Revenue and related accounts

6 Months Ended

Dec. 31, 2025

2. Revenue and related accounts.

Accounts Receivable, net. Accounts receivable are presented in the condensed consolidated balance sheets at their outstanding balances net of the allowance for credit losses. The allowance for credit losses was $45,000 and $122,000 at December 31, 2025 and June 30, 2025, respectively. The change in allowance was primarily due to write-offs of uncollectible invoices of $34,000 that had previously been reserved. Receivables are generally trade receivables due in one year or less or expected to be billed and collected within one year. The Company estimates credit losses on accounts receivable in accordance with ASC 326 Financial Instruments - Credit Losses. The Company measures the allowance for credit losses on trade receivables on a collective (pool) basis when similar risk characteristics exist. The estimate for allowance for credit losses is based on a historical loss rate for each pool. Management considers qualitative factors such as changes in economic factors, regulatory matters, and industry trends to determine if an allowance should be further adjusted. The provision for credit losses is included in selling, general, and administrative expenses on the condensed consolidated statements of operations and comprehensive loss.

Prepaid Expenses and Other Current Assets. The Company records a prepaid expense when it has paid for a good or service that it has not yet incurred. As of December 31, 2025 and June 30, 2025, the Company had paid $836,000 and $887,000, respectively, for bulbs to be received in fiscal year 2026. The balance in prepaid expenses and other current assets also includes $814,000 of ex-force bulbs as of December 31, 2025. As of June 30, 2025, these ex-force bulbs were included in other assets.

Revenue. The following table presents revenue disaggregated by customer, as determined by the operational nature of their industry:


	Three Months Ended					Six Months Ended
	December 31,					December 31,
	2025		2024			2025		2024
Supermarket	$	5,716,000	$	5,629,000		$	10,590,000	$	11,308,000
Wholesaler		1,023,000		563,000			1,282,000		1,449,000
Other		—		—			20,000		63,000
	$	6,739,000	$	6,192,000		$	11,892,000	$	12,820,000

During the three and six months ended December 31, 2025 and 2024, the Company had three customers that accounted for 10% or more of the total revenues. During the six months ended December 31, 2025, revenue from these three customers in the aggregate represented approximately 60% of total revenue. As of December 31, 2025, these customers accounted for approximately 15% of accounts receivable, net. The loss of a major customer could adversely affect the Company’s operating results and financial condition.

Cost of Sales. Cost of sales consists primarily of costs to procure, sort, grow, pick, cool, and transport bulbs and stems. Additionally, cost of sales includes labor and facility costs related to production operations. Inventories are stated at the lower of cost, as determined on the first-in, first-out method, or net realizable value.