What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-09-01 compared with 2023-09-01 · 179 added, 198 removed, 632 unchanged (37% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

March 31, 2023

December 31, 2022

(as Restated)

5 unchanged sentences

Marketable securities

Accounts receivable, net of allowance for credit losses of $ 125 and $ 243 as of March 31, 2023 and June 30, 2022, respectively

Accounts receivable, net of allowance for credit losses of $ 215 and $ 243 as of December 31, 2022 and June 30, 2022, respectively

Inventories, net

20 unchanged sentences

Common Stock, par value $ 0.01 per share;

100,000,000 shares authorized as of March 31, 2023 and June 30, 2022;

100,000,000 shares authorized as of December 31, 2022 and June 30, 2022;

39,639,433 and 39,628,197 shares issued;

9 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)

Three Months ended March 31,

Three Months ended December 31,

2022 (as Restated)

20 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)

Nine Months Ended March 31,

Six Months Ended December 31,

2022 (as Restated)

21 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY (unaudited)

Nine months ended March 31, 2023 (as Restated) (in thousands, except for share data)

Six months ended December 31, 2022 (as Restated) (in thousands, except for share data)

Treasury Stock

5 unchanged sentences

( 2,893,715 )

Stock-based compensation expense

Stock options exercised

Balances at December 31, 2022

( 2,893,715 )

Net income (as restated)

1 unchanged sentence

Stock options exercised

Balances at March 31, 2023

Balances at December 31, 2022

( 2,893,715 )

Nine months ended March 31, 2022 (in thousands, except share data)

Six months ended December 31, 2021 (in thousands, except share data)

Treasury Stock

9 unchanged sentences

( 2,893,715 )

Stock-based compensation expense

Stock options exercised

Balances at March 31, 2022

( 2,893,715 )

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

Nine Months ended March 31,

Six Months ended December 31,

2022 (as Restated)

6 unchanged sentences

Unrealized loss (gain) on marketable securities

Recovery of credit losses

(Recovery of) provision for credit losses

Change to inventory reserve

11 unchanged sentences

Proceeds from disposal of fixed asset

Purchases of marketable securities

Purchases of other investments

Redemption of other investments

Purchases of marketable securities and other investments

Net Cash Used in Investing Activities

12 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

March 31, 2023

December 31, 2022

NOTE 1 - Nature of Business and Summary of Significant Accounting Policies

4 unchanged sentences

We have experienced significant growth in recent years, primarily driven by fast growing recurring service revenues generated from wireless communication services for intrusion and fire alarm systems, as well as our school security products that are designed to meet the increasing needs to enhance school security as a result of on-campus shooting and violence in the U.S.

Our wireless communication services have led to the substantial growth in our monthly recurring revenues.

The Company's fiscal year begins on July 1 and ends on June 30.

21 unchanged sentences

Current Assets and Current Liabilities - The carrying amount of cash and cash equivalents, certificates of deposits, current receivables and payables and

certain other short-term financial instruments approximate their fair value as of March 31, 2023 and June 30, 2022 due to their short-term maturities.

certain other short-term financial instruments approximate their fair value as of December 31, 2022 and 2021 due to their short-term maturities.

Long-term debt and lease liabilities reflect fair value based on prevailing market rates.

Cash and Cash Equivalents and Investments – other

Cash and cash equivalents include approximately $ 10,225,000 of short-term time deposits, consisting of several certificates of deposit totaling $ 10,162,000 and $ 63,000 in a money market fund as of March 31, 2023.

Cash and cash equivalents include approximately $ 63,000 of short-term time deposits, consisting of $ 63,000 in a money market fund as of June 30, 2022.

Cash and cash equivalents include approximately $ 20,112,000 and $ 63,000 of short-term time deposits, consisting of several certificates of deposit totaling $ 20,049,000 and $ 0 , at December 31, 2022 and June 30, 2022, respectively, and $ 63,000 in a money market fund as of both December 31, 2022 and June 30, 2022.

The Company classifies these highly liquid investments with original maturities of three months or less as cash equivalents.

1 unchanged sentence

Cash and cash equivalents consists of the following as of (in thousands):

March 31, 2023

December 31, 2022

June 30, 2022

2 unchanged sentences

Investments-other consists of the following as of (in thousands):

March 31, 2023

December 31, 2022

June 30, 2022

2 unchanged sentences

The Company’s Certificates of Deposit consist of the following as of (in thousands):

March 31, 2023

December 31, 2022

Balance Sheet Classification

8 unchanged sentences

1/23/2023 - 2/21/2023

The Company has cash balances in banks in excess of the maximum amount insured by the FDIC and other international agencies as of March 31, 2023 and June 30, 2022.

The Company has cash balances in banks in excess of the maximum amount insured by the FDIC and other international agencies as of December 31, 2022 and June 30, 2022.

The Company has not historically experienced any credit losses with balances in excess of FDIC limits.

4 unchanged sentences

The Company would record an impairment charge if the cost of the available-for-sale securities exceeds the estimated fair value of the securities and the decline in value is determined to be other-than-temporary.

During the nine months ended March 31, 2023, the Company did not record an impairment charge regarding its investment in marketable securities because

During the six months ended December 31, 2022, the Company did not record an impairment charge regarding its investment in marketable securities because

management believes, based on its evaluation of the circumstances, that the decline in fair value below the cost of certain of the Company’s marketable securities is temporary.

Accounts Receivable

Accounts receivable is stated net of the reserves for credit losses of $ 125,000 and $ 243,000 as of March 31, 2023 and June 30, 2022, respectively.

Accounts receivable is stated net of the reserves for credit losses of $ 215,000 and $ 243,000 as of December 31, 2022 and June 30, 2022, respectively.

Our reserves for credit losses are subjective critical estimates that have a direct impact on reported net earnings.

23 unchanged sentences

Intangible assets determined to have indefinite lives were not amortized but were tested for impairment at least annually.

Intangible assets consisted of the follows (in thousands):

March 31, 2023

Changes in intangible assets are as follows (in thousands):

December 31, 2022

June 30, 2022

Customer relationships

Amortization expense for intangible assets subject to amortization was approximately $ 90,000 and $ 98,000 for the three months ended March 31, 2023 and 2022, respectively.

Amortization expense for intangible assets subject to amortization was approximately $ 271,000 and $ 293,000 for the nine months ended March 31, 2023 and 2022, respectively.

Amortization expense for intangible assets subject to amortization was approximately $ 90,000 and $ 98,000 for the three months ended December 31, 2022 and 2021, respectively.

Amortization expense for intangible assets subject to amortization was approximately $ 181,000 and $ 196,000 for the six months ended December 31, 2022 and 2021, respectively.

Amortization expense for each of the next five fiscal years is estimated to be as follows:

4 unchanged sentences

and 2027 - $ 283,000 .

The weighted average remaining amortization period for intangible assets was 15.7 years and 16.2 years at March 31, 2023 and June 30, 2022, respectively.

The weighted average remaining amortization period for intangible assets was 15.8 years and 16.2 years at December 31, 2022 and June 30, 2022, respectively.

Revenue Recognition

19 unchanged sentences

expenses in the consolidated statements of income and are expensed as incurred.

Advertising expense for the three months ended March 31, 2023 and 2022 was $ 926,000 and

Advertising expense for the three months ended December 31, 2022 and 2021 was $ 505,000 and

$ 512,000 , respectively.

Advertising expense for the three months ended March 31, 2023 and 2022 was $ 2,185,000 and $ 2,253,000 , respectively.

Advertising expense for the six months ended December 31, 2022 and 2021 was $ 1,259,000 and $ 1,598,000 , respectively.

Research and Development Costs

Research and development (“R&D”) costs incurred by the Company are charged to expense as incurred and are included in operating expenses in the consolidated statements of income.

Company-sponsored R&D expense for the three months ended March 31, 2023 and 2022 was $ 2,314,000 and $ 2,009,000 , respectively.

Company-sponsored R&D expense for the nine months ended March 31, 2023 and 2022 was $ 6,964,000 and $ 5,918,000 , respectively.

Company-sponsored R&D expense for the three months ended December 31, 2022 and 2021 was $ 2,222,000 and $ 1,978,000 , respectively.

Company-sponsored R&D expense for the six months ended December 31, 2022 and 2021 was $ 4,650,000 and $ 3,909,000 , respectively.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

8 unchanged sentences

Diluted net income per common share (Diluted EPS) is computed by dividing net income by the weighted average number of common shares and dilutive common share equivalents and convertible securities then outstanding.

The following provides a reconciliation of information used in calculating the per share amounts for the three months ended March 31, 2023 and 2022 (in thousands, except share and per share data):

The following provides a reconciliation of information used in calculating the per share amounts for the three months ended December 31, 2022 and 2021 (in thousands, except share and per share data):

Weighted Average Shares

2 unchanged sentences

Stock Options

Options to purchase 0 and 388,000 shares of common stock were excluded for the three months ended March 31, 2023 and 2022, respectively, and were not included in the computation of Diluted EPS because their inclusion would be anti-dilutive.

Options to purchase 0 and 80,435 shares of common stock were excluded for the three months ended December 31, 2022 and 2021, respectively, and were not included in the computation of Diluted EPS because their inclusion would be anti-dilutive.

These options were still outstanding at the end of the period.

The following provides a reconciliation of information used in calculating the per share amounts for the nine months ended March 31, 2023 and 2022 (in thousands, except share and per share data):

The following provides a reconciliation of information used in calculating the per share amounts for the six months ended December 31, 2022 and 2021 (in thousands, except share and per share data):

Weighted Average

2 unchanged sentences

Stock Options

Options to purchase 8,379 and 156,145 shares of common stock were excluded for the nine months ended March 31, 2023 and 2022, respectively, and were not included in the computation of Diluted EPS because their inclusion would be anti-dilutive.

Options to purchase 12,568 and 40,217 shares of common stock were excluded for the six months ended December 31, 2022 and 2021, respectively, and were not included in the computation of Diluted EPS because their inclusion would be anti-dilutive.

These options were still outstanding at the end of the period.

3 unchanged sentences

Determining the fair value of share-based awards at the grant date requires assumptions and judgments about expected volatility and forfeiture rates, among other factors.

Stock-based compensation costs of $ 322,000 and $ 35,000 were recognized for the three months ended March 31, 2023 and 2022, respectively.

Stock-based compensation costs of $ 1,134,000 and $ 1,379,000 were recognized for the nine months ended March 31, 2023 and 2022, respectively.

Stock-based compensation costs of $ 335,000 and $ 1,255,000 were recognized for the three months ended December 31, 2022 and 2021, respectively.

Stock-based compensation costs of $ 812,000 and $ 1,344,000 were recognized for the six months ended December 31, 2022 and 2021, respectively.

Foreign Currency

2 unchanged sentences

The day-to-day operations of all foreign subsidiaries are dependent on the economic environment of the U.S.

Therefore, no realized and unrealized gains and losses associated with foreign currency translation are recorded for the three or nine months ended March 31, 2023 or 2022.

Therefore, no realized and unrealized gains and losses associated with foreign currency translation are recorded for the three or six months ended December 31, 2022 or 2021.

Comprehensive Income

For the three and nine months ended March 31, 2023 and 2022, the Company’s operations did not give rise to material items includable in comprehensive income, which were not already included in net income.

For the three and six months ended December 31, 2022 and 2021, the Company’s operations did not give rise to material items includable in comprehensive income, which were not already included in net income.

Accordingly, the Company’s comprehensive income approximates its net income for all periods presented.

5 unchanged sentences

Shipping and Handling Sales and Costs

The Company records the amount billed to customers for shipping and handling in net sales ($ 106,000 and $ 106,000 in the three months ended March 31, 2023 and 2022, respectively, and $ 346,000 and $ 318,000 in the nine months ended March 31, 2023 and 2022, respectively);

and classifies the costs associated with these sales in cost of sales ($ 437,000 and $ 339,000 in the three months ended March 31, 2023 and 2022, respectively, and $ 1,285,000 and $ 1,033,000 in the nine months ended March 31, 2023 and 2022, respectively).

The Company records the amount billed to customers for shipping and handling in net sales ($ 128,000 and $ 106,000 in the three months ended December 31, 2022 and 2021, respectively, and $ 240,000 and $ 212,000 in the six months ended December 31, 2022 and 2021, respectively);

and classifies the costs associated with these sales in cost of sales ($ 454,000 and $ 361,000 in the three months ended December 31, 2022 and 2021, respectively, and $ 848,000 and $ 694,000 in the six months ended December 31, 2022 and 2021, respectively).

The Company records lease assets and corresponding lease liabilities for the operating lease on our Consolidated Balance Sheets, excluding short-term leases (leases with terms of 12 months or less) as described under ASU No.

7 unchanged sentences

In March 2020, the FASB issued authoritative guidance to provide optional relief for companies preparing for the discontinuation of interest rates such as the London Interbank Offered Rate (“LIBOR”), which is expected to be phased out for new arrangements at the end of calendar 2021, and applies to lease contracts, hedging instruments, held-to-maturity debt securities and debt arrangements that have LIBOR as the benchmark rate.

The Company’s bank has notified the Company that its LIBOR option will continue to be available to it through June 30, 2023, at which time the option will shift to the Benchmark Replacement as defined in the agreement with the bank (see Note 8).

In January 2021, the FASB issued authoritative guidance that makes amendments to the new rules on accounting for reference rate reform.

The amendments clarify that for all derivative instruments affected by the changes to interest rates used for discounting, margining or contract price alignment, regardless of whether they reference LIBOR or another rate expected to be discontinued as a result of reference rate reform, an entity may apply certain practical expedients in ASC Topic 848.

Effective for the Company – This guidance can be applied for a limited time through December 31, 2022.

The guidance will no longer be available to apply after December 31, 2022.

Impact on consolidated financial statements – The Company’s bank has notified the Company that its LIBOR option will continue to be available to it through June 30, 2023, at which time the option will shift to the Benchmark Replacement as defined in the agreement with the bank (see Note 8).

The Company does not believe that this transition will have a material impact on its financial condition.

3 unchanged sentences

As a result, inventories were overstated and COGS was understated, resulting in overstated gross profit, operating income and net income for each period.

The effects of the restatement resulted in a decrease to overall inventory (current and non-current inventory) and increase to cost of sales of $ 10,101,000 , a decrease to the provision for income taxes of $ 975,000 and a decrease to net income and retained earnings of $ 9,126,000 as of and for the nine months ended March 31, 2023.

The effects of the restatement resulted in a decrease to overall inventory (current and non-current inventory) and increase to cost of sales of $ 8,709,000 , a decrease to the provision for income taxes of $ 874,000 and a decrease to net income and retained earnings of $ 7,835,000 as of and for the six months ended December 31, 2022.

Net cash provided by operating activities remained the same.

The effects of the restatement resulted in an increase to cost of sales of $ 1,392,000 , a decrease to the provision for income taxes of $ 101,000 and a decrease to net income of $ 1,291,000 for the three months ended March 31, 2023.

The table below sets forth the consolidated balance sheets information, including the balances originally reported and the restated balances as of March 31, 2023 (in thousands):

As of March 31, 2023

The effects of the restatement resulted in an increase to cost of sales of $ 5,108,000 , a decrease to the provision for income taxes of $ 591,000 and a decrease to net income of $ 4,517,000 for the three months ended December 31, 2022.

The table below sets forth the consolidated balance sheets information, including the balances originally reported and the restated balances as of December 31, 2022 (in thousands):

As of December 31, 2022

Inventory - Current

3 unchanged sentences

Retained earnings

The table below sets forth the consolidated statements of income information, including the balances originally reported and the restated balances for the three months ended March 31, 2023:

Three Months ended March 31, 2023

The table below sets forth the consolidated statements of income information, including the balances originally reported and the restated balances for the three months ended December 31, 2022:

Three Months ended December 31, 2022

(in thousands, except for per share data)

5 unchanged sentences

Income per share:

The table below sets forth the consolidated statements of income information, including the balances originally reported and the restated balances for the nine months ended March 31, 2023:

Nine Months ended March 31, 2023

The table below sets forth the consolidated statements of income information, including the balances originally reported and the restated balances for the six months ended December 31, 2022:

Six Months ended December 31, 2022

(in thousands, except for per share data)

5 unchanged sentences

Income per share:

The table below sets forth the consolidated statements of cash flows information, including the balances originally reported and the restated balances for the nine months ended March 31, 2023:

Nine Months ended March 31, 2023

The table below sets forth the consolidated statements of cash flows information, including the balances originally reported and the restated balances for the six months ended December 31, 2022:

Six Months ended December 31, 2022

(in thousands)

10 unchanged sentences

Sales to unaffiliated customers are primarily shipped from the United States.

As of March 31, 2023 and June 30, 2022, the Company included refund liabilities of approximately $ 4,841,000 and $ 5,863,000 , respectively, in current liabilities.

As of March 31, 2023 and June 30, 2022, the Company included return-related assets of approximately $ 1,132,000 and $ 974,000 , respectively, in other current assets.

As a percentage of gross sales, returns, rebates and allowances were 8 % and 10 % for the three months ended March 31, 2023 and 2022, respectively.

As a percentage of gross sales, returns, rebates and allowances were 6 % and 11 % for the nine months ended March 31, 2023 and 2022, respectively.

As of December 31, 2022 and June 30, 2022, the Company included refund liabilities of approximately $ 4,096,000 and $ 5,863,000 , respectively, in current liabilities.

As of December 31, 2022 and June 30, 2022, the Company included return-related assets of approximately $ 909,000 and $ 974,000 , respectively, in other current assets.

As a percentage of gross sales, returns, rebates and allowances were 5 % and 13 % for the three months ended December 31, 2022 and 2021, respectively.

As a percentage of gross sales, returns, rebates and allowances were 5 % and 11 % for the six months ended December 31, 2022 and 2021, respectively.

The Company disaggregates revenue from contracts with customers into major product lines.

2 unchanged sentences

Following is the disaggregation of revenues based on major product lines (in thousands):

Three months ended March 31,

Nine months ended March 31,

Three months ended December 31,

Six months ended December 31,

Major Product Lines:

5 unchanged sentences

Such risks of loss manifest themselves differently, depending on the nature of the concentration, and vary in significance.

The Company had one customer with an accounts receivable balance that comprised of 12 % of the Company’s overall accounts receivable as of March 31, 2023.

As of June 30, 2022, the accounts receivable balance with this

respective customer did not exceed 10% of the Company’s overall accounts receivable.

Sales to this customer did not exceed 10% of the Company’s net sales during the three and nine months ended March 31, 2023 and 2022.

The Company had another customer with an accounts receivable balance that comprised 16 % of the Company’s overall accounts receivable at June 30, 2023.

This customer’s accounts receivable balance did not exceed 10% of the Company’s overall accounts receivable at March 31, 2023.

Sales to this customer did not exceed 10% of the Company’s net sales during the three and nine months ended March 31, 2023 and 2022.

The Company had another customer with an accounts receivable balance that comprised 19 % and 22 % of the Company’s overall accounts receivable as of March 31, 2023 and June 30, 2022, respectively.

Sales to this customer was 12 % and 10 % of the Company’s net sales for the three and nine months ended March 31, 2023, respectively.

Sales to this customer did not exceed 10% of the Company’s net sales for the three and nine months ended March 31, 2022.

The Company had one customer with an accounts receivable balance that comprised of 13 % and 16 % as of December 31, 2022 and June 30, 2022, respectively, of the Company’s overall accounts receivable as of those dates.

Sales to this customer did not exceed 10% of the Company’s net sales during the three or six months ended December 31, 2022 and 2021.

The Company had another customer with an accounts receivable balance of 14 % and 22 % as of December 31, 2022 and June 30, 2022, respectively.

Sales to this customer was 10 % for the six months ended December 31, 2021.

Sales for the three and six months ended December 31, 2022 and the three months ended December 31, 2021 did not exceed 10% of net sales.

The Company had another customer with an accounts receivable balance that comprised of 11 % of the Company’s overall accounts receivable as of December 31, 2022.

As of June 30, 2022, the accounts receivable balance with this respective customer did not exceed 10% of the Company’s overall accounts receivable.

Sales to this customer for the three and six months ended December 31, 2022 and 2021 did not exceed 10% of the Company’s net sales.

NOTE 4 – Marketable Securities

The Company’s marketable securities include investments in fixed income mutual funds, which invest primarily in various government and corporate obligations, stocks and money market funds, and are reported at their fair values.

The disaggregated net gains and losses on the marketable securities recognized within the accompanying condensed consolidated statements of income for the three and nine months ended March 31, 2023 and 2022, are as follows (in thousands):

Three months ended March 31,

Nine months ended March 31,

The disaggregated net gains and losses on the marketable securities recognized within the accompanying condensed consolidated statements of income for the three and six months ended December 31, 2022 and 2021 are as follows (in thousands):

Three months ended December 31,

Six months ended December 31,

Net gains recognized during the period on marketable securities

Net gains recognized during the period on marketable securities sold during the period

Unrealized gains (losses) recognized during the reporting period on marketable securities still held at the reporting date

Unrealized (losses) recognized during the reporting period on marketable securities still held at the reporting date

The fair values of the Company’s marketable securities are determined as being the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

5 unchanged sentences

The Company’s marketable securities, which are considered available-for-sale securities, are re-measured to fair value on a recurring basis and are valued using Level 1 inputs using quoted prices (unadjusted) for identical assets in active markets.

The following tables summarize the Company’s investments at March 31, 2023 and June 30, 2022, respectively (in thousands):

March 31, 2023

The following tables summarize the Company’s investments at December 31, 2022 and June 30, 2022, respectively (in thousands):

December 31, 2022

June 30, 2022

12 unchanged sentences

Property, plant and equipment consist of the following (in thousands):

March 31, 2023

December 31, 2022

June 30, 2022

6 unchanged sentences

accumulated depreciation and amortization

Depreciation and amortization expense on property, plant, and equipment was approximately $ 380,000 and $ 338,000 for the three months ended March 31, 2023 and 2022, respectively.

Depreciation and amortization expense on property, plant, and equipment was approximately $ 1,127,000 and $ 1,028,000 for the nine months ended March 31, 2023 and 2022, respectively.

Depreciation and amortization expense on property, plant, and equipment was approximately $ 379,000 and $ 348,000 for the three months ended December 31, 2022 and 2021, respectively.

Depreciation and amortization expense on property, plant, and equipment was approximately $ 747,000 and $ 690,000 for the six months ended December 31, 2022 and 2021, respectively.

NOTE 7 - Income Taxes (2022 amounts as restated)

1 unchanged sentence

The effective rate differs from statutory rates due to the effect of state and local income taxes, tax rates in foreign jurisdictions, global intangible low-taxed income (“GILTI”), tax benefit of R&D credits, and certain nondeductible expenses.

The Company’s effective tax rate will change from quarter to quarter based on recurring and non-recurring factors including, but not limited to, the geographical mix of earnings, enacted tax legislation, and state and local income taxes.

Our effective tax rate will change from quarter to quarter based on recurring and non-recurring factors including, but not limited to, the geographical mix of earnings, enacted tax legislation, and state and local income taxes.

In addition, changes in judgment from the evaluation of new information resulting in the recognition de-recognition or re-measurement of a tax position taken in a prior annual period is recognized separately in the quarter of the change.

For the nine months ended March 31, 2023 and March 31, 2022, the Company recognized net income tax expense of $ 2,475,000 and $ 1,771,000 , respectively.

During the nine months ended March 31, 2023, the Company’s reserve for uncertain income tax positions increased by $ 36,000 .

For the six months ended December 31, 2022 and December 31, 2021, the Company recognized net income tax expense of $ 1,047,000 and $ 639,000 , respectively.

During the six months ended December 31, 2022, the Company’s reserve for uncertain income tax positions increased by $ 24,000 .

The Company’s practice is to recognize interest and penalties related to income tax matters in income tax expense and accrued income taxes.

As of March 31, 2023, the Company had accrued interest totaling $ 124,000 , as well as $ 678,000 of unrecognized net tax benefits that, if recognized, would favorably affect the Company’s effective income tax rate in any future period.

For the nine months ended March 31, 2023, additional interest expense was accrued for in the amount of $ 36,000 .

The Company does not expect that its unrecognized tax benefits will change within the next twelve months due to statute of limitation lapses.

As of December 31, 2022, the Company had accrued interest totaling $ 112,000 , as well as $ 678,000 of unrecognized net tax benefits that, if recognized, would favorably affect the Company’s effective income tax rate in any future period.

For the six months ended December 31, 2022, additional interest expense was accrued for in the amount of $ 24,000 .

The Company does not expect that its unrecognized tax benefits will change within the next twelve months due to the statute of limitation lapses.

The Company files a consolidated U.S.

income tax return and tax returns in certain state and local and foreign jurisdictions.

As of March 31, 2023, the Company remains subject to examination in all tax jurisdictions for all relevant jurisdictional statutes for fiscal years 2018 and thereafter.

As of December 31, 2022, the Company remains subject to examination in all tax jurisdictions for all relevant jurisdictional statutes for fiscal years 2018 and thereafter.

In December 2022, the Company received a letter from the IRS (“IRS”) notifying it that the IRS has closed its examination of the Company’s income tax return for fiscal year ended June 30, 2020.

2 unchanged sentences

As of December 31, 2022 and June 30, 2022, the Company had a revolving line of credit of $ 11,000,000 (the “Revolver Agreement”) which expires in June 2024.

Outstanding balances and interest rates as of March 31, 2023 and June 30, 2022 are as follows (dollars in thousands):

March 31, 2023

Outstanding balances and interest rates as of December 31, 2022 and June 30, 2022 are as follows (dollars in thousands):

December 31, 2022

June 30, 2022

22 unchanged sentences

The Company follows ASC 718 (“Share-Based Payment”), which requires that all share-based payments to employees, including stock options, be recognized as compensation expense in the consolidated financial statements based on their fair values and over the requisite service period.

For the three months ended March 31, 2023 and 2022, the Company recorded non-cash compensation expense of $ 322,000 ($ 0.01 per basic and diluted share) and $ 35,000 ($ 0.00 per basic and diluted share), respectively, relating to stock-based compensation.

For the nine months ended March 31, 2023 and 2022, the Company recorded non-cash compensation expense of $ 1,134,000 ($ 0.03 per basic and diluted share) and $ 1,379,000 ($ 0.04 per basic and diluted share), respectively, relating to stock-based compensation.

For the three months ended December 31, 2022 and 2021, the Company recorded non-cash compensation expense of $ 335,000 ($ 0.01 per basic and diluted share) and $ 1,255,000 ($ 0.03 per basic and diluted share), respectively, relating to stock-based compensation.

For the six months ended December 31, 2022 and 2021, the Company recorded non-cash compensation expense of $ 812,000 ($ 0.02 per basic and diluted share) and $ 1,344,000 ($ 0.04 per basic and diluted share), respectively, relating to stock-based compensation.

2022 Employee Stock Option Plan

10 unchanged sentences

Under this plan, the Company may grant stock options, which are intended to qualify as incentive stock options (“ISOs”) or non-incentive stock options, to valued employees.

Any plan participant who is granted ISOs and possesses more than 10 % of the voting rights of the Company’s outstanding common stock must be granted an option with a price of at least 110 % of the fair market value on the date of grant and a term of 10 years .

Under the 2012 Employee Plan, stock options may be granted to valued employees with a term of up to 10 years at an exercise price equal to or greater than the fair market value on the date of grant and are exercisable, in whole or in part, at 20 % per year beginning on the date of grant.

An option granted under this plan shall vest in full upon a “change in control” as defined in the plan.

At March 31, 2023, 522,580 stock options were outstanding, 236,652 stock options were exercisable and no further stock options were available for grant under this plan.

0 and 37,500 options were granted during the three and nine months ended March 31, 2023.

0 and 338,000 options were granted during the three and nine months ended March 31, 2022, respectively.

No further options may be granted under this plan after December 2022.

At December 31, 2022, 553,380 stock options were outstanding, 262,252 stock options were exercisable and no further stock options were available for grant under this plan.

0 and 37,500 options were granted under the 1012 Employee Plan during the three and six months ended December 31, 2022.

338,000 options were granted during the three and six months ended December 31, 2021.

No options may be granted under this plan after December 2022.

The fair value of each option granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

3 unchanged sentences

Expected dividend yields

The following table reflects activity under the 2012 Employee Plan for the nine months ended March 31:

The following table reflects activity under the 2012 Employee Plan for the six months ended December 31:

Weighted average

10 unchanged sentences

Total intrinsic value of options exercisable

30,800 and 38,000 stock options were exercised during the three and nine months ended March 31, 2023, respectively.

27,600 of the 30,800 options that were exercised during the three months ended March 31, 2023, were settled by exchanging 9,943 shares of the Company’s common stock which were retired and returned to unissued status upon receipt.

29,600 of the 38,000 options that were exercised during the nine months ended March 31, 2023, were settled by exchanging 10,150 shares of the Company’s common stock which were retired and returned to unissued status upon receipt.

$ 36,000 and $ 81,000 cash was received from the option exercises during the three and nine months ended March 31, 2023, respectively.

The actual tax benefit realized for the tax deductions from option exercises during the three and nine months ended March 31, 2023 was $ 0 and $ 0 , respectively.

1,000 and 29,000 stock options were exercised during the three and nine months ended March 31, 2022, respectively.

1,000 options that were exercised during the three and nine months ended March 31, 2023, were settled by exchanging 153 shares of the Company’s common stock which were retired and returned to unissued status upon receipt.

$ 0 and $ 155,000 cash was received from the option exercises during the three and nine months ended March 31, 2022, respectively.

The actual tax benefit realized for the tax deductions from option exercises during the three and nine months ended March 31, 2022 was $ 3,000 for both periods.

The following table summarizes information about stock options outstanding under the 2012 Employee Plan at March 31, 2023:

2,000 and 7,200 stock options were exercised during the three and six months ended December 31, 2022, respectively.

The 2,000 options that were exercised during the three months ended December 31, 2022, were settled by exchanging 207 shares of the Company’s common stock which were retired and returned to unissued status upon receipt.

$ 0 and $ 45,000 cash was received from the option exercises during the three and six months ended December 31, 2022, respectively.

The actual tax benefit realized for the tax deductions from option exercises during the three and six months ended December 31, 2022 was $ 0 and $ 0 , respectively.

23,000 and 28,000 stock options were exercised during the three and six months ended December 31, 2021, respectively.

$ 139,000 and $ 155,000 cash was received from the option exercises during the three and six months ended December 31, 2021, respectively.

The actual tax benefit realized for the tax deductions from option exercises during the three and six months ended December 31, 2021 was $ 0 for both periods.

The following table summarizes information about stock options outstanding under the 2012 Employee Plan at December 31, 2022:

Options outstanding

8 unchanged sentences

$ 3.14 ‑ $ 26.94

As of March 31, 2023, there was $ 2,208,000 of unearned stock-based compensation cost related to share-based compensation arrangements granted under the 2012 Employee Plan.

0 and 37,500 Options were granted during the three and nine months ended March 31, 2023, respectively.

5,200 and 97,900 options vested during the three and nine months ended March 31, 2023, respectively.

The total grant date fair value of the options vesting during the three and nine months ended March 31, 2023 under this plan was $ 33,000 and $ 916,000 , respectively.

0 and 338,000 options were granted during the three and nine months ended March 31, 2022.

5,200 and 95,600 options vested during the three and nine months ended March 31, 2022, respectively.

The total grant date fair value of the options vesting during the three and nine months ended March 31, 2022 under this plan was $ 36,000 and $ 975,000 , respectively.

As of December 301, 2022, there was $ 2,445,000 of unearned stock-based compensation cost related to share-based compensation arrangements granted under the 2012 Employee Plan.

0 and 37,500 Options were granted during the three and six months ended December 31, 2022.

80,400 and 92,700 options vested during the three and six months ended December 31, 2022, respectively.

The total grant date fair value of the options vesting during the three and six months ended December 31, 2022 under this plan was $ 754,000 and $ 883,000 , respectively.

338,000 Options were granted during the three and six months ended December 31, 2021.

85,600 and 90,400 options vested during the three and six months ended December 31, 2021, respectively.

The total grant date fair value of the options vesting during the three and six months ended December 31, 2021 under this plan was $ 913,000 and $ 942,000 , respectively.

2012 Non-Employee Stock Option Plan

3 unchanged sentences

Under the 2012 Non-Employee Plan, stock options may be granted with a term of up to 10 years at an exercise price equal to or greater than the fair market value on the date of grant and are exercisable in whole or in part at 20 % per year beginning on the date of grant.

option granted under this plan shall vest in full upon a “change in control” as defined in the plan.

At March 31, 2023, 20,400 stock options were outstanding, 13,920 stock options were exercisable and no further stock options were available for grant under this plan.

There were no options granted during the three and nine months ended March 31, 2023.

0 and 9,600 Options were granted during the three and nine months ended March 31, 2022.

No options may be granted under this plan after December 2022.

An option granted under this plan shall vest in full upon a “change in control” as defined in the plan.

At December 31, 2022, 20,400 stock options were outstanding, 13,200 stock options were exercisable and no further stock options were available for grant under this plan.

There were no options granted under the 2012 Non-Employee Plan during the three and six months ended December 31, 2022.

9,600 Options were granted during the three and six months ended December 31, 2021.

No options may be granted under this plan after

December 2022.

The fair value of each option granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

3 unchanged sentences

Expected dividend yields

The following table reflects activity under the 2012 Non-Employee Plan for the nine months ended March 31:

The following table reflects activity under the 2012 Non-Employee Plan for the six months ended December 31:

Weighted average

10 unchanged sentences

Total intrinsic value of options exercisable

No stock options were exercised during the three and nine months ended March 31, 2023 and 2022, respectively.

No cash was received from option exercises during the three and nine months ended March 31, 2023 and 2022, respectively, and the actual tax benefit realized for the tax deductions from option exercises was $ 0 for both periods.

The following table summarizes information about stock options outstanding under the 2012 Non-Employee Plan at March 31, 2023:

No stock options were exercised during the three and six months ended December 31, 2022 and 2021, respectively.

No cash was received from option exercises during the three and six months ended December 31, 2022 and 2021, respectively, and the actual tax benefit realized for the tax deductions from option exercises was $ 0 for both periods.

The following table summarizes information about stock options outstanding under the 2012 Non-Employee Plan at December 31, 2022:

Options outstanding

6 unchanged sentences

$ 4.35 - $ 22.93

As of March 31, 2022, there was $ 52,000 of unearned stock-based compensation cost related to share-based compensation arrangements granted under the 2012 Non-Employee Plan.

No options were granted during the three and nine months ended March 31, 2023, respectively.

720 and 2,640 options vested during the three and nine months ended March 31, 2023, respectively.

The total grant date fair value of the options vesting during the three and nine months ended March 31, 2023 under this plan was $ 5,000 and $ 24,000 , respectively.

0 and 9,600 Options were granted during the three and nine months ended March 31, 2022.

720 and 6,240 options vested during the three and nine months ended March 31, 2022, respectively.

The total grant date fair value of the options vesting during the three and nine months ended March 31, 2022 under this plan was $ 5,000 and $ 39,000 , respectively.

As of December 31, 2022, there was $ 58,000 of unearned stock-based compensation cost related to share-based compensation arrangements granted under the 2012 Non-Employee Plan.

No options were granted during the three and six months ended December 31, 2022, respectively.

1,920 options vested during the three and six months ended December 31, 2022, respectively.

The total grant date fair value of the options vesting during the three and six months ended December 31, 2022 under this plan was $ 19,000 for both periods.

9,600 Options were granted during the three and six months ended December 31, 2021.

5,520 options vested during the three and six months ended December 31, 2021 for both periods.

The total grant date fair value of the options vesting during the three and six months ended December 31, 2021 under this plan was $ 34,000 for both periods.

2018 Non-Employee Stock Option Plan

In December 2018, the stockholders approved the 2018 Non-Employee Stock Option Plan (the “2018 Non-Employee Plan”).

This plan authorizes the granting of awards, the exercise of which would allow up to an aggregate of 100,000 shares of the Company's common stock to be acquired by the holders of such awards.

This plan authorizes the granting of awards, the exercise of which would allow up to an aggregate of 100,000 shares of the Company's common

stock to be acquired by the holders of such awards.

Under this plan, the Company may grant stock options to non-employee directors and consultants to the Company and its subsidiaries.

1 unchanged sentence

An option granted under this plan shall vest in full upon a “change in control” as defined in the plan.

At March 31, 2023, 77,500 stock options were outstanding, 53,220 stock options were exercisable and no further stock options were available for grant under this plan.

There were no options granted during the three and nine months ended March 31, 2023.

0 and 23,500 Options were granted during the three and nine months ended March 31, 2022.

At December 31, 2022, 79,100 stock options were outstanding, 49,440 stock options were exercisable and no further stock options were available for grant under this plan.

There were no options granted under the 2018 Non-Employee Plan during the three and six months ended December 31, 2022.

23,500 Options were granted during the three and six months ended December 31, 2021.

No options may be granted under this plan after December 2028.

4 unchanged sentences

Expected dividend yields

The following table reflects activity under the 2018 Non-Employee Plan for the nine months ended March 31:

The following table reflects activity under the 2018 Non-Employee Plan for the six months ended December 31:

Weighted average

10 unchanged sentences

Total intrinsic value of options exercisable

1,600 and 11,500 options were exercised during the three and nine months ended March 31, 2023, respectively.

The 1,600 options that were exercised during the three months ended March 31, 2023 were settled by exchanging 395 shares of the Company’s common stock which were retired and returned to unissued status upon receipt.

The 11,500 options that were exercised during the nine months ended March 31, 2023 were settled by exchanging 6,052 shares of the Company’s common stock which were retired and returned to unissued status upon receipt.

No cash was received from option exercises during the three and nine months ended March 31, 2023.

and the actual tax benefit realized for the tax deductions from option exercises was $ 8,000 and $ 34,000 , respectively.

1,600 and 4,600 options were exercised during the three and nine months ended March 31, 2022, respectively.

The 1,600 options that were exercised during the three months ended March 31, 2022, were settled by exchanging 663 shares of the Company’s common stock which were retired and returned to unissued status upon receipt.

The 4,600 options that were exercised during the nine months ended March 31, 2022, were settled by exchanging 2,075 shares of the Company’s common stock which were retired and returned to unissued status upon receipt.

No cash was received from option exercises during the three and nine months ended March 31, 2022.

For the three and nine months ended March 31, 2022 the actual tax benefit realized for the tax deductions from option exercises was $ 4,000 and $ 12,000 , respectively.

The following table summarizes information about stock options outstanding under the 2018 Non-Employee Plan at March 31, 2023:

3,600 and 9,900 options were exercised during the three and six months ended December 31, 2022, respectively.

The 3,600 options that were exercised during the three months ended December 31, 2022 were settled by exchanging 2,637 shares of the Company’s common stock which were retired and returned to unissued status upon receipt.

The 9,900 options that were exercised during the six months ended December 31, 2022 were settled by exchanging 5,657 shares of the Company’s common stock which were retired and returned to unissued status upon receipt.

No cash was received from option exercises during the three and six months ended December 31, 2022 and the actual tax benefit realized for the tax deductions from option exercises was $ 5,000 and $ 26,000 , respectively.

3,000 options were exercised during the three and six months ended December 31, 2021, respectively.

The 3,000 options that were exercised during the three months ended December 31, 2021, were settled by exchanging 1,412 shares of the Company’s common stock which were retired and returned to unissued status upon receipt.

For the three and six months ended December 31, 2021 the actual tax benefit realized for the tax deductions from option exercises was $ 8,000 each period.

The following table summarizes information about stock options outstanding under the 2018 Non-Employee Plan at December 31, 2022:

Options outstanding

6 unchanged sentences

$ 8.10 - $ 22.93

As of March 31, 2023, there was $ 166,000 of unearned stock-based compensation cost related to share-based compensation arrangements granted under the 2018 Non-Employee Plan.

No options were granted during the three and nine months ended March 31, 2023, respectively.

5,380 and 19,680 options vested during the three and nine months ended March 31, 2023, respectively.

The total grant date fair value of the options vesting during the three and nine months ended March 31, 2023 under this plan was $ 35,000 and $ 149,000 , respectively.

0 and 23,500 options were granted during the three and nine months ended March 31, 2022.

5,380 and 19,680 options vested during the three and nine months ended March 31, 2022.

The total grant date fair value of the options vesting during the three and nine months ended December 31, 2021 under this plan was $ 35,000 and $ 160,000 , respectively.

As of December 31, 2022, there was $ 197,000 of unearned stock-based compensation cost related to share-based compensation arrangements granted under the 2018 Non-Employee Plan.

No options were granted during the three and six months ended December 31, 2022, respectively.

14,300 options vested during the three and six months ended December 31, 2022, respectively.

The total grant date fair value of the options vesting during the three and six months ended December 31, 2022 under this plan was $ 114,000 for both periods.

23,500 options were granted during the three and six months ended December 31, 2021.

14,300 options vested during the three and six months ended December 31, 2021.

The total grant date fair value of the options vesting during the three and six months ended December 31, 2021 under this plan was $ 125,000 for both periods

2020 Non-Employee Stock Option Plan

4 unchanged sentences

An option granted under this plan shall vest in full upon a “change in control” as defined in the plan.

At March 31, 2023, 56,900 stock options were outstanding, 18,760 stock options were exercisable and 43,100 stock options were available for grant under this plan.

5,000 and 30,000 Options were granted during the three and nine months ended March 31, 2023 under the 2020 Non-Employee Plan.

0 and 16,900 Options were granted during the three and nine months ended March 31, 2022.

At December 31, 2022, 51,900 stock options were outstanding, 17,760 stock options were exercisable and 48,100 stock options were available for grant under this plan.

0 and 25,000 options were granted under the 2020 Non-Employee Plan during the three and six months ended December 31, 2022.

16,900 options were granted during the three and six months ended December 31, 2021.

No options may be granted under this plan after May 2030.

2 unchanged sentences

Expected lives

7.23 - 7.27 Years

Expected volatility

Expected dividend yields

The following table reflects activity under the 2020 Non-Employee Plan for the nine months ended March 31:

The following table reflects activity under the 2020 Non-Employee Plan for the six months ended December 31:

Weighted average

10 unchanged sentences

Total intrinsic value of options exercisable

No stock options were exercised during the three and nine months ended March 31, 2023 and 2022 under the 2020 Non-Employee Plan.

No cash was received from option exercises during either of the three and nine months ended March 31, 2023 or 2022 and the actual tax benefit realized for the tax deductions from option exercises was $ 0 for both periods.

The following table summarizes information about stock options outstanding under the 2020 Non-Employee Plan at March 31, 2023:

No stock options were exercised during the three and six months ended December 31, 2022 and 2021.

No cash was received from option exercises during either of the three and six months ended December 31, 2022 or 2021 and the actual tax benefit realized for the tax deductions from option exercises was $ 0 for both periods.

The following table summarizes information about stock options outstanding under the 2020 Non-Employee Plan at December 31, 2022:

Options outstanding

8 unchanged sentences

$ 11.40 - $ 26.94

As of March 31, 2023, there was $ 376,000 of unearned stock-based compensation cost related to share-based compensation arrangements granted under the 2020 Non-Employee Plan.

5,000 and 30,000 options were granted during the three and nine months ended March 31, 2023, respectively.

1,000 and 11,380 options vested during the three and nine months ended March 31, 2023.

The total grant date fair value of the options vesting during the three and nine months ended March 31, 2023 under this plan was $ 16,000 and $ 129,000 .

0 and 5,380 options vested during the three and nine months ended March 31, 2022.

The total grant date fair value of the options vesting during the three and nine months ended March 31, 2022 under this plan was $ 0 and $ 55,000 .

As of December 31, 2022, there was $ 346,000 of unearned stock-based compensation cost related to share-based compensation arrangements granted under the 2020 Non-Employee Plan.

0 and 25,000 options were granted during the three and six months ended December 31, 2022, respectively.

3,380 and 10,380 options vested during the three and six months ended December 31, 2022.

3,380 and 5,380 options vested during the three and six months ended December 31, 2021.

The total grant date fair value of the options vesting during the three and six months ended December 31, 2022 under this plan was $ 34,000 and $ 113,000 .

The total grant date fair value of the options vesting during the three and six months ended December 31, 2021 under this plan was $ 34,000 and $ 46,000 .

NOTE 10 – Stockholders’ Equity Transactions

2 unchanged sentences

Relative to the Revolver Agreement described in Note 8, the Company’s lender gave its consent to this stock repurchase plan.

During the three and nine months ended March 31, 2023 and the fiscal year ended June 30, 2022, the Company did not repurchase any shares of its outstanding common stock.

During the three and six months ended December 31, 2022 and the fiscal year ended June 30, 2022, the Company did no t repurchase any shares of its outstanding common stock.

Pursuant to the PPP loan described in Note 8, the Company was not allowed to repurchase any of its shares of common stock until 12 months after the termination of the term loans described therein which occurred between August, 2021 and September, 2021.

4 unchanged sentences

There was no net effect on total stockholders' equity as a result of the stock split.

During the three months ended March 31, 2023, certain employees and directors exercised stock options under the Company's 2012 Employee and 2018 Non-Employee Stock Option Plans totaling 32,400 shares.

29,200 of the 32,400 of these exercises were completed as cashless exercises as allowed for under the plans, where the exercise shares are issued by the Company in exchange for shares of the Company’s common stock that are owned by the optionees.

During the three months ended December 31, 2022, certain employees and directors exercised stock options under the Company's 2012 Employee and 2018 Non-Employee Stock Option Plans totaling 5,600 shares.

All 5,600 of these exercises were completed as cashless exercises as allowed for under the plans, where the exercise shares are issued by the Company in exchange for shares of the Company’s common stock that are owned by the optionees.

The number of shares surrendered by the optionees was 2,844 and was based upon the per share price on the effective date of the option exercise.

$ 36,000 cash was received from the other 3,200 options exercised.

During the nine months ended March 31, 2023, certain employees and directors exercised stock options under the Company's 2012 Employee and 2018 Non-Employee Stock Option Plans totaling 49,500 shares.

During the six months ended December 31, 2022, certain employees and directors exercised stock options under the Company's 2012 Employee and 2018 Non-Employee Stock Option Plans totaling 17,100 shares.

11,900 of these exercises were completed as cashless exercises as allowed for under the plans, where the exercise shares are issued by the Company in exchange for shares of the Company’s common stock that are owned by the optionees.

5 unchanged sentences

The number of shares surrendered by the optionees was 2,486 and was based upon the per share price on the effective date of the option exercise.

NOTE 11 – Related Party Transaction

On February 13, 2023, the Company's President and Chairman and the Company’s Executive Vice President and Chief Financial Officer sold 2,012,500 and 87,500 shares of our common stock, respectively, as selling stockholders in an underwritten secondary public offering at a public offering price of $ 31.50 per share.

In connection with such offering, the selling stockholders granted the underwriters an option to purchase additional shares (the “Greenshoe Option”).

On February 15, 2023, the underwriters exercised in full the Greenshoe Option, pursuant to which the selling stockholders sold a total of 300,000 additional shares of common stock at the same public offering price.

The Company did not sell any shares in the offering and received no proceeds from the offerings, but the Company incurred $ 496,000 in offering expenses, which are recorded in selling, general, and administrative expenses in the accompanying condensed consolidated statements of income.

NOTE 11 - 401(k) Plan

1 unchanged sentence

non-union employees with and is qualified under Sections 401(a) and 401(k) of the Internal Revenue Code.

Company contributions to this plan are discretionary and totaled $ 64,000 and $ 187,000 for the three and nine months ended March 31, 2023.

Company contributions to this plan are discretionary and totaled $ 59,000 and $ 132,000 for the three and nine months ended March 31, 2022.

Company contributions to this plan are discretionary and totaled $ 61,000 and $ 123,000 for the three and six months ended December 31, 2022.

Company contributions to this plan are discretionary and totaled $ 37,000 and $ 73,000 for the six months ended December 31, 2021.

NOTE 12 - Commitments and Contingencies

5 unchanged sentences

Operating leases are included in operating lease right-of-use assets, accrued expenses and operating lease liabilities, non-current on our condensed consolidated balance sheets.

For the three months March 31, 2023 and 2022, cash payments against operating lease liabilities totaled $ 85,000 and $ 72,000 , respectively.

For the nine months March 31, 2023 and 2022, cash payments against operating lease liabilities totaled $ 249,000 and $ 216,000 , respectively.

For the three months December 31, 2022 and 2021 cash payments against operating lease liabilities totaled $ 92,000 and $ 72,000 for each period.

For the six months December 31, 2022 and 2021, cash payments against operating lease liabilities totaled $ 164,000 and $ 144,000 for each period.

Supplemental balance sheet information related to operating leases was as follows:

1 unchanged sentence

Weighted-average discount rate

The following is a schedule, by years, of maturities of lease liabilities as of March 31, 2023 (in thousands):

The following is a schedule, by years, of maturities of lease liabilities as of December 31, 2022 (in thousands):

Year Ending June 30,

Operating lease expense totaled approximately $ 123,000 and $ 80,000 for the three months ended March 31, 2023 and 2022, respectively.

Operating lease expense totaled approximately $ 334,000 and $ 239,000 for the nine months ended March 31, 2023 and 2022, respectively.

Operating lease expense totaled approximately $ 131,000 and $ 79,000 for the three months ended December 31, 2022 and 2021, respectively.

Operating lease expense totaled approximately $ 211,000 and $ 160,000 for the six months ended December 31, 2022 and 2021, respectively.

In the normal course of business, the Company is a party to claims and/or litigation.

7 unchanged sentences

The employment agreement renews annually in August unless either party gives the other notice of non-renewal at least six months prior to the end of the applicable term.

The employment agreement with the SVP of Engineering expires in August 2024 and provides for an annual salary of $ 361,000 , and, if terminated by the Company without cause, severance of nine months’ salary and continued company-sponsored health insurance for six months from the date of termination.

The employment agreement with the SVP of Engineering expires in August 2024 and provides for an annual salary of $ 361,000 , and, if terminated by the Company without cause, severance of nine month’s salary and continued company-sponsored health insurance for six months from the date of termination.

The severance agreement is with the Executive Vice President of Operations and Chief Financial Officer and provides for, if terminated by the Company without cause or within three months of a change in corporate control of the Company, severance of nine months’ salary, continued company-sponsored health insurance for six months from the date of termination and certain non-compete and other restrictive provisions.

7 unchanged sentences

Financial Information Relating to Domestic and Foreign Operations (in thousands):

Three months ended March 31,

Nine months ended March 31,

Three months ended December 31,

Six months ended December 31,

Sales to external customers (1):

Total Net Sales

March 31, 2023

December 31, 2022

June 30, 2022

6 unchanged sentences

There were no sales into any one foreign country in excess of 10% of total Net Sales.

(2) Consists primarily of inventories (March 31, 2023 = $ 34,428 ;

June 30, 2022 = $ 38,755 ), operating lease assets (March 31, 2023 = $ 5,878 ;

June 30, 2022 = $ 7,350 ) and fixed assets (March 31, 2023 = $ 4,083 ;

(2) Consists primarily of inventories (December 31, 2022 = $ 38,059 ;

June 30, 2022 = $ 38,755 ), operating lease assets (December 31, 2022 = $ 5,961 ;

June 30, 2022 = $ 7,350 ) and fixed assets (December 31, 2022 = $ 3,098 ;

June 30, 2022 = $ 3,253 ) located at the Company’s principal manufacturing facility in the Dominican Republic.

2 unchanged sentences

On May 5, 2023, the Company’s Board of Directors declared a cash dividend of $ .0625 per share payable on June 12, 2023 to stockholders of record on May 22, 2023.

The cash dividend resulted in approximately $ 2,298,000 of cash paid to stockholders.

On August 18, 2023, the Company’s Board of Directors declared a cash dividend of $ .08 per share payable on September 22, 2023 to stockholders of record on September 1, 2023.

3 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/A

Item 1. Financial Statements