What changed in this filing

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Item 1. Financial Statements

2025-05-09 compared with 2025-01-31 · 63 added, 62 removed, 234 unchanged (35% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

December 31, 2024

March 31, 2025

June 30, 2024

2 unchanged sentences

Short term investments

Accounts receivable, less allowance for credit losses of $ 2,043 and $ 1,922 at December 31, 2024 and June 30, 2024, respectively

Accounts receivable, less allowance for credit losses of $ 2,043 and $ 1,922 at March 31, 2025 and June 30, 2024, respectively

Prepaid expenses and other current assets

24 unchanged sentences

Common stock, $ 0.005 par value, authorized 20,000,000 shares;

issued and outstanding 9,375,795 at December 31, 2024 and 9,299,795 at June 30, 2024, respectively

issued and outstanding 9,375,795 at March 31, 2025 and 9,299,795 at June 30, 2024, respectively

Paid in capital

6 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Cost of goods sold

1 unchanged sentence

Loss from operations

( 1,297,923 )

( 1,554,396 )

Interest income

Income (loss) before income tax provision

Income tax provision

Net income (loss)

Income (loss) per common share:

Loss before income tax provision (benefit)

Income tax provision (benefit)

Loss per common share:

Weighted-average number of shares:

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Six Months Ended

Nine Months Ended

Operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Provision for (recovery of) credit losses

Depreciation of equipment and leasehold improvements

Accretion of discount on treasury securities

Net accretion of (discount)/premium on treasury securities

Noncash operating lease expense

11 unchanged sentences

Deferred revenue

Net cash used in operating activities

Net cash provided by (used in) operating activities

Investing activities:

9 unchanged sentences

Net cash provided by financing activities

Net (decrease) in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)

Six Months Ended December 31, 2024

Nine Months Ended March 31, 2025

Balance, June 30, 2024

1 unchanged sentence

Stock option exercises

Balance, December 31, 2024

Six Months Ended December 31, 2023

Balance, March 31, 2025

Nine Months Ended March 31, 2024

Balance, June 30, 2023

1 unchanged sentence

Stock option exercises

Balance, March 31, 2024

Three Months Ended March 31, 2025

Balance, December 31, 2024

Three Months Ended December 31, 2024

Balance, September 30, 2024

Stock-based compensation expense

Stock option exercises

Balance, March 31, 2025

Three Months Ended March 31, 2024

Balance, December 31, 2023

Three Months Ended December 31, 2023

Balance, September 30, 2023

Stock-based compensation expense

Stock option exercises

Balance, December 31, 2023

Balance, March 31, 2024

The accompanying notes are an integral part of these condensed consolidated financial statements.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

March 31, 2025

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A) BASIS OF PRESENTATION

The condensed consolidated balance sheets as of December 31, 2024 and June 30, 2024, the condensed consolidated statements of operations for the three and six months ended December 31, 2024 and 2023, the condensed consolidated statements of cash flows for the six months ended December 31, 2024 and 2023, and the condensed consolidated statements of stockholders' equity for the three and six months ended December 31, 2024 and 2023, have been prepared by the Company in accordance with generally accepted accounting principles in the United States of America (“U.S.

The condensed consolidated balance sheets as of March 31, 2025 and June 30, 2024, the condensed consolidated statements of operations for the three and nine months ended March 31, 2025 and 2024, the condensed consolidated statements of cash flows for the nine months ended March 31, 2025 and 2024, and the condensed consolidated statements of stockholders' equity for the three and nine months ended March 31, 2025 and 2024, have been prepared by the Company in accordance with generally accepted accounting principles in the United States of America (“U.S.

GAAP”) and have not been audited.

32 unchanged sentences

Additionally, discrete items are treated separately from the effective rate analysis and are recorded separately as an income tax provision or benefit at the time they are recognized.

During the three and six months ended December 31, 2024, state income tax provisions of $ 2,760 and $ 5,520 , respectively, were recorded for the required minimum state tax payments plus estimated tax due on the negligible net taxable income after state net operating loss (NOL) deductions.

State income tax provisions of $ 1,879 and $ 3,758 , respectively, were recorded for the three and six months ended December 31, 2023 for minimum state required tax payments only as there was no taxable income after application of available NOLs.

No federal income tax provisions were booked for either the three month or six-month periods ending December 31, 2024 or 2023 given the availability of federal net operating loss carryforwards to offset minimal to no taxable income.

A minimal federal income tax provision was recorded during the three and nine months ended March 31, 2025 as the result of taxes due on the fiscal year 2022 after an amended tax return was filed to properly reflect employer payroll taxes inappropriately paid in that year related to the gains from the disqualifying dispositions of incentive stock options.

During the three- and nine-month periods ended March 31, 2024, a federal tax benefit of $ 82,652 was recorded as a result of the Return-to-Provision (“RTP”) adjustment.

State tax expense of $ 5,203 and $ 10,724 , respectively, was booked for the three and nine months ended March 31, 2025 for the required minimum state tax payments.

State income tax provisions of $ 1,522 and $ 5,281 , respectively, were recorded for the three and nine months ended March 31, 2024 for minimum state required tax payments only as there was no taxable income after application of available net operating loss carryforwards (“NOLs”).

NOLs arising in tax years beginning after December 31, 2017 are limited to 80 percent of taxable income per the Tax Cuts and Jobs Act (“TCJA”).

As such, the future utilization of all federal NOLs available to the Company is limited to 80 percent of the resulting taxable income.

The effective tax rate was 2.8 % and 1.7 % for the three and six months ended December 31, 2024, respectively.

The effective tax rate was less than 1 % for the three and six months ended December 31, 2023.

It is anticipated that the effective rate in the current year and future years will continue to be reduced by utilization of a portion or all of the federal and state net operating loss carryforwards that existed as of June 30, 2024.

The Company's taxable loss generated during the first six months of fiscal year 2025 increased the tax loss carryforward as of December 31, 2024 to approximately $ 32,900,000 .

The effective tax rate for the three months ended March 31, 2025 and 2024 was 1.9 % and 20.5 %, respectively.

For the nine months ended March 31, 2025 and 2024, the effective tax rate was 1.8 % and 8.4 %, respectively.

It is anticipated that the effective rate in future years will continue to be reduced by utilization of a portion or all of the available federal and state net operating loss (NOL) carryforwards that existed as of June 30, 2024.

The Company's taxable loss generated during the first nine months of fiscal year 2025 increased the tax loss carryforward as of March 31, 2025 to approximately $ 33,600,000 .

Given the cumulative taxable losses for the last three years, excluding one-time items, the expectation for utilization of the estimated tax loss carryforward is not likely, and as such, the future realization of this continues to be uncertain.

3 unchanged sentences

The related expense is calculated using the net present value of the expected payments and is included in selling, general and administrative expenses in the condensed consolidated statements of operations.

The deferred compensation liability recorded at December 31, 2024 and June 30, 2024 is $ 2,227,789 and $ 2,093,124 , respectively.

Compensation expense of $ 134,665 was recorded during the six months ended December 31, 2024 as a result of the increase in the deferred compensation liability for the current officer, due mainly to the annual increase in the future payments earned under the arrangement due to an additional year of service completed.

The discount factor used to calculate the net present value of the liability was stable at 5.53 % at December 31, 2024 compared to 5.55 % at June 30, 2024.

A compensation benefit of $( 62,710 ) was recorded under this arrangement for the three months ended December 31, 2024 as the discount factor increased from 5.12 % at September 30, 2024 to 5.53 % as of December 31, 2024.

Compensation expense of $ 123,190 and $ 63,255 , respectively, was recorded for the three and six months ended December 31, 2023.

The following tables summarize the unrealized positions for the held-to-maturity debt securities as of December 31, 2024 and June 30, 2024:

December 31, 2024

The deferred compensation liability recorded at March 31, 2025 and June 30, 2024 is $ 2,241,804 and $ 2,093,124 , respectively.

Compensation expense of $ 148,680 was recorded during the nine months ended March 31, 2025 as a result of the increase in the deferred compensation liability for the current officer, due mainly to the annual increase in the future payments earned under the arrangement due to completing an additional year of service, partially offset by a slight increase in the discount factor.

The discount factor used to calculate the net present value of the liability was stable at 5.62 % at March 31, 2025 compared to 5.55 % at June 30, 2024.

For the three months ended March 31, 2025 and 2024, compensation expense of $ 14,016 and $ 50,132 , respectively, was recorded under this arrangement.

Compensation expense of $ 113,387 was recorded for the nine months ended March 31, 2024.

The following tables summarize the unrealized positions for the held-to-maturity debt securities as of March 31, 2025 and June 30, 2024:

March 31, 2025

Amortized cost basis

7 unchanged sentences

US Treasury securities

The following tables summarize the fair value and amortized cost basis of the held-to-maturity debt securities by contractual maturity as of December 31, 2024 and June 30, 2024:

December 31, 2024

The following tables summarize the fair value and amortized cost basis of the held-to-maturity debt securities by contractual maturity as of March 31, 2025 and June 30, 2024:

March 31, 2025

Amortized Cost Basis

6 unchanged sentences

The components of inventories were as follows:

December 31, 2024

March 31, 2025

June 30, 2024

15 unchanged sentences

The negative covenants include restrictions on other indebtedness, liens, fundamental changes, certain investments, disposition of assets, mergers and liquidations, among other restrictions.

As of December 31, 2024, the Company was in compliance with all covenants related to the Credit Agreement.

As of December 31, 2024 and June 30, 2024, there were no outstanding borrowings on the facility.

As of March 31, 2025, the Company was in compliance with all covenants related to the Credit Agreement.

As of March 31, 2025 and June 30, 2024, there were no outstanding borrowings on the facility.

REVENUE RECOGNITION

2 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

United States

2 unchanged sentences

Effective July 1, 2023, the Company increased its deferral rates from 2.4 % to 3 % for domestic sales and decreased its deferral rate from 10 % to 8 % for export sales to reflect recent warranty experience.

In the six months ended December 31, 2024 and 2023, the Company recognized revenue, which was included in the

deferred revenue liability at the beginning of those periods of $ 141,787 and $ 197,718 , respectively, for performance obligations related to consumer and customer warranties.

In the nine months ended March 31, 2025 and 2024, the Company recognized revenue, which was included in the deferred

revenue liability at the beginning of those periods of $ 192,592 and $ 264,719 , respectively, for performance obligations related to consumer and customer warranties.

The Company estimates that the deferred revenue performance obligations are satisfied within one year to three years and therefore uses that same timeframe for recognition of the deferred revenue.

INCOME (LOSS) PER COMMON AND COMMON STOCK EQUIVALENT SHARE

Basic income (loss) per common share is computed based on the weighted-average number of common shares outstanding.

Diluted income (loss) per common share is calculated assuming the exercise of stock options except where the result would be anti-dilutive.

The following table reconciles the numerator and denominator used to calculate basic and diluted income (loss) per share:

Three Months Ended December 31,

Six Months Ended December 31,

Net income (loss)

LOSS PER COMMON AND COMMON STOCK EQUIVALENT SHARE

Basic loss per common share is computed based on the weighted-average number of common shares outstanding.

Diluted loss per common share is calculated assuming the exercise of stock options except where the result would be anti-dilutive.

The following table reconciles the numerator and denominator used to calculate basic and diluted loss per share:

Three Months Ended March 31,

Nine Months Ended March 31,

Weighted average shares, basic

1 unchanged sentence

Diluted shares

Net income (loss) attributable to common shareholders per share:

(1) Excludes 713,846 weighted average stock options during the three months ended December 31, 2023 as the impact of such awards was anti-dilutive.

Weighted average stock options excluded during the six months ended December 31, 2024 and 2023 due to anti-dilution were 425,304 and 743,465 , respectively.

For the three months ended December 31, 2024, no stock options were anti-dilutive.

Net loss attributable to common shareholders per share:

(1) Excludes 354,000 and 401,883 , respectively, weighted average stock options during the three and nine months ended March 31, 2025 as the impact of such awards was anti-dilutive.

Weighted average stock options excluded during the three and nine months ended March 31, 2024 due to anti-dilution were 700,911 and 729,384 , respectively.

RELATED PARTY TRANSACTIONS

5 unchanged sentences

ACCOUNTS RECEIVABLE CONCENTRATIONS

As of December 31, 2024, the Company’s top three accounts receivable customers represented approximately 52 %, 15 % and 9 % of trade accounts receivable.

As of March 31, 2025, the Company’s top accounts receivable customer represented approximately 18 % of trade accounts receivable.

The top three accounts receivable customers as of June 30, 2024, represented approximately 18 %, 15 % and 12 % of trade accounts receivable.

LEGAL MATTERS

As of December 31, 2024, the Company is involved in the matters described below:

As of March 31, 2025, the Company is involved in the matters described below:

• The Company maintains a program focused on enforcing its intellectual property and, in particular, certain patents in its patent portfolio.

5 unchanged sentences

that some of the Company's wireless products may infringe on certain One-E-Way patents.

No lawsuits involving these allegations have yet been filed and served on the Company.

The Company is currently investigating whether these allegations have any merit.

A Supplemental Notice of Infringement was served on the Company on March 18, 2025.

The Company is investigating the merits of the notice and it is the Company’s hope that the controversy can come to a satisfactory resolution through good faith negotiations.

Depending on the results of the investigation and the defense of these allegations, the ultimate resolution of this matter may have a material effect on the Company's condensed consolidated financial statements.

The Company estimates that this matter will ultimately be resolved at a cost of approximately $ 41,000 and has accrued this amount as of December 31, 2024 and June 30, 2024.

The Company estimates that this matter will ultimately be resolved at a cost of approximately $ 41,000 and has accrued this amount as of March 31, 2025 and June 30, 2024.

The ultimate resolution of these matters is not determinable unless otherwise noted.

21 unchanged sentences

uncertainties associated with the pandemics and other health crises or natural disasters, including their possible effects on the Company’s operations and its supply chain;

trade tensions between the U.S.

and China given recently enacted tariffs and their uncertainty;

the impact of the ongoing conflict in Eastern Europe and the instability in the Middle East on the Company’s operations;

7 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements