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ESP Espey Manufacturing & Electronics

Document and Entity Information

Document and Entity Information - shares6 Months Ended
Dec. 31, 2020Feb. 12, 2021
Document And Entity Information [Abstract]
Entity Registrant NameESPEY MFG & ELECTRONICS CORP
Entity Central Index Key0000033533
Document Type10-Q
Document Period End DateDec. 31,
2020
Amendment Flagfalse
Current Fiscal Year End Date--06-30
Entity Filer CategoryNon-accelerated Filer
Entity Small Businesstrue
Entity Emerging Growth Companyfalse
Document Fiscal Period FocusQ2
Document Fiscal Year Focus2021
Entity Common Stock, Shares Outstanding2,702,633
Entity Current Reporting StatusYes
Entity Interactive Data CurrentYes
Entity File Number1-4383
Entity Incorportion, State or Country CodeNY
Entity Shell Companyfalse

Balance Sheets

Balance Sheets - USD ($)Dec. 31, 2020Jun. 30, 2020
ASSETS:
Cash and cash equivalents $ 9,040,393 $ 5,402,122
Investment securities3,203,113 5,141,520
Trade accounts receivable, net of allowance of $3,0004,207,602 9,013,405
Income tax receivable86,274
ESOP receivable due to dividends on unallocated shares18,726
Inventories:
Raw materials2,076,391 2,057,778
Work-in-process362,494 614,521
Costs related to contracts in process14,055,905 12,115,756
Total inventories16,494,790 14,788,055
Prepaid expenses and other current assets506,501 396,886
Total current assets33,557,399 34,741,988
Property, plant and equipment, net3,224,610 3,466,778
Total assets36,782,009 38,208,766
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable3,253,983 2,861,696
Accrued expenses:
Salaries and wages344,141 469,201
Vacation666,160 689,834
Other90,186 318,322
Payroll and other taxes withheld463,285 186,970
Contract liabilities1,650,288 2,175,235
Income taxes payable 47,707
Total current liabilities6,468,043 6,748,965
Deferred tax liabilities197,705 232,953
Total liabilities6,665,748 6,981,918
Commitments and contingencies (see Note 5)
Common stock, par value $.33-1/3 per share Authorized 10,000,000 shares; Issued 3,129,874 and 3,029,874 shares as of December 31, 2020 and June 30, 2020, respectively. Outstanding 2,702,633 and 2,402,633 as of December 31, 2020 And June 30, 2020, respectively (includes 297,061 and 0 Unearned ESOP shares, respectively)1,043,291 1,009,958
Capital in excess of par value22,995,640 19,073,213
Accumulated other comprehensive loss(2,069)(3,107)
Retained earnings17,605,090 18,797,589
Total stockholders equity before ESOP41,641,952 38,877,653
Less: Unearned ESOP shares(5,487,000)
Less: Cost of 427,241 and 627,241 shares of common stock in treasury as of December 31, 2020 and June 30, 2020, respectively(6,038,691)(7,650,805)
Total stockholders' equity30,116,261 31,226,848
Total liabilities and stockholders' equity $ 36,782,009 $ 38,208,766

Balance Sheets (Parenthetical)

Balance Sheets (Parenthetical) - USD ($)Dec. 31, 2020Jun. 30, 2020
Statement of Financial Position [Abstract]
Trade accounts receivable, allowance $ 3,000 $ 3,000
Common stock, par value $ 0.3333 $ 0.3333
Common stock, shares authorized10,000,000 10,000,000
Common stock, shares issued3,129,874 3,029,874
Common stock, shares outstanding2,702,633 2,402,633
Unearned ESOP, shares297,061 0
Treasury stock, shares427,241 627,241

Statements of Comprehensive Inc

Statements of Comprehensive Income (Loss) (Unaudited) - USD ($)3 Months Ended6 Months Ended
Dec. 31, 2020Dec. 31, 2019Dec. 31, 2020Dec. 31, 2019
Income Statement [Abstract]
Net sales $ 6,962,065 $ 7,286,674 $ 14,227,580 $ 13,210,493
Cost of sales6,248,604 5,806,526 12,386,745 10,593,997
Gross profit713,461 1,480,148 1,840,835 2,616,496
Selling, general and administrative expenses945,478 1,249,742 1,860,104 2,333,954
Operating (loss) income(232,017)230,406 (19,269)282,542
Other income
Interest income1,753 33,915 16,970 66,076
Other13,734 4,849 16,861 20,177
Total other income15,487 38,764 33,831 86,253
(Loss) income before provision for income taxes(216,530)269,170 14,562 368,795
(Benefit) provision for income taxes(35,524)40,206 5,745 58,055
Net (loss) income(181,006)228,964 8,817 310,740
Other comprehensive (loss) income, net of tax:
Unrealized gain (loss) on investment securities2,712 (355)1,038 (158)
Total comprehensive (loss) income $ (178,294) $ 228,609 $ 9,855 $ 310,582
Net (loss) income per share:
Basic $ (0.08) $ 0.10 $ 0 $ 0.13
Diluted $ (0.08) $ 0.10 $ 0 $ 0.13
Weighted average number of shares outstanding:
Basic2,402,665 2,391,643 2,402,649 2,389,526
Diluted2,402,665 2,395,020 2,404,043 2,395,638
Dividends per share: $ 0.25 $ 0.25 $ 0.50 $ 0.50

Statements of Changes in Stockh

Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)Common Stock [Member]Capital in Excess of Par Value [Member]Accumulated Other Comprehensive (Loss) Income [Member]Retained Earnings [Member]Treasury Stock [Member]Unearned ESOP Shares [Member]Total
Balance, beginning at Jun. 30, 2019 $ 1,009,958 $ 18,731,975 $ (1,299) $ 20,022,132 $ (7,632,556) $ (204,706) $ 31,925,504
Balance, beginning, shares at Jun. 30, 20192,401,213 628,661
Comprehensive income (loss):
Net income (loss)310,740 310,740
Other comprehensive income (loss), net of tax(158)(158)
Total comprehensive income (loss)310,582
Stock options exercised33,780 $ 16,500 50,280
Stock options exercised, shares2,000 (2,000)
Stock-based compensation92,447 92,447
Dividends paid on common stock per share(1,193,977)(1,193,977)
Purchase of treasury stock $ (47,949)(47,949)
Purchase of treasury stock, shares(2,180)2,180
Balance, ending at Dec. 31, 2019 $ 1,009,958 18,858,202 (1,457)19,138,895 $ (7,664,005)(204,706)31,136,887
Balance, ending, common shares at Dec. 31, 20192,401,033 628,841
Balance, beginning at Sep. 30, 2019 $ 1,009,958 18,812,931 (1,102)19,506,648 $ (7,624,347)(204,706)31,499,382
Balance, beginning, shares at Sep. 30, 20192,402,880 626,994
Comprehensive income (loss):
Net income (loss)228,964 228,964
Other comprehensive income (loss), net of tax(355)(355)
Total comprehensive income (loss)228,609
Stock-based compensation45,271 45,271
Dividends paid on common stock per share(596,717)(596,717)
Purchase of treasury stock $ (39,658)(39,658)
Purchase of treasury stock, shares(1,847)1,847
Balance, ending at Dec. 31, 2019 $ 1,009,958 18,858,202 (1,457)19,138,895 $ (7,664,005)(204,706)31,136,887
Balance, ending, common shares at Dec. 31, 20192,401,033 628,841
Balance, beginning at Jun. 30, 2020 $ 1,009,958 19,073,213 (3,107)18,797,589 $ (7,650,805) $ 31,226,848
Balance, beginning, shares at Jun. 30, 20202,402,633 627,241 2,402,633
Comprehensive income (loss):
Net income (loss)8,817 $ 8,817
Other comprehensive income (loss), net of tax1,038 1,038
Total comprehensive income (loss) $ 9,855
Stock options exercised, shares
Stock-based compensation80,874 $ 80,874
Dividends paid on common stock per share(1,201,316)(1,201,316)
Sale of stock to ESOP $ 33,333 3,841,553 $ 1,612,114 (5,487,000)
Sale of stock to ESOP, shares300,000 (200,000)
Balance, ending at Dec. 31, 2020 $ 1,043,291 22,995,640 (2,069)17,605,090 $ (6,038,691)(5,487,000) $ 30,116,261
Balance, ending, common shares at Dec. 31, 20202,702,633 427,241 2,702,633
Balance, beginning at Sep. 30, 2020 $ 1,009,958 19,120,380 (4,781)18,386,755 $ (7,650,805) $ 30,861,507
Balance, beginning, shares at Sep. 30, 20202,402,633 627,241
Comprehensive income (loss):
Net income (loss)(181,006)(181,006)
Other comprehensive income (loss), net of tax2,712 2,712
Total comprehensive income (loss)(178,294)
Stock-based compensation33,707 33,707
Dividends paid on common stock per share(600,659)(600,659)
Sale of stock to ESOP $ 33,333 3,841,553 $ 1,612,114 (5,487,000)
Sale of stock to ESOP, shares300,000 (200,000)
Balance, ending at Dec. 31, 2020 $ 1,043,291 $ 22,995,640 $ (2,069) $ 17,605,090 $ (6,038,691) $ (5,487,000) $ 30,116,261
Balance, ending, common shares at Dec. 31, 20202,702,633 427,241 2,702,633

Statements of Changes in Stoc_2

Statements of Changes in Stockholders' Equity (Unaudited) (Parenthetical) - USD ($)3 Months Ended6 Months Ended
Dec. 31, 2020Dec. 31, 2019Dec. 31, 2020Dec. 31, 2019
Statement of Stockholders' Equity [Abstract]
Other comprehensive income (loss), tax portion $ 721 $ (94) $ 276 $ (42)
Dividends paid per share $ 0.25 $ 0.25 $ 0.50 $ 0.50

Statements of Cash Flows (Unaud

Statements of Cash Flows (Unaudited) - USD ($)6 Months Ended
Dec. 31, 2020Dec. 31, 2019
Cash Flows from Operating Activities:
Net income $ 8,817 $ 310,740
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation80,874 92,447
Depreciation271,341 286,549
ESOP compensation expense56,274 165,820
Deferred income tax benefit(35,524)(18,561)
Changes in assets and liabilities:
Decrease in trade accounts receivable4,805,803 6,574,172
Increase in income taxes receivable(86,274)(43,903)
Increase in ESOP receivable due to dividends on unallocated shares(18,726)
Increase in inventories(1,706,735)(2,363,114)
Increase in prepaid expenses and other current assets(109,615)(512,667)
Increase (decrease) increase in accounts payable392,287 (246,984)
(Decrease) increase in accrued salaries and wages(125,060)54,249
Decrease in vacation accrual(23,674)(72,161)
Decrease in ESOP payable(56,274)(7,084)
(Decrease) increase in other accrued expenses(228,136)76,001
Increase (decrease) in payroll and other taxes withheld276,315 (60,941)
(Decrease) increase in contract liabilities(524,947)1,797,286
Decrease in income taxes payable(47,707)(30,481)
Net cash provided by operating activities2,929,039 6,001,368
Cash Flows from Investing Activities:
Additions to property, plant and equipment(29,173)(177,826)
Purchase of investment securities(2,391,686)(6,063,558)
Proceeds from sale/maturity of investment securities4,331,407 6,079,747
Net cash provided by (used in) investing activities1,910,548 (161,637)
Cash Flows from Financing Activities:
Dividends on common stock(1,201,316)(1,193,977)
Purchase of treasury stock (47,949)
Proceeds from exercise of stock options 50,280
Net cash used in financing activities(1,201,316)(1,191,646)
Increase in cash and cash equivalents3,638,271 4,648,085
Cash and cash equivalents, beginning of period5,402,122 1,462,761
Cash and cash equivalents, end of period9,040,393 6,110,846
Supplemental Schedule of Cash Flow Information:
Income taxes paid $ 175,250 $ 151,000

Basis of Presentation

Basis of Presentation6 Months Ended
Dec. 31, 2020
Basis of Presentation [Abstract]
Basis of PresentationNote 1. Basis of Presentation In the opinion of management the
accompanying unaudited financial statements contain all adjustments (consisting of normal recurring adjustments) necessary
for a fair presentation of the results for such periods. The results for any interim period are not necessarily indicative of
the results to be expected for the full fiscal year. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with United States generally accepted accounting principles have been condensed
or omitted. The preparation of these financial statements requires us to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses, and related disclosure of assets and liabilities. On an
ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition, inventories, income
taxes, and stock-based compensation. Specific to inventories, including work-in-process and contracts in process, management
evaluates, quarterly, those estimates used in determining the cost to complete for each contract on Espey Mfg. &
Electronics Corp. (the Company's) sales backlog. During the quarter ended December 31, 2020 the Company, related to the
pandemic, received notice from a customer to cancel an in-process contract. The Company recorded a write-off of inventory to
cost of sales to the net realizable value of the inventory based on the terms of the contract. The change in estimates may
affect the reported amount of inventories and gross profit in the current or a future period. Management bases its estimates
on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results
of which form the basis for making judgments about the carrying amounts of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. These
financial statements should be read in conjunction with the Company's most recent audited financial statements included in
its report on Form 10-K for the year ended June 30, 2020. Certain reclassifications may have been made to the prior year
financial statements to conform to the current year presentation.

Investment Securities

Investment Securities6 Months Ended
Dec. 31, 2020
Investments, Debt and Equity Securities [Abstract]
Investment SecuritiesNote 2. Investment Securities Accounting Standards Codification (“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:
§ 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.
§ 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.
§ 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. The carrying amounts of financial instruments,
including cash and cash equivalents, short term investment securities, accounts receivable, accounts payable and accrued expenses,
approximated fair value as of December 31, 2020 and June 30, 2020 because of the immediate or short-term maturity of these financial
instruments. Investment securities at December 31,
2020 and June 30, 2020 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 December 31, 2020 and June 30, 2020 are as follows:
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
December 31, 2020
Certificates of deposit $ 3,132,000 $ — $ — $ 3,132,000
Municipal bonds 70,744 369 — 71,113
Total investment securities $ 3,202,744 $ 369 $ — $ 3,203,113
June 30, 2020
Certificates of deposit $ 4,679,847 $ — $ — $ 4,679,847
Municipal bonds 462,618 1,243 (2,188 ) 461,673
Total investment securities $ 5,142,465 $ 1,243 $ (2,188 ) $ 5,141,520 The portfolio is diversified and highly
liquid. At December 31, 2020, the Company did not have any investments in individual securities that have been in a continuous
loss position considered to be other than temporary. As of December 31, 2020 and June 30,
2020, the remaining contractual maturities of available-for-sale securities were as follows:
Years to Maturity
Less than One to
One Year Five Years Total
December 31, 2020
Available-for-sale $ 3,203,113 $ — $ 3,203,113
June 30, 2020
Available-for-sale $ 5,141,520 $ — $ 5,141,520

Net (Loss) Income per Share

Net (Loss) Income per Share6 Months Ended
Dec. 31, 2020
Net Income per Share [Abstract]
Net (Loss) Income per Share Note 3. Net (Loss) Income per Share Basic net (loss) income per share excludes dilution and is
computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding for
the period. Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue
common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the
income of the Company. The computation of diluted net (loss) income per share, excluded options to purchase 315,337 and 253,312
shares for the three and six months ended December 31, 2020 and 184,342 shares of our common stock for the three and six months
ended December 31, 2019, as the effect of including them would be anti-dilutive. As unearned ESOP shares are released or committed-to-be-released
the shares become outstanding for earnings-per-share computations.

Stock Based Compensation

Stock Based Compensation6 Months Ended
Dec. 31, 2020
Share-based Payment Arrangement [Abstract]
Stock Based CompensationNote 4. Stock Based Compensation 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. Total stock-based compensation
expense recognized in the statements of comprehensive income (loss) for the three-month periods ended December 31, 2020 and
2019 was $33,707 and $45,271, respectively, before income taxes. The related total deferred tax benefits were $1,080 and
$2,483 for the same periods. Total stock-based compensation expense recognized in the statements of comprehensive income
(loss) for the six-month periods ended December 31, 2020 and 2019, was $80,874 and $92,447, respectively, before income
taxes. The related total deferred tax benefits were $3,808 and $5,061 for the same periods. As of December 31, 2020, there was $139,818
of unrecognized compensation cost related to stock option awards that is expected to be recognized as expense over the next 2 years.
The total deferred tax benefit related to these awards is expected to be $ 7,712. 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").
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 226,354 have been granted as of December 31, 2020. While no further
grants of options may be made under the Company’s 2007 Stock Option and Restricted Stock Plan, as of December 31, 2020, 119,750
options were outstanding under such plan of which all are vested and exercisable. 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 dividend yield, volatility, expected life and interest rates. The table below outlines the weighted average
assumptions that the Company used to calculate the fair value of each option award for the six months ended December 31, 2020 and
2019.
December 31, 2020 December 31, 2019
Dividend yield 5.54 % 4.88%
Company’s expected volatility 23.41% 27.81%
Risk-free interest rate 0.36 % 1.67%
Expected term 5.4 yrs 5.3 yrs
Weighted average fair value per share
of options granted during the period $1.59 $3.03 The Company declares regular dividends quarterly
and declared and paid regular cash dividends of $0.50 per share for the six months ended December 31, 2020. The Company declared
regular cash dividends of $0.50 per share for the six months ended December 31, 2019. 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 term (in years)
represents the estimated period of time until exercise and is based on actual historical experience. The following table summarizes stock
option activity during the six months ended December 31, 2020:
Employee Stock Options Plan
Weighted
Number of Weighted Average
Shares Average Remaining Aggregate
Subject Exercise Contractual Intrinsic
to Option Price Term Value
Balance at July 1, 2020 276,712 $ 24.30 $ 6.10
Granted 62,025 $ 18.05 9.81
Exercised — — —
Forfeited or expired (23,400 ) $ 21.20 —
Outstanding at December 31, 2020 315,337 $ 23.30 6.60 $ 53,962
Vested or expected to vest at December 31, 2020 297,286 $ 23.55 6.43 $ 44,882
Exercisable at December 31, 2020 205,187 $ 25.54 5.08 $ 0 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 December 31, 2020 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 December 31, 2020. 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 six months ended December 31, 2020 and 2019 were $0 and $263, respectively. The following table summarizes changes in non-vested stock
options during the six months ended December 31, 2020:
Weighted Number Average
of Shares Grant Date
Subject Fair Value
to Option (per Option)
Non-vested at July 1, 2020 97,192 $ 4.034
Granted 62,025 $ 1.590
Vested (44,667 ) $ 5.140
Forfeited or expired (4,400 ) $ 3.797
Non-vested at December 31, 2020 110,150 $ 2.219

Commitments and Contingencies

Commitments and Contingencies6 Months Ended
Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and ContingenciesNote 5. Commitments and Contingencies The Company from time to time, 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 December 31, 2020 and
June 30, 2020. 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. 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. Currently, there are no matters pending.

Revenue

Revenue6 Months Ended
Dec. 31, 2020
Revenue from Contract with Customer [Abstract]
RevenueNote 6. Revenue The company follows ASC 606 “Revenue
from Contracts with Customers” to determine the recognition of revenue. This standard requires entities to assess the products
or services promised in contracts with customers at contract inception to determine the appropriate unit at which to record revenues.
Revenue is recognized when control of the promised products or services is transferred to customers at an amount that reflects
the consideration to which the entity expects to be entitled to in exchange for those products or services. Significant judgment is required in determining
the satisfaction of performance obligations. Revenues from our performance obligations are satisfied over time using the
output method which considers the appraisal of results achieved and milestones reached or units delivered based on contractual
shipment terms, typically shipping point. Revenue is recognized when the customer takes control of the product or services.
The output method best depicts the transfer of control to the customer as the output method represents work completed. Control
is typically transferred to the customer at the shipping point as the company has a present right to payment, the customer has
legal title to the asset, the customer has the significant risks and rewards of ownership of the asset, and in most instances the
customer has accepted the asset. Total revenue recognized for the three and
six months ended December 31, 2020 based on units delivered totaled $5,865,878 and $11,724,584, respectively, compared to $5,702,565
and $10,820,879 for the same periods in fiscal year 2020. Total revenue recognized for the three and six months ended December
31, 2020 based on milestones achieved totaled $1,096,187 and $2,502,996, respectively, compared to $1,584,109 and $2,389,614 for
the same periods in fiscal year 2020. The Company offers a standard one-year product
warranty. Product warranties offered by the Company are classified as assurance-type warranties, which means, the warranty only
guarantees that the good or service functions as promised. Based on this, the provided warranty is not considered to be a distinct
performance obligation. The impact of variable consideration has been considered but none identified which would be required
to be allocated to the transaction price as of December 31, 2020. Our payment terms are generally 30-60 days. Contract liabilities were $1,650,288 and
$2,175,235 as of December 31, 2020 and June 30, 2020, respectively. The decrease in contract liabilities is primarily
due to revenue recognized, offset, in part, by the advance collection of cash on specific contracts. The company used the
practical expedient to expense incremental costs incurred to obtain a contract when the contract term is less than one
year. The Company’s backlog at December 31,
2020 totaling $60.1 million is expected, based on expected due dates, to be recognized in the following fiscal years: 27% in 2021;
51% in 2022; 12% in 2023, and 10% thereafter.

Recently Issued Accounting Stan

Recently Issued Accounting Standards6 Months Ended
Dec. 31, 2020
Recently Issued Accounting Standards [Abstract]
Recently Issued Accounting StandardsNote 7. Recently Issued Accounting Standards Recent Accounting Pronouncements Adopted In August 2018, the FASB issued ASU No. 2018-13,
“Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” This
ASU is part of the FASB’s larger disclosure framework project intended to improve the effectiveness of financial statement
footnote disclosure. ASU 2018-13 modifies required fair value disclosures related primarily to level 3 investments. This
ASU is effective for annual periods beginning after December 15, 2019 and interim periods within those annual periods. The
adoption of ASU 2018-13 does not have a material effect on the Company’s financial position, results of operations, and cash
flows as our investments are currently Level 1. We will, however, continue to evaluate going forward should we obtain any Level
3 investments. Recent Accounting Pronouncements Not Yet Adopted In December 2019, the FASB issued guidance
(ASU 2019-12) intended to simplify the accounting for income taxes. The amendments in this guidance are effective for fiscal years,
and interim periods within those fiscal years, beginning after December 15, 2020 (the Company’s fiscal 2021), with early
adoption permitted. The Company is currently evaluating the potential impact of this guidance on the Company’s disclosures.

Employee Stock Ownership Plan

Employee Stock Ownership Plan6 Months Ended
Dec. 31, 2020
Employee Stock Ownership Plan [Abstract]
Employee Stock Ownership PlanNote 8. Employee
Stock Ownership Plan 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. Prior to December 1, 2020, the ESOP owned 469,119 shares, all of which were allocated to employees.
On December 1, 2020, pursuant to a Stock Purchase Agreement dated as of such date, the Company, by selling 300,000 shares of its
common stock, par value $0.33 1/3 per share, to the Espey Mfg. & Electronics Corp. Employee Stock Ownership Plan Trust, provided
more shares to be allocated to employees for services rendered over the next 15 years. The ESOP paid $18.29 per share, for
an aggregate purchase price of $5,487,000. The determination of the purchase price was based on a fairness opinion obtained
by an independent valuation firm. The ESOP borrowed from the Corporation an amount equal to the purchase price. The
loan will be repaid in fifteen (15) equal annual installments of principal. The Board of Directors has fixed the interest
rate and the unpaid balance will bear interest at a fixed rate of 3.00% per annum. The Board of Directors of the Company had approved
a purchase price per share equal to the lesser of the trading value on the day of closing or the lowest price listed in the valuation
established by the independent valuation firm plus $0.25. The valuation identified a range of $18.04 - $19.43 per share.
In making the sale, the Company
relied on the exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, because the shares sold
were offered only to the ESOP. After giving effect to the
transaction, the ESOP owned 769,119 shares of the Company's 2,702,633 outstanding shares of common stock as of December 1, 2020. 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 balance sheets and the statements of changes in stockholders’ equity. 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 $56,274 and $77,987
for the three-month periods ended December 31, 2020 and 2019, respectively. ESOP compensation expense was $56,274 and $165,820
for the six-month periods ended December 31, 2020 and 2019, respectively. The ESOP shares as
of December 31, 2020 and 2019 were as follows:
December 31, 2020 December 31, 2019
Allocated shares 468,663 452,763
Committed-to-be-released shares 2,939 7,083
Unreleased shares 297,061 7,083
Total shares held by the ESOP 768,663 466,929
Fair value of unreleased shares $ 5,620,394 $ 152,993 The Company may at times be required
to repurchase shares at the ESOP participants’ request at the fair market value. During the three and six months ended December
31, 2020 the Company did not repurchase shares previously held by the ESOP. During the three and six months ended December 31,
2019 the Company repurchased 1,847 and 2,180 shares previously held by the ESOP for $39,658 and $47,949, respectively. 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 six months ended December 31, 2020 and 2019 totaled 456 and 2,180, respectively.

Investment Securities (Tables)

Investment Securities (Tables)6 Months Ended
Dec. 31, 2020
Investments, Debt and Equity Securities [Abstract]
Schedule of Available-for-Sale SecuritiesThe cost, gross unrealized gains, gross unrealized losses and fair value of available-for-sale
securities by major security type at December 31, 2020 and June 30, 2020 are as follows:
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
December 31, 2020
Certificates of deposit $ 3,132,000 $ — $ — $ 3,132,000
Municipal bonds 70,744 369 — 71,113
Total investment securities $ 3,202,744 $ 369 $ — $ 3,203,113
June 30, 2020
Certificates of deposit $ 4,679,847 $ — $ — $ 4,679,847
Municipal bonds 462,618 1,243 (2,188 ) 461,673
Total investment securities $ 5,142,465 $ 1,243 $ (2,188 ) $ 5,141,520
Schedule of Contractual MaturitiesAs of December 31, 2020 and June 30,
2020, the remaining contractual maturities of available-for-sale securities were as follows:
Years to Maturity
Less than One to
One Year Five Years Total
December 31, 2020
Available-for-sale $ 3,203,113 $ — $ 3,203,113
June 30, 2020
Available-for-sale $ 5,141,520 $ — $ 5,141,520

Stock Based Compensation (Table

Stock Based Compensation (Tables)6 Months Ended
Dec. 31, 2020
Share-based Payment Arrangement [Abstract]
Schedule of Fair Value AssumptionsThe table below outlines the weighted average
assumptions that the Company used to calculate the fair value of each option award for the six months ended December 31, 2020 and
2019.
December 31, 2020 December 31, 2019
Dividend yield 5.54 % 4.88%
Company’s expected volatility 23.41% 27.81%
Risk-free interest rate 0.36 % 1.67%
Expected term 5.4 yrs 5.3 yrs
Weighted average fair value per share
of options granted during the period $1.59 $3.03
Schedule of Stock Option ActivityThe following table summarizes stock
option activity during the six months ended December 31, 2020:
Employee Stock Options Plan
Weighted
Number of Weighted Average
Shares Average Remaining Aggregate
Subject Exercise Contractual Intrinsic
to Option Price Term Value
Balance at July 1, 2020 276,712 $ 24.30 $ 6.10
Granted 62,025 $ 18.05 9.81
Exercised — — —
Forfeited or expired (23,400 ) $ 21.20 —
Outstanding at December 31, 2020 315,337 $ 23.30 6.60 $ 53,962
Vested or expected to vest at December 31, 2020 297,286 $ 23.55 6.43 $ 44,882
Exercisable at December 31, 2020 205,187 $ 25.54 5.08 $ 0
Schedule of Changes in Non-Vested Stock OptionsThe following table summarizes changes in non-vested stock
options during the six months ended December 31, 2020:
Weighted Number Average
of Shares Grant Date
Subject Fair Value
to Option (per Option)
Non-vested at July 1, 2020 97,192 $ 4.034
Granted 62,025 $ 1.590
Vested (44,667 ) $ 5.140
Forfeited or expired (4,400 ) $ 3.797
Non-vested at December 31, 2020 110,150 $ 2.219

Employee Stock Ownership Plan (

Employee Stock Ownership Plan (Tables)6 Months Ended
Dec. 31, 2020
Employee Stock Ownership Plan [Abstract]
Schedule of ESOP sharesThe ESOP shares as
of December 31, 2020 and 2019 were as follows:
December 31, 2020 December 31, 2019
Allocated shares 468,663 452,763
Committed-to-be-released shares 2,939 7,083
Unreleased shares 297,061 7,083
Total shares held by the ESOP 768,663 466,929
Fair value of unreleased shares $ 5,620,394 $ 152,993

Investment Securities (Schedule

Investment Securities (Schedule of Available-for-Sale Securities) (Details) - USD ($)Dec. 31, 2020Jun. 30, 2020
Debt Securities, Available-for-sale [Line Items]
Amortized Cost $ 3,202,744 $ 5,142,465
Gross Unrealized Gains369 1,243
Gross Unrealized Losses (2,188)
Fair Value3,203,113 5,141,520
Certificates of Deposit [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost3,132,000 4,679,847
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value3,132,000 4,679,847
Municipal Bonds [Member]
Debt Securities, Available-for-sale [Line Items]
Amortized Cost70,744 462,618
Gross Unrealized Gains369 1,243
Gross Unrealized Losses (2,188)
Fair Value $ 71,113 $ 461,673

Investment Securities (Schedu_2

Investment Securities (Schedule of Contractual Maturities) (Details) - USD ($)Dec. 31, 2020Jun. 30, 2020
Contractual maturities of available-for-sale securities
Less than One Year $ 3,203,113 $ 5,141,520
One to Five Years
Fair Value $ 3,203,113 $ 5,141,520

Net (Loss) Income per Share (De

Net (Loss) Income per Share (Details) - shares3 Months Ended6 Months Ended
Dec. 31, 2020Dec. 31, 2019Dec. 31, 2020Dec. 31, 2019
Net Income per Share [Abstract]
Anti-dilutive securities315,337 184,342 253,312 184,342

Stock Based Compensation (Narra

Stock Based Compensation (Narrative) (Details) - USD ($)3 Months Ended6 Months Ended
Dec. 31, 2020Dec. 31, 2019Dec. 31, 2020Dec. 31, 2019Jun. 30, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense $ 33,707 $ 45,271 $ 80,874 $ 92,447
Deferred tax benefit related to stock based compensation1,080 $ 2,483 3,808 $ 5,061
Unrecognized compensation costs139,818 $ 139,818
Period in which compensation cost will be recognized2 years
Deferred tax benefit related to unrecognized compensation costs $ 7,712 $ 7,712
Granted62,025
Outstanding315,337 315,337 276,712
Cash divided paid $ 0.25 $ 0.25 $ 0.50 $ 0.50
Total intrinsic values of the options exercised $ 0 $ 263
2017 Plan [Member] | Stock Option Plans [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period2 years
Expiration period10 years
Authorized shares under plan400,000 400,000
Granted226,354
2017 Plan [Member] | Non employee directors [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Authorized shares under plan133,000 133,000
Percentage of total number of shares subject to options or awards, single fiscal year33.33%
Number of shares subject to option or award, single fiscal year13,300 13,300
2017 Plan [Member] | Individual Employee [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares subject to option or award, single fiscal year15,000 15,000
2007 Plan [Member] | Stock Option Plans [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding119,750 119,750

Stock Based Compensation (Sched

Stock Based Compensation (Schedule of Fair Value Assumptions) (Details) - $ / shares6 Months Ended
Dec. 31, 2020Dec. 31, 2019
Weighted average assumptions to calculation option fair value
Dividend yield5.54%4.88%
Company's expected volatility23.41%27.81%
Risk-free interest rate0.36%1.67%
Expected term5 years 4 months 24 days5 years 3 months 19 days
Weighted average fair value per share of options granted during the period $ 1.59 $ 3.03

Stock Based Compensation (Sch_2

Stock Based Compensation (Schedule of Stock Option Activity) (Details) - USD ($)6 Months Ended12 Months Ended
Dec. 31, 2020Jun. 30, 2020
Number of Shares Subject To Option
Balance at July 1, 2020276,712
Granted62,025
Exercised
Forfeited or expired(23,400)
Outstanding at December 31, 2020315,337 276,712
Vested or expected to vest at December 31, 2020297,286
Exercisable at December 31, 2020205,187
Weighted Average Exercise Price
Balance at July 1, 2020 $ 24.30
Granted18.05
Exercised
Forfeited or expired21.20
Outstanding at December 31, 202023.30 $ 24.30
Vested or expected to vest at December 31, 202023.55
Exercisable at December 31, 2020 $ 25.54
Weighted Average Remaining Contractual Term
Outstanding6 years 7 months 6 days6 years 1 month 6 days
Granted9 years 9 months 22 days
Vested or expected to vest at December 31, 20206 years 5 months 5 days
Exercisable at December 31, 20205 years 29 days
Aggregate Intrinsic Value
Outstanding at December 31, 2020 $ 53,962
Vested or expected to vest at December 31, 202044,882
Exercisable at December 31, 2020 $ 0

Stock Based Compensation (Sch_3

Stock Based Compensation (Schedule of Changes in Non-Vested Stock Options) (Details)6 Months Ended
Dec. 31, 2020$ / sharesshares
Number of Shares Subject to Option
Non-vested at July 1, 2020 | shares97,192
Granted | shares62,025
Vested | shares(44,667)
Forfeited or expired | shares(4,400)
Non-vested at December 31, 2020 | shares110,150
Weighted Average Grant Date Fair Value (per Option)
Non-vested at July 1, 2020 | $ / shares $ 4.034
Granted | $ / shares1.590
Vested | $ / shares5.140
Forfeited or expired | $ / shares3.797
Non-vested at December 31, 2020 | $ / shares $ 2.219

Commitments and Contingencies (

Commitments and Contingencies (Details) - USD ($)Dec. 31, 2020Jun. 30, 2020
Standby Letters of Credit [Member]
Contingent liabilities $ 0 $ 0

Revenue (Details)

Revenue (Details) - USD ($)3 Months Ended6 Months Ended
Dec. 31, 2020Dec. 31, 2019Dec. 31, 2020Dec. 31, 2019Jun. 30, 2020
Item Effected [Line Items]
Revenue $ 6,962,065 $ 7,286,674 $ 14,227,580 $ 13,210,493
ASC 606 [Member]
Item Effected [Line Items]
Contract liabilities1,650,288 1,650,288 $ 2,175,235
ASC 606 [Member] | Units Delivered [Member]
Item Effected [Line Items]
Revenue5,865,878 5,702,565 11,724,584 10,820,879
ASC 606 [Member] | Milestones Achieved [Member]
Item Effected [Line Items]
Revenue1,096,187 $ 1,584,109 2,502,996 $ 2,389,614
ASC 606 [Member] | Backlog [Member]
Item Effected [Line Items]
Intangible assets $ 60,100,000 $ 60,100,000
Percentage of estimated shipments27% in 2021; 51% in 2022; 12% in 2023, and 10% thereafter.

Employee Stock Ownership Plan_2

Employee Stock Ownership Plan (Narrative) (Details)Dec. 01, 2020$ / sharessharesDec. 31, 2020USD ($)$ / sharessharesDec. 31, 2019USD ($)sharesDec. 31, 2020USD ($)h$ / sharessharesDec. 31, 2019USD ($)sharesSep. 30, 2020sharesJun. 30, 2020sharesSep. 30, 2019sharesJun. 30, 2019shares
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Number of shares allocated to employees468,663 452,763 468,663 452,763
Number of shares owned768,663 466,929 768,663 466,929
Common stock, shares outstanding2,702,633 2,702,633 2,402,633
ESOP compensation expense | $ $ 56,274 $ 77,987 $ 56,274 $ 165,820
Value of shares repurchased | $ $ 39,658 $ 47,949
Common Stock [Member]
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Common stock, shares outstanding2,702,633 2,401,033 2,702,633 2,401,033 2,402,633 2,402,633 2,402,880 2,401,213
Shares repurchased(1,847)(2,180)
Shares distributed300,000 300,000
Employee Stock Ownership Plan [Member]
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Number of hours worked per year to quality for the plan | h1,000
Number of shares allocated to employees469,119
Period of services rendered15 years
Price per share | $ / shares $ 18.29 $ 18.29
Aggregate purchase price | $ $ 5,487,000
Loan, frequency of periodic paymentannual
Number of loan repayment annual installments15 15
Interest rate on loan3.00%3.00%
Purchase price per share, lower range limit | $ / shares $ 18.04
Purchase price per share, upper range limit | $ / shares $ 19.43
Number of shares owned769,119
Common stock, shares outstanding2,702,633
Shares repurchased1,847 2,180
Value of shares repurchased | $ $ 39,658 $ 47,949
Shares distributed456 2,180
Employee Stock Ownership Plan [Member] | Common Stock [Member]
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Number of shares sold300,000
Sale of stock, price per share | $ / shares $ 0.3333

Employee Stock Ownership Plan_3

Employee Stock Ownership Plan (Schedule of ESOP shares) (Details) - USD ($)Dec. 31, 2020Dec. 31, 2019
Employee Stock Ownership Plan [Abstract]
Allocated shares468,663 452,763
Committed-to-be-released shares2,939 7,083
Unreleased shares297,061 7,083
Total shares held by the ESOP768,663 466,929
Fair value of unreleased shares $ 5,620,394 $ 152,993