What changed in this filing

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Item 1. Financial Statements

2025-01-22 compared with 2024-10-23 · 89 added, 56 removed, 226 unchanged (39% of the section changed)

2 unchanged sentences

BALANCE SHEETS

September 30, 2024

December 31, 2024

March 31, 2024*

1 unchanged sentence

Cash and cash equivalents

Marketable securities, short-term (amortized cost of $ 20,002,199 as of September 30, 2024,

Marketable securities, short-term (amortized cost of $ 14,993,163 as of December 31, 2024,

and $ 12,283,630 as of March 31, 2024)

Accounts receivable, net of allowance for credit losses of $ 15,000 as of September 30 and March 31, 2024

Accounts receivable, net of allowance for credit losses of $ 15,000 as of December 31 and March 31, 2024

Prepaid expenses and other assets

5 unchanged sentences

Deferred tax assets

Marketable securities, long-term (amortized cost of $ 28,203,595 as of September 30, 2024, and $ 31,417,890 as of March 31, 2024)

Marketable securities, long-term (amortized cost of $ 29,996,231 as of December 31, 2024, and $ 31,417,890 as of March 31, 2024)

Right-of-use asset – operating lease

9 unchanged sentences

Common stock, $ 0.01 par value, 6,000,000 shares authorized;

4,834,020 issued and outstanding as of September 30, 2024 and 4,833,676 as of March 31, 2024

4,837,166 issued and outstanding as of December 31, 2024 and 4,833,676 as of March 31, 2024

Additional paid-in capital

7 unchanged sentences

STATEMENTS OF INCOME

Quarter Ended September 30,

Quarter Ended December 31,

Product sales

4 unchanged sentences

Selling, general, and administrative

Recovery of credit losses

Total expenses

8 unchanged sentences

STATEMENTS OF COMPREHENSIVE INCOME

Quarter Ended September 30,

Unrealized gain (loss) from marketable securities, net of tax

Quarter Ended December 31,

Unrealized gain (loss) on marketable securities, net of tax

Comprehensive income

2 unchanged sentences

STATEMENTS OF INCOME

Six Months Ended September 30,

Nine Months Ended December 31,

Product sales

15 unchanged sentences

STATEMENTS OF COMPREHENSIVE INCOME

Six Months Ended September 30,

Unrealized gain (loss) from marketable securities, net of tax

Nine Months Ended December 31,

Unrealized gain on marketable securities, net of tax

Comprehensive income

18 unchanged sentences

Balance as of September 30, 2024

Exercise of stock options

Comprehensive income:

Unrealized loss on marketable securities, net of tax

Total comprehensive income

Stock-based compensation

Cash dividends ($1.00 per share of common stock)

Balance as of December 31, 2024

See accompanying notes.

9 unchanged sentences

Stock-based compensation

Cash dividends ($1.00 per share of common stock)

Cash dividends declared ($1.00 per share of common stock)

Balance as of June 30, 2023

3 unchanged sentences

Stock-based compensation

Cash dividends ($1.00 per share of common stock)

Cash dividends declared ($1.00 per share of common stock)

Balance as of September 30, 2023

Comprehensive income:

Unrealized gain on marketable securities, net of tax

Total comprehensive income

Stock-based compensation

Cash dividends declared ($1.00 per share of common stock)

Balance as of December 31, 2023

See accompanying notes.

1 unchanged sentence

STATEMENTS OF CASH FLOWS

Six Months Ended September 30,

Nine Months Ended December 31,

OPERATING ACTIVITIES

15 unchanged sentences

Proceeds from maturities of marketable securities

Net cash Provided (used) by investing activities

Net cash provided by (used in) investing activities

FINANCING ACTIVITIES

(Payments on) proceeds from exercise of stock options

Proceeds from exercise of stock options

Payment of dividends to shareholders

Net cash used in financing activities

Decrease (increase) in cash and cash equivalents

Increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

13 unchanged sentences

It is suggested that these unaudited financial statements be read in conjunction with the audited financial statements and Notes included in our latest Annual Report on Form 10-K for the fiscal year ended March 31, 2024.

The results of operations for the quarter ended September 30, 2024, are not necessarily indicative of the results that may be expected for the full fiscal year ending March 31, 2025.

The results of operations for the quarter ended December 31, 2024, are not necessarily indicative of the results that may be expected for the full fiscal year ending March 31, 2025.

Significant accounting policies

A description of our significant accounting policies and estimates is provided in Note 2 to the Financial Statements in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024.

As of September 30, 2024, there were no changes to our significant accounting policies or estimates.

As of December 31, 2024, there were no changes to our significant accounting policies or estimates.

Reclassification

The presentation of certain items in the statement of cash flows for the three- and nine-month periods ending December 31, 2023 has been changed to conform to the classifications used in 2024.

These reclassifications had no effect on shareholders’ equity, net income, or comprehensive net income as previously reported.

NEW ACCOUNTING STANDARDS NOT YET ADOPTED

There were no additions to the new accounting standards not yet adopted as described in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024.

We do not expect the adoption of accounting standards that have been issued or proposed by the Financial Accounting Standards Board (FASB) or other standards-setting bodies that do not require adoption until a future date to have a material impact on our financial statements when they are adopted.

In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No.

2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40).

ASU 2024-03 aims to enhance transparency for users of financial statements by requiring public business entities to disaggregate specific expense categories.

In January 2025, the FASB issued ASU No.

2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date , which clarified the effective date for non-calendar year-end entities such as us.

ASU 2024-03 mandates disclosures in the notes to financial statements detailing the composition and trends of key expense categories within major income statement captions.

These enhanced disclosures are intended to help investors more effectively assess the entity’s performance, understand its cost structure, and make more accurate forecasts of future cash flows.

For public business entities, ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, which for us will be for fiscal 2028 and for interim reporting periods beginning with the first quarter of fiscal 2029.

The adoption will result in disclosure changes only.

We do not expect the adoption of other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date to have a material impact on our financial statements when they are adopted.

NET INCOME PER SHARE

2 unchanged sentences

The following tables show the components of diluted shares:

Quarter Ended September 30,

Quarter Ended December 31,

Weighted average common shares outstanding – basic

1 unchanged sentence

Shares used in computing net income per share – diluted

Six Months Ended September 30,

Nine Months Ended December 31,

Weighted average common shares outstanding – basic

2 unchanged sentences

MARKETABLE SECURITIES

The following table shows the major categories of our marketable securities and their contractual maturities as of September 30, 2024:

The following table shows the major categories of our marketable securities and their contractual maturities as of December 31, 2024:

Money market funds

Treasury securities

Corporate bonds

Total marketable securities represented approximately 77% of our total assets as of September 30, 2024.

Marketable securities as of September 30, 2024, had remaining maturities between one and 55 months.

Money market funds are included on the balance sheets in “Cash and cash equivalents.” Corporate bonds are included on the balance sheets in “Marketable securities, short term” and “Marketable securities, long term.” Accrued interest receivables were $ 413,483 as of September 30, 2024, and $ 460,627 as of March 31, 2024, and are included in the balance sheets in “Prepaid expenses and other assets.”

Total marketable securities and money market funds represented approximately 77% of our total assets as of December 31, 2024.

Marketable securities as of December 31, 2024, had remaining maturities between 10 weeks and 52 months.

Money market funds are included on the balance sheets in “Cash and cash equivalents.” Corporate bonds are included in “Marketable securities, short term” and “Marketable securities, long term.” Treasury securities are included in “Marketable securities, long term.” Accrued interest receivable was $ 354,529 as of December 31, 2024, and $ 460,627 as of March 31, 2024, and is included in the balance sheets in “Prepaid expenses and other assets.”

We monitor the credit ratings of our marketable securities at least quarterly as reported by Standard & Poor’s.

The following table summarizes the fair values of our marketable securities as of September 30, 2024, aggregated by credit rating:

The following table summarizes the fair values of our marketable securities as of December 31, 2024, aggregated by credit rating:

Credit Rating

Because we believe it is more likely than not we will recover the cost basis of our investments, we did not record any allowance attributable to credit losses.

None of the marketable securities purchased during the period had experienced more-than-insignificant deterioration in credit quality since its origination and were therefore not considered “Purchased Financial Assets with Credit Deterioration.”

The following table shows the estimated fair value of our marketable securities, aggregated by fair value hierarchy inputs used in estimating their fair values:

As of September 30, 2024

As of December 31, 2024

As of March 31, 2024

Money market funds

Treasury securities

Corporate bonds

The following table shows the amortized cost, fair value and gross unrealized holding gains and losses of our marketable securities as of September 30 and March 31, 2024:

As of September 30, 2024

The following table shows the amortized cost, fair value and gross unrealized holding gains and losses of our marketable securities as of December 31 and March 31, 2024:

As of December 31, 2024

As of March 31, 2024

Money market funds

Treasury securities

Corporate bonds

The following table shows the gross unrealized holding losses and estimated fair value of our marketable securities for which an allowance for credit losses has not been recorded, aggregated by category of securities and length of time that individual securities had been in a continuous unrealized loss position as of September 30 and March 31, 2024.

The following table shows the gross unrealized holding losses and estimated fair value of our marketable securities, aggregated by category of securities and length of time that individual securities had been in a continuous unrealized loss position as of December 31 and March 31, 2024.

Less Than 12 Months

12 Months or Greater

As of September 30, 2024

As of December 31, 2024

Treasury securities

Corporate bonds

4 unchanged sentences

The issuers continue to make timely interest payments on these securities.

Because we believe it is more likely than not we will recover the cost basis of our investments, we did not record any impairment attributable to credit losses.

Unrealized losses on our marketable securities and their tax effects are as follows:

Quarter Ended September 30,

Unrealized gains and losses on our marketable securities and their tax effects are as follows:

Quarter Ended December 31,

Unrealized gain (loss) on marketable securities

Unrealized gain (loss) on marketable securities, net of tax

Six Months Ended September 30,

Unrealized gain (loss) from marketable securities

Unrealized gain (loss) on marketable securities, net of tax

Nine Months Ended December 31,

Unrealized gain from marketable securities

Unrealized gain on marketable securities, net of tax

ALLOWANCE FOR CREDIT LOSSES ON ACCOUNTS RECEIVABLES

2 unchanged sentences

Change in provision for current expected credit losses

Allowance for credit losses as of September 30, 2024

Allowance for credit losses as of December 31, 2024

Inventories are shown in the following table:

5 unchanged sentences

STOCK-BASED COMPENSATION

Stock-based compensation expense was $ 105,203 for the second quarter of fiscal 2025, $ 106,312 for the second quarter of fiscal 2024, $ 123,645 for the first six months of fiscal 2025, and $ 116,848 for the first six months of fiscal 2024.

Stock-based compensation expense was $ 14,261 for the third quarter of fiscal 2025, $ 12,544 for the third quarter of fiscal 2024, $ 137,906 for the first nine months of fiscal 2025, and $ 129,392 for the first nine months of fiscal 2024.

We calculate share-based compensation expense using the Black-Scholes-Merton standard option-pricing model .

Quarter Ended

September 30,

Six Months Ended

September 30,

Nine Months Ended

Stock options grant

Stock options exercised

During the three and nine months ended December 31, 2024 there were 6,000 and 7,000 stock options, respectively, exchanged in a cashless net option exercise which resulted in 1,146 and 1,490 shares issued, respectively.

During the nine months ended December 31, 2023 there were 2,000 stock options exchanged in a cashless net option exercise which resulted in 575 shares issued.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

As of September 30, 2024, federal and state estimated tax liabilities of $ 41,495 were included in the balance sheet in “Accrued payroll and other.”

We had no unrecognized tax benefits as of September 30, 2024, and we do no t expect any significant unrecognized tax benefits within 12 months of the reporting date.

As of December 31, 2024, federal and state estimated tax overpayments of $ 301,246 were included in the balance sheet in “Prepaid expenses and other assets.”

We had no unrecognized tax benefits as of December 31, 2024, and we do no t expect any significant unrecognized tax benefits within 12 months of the reporting date.

We recognize interest and penalties related to income tax matters in income tax expense.

As of September 30, 2024, we had no accrued interest related to uncertain tax positions.

As of December 31, 2024, we had no accrued interest related to uncertain tax positions.

The tax years ended March 31, 2020 through March 31, 2024 remain open to examination by the major taxing jurisdictions to which we are subject.

We conduct our operations in a leased facility under a non-cancellable lease expiring March 31, 2026.

We conduct our operations in a leased facility under a non-cancellable lease expiring May 31, 2031.

Effective November 4, 2024 we executed an Amendment extending our lease, which would have expired March 31, 2026 without the Amendment.

Liabilities under the lease Amendment are included in the lease-liabilities table below.

For further details on obligations under our lease as amended, refer to our Form 8-K/A filed on November 7, 2024 and referenced in Item 6 of this Report.

Our lease does not provide an implicit interest rate, so we used our incremental borrowing rate to determine the present value of lease payments.

2 unchanged sentences

Quarter Ended

Six Months Ended

Nine Months Ended

Operating lease cost

2 unchanged sentences

Operating cash flows for leases

Right-of-use assets obtained in exchange for new lease liabilities

Operating lease

Remaining lease term

Discount rate

The following table shows the maturities of lease liabilities as of September 30, 2024:

The following table shows the maturities of lease liabilities as of December 31, 2024:

Year Ending March 31,

10 unchanged sentences

We intend to finance any stock repurchases with cash provided by operating activities or maturing marketable securities.

The remaining authorization was $ 3,520,369 as of September 30, 2024.

We did no t repurchase any of our Common Stock during the first six months of fiscal 2025.

The remaining authorization was $ 3,520,369 as of December 31, 2024.

We did no t repurchase any of our Common Stock during the first nine months of fiscal 2025.

INFORMATION AS TO EMPLOYEE STOCK PURCHASE, SAVINGS, AND SIMILAR PLANS

2 unchanged sentences

We make matching contributions of 100 % of the first 3 % of participants’ salary deferral contributions.

Our matching contributions were $ 21,300 for the second quarter of fiscal 2025, $ 24,406 for the second quarter of fiscal 2024, $ 50,067 for the first six months of fiscal 2025, and $ 51,483 for the first six months of fiscal 2024.

Our matching contributions were $ 22,375 for the third quarter of fiscal 2025, $ 27,904 for the third quarter of fiscal 2024, $ 72,442 for the first nine months of fiscal 2025, and $ 79,388 for the first nine months of fiscal 2024.

SUBSEQUENT EVENTS

On October 23, 2024 , we announced that our Board of Directors had declared a quarterly cash dividend of $ 1.00 per share of Common Stock to be paid November 29, 2024 , to shareholders of record as of the close of business November 4, 2024 .

On January 22, 2025 , we announced that our Board of Directors had declared a quarterly cash dividend of $ 1.00 per share of Common Stock to be paid February 28, 2025 , to shareholders of record as of the close of business February 3, 2025 .

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