Summary of Significant Accounting Policies

6 Months Ended

Sep. 30, 2024

Summary of Significant Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Note 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Basis of Presentation

The accompanying condensed financial statements and the related disclosures as of September 30, 2024 and for the three and six months ended September 30, 2024 and 2023 are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States, (“U.S. GAAP”), and the rules and regulations of the SEC for interim financial statements. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These interim condensed financial statements should be read in conjunction with the audited financial statements and notes included in the Annual Report on Form 10-K for the fiscal year ended March 31, 2024, filed with the SEC on June 14, 2024. The balance sheet as of March 31, 2024 included herein was derived from the audited financial statements as of that date but does not include all disclosures including notes required by U.S. GAAP for complete financial statements. In the opinion of management, the condensed financial statements reflect all adjustments, consisting of normal and recurring adjustments, necessary for the fair presentation of the Company’s financial position as of September 30, 2024 and March 31, 2024 and its results of operations for the three and six months ended September 30, 2024 and 2023. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the fiscal year ended March 31, 2025 or any other interim period or future year or period.

Revenue Recognition

The core principle underlying Accounting Standards Codification (“ASC”) Topic 606 “Revenue from Contracts with Customers” (“ASC 606”) is to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASC 606 sets out the following steps for an entity to follow when applying the core principle to its revenue generating transactions:

● Identify the contract with a customer

● Identify the performance obligations in the contract

● Determine the transaction price

● Allocate the transaction price to the performance obligations

● Recognize revenue when (or as) each performance obligation is satisfied

The Company recognizes revenue and the related cost of products sold when the performance obligations are satisfied. The performance obligations are typically satisfied upon shipment of physical goods. In addition to the satisfaction of the performance obligations, the following conditions are required for revenue recognition: an arrangement exists, there is a fixed price, and collectability is reasonably assured.

The Company does not offer any discounts, credits or other sales incentives. Historically, the Company has not had an issue with uncollectible accounts receivable.

The Company will accept a return of defective products within one year from shipment for repair or replacement at the Company’s option. If the product is repairable, the Company at its own cost, will repair and return it to the customer. If unrepairable, the Company will provide a replacement at its own cost. Historically, returns and repairs have not been material.

The Company’s disaggregated revenue by geographical location is as follows:

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
	2024		2023		2024		2023
Domestic	$	6,946,469	$	4,317,474	$	13,724,709	$	8,560,905
International		394,655		493,514		721,392		929,928
Total	$	7,341,124	$	4,810,988	$	14,446,101	$	9,490,833

The Company’s disaggregated revenue by industry as a percentage of total revenue is provided below:

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
	2024		2023		2024		2023
Industry	%		%		%		%
Defense		67.5		64.5		68.2		62.6
Commercial Aerospace		19.1		24.8		19.2		22.5
Space		9.8		6.3		9.1		9.5
Other		3.6		4.4		3.5		5.4
		100.0		100.0		100.0		100.0

Cash and Cash Equivalents

Cash and cash equivalents represent highly liquid investments with original maturities of three months or less. The Company places its cash and cash equivalents with high credit quality financial institutions that may exceed federally insured amounts at times. As of September 30, 2024 and March 31, 2024, the Company had $0 and $3,500,000 in cash equivalents, respectively, consisting of certificates of deposit. As of September 30, 2024, and March 31, 2024, the Company’s cash and cash equivalents was $8,587,615 and $6,139,823, respectively.

Inventories

Inventories are comprised of raw materials, work-in-process and finished goods, and are stated at cost, on an average basis, which does not exceed net realizable value. The Company manufactures products pursuant to specific technical and contractual requirements.

The Company reviews its purchase and usage activity of its inventory of parts as well as work in process and finished goods to determine which items of inventory have become obsolete within the framework of current and anticipated orders. The Company estimates which materials may be obsolete and which products in work in process or finished goods may be sold at less than cost. A periodic adjustment, based upon historical experience is made to inventory in recognition of this impairment. The Company’s allowance for obsolete inventory was $973,402 and $773,402 as of September 30, 2024 and March 31, 2024, respectively, and was reflected as a reduction of inventory. 

Net Income (Loss) Per Share

The Company accounts for earnings per share pursuant to ASC Topic 260, “Earnings per Share”, which requires disclosure on the financial statements of “basic” and “diluted” earnings per share. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the reporting period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding plus common stock equivalents (if dilutive).

Basic and diluted net income (loss) per common share is calculated as follows: 

	For the Three Months Ended September 30,					For the Six Months Ended September 30,
	2024		2023			2024		2023
Net income (loss)	$	246,443	$	(1,100,603	)	$	639,230	$	(2,416,505	)
Net income (loss) per common share:
Basic	$	0.10	$	(0.46	)	$	0.27	$	(1.02	)
Diluted	$	0.10	$	(0.46	)	$	0.26	$	(1.02	)
Weighted average number of common shares outstanding- basic		2,380,251		2,370,251			2,380,251		2,370,251
Dilutive effect of options to the extent that such options are determined to be in the money for the period		58,346		-			40,462		-
Weighted average number of common shares outstanding-fully diluted		2,438,597		2,370,251			2,420,713		2,370,251

Potentially dilutive securities outlined in the table below have been excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive.

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
	2024		2023		2024		2023
Potentially dilutive options to purchase common shares		325,000		472,217		331,394		472,217

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and disclosure of contingent assets and liabilities at the date of the financial statements. The Company utilizes estimates with respect to determining the useful lives of fixed assets, the fair value of stock-based instruments, an incremental borrowing rate for determining the present value of lease payments, the calculation of inventory obsolescence, as well as determining the amount of the valuation allowance for deferred income tax assets, net. Actual amounts could differ from those estimates.

Depreciation and Amortization

The Company provides for depreciation and amortization on a straight-line basis over the estimated useful lives (5-7 years) of the related assets. Depreciation expense for the three months ended September 30, 2024 and 2023 was $185,907 and $215,586, respectively. Depreciation expense for the six months ended September 30, 2024 and 2023 was $374,177 and $430,822, respectively.

Stock-Based Compensation

Compensation expense for stock options granted to directors, officers and key employees is based on the fair value of the award on the measurement date, which is the date of the grant. The expense is recognized ratably over the service period of the award. The fair value of stock options is estimated using the Black-Scholes valuation model. The fair value of any other stock awards is generally the market price of the Company’s common stock on the date of the grant.

The Company determined the fair value of the stock option grants based upon the assumptions as provided below.  

	For the Six Months Ended September 30,
	2024			2023
Weighted Average Stock Price	$	5.65		$	6.55
Expected life (in years)		5.0			5.0
Expected volatility		50.3	%		58.0	%
Dividend yield		-	%		-	%
Weighted average risk-free interest rate, per annum		4.7	%		3.8	%

Recent Accounting Standard Not Yet Adopted

In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2023-09 – Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax disclosures. The standard is effective for public companies for annual periods beginning after December 15, 2024. Early adoption is available. The Company is still evaluating the full extent of the potential impact of the adoption of ASU 2023-09, but believes it will not have a material impact on its financial statements and disclosures.

Subsequent Events

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. The Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.