0000033533
2015-07-01
2016-06-30
0000033533
2016-06-30
0000033533
esp:EmployeeStockOwnershipPlanMember
2016-07-01
2017-06-30
0000033533
esp:EmployeeStockOwnershipPlanMember
2017-06-30
0000033533
us-gaap:LandMember
2017-06-30
0000033533
us-gaap:BuildingAndBuildingImprovementsMember
2017-06-30
0000033533
us-gaap:MachineryAndEquipmentMember
2017-06-30
0000033533
us-gaap:FurnitureAndFixturesMember
2017-06-30
0000033533
us-gaap:TreasuryStockMember
2016-06-30
0000033533
esp:UnearnedESOPSharesMember
2016-06-30
0000033533
us-gaap:CertificatesOfDepositMember
2017-06-30
0000033533
us-gaap:MunicipalBondsMember
2017-06-30
0000033533
us-gaap:CommonStockMember
2016-06-30
0000033533
us-gaap:AdditionalPaidInCapitalMember
2016-06-30
0000033533
us-gaap:AccumulatedOtherComprehensiveIncomeMember
2016-06-30
0000033533
us-gaap:RetainedEarningsMember
2016-06-30
0000033533
2016-07-01
2017-06-30
0000033533
us-gaap:SalesRevenueNetMember
us-gaap:GeographicConcentrationRiskMember
2016-07-01
2017-06-30
0000033533
us-gaap:AccountsReceivableMember
2016-07-01
2017-06-30
0000033533
us-gaap:BuildingAndBuildingImprovementsMember
srt:MinimumMember
2017-07-01
2018-06-30
0000033533
us-gaap:BuildingAndBuildingImprovementsMember
srt:MaximumMember
2017-07-01
2018-06-30
0000033533
us-gaap:MachineryAndEquipmentMember
srt:MinimumMember
2017-07-01
2018-06-30
0000033533
us-gaap:MachineryAndEquipmentMember
srt:MaximumMember
2017-07-01
2018-06-30
0000033533
us-gaap:FurnitureAndFixturesMember
srt:MinimumMember
2017-07-01
2018-06-30
0000033533
us-gaap:FurnitureAndFixturesMember
srt:MaximumMember
2017-07-01
2018-06-30
0000033533
us-gaap:LondonInterbankOfferedRateLIBORMember
2017-07-01
2018-06-30
0000033533
2017-06-30
0000033533
us-gaap:CommonStockMember
2016-07-01
2017-06-30
0000033533
us-gaap:CommonStockMember
2017-06-30
0000033533
us-gaap:AdditionalPaidInCapitalMember
2016-07-01
2017-06-30
0000033533
us-gaap:AdditionalPaidInCapitalMember
2017-06-30
0000033533
us-gaap:AccumulatedOtherComprehensiveIncomeMember
2016-07-01
2017-06-30
0000033533
us-gaap:AccumulatedOtherComprehensiveIncomeMember
2017-06-30
0000033533
us-gaap:RetainedEarningsMember
2016-07-01
2017-06-30
0000033533
us-gaap:RetainedEarningsMember
2017-06-30
0000033533
us-gaap:TreasuryStockMember
2016-07-01
2017-06-30
0000033533
us-gaap:TreasuryStockMember
2017-06-30
0000033533
esp:UnearnedESOPSharesMember
2016-07-01
2017-06-30
0000033533
esp:UnearnedESOPSharesMember
2017-06-30
0000033533
2017-04-01
2017-06-30
0000033533
2017-01-01
2017-03-31
0000033533
2016-07-01
2016-09-30
0000033533
2016-10-01
2016-12-31
0000033533
us-gaap:SalesRevenueNetMember
esp:GeographicConcentrationRisk1Member
2016-07-01
2017-06-30
0000033533
2017-12-31
0000033533
2018-09-04
0000033533
2017-07-01
2018-06-30
0000033533
2018-06-30
0000033533
us-gaap:CommonStockMember
2017-07-01
2018-06-30
0000033533
us-gaap:CommonStockMember
2018-06-30
0000033533
us-gaap:AdditionalPaidInCapitalMember
2017-07-01
2018-06-30
0000033533
us-gaap:AdditionalPaidInCapitalMember
2018-06-30
0000033533
us-gaap:AccumulatedOtherComprehensiveIncomeMember
2017-07-01
2018-06-30
0000033533
us-gaap:AccumulatedOtherComprehensiveIncomeMember
2018-06-30
0000033533
us-gaap:RetainedEarningsMember
2017-07-01
2018-06-30
0000033533
us-gaap:RetainedEarningsMember
2018-06-30
0000033533
us-gaap:TreasuryStockMember
2017-07-01
2018-06-30
0000033533
us-gaap:TreasuryStockMember
2018-06-30
0000033533
esp:UnearnedESOPSharesMember
2017-07-01
2018-06-30
0000033533
esp:UnearnedESOPSharesMember
2018-06-30
0000033533
us-gaap:CertificatesOfDepositMember
2018-06-30
0000033533
us-gaap:MunicipalBondsMember
2018-06-30
0000033533
us-gaap:LandMember
2018-06-30
0000033533
us-gaap:BuildingAndBuildingImprovementsMember
2018-06-30
0000033533
us-gaap:MachineryAndEquipmentMember
2018-06-30
0000033533
us-gaap:FurnitureAndFixturesMember
2018-06-30
0000033533
us-gaap:SalesRevenueNetMember
us-gaap:GeographicConcentrationRiskMember
2017-07-01
2018-06-30
0000033533
us-gaap:SalesRevenueNetMember
esp:GeographicConcentrationRisk1Member
2017-07-01
2018-06-30
0000033533
esp:EmployeeStockOwnershipPlanMember
2017-07-01
2018-06-30
0000033533
esp:EmployeeStockOwnershipPlanMember
2018-06-30
0000033533
us-gaap:AccountsReceivableMember
2017-07-01
2018-06-30
0000033533
2017-07-01
2017-09-30
0000033533
2017-10-01
2017-12-31
0000033533
2018-01-01
2018-03-31
0000033533
2018-04-01
2018-06-30
0000033533
us-gaap:NewAccountingPronouncementMember
2016-07-01
2017-06-30
0000033533
us-gaap:NewAccountingPronouncementMember
2017-07-01
2018-06-30
0000033533
2017-07-01
2017-12-31
0000033533
esp:NonQualifiedStockOptionsMember
2017-07-01
2018-06-30
0000033533
esp:NonQualifiedStockOptionsMember
2016-07-01
2017-06-30
0000033533
esp:NonQualifiedStockOptionsMember
2018-06-30
0000033533
esp:IncentiveStockOptionMember
2018-06-30
0000033533
esp:TwoThousandSeventeenPlanMember
us-gaap:EmployeeStockOptionMember
2017-07-01
2018-06-30
0000033533
us-gaap:SubsequentEventMember
2018-09-30
0000033533
us-gaap:SubsequentEventMember
2018-07-01
2018-09-30
0000033533
esp:TwoThousandSeventeenPlanMember
us-gaap:EmployeeStockOptionMember
2018-06-30
0000033533
esp:TwoThousandSeventeenPlanMember
us-gaap:DirectorMember
srt:MaximumMember
2017-07-01
2018-06-30
0000033533
esp:TwoThousandSeventeenPlanMember
us-gaap:DirectorMember
srt:MaximumMember
2018-06-30
0000033533
esp:TwoThousandSeventeenPlanMember
esp:IndividualEmployeeMember
srt:MaximumMember
2018-06-30
0000033533
us-gaap:SubsequentEventMember
esp:SpecialDividendMember
2018-09-30
iso4217:USD
iso4217:USD
xbrli:shares
xbrli:shares
xbrli:pure
utr:H
esp:Customers
P5Y10M10D
P6Y3M4D
P4Y7M6D
P4Y9M18D
1135736
1135736
191659
279173
420825
244079
3075797
3075797
442764
1614871
317764
700398
4714568
1162170
1128505
1343748
1080145
7662252
1461154
3075598
1255204
1870296
0
0
316848
541996
581319
44335
44335
44335
109694
109694
109694
417419
176584
240835
387882
159087
228795
32388238
-7803239
-891083
1009958
17253072
-1408
22820938
31897543
1009958
17650335
-3599
21670196
-7779099
-650248
33481412
1009958
18201691
-6349
22416400
-7718835
-421453
-2191
-2191
-2750
-2750
1133545
3073047
150917
82442
68475
439115
269157
169958
2307445
2307445
2329593
2329593
9070
9070
1366504
102924
-1179
-394
20967
20967
129167
129167
123112
123112
0.49
0.08
0.12
0.18
0.11
1.32
0.19
0.69
0.14
0.30
0.49
0.08
0.12
0.18
0.11
1.31
0.19
0.69
0.14
0.29
1.00
1.00
0.3333
0.3333
22.14
21.32
24.25
3.64
3.87
4.64
2.95
2.92
4.59
3.65
24.31
24.57
24.29
24.56
197800
222854
171949
2364684
665190
2364684
2371321
2371321
658553
2387124
2387124
642750
54715
135249
135249
42900
87605
3000
7010
209754
9060
8300
8300
-8300
20601
20601
-20601
1663
-1663
1663
-4798
4798
4798
658553
642750
45000
29166
10000000
10000000
3029874
3029874
0.45
0.41
0.60
0.61
0.0385
0.0454
0.2970
0.2407
0.0184
0.0204
2
2
2
1
3000
3000
ESPEY MFG & ELECTRONICS CORP
0000033533
10-K
2018-06-30
false
--06-30
No
No
Yes
Smaller Reporting Company
FY
2018
2388224
151800
2500
349095
571949
61667
45000
4465
4685
879
3075
6267
5954
11968
14422
3000000
0.0200
35493695
36716417
7779099
7718835
650248
421453
40326890
41621700
21670196
22416400
-3599
-6349
17650335
18201691
1009958
1009958
3596152
3235005
220571
17693
3375581
3217312
46939
53435
250283
104663
656199
707612
172045
529005
2250115
1822597
35493695
36716417
2265096
3758637
33228599
32957780
227306
1292575
317559
9678811
11306002
7863538
8777079
512014
966342
1303259
1562581
120179
161975
3399613
4377726
9426968
11520706
2324838
2348307
2312870
2333885
515669
993279
1651405
4069076
124949
215219
36113
54569
88836
160650
1526456
3853857
3188112
3808395
323000
920000
10031644
10058163
4298796
26519
-5759367
-2191793
-2000172
9070
150917
439115
44335
109694
2307445
2329593
-4202411
-4020102
5071818
9102457
8922097
11199339
352132
1923220
6420723
260907
-2414
6496
53652
-145620
-48562
51413
-185865
356960
1697328
-427518
7618
1065269
-1054870
1627191
-218189
41796
-1557851
978113
-46488
115075
-4
417419
387882
435557
429679
20967
9070
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt 0.75in; text-align: justify; text-indent: -0.75in">Note 1.
Nature of Operations</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify">Espey Mfg. & Electronics Corp. (the
Company) is a manufacturer of electronic equipment used primarily in military and industrial applications. The principal markets
for the Company's products are companies that provide electronic support to both military and industrial applications across the
United States and at some international locations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Revenue Recognition</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company recognizes revenue in accordance
with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 605
“Revenue Recognition<i>”</i>. Product sales represent the majority of the Company’s revenue. The Company recognizes
revenue from these product sales when persuasive evidence of an arrangement exists, transfer of title and risk of loss has occurred,
the sale price is fixed or determinable, and collectability is reasonably assured. The Company sells its products on terms which
transfer title and risk of loss at a specified location, typically shipping point. Accordingly, revenue recognition from product
sales occurs when all factors are met. If these conditions are not met, the Company will defer revenue recognition until such time
as these conditions have been satisfied. The Company collects and remits sales taxes in certain jurisdictions and reports revenue
net of any associated sales taxes. The provision for product returns and price adjustments is assessed for adequacy at each quarter
end and is based on recent historical experience and known customer claims and was not material as of June 30, 2018 or 2017.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">A portion of our revenue, primarily for development
contracts, is recognized using the milestone method of accounting. Each milestone for which revenue is recognized is considered
substantive. In determining this the Company considered whether the consideration associated with the milestone was commensurate
with the performance to achieve the milestone, relates solely to past performance, and reasonable relative to the other deliverables
and payment terms within the agreement.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Depreciation</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Depreciation of plant and equipment is
computed on a straight-line basis over the estimated useful lives of the assets. </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Estimated useful lives of depreciable
assets are as follows:</p>
<table cellspacing="0" cellpadding="0" align="center" style="width: 80%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 50%; padding-bottom: 6pt; text-align: justify"> Buildings and improvements </td>
<td style="width: 50%; padding-bottom: 6pt; text-align: justify"> 10 – 40 years</td></tr>
<tr style="vertical-align: top">
<td style="padding-bottom: 6pt; text-align: justify"> Machinery and equipment</td>
<td style="padding-bottom: 6pt; text-align: justify">   3 – 20 years</td></tr>
<tr style="vertical-align: top">
<td style="padding-bottom: 6pt; text-align: justify"> Furniture and fixtures</td>
<td style="padding-bottom: 6pt; text-align: justify">   7 – 10 years</td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Income Taxes</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The Company follows the provisions of
Accounting Standards Codification (“ASC”) Topic 740-10, "Accounting for Income Taxes."</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Under the provisions of ASC 740-10, deferred
tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected
to be recovered or settled.  The effect on deferred taxes and liabilities of a change in tax rates is recognized in earnings
in the period that includes the enactment date.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Cash and Cash Equivalents</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Cash and cash equivalents consist of
cash and money market funds.  The Company considers all highly liquid investments with original maturities of three months
or less to be cash equivalents.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Investment Securities</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The Company accounts for its investment
securities in accordance with ASC 320-10-25, “Accounting for Certain Investments in Debt and Equity Securities.” 
Investment securities at June 30, 2018 and 2017 consist of certificates of deposit and municipal bonds.  The Company classifies
investment securities as available-for-sale.  Unrealized holding gains and losses, net of related tax effect, on available-for-sale
securities are excluded from earnings and are reported as a separate component of stockholders’ equity until realized. 
Realized gains and losses for securities classified as available-for-sale are included in earnings and are determined using the
specific identification method.  Interest income is recognized when earned.  Fair values are based on quoted market prices
available as of the balance sheet date, and are therefore considered a Level 1 valuation.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Fair Value of Financial Instruments</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">ASC 820 establishes a fair value hierarchy
which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair
value.  The standard describes three levels of inputs that may be used to measure fair value:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify"><font style="font-family: Wingdings">§</font>          Level
1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as
of the measurement date.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify"><font style="font-family: Wingdings">§</font>          Level
2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted
prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify"><font style="font-family: Wingdings">§</font>          Level
3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants
would use in pricing an asset or liability.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The carrying amounts of financial instruments,
including cash and cash equivalents, short term investments, accounts receivable, accounts payable and accrued expenses, approximated
fair value as of June 30, 2018 and 2017 because of the immediate or short-term maturity of these financial instruments. </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Accounts Receivable and Allowance for
Doubtful Accounts</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The Company extends credit to its customers
in the normal course of business and collateral is generally not required for trade receivables.  Exposure to credit risk
is controlled through the use of credit approvals, credit limits, and monitoring procedures.  Accounts receivable are reported
net of an allowance for doubtful accounts.  The Company estimates the allowance based on its analysis of specific balances.
Interest is not charged on past due balances.  Based on these factors, there was an allowance for doubtful accounts of $3,000
at June 30, 2018 and 2017.  Changes to the allowance for doubtful accounts are charged to expense and reduced by charge-offs,
net of recoveries.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Per Share Amounts</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">ASC 260-10 “Earnings Per Share
(EPS)” requires the Company to calculate net income (loss) per share based on basic and diluted net income (loss) per share,
as defined.  Basic EPS excludes dilution and is computed by dividing net income (loss) by the weighted average number of shares
outstanding for the period.  Diluted EPS reflects the potential dilution that could occur if securities or other contracts
to issue common stock were exercised or converted into common stock.  The dilutive effect of outstanding options issued by
the Company are reflected in diluted EPS using the treasury stock method.  Under
the treasury stock method, options will only have a dilutive effect when the average market price of common stock during the period
exceeds the exercise price of the options.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Comprehensive Income</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Comprehensive income consists of net
income and other comprehensive income.  Other comprehensive income for fiscal years ended June 30, 2018 and 2017
consists of unrealized holding gains and losses on available-for-sale securities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Use of Estimates</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The preparation of financial statements in
conformity with accounting principles generally accepted in the United States of America requires management to make estimates
and assumptions that affect the reported amount 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.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Investment Tax Credits</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Investment tax credits are accounted for as
a reduction of income tax expense in the year taxes payable are reduced. Unused credits are reflected as a deferred tax asset.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Reclassifications</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Certain reclassifications may have been made
to the prior year financial statements to conform to the current year presentation.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Recently Issued Accounting Standards</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In May 2014, the FASB issued ASU No. 2014-09,
“Revenue from Contracts with Customers,<i>”</i> which supersedes nearly all existing revenue recognition guidance under
U.S. GAAP.  The core principle of ASU No. 2014-09 is to recognize revenues when promised goods or services are transferred
to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. 
ASU No. 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be
required within the revenue recognition process than are required under existing U.S. GAAP.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In subsequent periods, the FASB issued additional
ASUs intended to clarify specific aspects related to the interpretation and implementation of ASU No. 2014-09. In March 2016, the
FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers – Principal versus Agent Considerations (Reporting
Revenue Gross versus Net)” to provide guidance on principal versus agent considerations by an entity as discussed in ASU
No. 2014-09. ASU No. 2016-08 provides criteria to be assessed by an entity when determining whether it is the principal or agent
in relation to the goods or services which the Company is contractually obligated to provide to the customer. Among these considerations
are: identifying the unit of account at which the entity should assess whether it is a principal or an agent; identifying the nature
of the good or service provided to the customer; applying the control principle to certain types of transactions; and, interaction
of the control principle with the indicators provided to assist in the principle versus agent evaluation. In April 2016, the FASB
issued ASU No. 2016-10, “Revenue from Contracts with Customers – (Topic 606): Identifying Performance Obligations and
Licensing” to provide implementation guidance related to the necessary judgements required in identifying performance obligations
of a contract and guidance related to recognition of licensing revenues. In May 2016, the FASB issued ASU No. 2016-12, “Revenue
from Contracts with Customers – (Topic 606): Narrow-Scope Improvements and Practical Expedients” to provide guidance
related to the implementation of ASU No. 2014-09 in the following areas; assessing collectability for contracts that do not meet
Step 1 of revenue recognition, presentation of sales taxes, noncash consideration, contract modifications at transition, and completed
contracts at transition.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">These standards are effective for annual
periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i)
a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to
elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU No.
2014-09 recognized at the date of adoption (which includes additional footnote disclosures).  Early adoption is
permitted for annual periods beginning after December 15, 2016 and interim periods therein. We evaluated the impact of
adopting of ASU No. 2014-09; this will not have a material impact on the Company’s financial statements aside from
increased disclosures. The Company used the modified retrospective method when adopting the standard beginning July 1, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In July 2015, the Financial Accounting Standards
Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-11, “Inventory (Topic 330): Simplifying
the Measurement of Inventory.”  ASU No. 2015-11 requires inventory measured using any method other than last-in, first
out or the retail inventory method to be subsequently measured at the lower of cost and net realizable value, rather than at the
lower of cost or market.  Net realizable value is defined as the estimated selling price, less the estimated costs to complete,
dispose, and transport such inventory.  ASU No. 2015-11 was effective for fiscal years and interim periods beginning after
December 15, 2016.  ASU No. 2015-11 was required to be applied prospectively and early adoption was permitted.  The Company
adopted ASU No. 2015-11 and it did not have a material impact on the Company’s financial position or results of operations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In November 2015, the FASB issued ASU No. 2015-17,
“Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes”. The guidance requires the classification
of deferred tax assets and liabilities as non-current in a classified balance sheet. The current requirement that deferred tax
assets and liabilities of a tax-paying component of an entity be offset and presented as a single amount is not affected by this
update. We adopted ASU 2015-17 during the first quarter of fiscal year 2018 on a prospective basis. Prior periods were not retrospectively
adjusted. Accordingly, for the twelve-month period ended June 30, 2018 we decreased current deferred tax assets by $310,650 netted
against noncurrent deferred tax liabilities of $328,343; resulting in a noncurrent deferred tax liability balance of $17,693. Adoption
of ASU No. 2015-17 for the prior period presented would have the following impact on the Company’s financial statements for
June 30, 2017; a decrease in current assets of $317,559, a decrease in non-current liabilities of $220,571 and an increase in non-current
assets of $96,988.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In January 2016, the FASB issued ASU No. 2016-01,
“Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”.
The amendments in this Update address certain aspects of recognition, measurement, presentation and disclosure of financial instruments
(primarily equity securities) in order to enhance the reporting model for financial instruments to provide users of financial statements
with more decision-useful information. ASU No. 2016-01 will be effective for annual periods beginning after December 15, 2017,
and interim periods within those annual periods. The Company will be adopting ASU No. 2016-01 and it will not have a material impact
on the Company's financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In March 2016, the FASB issued ASU No.
2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment
Accounting”. The areas for simplification in this update involve several aspects of the accounting for share-based
payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and
classification on the statement of cash flows. We adopted ASU 2016-09 during the first quarter of fiscal year 2018 on a
prospective basis. We have elected to follow an accounting policy to estimate the number of awards that are expected to vest
(consistent with ASU and prior GAAP). Adoption of ASU No. 2016-09 resulted in certain tax benefits of equity transactions
being shown in the tax provision rather than in equity. The adoption of the ASU did not have a material impact on the
Company’s financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In February 2018, the FASB issued ASU No.
2018-02, “Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from
Accumulated Other Comprehensive Income”. Under current accounting guidance, the income tax effects for changes in income
tax rates and certain other transactions are recognized in income from continuing operations resulting in income tax effects recognized
in Accumulated Other Comprehensive Income that do not reflect the current tax rate of the entity (“stranded tax effects”).
The new guidance allows the Company the option to reclassify these stranded tax effects to retained earnings that relate to the
change in the federal tax rate resulting from the passage of the Tax Cuts and Jobs Act (the “Tax Act”). This update
is effective for fiscal years beginning after December 15, 2018, including interim periods therein, and early adoption is permitted.
The Company is evaluating the impact that ASU No. 2018-02 will have on the Company's financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Impairment of Long-Lived Assets</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Long-lived assets, including property, plant,
and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an
asset may not be recoverable.  Recoverability of assets to be held and used is measured by a comparison of the carrying amount
of an asset to estimated undiscounted future cash flows expected to be generated by the asset.  If the carrying amount of
an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount
of the asset exceeds the fair value of the asset.  There were no impairments of long-lived assets in fiscal years 2018 and
2017.  Assets to be disposed of are separately presented in the balance sheet and reported at the lower of the carrying amount
or fair value less costs to sell, and no longer depreciated.  The assets and liabilities of a disposed group classified as
held for sale are presented separately in the appropriate asset and liability sections of the balance sheet, if applicable.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Concentrations of Risk</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The market for our defense electronics
products is largely dependent on the availability of new contracts from the United States and foreign governments to prime contractors
to which we provide components.  Any decline in expenditures by the United States or foreign governments may have an adverse
effect on our financial performance. </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Generally, U.S. Government contracts
are subject to procurement laws and regulations.  Some of the Company’s contracts are governed by the Federal Acquisition
Regulation (FAR), which lays out uniform policies and procedures for acquiring goods and services by the U.S. Government, and agency-specific
acquisition regulations that implement or supplement the FAR.  For example, the Department of Defense implements the FAR through
the Defense Federal Acquisition Regulation (DFAR).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The FAR also contains guidelines and
regulations for managing a contract after award, including conditions under which contracts may be terminated, in whole or in part,
at the government’s convenience or for default.  If a contract is terminated for the convenience of the government,
a contractor is entitled to receive payments for its allowable costs and, in general, the proportionate share of fees or earnings
for the work done.  If a contract is terminated for default, the government generally pays for only the work it has accepted. 
These regulations also subject the Company to financial audits and other reviews by the government of its costs, performance, accounting
and general business practices relating to its contracts, which may result in adjustment of the Company’s contract-related
costs and fees.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Note 3. Investment Securities</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify">Investment securities at June 30, 2018
and 2017 consist of certificates of deposit and municipal bonds which are classified as available-for-sale securities and have
been determined to be level 1 assets. The cost, gross unrealized gains, gross unrealized losses and fair value of available-for-sale
securities by major security type at June 30, 2018 and 2017 are as follows:</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right">Gross</td><td> </td><td> </td>
<td colspan="2" style="text-align: right">Gross</td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="2" style="text-align: right">Amortized</td><td> </td><td> </td>
<td colspan="2" style="text-align: right">Unrealized</td><td> </td><td> </td>
<td colspan="2" style="text-align: right">Unrealized</td><td> </td><td> </td>
<td colspan="2" style="text-align: right">Fair</td><td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">Cost</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">Gains</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">Losses</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">Value</td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><u>2018</u></td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right"> </td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right"> </td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right"> </td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right"> </td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 56%">Certificates of deposit</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">10,440,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">—</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">—</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">10,440,000</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt">Municipal bonds</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">1,085,754</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">635</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(5,683</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">1,080,706</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 2.5pt">2018 Total investment securities</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">11,525,754</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">635</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(5,683</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">11,520,706</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-decoration: underline; text-align: left; vertical-align: bottom">2017</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Certificates of deposit</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">8,557,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">8,557,000</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt">Municipal bonds</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">871,872</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">258</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(2,162</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">869,968</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 2.5pt">2017 Total investment securities</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">9,428,872</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">258</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(2,162</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">9,426,968</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0; text-align: justify">The portfolio is diversified and highly
liquid and primarily consists of investment grade fixed income instruments. At June 30, 2018, the Company did not have any investments
in individual securities that have been in a continuous loss position considered to be other than temporary.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify">As of June 30, 2018 and 2017, the remaining
contractual maturities of available-for-sale securities were as follows:</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: left; vertical-align: bottom"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="6" style="text-align: center; border-bottom: Black 1pt solid">Years to Maturity</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right"> </td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: left; vertical-align: bottom"> </td><td> </td>
<td colspan="2" style="text-align: right">Less than</td><td> </td><td> </td>
<td colspan="2" style="text-align: right">One to</td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: left; vertical-align: bottom"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">One Year</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">Five Years</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">Total</td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: left; vertical-align: bottom"> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-decoration: underline; text-align: left; vertical-align: bottom">2018</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="width: 67%; padding-bottom: 1pt; text-align: left; vertical-align: bottom">Available-for-sale</td><td style="width: 1%; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</td><td style="width: 8%; border-bottom: Black 1pt solid; text-align: right">10,967,300</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td><td style="width: 1%; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</td><td style="width: 8%; border-bottom: Black 1pt solid; text-align: right">553,406</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td><td style="width: 1%; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</td><td style="width: 8%; border-bottom: Black 1pt solid; text-align: right">11,520,706</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-decoration: underline; text-align: left; vertical-align: bottom">2017</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1pt; text-align: left; vertical-align: bottom">Available-for-sale</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">8,829,542</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">597,426</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">9,426,968</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0; text-align: justify">Note 4. Contracts in Process</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify">Contracts
in process at June 30, 2018 and 2017 are as follows:</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">2018</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">2017</td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 78%; text-align: justify">Unrecognized gross contract value </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">48,100,984</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">43,140,921</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">Costs related to contracts in process, net of progress payments</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">   of $102,924 and $1,366,504 at June 30, 2018 and 2017, respectively</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">8,777,079</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">7,863,538</td><td style="text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 12pt; text-align: justify">Included in costs relating to contracts
in process at June 30, 2018 and 2017 are costs of <font style="color: windowtext">$1,597,739 </font>and $<font style="color: windowtext">1,635,661</font>,
respectively, relative to contracts that may not be completed within the ensuing year. Under the units-of-delivery method, the
related sale and cost of sales will not be reflected in the statements of comprehensive income until the units under contract are
shipped.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Note 5. Property, Plant and Equipment</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Property, plant and equipment at June
30, 2018 and 2017 is as follows:</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">2018</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">2017</td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 78%">Land</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">45,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">45,000</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Building and improvements</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,378,866</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,304,366</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Machinery and equipment</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">10,877,555</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">9,028,835</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt">Furniture and fixtures</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">170,120</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">170,120</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">15,471,541</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">13,548,321</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt">Accumulated depreciation</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(11,712,904</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(11,283,225</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 2.5pt">Property, plant and equipment, net</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">3,758,637</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">2,265,096</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 12pt; text-align: justify">Machinery and equipment includes $763,367
that was not placed in service as of June 30, 2018. Depreciation expense was $429,679 and $435,557 for the years ended June 30,
2018 and 2017, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Note 6. Pension Expense</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Under terms of a negotiated union contract
which expires on June 30, 2022, the Company is obligated to make contributions to a union-sponsored International Brotherhood of
Electrical Workers Local 1799 defined benefit pension plan (Plan identifying number is 14-6065199) covering eligible employees.
Such contributions and expenses are based upon hours <font style="color: windowtext">worked at a specified rate and amounted to
$99,031 in fiscal year 2018 and $89,023 in fiscal year 2017. These contributions represent more than five percent of the total
contributions made into the Plan. For the years beginning January 1, 2018 and 2017, the Plan was in the “green zone”
which means it is neither endangered nor critical status. A Funding Improvement Plan, entered into by Plan Trustees in fiscal year
2013, when the Plan was in “critical status,” calls for an increase in contributions starting January 1, 2016 of $0.04
per hour for each year for five years thereafter. The increase did not and will not have a material impact on the Company’s
financial statements.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt">The Company sponsors a 401(k) plan for non-union workers
with employee and employer matching contributions. The employer match is 10% of the employee contribution and was $52,225 and
$49,247, for fiscal years 2018 and 2017, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt 0.75in; text-align: justify; text-indent: -0.75in">Note 8.
Significant Customers</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">A significant portion of the Company's
business is the production of military and industrial electronic equipment for use by the U.S. and foreign governments and certain
<font style="color: windowtext">industrial customers. Sales to two domestic customers accounted for approximately 60% of total
sales in fiscal year 2018. Sales to two domestic customers accounted for approximately 45% of total sales in fiscal year 2017.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify">Export sales in fiscal years 2018 and
2017 were approximately $3,112,000 and $1,730,000, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Note 9. Stock Rights Plan</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The Company has a Shareholder Rights
Plan that expires on <font style="color: windowtext">December 31, 2019</font>. Under this plan, common stock purchase rights were
distributed as a dividend at the rate of one right for each share of common stock outstanding as of or issued subsequent to April
14, 1989. Each right entitles the holder thereof to buy one-half share of common stock of the Company at an exercise price of $25
per share subject to adjustment. The rights are exercisable only if a person or group acquires beneficial ownership of 15% or more
of the Company's common stock or commences a tender or exchange offer which, if consummated, would result in the offeror individually
or, together with all affiliates and associates thereof, being the beneficial owner of 15% or more of the Company's common stock.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">If a 15% or larger shareholder should
engage in certain self-dealing transactions or a merger with the Company in which the Company is the surviving corporation and
its shares of common stock are not changed or converted into equity securities of any other person, or if any person were to become
the beneficial owner of 15% or more of the Company's common stock, then each right not owned by such shareholder or related parties
of such shareholder (all of which will be void) will entitle its holder to purchase, at the right's then current exercise price,
shares of the Company's common stock having a value of twice the right's exercise price. In addition, if the Company is involved
in any other merger or consolidation with, or sells 50% or more of its assets or earning power to another person, each right will
entitle its holder to purchase, at the right's then current exercise price, shares of common stock of such other person having
a value of twice the right's exercise price.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The Company generally is entitled to
redeem the rights at one cent per right at any time until the 15th day (or 25th day if extended by the Company's Board of Directors)
following public announcement that a 15% position has been acquired or the commencement of a tender or exchange offer which, if
consummated, would result in the offeror, together with all affiliates and associates thereof, being the beneficial owner of 15%
or more of the Company's common stock.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt">Note 12. Concentration of Credit Risk</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Financial instruments that potentially
subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, short-term investments and
accounts receivable. The Company maintains cash and cash equivalents with various financial institutions.
At times such investments may be in excess of FDIC insurance limits. As disclosed in Note 8, a significant portion of the Company's
business is the production of military and industrial electronic equipment for use by the U.S. and foreign governments and certain
industrial customers. The related accounts receivable balance<font style="color: windowtext">, as a percentage of the Company's
total trade accounts receivable balance, was 61% represented by one customer at June 30, 2018 and 41% represented by two customers
at June 30, 2017.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify">Although the Company's exposure to credit
risk associated with nonpayment of these concentrated balances is affected by the conditions or occurrences within the U.S. and
foreign governments, the Company believes that its trade accounts receivable credit risk exposure is limited. The Company performs
ongoing credit evaluations of its customer's financial conditions and requires collateral, such as progress payments, in certain
circumstances. The Company establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific
customers, historical trends and other information.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Note 13. Related Parties</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify">The administration of the shares of
common stock held by the ESOP Trust is subject to the Amended and Restated Plan and a Trust Agreement, each effective as of July
1, 2016. The Trustees’ rights with respect to the disposition of shares are governed by the terms of the Plan and the Trust
Agreement. As to shares that have been allocated to the accounts of participants in the ESOP Trust, the Plan provides that the
Trustees are required to vote such shares in accordance with instructions received from the participants. As to unallocated shares
and allocated shares for which voting instructions have not been received from participants, the Plan provides that the Trustees
are required to vote such shares in accordance with the direction of the Board of Directors of the Company under the terms of the
Plan and Trust Agreement. See Note 10 for additional information regarding the ESOP.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt 0.75in; text-align: justify; text-indent: -0.75in">Note 14.
Commitments and Contingencies</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company at certain times enters into standby
letters of credit agreements with financial institutions primarily relating to the guarantee of future performance on certain contracts.
Contingent liabilities on outstanding standby letters of credit agreements aggregated to zero at June 30, 2018 and 2017. The Company,
as a U.S. Government contractor, is subject to audits, reviews, and investigations by the U.S. Government related to its negotiation
and performance of government contracts and its accounting for such contracts. Failure to comply with applicable U.S. Government
standards by a contractor may result in suspension from eligibility for award of any new government contract and a guilty plea
or conviction may result in debarment from eligibility for awards. The government may, in certain cases, also terminate existing
contracts, recover damages, and impose other sanctions and penalties. As a result of contract audits the Company will determine
a range of possible outcomes and in accordance with ASC 450 “Contingencies” the Company will accrue amounts within
a range that appears to be its best estimate of a possible outcome. Adjustments are made to accruals, if any, periodically based
on current information.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We are party to various litigation matters
and claims arising from time to time in the ordinary course of business.  While the results of such matters cannot be
predicted with certainty, we believe that the final outcome of such matters will not have a material adverse effect on our business,
financial condition, results of operations or cash flows.  </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Note 16. Line of Credit</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify">At June 30, 2018, the Company has an
uncommitted and unused Line of Credit with a financial institution. The agreement provides that the Company may borrow up to $3,000,000.
The line provides for interest payments equal to the LIBOR Daily Floating Rate plus 2.00%. Any borrowing under the line of credit
will be collateralized by accounts receivable. The line will be reviewed annually in November for renewal on December 1st. All
outstanding balances are payable no later than the expiration date of the agreement, unless other terms are agreed to by the lender.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Estimated useful lives of depreciable
assets are as follows:</p>
<div>
<table cellspacing="0" cellpadding="0" align="center" style="width: 80%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 50%; padding-bottom: 6pt; text-align: justify"> Buildings and improvements </td>
<td style="width: 50%; padding-bottom: 6pt; text-align: justify"> 10 – 40 years</td></tr>
<tr style="vertical-align: top">
<td style="padding-bottom: 6pt; text-align: justify"> Machinery and equipment</td>
<td style="padding-bottom: 6pt; text-align: justify">   3 – 20 years</td></tr>
<tr style="vertical-align: top">
<td style="padding-bottom: 6pt; text-align: justify"> Furniture and fixtures</td>
<td style="padding-bottom: 6pt; text-align: justify">   7 – 10 years</td></tr></table></div>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify">The cost, gross unrealized gains, gross unrealized losses and fair value of available-for-sale
securities by major security type at June 30, 2018 and 2017 are as follows:</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right">Gross</td><td> </td><td> </td>
<td colspan="2" style="text-align: right">Gross</td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="2" style="text-align: right">Amortized</td><td> </td><td> </td>
<td colspan="2" style="text-align: right">Unrealized</td><td> </td><td> </td>
<td colspan="2" style="text-align: right">Unrealized</td><td> </td><td> </td>
<td colspan="2" style="text-align: right">Fair</td><td> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">Cost</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">Gains</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">Losses</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">Value</td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom">
<td><u>2018</u></td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right"> </td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right"> </td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right"> </td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right"> </td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 56%">Certificates of deposit</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">10,440,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">—</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">—</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">10,440,000</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt">Municipal bonds</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">1,085,754</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">635</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(5,683</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">1,080,706</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 2.5pt">2018 Total investment securities</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">11,525,754</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">635</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(5,683</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">11,520,706</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-decoration: underline; text-align: left; vertical-align: bottom">2017</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Certificates of deposit</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">8,557,000</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">8,557,000</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt">Municipal bonds</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">871,872</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">258</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(2,162</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">869,968</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 2.5pt">2017 Total investment securities</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">9,428,872</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">258</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(2,162</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">9,426,968</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify">As of June 30, 2018 and 2017, the remaining
contractual maturities of available-for-sale securities were as follows:</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: left; vertical-align: bottom"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="6" style="text-align: center; border-bottom: Black 1pt solid">Years to Maturity</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right"> </td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: left; vertical-align: bottom"> </td><td> </td>
<td colspan="2" style="text-align: right">Less than</td><td> </td><td> </td>
<td colspan="2" style="text-align: right">One to</td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: left; vertical-align: bottom"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">One Year</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">Five Years</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">Total</td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: left; vertical-align: bottom"> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-decoration: underline; text-align: left; vertical-align: bottom">2018</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="width: 67%; padding-bottom: 1pt; text-align: left; vertical-align: bottom">Available-for-sale</td><td style="width: 1%; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</td><td style="width: 8%; border-bottom: Black 1pt solid; text-align: right">10,967,300</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td><td style="width: 1%; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</td><td style="width: 8%; border-bottom: Black 1pt solid; text-align: right">553,406</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td><td style="width: 1%; padding-bottom: 1pt"> </td>
<td style="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</td><td style="width: 8%; border-bottom: Black 1pt solid; text-align: right">11,520,706</td><td style="width: 1%; padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-decoration: underline; text-align: left; vertical-align: bottom">2017</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1pt; text-align: left; vertical-align: bottom">Available-for-sale</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">8,829,542</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">597,426</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">9,426,968</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify">Contracts
in process at June 30, 2018 and 2017 are as follows:</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">2018</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">2017</td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 78%; text-align: justify">Unrecognized gross contract value </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">48,100,984</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">43,140,921</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">Costs related to contracts in process, net of progress payments</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">   of $102,924 and $1,366,504 at June 30, 2018 and 2017, respectively</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">8,777,079</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">7,863,538</td><td style="text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Property, plant and equipment at June
30, 2018 and 2017 is as follows:</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">2018</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">2017</td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 78%">Land</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">45,000</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">45,000</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Building and improvements</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,378,866</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,304,366</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left">Machinery and equipment</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">10,877,555</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">9,028,835</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt">Furniture and fixtures</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">170,120</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">170,120</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">15,471,541</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">13,548,321</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt">Accumulated depreciation</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(11,712,904</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(11,283,225</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 2.5pt">Property, plant and equipment, net</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">3,758,637</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">2,265,096</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">A summary of the components of the provision
for income taxes for the years ended June 30, 2018 and 2017 is as follows:</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">2018</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">2017</td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 78%; text-align: justify">     Current tax expense - federal </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">880,213</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">559,171</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">     Current tax (benefit) expense - state </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(2,009</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,986</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify; padding-bottom: 1pt">     Deferred tax expense (benefit)</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">115,075</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(46,488</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify; padding-bottom: 2.5pt">          Provision for income taxes</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">993,279</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">515,669</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The combined U.S. federal and state effective
income tax rates of 24.4% and 31.2%, for 2018 and 2017 respectively, differed from the statutory U.S. federal income tax rate for
the following reasons:</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">2018</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">2017</td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 78%; text-align: justify">     U.S. federal statutory income tax rate </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">28.1</td><td style="width: 1%; text-align: left">%</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">34.0</td><td style="width: 1%; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">     Increase (reduction) in rate resulting from:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">          State franchise tax, net of federal income tax benefit</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(0.1</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.1</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">          ESOP cost versus Fair Market Value</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1.1</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3.6</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">          Dividend on allocated ESOP shares</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(2.9</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(7.2</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">          Qualified production activities</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(2.1</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(2.8</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">          Stock-based compensation</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.1</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1.8</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify; padding-bottom: 1pt">          Other</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">0.2</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">1.7</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify; padding-bottom: 2.5pt">     Effective tax rate </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">24.4</td><td style="padding-bottom: 2.5pt; text-align: left">%</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">31.2</td><td style="padding-bottom: 2.5pt; text-align: left">%</td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify; text-indent: 0in">The ESOP shares as of June 30, 2018 and 2017 were as follows:</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">2018</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">2017</td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 78%; text-align: justify; text-indent: 0in">Allocated shares</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">459,032</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">456,099</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify; padding-bottom: 1pt">Unreleased shares</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">29,166</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">45,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify; padding-bottom: 2.5pt">Total shares held by the ESOP</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">488,198</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">501,099</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt">     Fair value of unreleased shares</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">782,524</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">1,008,900</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The table below outlines the weighted average
assumptions that the Company used to calculate the fair value of each option award for the year ended June 30, 2018 and 2017.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">2018</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">2017</td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 78%; text-align: justify; text-indent: 0in">Dividend yield</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">4.54</td><td style="width: 1%; text-align: left">%</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">3.85</td><td style="width: 1%; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">Expected stock price volatility</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">24.07</td><td style="text-align: left">%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">29.70</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">Risk-free interest rate</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2.04</td><td style="text-align: left">%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1.84</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">Expected option life (in years)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font-size: 10pt">4.8</font></td><td style="text-align: left"> yrs</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font-size: 10pt">4.6</font> </td><td style="text-align: left"> yrs</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">Weighted average fair value per share</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">   of options granted during the period</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">2.95</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">4.64</td><td style="text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The following table summarizes stock
option activity during the twelve months ended June 30, 2018:</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td><td style="border-bottom: Black 1pt solid"> </td>
<td colspan="15" style="text-align: center; border-bottom: Black 1pt solid">Employee Stock Options Plan</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="3" style="text-align: center"> </td><td> </td>
<td colspan="3" style="text-align: center"> </td><td> </td>
<td colspan="3" style="text-align: center">Weighted</td><td> </td>
<td colspan="3" style="text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="3" style="text-align: center">Number of</td><td> </td>
<td colspan="3" style="text-align: center">Weighted</td><td> </td>
<td colspan="3" style="text-align: center">Average</td><td> </td>
<td colspan="3" style="text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="3" style="text-align: center">Shares</td><td> </td>
<td colspan="3" style="text-align: center">Average</td><td> </td>
<td colspan="3" style="text-align: center">Remaining</td><td> </td>
<td colspan="3" style="text-align: center">Aggregate</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="3" style="text-align: center">Subject</td><td> </td>
<td colspan="3" style="text-align: center">Exercise</td><td> </td>
<td colspan="3" style="text-align: center">Contractual</td><td> </td>
<td colspan="3" style="text-align: center">Intrinsic</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="border-bottom: Black 1pt solid"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">to Option</td><td style="border-bottom: Black 1pt solid"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Price</td><td style="border-bottom: Black 1pt solid"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Term</td><td style="border-bottom: Black 1pt solid"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Value</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 56%">Balance at July 1, 2017</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">197,800</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">24.57</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">5.86</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Granted</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">54,715</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">22.14</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">9.32</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Exercised</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(20,601</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">21.32</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Forfeited or expired</td><td style="border-bottom: Black 1pt solid"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(9,060</td><td style="border-bottom: Black 1pt solid; text-align: left">)</td><td style="border-bottom: Black 1pt solid"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">24.25</td><td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—</td><td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid"> </td>
<td style="padding-bottom: 1pt; text-align: left; border-bottom: Black 1pt solid"> </td><td style="padding-bottom: 1pt; text-align: right; border-bottom: Black 1pt solid"> </td><td style="border-bottom: Black 1pt solid; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Outstanding at June 30, 2018</td><td style="border-bottom: Black 2.5pt double"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">222,854</td><td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">24.29</td><td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">6.26</td><td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">581,319</td><td style="border-bottom: Black 2.5pt double; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Vested or expected to vest at June 30, 2018</td><td style="border-bottom: Black 2.5pt double"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">209,754</td><td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">24.31</td><td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">6.09</td><td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">541,996</td><td style="border-bottom: Black 2.5pt double; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Exercisable at June 30, 2018</td><td style="border-bottom: Black 2.5pt double"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">135,249</td><td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">24.56</td><td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">4.52</td><td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">316,848</td><td style="border-bottom: Black 2.5pt double; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt">The following table summarizes changes in non-vested stock
options during the twelve months ended June 30, 2018:</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="white-space: nowrap"> </td><td style="white-space: nowrap"> </td>
<td colspan="2" style="text-align: center; white-space: nowrap">Weighted</td><td style="white-space: nowrap"> </td><td style="white-space: nowrap"> </td>
<td colspan="2" style="text-align: center; white-space: nowrap"> </td><td style="white-space: nowrap"> </td></tr>
<tr style="vertical-align: bottom">
<td style="white-space: nowrap"> </td><td style="white-space: nowrap"> </td>
<td colspan="2" style="text-align: center; white-space: nowrap">Number of</td><td style="white-space: nowrap"> </td><td style="white-space: nowrap"> </td>
<td colspan="2" style="text-align: center; white-space: nowrap">Average</td><td style="white-space: nowrap"> </td></tr>
<tr style="vertical-align: bottom">
<td style="white-space: nowrap"> </td><td style="white-space: nowrap"> </td>
<td colspan="2" style="text-align: center; white-space: nowrap">Shares</td><td style="white-space: nowrap"> </td><td style="white-space: nowrap"> </td>
<td colspan="2" style="text-align: center; white-space: nowrap">Grant Date</td><td style="white-space: nowrap"> </td></tr>
<tr style="vertical-align: bottom">
<td style="white-space: nowrap"> </td><td style="white-space: nowrap"> </td>
<td colspan="2" style="text-align: center; white-space: nowrap">Subject</td><td style="white-space: nowrap"> </td><td style="white-space: nowrap"> </td>
<td colspan="2" style="text-align: center; white-space: nowrap">Fair Value</td><td style="white-space: nowrap"> </td></tr>
<tr style="vertical-align: bottom">
<td style="white-space: nowrap"> </td><td style="padding-bottom: 1pt; white-space: nowrap"> </td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid; white-space: nowrap">to Option</td><td style="padding-bottom: 1pt; white-space: nowrap"> </td><td style="padding-bottom: 1pt; white-space: nowrap"> </td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid; white-space: nowrap">(per Option)</td><td style="padding-bottom: 1pt; white-space: nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 78%; white-space: nowrap">Non-Vested at July 1, 2017</td><td style="width: 1%; white-space: nowrap"> </td>
<td style="width: 1%; text-align: left; white-space: nowrap"> </td><td style="width: 8%; text-align: right; white-space: nowrap">42,900</td><td style="width: 1%; text-align: left; white-space: nowrap"> </td><td style="width: 1%; white-space: nowrap"> </td>
<td style="width: 1%; text-align: left; white-space: nowrap">$</td><td style="width: 8%; text-align: right; white-space: nowrap">4.59</td><td style="width: 1%; text-align: left; white-space: nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="white-space: nowrap">Granted</td><td style="white-space: nowrap"> </td>
<td style="text-align: left; white-space: nowrap"> </td><td style="text-align: right; white-space: nowrap">54,715</td><td style="text-align: left; white-space: nowrap"> </td><td style="white-space: nowrap"> </td>
<td style="text-align: left; white-space: nowrap"> </td><td style="text-align: right; white-space: nowrap">2.92</td><td style="text-align: left; white-space: nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="white-space: nowrap">Vested</td><td style="white-space: nowrap"> </td>
<td style="text-align: left; white-space: nowrap"> </td><td style="text-align: right; white-space: nowrap">(3,000</td><td style="text-align: left; white-space: nowrap">)</td><td style="white-space: nowrap"> </td>
<td style="text-align: left; white-space: nowrap"> </td><td style="text-align: right; white-space: nowrap">3.87</td><td style="text-align: left; white-space: nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt; white-space: nowrap">Forfeited or expired</td><td style="padding-bottom: 1pt; white-space: nowrap"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left; white-space: nowrap"> </td><td style="border-bottom: Black 1pt solid; text-align: right; white-space: nowrap">(7,010</td><td style="padding-bottom: 1pt; text-align: left; white-space: nowrap">)</td><td style="padding-bottom: 1pt; white-space: nowrap"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left; white-space: nowrap"> </td><td style="border-bottom: Black 1pt solid; text-align: right; white-space: nowrap">3.64</td><td style="padding-bottom: 1pt; text-align: left; white-space: nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; white-space: nowrap">Non-Vested at June 30, 2018</td><td style="padding-bottom: 2.5pt; white-space: nowrap"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left; white-space: nowrap"> </td><td style="border-bottom: Black 2.5pt double; text-align: right; white-space: nowrap">87,605</td><td style="padding-bottom: 2.5pt; text-align: left; white-space: nowrap"> </td><td style="padding-bottom: 2.5pt; white-space: nowrap"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left; white-space: nowrap">$</td><td style="border-bottom: Black 2.5pt double; text-align: right; white-space: nowrap">3.65</td><td style="padding-bottom: 2.5pt; text-align: left; white-space: nowrap"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The Company has reserved common shares
for future issuance as follows as of June 30, 2018:</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 89%; text-align: left">Stock options outstanding</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">222,854</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt">Stock options available for issuance</td><td style="padding-bottom: 1pt"> </td>
<td style="text-align: right; border-bottom: Black 1pt solid"> </td><td style="text-align: right; border-bottom: Black 1pt solid">349,095</td><td style="text-align: left; padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt">Number of common shares reserved</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">571,949</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
22521012
5460600
5324104
6068684
5667624
1730000
32517883
3112000
7496423
11531105
5663161
7827194
17806444
24855631
P9Y3M26D
P6Y1M2D
P4Y6M7D
P10Y
P40Y
P3Y
P20Y
P7Y
P10Y
317559
310650
220571
328343
96988
17693
8557000
871872
9428872
11525754
10440000
1085754
258
258
635
635
2162
2162
5683
5683
8557000
869968
9426968
11520706
10440000
1080706
8829542
10967300
597426
553406
1635661
1597739
43140921
48100984
763367
45000
4304366
9028835
170120
13548321
15471541
45000
4378866
10877555
170120
11283225
11712904
89023
99031
0.04
0.10
0.10
49247
52225
0.21
4553
35200
0.312
0.244
559171
880213
2986
-2009
0.34
0.281
0.001
-0.001
0.036
0.011
0.072
0.029
0.028
0.021
0.018
0.001
0.017
0.002
0.312
0.244
195915
203150
73696
32875
81659
51140
36935
53863
666
1060
2384
1437
391255
343525
294267
361218
294267
361218
2019-12-31
1
1989-04-14
0.50
25
0.15
0.50
1000
0
8103
456099
459032
45000
29166
501099
488198
1008900
782524
129167
123112
32564
34136
11606
6839
129983
31923
98060
P2Y0M0D
6704
20769
26691
0.25
1.00
2018-10
2018-09-24
40076299
23.96
96988
-17693
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt">Note 2. Summary of Significant Accounting Policies</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Revenue Recognition</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company recognizes revenue in accordance
with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 605
“Revenue Recognition<i>”</i>. Product sales represent the majority of the Company’s revenue. The Company recognizes
revenue from these product sales when persuasive evidence of an arrangement exists, transfer of title and risk of loss has occurred,
the sale price is fixed or determinable, and collectability is reasonably assured. The Company sells its products on terms which
transfer title and risk of loss at a specified location, typically shipping point. Accordingly, revenue recognition from product
sales occurs when all factors are met. If these conditions are not met, the Company will defer revenue recognition until such time
as these conditions have been satisfied. The Company collects and remits sales taxes in certain jurisdictions and reports revenue
net of any associated sales taxes. The provision for product returns and price adjustments is assessed for adequacy at each quarter
end and is based on recent historical experience and known customer claims and was not material as of June 30, 2018 or 2017.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">A portion of our revenue, primarily for development
contracts, is recognized using the milestone method of accounting. Each milestone for which revenue is recognized is considered
substantive. In determining this the Company considered whether the consideration associated with the milestone was commensurate
with the performance to achieve the milestone, relates solely to past performance, and reasonable relative to the other deliverables
and payment terms within the agreement.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Inventory Valuation and Cost Estimation</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Raw materials are valued at the lower of cost
(average cost) or net realizable value. Balances for slow-moving and obsolete inventory are reviewed on a regular basis by analyzing
estimated demand, inventory on hand, sales levels, market conditions, and other information and reduce inventory balances based
on this analysis.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Inventoried work relating to
contracts in process and work in process is valued at actual production cost, including factory overhead incurred to
date.  Contract costs include material, subcontract costs, labor, and an allocation of overhead costs. Work in
process represents spare units; parts and other inventory items acquired or produced to service units previously sold or to
meet anticipated future orders. Provision for losses on contracts is made when the existence of such losses becomes probable
and estimable.  The provision for losses on contracts is included in other accrued expenses on the Company’s
balance sheet.  The costs attributed to units delivered under contracts are based on the estimated average cost of all
units expected to be produced.  Certain contracts are expected to extend beyond twelve months.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The estimation of cost at
completion of a contract is subject to numerous variables involving contract costs and estimates as to the length of time to complete
the contract.  Given the significance of the estimation processes and judgments described above, it is possible that materially
different amounts of expected sales and contract costs could be recorded if different assumptions were used, based on changes in
circumstances, in the estimation process.  When a change in expected sales value or estimated cost is determined, changes
are reflected in current period earnings.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Depreciation</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Depreciation of plant and equipment is
computed on a straight-line basis over the estimated useful lives of the assets. </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Estimated useful lives of depreciable
assets are as follows:</p>
<table cellspacing="0" cellpadding="0" align="center" style="width: 80%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<tr style="vertical-align: top">
<td style="width: 50%; padding-bottom: 6pt; text-align: justify"> Buildings and improvements </td>
<td style="width: 50%; padding-bottom: 6pt; text-align: justify"> 10 – 40 years</td></tr>
<tr style="vertical-align: top">
<td style="padding-bottom: 6pt; text-align: justify"> Machinery and equipment</td>
<td style="padding-bottom: 6pt; text-align: justify">   3 – 20 years</td></tr>
<tr style="vertical-align: top">
<td style="padding-bottom: 6pt; text-align: justify"> Furniture and fixtures</td>
<td style="padding-bottom: 6pt; text-align: justify">   7 – 10 years</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Income Taxes</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The Company follows the provisions of
Accounting Standards Codification (“ASC”) Topic 740-10, "Accounting for Income Taxes."</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Under the provisions of ASC 740-10, deferred
tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected
to be recovered or settled.  The effect on deferred taxes and liabilities of a change in tax rates is recognized in earnings
in the period that includes the enactment date.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Cash and Cash Equivalents</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Cash and cash equivalents consist of
cash and money market funds.  The Company considers all highly liquid investments with original maturities of three months
or less to be cash equivalents. </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Investment Securities</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The Company accounts for its investment
securities in accordance with ASC 320-10-25, “Accounting for Certain Investments in Debt and Equity Securities.” 
Investment securities at June 30, 2018 and 2017 consist of certificates of deposit and municipal bonds.  The Company classifies
investment securities as available-for-sale.  Unrealized holding gains and losses, net of related tax effect, on available-for-sale
securities are excluded from earnings and are reported as a separate component of stockholders’ equity until realized. 
Realized gains and losses for securities classified as available-for-sale are included in earnings and are determined using the
specific identification method.  Interest income is recognized when earned.  Fair values are based on quoted market prices
available as of the balance sheet date, and are therefore considered a Level 1 valuation. </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Fair Value of Financial Instruments</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">ASC 820 establishes a fair value hierarchy
which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair
value.  The standard describes three levels of inputs that may be used to measure fair value:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify"><font style="font-family: Wingdings">§</font>          Level
1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as
of the measurement date.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify"><font style="font-family: Wingdings">§</font>          Level
2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted
prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify"><font style="font-family: Wingdings">§</font>          Level
3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants
would use in pricing an asset or liability.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The carrying amounts of financial instruments,
including cash and cash equivalents, short term investments, accounts receivable, accounts payable and accrued expenses, approximated
fair value as of June 30, 2018 and 2017 because of the immediate or short-term maturity of these financial instruments. </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Accounts Receivable and Allowance for
Doubtful Accounts</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The Company extends credit to its customers
in the normal course of business and collateral is generally not required for trade receivables.  Exposure to credit risk
is controlled through the use of credit approvals, credit limits, and monitoring procedures.  Accounts receivable are reported
net of an allowance for doubtful accounts.  The Company estimates the allowance based on its analysis of specific balances.
Interest is not charged on past due balances.  Based on these factors, there was an allowance for doubtful accounts of $3,000
at June 30, 2018 and 2017.  Changes to the allowance for doubtful accounts are charged to expense and reduced by charge-offs,
net of recoveries.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Per Share Amounts</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">ASC 260-10 “Earnings Per Share
(EPS)” requires the Company to calculate net income (loss) per share based on basic and diluted net income (loss) per share,
as defined.  Basic EPS excludes dilution and is computed by dividing net income (loss) by the weighted average number of shares
outstanding for the period.  Diluted EPS reflects the potential dilution that could occur if securities or other contracts
to issue common stock were exercised or converted into common stock.  The dilutive effect of outstanding options issued by
the Company are reflected in diluted EPS using the treasury stock method.  Under
the treasury stock method, options will only have a dilutive effect when the average market price of common stock during the period
exceeds the exercise price of the options.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Comprehensive Income</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Comprehensive income consists of net income
and other comprehensive income.  Other comprehensive income for fiscal years ended June 30, 2018 and 2017 consists of unrealized
holding gains and losses on available-for-sale securities. </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Use of Estimates</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The preparation of financial statements in
conformity with accounting principles generally accepted in the United States of America requires management to make estimates
and assumptions that affect the reported amount 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.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Investment Tax Credits</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Investment tax credits are accounted for as
a reduction of income tax expense in the year taxes payable are reduced. Unused credits are reflected as a deferred tax asset.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Reclassifications</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Certain reclassifications may have been made
to the prior year financial statements to conform to the current year presentation.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Recently Issued Accounting Standards</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In May 2014, the FASB issued ASU No. 2014-09,
“Revenue from Contracts with Customers,<i>”</i> which supersedes nearly all existing revenue recognition guidance under
U.S. GAAP.  The core principle of ASU No. 2014-09 is to recognize revenues when promised goods or services are transferred
to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. 
ASU No. 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be
required within the revenue recognition process than are required under existing U.S. GAAP.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In subsequent periods, the FASB issued additional
ASUs intended to clarify specific aspects related to the interpretation and implementation of ASU No. 2014-09. In March 2016, the
FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers – Principal versus Agent Considerations (Reporting
Revenue Gross versus Net)” to provide guidance on principal versus agent considerations by an entity as discussed in ASU
No. 2014-09. ASU No. 2016-08 provides criteria to be assessed by an entity when determining whether it is the principal or agent
in relation to the goods or services which the Company is contractually obligated to provide to the customer. Among these considerations
are: identifying the unit of account at which the entity should assess whether it is a principal or an agent; identifying the nature
of the good or service provided to the customer; applying the control principle to certain types of transactions; and, interaction
of the control principle with the indicators provided to assist in the principle versus agent evaluation. In April 2016, the FASB
issued ASU No. 2016-10, “Revenue from Contracts with Customers – (Topic 606): Identifying Performance Obligations and
Licensing” to provide implementation guidance related to the necessary judgements required in identifying performance obligations
of a contract and guidance related to recognition of licensing revenues. In May 2016, the FASB issued ASU No. 2016-12, “Revenue
from Contracts with Customers – (Topic 606): Narrow-Scope Improvements and Practical Expedients” to provide guidance
related to the implementation of ASU No. 2014-09 in the following areas; assessing collectability for contracts that do not meet
Step 1 of revenue recognition, presentation of sales taxes, noncash consideration, contract modifications at transition, and completed
contracts at transition.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">These standards are effective for
annual periods beginning after December 15, 2017, and interim periods therein, using either of the following transition
methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the
option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially
adopting ASU No. 2014-09 recognized at the date of adoption (which includes additional footnote disclosures).  Early
adoption is permitted for annual periods beginning after December 15, 2016 and interim periods therein. We evaluated the
impact of adopting of ASU No. 2014-09; this will not have a material impact on the Company’s financial statements aside
from increased disclosures. The Company used the modified retrospective method when adopting the standard beginning July
1, 2018.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In July 2015, the Financial Accounting Standards
Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-11, “Inventory (Topic 330): Simplifying
the Measurement of Inventory.”  ASU No. 2015-11 requires inventory measured using any method other than last-in, first
out or the retail inventory method to be subsequently measured at the lower of cost and net realizable value, rather than at the
lower of cost or market.  Net realizable value is defined as the estimated selling price, less the estimated costs to complete,
dispose, and transport such inventory.  ASU No. 2015-11 was effective for fiscal years and interim periods beginning after
December 15, 2016.  ASU No. 2015-11 was required to be applied prospectively and early adoption was permitted.  The Company
adopted ASU No. 2015-11 and it did not have a material impact on the Company’s financial position or results of operations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In November 2015, the FASB issued ASU No. 2015-17,
“Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes”. The guidance requires the classification
of deferred tax assets and liabilities as non-current in a classified balance sheet. The current requirement that deferred tax
assets and liabilities of a tax-paying component of an entity be offset and presented as a single amount is not affected by this
update. We adopted ASU 2015-17 during the first quarter of fiscal year 2018 on a prospective basis. Prior periods were not retrospectively
adjusted. Accordingly, for the twelve-month period ended June 30, 2018 we decreased current deferred tax assets by $310,650 netted
against noncurrent deferred tax liabilities of $328,343; resulting in a noncurrent deferred tax liability balance of $17,693. Adoption
of ASU No. 2015-17 for the prior period presented would have the following impact on the Company’s financial statements for
June 30, 2017; a decrease in current assets of $317,559, a decrease in non-current liabilities of $220,571 and an increase in non-current
assets of $96,988.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In January 2016, the FASB issued ASU No. 2016-01,
“Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”.
The amendments in this Update address certain aspects of recognition, measurement, presentation and disclosure of financial instruments
(primarily equity securities) in order to enhance the reporting model for financial instruments to provide users of financial statements
with more decision-useful information. ASU No. 2016-01 will be effective for annual periods beginning after December 15, 2017,
and interim periods within those annual periods. The Company will be adopting ASU No. 2016-01 and it will not have a material impact
on the Company's financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In March 2016, the FASB issued ASU No.
2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment
Accounting”. The areas for simplification in this update involve several aspects of the accounting for share-based
payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and
classification on the statement of cash flows. We adopted ASU 2016-09 during the first quarter of fiscal year 2018 on a
prospective basis. We have elected to follow an accounting policy to estimate the number of awards that are expected to vest
(consistent with ASU and prior GAAP). Adoption of ASU No. 2016-09 resulted in certain tax benefits of equity transactions
being shown in the tax provision rather than in equity. The adoption of the ASU did not have a material impact on the
Company’s financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In February 2018, the FASB issued ASU No.
2018-02, “Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from
Accumulated Other Comprehensive Income”. Under current accounting guidance, the income tax effects for changes in income
tax rates and certain other transactions are recognized in income from continuing operations resulting in income tax effects recognized
in Accumulated Other Comprehensive Income that do not reflect the current tax rate of the entity (“stranded tax effects”).
The new guidance allows the Company the option to reclassify these stranded tax effects to retained earnings that relate to the
change in the federal tax rate resulting from the passage of the Tax Cuts and Jobs Act (the “Tax Act”). This update
is effective for fiscal years beginning after December 15, 2018, including interim periods therein, and early adoption is permitted.
The Company is evaluating the impact that ASU No. 2018-02 will have on the Company's financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Impairment of Long-Lived Assets</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Long-lived assets, including property, plant,
and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an
asset may not be recoverable.  Recoverability of assets to be held and used is measured by a comparison of the carrying amount
of an asset to estimated undiscounted future cash flows expected to be generated by the asset.  If the carrying amount of
an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount
of the asset exceeds the fair value of the asset.  There were no impairments of long-lived assets in fiscal years 2018 and
2017.  Assets to be disposed of are separately presented in the balance sheet and reported at the lower of the carrying amount
or fair value less costs to sell, and no longer depreciated.  The assets and liabilities of a disposed group classified as
held for sale are presented separately in the appropriate asset and liability sections of the balance sheet, if applicable.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Concentrations of Risk</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The market for our defense electronics
products is largely dependent on the availability of new contracts from the United States and foreign governments to prime contractors
to which we provide components.  Any decline in expenditures by the United States or foreign governments may have an adverse
effect on our financial performance. </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Generally, U.S. Government contracts
are subject to procurement laws and regulations.  Some of the Company’s contracts are governed by the Federal Acquisition
Regulation (FAR), which lays out uniform policies and procedures for acquiring goods and services by the U.S. Government, and agency-specific
acquisition regulations that implement or supplement the FAR.  For example, the Department of Defense implements the FAR through
the Defense Federal Acquisition Regulation (DFAR).</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The FAR also contains guidelines and
regulations for managing a contract after award, including conditions under which contracts may be terminated, in whole or in part,
at the government’s convenience or for default.  If a contract is terminated for the convenience of the government,
a contractor is entitled to receive payments for its allowable costs and, in general, the proportionate share of fees or earnings
for the work done.  If a contract is terminated for default, the government generally pays for only the work it has accepted. 
These regulations also subject the Company to financial audits and other reviews by the government of its costs, performance, accounting
and general business practices relating to its contracts, which may result in adjustment of the Company’s contract-related
costs and fees.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Inventory Valuation and Cost Estimation</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Raw materials are valued at the lower of cost
(average cost) or net realizable value. Balances for slow-moving and obsolete inventory are reviewed on a regular basis by analyzing
estimated demand, inventory on hand, sales levels, market conditions, and other information and reduce inventory balances based
on this analysis.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Inventoried work relating to
contracts in process and work in process is valued at actual production cost, including factory overhead incurred to
date.  Contract costs include material, subcontract costs, labor, and an allocation of overhead costs. Work in
process represents spare units; parts and other inventory items acquired or produced to service units previously sold or to
meet anticipated future orders. Provision for losses on contracts is made when the existence of such losses becomes probable
and estimable.  The provision for losses on contracts is included in other accrued expenses on the Company’s
balance sheet.  The costs attributed to units delivered under contracts are based on the estimated average cost of all
units expected to be produced.  Certain contracts are expected to extend beyond twelve months.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The estimation of cost at
completion of a contract is subject to numerous variables involving contract costs and estimates as to the length of time to complete
the contract.  Given the significance of the estimation processes and judgments described above, it is possible that materially
different amounts of expected sales and contract costs could be recorded if different assumptions were used, based on changes in
circumstances, in the estimation process.  When a change in expected sales value or estimated cost is determined, changes
are reflected in current period earnings.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Note 7. Provision for Income Taxes</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Tax Cuts and Jobs Act (“Tax Act”)
was enacted on December 22, 2017. The legislation significantly changes U.S. tax law by, among other things, lowering the U.S.
federal corporate tax rate, bonus depreciation that allows for full expensing of qualified property, and limiting the deductibility
of interest expense and executive compensation. The Tax Act permanently reduces the U.S. corporate income tax rate to a flat 21%
rate, effective January 1, 2018. Pursuant to Section 15 of the Internal Revenue Code, the Company applied a blended corporate tax
rate of 28.1 percent for fiscal year 2018, which was based on the applicable tax rates before and after the Tax Reform Act and
the number of days in the year.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company re-measured certain U.S. deferred
tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%, and
provisionally recorded an increase to the provision for income taxes of $35,200 related to the re-measurement in the second quarter
of fiscal year 2018. However, as of June 30, 2018 the impact from the Tax Act related to the re-measurement of the company’s
deferred tax assets and liabilities was a $4,553 increase to the provision for income taxes. The year-end amount differed from
the provisional amount booked in the second quarter due to variances in timing adjustments from those forecasted, mainly the accelerated
expensing of property, plant and equipment placed in service in the third and fourth quarter.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">A summary of the components of the provision
for income taxes for the years ended June 30, 2018 and 2017 is as follows:</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">2018</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">2017</td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 78%; text-align: justify">     Current tax expense - federal </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">880,213</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">559,171</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">     Current tax (benefit) expense - state </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(2,009</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,986</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify; padding-bottom: 1pt">     Deferred tax expense (benefit)</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">115,075</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(46,488</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify; padding-bottom: 2.5pt">          Provision for income taxes</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">993,279</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">515,669</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0; text-align: justify">Deferred income taxes reflect the impact
of "temporary differences" between the amount of assets and liabilities for financial reporting purposes and such amounts
measured by tax laws and regulations. These "temporary differences" are determined in accordance with ASC 740-10.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The combined U.S. federal and state effective
income tax rates of 24.4% and 31.2%, for 2018 and 2017 respectively, differed from the statutory U.S. federal income tax rate for
the following reasons:</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">2018</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">2017</td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 78%; text-align: justify">     U.S. federal statutory income tax rate </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">28.1</td><td style="width: 1%; text-align: left">%</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">34.0</td><td style="width: 1%; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">     Increase (reduction) in rate resulting from:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">          State franchise tax, net of federal income tax benefit</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(0.1</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.1</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">          ESOP cost versus Fair Market Value</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1.1</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3.6</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">          Dividend on allocated ESOP shares</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(2.9</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(7.2</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">          Qualified production activities</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(2.1</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(2.8</td><td style="text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">          Stock-based compensation</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.1</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1.8</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify; padding-bottom: 1pt">          Other</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">0.2</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">1.7</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify; padding-bottom: 2.5pt">     Effective tax rate </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">24.4</td><td style="padding-bottom: 2.5pt; text-align: left">%</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">31.2</td><td style="padding-bottom: 2.5pt; text-align: left">%</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0; text-align: justify">For the years ended June 30, 2018 and 2017
deferred income tax expense (benefit) of $115,075 and ($46,488), respectively, results from the changes in temporary differences
for each year. The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities as of
June 30, 2018 and 2017 are presented as follows:</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">2018</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">2017</td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">     Deferred tax assets:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="width: 78%; text-align: justify">          Accrued expenses</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">203,150</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">195,915</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">          ESOP</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">32,875</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">73,696</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">          Stock-based compensation</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">51,140</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">81,659</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">          Inventory - effect of uniform capitalization</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">53,863</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">36,935</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">          Unrealized loss (gain) on investment securities</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,060</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">666</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify; padding-bottom: 1pt">          Other</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">1,437</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,384</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify; padding-bottom: 1pt">                    Total deferred tax assets </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">343,525</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">391,255</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">     Deferred tax liability:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">          Property, plant and equipment - principally due</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify; padding-bottom: 1pt">            to differences in depreciation methods</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">361,218</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">294,267</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify; padding-bottom: 1pt">                    Total deferred tax liability</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">361,218</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">294,267</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 78%; text-align: justify; padding-bottom: 2.5pt">     Net deferred tax (liability) asset</td><td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 8%; border-bottom: Black 2.5pt double; text-align: right">(17,693</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left">)</td><td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 8%; border-bottom: Black 2.5pt double; text-align: right">96,988</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">In assessing the realizability of deferred
tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be
realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities,
projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable
income and projection for future taxable income over the period in which the deferred tax assets are deductible, management believes
it is more likely than not that the Company will realize the benefits of these temporary differences without consideration of a
valuation allowance.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">As the result of the implementation of
the FASB interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes – An Interpretation of
FASB Statement No. 109, the Company recognized no material adjustments to unrecognized tax benefits. As of June 30, 2018 and 2017,
the Company has no unrecognized tax benefits.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The Company recognizes interest and penalties
in general and administrative expense. As of June 30, 2018 and 2017, the Company has not recorded any provision for accrued interest
and penalties.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">By federal and state tax statue, federal
and state tax returns are subject to audit for three years from date of filing, unless the return was audited within that period.
As such, federal returns for tax years ending June 30, 2018, 2017, 2016, and 2015 remain open to examination by the IRS. State
returns for tax years ending June 30, 2018, 2017, 2016 and 2015 remain open to examination by the State of New York.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0; text-align: justify">The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities as of
June 30, 2018 and 2017 are presented as follows:</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">2018</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">2017</td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">     Deferred tax assets:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="width: 78%; text-align: justify">          Accrued expenses</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">203,150</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">195,915</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">          ESOP</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">32,875</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">73,696</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">          Stock-based compensation</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">51,140</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">81,659</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">          Inventory - effect of uniform capitalization</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">53,863</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">36,935</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">          Unrealized loss (gain) on investment securities</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,060</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">666</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify; padding-bottom: 1pt">          Other</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">1,437</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,384</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify; padding-bottom: 1pt">                    Total deferred tax assets </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">343,525</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">391,255</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">     Deferred tax liability:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">          Property, plant and equipment - principally due</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify; padding-bottom: 1pt">            to differences in depreciation methods</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">361,218</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">294,267</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify; padding-bottom: 1pt">                    Total deferred tax liability</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">361,218</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">294,267</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 78%; text-align: justify; padding-bottom: 2.5pt">     Net deferred tax (liability) asset</td><td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 8%; border-bottom: Black 2.5pt double; text-align: right">(17,693</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left">)</td><td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 8%; border-bottom: Black 2.5pt double; text-align: right">96,988</td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-indent: 0in">Note 11. Stock-based Compensation</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The Company follows ASC 718 in establishing
standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services, as well
as transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the
entity’s equity instruments or that may be settled by the issuance of those equity instruments. ASC 718 requires that the
cost resulting from all share-based payment transactions be recognized in the financial statements based on the fair value of the
share-based payment. ASC 718 establishes fair value as the measurement objective in accounting for share-based payment transactions
with employees, except for equity instruments held by employee share ownership plans.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Total stock-based compensation expense
recognized in the statements of comprehensive income for the fiscal years ended June 30, 2018 and 2017, was $123,112 and $129,167,
respectively, before income taxes. The amount of this stock-based compensation expense related to non-qualified stock options
(“NQSO”) for the fiscal years ended June 30, 2018 and 2017, was $32,564 and $34,136, respectively. The total deferred
tax benefit related to the NQSO’s as of June 30, 2018 and 2017 was approximately $6,839 and $11,606, respectively. The remaining
stock option expense in each year related to incentive stock options (“ISO”) which are not deductible by the corporation
when exercised, assuming a qualifying disposition and as such no deferred tax benefit was established related to these amounts.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">As of June 30, 2018, there was approximately
$129,983 of unrecognized compensation cost related to stock option awards that is expected to be recognized as expense over the
next 2.0 years, of which $31,923 relates to NQSO’s and $98,060 relates to ISO’s. The total deferred tax benefit related
the NQSO’s in future years will be approximately $6,704.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The Company has one employee stock option plan
under which options or stock awards may be granted, the 2017 Stock Option and Restricted Stock Plan (the "2017 Plan"),
approved by the Company's shareholders at the Company's Annual Meeting on December 1, 2017. The Board of Directors may grant options
to acquire shares of common stock to employees and non-employee directors of the Company at the fair market value of the common
stock on the date of grant. The maximum aggregate number of shares of Common Stock subject to options or awards to non-employee
directors is 133,000 and the maximum aggregate number of shares of Common Stock subject to options or awards granted to non-employee
directors during any single fiscal year is the lesser of 13,300 and 33 1/3% of the total number of shares subject to options or
awards granted in such fiscal year. The maximum number of shares subject to options or awards granted to any individual employee
may not exceed 15,000 in a fiscal year. Generally, options granted have a two-year vesting period based on two years of continuous
service and have a ten-year contractual life. Option grants provide for accelerated vesting if there is a change in control. Shares
issued upon the exercise of options are from those held in Treasury. Options covering 400,000 shares are authorized for issuance
under the 2017 plan, of which 54,715 have been granted as of June 30, 2018. While no further grants of options may be made under
the Company’s 2007 Stock Option and Restricted Stock Plan, as of June 30, 2018, 171,949 options were outstanding under such
plan of which 135,249 are vested and exercisable.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">ASC 718 requires the use of a valuation
model to calculate the fair value of stock-based awards. The Company has elected to use the Black-Scholes option valuation model,
which incorporates various assumptions including those for volatility, expected life, and interest rates.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The table below outlines the weighted average
assumptions that the Company used to calculate the fair value of each option award for the year ended June 30, 2018 and 2017.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">2018</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">2017</td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 78%; text-align: justify; text-indent: 0in">Dividend yield</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">4.54</td><td style="width: 1%; text-align: left">%</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">3.85</td><td style="width: 1%; text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">Expected stock price volatility</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">24.07</td><td style="text-align: left">%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">29.70</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">Risk-free interest rate</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2.04</td><td style="text-align: left">%</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1.84</td><td style="text-align: left">%</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">Expected option life (in years)</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font-size: 10pt">4.8</font></td><td style="text-align: left"> yrs</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"><font style="font-size: 10pt">4.6</font> </td><td style="text-align: left"> yrs</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">Weighted average fair value per share</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">   of options granted during the period</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">2.95</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">4.64</td><td style="text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0; text-align: justify">The Company pays dividends quarterly
and paid cash dividends totaling $1.00 per share for the twelve months ended June 30, 2018 and 2017. Expected stock price volatility
is based on the historical volatility of the Company’s stock. The risk-free interest rate is based on the implied yield available
on U.S. Treasury issues with an equivalent term approximating the expected life of the options. The expected option life (in years)
represents the estimated period of time until exercise and is based on actual historical experience.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The following table summarizes stock
option activity during the twelve months ended June 30, 2018:</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td><td style="border-bottom: Black 1pt solid"> </td>
<td colspan="15" style="text-align: center; border-bottom: Black 1pt solid">Employee Stock Options Plan</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="3" style="text-align: center"> </td><td> </td>
<td colspan="3" style="text-align: center"> </td><td> </td>
<td colspan="3" style="text-align: center">Weighted</td><td> </td>
<td colspan="3" style="text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="3" style="text-align: center">Number of</td><td> </td>
<td colspan="3" style="text-align: center">Weighted</td><td> </td>
<td colspan="3" style="text-align: center">Average</td><td> </td>
<td colspan="3" style="text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="3" style="text-align: center">Shares</td><td> </td>
<td colspan="3" style="text-align: center">Average</td><td> </td>
<td colspan="3" style="text-align: center">Remaining</td><td> </td>
<td colspan="3" style="text-align: center">Aggregate</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td> </td>
<td colspan="3" style="text-align: center">Subject</td><td> </td>
<td colspan="3" style="text-align: center">Exercise</td><td> </td>
<td colspan="3" style="text-align: center">Contractual</td><td> </td>
<td colspan="3" style="text-align: center">Intrinsic</td></tr>
<tr style="vertical-align: bottom">
<td> </td><td style="border-bottom: Black 1pt solid"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">to Option</td><td style="border-bottom: Black 1pt solid"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Price</td><td style="border-bottom: Black 1pt solid"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Term</td><td style="border-bottom: Black 1pt solid"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Value</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 56%">Balance at July 1, 2017</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">197,800</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">24.57</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">5.86</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td>Granted</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">54,715</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">22.14</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">9.32</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Exercised</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">(20,601</td><td style="text-align: left">)</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">21.32</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Forfeited or expired</td><td style="border-bottom: Black 1pt solid"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(9,060</td><td style="border-bottom: Black 1pt solid; text-align: left">)</td><td style="border-bottom: Black 1pt solid"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left">$</td><td style="border-bottom: Black 1pt solid; text-align: right">24.25</td><td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—</td><td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid"> </td>
<td style="padding-bottom: 1pt; text-align: left; border-bottom: Black 1pt solid"> </td><td style="padding-bottom: 1pt; text-align: right; border-bottom: Black 1pt solid"> </td><td style="border-bottom: Black 1pt solid; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Outstanding at June 30, 2018</td><td style="border-bottom: Black 2.5pt double"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">222,854</td><td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">24.29</td><td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">6.26</td><td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">581,319</td><td style="border-bottom: Black 2.5pt double; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left">Vested or expected to vest at June 30, 2018</td><td style="border-bottom: Black 2.5pt double"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">209,754</td><td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">24.31</td><td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">6.09</td><td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">541,996</td><td style="border-bottom: Black 2.5pt double; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td>Exercisable at June 30, 2018</td><td style="border-bottom: Black 2.5pt double"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">135,249</td><td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">24.56</td><td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">4.52</td><td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">316,848</td><td style="border-bottom: Black 2.5pt double; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0; text-align: justify">The aggregate intrinsic value in the
table above represents the total pretax intrinsic value (the difference between the closing sale price of the Company’s common
stock as reported on the NYSE American on June 30, 2018 and the exercise price, multiplied by the number of in-the-money options)
that would have been received by the option holders if all option holders had exercised their options on June 30, 2018. This amount
changes based on the fair market value of the Company’s common stock. The total intrinsic values of the options exercised
during the twelve months ended June 30, 2018 and 2017 was $26,691 and $20,769, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt">The following table summarizes changes in non-vested stock
options during the twelve months ended June 30, 2018:</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="white-space: nowrap"> </td><td style="white-space: nowrap"> </td>
<td colspan="2" style="text-align: center; white-space: nowrap">Weighted</td><td style="white-space: nowrap"> </td><td style="white-space: nowrap"> </td>
<td colspan="2" style="text-align: center; white-space: nowrap"> </td><td style="white-space: nowrap"> </td></tr>
<tr style="vertical-align: bottom">
<td style="white-space: nowrap"> </td><td style="white-space: nowrap"> </td>
<td colspan="2" style="text-align: center; white-space: nowrap">Number of</td><td style="white-space: nowrap"> </td><td style="white-space: nowrap"> </td>
<td colspan="2" style="text-align: center; white-space: nowrap">Average</td><td style="white-space: nowrap"> </td></tr>
<tr style="vertical-align: bottom">
<td style="white-space: nowrap"> </td><td style="white-space: nowrap"> </td>
<td colspan="2" style="text-align: center; white-space: nowrap">Shares</td><td style="white-space: nowrap"> </td><td style="white-space: nowrap"> </td>
<td colspan="2" style="text-align: center; white-space: nowrap">Grant Date</td><td style="white-space: nowrap"> </td></tr>
<tr style="vertical-align: bottom">
<td style="white-space: nowrap"> </td><td style="white-space: nowrap"> </td>
<td colspan="2" style="text-align: center; white-space: nowrap">Subject</td><td style="white-space: nowrap"> </td><td style="white-space: nowrap"> </td>
<td colspan="2" style="text-align: center; white-space: nowrap">Fair Value</td><td style="white-space: nowrap"> </td></tr>
<tr style="vertical-align: bottom">
<td style="white-space: nowrap"> </td><td style="padding-bottom: 1pt; white-space: nowrap"> </td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid; white-space: nowrap">to Option</td><td style="padding-bottom: 1pt; white-space: nowrap"> </td><td style="padding-bottom: 1pt; white-space: nowrap"> </td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid; white-space: nowrap">(per Option)</td><td style="padding-bottom: 1pt; white-space: nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 78%; white-space: nowrap">Non-Vested at July 1, 2017</td><td style="width: 1%; white-space: nowrap"> </td>
<td style="width: 1%; text-align: left; white-space: nowrap"> </td><td style="width: 8%; text-align: right; white-space: nowrap">42,900</td><td style="width: 1%; text-align: left; white-space: nowrap"> </td><td style="width: 1%; white-space: nowrap"> </td>
<td style="width: 1%; text-align: left; white-space: nowrap">$</td><td style="width: 8%; text-align: right; white-space: nowrap">4.59</td><td style="width: 1%; text-align: left; white-space: nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="white-space: nowrap">Granted</td><td style="white-space: nowrap"> </td>
<td style="text-align: left; white-space: nowrap"> </td><td style="text-align: right; white-space: nowrap">54,715</td><td style="text-align: left; white-space: nowrap"> </td><td style="white-space: nowrap"> </td>
<td style="text-align: left; white-space: nowrap"> </td><td style="text-align: right; white-space: nowrap">2.92</td><td style="text-align: left; white-space: nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="white-space: nowrap">Vested</td><td style="white-space: nowrap"> </td>
<td style="text-align: left; white-space: nowrap"> </td><td style="text-align: right; white-space: nowrap">(3,000</td><td style="text-align: left; white-space: nowrap">)</td><td style="white-space: nowrap"> </td>
<td style="text-align: left; white-space: nowrap"> </td><td style="text-align: right; white-space: nowrap">3.87</td><td style="text-align: left; white-space: nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt; white-space: nowrap">Forfeited or expired</td><td style="padding-bottom: 1pt; white-space: nowrap"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left; white-space: nowrap"> </td><td style="border-bottom: Black 1pt solid; text-align: right; white-space: nowrap">(7,010</td><td style="padding-bottom: 1pt; text-align: left; white-space: nowrap">)</td><td style="padding-bottom: 1pt; white-space: nowrap"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left; white-space: nowrap"> </td><td style="border-bottom: Black 1pt solid; text-align: right; white-space: nowrap">3.64</td><td style="padding-bottom: 1pt; text-align: left; white-space: nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; white-space: nowrap">Non-Vested at June 30, 2018</td><td style="padding-bottom: 2.5pt; white-space: nowrap"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left; white-space: nowrap"> </td><td style="border-bottom: Black 2.5pt double; text-align: right; white-space: nowrap">87,605</td><td style="padding-bottom: 2.5pt; text-align: left; white-space: nowrap"> </td><td style="padding-bottom: 2.5pt; white-space: nowrap"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left; white-space: nowrap">$</td><td style="border-bottom: Black 2.5pt double; text-align: right; white-space: nowrap">3.65</td><td style="padding-bottom: 2.5pt; text-align: left; white-space: nowrap"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt 0.75in; text-align: justify; text-indent: -0.75in">Note 17.
Quarterly Financial Information (Unaudited)</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td><td> </td>
<td colspan="2" style="text-align: right">First</td><td> </td><td> </td>
<td colspan="2" style="text-align: right">Second</td><td> </td><td> </td>
<td colspan="2" style="text-align: right">Third</td><td> </td><td> </td>
<td colspan="2" style="text-align: right">Fourth</td><td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify">     <b>2018</b>   </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">Quarter</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">Quarter</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">Quarter</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">Quarter</td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 56%; text-align: justify">     Net sales</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">7,496,423</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">11,531,105</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">5,663,161</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">7,827,194</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">               Gross profit</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,461,154</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,075,598</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,255,204</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,870,296</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">               Net income</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">442,764</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,614,871</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">317,764</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">700,398</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">     Net income per share -</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">          Basic</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.19</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.69</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.14</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.30</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">          Diluted</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.19</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.69</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.14</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.29</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">     <b>2017</b></td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">     Net sales</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">6,068,684</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">5,667,624</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">5,324,104</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">5,460,600</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">               Gross profit</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,343,748</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,080,145</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,128,505</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,162,170</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">               Net income</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">420,825</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">244,079</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">279,173</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">191,659</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">     Net income per share -</td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="width: 56%; text-align: justify">          Basic</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">0.18</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">0.11</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">0.12</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">0.08</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">          Diluted</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.18</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.11</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.12</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.08</td><td style="text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify; text-indent: -0.75in"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td><td> </td>
<td colspan="2" style="text-align: right">First</td><td> </td><td> </td>
<td colspan="2" style="text-align: right">Second</td><td> </td><td> </td>
<td colspan="2" style="text-align: right">Third</td><td> </td><td> </td>
<td colspan="2" style="text-align: right">Fourth</td><td> </td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: justify">     <b>2018</b>   </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">Quarter</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">Quarter</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">Quarter</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">Quarter</td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 56%; text-align: justify">     Net sales</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">7,496,423</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">11,531,105</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">5,663,161</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">7,827,194</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">               Gross profit</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,461,154</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">3,075,598</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,255,204</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,870,296</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">               Net income</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">442,764</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,614,871</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">317,764</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">700,398</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">     Net income per share -</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">          Basic</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.19</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.69</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.14</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.30</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">          Diluted</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.19</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.69</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.14</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.29</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">     <b>2017</b></td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">     Net sales</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">6,068,684</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">5,667,624</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">5,324,104</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">5,460,600</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">               Gross profit</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,343,748</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,080,145</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,128,505</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">1,162,170</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify">               Net income</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">420,825</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">244,079</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">279,173</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">191,659</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">     Net income per share -</td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: right"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="width: 56%; text-align: justify">          Basic</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">0.18</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">0.11</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">0.12</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">0.08</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify">          Diluted</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.18</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.11</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.12</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">0.08</td><td style="text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
13300
15000
0.3333
400000
133000
P2Y
P10Y
54715
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt 0.75in; text-align: justify; text-indent: -0.75in">Note 10.
Employee Stock Ownership Plan</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">The Company sponsors a
leveraged employee stock ownership plan (the "ESOP") that covers all nonunion employees who work 1,000 or more
hours per year and are employed on June 30. The Company makes annual contributions to the ESOP equal to the ESOP's debt
service less dividends on unallocated shares received by the ESOP. All dividends on unallocated shares received by the ESOP
are used to pay debt service. Dividends on allocated ESOP shares are recorded as a reduction of retained earnings. As the
debt is repaid, shares are released and allocated to active employees, based on the proportion of debt service paid in the
year. The Company accounts for its ESOP in accordance with FASB ASC 718-40. Accordingly, the shares purchased by the ESOP are
reported as Unearned ESOP Shares in the statement of financial position. As shares are released or committed-to-be-released,
the Company reports compensation expense equal to the current average market price of the shares, and the shares become
outstanding for earnings-per-share (EPS) computations. ESOP compensation expense was $387,882 and $417,419 for the years
ended June 30, 2018 and 2017, respectively. The ESOP shares as of June 30, 2018 and 2017 were as follows:</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">2018</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid">2017</td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 78%; text-align: justify; text-indent: 0in">Allocated shares</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">459,032</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">456,099</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: justify; padding-bottom: 1pt">Unreleased shares</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">29,166</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">45,000</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: justify; padding-bottom: 2.5pt">Total shares held by the ESOP</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">488,198</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">501,099</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt">     Fair value of unreleased shares</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">782,524</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">1,008,900</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0 12pt; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The Company may at times be
required to repurchase shares at the ESOP participants’ request at the fair market value. During the twelve months
ended June 30, 2018, the Company repurchased 4,798 shares previously held in the ESOP for $109,694. During the twelve months
ended June 30, 2017 the Company repurchased 1,663 shares previously held by the ESOP for $44,335.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The ESOP allows for eligible participants
to take whole share distributions from the plan on specific dates in accordance with the provision of the plan. Share distributions
from the ESOP during the twelve months ended June 30, 2018 and 2017 totaled 8,103 shares and 0 shares, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Note 15. Stockholders' Equity</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">Reservation of Shares</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The Company has reserved common shares
for future issuance as follows as of June 30, 2018:</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 89%; text-align: left">Stock options outstanding</td><td style="width: 1%"> </td>
<td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right">222,854</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt">Stock options available for issuance</td><td style="padding-bottom: 1pt"> </td>
<td style="text-align: right; border-bottom: Black 1pt solid"> </td><td style="text-align: right; border-bottom: Black 1pt solid">349,095</td><td style="text-align: left; padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt">Number of common shares reserved</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">571,949</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The following table sets forth the reconciliation
of the numerators and denominators of the basic and diluted earnings per share computations for continuing operations for the
years ended June 30:</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid; vertical-align: bottom">2018</td><td style="padding-bottom: 1pt; text-align: right; vertical-align: bottom"> </td><td style="padding-bottom: 1pt; text-align: right; vertical-align: bottom"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid; vertical-align: bottom">2017</td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom">
<td>Numerator:</td><td> </td>
<td colspan="2" style="text-align: center"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: center"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 78%; text-align: left; padding-bottom: 2.5pt">Net income</td><td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 8%; border-bottom: Black 2.5pt double; text-align: right">3,075,797</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td><td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 8%; border-bottom: Black 2.5pt double; text-align: right">1,135,736</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
<td style="font: 10pt Times New Roman, Times, Serif">     Denominator:</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif">
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif">     Basic EPS:</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif">
<td style="width: 78%; text-align: left; font: 10pt Times New Roman, Times, Serif">          Common shares outstanding, beginning of period</td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="width: 8%; text-align: right; font: 10pt Times New Roman, Times, Serif">2,371,321</td><td style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="width: 8%; text-align: right; font: 10pt Times New Roman, Times, Serif">2,364,684</td><td style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif">
<td style="font: 10pt Times New Roman, Times, Serif">          Unearned ESOP shares</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">(45,000</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">(61,667</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif">)</td></tr>
<tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif">
<td style="font: 10pt Times New Roman, Times, Serif">          Weighted average common shares issued during the period</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">4,685</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">4,465</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif">
<td style="font: 10pt Times New Roman, Times, Serif">          Weighted average common shares purchased during the period</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">(3,075</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">(879</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif">)</td></tr>
<tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif">
<td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif">          Weighted average ESOP shares earned during the period</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">5,954</td><td style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">6,267</td><td style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif">
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif">          Denominator for basic earnings per common shares –</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif">
<td style="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif">               Weighted average common shares</td><td style="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">2,333,885</td><td style="padding-bottom: 2.5pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">2,312,870</td><td style="padding-bottom: 2.5pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif">
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif">     Diluted EPS:</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif">
<td style="font: 10pt Times New Roman, Times, Serif">          Common shares outstanding, beginning of period</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">2,371,321</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">2,364,684</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif">
<td style="font: 10pt Times New Roman, Times, Serif">          Unearned ESOP shares</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">(45,000</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">(61,667</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif">)</td></tr>
<tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif">
<td style="font: 10pt Times New Roman, Times, Serif">          Weighted average common shares issued during the period</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">4,685</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">4,465</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif">
<td style="font: 10pt Times New Roman, Times, Serif">          Weighted average common shares purchased during the period</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">(3,075</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">(879</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif">)</td></tr>
<tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif">
<td style="font: 10pt Times New Roman, Times, Serif">          Weighted average ESOP shares earned during the period</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">5,954</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">6,267</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif">
<td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif">          Weighted average dilutive effect of stock options</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">14,422</td><td style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">11,968</td><td style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif">
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif">          Denominator for diluted earnings per common shares –</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif">
<td style="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif">               Weighted average common shares</td><td style="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">2,348,307</td><td style="padding-bottom: 2.5pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">2,324,838</td><td style="padding-bottom: 2.5pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 6pt 0; text-align: justify">Not included in this computation of earnings
per share for the year ended June 30, 2018 and 2017 were options to purchase 2,500 and 151,800 shares, respectively, of the Company’s
common stock. These options were excluded because their inclusion would have been anti-dilutive due to the average strike price
exceeding the average market price of those shares.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify">The Company paid cash dividends on
common stock of $1.00 per share for the fiscal year ended June 30, 2018 and 2017. Subsequent to June 30, 2018, the Board of
Directors has authorized the payment of a fiscal year 2019 first quarter regular dividend of $0.25, and a special dividend of
$1.00, payable October 1, 2018 to shareholders of record on September 24, 2018. Our Board of Directors assesses
the Company’s dividend policy periodically. There is no assurance that the Board of Directors will either maintain the
amount of the regular cash dividend or declare a special dividend during any future years.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0 0 6pt; text-align: justify">The following table sets forth the reconciliation
of the numerators and denominators of the basic and diluted earnings per share computations for continuing operations for the
years ended June 30:</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid; vertical-align: bottom">2018</td><td style="padding-bottom: 1pt; text-align: right; vertical-align: bottom"> </td><td style="padding-bottom: 1pt; text-align: right; vertical-align: bottom"> </td>
<td colspan="2" style="text-align: right; border-bottom: Black 1pt solid; vertical-align: bottom">2017</td><td style="padding-bottom: 1pt"> </td></tr>
<tr style="vertical-align: bottom">
<td>Numerator:</td><td> </td>
<td colspan="2" style="text-align: center"> </td><td> </td><td> </td>
<td colspan="2" style="text-align: center"> </td><td> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 78%; text-align: left; padding-bottom: 2.5pt">Net income</td><td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 8%; border-bottom: Black 2.5pt double; text-align: right">3,075,797</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td><td style="width: 1%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 8%; border-bottom: Black 2.5pt double; text-align: right">1,135,736</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif">
<td style="font: 10pt Times New Roman, Times, Serif">     Denominator:</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif">
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif">     Basic EPS:</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: right"> </td><td style="font: 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif">
<td style="width: 78%; text-align: left; font: 10pt Times New Roman, Times, Serif">          Common shares outstanding, beginning of period</td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="width: 8%; text-align: right; font: 10pt Times New Roman, Times, Serif">2,371,321</td><td style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="width: 1%; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="width: 8%; text-align: right; font: 10pt Times New Roman, Times, Serif">2,364,684</td><td style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif">
<td style="font: 10pt Times New Roman, Times, Serif">          Unearned ESOP shares</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">(45,000</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">(61,667</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif">)</td></tr>
<tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif">
<td style="font: 10pt Times New Roman, Times, Serif">          Weighted average common shares issued during the period</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">4,685</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">4,465</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif">
<td style="font: 10pt Times New Roman, Times, Serif">          Weighted average common shares purchased during the period</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">(3,075</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">(879</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif">)</td></tr>
<tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif">
<td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif">          Weighted average ESOP shares earned during the period</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">5,954</td><td style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">6,267</td><td style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif">
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif">          Denominator for basic earnings per common shares –</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif">
<td style="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif">               Weighted average common shares</td><td style="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">2,333,885</td><td style="padding-bottom: 2.5pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">2,312,870</td><td style="padding-bottom: 2.5pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif">
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif">     Diluted EPS:</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif">
<td style="font: 10pt Times New Roman, Times, Serif">          Common shares outstanding, beginning of period</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">2,371,321</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">2,364,684</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif">
<td style="font: 10pt Times New Roman, Times, Serif">          Unearned ESOP shares</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">(45,000</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">(61,667</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif">)</td></tr>
<tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif">
<td style="font: 10pt Times New Roman, Times, Serif">          Weighted average common shares issued during the period</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">4,685</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">4,465</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif">
<td style="font: 10pt Times New Roman, Times, Serif">          Weighted average common shares purchased during the period</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">(3,075</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">(879</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif">)</td></tr>
<tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif">
<td style="font: 10pt Times New Roman, Times, Serif">          Weighted average ESOP shares earned during the period</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">5,954</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">6,267</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif">
<td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif">          Weighted average dilutive effect of stock options</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">14,422</td><td style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">11,968</td><td style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif">
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif">          Denominator for diluted earnings per common shares –</td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td>
<td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif">
<td style="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif">               Weighted average common shares</td><td style="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">2,348,307</td><td style="padding-bottom: 2.5pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="padding-bottom: 2.5pt; font: 10pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font: 10pt Times New Roman, Times, Serif; text-align: right">2,324,838</td><td style="padding-bottom: 2.5pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr></table>