What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-05-06 compared with 2024-02-05 · 198 added, 167 removed, 594 unchanged (38% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

December 31, 2023

March 31, 2024

June 30, 2023

4 unchanged sentences

Marketable securities

Accounts receivable, net of allowance for credit losses of $ 96 and $ 131 as of December 31, 2023 and June 30, 2023, respectively

Accounts receivable, net of allowance for credit losses of $ 105 and $ 131 as of March 31, 2024 and June 30, 2023, respectively

Inventories, net

11 unchanged sentences

Accrued salaries and wages

Accrued income taxes

Total Current Liabilities

5 unchanged sentences

Common Stock, par value $ 0.01 per share;

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

100,000,000 shares authorized as of March 31, 2024 and June 30, 2023;

39,766,354 and 39,663,812 shares issued;

9 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)

Three Months ended December 31,

Three Months ended March 31,

(in thousands, except for share and per share data)

9 unchanged sentences

Operating Income

Other income (expense):

Interest and other income (expense), net

Other income:

Interest and other income, net

Income before Provision for Income Taxes

6 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)

Six Months Ended December 31,

Nine Months Ended March 31,

(in thousands, except for share and per share data)

9 unchanged sentences

Operating Income

Other income (expense):

Interest and other income (expense), net

Other income:

Interest and other income, net

Income before Provision for Income Taxes

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY (unaudited)

Six months ended December 31, 2023 (in thousands, except for share data)

Nine months ended March 31, 2024 (in thousands, except for share data)

Treasury Stock

10 unchanged sentences

( 2,893,715 )

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

Stock-based compensation expense

Stock options exercised

Cash dividend ($ .10 per share)

Balances at March 31, 2024

( 2,893,715 )

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

Treasury Stock

9 unchanged sentences

( 2,893,715 )

Stock-based compensation expense

Stock options exercised

Balances at March 31, 2023

( 2,893,715 )

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

Six Months ended December 31,

Nine Months ended March 31,

(in thousands)

3 unchanged sentences

Gain on disposal of fixed asset

Interest income on other investments

Interest expense (income) on other investments

Unrealized (gain) loss on marketable securities

8 unchanged sentences

Accounts payable, accrued expenses, accrued salaries and wages, accrued income taxes

Net Cash Provided by (Used in) Operating Activities

Net Cash Provided by Operating Activities

CASH FLOWS FROM INVESTING ACTIVITIES

3 unchanged sentences

Purchases of other investments

Redemption of other investments

Net Cash Used in Investing Activities

13 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

December 31, 2023

March 31, 2024

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

8 unchanged sentences

therefore, sales of these products historically peak in the period April 1 through June 30, the Company's fiscal fourth quarter, and are reduced in the period July 1 through September 30, the Company's fiscal first quarter.

In addition, demand for all of our products may be affected by the housing and construction markets.

In addition, demand for our products may be affected by the housing and construction markets.

Deterioration of the current economic conditions may also affect this trend.

11 unchanged sentences

The methods and assumptions used to estimate the fair value of the following classes of financial instruments were:

Current Assets and Current Liabilities - The carrying amount of cash and cash equivalents, certificates of deposits, marketable securities, current receivables and payables and certain other short-term financial instruments approximate their fair value as of December 31, 2023 and June 30, 2023 due to their short-term maturities.

Current Assets and Current Liabilities - The carrying amount of cash and cash equivalents, certificates of deposits, marketable securities, current receivables and payables and certain other short-term financial instruments approximate their fair value as of March 31, 2024 and June 30, 2023 due to their short-term maturities.

Lease liabilities reflect fair value based on prevailing market rates.

Cash and Cash Equivalents and Investments – other

Cash and cash equivalents include approximately $ 25,838,000 of short-term time deposits, consisting of several certificates of deposit totaling $ 5,275,000 and $ 20,562,000 in money market funds as of December 31, 2023.

Cash and cash equivalents include approximately $ 36,106,000 of short-term time deposits, consisting of several certificates of deposit totaling $ 5,340,000 and $ 30,766,000 in money market funds as of March 31, 2024.

Cash and cash equivalents include approximately $ 15,242,000 of short-term time deposits, consisting of several certificates of deposit totaling $ 15,179,000 and $ 63,000 in a money

3 unchanged sentences

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

December 31, 2023

March 31, 2024

June 30, 2023

2 unchanged sentences

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

December 31, 2023

March 31, 2024

June 30, 2023

2 unchanged sentences

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

December 31, 2023

March 31, 2024

Balance Sheet Classification

6 unchanged sentences

4/24/2024 - 9/23/2024

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, 2023 and June 30, 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, 2024 and June 30, 2023.

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 three and six months ended December 31, 2023, the Company did not record an impairment charge regarding its investment in marketable securities because

During the three and nine months ended March 31, 2024, 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 $ 96,000 and $ 131,000 as of December 31, 2023 and June 30, 2023, respectively.

Accounts receivable is stated net of the reserves for credit losses of $ 105,000 and $ 131,000 as of March 31, 2024 and June 30, 2023, respectively.

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

22 unchanged sentences

Intangible assets consisted of the follows (in thousands):

December 31, 2023

March 31, 2024

June 30, 2023

Customer relationships

Amortization expense for intangible assets subject to amortization was approximately $ 84,000 and $ 90,000 for the three months ended December 31, 2023 and 2022, respectively.

Amortization expense for intangible assets subject to amortization was approximately $ 168,000 and $ 181,000 for the six months ended December 31, 2023 and 2022, respectively.

Amortization expense for intangible assets subject to amortization was approximately $ 84,000 and $ 90,000 for the three months ended March 31, 2024 and 2023, respectively.

Amortization expense for intangible assets subject to amortization was approximately $ 253,000 and $ 271,000 for the nine months ended March 31, 2024 and 2023, respectively.

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

4 unchanged sentences

and 2028 - $ 269,000 .

The weighted average remaining amortization period for intangible assets was 15.1 years and 15.5 years at December 31, 2023 and June 30, 2023, respectively.

The weighted average remaining amortization period for intangible assets was 15.0 years and 15.5 years at March 31, 2024 and June 30, 2023, respectively.

Revenue Recognition

20 unchanged sentences

Advertising and promotional costs are included in "Selling, General and Administrative" (“SG&A”) expenses in the consolidated statements of income and are expensed as incurred.

Advertising expense for the three months ended December 31, 2023 and 2022 was

Advertising expense for the three months ended March 31, 2024 and 2023 was

$ 395,000 and $ 926,000 , respectively.

Advertising expense for the six months ended December 31, 2023 and 2022 was $ 1,457,000 and $ 1,259,000 , respectively.

Advertising expense for the nine months ended March 31, 2024 and 2023 was $ 1,852,000 and $ 2,185,000 , 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 December 31, 2023 and 2022 was $ 2,542,000 and $ 2,222,000 , respectively.

Company-sponsored R&D expense for the six months ended December 31, 2023 and 2022 was $ 4,979,000 and $ 4,650,000 , respectively.

Company-sponsored R&D expense for the three months ended March 31, 2024 and 2023 was $ 2,757,000 and $ 2,314,000 , respectively.

Company-sponsored R&D expense for the nine months ended March 31, 2024 and 2023 was $ 7,736,000 and $ 6,964,000 , 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 December 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 March 31, 2024 and 2023 (in thousands, except share and per share data):

Weighted Average Shares

2 unchanged sentences

Stock Options

Options to purchase 67,500 and 0 shares of common stock were excluded for the three months ended December 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 shares of common stock were excluded for both the three months ended March 31, 2024 and 2023, 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 six months ended December 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 nine months ended March 31, 2024 and 2023 (in thousands, except share and per share data):

Weighted Average

2 unchanged sentences

Stock Options

Options to purchase 36,250 and 12,568 shares of common stock were excluded for the six months ended December 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 24,167 and 8,379 shares of common stock were excluded for the nine months ended March 31, 2024 and 2023, 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 $ 303,000 and $ 335,000 were recognized for the three months ended December 31, 2023 and 2022, respectively.

Stock-based compensation costs of $ 610,000 and $ 812,000 were recognized for the six months ended December 31, 2023 and 2022, respectively.

Stock-based compensation costs of $ 266,000 and $ 322,000 were recognized for the three months ended March 31, 2024 and 2023, respectively.

Stock-based compensation costs of $ 876,000 and $ 1,134,000 were recognized for the nine months ended March 31, 2024 and 2023, 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 and six months ended December 31, 2023 or 2022.

Therefore, no realized and unrealized gains and losses associated with foreign currency translation are recorded for the three and nine months ended March 31, 2024 or 2023.

Comprehensive Income

For the three and six months ended December 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 nine months ended March 31, 2024 and 2023, 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 ($ 103,000 and $ 128,000 in the three months ended December 31, 2023 and 2022, respectively, and $ 186,000 and $ 240,000 in the six months ended December 31, 2023 and 2022, respectively);

and classifies the costs associated with these sales in cost of sales ($ 389,000 and $ 454,000 in the three months ended December 31, 2023 and 2022, respectively, and $ 760,000 and $ 848,000 in the six months ended December 31, 2023 and 2022, respectively).

The Company records the amount billed to customers for shipping and handling in net sales ($ 93,000 and $ 106,000 in the three months ended March 31, 2024 and 2023, respectively, and $ 279,000 and $ 346,000 in the nine months ended March 31, 2024 and 2023, respectively);

and classifies the costs associated with these sales in cost of sales ($ 421,000 and $ 437,000 in the three months ended March 31, 2024 and 2023, respectively, and $ 1,181,000 and $ 1,285,000 in the nine months ended March 31, 2024 and 2023, respectively).

The Company records a right of use asset and corresponding liability 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, which was available to it through June 30, 2023, has shifted to the Benchmark Replacement as defined in the agreement with the bank.

On February 9, 2024, the Company’s bank has shifted to the Benchmark Replacement as defined in the Fourth Amended and Restated Credit Agreement (“Amended Agreement”) with the bank.

The new benchmark rate is the Secured Overnight Financing Rate (SOFR) (see Note 8).

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

The transition did not have a material impact on the condensed consolidated financial statements.

NOTE 2 – Revenue Recognition and Contracts with Customers

4 unchanged sentences

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

As of December 31, 2023 and June 30, 2023, the Company included refund liabilities of approximately $ 4,612,000 and $ 5,521,000 , respectively, in current liabilities.

As of December 31, 2023 and June 30, 2023, the Company included return-related assets of approximately $ 1,221,000 and $ 1,338,000 , respectively, in other current assets.

As a percentage of gross sales, returns, rebates and allowances were 6 % and 5 % for the three months ended December 31, 2023 and 2022, respectively.

As a percentage of gross sales, returns, rebates and allowances were 5 % for both the six months ended December 31, 2023 and 2022, respectively.

As of March 31, 2024 and June 30, 2023, the Company included refund liabilities of approximately $ 5,224,000 and $ 5,521,000 , respectively, in current liabilities.

As of March 31, 2024 and June 30, 2023, the Company included return-related assets of approximately $ 1,316,000 and $ 1,338,000 , respectively, in other current assets.

As a percentage of gross sales, returns, rebates and allowances were 6 % and 8 % for the three months ended March 31, 2024 and 2023, respectively.

As a percentage of gross sales, returns, rebates and allowances were 6 % for both the nine months ended March 31, 2024 and 2023, 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 December 31,

Six months ended December 31,

Three months ended March 31,

Nine months ended March 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 two customers with an accounts receivable balance that comprised of 19 % and 10 % as of December 31, 2023.

The Company had two customers with an accounts receivable balance that comprised of 16 % and 11 % as of March 31, 2024.

As of June 30, 2023, the accounts receivable balance with these respective customers were 19 % and 14 %.

Sales to either of these customers did not exceed 10% of net sales during the three and six months ended December 31, 2023 and 2022, respectively.

Sales to either of these customers did not exceed 10% of net sales during the three and nine months ended March 31, 2024.

Sales to one of these customers was 12 % and 10 % of net sales during the three and nine months ended March 31, 2023.

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 six months ended December 31, 2023 and 2022, are as follows (in thousands):

Three months ended December 31,

Six months ended December 31,

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, 2024 and 2023, are as follows (in thousands):

Three months ended March 31,

Nine months ended March 31,

Net gains recognized during the period on marketable securities

8 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 December 31, 2023 and June 30, 2023, respectively (in thousands):

December 31, 2023

The following tables summarize the Company’s investments at March 31, 2024 and June 30, 2023, respectively (in thousands):

March 31, 2024

June 30, 2023

11 unchanged sentences

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

December 31, 2023

March 31, 2024

June 30, 2023

6 unchanged sentences

accumulated depreciation and amortization

Depreciation and amortization expense on property, plant, and equipment was approximately $ 467,000 and $ 379,000 for the three months ended December 31, 2023 and 2022, respectively.

Depreciation and amortization expense on property, plant and equipment was approximately $ 920,000 and $ 747,000 for the six months ended December 31, 2023 and 2022, respectively.

Depreciation and amortization expense on property, plant, and equipment was approximately $ 454,000 and $ 380,000 for the three months ended March 31, 2024 and 2023, respectively.

Depreciation and amortization expense on property, plant and equipment was approximately $ 1,374,000 and $ 1,127,000 for the nine months ended March 31, 2024 and 2023, respectively.

NOTE 7 - Income Taxes

3 unchanged sentences

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 six months ended December 31, 2023 the Company recognized total pre-tax book income of $ 26,529,000 , comprised of $ 3,696,000 and $ 22,833,000 of domestic and foreign pre-tax book income, respectively.

For the nine months ended March 31, 2024 the Company recognized total pre-tax book income of $ 41,660,000 , comprised of $ 5,412,000 and $ 36,248,000 of domestic and foreign pre-tax book income, respectively.

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 December 31, 2023, the Company had accrued interest totaling $ 178,000 , as well as $ 700,000 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, 2023, additional interest expense was accrued for in the amount of $ 39,000 .

As of March 31, 2024, the Company had accrued interest totaling $ 198,000 , as well as $ 700,000 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, 2024, additional interest expense was accrued for in the amount of $ 59,000 .

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

1 unchanged sentence

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

As of December 31, 2023, we remain 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 it's examination of the Company’s income tax return for fiscal year ended June 30, 2020.

As of March 31, 2024, we remain 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.

There has been no changes proposed in relation to this examination.

NOTE 8 - Long-Term Debt

As of December 31, 2023 and June 30, 2023, the Company had a revolving line of credit of $ 11,000,000 (“Revolver Agreement”) which expires in June 2024.

As of December 31, 2023 and June 30, 2023, the Company has no outstanding debt.

The Revolver Agreement also provides for a LIBOR-based interest rate option of LIBOR plus 1.15 % to 2.00 %, depending on the ratio of outstanding debt to EBITDA, which is to be measured and adjusted quarterly, a prime rate-based option of the prime rate plus 0.25 % and other terms and conditions as more fully described in the Revolver Agreement.

The Company’s obligations under the Revolver Agreement continue to be secured by substantially all of its domestic assets, including but not limited to, deposit accounts, accounts receivable, inventory, equipment and fixtures and intangible assets.

In addition, the Company’s wholly owned subsidiaries, with the exception of the Company’s foreign subsidiaries, have issued guarantees and pledges of all of their assets to secure the Company’s obligations under the Revolver Agreement.

All of the outstanding common stock of the Company’s domestic subsidiaries and 65% of the common stock of the Company’s foreign subsidiaries has been pledged to secure the Company’s obligations under the Revolver Agreement.

The Revolver Agreement contains various restrictions and covenants including, among others, restrictions on payment of dividends, restrictions on borrowings and compliance with certain financial ratios, as defined in the Revolver Agreement.

In September 2020, the Company and its lender amended the Revolver Agreement, which had an expiration date of June 2021, to expire in June 2024.

The amended Revolver Agreement also removed certain requirements and restrictions on the Company as well as removing the mortgage on the Company’s Amityville facility.

The new benchmark rate is the Secured Overnight Financing Rate (SOFR).

On February 9, 2024, the Company and its primary bank, HSBC Bank USA National Association (“HSBC”), agreed to amend and restate the existing Third Amended and Restated Credit Agreement (“Agreement”) dated June 29, 2012, as amended, between the Registrant and HSBC with the Fourth Amended and Restated Credit Agreement (“Amended Agreement”).

The Amended Agreement extends the term of the Agreement from June 28, 2024, to February 9, 2029.

The Amended Agreement also increases the available revolving credit line from $ 11,000,000 to $ 20,000,000 and replaces the LIBOR benchmark rate with the Secured Overnight Financing Rate (SOFR) benchmark rate.

As of March 31, 2024 and June 30, 2023, the Company has no outstanding debt.

The Amended Agreement provides for a SOFR-based interest rate option of SOFR plus 1.2645 % to 1.3645 %, depending on the Fixed Charge Coverage Ratio, which is to be measured and adjusted quarterly, a prime rate-based interest rate option of the prime rate, as defined in the Amended Agreement, and other terms and conditions as more fully described in the Amended Agreement.

The Company’s obligations under the Amended Agreement continue to be secured by substantially all its domestic assets, including but not limited to, deposit accounts, accounts receivable, inventory, equipment and fixtures and intangible assets.

In addition, the Company’s wholly owned subsidiaries, except for the Company’s foreign subsidiaries, have issued guarantees and pledges of all their assets to secure the Company’s obligations under the Amended Agreement.

All the outstanding common stock of the Company’s domestic subsidiaries and 65% of the common stock of the Company’s foreign subsidiaries have been pledged to secure the Company’s obligations under the Amended Agreement.

The Amended Agreement contains various restrictions and covenants including, but not limited to, compliance with certain financial rations, restrictions on payment of dividends and restrictions on borrowings.

During the fourth quarter of fiscal 2020, the Company received the proceeds of promissory notes dated between April 17, 2020 and May 7, 2020 (the "PPP Loan Agreement"), entered into between the Company and HSBC Bank USA N.A., as lender (the "Lender).

9 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 December 31, 2023 and 2022, the Company recorded non-cash compensation expense of $ 303,000 ($ 0.01 per basic and diluted share) and $ 335,000 ($ 0.01 per basic and diluted share), respectively, relating to stock-based compensation which are included in SG&A in the consolidated statements of income.

For the six months ended December 31, 2023 and 2022, the Company recorded non-cash compensation expense of $ 610,000 ($ 0.01 per basic and diluted share) and $ 812,000 ($ 0.02 per

basic and diluted share), respectively, relating to stock-based compensation which are included in SG&A in the consolidated statements of income.

For the three months ended March 31, 2024 and 2023, the Company recorded non-cash compensation expense of $ 266,000 ($ 0.01 per basic and diluted share) and $ 322,000 ($ 0.01 per basic and diluted share), respectively, relating to stock-based compensation which are included in SG&A in the consolidated statements of income.

For the nine months ended March 31, 2024 and 2023, the Company recorded non-cash compensation expense of $ 876,000 ($ 0.02 per basic and diluted share) and $ 1,134,000 ($ 0.03

per basic and diluted share), respectively, relating to stock-based compensation which are included in SG&A in the consolidated statements of income.

2012 Employee Stock Option Plan

5 unchanged sentences

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

At December 31, 2023, 478,980 stock options were outstanding, 289,728 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 six months ended December 31, 2023 and 2022, respectively.

At March 31, 2024, 363,036 stock options were outstanding, 178,984 stock options were exercisable and no further stock options were available for grant under this plan.

No stock options were granted during the three and nine months ended March 31, 2024.

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

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

4 unchanged sentences

Expected dividend yields

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

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

Weighted average

10 unchanged sentences

Total intrinsic value of options exercisable

A total of 31,600 stock options were exercised during the three and six months ended December 31, 2023.

The 31,600 options that were exercised during the three and six months ended December 31, 2023 were settled by the Company withholding 20,567 from the shares issuable on exercise of the options.

A total of 115,944 and 147,544 stock options were exercised during the three and nine months ended March 31, 2024.

77,944 of the 115,944 options that were exercised during the three months ended March 31, 2024 were settled by the Company withholding 26,002 from the shares issuable on exercise of the options.

109,544 of the 147,544 options that were exercised during the nine months ended March 31, 2024 were settled by the Company withholding 46,570 from the shares issuable on exercise of the options.

The withheld shares of Common Stock had an aggregate fair market value on the date of exercise equal to the purchase price being paid.

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

The actual tax benefit realized for the tax deductions from option exercises during the three and six months ended December 31, 2023 was $ 52,000 each period.

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 of the Company’s common stock which were retired and returned to unissued status upon receipt.

No cash and $ 45,000 cash was received from the option exercises during the three and six months ended December 31, 2022.

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

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

For the remaining 38,000 shares exercised during the three and nine months ended March 31, 2024, $ 427,000 cash was received from the option exercises.

The actual tax benefit realized for the tax deductions from option exercises during the three and nine months ended March 31, 2024 was $ 67,000 and $ 119,000 , respectively.

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 the Company withholding 9,943 from the shares issuable on exercise of the options.

29,600 of the 38,000 options that were exercised during the nine months ended March 31, 2023 were settled by the Company withholding 10,150 from the shares issuable on exercise of the options.

The withheld shares of Common Stock had an aggregate fair market value on the date of exercise equal to the purchase price being paid.

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

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

The following table summarizes information about stock options outstanding under the 2012 Employee Plan at March 31, 2024:

Options outstanding

8 unchanged sentences

$ 10.02 ‑ $ 26.94

As of December 31, 2023, there was $ 1,518,000 of unearned stock-based compensation cost related to share-based compensation arrangements granted under the 2012 Employee Plan.

No options were granted during the three and six months ended December 31, 2023.

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

74,000 and 84,700 options vested during the three and six months ended December 31, 2023.

The total grant date fair value of the options vesting during the three and six months ended December 31, 2023 was $ 724,000 and $ 849,000 , respectively.

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.

As of March 31, 2024, there was $ 1,306,000 of unearned stock-based compensation cost related to share-based compensation arrangements granted under the 2012 Employee Plan.

No options were granted during the three and nine months ended March 31, 2024.

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

5,200 and 89,900 options vested during the three and nine months ended March 31, 2024.

The total grant date fair value of the options vesting during the three and nine months ended March 31, 2024 was $ 33,000 and $ 881,000 , 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.

2012 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 December 31, 2023, 20,400 stock options were outstanding, 15,840 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 six months ended December 31, 2023 and 2022.

At March 31, 2024, 20,400 stock options were outstanding, 16,560 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, 2024 and 2023.

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

4 unchanged sentences

Expected dividend yields

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

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

Weighted average

10 unchanged sentences

Total intrinsic value of options exercisable

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

No cash was received from option exercises during the three and six months ended December 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 December 31, 2023:

No stock options were exercised during the three and nine months ended March 31, 2024 and 2023, respectively.

No cash was received from option exercises during the three and nine months ended March 31, 2024 and 2023, 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, 2024:

Options outstanding

6 unchanged sentences

$ 4.35 - $ 22.93

As of December 31, 2023, there was $ 34,000 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, 2023 and 2022, respectively.

1,920 options vested during the three and six months ended December 31, 2023 and 2022, respectively.

The total grant date fair value of the options vesting during the three and six months ended December 31, 2023 and 2022 under this plan was $ 19,000 for both periods.

As of March 31, 2024, there was $ 29,000 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, 2024 and 2023, respectively.

720 and 2,640 options vested during the three and nine months ended March 31, 2024 and 2023, respectively.

The total grant date fair value of the options vesting during the three and nine months ended March 31, 2024 and 2023 under this plan was $ 5,000 and 24,000 , respectively.

2018 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 December 31, 2023, 73,400 stock options were outstanding, 58,620 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 six months ended December 31, 2023 and 2022.

At March 31, 2024, 71,900 stock options were outstanding, 62,500 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, 2024 and 2023.

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 six months ended December 31:

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

Weighted average

10 unchanged sentences

Total intrinsic value of options exercisable

A total of 1,600 stock options were exercised during the three and six months ended December 31, 2023.

The 1,600 options that were exercised during the three and six months ended December 31, 2023 were settled by the Company withholding 740 from the shares issuable on exercise of the options.

A total of 1,500 and 3,100 stock options were exercised during the three and nine months ended March 31, 2024.

The 1,500 options that were exercised during the three months ended March 31, 2024 were settled by the Company withholding 792 from the shares issuable on exercise of the options.

The 3,100 options that were exercised during the nine months ended March 31, 2024 were settled by the Company withholding 1,532 from the shares issuable on exercise of the options.

The withheld shares of Common Stock had an aggregate fair market value on the date of exercise equal to the purchase price being paid.

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

The actual tax benefit realized for the tax deductions from option exercises during the three and six months ended December 31, 2023 was $ 6,000 each period.

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.

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

No cash was received from the option exercises during the three and nine months ended March 31, 2024.

The actual tax benefit realized for the tax deductions from option exercises during the three and nine months ended March 31, 2024 was $ 6,000 and $ 12,000 , respectively.

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 the Company withholding 395 from the shares issuable on exercise of the options.

The 11,500 options that were exercised during the nine months ended March 31, 2023, were settled by the Company withholding 6,052 from the shares issuable on exercise of the options.

The withheld shares of Common Stock had an aggregate fair market value on the date of exercise equal to the purchase price being paid.

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.

The following table summarizes information about stock options outstanding under the 2018 Non-Employee Plan at March 31, 2024:

Options outstanding

6 unchanged sentences

$ 8.10 - $ 22.93

As of December 31, 2023, there was $ 83,000 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, 2023 and 2022, respectively.

9,500 options vested during the three and six months ended December 31, 2023, respectively.

The total grant date fair value of the options vesting during the three and six months ended December 31, 2023 under this plan was $ 89,000 for both periods.

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.

As of March 31, 2024, there was $ 71,000 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, 2024 and 2023, respectively.

5,380 and 14,880 options vested during the three and nine months ended March 31, 2024, respectively.

The total grant date fair value of the options vesting during the three and nine months ended March 31, 2024 under this plan was $ 35,000 and $ 124,000 , respectively.

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

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.

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 December 31, 2023, 56,900 stock options were outstanding, 29,140 stock options were exercisable and 43,100 stock options were available for grant under this plan.

No options were granted during the three and six months ended December 31, 2023.

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

At March 31, 2024, 56,900 stock options were outstanding, 30,140 stock options were exercisable and 43,100 stock options were available for grant under this plan.

No options were granted during the three and nine months ended March 31, 2024.

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

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 six months ended December 31:

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

Weighted average

10 unchanged sentences

Total intrinsic value of options exercisable

No stock options were exercised during the three and six months ended December 31, 2023 and 2022.

No cash was received from option exercises during either of the three and six months ended December 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 December 31, 2023:

No stock options were exercised during the three and nine months ended March 31, 2024 and 2023.

No cash was received from option exercises during either of the three and nine months ended March 31, 2024 or 2023 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, 2024:

Options outstanding

8 unchanged sentences

$ 11.40 - $ 30.71

As of December 31, 2023, there was $ 278,000 of unearned stock-based compensation cost related to share-based compensation arrangements granted under the 2020 Non-Employee Plan.

No stock options were granted during the three and six months ended

December 31, 2023.

3,380 and 10,380 options vested during the three and six months ended December 31, 2023 and 2022, respectively.

The total grant date fair value of the options vesting during the three and six months ended December 31, 2023 and 2022 under this plan was $ 34,000 and $ 113,000 , respectively.

As of March 31, 2024, there was $ 248,000 of unearned stock-based compensation cost related to share-based compensation arrangements granted under the 2020 Non-Employee Plan.

No stock options were granted during the three and nine months ended March 31, 2024.

5,000 and 30,000 stock 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, 2024 and 2023, respectively.

The total grant date fair value of the options vesting during the three and nine months ended March 31, 2024 and 2023 under this plan was $ 16,000 and $ 129,000 , respectively.

2022 Employee Stock Option Plan

5 unchanged sentences

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

At December 31, 2023, 10,000 stock options were outstanding, 2,000 stock options were exercisable and 940,000 stock options were available for grant under this plan.

There were 10,000 options granted during the three and six months ended December 31, 2023.

At March 31, 2024, 10,000 stock options were outstanding, 2,000 stock options were exercisable and 940,000 stock options were available for grant under this plan.

No stock options were granted during the three months ended March 31, 2024.

There were 10,000 options granted during the nine months ended March 31, 2024.

No options may be granted under this plan after December 2032.

4 unchanged sentences

Expected dividend yields

The following table reflects activity under the 2022 Employee Plan for the six months ended December 31:

The following table reflects activity under the 2022 Employee Plan for the nine months ended March 31:

Weighted average

8 unchanged sentences

Total intrinsic value of options exercisable

No options were exercised during the three and six months ended December 31, 2023.

No cash was received from option exercises during the three and six months ended December 31, 2023 and the actual tax benefit realized for the tax deductions from option exercises was $ 0 .

The following table summarizes information about stock options outstanding under the 2022 Employee Plan at December 31, 2023:

No options were exercised during the three and nine months ended March 31, 2024.

No cash was received from option exercises during the three and nine months ended March 31, 2024 and the actual tax benefit realized for the tax deductions from option exercises was $ 0 .

The following table summarizes information about stock options outstanding under the 2022 Employee Plan at March 31, 2024:

Options outstanding

7 unchanged sentences

exercise price

As of December 31, 2023, there was $ 73,000 of unearned stock-based compensation cost related to share-based compensation arrangements granted under the 2022 Employee Plan.

10,000 options were granted during the three and six months ended December 31, 2023.

2,000 options vested during the three and six months ended December 31, 2023, respectively.

The total grant date fair value of the options vesting during the three and six months ended December 31, 2023 under this plan was $ 19,500 , respectively.

As of March 31, 2024, there was $ 68,000 of unearned stock-based compensation cost related to share-based compensation arrangements granted under the 2022 Employee Plan.

No options were granted during the three months ended March 31, 2024.

10,000 options were granted during the nine months ended March 31, 2024.

No options vested during the three months ended March 31, 2024.

2,000 options vested during the nine months ended March 31, 2024, respectively.

The total grant date fair value of the options vesting during the three and nine months ended March 31, 2024 under this plan was $ 0 and $ 19,500 , respectively.

NOTE 10 – Stockholders’ Equity Transactions

1 unchanged sentence

On November 2, 2023, the Company’s Board of Directors declared a cash dividend of $ .08 per share payable on December 22, 2023 to stockholders of record on December 1, 2023.

During the three and six months ended December 31, 2023, certain employees and directors exercised stock options under the Company's 2012 Employee and 2018 Non-Employee Stock Option Plans totaling 33,200 shares.

All 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.

On February 1, 2024, the Company’s Board of Directors declared a cash dividend of $ .10 per share payable on March 22, 2024 to stockholders of record on March 1, 2024.

During the three months ended March 31, 2024, certain employees and directors exercised stock options under the Company's 2012 Employee and 2018 Non-Employee Stock Option Plans totaling 117,444 shares.

Of the 117,444 shares exercised, 79,444 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 withheld by the Company was 26,794 and was based upon the aggregate fair market value on the date of exercise equal to the purchase price being paid.

During the nine months ended March 31, 2024, certain employees and directors exercised stock options under the Company's 2012 Employee and 2018 Non-Employee Stock Option Plans totaling 150,644 shares.

Of the 150,644 shares exercised, 112,644 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 withheld by the Company was 48,101 and was based upon the aggregate fair market value on the date of exercise equal to the purchase price being paid.

During fiscal 2023, certain employees and directors exercised stock options under the Company's 2012 Employee and 2018 Non-Employee Stock Option Plans totaling 53,000 shares.

2 unchanged sentences

NOTE 11 – Related Party Transaction

In March 2024, the Company's President and Chairman sold 2,000,000 shares of our common stock as a selling stockholder in an underwritten secondary public offering at a public offering price of $ 40.75 per share.

In connection with such offering, the selling stockholder has granted the underwriters an option to purchase additional shares (the “Greenshoe Option” up to an additional 300,000 shares of their common stock.

On April 8, 2024, the underwriters exercised the Greenshoe Options, pursuant to which the selling stockholder sold an additional 50,000 shares.

The Company did not sell any shares in the offering and received no proceeds from the offerings, but the Company incurred $ 372,000 in offering expenses, which are recorded in SG&A in the accompanying condensed consolidation statements of income during the three and nine months ended March 31, 2024, respectively.

In February 2023, the Company's President and Chairman and the Company’s Executive Vice President and Chief Financial Officer sold 2,300,000 and 100,000 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.

The Company did not sell any shares in the offering and received no proceeds from the offerings, but the Company incurred $ 96,000 and $ 293,000 in offering expenses, which are recorded in SG&A in the accompanying condensed consolidation statements of income during the three and six months ended December 31, 2022, respectively.

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 SG&A in the accompanying condensed consolidation statements of income during the nine months ended March 31, 2023, respectively.

NOTE 12 - 401(k) Plan

1 unchanged sentence

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

Company contributions to this plan are discretionary and totaled $ 58,000 and $ 61,000 for the three months ended December 31, 2023 and 2022, respectively.

Company contributions to this plan totaled $ 119,000 and $ 123,000 for the six months ended December 31, 2023 and 2022, respectively.

Company contributions to this plan are discretionary and totaled $ 72,000 and $ 64,000 for the three months ended March 31, 2024 and 2023, respectively.

Company contributions to this plan totaled $ 191,000 and $ 187,000 for the nine months ended March 31, 2024 and 2023, respectively.

NOTE 13 - 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 ended December 31, 2023 and 2022 cash payments against operating lease liabilities totaled $ 86,000 and $ 92,000 , respectively.

For the six months ended December 31, 2023 and 2022 cash payments against operating lease liabilities totaled $ 171,000 and $ 164,000 , respectively.

For the three months ended March 31, 2024 and 2023 cash payments against operating lease liabilities totaled $ 57,000 and $ 85,000 , respectively.

For the nine months ended March 31, 2024 and 2023 cash payments against operating lease liabilities totaled $ 228,000 and $ 249,000 , respectively.

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 December 31, 2023 (in thousands):

The following is a schedule, by years, of maturities of lease liabilities as of March 31, 2024 (in thousands):

Year Ending June 30,

Operating lease expense totaled approximately $ 129,000 and $ 131,000 for the three months ended December 31, 2023 and 2022, respectively.

Operating lease expense totaled approximately $ 253,000 and $ 211,000 for the six months ended December 31, 2023 and 2022, respectively.

Operating lease expense totaled approximately $ 127,000 and $ 123,000 for the three months ended March 31, 2024 and 2023, respectively.

Operating lease expense totaled approximately $ 380,000 and $ 334,000 for the nine months ended March 31, 2024 and 2023, respectively.

On August 29, 2023, a purported class action, brought on behalf of a putative class who acquired publicly traded NAPCO securities between November 7, 2022 and August 18, 2023, was filed in the United States District Court for the Eastern District of New York against the Company, its Chairman and Chief Executive Officer, and its Chief Financial Officer.

2 unchanged sentences

et al., asserts securities fraud claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 in connection with statements made in the Company’s quarterly reports and earnings releases during the period of November 7, 2022 through May 8, 2023.

A lead plaintiff was appointed in November 2023 and it is expect that such plaintiff will file an amended complaint by February 16, 2024.

A lead plaintiff was appointed in November 2023 and lead plaintiff filed an Amended Complaint on February 16, 2024.

The Amended Complaint added claims under Sections 11, 12, and 15 of the Securities Act of 1933 in connection with the secondary public offering in February 2023.

These additional claims are brought against the defendants named in the initial complaint, as well as the directors who allegedly signed the offering materials (prospectuses and registration statement in connection with the offering), and the underwriters for the offering.

The Company filed a motion to dismiss the Amended Complaint on April 26, 2024.

The Company intends to vigorously defend against the action.

3 unchanged sentences

Employment Agreements

As of December 31, 2023, the Company was obligated under two employment agreements and one severance agreement with executive officers of the Company.

As of March 31, 2024, the Company was obligated under two employment agreements and one severance agreement with executive officers of the Company.

The employment agreements are with the Company’s CEO, and the Senior Vice President of Engineering (“the SVP of Engineering”) and the severance agreement is with the Company’s Executive Vice President of Operations and Chief Financial Officer (“CFO”).

11 unchanged sentences

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

Three months ended December 31,

Six months ended December 31,

Three months ended March 31,

Nine months ended March 31,

Sales to external customers (1) :

Total Net Sales

December 31, 2023

March 31, 2024

June 30, 2023

5 unchanged sentences

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

(2) Consists primarily of inventories (December 31, 2023 = $ 37,068 ;

June 30, 2023 = $ 33,477 ), operating lease assets (December 31, 2023 = $ 5,642 ;

June 30, 2023 = $ 5,797 ) and fixed assets (December 31, 2023 = $ 3,807 ;

(2) Consists primarily of inventories (March 31, 2024 = $ 36,424 ;

June 30, 2023 = $ 33,477 ), operating lease assets (March 31, 2024 = $ 5,564 ;

June 30, 2023 = $ 5,797 ) and fixed assets (March 31, 2024 = $ 3,700 ;

June 30, 2023 = $ 3,958 ) located at the Company’s principal manufacturing facility in the Dominican Republic.

1 unchanged sentence

The Company has evaluated subsequent events occurring after the end of the period covered by the condensed consolidated financial statements for events requiring recording or disclosure in the condensed consolidated financial statements.

On February 1, 2024, the Company’s Board of Directors declared a cash dividend of $ .10 per share payable on March 22, 2024 to stockholders of record on March 1, 2024.

On May 2, 2024, the Company’s Board of Directors declared a cash dividend of $ .10 per share payable on June 24, 2024 to stockholders of record on June 3, 2024.

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