NOTE 13 – CONCENTRATIONS

Credit Risk

The Company is subject to potential concentrations in credit risk that consist principally of its cash deposits in banking institutions and its unsecured trade accounts receivable.

The Company maintains cash balances in non-interest-bearing 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 June 30, 2026 and 2025, cash deposited was approximately $305,000 and $1,334,000, respectively. The Company has not experienced any losses in its cash accounts, and therefore management believes that the Company is not exposed to any significant credit risk with respect to its cash deposits.

As of June 30, 2026, the Company had three major customers that each represented more than 10% of its accounts receivable on an individual basis, and together represented approximately $3,525,000 or 73% of its total accounts receivable. Of that total, 96% is outstanding for less than 60 days from invoice date. The Company has not experienced, nor does it expect to experience, any significant losses in such accounts. Management therefore believes that the Company is not exposed to any significant credit risk with respect to its trade accounts receivable.

Customer Concentrations

During the year ended June 30, 2026, the Company had two major customers that each represented more than 10% of its revenues on an individual basis, and together represented approximately $30,065,000 or 71% of its total revenues. During the year ended June 30, 2025, the Company had three major customers that each represented more than 10% of its revenues on an individual basis, and together represented approximately $48,288,000 or 73% of its total revenues.

Suppliers/Vendor Concentrations

The Company obtains components and supplies included in its products from a group of suppliers. The Company does not manufacture the battery cells used in energy storage solutions. Battery cells, which are an integral part of energy storage solutions, are sourced from a single manufacturer located in China. In response to business uncertainties resulting from tariffs and increased tariff levels imposed by the U.S. government on goods imported into the U.S., imports from the battery cell supplier in China were temporarily paused. The pause was short-lived as both parties quickly agreed to modified terms. At this time, neither the pause in shipments nor the modified terms have materially affected the Company’s operations. However, further escalation of tariffs between the U.S. and China could have a material effect on the Company’s ability to cost-effectively source from the supplier in China.

During the year ended June 30, 2026 the Company had one supplier who accounted for more than 10% of its total purchases, which represented approximately $7,002,000 or 20% of its total purchases. During the year ended June 30, 2025, the Company had one supplier who accounted for more than 10% of its total purchases, which represented approximately $15,901,000 or 28% of its total purchases.