will be set in those fiscal years, which will give rise to grant dates for expense recognition purposes.

2013 LTIP Awards

As previously reported, based on the financial results achieved in fiscal 2017, the Company achieved the maximum performance goal under the 2013 LTIP, in fiscal 2017. Therefore, in accordance with the terms of the 2013 LTIP, the remaining 50% of the 2013 LTIP shares vested on June 30, 2018. Stock-based compensation expense recognized for those shares was approximately $503,000, in fiscal 2018. There was no compensation expense required to be recognized under the 2013 LTIP in fiscal 2020 and 2019.

Non-Employee Director Award

In each of fiscal years 2020, 2019, and 2018, each of our non-employee directors was granted restricted service-based shares with grant date fair values of $45,000, for a total fair value of $180,000 in both fiscal 2020, and fiscal 2019, and $315,000 in fiscal 2018. Those shares have a one year vesting period, coinciding with the directors’ service period and the shares vest 25% on a quarterly basis.

CEO Awards

On March 16, 2020, the Company granted Mr. Orlando, the Company’s CEO, a total of 32,278 restricted shares, comprising 16,139 service-based RSUs and 16,139 performance-based PSUs.

The RSUs vest in three equal annual installments on March 16, 2021, 2022, and 2023, respectively.

The PSUs vest in three equal installments based on the annual revenue performance of the business in fiscal years ending June 30, 2020, 2021 and 2022, respectively. The 16,139 PSUs referenced above represent the number of shares that can be earned at target. If maximum performance is achieved, an additional 25% of that year’s PSUs will be earned. Threshold, target and maximum revenue goals were established by the Compensation Committee of the Board of Directors for fiscal 2020. Based on the revenue generated by the Company in fiscal 2020, a determination was made by the Compensation Committee that one-third of the PSUs or 5,379 had vested. Threshold, target and maximum performance goals will be established for the fiscal years 2021 and 2022 PSUs in those respective years, which will give rise to grant dates for expense recognition purposes.

Stock-based compensation expense related to these grants was $108,000 in fiscal 2020.

Other Service-Based Awards

In each of fiscal 2019 and 2018 the Company granted to other employees 5,000 service-based restricted shares, with grant date fair values of $111,000 and $83,000 respectively, and with vesting periods of four years.

The following table shows total stock-based compensation expense included as part of continuing operations in the Consolidated Statements of Operations, as follows (in thousands):

	Year Ended June 30,
Included in:	2020		2019		2018
Selling and marketing expenses		29		70		98
General and administrative expenses		1,546		904		1,323
	$	1,575	$	974	$	1,421

The related tax benefit recognized for stock-based compensation expense was approximately $418,000, $254,000 and $1,035,000 in fiscals 2020, 2019 and 2018, respectively.

A total of $1,935,000 of compensation expense related to unvested stock-based compensation awards remained unrecognized as of June 30, 2020 based on the assumption that the holders of the equity awards will remain in the Company’s service through 2023. That expense will be recognized in future periods, as follows (in thousands):

Year Ending June 30,
2021	$	1,321
2022		530
2023		84
Total	$	1,935

The $1,935,000 of unrecognized expense does not include expense arising from (i) the grant of any additional stock-based awards that may be granted in future periods and, (ii) the PSUs granted under the 2020 and 2019 LTIP for which grant dates are to be established in fiscal 2021 and 2022.

The following table presents the non-vested status of the restricted shares for the fiscal years ended June 30, 2020, 2019 and 2018 and their respective weighted average grant date fair values (in thousands, except per share data):

Non-Vested Shares:	Number of Shares (in thousands)			Weighted Average Grant-Date Fair Value (per share)
Non-vested at June 30, 2017		431		$	13.97
Granted		100			29.43
Vested		(442	)		14.13
Cancelled		(6	)		28.97
Non-vested at June 30, 2018		83			28.23
Granted		162			13.28
Vested		(40	)		20.85
Cancelled		(24	)		23.63
Non-vested at June 30, 2019		181			17.11
Granted		117			24.77
Vested		(52	)		15.94
Cancelled		(30	)		30.25
Non-vested at June 30, 2020		216		$	18.72

Commitments and Contingencies

12 Months Ended

Jun. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

13. Commitments and Contingencies

The Company has various operating lease commitments for facilities and equipment some of which contain renewal options. On February 3, 2017, the Company, as tenant, entered into a triple net lease (as amended) pursuant to which the Company is leasing approximately 62,755 rentable square feet space for its operations and headquarters facility. The term of the lease is 10 years and 10 months, which commenced on, December 1, 2017. The Company received an abatement of the monthly rent for the period from January 1, 2018 through October 31, 2018. The landlord contributed approximately $2.9 million to the tenant improvements. At June 30, 2020 aggregate minimum obligations over the remaining term of the lease is approximately $12.0 million.

We also lease offices for our overseas operations including a five year lease for our Shanghai office that commenced in November 2017, with aggregate minimum obligations over the term of the lease of approximately $3.0 million and a three year lease for our offices Hong Kong, which commenced in July 2018, with aggregate minimum obligations over the term of that lease of approximately $625,000.

The Company’s rent expense for its existing occupied facilities is recognized on a straight-line basis over the lease period. Total rent expense for the fiscal years ended June 30, 2020, 2019 and 2018 for those operations classified as continuing operations was approximately $2,549,000, $2,366,000, and $2,401,000, respectively.

Future minimum lease payments under those agreements associated with our continuing operations at June 30, 2020, are as follows (in thousands):

Year Ending June 30,	Gross Amount
2021	$	2,514
2022		2,138
2023		1,663
2024		1,473
2025		1,470
Thereafter		5,069
	$	14,327

Employment Agreements

The Company has entered into employment agreements with certain executive officers and other key employees. The employment agreements provide for minimum salary levels, incentive compensation and severance benefits, among other items.

Indemnification Obligations

The Company from time to time enters into certain types of contracts that contingently require the Company to indemnify parties against third-party claims. These contracts primarily relate to (i) certain real estate leases under which the Company may be required to indemnify property owners for environmental or other liabilities and other claims arising from the Company’s use of the applicable premises; and (ii) certain agreements with the Company’s officers and directors, under which the Company may be required to indemnify such persons for liabilities arising out of their relationships as officers or directors of the Company. The terms of such indemnification obligations vary by contract and in most instances a specific or maximum dollar amount is not explicitly stated therein. Historically, the Company has not been obligated to make significant payments under, and no liabilities have been recorded in the accompanying consolidated balance sheets for these indemnification obligations.

Legal Proceedings

The Company is named from time to time, as a defendant in lawsuits that arise in the ordinary course of business. We establish accruals for lawsuits or disputes if and when it is determined that a loss is both probable and can be reasonably estimated. Accruals can be adjusted from time to time, in light of additional or changed information or based on a re-assessment of the risk and costs of proceeding with lawsuits and disputes. In fiscal 2020, the Company recognized approximately $967,000 related to pre-trial litigation settlements of which $845,000 was recognized in the fourth quarter of fiscal 2020. We currently believe that none of the lawsuits currently pending against the Company, is likely to have a material adverse effect on the Company.

Business Segments

12 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Business Segments

14. Business Segments

The operating segments of the Company are organized based on the respective services that they offer to customers of the Company. Similar operating segments have been aggregated to reportable operating segments based on having similar services, types of customers, and other criteria. For our continuing operations, we operate principally in three reportable service segments: coins, trading cards and autographs and other collectibles. Services provided by these segments include authentication, grading, publication and web-based advertising and subscription-based revenues. The other collectibles segment includes CCE, Coinflation.com, Collectors.com and Expos and product sales.

We allocate operating expenses to each service segment based upon activity levels. The following tables set forth on a business segment basis, (i) external revenues, (ii) amortization and depreciation; (iii) stock-based compensation expense as significant other non-cash transactions; and (iv) operating income for the fiscal years ended June 30, 2020, 2019 and 2018. Net identifiable assets and goodwill are provided by business segment as of June 30, 2020 and 2019.

	Year Ended June 30,
Net Revenues from external customers ⁽¹⁾	2020			2019			2018
Coins	$	41,599		$	41,394		$	42,838
Trading cards and autographs		33,673			26,420			21,065
Other		3,619			4,639			4,546
Total revenue	$	78,891		$	72,453		$	68,449

Depreciation and Amortization:
Coins	$	1,539		$	1,360		$	954
Trading cards and autographs		702			581			394
Other		329			428			562
Total		2,570			2,369			1,910
Unallocated amortization and depreciation		470			443			396
Consolidated amortization and depreciation	$	3,040		$	2,812		$	2,306

Stock-based compensation:
Coins	$	262		$	143		$	385
Trading cards and autographs		120			33			63
Other		49			32			63
Total		431			208			511
Unallocated stock-based compensation		1,144			766			910
Consolidated stock-based compensation	$	1,575		$	974		$	1,421

Operating income:
Coins	$	11,995		$	10,536		$	9,051
Trading cards and autographs		9,328			7,841			5,540
Other		621			1,283			1,190
Total		21,944			19,660			15,781
Unallocated operating expenses		(7,842	)		(5,318	)		(6,804	)
Consolidated operating income	$	14,102		$	14,342		$	8,977

(1)

Includes revenues of $8.4 million, $7.6 million, and $11.1 million, generated outside the United States in fiscal years 2020, 2019 and 2018, respectively.

	At June 30,
Identifiable Assets:	2020		2019
Coins	$	10,836	$	9,398
Trading cards and autographs		4,633		3,753
Other		1,778		2,468
Total		17,247		15,619
Unallocated assets		38,235		22,074
Consolidated assets	$	55,482	$	37,693
Goodwill:
Coins	$	515	$	515
Other		1,110		1,568
Consolidated goodwill	$	1,625	$	2,083

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Quarterly Results (Unaudited)

12 Months Ended

Jun. 30, 2020

Quarterly Financial Information Disclosure [Abstract]

Quarterly Results (unaudited)

15. Quarterly Results (unaudited)

The following table sets forth the unaudited consolidated financial results for quarterly periods in fiscal years 2020 and 2019:

Quarterly Results of Operations

	Quarter Ended (In thousands, except per share data)
	Sept. 30, 2018		Dec.31, 2018			Mar.31, 2019			June 30, 2019			Sept. 30, 2019		Dec. 31, 2019		Mar. 31, 2020		June 30, 2020
Statement of Operations Data:
Net revenues	$	17,495	$	15,704		$	19,471		$	19,783		$	20,210	$	19,456	$	18,723	$	20,502
Cost of revenue		7,202		6,953			7,827			8,171			8,101		8,533		8,771		8,250
Gross profit		10,293		8,751			11,644			11,612			12,109		10,923		9,952		12,252
Operating Expenses:
SG&A expense⁽ⁱ⁾		7,466		6,537			6,879			7,076			7,472		7,649		7,310		8,217
Impairment Charge⁽ⁱⁱ⁾		-		-			-			-			-		-		-		486
Operating income		2,827		2,214			4,765			4,536			4,637		3,274		2,642		3,549
Interest and other income (expense), net		3		(145	)		(4	)		(71	)		71		4		38		(20	)
Income before provision for income taxes		2,830		2,069			4,761			4,465			4,708		3,278		2,680		3,529
Provision for income taxes ⁽ⁱⁱⁱ⁾		699		588			1,202			1,659			1,095		664		753		897
Net Income	$	2,131	$	1,481		$	3,559		$	2,806		$	3,613	$	2,614	$	1,927	$	2,632

Net income per share:
Basic	$	0.24	$	0.17		$	0.40		$	0.31		$	0.40	$	0.29	$	0.21	$	0.29
Diluted	$	0.24	$	0.17		$	0.40		$	0.31		$	0.40	$	0.29	$	0.21	$	0.29

Weighted average shares outstanding:
Basic		8,933		8,936			8,938			8,943			8,973		8,980		8,989		8,993
Diluted		8,962		8,947			8,966			9,004			9,060		9,061		9,073		9,078

	(i)	In the fourth quarter of fiscal 2020, the Company recognized approximately $845,000 of pre-trial litigation costs that are included in SG&A expense in that quarter.
	(ii)	The impairment reserve in the fourth quarter of fiscal 2020 related to our Expos tradeshow business. See Recent Developments-Coronavirus (COVID-19) above.
	(iii)	The higher ETR in the fourth quarter of fiscal 2019, reflects a non-cash valuation allowance established against deferred tax assets in China as of June 30, 2019. See Provisions for Income Taxes above.

Subsequent Events

12 Months Ended

Jun. 30, 2020

Subsequent Events [Abstract]

Subsequent Events

16. Subsequent Events

Dividends

On August 3, 2020, the Company announced its quarterly cash dividend of $0.175 per share of common stock for the first quarter of fiscal 2021. The cash dividend will be paid on August 28, 2020 to stockholders of record on August 14, 2020.

Schedule II Valuation and Qualifying Accounts

12 Months Ended

Jun. 30, 2020

SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]

Schedule II Valuation and Qualifying Accounts

	Schedule II
	Valuation and Qualifying Accounts
	Balance at		Charged to		Charged to		Charged (Credited)		Net			Balance
	Beginning		Operating		Cost of		to Tax		(Deductions)			at End
Description	of Period		Expenses		Revenues		Provision		Recovery			of Period

Allowance for doubtful accounts
Year ended June 30, 2018	$	77,000	$	33,000	$	-	$	-	$	(30,000	)	$	80,000
Year ended June 30, 2019	$	80,000	$	8,000	$	-	$	-	$	(16,000	)	$	72,000
Year ended June 30, 2020	$	72,000	$	26,000	$	-	$	-	$	-		$	98,000

Inventory Reserve
Year ended June 30, 2018	$	977,000	$	-	$	502,000	$	-	$	(265,000	)	$	1,214,000
Year ended June 30, 2019	$	1,214,000	$	-	$	178,000	$	-	$	(114,000	)	$	1,278,000
Year ended June 30, 2020	$	1,278,000	$	-	$	252,000	$	-	$	(458,000	)	$	1,072,000

Valuation allowances for deferred tax assets
Year ended June 30, 2018	$	709,000	$	-	$	-	$	108,000	$	-		$	817,000
Year ended June 30, 2019	$	817,000	$	-	$	-	$	852,000	$	-		$	1,669,000
Year ended June 30, 2020	$	1,669,000	$	-	$	-	$	10,000	$	-		$	1,679,000

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).

Principles of Consolidation

Principles of Consolidation

Reclassifications

Reclassification

Certain prior period amounts have been reclassified to conform to the current year presentation.

Use of Estimates

Use of Estimates

Cash and Cash Equivalents

Cash and Cash Equivalents

We consider all highly liquid investments with original maturities of three months or less at the date of purchase to be cash and cash equivalents.

Concentrations

Concentrations

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Leases

Leases

Revenue Recognition

Revenue Recognition

In accordance with ASC 606 we recognize revenue for our main revenue streams as follows:

Shipping and Handling Costs

Shipping and Handling Costs

Inventories

Inventories

Property and Equipment

Property and Equipment

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Capitalized Software

Capitalized Software

Long-Lived Assets

Long-Lived Assets

Warranty Costs

Warranty Costs

Advertising Costs

Advertising Costs

Advertising costs are expensed as incurred and amounted to approximately $250,000, $260,000, and $286,000 in the fiscal years ended June 30, 2020, 2019 and 2018, respectively.

Income Taxes

Income Taxes

Foreign Currency

Foreign Currency

Stock-based Compensation

Stock-Based Compensation

Net Income Per Share

Net Income Per Share

The following table sets forth the computation of basic and diluted net income (loss) per common share (in thousands except per share data):

	Year Ended June 30,
	2020		2019		2018
Income from continuing operations	$	10,786	$	9,977	$	6,132
Income (loss) from discontinued operations (net of income taxes)		-		-		104
Net income	$	10,786	$	9,977	$	6,236

Net income per basic share:
From continuing operations	$	1.20	$	1.12	$	0.71
From discontinued operations (net of income taxes)		-		-		0.01
Net income per share	$	1.20	$	1.12	$	0.72

Net income per diluted share:
From continuing operations	$	1.19	$	1.11	$	0.70
From discontinued operations (net of income taxes)		-		-		0.01
Net income per share	$	1.19	$	1.11	$	0.71

Weighted-average shares outstanding:
Basic		8,984		8,937		8,662
Effect of dilutive shares		84		33		155
Diluted		9,068		8,970		8,817

There were approximately 21,000 and 5,000 anti-dilutive restricted shares excluded from the computation of diluted income per share at June 30, 2020 and 2019, respectively.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Schedule of Computation of Net Income (Loss) Per Common Share

The following table sets forth the computation of basic and diluted net income (loss) per common share (in thousands except per share data):

	Year Ended June 30,
	2020		2019		2018
Income from continuing operations	$	10,786	$	9,977	$	6,132
Income (loss) from discontinued operations (net of income taxes)		-		-		104
Net income	$	10,786	$	9,977	$	6,236

Net income per basic share:
From continuing operations	$	1.20	$	1.12	$	0.71
From discontinued operations (net of income taxes)		-		-		0.01
Net income per share	$	1.20	$	1.12	$	0.72

Net income per diluted share:
From continuing operations	$	1.19	$	1.11	$	0.70
From discontinued operations (net of income taxes)		-		-		0.01
Net income per share	$	1.19	$	1.11	$	0.71

Weighted-average shares outstanding:
Basic		8,984		8,937		8,662
Effect of dilutive shares		84		33		155
Diluted		9,068		8,970		8,817

Inventories (Tables)

12 Months Ended

Jun. 30, 2020

Inventory Disclosure [Abstract]

Schedule of Inventories, Net

Inventories consist of the following at June 30 (in thousands):

	2020			2019
Coins	$	195		$	173
Grading raw materials consumable inventory		3,389			3,070
		3,584			3,243
Less inventory reserve		(1,072	)		(1,278	)
	$	2,512		$	1,965

Property and Equipment (Tables)

12 Months Ended

Jun. 30, 2020

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment consist of the following at June 30 (in thousands):

	2020			2019
Coin reference sets	$	68		$	68
Computer hardware and equipment		2,844			2,325
Computer software		1,752			1,606
Equipment		5,566			5,131
Furniture and office equipment		1,113			944
Leasehold improvements		4,801			4,741
Trading card reference library		52			52
		16,196			14,867
Less accumulated depreciation and amortization		(9,434	)		(7,608	)
Property and equipment, net	$	6,762		$	7,259

Goodwill and Intangible Assets (Tables)

12 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The following table sets forth the carrying values of goodwill for those acquired businesses that are classified as continuing operations as of June 30 (in thousands):

	2020		2019
CoinFacts	$	515	$	515
Expos Unlimited		-		458
CCE		1,110		1,110
	$	1,625	$	2,083

Schedule of Intangible Assets

The following table sets forth, by asset class, the amounts classified as other intangible assets, net, on the consolidated balance sheets as of June 30, 2020 and 2019 (in thousands):

	As of June 30, 2020							As of June 30, 2019
	Gross Book Value		Accumulated Amortization			Net Book Value		Gross Book Value		Accumulated Amortization			Net Book Value
Amortized Intangible Assets:

Capitalized Software	$	8,622	$	(6,373	)	$	2,249	$	7,292	$	(5,334	)	$	1,958

Other:		2,470		(2,312	)		158		2,269		(2,137	)		132

Indefinite lived Intangible Assets:		39		-			39		239		-			239
	$	11,131	$	(8,685	)	$	2,446	$	9,800	$	(7,471	)	$	2,329

Schedule of Estimated Amortization Expense of Intangible Assets

Estimated amortization expense for each of the five succeeding years and thereafter relating to amortizable intangible assets, is as follows (in thousands):

Fiscal Year Ending June 30,
2021	$	1,216
2022		818
2023		373
	$	2,407

Accrued Liabilities (Tables)

12 Months Ended

Jun. 30, 2020

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities consisted of the following at June 30 (in thousands):

	2020		2019
Warranty reserve	$	698	$	852
Professional fees and legal settlements accruals		975		141
Other		1,040		880
	$	2,713	$	1,873

Schedule of Product Warranty

Warranty reserve activity and balances related to fiscal years 2020, 2019 and 2018, were as follows (in thousands):

Warranty reserve at June 30, 2017	$	834
Charged to cost of revenues		764
Payments		(736	)
Warranty reserve at June 30, 2018		862
Charged to cost of revenues		568
Payments		(578	)
Warranty reserve at June 30, 2019		852
Charged to cost of revenues		462
Payments		(616	)
Warranty reserve at June 30, 2020	$	698

Taxes (Tables)

12 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Schedule of Pre-Tax Income (Loss)

For fiscal years ended June 30, 2020, 2019 and 2018, pre-tax income (loss) was attributed to the following jurisdictions (in thousands):

	2020		2019			2018
Domestic operations	$	13,845	$	15,691		$	8,015
Foreign operations		350		(1,566	)		877
	$	14,195	$	14,125		$	8,892

Schedule of Components of Provision for Income Taxes

Set forth below is the (benefit) provision for income taxes for continuing operations for the years ended June 30 (in thousands):

	2020			2019		2018
Current:
Federal	$	3,008		$	2,951	$	816
State		381			251		44
International		82			285		258
		3,471			3,487		1,118
Deferred:
Federal		(261	)		193		1,470
State		199			378		157
International		-			90		15
		(62	)		661		1,642
Total provision for income taxes	$	3,409		$	4,148	$	2,760

Schedule of Reconciliation of Tax Computed at Statutory Federal Rate

The reconciliation of the provision (benefit) for income taxes computed at federal statutory rates to the provision for income taxes for the years ended June 30 was as follows (in thousands):

	2020			2019			2018
Provision at federal statutory rates	$	2,981		$	2,966		$	2,530
State income taxes, net		458			497			142
Permanent differences		123			130			246
International, including change in valuation allowances		(82	)		590			127
Other		(34	)		(55	)		25
Impact of federal law change		-			-			280
Deficiency (Excess) tax deduction for stock compensation		(37	)		20			(590	)
	$	3,409		$	4,148		$	2,760

Summary of Components of Deferred Tax

Significant components of deferred taxes as of June 30, 2020 and 2019 were as follows (in thousands):

	2020			2019
Deferred tax assets:
Stock compensation costs	$	405		$	256
Reserves and accruals		823			1,771
Net operating loss carryforward		1,449			1,409
Operating lease liabilities		2,528			-
Credits		206			394
Other		166			132
		5,577			3,962
Less: valuation allowance		(1,679	)		(1,669	)
Total deferred tax assets		3,898			2,293
Deferred tax liabilities:
Property and equipment		(1,075	)		(1,237	)
Operating lease right-of-use assets		(1,679	)		-
Intangibles		(335	)		(333	)
Other		(186	)		(162	)
Total deferred tax liabilities		(3,275	)		(1,732	)
Net deferred tax assets	$	623		$	561

Schedule of Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows (in thousands):

Unrecognized tax benefits balance at June 30, 2018	$	288
Gross increases for tax positions of prior years		-
Gross decreases for tax positions of prior years		-
Gross increases for tax positions of current year		-
Settlements		-
Lapse of statute of limitations		-
Unrecognized tax benefits balance at June 30, 2019		288
Gross increases for tax positions of prior years		-
Gross decreases for tax positions of prior years		-
Gross increases for tax positions of current year		-
Settlements		-
Lapse of statute of limitations		-
Unrecognized tax benefits balance at June 30, 2020	$	288

Leases (Tables)

12 Months Ended

Jun. 30, 2020

Leases [Abstract]

Schedule of Lease, Cost

Information related to the Company’s total lease costs were as follows (in thousands):

	Year Ended June 30, 2020
Operating lease cost	$	2,133
Variable lease cost		551
Total lease cost	$	2,684

Schedule of ROU Assets and Lease Liabilities

Information related to the Company’s ROU assets and related lease liabilities were as follows (in thousands):

	Year Ended June 30, 2020
Cash paid for operating lease liabilities	$	2,337
Weighted-average remaining lease term		7.3 years
Weighted-average discount rate		4.8	%

Schedule of Future Minimum Lease Payments

Year Ending June 30,
2021	$	2,324
2022		1,986
2023		1,647
2024		1,473
2025		1,468
Thereafter		5,070
Total undiscounted future minimum lease payments	$	13,968
Less: Imputed interest		(2,244	)
Total operating lease liabilities	$	11,724
Current operating lease liabilities	$	2,274
Long-term operating lease liabilities		9,450
Total operating lease liabilities	$	11,724

Schedule of Future Minimum Lease Payments Under Agreements

Future minimum lease payments under those agreements at June 30, 2019, were as follows (in thousands):

Year Ending June 30,	Gross Amount
2020	$	2,457
2021		2,424
2022		2,044
2023		1,660
2024		1,465
Thereafter		6,535
	$	16,585

Stock Incentive Plans (Tables)

12 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Abstract]

Schedule of Stock-Based Compensation Expense

The following table shows total stock-based compensation expense included as part of continuing operations in the Consolidated Statements of Operations, as follows (in thousands):

	Year Ended June 30,
Included in:	2020		2019		2018
Selling and marketing expenses		29		70		98
General and administrative expenses		1,546		904		1,323
	$	1,575	$	974	$	1,421

Schedule of Unrecognized and Non-Vested Stock-Based Compensation Awards

That expense will be recognized in future periods, as follows (in thousands):

Year Ending June 30,
2021	$	1,321
2022		530
2023		84
Total	$	1,935

Schedule of Non-Vested Activity

Non-Vested Shares:	Number of Shares (in thousands)			Weighted Average Grant-Date Fair Value (per share)
Non-vested at June 30, 2017		431		$	13.97
Granted		100			29.43
Vested		(442	)		14.13
Cancelled		(6	)		28.97
Non-vested at June 30, 2018		83			28.23
Granted		162			13.28
Vested		(40	)		20.85
Cancelled		(24	)		23.63
Non-vested at June 30, 2019		181			17.11
Granted		117			24.77
Vested		(52	)		15.94
Cancelled		(30	)		30.25
Non-vested at June 30, 2020		216		$	18.72

Commitments and Contingencies (Tables)

12 Months Ended

Jun. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Lease Payments Under Continuing Operations

Future minimum lease payments under those agreements associated with our continuing operations at June 30, 2020, are as follows (in thousands):

Year Ending June 30,	Gross Amount
2021	$	2,514
2022		2,138
2023		1,663
2024		1,473
2025		1,470
Thereafter		5,069
	$	14,327

Business Segments (Tables)

12 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

Net identifiable assets and goodwill are provided by business segment as of June 30, 2020 and 2019.

	Year Ended June 30,
Net Revenues from external customers ⁽¹⁾	2020		2019		2018
Coins	$	41,599	$	41,394	$	42,838
Trading cards and autographs		33,673		26,420		21,065
Other		3,619		4,639		4,546
Total revenue	$	78,891	$	72,453	$	68,449

Depreciation and Amortization:
Coins	$	1,539	$	1,360	$	954
Trading cards and autographs		702		581		394
Other		329		428		562
Total		2,570		2,369		1,910
Unallocated amortization and depreciation		470		443		396
Consolidated amortization and depreciation	$	3,040	$	2,812	$	2,306

Stock-based compensation:
Coins	$	262	$	143	$	385
Trading cards and autographs		120		33		63
Other		49		32		63
Total		431		208		511
Unallocated stock-based compensation		1,144		766