| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES Use
of Estimates in the Preparation of Financial Statements Debt
Issuance Costs Simplifying the Presentation of Debt Issuance Costs 4,304 4,304 Deferred
Taxes Balance Sheet Classification of Deferred Taxes ( Fair
Value Measurement Fair Value Measurements and Disclosures
Level
1 - Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and
liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equity securities listed
on the New York Stock Exchange. Level
2 - Pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable as of the reported
date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced
with models using highly observable inputs. Level
3 - Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level
3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts
used to determine the fair value of financial transmission rights. Cash
and Cash Equivalents Fair
Value of Financial Instruments Concentration
of Credit Risk 250,000 250,976 860,635 We
have no significant off-balance sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign
hedging arrangements. Accounts
Receivable
Schedule of allowance for doubtful accounts
Years Ended December
31 2023 2022
Balance, beginning of year $ 5,000 $ 5,000
Provision (reduction) for estimated losses (5,090 ) 297
Recovery (write-off) of uncollectible accounts 5,090 (297 )
Balance, end of year $ 5,000 $ 5,000 The
net accounts receivable balance at December 31, 2023 of $ 812,126 103,739 98,412 42,954 627,919 71,522 57,500 Inventories
Schedule of inventories
2023 2022
Raw materials & deposits $ 2,696,659 $ 2,509,661
Work-in-process 26,269 52,642
Finished goods 671,062 539,316
Total gross inventories 3,393,990 3,101,619
Less reserve for obsolescence (369,156 ) (369,156 )
Total net inventories $ 3,024,834 $ 2,732,463 A
summary of the activity in our inventory reserve for obsolescence is as follows:
Schedule of inventory reserve
Years Ended December 31 2023 2022
Balance, beginning of year $ 369,156 $ 155,000
Provision for estimated obsolescence 46,589 269,837
Write-off of obsolete inventory (46,589 ) (55,681 )
Balance, end of year $ 369,156 $ 369,156 Property,
Plant and Equipment 253,876 553,995 Long-Lived
Assets No Patents . The
costs of applying for patents are capitalized and amortized on a straight-line basis over the lesser of the patent's economic or
legal life (20 years for utility patents in the United States, and 14 years for design patents). Amortization expense,
including impairments, for the years ended December 31, 2023 and 2022, was $ 6,644 and
$ 74,120 respectively.
Amortization expense for each of the next 5 years is estimated to be $ 6,644 per
year. Capitalized costs are expensed if patents are not granted. We review the carrying value of our patents
periodically to determine whether the patents have continuing value and such reviews could result in the conclusion that the
recorded amounts have been impaired. No impairments were included in amortization expense for the years ended December 31,
2023 and 2022 respectively. A summary of our patents at December 31, 2023 and 2022 is as follows:
Schedule of patents
2023 2022
Patents issued $ 191,871 $ 191,871
Patent applications filed and in process 26,558 25,154
Accumulated amortization (153,990 ) (147,346 )
Total net patents $ 64,439 $ 69,679 Deposits
and Other Assets Customer Deposits
Schedule of customer deposits
Total Customer Pre-Payments Tenant Security Deposits
Balance, December 31, 2021 $ 170,952 $ 161,077 $ 9,875
Increase (decrease) 30,079 30,079 —
Balance, December 31, 2022 201,031 191,156 9,875
Increase (decrease) (5,312 ) 2,563 (7,875 )
Balance, December 31, 2023 $ 195,719 $ 193,719 $ 2,000 Accrued
Expenses
Schedule of accrued expenses
2023 2022
Compensation $ 218,572 $ 205,422
Property and other taxes 75,634 73,892
Rebates 35,105 65,630
Total accrued expenses $ 329,311 $ 344,944 Product
Warranty Reserve
Schedule of product warranty reserve
Years Ended December 31 2023 2022
Balance, beginning of year $ 46,500 $ 46,500
Provision for estimated warranty claims 28,191 37,092
Claims made (28,191 ) (37,092 )
Balance, end of year $ 46,500 $ 46,500 Income
Taxes Accounting for Income Taxes ASC
740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements,
uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the
financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax
positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of
being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. For
the years ended December 31, 2023 and 2022, we did not have any significant interest or penalties or any significant uncertain tax positions. Revenue
Recognition Revenue from Contracts with Customers (Topic 606). Revenue
from product sales and supplies is generally recorded when we ship the product and title has passed to the customer, or when agreed milestones
are met in the case of product developments, provided that we have evidence of a customer arrangement and can conclude that collection
is probable. The prices at which we sell our products are fixed and determinable at the time we accept a customer's order.
We recognize revenue from sales to stocking distributors when there is no right of return, other than for normal warranty claims, and
generally have no ongoing obligations related to product sales, except for normal warranty. The
sales of licenses to our training courses are recognized as revenue at the time of sale. Training and certification revenues are recognized
at the time the training and certification occurs. Data recording revenue is recognized based on each day’s usage of
enrolled devices. Revenues
arising from extended warranty contracts are booked as sales over their life on a straight-line basis. We have discontinued arranging
for customer financing and leasing through unrelated third parties and instead are providing for customer financing and leasing ourselves,
which we recognize as revenue over the applicable lease term. Occasionally, we rent used equipment to customers, and in those
cases, we recognize the revenues as they are earned over the life of the contract. Royalty
income is recognized in accordance with agreed upon terms, when performance obligations are satisfied, the amount is fixed or determinable
and collectability is reasonably assured. Rental
income from space leased to our tenants is recognized in the month in which it is due, which approximates if it were recognized on a
straight-line basis over the term of the related lease. On
occasion we receive customer deposits for future product orders and product developments. Customer deposits are initially
recorded as a liability and recognized as revenue when the product is shipped and title has passed to the customer, or when agreed milestones
are met in the case of product developments. Topic
606 requires the disaggregation of revenue into broad categories, which we have defined as shown below.
Schedule of disaggregation of revenue
Year Ended December 31,
Product sales: 2023 2022
Product sales and supplies $ 8,359,687 $ 7,632,716
Training, certification and data recording 785,209 651,128
Service plans and equipment rental 83,947 66,619
Product sales subtotal 9,228,843 8,350,463
Royalties 32,299 40,674
Rental income 68,424 90,856
Total revenues $ 9,329,566 $ 8,481,993 Deferred
Revenue Rebates Recently
Issued Accounting Pronouncements Research
and Development Expenses Stock-Based
Compensation Compensation
– Stock Compensation ASC
718 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The
value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in
the accompanying statement of income. Stock-based
compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately
expected to vest during the period. We used the Black-Scholes option-pricing model ("Black-Scholes model") to determine
fair value. Our determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected
by our stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include but
are not limited to our expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise
behaviors. Although the fair value of employee stock options is determined in accordance with ASC 718 using an option-pricing model,
that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction. Stock-based
compensation expense recognized under ASC 718 for years 2023 and 2022 was $ 0 17,202 Segment
Reporting Basic
and Diluted Income and Loss per Common Share Earnings Per Share 0.00 0.00 Wholly
Owned Subsidiary 61,353 613,530 613,530 61,353 |
