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COMPOSITION OF CERTAIN FINANCIAL STATEMENT ITEMS | 9 Months Ended
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Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
COMPOSITION OF CERTAIN FINANCIAL STATEMENT ITEMS | NOTE 4. COMPOSITION OF CERTAIN FINANCIAL STATEMENT ITEMS Inventory Inventory is stated at the lower of cost (first-in, first-out) or net realizable value and consists of the following (in thousands):
Schedule of inventory |  |  |  |  |  |
|  | March 31, 2023 |  |  | June 30, 2022 |
Raw materials /purchased components |  | $ | 8,673 |  |  | $ | 6,323 |
Work in process |  |  | 2,991 |  |  |  | 3,463 |
Sub-assemblies/finished components |  |  | 2,058 |  |  |  | 2,118 |
Finished goods |  |  | 1,423 |  |  |  | 774 |
Total inventory |  | $ | 15,145 |  |  | $ | 12,678 |
Investments Investments are stated at market value and consist of the following (in thousands):
Schedule of investments |  |  |  |  |  |
|  | March 31, 2023 |  |  | June 30, 2022 |
Marketable equity securities - short-term |  | $ | 1,149 |  |  | $ | 755 |
Marketable equity securities - long-term |  |  | 1,534 |  |  |  | 1,779 |
Total marketable equity securities |  | $ | 2,683 |  |  | $ | 2,534 |
Investments at March 31, 2023 and June 30, 2022, had an aggregate cost basis of $2,714,000 and $2,796,000, respectively. The long-term investments include equity investments of thinly traded securities that we classified as long term in nature because if we decide to sell these securities we may not be able to sell our position within one year. At March 31, 2023, the investments included net unrealized losses of $31,000 (gross unrealized losses of $113,000 offset by gross unrealized gains of $82,000). At June 30, 2022, the investments included net unrealized losses of $262,000 (gross unrealized losses of $369,000 offset by gross unrealized gains of $107,000). Of the total marketable equity securities at March 31, 2023 and June 30, 2022, $1,149,000 and $755,000, respectively, represent an investment in the common stock of Air T, Inc. Two of our Board members are also board members of Air T, Inc. and both either individually or through affiliates own an equity interest in Air T, Inc. Our Chairman, one of the two Board members aforementioned, also serves as the Chief Executive Officer and Chairman of Air T, Inc. Another of our Board members is employed by Air T, Inc. as its Chief of Staff. The shares were purchased through 10b5-1 Plans that, in accordance with our internal policies regarding the approval of related-party transactions, were approved by our then three Board members that are not affiliated with Air T, Inc. We invest surplus cash from time to time through our Investment Committee, which is comprised of one management director, Mr. Van Kirk, and two non-management directors, Mr. Cabillot and Mr. Swenson, who chairs the committee. Both Mr. Cabillot and Mr. Swenson are active investors with extensive portfolio management expertise. We leverage the experience of these committee members to make investment decisions for the investment of our surplus operating capital or borrowed funds. Additionally, many of our securities holdings include stocks of public companies that either Messrs. Swenson or Cabillot or both may own from time to time either individually or through the investment funds that they manage, or other companies whose boards they sit on, such as Air T, Inc. Land and building Land and building consist of the following (in thousands):
Schedule of land and building |  |  |  |  |  |
|  | March 31, 2023 |  |  | June 30, 2022 |
Land |  | $ | 3,684 |  |  | $ | 3,684 |
Building |  |  | 2,815 |  |  |  | 2,815 |
Total |  |  | 6,499 |  |  |  | 6,499 |
Less: accumulated depreciation |  |  | (226 | ) |  |  | (156 | )
Land and building |  | $ | 6,273 |  |  | $ | 6,343 |
On November 6, 2020, we acquired the Franklin Property for a total purchase price of $6.5 million, of which we paid $1.3 million in cash and the balance of $5.2 million we financed through Minnesota Bank & Trust (“MBT”) (See Note 10). We substantially completed the build-out of the property in the first quarter of this fiscal year. Currently, we are actively engaged in various verification and validation activities. We expect that we will begin operations in the new facility during the fourth quarter of this fiscal year. The building is being amortized on a straight-line basis over a period of 30 years. Intangibles Intangibles consist of the following (in thousands):
Schedule of intangibles |  |  |  |  |  |
|  | March 31, 2023 |  |  | June 30, 2022 |
Patent-related costs |  | $ | 208 |  |  | $ | 208 |
Less accumulated amortization |  |  | (121 | ) |  |  | (90 | )
|  | $ | 87 |  |  | $ | 118 |
Patent-related costs consist of legal fees incurred in connection with both patent applications and a patent issuance and will be amortized over the estimated life of the product(s) that is or will be utilizing the technology or expensed immediately in the event the patent office denies the issuance of the patent. Since we do not know when, or if, our patent applications will be issued, the future amortization expense is not predictable. Future amortization expense is expected to be $7,000 for the remainder of fiscal 2023 and $27,000 per fiscal year through fiscal 2026, at which time we expect these costs to be fully amortized. During the three months ended December 31, 2021, we impaired $46,000 in previously capitalized legal fees because although we were granted the underlying patent, in this case, we had (and continue to have) no products either in development or sold that utilize the intellectual property protected by the patent.

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