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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
 6 Months Ended
Dec. 31, 2025
Accounting Policies [Abstract]  
Principles of Consolidation and Operations

Principles of Consolidation and Operations

 

These financial statements have been prepared by the Company, without audit, and reflect normal recurring adjustments which, in the opinion of management, are necessary for a fair statement of the results of the first six months of the Company’s fiscal year 2026. These financial statements do not include all disclosures associated with annual financial statements and, accordingly, should be read in conjunction with footnotes contained in the Company’s financial statements for the fiscal year ended June 30, 2025, together with the Report of Independent Registered Public Accounting Firm filed under cover of the Company’s 2025 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on September 29, 2025, as amended by Amendment No. 1 on Form 10-K/A filed with the Securities and Exchange Commission on October 28, 2025.

 
Going Concern and Liquidity

Going Concern and Liquidity

 

These financial statements have been prepared on a going concern basis, which assumes the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the ability of the Company to obtain necessary equity financing to continue operations and the attainment of profitable operations. Management anticipates that its cash on hand of $0.9 million as of December 31, 2025 is insufficient to fund its planned operations for a period of at least one year from when these consolidated financial statements are issued. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. These unaudited financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

During fiscal 2026 through the issuance date, the Company has taken the following actions, and implemented the following plans, to improve its operational and financial performance and enhance its liquidity and financial condition:

 

·Through new leadership and improved accountability and process disciplines implemented throughout the organization, improve manufacturing yields and increase production throughput;
·Renegotiated pricing and added tariff reimbursement with some of its major manufacturing customers
·Improved the quality and depth of its product development pipeline;
·Planned increased utilization of engineering resources and the capabilities of its MicroOptics Laboratory;
·Planned launch of several maturing development projects into manufacturing in the coming twelve months; and
·Planned reductions in its cost structure to better align operating expenses with revenue expectations, including headcount rationalization and optimization.

 

The Company’s ability to meet future anticipated liquidity needs over the next year beyond the issuance date will largely depend on its ability to execute its operational strategy, generate positive cash inflows from operations, maximize its borrowing capacity and secure additional capital.

 

The Company intends to seek additional funding through one or more of the following: equity offerings, debt financings, government funding, and delay of planned cash outlays. However, the Company’s ability to do so, and on favorable terms, may be affected by general economic, financial and other factors which are beyond its control. There can be no assurance that such events or a combination thereof can be achieved or achieved on favorable terms.

 
Use of Estimates

Use of Estimates

 

The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

 
Income (Loss) Per Share

Income (Loss) Per Share

 

Basic income (loss) per share is computed by dividing net income or net loss by the weighted average number of shares of common stock outstanding during the period. Diluted income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period, plus the number of potentially dilutive securities outstanding during the period such as stock options. For the three months and six months ended December 31, 2025, potentially dilutive securities outstanding have been excluded from the computations of weighted-average shares outstanding because such securities have an antidilutive impact due to the net loss reported during those periods. The number of shares issuable upon the exercise of outstanding stock options that were excluded from the computation of fully dilutive weighted average shares outstanding was approximately 1,727,069 for the three and six months ended December 31, 2025.

 

The following is the calculation of income (loss) per share for the three months and six months ended December 31, 2025 and 2024:

                
   Three Months
Ended December 31,		   Six Months
Ended December 31,		 
   2025   2024   2025   2024 
Net Income (Loss) Basic and Fully Diluted  $(1,780,791)  $(969,681)  $(3,417,821)  $(2,280,928)
                     
Weighted Average Shares Outstanding                    
Basic and Fully Diluted   7,714,759    6,350,403    7,714,730    6,283,516 
                     
Income (Loss) Per Share – Basic and Fully Diluted  $(0.23)  $(0.15)  $(0.44)  $(0.36)

 
Significant Customers and Concentration of Credit Risk

Significant Customers and Concentration of Credit Risk

 

Financial instruments that subject the Company to credit risk consist primarily of cash equivalents and trade accounts receivable. The Company places its investments with highly rated financial institutions. The Company has not experienced any losses on these investments to date.

 

The allowance for credit losses was $99,258 at December 31, 2025, and $121,901 at December 31, 2024.

        
   Six Months Ended December 31, 
   2025   2024 
Allowance for credit losses, beginning of period  $80,192   $118,872 
Change in the provision for expected credit losses   21,289    10,668 
Writeoffs charged against the allowance   (2,223)   (7,639)
Allowance for credit losses, end of period  $99,258   $121,901 

 

During the six months ended December 31, 2025, the Company increased the credit loss reserve by approximately $19,000. Management believes the allowance for credit losses, which is established based upon review of specific account balances and historical experience, is adequate at December 31, 2025.

 
Income Taxes

Income Taxes

 

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

  

In assessing the likelihood of utilization of existing deferred tax assets, management has considered the historical results of operations and the current operating environment. Based on this evaluation, a full valuation reserve has been provided for the deferred tax assets.

 
Segment Reporting

Segment Reporting

 

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions about how to allocate resources and assess performance. The Company’s chief decision-maker is its Chief Executive Officer. To date, the Company has viewed its operations and manages its business as principally one segment. The chief operating decision maker assesses performance for the single reporting segment and decides how to allocate resources based on revenues, gross profit, and net income (loss) that also is reported on the income statement as revenues, gross profit, and net income (loss). The measure of segment assets is reported on the balance sheet as total assets.

 
Goodwill and Patents

Goodwill and Patents

 

Long-lived assets such as goodwill and patents are capitalized when acquired and reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable. Impairment of the carrying value of long-lived assets such as goodwill and patents would be indicated if the best estimate of future undiscounted cash flows expected to be generated by the asset grouping is less than its carrying value. If an impairment is indicated, any loss is measured as the difference between estimated fair value and carrying value and is recognized in operating income or loss. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. No such impairments of goodwill or patents have been estimated by management as of December 31, 2025. Amortization expense for the six months ended December 31, 2025 and 2024 was $12,584 and $0, respectively.