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COMPOSITION OF CERTAIN FINANCIAL STATEMENT ITEMS | 6 Months Ended
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Dec. 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 |  |  |  |  |  |  |  |
|  | December 31, 2023 |  |  | June 30, 2023 |
Raw materials/purchased components |  | $ | 7,524 |  |  | $ | 8,824 |
Work in process |  |  | 3,905 |  |  |  | 3,686 |
Sub-assemblies/finished components |  |  | 2,721 |  |  |  | 2,387 |
Finished goods |  |  | 876 |  |  |  | 1,270 |
Total inventory |  | $ | 15,026 |  |  | $ | 16,167 |
Investments Investments are stated at market value and consist of the following (in thousands):
Schedule of investments |  |  |  |  |  |  |  |
|  | December 31, 2023 |  |  | June 30, 2023 |
Current: |  |  |  |  |  |  |  |
Marketable equity securities – short-term |  | $ | 5,803 |  |  | $ | 1,134 |
Long-term: |  |  |  |  |  |  |  |
Warrant |  |  | — |  |  |  | 6,160 |
Marketable equity securities – long-term |  |  | 1,509 |  |  |  | 1,361 |
Total Investments |  | $ | 7,312 |  |  | $ | 8,655 |
Investments at December 31, 2023 and June 30, 2023 had an aggregate cost basis of $3,964,000 and $2,714,000, 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 December 31, 2023, the investments included net unrealized gains of $3.3 million (gross unrealized gains of $3.8 million offset by gross unrealized losses of $482,000). At June 30, 2023, the investments, excluding the Monogram Warrant, included net unrealized losses of $219,000 (gross unrealized losses of $286,000 offset by gross unrealized gains of $67,000). Of the total marketable equity securities at December 31, 2023 and June 30, 2023, $763,000 and $1,134,000, 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. On October 6, 2023, in conjunction with the execution of a supply agreement with Monogram, we exercised the Monogram Warrant in full in cash totaling $1,250,000 and received 1,828,551 shares of Monogram common stock (NasdaqCM: MGRM). On the date of exercise our unrealized loss on the investment was approximately $38,000. The fair value of the Monogram common stock is reflected in marketable equity securities – short term in the table above as of December 31, 2023. Our Chief Executive Officer, Richard (“Rick”) Van Kirk, is also a Monogram board member. We invest surplus cash from time to time through our Investment Committee, which is comprised of one management director, Rick Van Kirk, and two non-management directors, Raymond (“Ray”) Cabillot and Nicholas (“Nick”) Swenson, who chairs the committee. Both Nick and Ray 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 Nick or Ray 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 |  |  |  |  |  |  |  |
|  | December 31, 2023 |  |  | June 30, 2023 |
Land |  | $ | 3,684 |  |  | $ | 3,684 |
Building |  |  | 2,815 |  |  |  | 2,815 |
Total |  |  | 6,499 |  |  |  | 6,499 |
Less: accumulated depreciation |  |  | (297 | ) |  |  | (250 | )
|  | $ | 6,202 |  |  | $ | 6,249 |
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 fiscal 2022. We began operations in the new facility during the fourth quarter of fiscal 2023. 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 |  |  |  |  |  |  |  |
|  | December 31, 2023 |  |  | June 30, 2023 |
Patent-related costs |  | $ | 208 |  |  | $ | 208 |
Less: accumulated amortization |  |  | (140 | ) |  |  | (127 | )
|  | $ | 68 |  |  | $ | 81 |
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. Future amortization expense is expected to be $14,000 for the remainder of fiscal 2024 and $28,000 per fiscal year through fiscal 2026, at which time we expect these costs to be fully amortized.

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