| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Net Sales Net sales consists of the
sale of products and services, as well as shipping and handling billed to our customers and is net of volume rebates and discounts and
excludes sales tax. Revenue Recognition Revenue from product sales is recognized
as promulgated by the Financial Accounting Standards Board (“FASB”) in Accounting Standards Update (“ASU”) 2014-09,
Revenue from Contracts with Customers Revenue
from services, typically non-recurring engineering (“NRE”) services related to the design or customization of a medical device,
is typically recognized over time. The customer funding for costs incurred for NRE services is deferred and subsequently recognized as
revenue as under-lying products or services are delivered to the customers. Additionally, expenses incurred, up to the customer agreed
funding amount, are deferred as an asset and recognized as cost of sales when the under-lying products or services are delivered to the
customer. The deferred customer funding and costs result in recognition of deferred costs (asset) and deferred revenue (liability) on
our consolidated balance sheets. One of our customer contracts
can give rise to variable consideration due to volume rebates. We estimate variable consideration at the most likely amount we will receive
from this customer. Our estimates of variable consideration are based on an assessment of our anticipated performance and all information
(historical, current, and forecasted) that is reasonably available to us. Returns of our product for
credit are minimal; accordingly, we do not establish a reserve for product returns at the time of sale. Cost of Sales Cost of sales consists primarily
of the purchase price of goods and cost of services rendered including freight costs. Cost of sales also includes production labor and
overhead costs for all of our manufacturing and assembly operations, which overhead includes all indirect labor and expenses associated
with our inspection, warehousing, material planning and quality departments. Estimated Losses on Product Development Services Cost
and revenue estimates related to the product development service portions of development and supply contracts are reviewed and updated
quarterly. An expected loss on development service contracts is recognized immediately in cost of sales. Losses recorded in fiscal 2024
and 2023 related to these services totaled $ 118,000 108,000 Due
to the complexity of many of the contracts we have undertaken, the cost estimation process requires significant judgment. It is based
upon the knowledge and experience of our project managers, engineers, and finance professionals. Factors that are considered in estimating
the cost of work to be completed and ultimate profitability of the fixed price product development portion of development and supply contracts
include the nature and complexity of the work to be performed, availability and productivity of labor, the effect of change orders, the
availability of materials, performance of subcontractors, and expected costs for specific regulatory approvals. Warranties Certain of our products are
sold with a warranty that provides for repairs or replacement of any defective parts for a period, generally one to two years, after the
sale. At the time of the sale, we accrue an estimate of the cost of providing the warranty based on prior experience with such factors
as return rates and repair costs, which factors are reviewed quarterly. The warranty accrual is based
on historical costs of warranty repairs and expected future identifiable warranty expenses and is included in accrued expenses in the
accompanying consolidated balance sheets. Warranty expenses are included in cost of sales in the accompanying consolidated statements
of operations. Changes in estimates to previously established warranty accruals result from current period updates to assumptions regarding
repair costs and warranty return rates and are included in current period warranty expense. Cash and Cash Equivalents We consider all highly liquid
investments with an original maturity of ninety days or less to be cash equivalents. At June 30, 2024 and 2023, cash equivalents consisted
of investments in money market funds. Accounts Receivable Trade receivables are stated
at their original invoice amounts, less an allowance for doubtful portions of such accounts represented by expected credit losses. Management
determines the allowance for credit losses based on facts and circumstances related to specific accounts and the age of accounts. Trade
receivables are written off when deemed uncollectible. Recoveries of trade receivables previously reserved are offset against the allowance
when received. Leases Our operating lease consists solely of our corporate headquarters located
in Irvine, California. We do not have any leases classified as financing leases. We classify arrangements meeting the definition of a
lease as operating or financing leases, and leases are recorded on the consolidated balance sheets as both a right-of-use asset (“ROU”)
and lease liability, calculated by discounting the fixed lease payments over the term of the lease term at the rate implicit in the lease
or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and
the ROU asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the ROU
asset result in straight-line rent expense over the lease term. Operating lease assets and liabilities are recognized at commencement
date based on the present value of lease payments over the lease term. Variable lease expenses are recorded when incurred. We exclude
short-term leases having an initial term of 12 month or less as an accounting policy election, and instead recognize rent expense on a
straight-line basis over the term of the lease. We assess the impairment of ROU
assets when an event or change in circumstance indicates that the carrying value of such ROU assets may not be recoverable. If an event
or a change in circumstance indicates that the carrying value of an ROU asset may not be recoverable and the estimated fair value attributable
to the ROU asset is less than its carrying value, an impairment loss equal to the excess of the ROU’s carrying value over its estimated
fair value is recognized. Deferred Costs Deferred costs reflect costs
incurred related to NRE services under the terms of the related development and/or supply contracts. These costs get recorded to cost
of sales in the period that the revenue is recognized. Inventories Inventories are stated at
the lower of cost (first-in, first-out method) or net realizable value. Cost includes materials, labor, and manufacturing overhead related
to the purchase and production of inventories. Reductions to estimated market value are recorded and charged to cost of sales, when indicated
based on a formula that compares on-hand quantities to both historical usage and estimated demand as of the measurement date. On an ongoing
basis, we evaluate inventory for obsolescence and slow-moving items. This evaluation includes analysis of historical sales and usage,
existing demand, as well as specific factors known to management. As of June 30, 2024 and 2023, there was approximately $ 275,000 637,000 Investments Investments at June 30,
2024 and 2023, consist of marketable equity securities of publicly held companies. Investments at June 30, 2023 also included a warrant
(the “Monogram Warrant”) to purchase common stock of a company whose common stock first became publicly traded in May 2023,
which we exercised in the second quarter of fiscal 2024 (See Note 4). The investments were made to realize a reasonable return, although
there is no assurance that positive returns will be realized. Investments are marked to market at each measurement date, with unrealized
gains and losses presented separately within other income and expense on the consolidated income statement. All of our investments consist
of common stocks of public companies that are either thinly traded or we hold a significant (in excess of 5%) interest in. These investments
were subject to a valuation analysis as of June 30, 2024 and 2023. Long-lived Assets We review the recoverability
of long-lived assets, consisting of the land and building that we own, equipment, and improvements, including leasehold improvements,
when events or changes in circumstances occur that indicate carrying values may not be recoverable. Our building, equipment and
improvements are recorded at historical cost and depreciation is provided using the straight-line method over the following periods:
Schedule of building, equipment and improvements
Building Thirty years
Equipment Three to ten years
Improvements Shorter of the remaining life of the underlying building, lease term, or the asset’s estimated useful life Intangibles Intangibles
consist legal fees incurred connection
with patent applications. Our patent costs are being amortized over a period of four to seven years. The expense associated with the amortization
of the patent costs is recognized in research and development costs. Income Taxes We recognize deferred tax
assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities
along with net operating losses and tax credit carryovers. Net deferred tax assets or liabilities at both June 30, 2024 and 2023
consisted primarily of basis differences related to unrealized gain/loss related to investments, stock-based compensation, fixed assets,
accrued expenses, and inventories. Our deferred tax assets also includes capitalization of our research expenditures as prescribed by
the Tax Cuts and Jobs Act. Significant management judgment
is required in determining the provision for income taxes, the recoverability of deferred tax assets, and the extinguishment of deferred
tax liabilities. Such determination is based on historical taxable income, with consideration given to estimates of future taxable income
and the periods over which deferred tax assets will be recoverable and deferred tax liabilities will be extinguished. We record a valuation
allowance against deferred tax assets to reduce the net carrying value to an amount that we believe is more likely than not to be realized.
When we establish or reduce the valuation allowance against deferred tax assets, the provision for income taxes will increase or decrease,
respectively, in the period such determination is made. Uncertain Tax Positions We record uncertain tax positions
in accordance with Accounting Standards Codification (“ASC”) 740 on the basis of a two-step process whereby (1) we determine
whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position, and
(2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that
is more than 50% likely to be realized upon ultimate settlement with the related tax authority. Shipping and Handling Payments from customers for
shipping and handling are included in net sales . Concentration of Credit Risk Financial instruments that
potentially subject us to credit risk consist principally of cash, cash equivalents, and trade receivables. We place our cash and cash
equivalents with major financial institutions. At June 30, 2024 and 2023, and throughout the fiscal years then ended, we had deposits
in excess of federally insured limits. Credit sales are made to medical device distributors, original equipment manufacturers, and resellers
throughout the world, and sales to such customers account for a substantial portion of our trade receivables. While such receivables are
not collateralized, we evaluate their collectability based on several factors including customers’ payment histories. Segment Reporting We have identified one business segment which management also considers
to be one reporting unit as our Chief Executive Officer (“CEO”) allocates resources, assesses performance, and manages our
business as one segment. We have reached this conclusion because 99% of our business relates to designing, manufacturing, and repairing
medical devices. We primarily design, sell, and repair handheld medical devices and accessories. We provide medical devices, NRE and proto-type
services, as well as repairs to all our customers and we utilize one machine shop and purchasing team to procure and manufacture all the
products that we sell. Our CEO utilizes consolidated operating income to analyze our business operations. Compensation Plans We recognize compensation
expense for the share-based awards that vest subject to market conditions under ASC 718, Compensation-Stock Compensation Use of Estimates The preparation of financial
statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates. Our operations are affected
by numerous factors including market acceptance of our products, supply chain disruptions, changes in technologies, and new laws, government
regulations, and policies. We cannot predict what impact, if any, the occurrence of these or other events might have on our operations.
Significant estimates and assumptions made by management include, but are not limited to, revenue recognition, share-based compensation,
the allowance for credit losses, accrued warranty expense, investments, inventory valuation, the carrying value of long-lived assets,
and the recoverability/extinguishment of deferred income tax assets and liabilities. Basic and Diluted Per Share Information Basic per share amounts are
computed on the basis of the weighted-average number of common shares outstanding during each period presented. Diluted per share amounts
assume the issuance of all potential common stock equivalents, consisting of outstanding stock options and performance awards as discussed
in Note 12, unless the effect of such exercise is to increase income, or decrease loss, per common share. Fair Value Measurements Fair value is measured based
on the prices that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used to measure fair
value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs
other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs
for which little or no market data exists, therefore requiring an entity to develop its own assumptions. Cash and cash equivalents:
Investments: Although the methods above
may produce a fair value calculation that may not be indicative of the net realizable value or reflective of future fair values, we believe
our valuation methods are appropriate. Advertising Advertising costs
are charged to selling or general and administrative expense as incurred and amounted to $ 14,000 4,000 Recently Adopted Accounting Pronouncements In March 2022, the FASB issued ASU
No 2022-02 (Topic 326) Financial Instruments – Credit Losses Recently Issued and Not Yet Adopted Accounting Pronouncements In
December 2023, the FASB issued ASU No. 2023-09, Income Taxes: Improvements to Income Tas Disclosures (Topic 740) In
November 2023, the FASB issued ASU 2023-07, Segment Reporting: Improvements to Reportable Segment Disclosures (Topic280) |
