COMPOSITION OF CERTAIN FINANCIAL STATEMENT ITEMS

3 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

COMPOSITION OF CERTAIN FINANCIAL STATEMENT ITEMS

NOTE 4. COMPOSITION OF CERTAIN FINANCIAL STATEMENT ITEMS

Investments

Investments are stated at fair market value and consist of the following (in thousands):

	September 30, 2022		June 30, 2022
Marketable equity securities - short-term	$	813	$	755
Marketable equity securities - long-term		1,889		1,779
Total marketable equity securities	$	2,702	$	2,534

Investments at September 30, 2022 and June 30, 2022 had an aggregate cost basis of $2,714,000 and $2,796,000, respectively. We classified certain investments 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 September 30, 2022, the investments included unrealized losses of $12,000 (gross unrealized losses of $325,000 offset by gross unrealized gains of $313,000). 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 September 30, 2022 and June 30, 2022, $813,000 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.

Inventory

Inventory is stated at the lower of cost (first-in, first-out) or net realizable value and consists of the following (in thousands):

	September 30, 2022		June 30, 2022
Raw materials/purchased components	$	7,641	$	6,323
Work in process		4,104		3,463
Sub-assemblies/finished components		2,183		2,118
Finished goods		1,736		774
Total inventory	$	15,664	$	12,678

Intangibles

Intangibles consist of the following (in thousands):

	September 30, 2022			June 30, 2022
Patent-related costs	$	208		$	208
Less accumulated amortization		(100	)		(90	)
	$	108		$	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. Future amortization expense is estimated to be $27,000 for the balance of fiscal 2023 and annually through fiscal 2026. All remaining costs are expected to be fully amortized within 3 years and nine months.