NOTE 8 - CONCENTRATIONS

Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and unsecured trade accounts receivable. The Company maintains cash balances in bank deposit accounts at a California commercial bank. The Company’s cash balance at this institution is secured by the Federal Deposit Insurance Corporation up to $250,000. As of March 31, 2024 and June 30, 2023, the cash balance was approximately $1,250,000 and $2,379,000, respectively.

The Company has not experienced any losses in such accounts. Management believes that the Company is not exposed to any significant credit risk with respect to its cash.

Customer Concentrations

During the three months ended March 31, 2024, the Company had three (3) major customers that each represented more than 10% of revenues on an individual basis, and together represented approximately $7,789,000 or 54% of total revenues. During the nine months ended March 31, 2024, the Company had four (4) major customers that each represented more than 10% of revenues on an individual basis, and together represented approximately $33,161,000 or 70% of total revenues.

During the three months ended March 31, 2023, the Company had three (3) major customers that each represented more than 10% of revenues on an individual basis, and together represented approximately $10,409,000 or 69% of total revenues. During the nine months ended March 31, 2023, the Company had three (3) major customers that each represented more than 10% of revenues on an individual basis, and together represented approximately $32,745,000 or 65% of total revenues.

Suppliers/Vendor Concentrations

The Company obtains several components and supplies included in its products from a group of suppliers. During the three months ended March 31, 2024, the Company had one (1) supplier that accounted for more than 10% of total purchases and represented approximately $3,542,000 or 28% of total purchases. During the nine months ended March 31, 2024, the Company had one (1) supplier that accounted for more than 10% of total purchases and represented approximately $11,510,000 or 30% of total purchases.

During the three months ended March 31, 2023, the Company had one (1) supplier that accounted for more than 10% of total purchases and represented approximately $5,290,000 or 37% of total purchases. During the nine months ended March 31, 2023, the Company had one (1) supplier that accounted for more than 10% of total purchases and represented approximately $14,439,000 or 32% of total purchases.