| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES Principles of Consolidation The consolidated financial
statements include the accounts of the Company and its subsidiary with a majority voting interest of 66.3% (33.7% is owned by non-controlling
interests) as of March 31, 2021 and June 30, 2020. In the preparation of consolidated financial statements of the Company, intercompany
transactions and balances are eliminated and net earnings are reduced by the portion of the net earnings of the subsidiary applicable
to non-controlling interests. Non-controlling Interest in a Consolidated
Subsidiary As of March 31, 2021, the
non-controlling interest was $1,416,561, which represents a $634,546 increase from $782,015 as of June 30, 2020. The increase in the non-controlling
interest of $634,546 was from income in the subsidiary of $1,885,307 incurred for the nine months ended March 31, 2021. Segment Reporting Accounting Standards Codification
(“ASC”) 280, “Segment Reporting,” requires public companies to report financial and descriptive information about
their reportable operating segments. We identify our operating segments based on how our chief operating decision maker internally evaluates
separate financial information, business activities and management responsibility. We have one reportable segment, consisting
of the sale of wireless access products. We generate revenues from three geographic areas, consisting of North America, the Caribbean
and South America, and Asia. The following enterprise-wide disclosure is prepared on a basis consistent with the preparation of the consolidated
financial statements. The following table contains certain financial information by geographic area:
Three Months Ended Nine Months Ended
March 31, March 31,
Net sales: 2021 2020 2021 2020
North America $ 44,054,824 $ 15,444,110 $ 172,853,744 $ 37,342,577
Caribbean and South America – – 17,500 –
Asia 276,130 102,072 276,738 337,735
Totals $ 44,330,954 $ 15,546,182 $ 173,147,982 $ 37,680,312
Long-lived assets, net (property and equipment and intangible assets): March 31, 2021 June 30, 2020
North America $ 1,494,008 $ 1,302,353
Asia 44,582 43,688
Totals $ 1,538,590 $ 1,346,041 Use of Estimates The preparation of the consolidated
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 amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual
results could materially differ from those estimates. Fair Value of Financial Instruments The carrying amounts of financial
instruments such as cash equivalents, short-term investments, accounts receivable, accounts payable and debt approximate the related fair
values due to the short-term maturities of these instruments. We invest our excess cash into financial instruments which are readily convertible
into cash, such as money market funds and certificates of deposit. Allowance for Doubtful Accounts
Revenue Recognition In April 2016, the FASB issued
Accounting Standards Update No. 2016-10, Revenue from Contracts with Customers (Topic 606) (ASU 2016-10), which amends and adds clarity
to certain aspects of the guidance set forth in the original revenue standard (ASU 2014-09) related to identifying performance obligations
and licensing. In May 2016, the FASB issued Accounting Standards Update No. 2016-11, Revenue Recognition (Topic 605), which amends and
rescinds certain revenue recognition guidance previously released within ASU 2014-09. In May 2016 the FASB issued Accounting Standards
Update No. 2016-12, Revenue from Contracts with Customers (Topic 606) (ASU 2016-12), which provides narrow scope improvements and practical
expedients related to ASU 2014-09. On July 1, 2018, we adopted
ASU 2014-09 using the modified retrospective method applied to those contracts that were not completed or substantially complete as of
June 30, 2018. Results for the reporting period beginning after July 1, 2018 are presented under Topic 606. We recorded no change in retained
earnings as of July 1, 2018 as a result of the cumulative impact of adopting Topic 606. Contracts with Customers Revenue for sales of products
and services is derived from contracts with customers. The products and services promised in contracts primarily consist of hotspot routers.
Contracts with each customer generally state the terms of the sale, including the description, quantity and price of each product or service.
Payment terms are stated in the contract, primarily in the form of a purchase order. Since the customer typically agrees to a stated rate
and price in the purchase order that does not vary over the life of the contract, the majority of our contracts do not contain variable
consideration. We establish a provision for estimated warranty and returns. Using historical averages, that provision for the nine months
ended March 31, 2021 was not material. Disaggregation of Revenue In accordance with Topic
606, we disaggregate revenue from contracts with customers into geographical regions and by the timing of when goods and services are
transferred. We determined that disaggregating revenue into these categories meets the disclosure objective in Topic 606, which is to
depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by regional economic factors. Contract Balances We perform our obligations
under a contract with a customer by transferring products in exchange for consideration from the customer. We typically invoice our customers
as soon as control of an asset is transferred, and a receivable is established. We, however, recognize a contract liability when a customer
prepays for goods and/or services, or we have not delivered goods under the contract since we have not yet transferred control of the
goods and/or services. Performance Obligations A performance obligation
is a promise in a contract to transfer a distinct good or service to the customer and is the unit of measurement in Topic 606. At contract
inception, we assess the products and services promised in our contracts with customers. We then identify performance obligations to
transfer distinct products or services to the customer. In order to identify performance obligations, we consider all the products or
services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. Our performance obligations
are primarily satisfied at a point in time. Revenue from products transferred to customers at a single point in time accounted for 99.7%
of net sales for the three and nine months ended March 31, 2021. Revenue recognized over a period of time for non-recurring engineering
projects is based on the percent complete of a project and accounted for 0.3% of net sales for the three and nine months ended March 31,
2021. The majority of our revenue recognized at a point in time is for the sale of hotspot router products. Revenue from these contracts
is recognized when the customer is able to direct the use of and obtain substantially all of the benefits from the product which generally
coincides with title transfer at completion of the shipping process. As of March 31, 2021, our
contracts do not contain any unsatisfied performance obligations, except for undelivered products. Cost of Goods Sold All costs associated with
our contract manufacturers, as well as distribution, fulfillment and repair services, are included in our cost of goods sold. Cost of
goods sold also includes amortization expenses of approximately $82,000 and $282,000 associated with capitalized product development costs
associated with complete technology for the three and nine months ended March 31, 2021, respectively, and $122,000 and $289,000 for the
three and nine months ended March 31, 2020, respectively. Capitalized Product Development Costs Accounting Standards Codification
(“ASC”) Topic 350, “Intangibles - Goodwill and Other” includes software that is part of a product or process to
be sold to a customer and is accounted for under Subtopic 985-20. Our products contain embedded software internally developed by FTI,
which is an integral part of these products because it allows the various components of the products to communicate with each other and
the products are clearly unable to function without this coding. The costs of product development
that are capitalized once technological feasibility is determined (noted as technology in progress in the Intangible Assets table in Note
3 to Notes to Consolidated Financial Statements) include related licenses, certification costs, payroll, employee benefits, and other
headcount-related expenses associated with product development. We determine that technological feasibility for our products is reached
after all high-risk development issues have been resolved. Once the products are available for general release to our customers, we cease
capitalizing the product development costs and any additional costs, if any, are expensed. The capitalized product development costs are
amortized on a product-by-product basis using the greater of straight-line amortization or the ratio of the current gross revenues to
the current and anticipated future gross revenues. The amortization begins when the products are available for general release to our
customers. As
of March 31, 2021, and June 30, 2020, capitalized product development costs in progress were $644,097 and $140,192, and the amounts are
included in intangible assets in our consolidated balance sheets. For the three and nine months ended March 31, 2021, we incurred $54,100
and $587,246, respectively, and for the three and nine months ended March 31, 2020, we incurred $9,692 and $343,360, respectively, in
capitalized product development costs, and such amounts are primarily comprised of certifications and licenses. All costs incurred before
technological feasibility is reached are expensed and included in our consolidated statements of comprehensive income. Research and Development Costs Costs associated with research
and development are expensed as incurred. Research and development costs were $1,199,525 and $834,478 for the three months ended March
31, 2021 and 2020, respectively, and $3,329,649 and $2,754,414 for the nine months ended March 31, 2021 and 2020, respectively. Warranties We provide a warranty for
one year which is covered by our vendors and manufacturers under purchase agreements between the Company and the vendors. As a result,
we believe we do not have any net warranty exposure and do not accrue any warranty expenses. Historically, the Company has not experienced
any material net warranty expenditures. Shipping and Handling Costs Costs associated with product
shipping and handling are expensed as incurred. Shipping and handling costs, which are included in selling, general and administrative
expenses on the consolidated statements of comprehensive income, were $147,202 and $115,731 for the three months ended March 31, 2021
and 2020, respectively, and $674,854 and $455,580 for the nine months ended March 31, 2021 and 2020, respectively. Cash and Cash Equivalents For purposes of the consolidated
statements of cash flow, we consider all highly liquid investments purchased with original maturities of three months or less to be cash
equivalents. We invest our excess cash into financial instruments which management believes are readily convertible into cash, such as
money market funds that are readily convertible to cash. Short Term Investments We have invested excess funds
in short term liquid assets, such as certificates of deposit. Inventories Our inventories consist of
finished goods and are stated at the lower of cost or net realizable value, cost being determined on a first-in, first-out basis. We assess
the inventory carrying value and reduce it, if necessary, to its net realizable value based on customer orders on hand, and internal demand
forecasts using management’s best estimates given information currently available. Our customer demand is highly unpredictable and
can fluctuate significantly caused by factors beyond our control. We may write down our inventory value for potential obsolescence and
excess inventory. As of March 31, 2021, and June 30, 2020, we have recorded an
inventory reserve in the amounts of $0 and $399,437, respectively, for inventories that we have identified as obsolete or slow-moving. Property and Equipment Property and equipment are
recorded at cost. Significant additions or improvements extending useful lives of assets are capitalized. Maintenance and repairs are
charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives as follows:
Machinery 6 years
Office equipment 5 years
Molds 3 years
Vehicles 5 years
Computers and software 5 years
Furniture and fixtures 7 years
Facilities improvements 5 years or life of the lease, whichever is shorter Goodwill and Intangible Assets Goodwill and certain intangible
assets were recorded in connection with the FTI acquisition in October 2009, and are accounted for in accordance with ASC 805, “Business
Combinations.” Goodwill represents the excess of the purchase price over the fair value of the tangible and intangible
net assets acquired. Intangible assets are recorded at their fair value at the date of acquisition. Goodwill and other intangible
assets are accounted for in accordance with ASC 350, “Goodwill and Other Intangible Assets.” Goodwill and other
intangible assets are tested for impairment at least annually and any related impairment losses are recognized in earnings when identified.
No impairment was deemed necessary as of March 31, 2021 or June 30, 2020. Long-lived Assets We review for impairment of
long-lived assets and certain identifiable intangibles whenever events or circumstances indicate that the carrying amount of assets may
not be recoverable. We consider the carrying value of assets may not be recoverable based upon our review of the following events or changes
in circumstances: the asset’s ability to continue to generate income from operations and positive cash flow in future periods; loss
of legal ownership or title to the asset; significant changes in our strategic business objectives and utilization of the asset; or significant
negative industry or economic trends. An impairment loss would be recognized when estimated future cash flows expected to result
from the use of the asset are less than its carrying amount. As of March 31, 2021, and
June 30, 2020, we were not aware of any events or changes in circumstances that would indicate that the long-lived assets are impaired. Stock-based Compensation Our employee share-based awards
result in a cost that is measured at fair value on an award’s grant date, based on the estimated number of awards that are expected
to vest. Stock-based compensation is recognized on a straight-line basis over the award’s vesting period. We estimate the fair value
of stock options using a Black-Scholes option pricing model. Transactions with non-employees in which goods or services are the consideration
received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value
of the equity instrument issued, whichever is more reliably measurable. Stock-based compensation costs are reflected in the accompanying
consolidated statements of comprehensive income based upon the underlying recipients' roles. Income Taxes We use the asset and liability
method of accounting for income taxes. Accordingly, deferred tax assets and liabilities are determined based on the difference between
the financial statement and income tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences
are expected to reverse. A valuation allowance is recorded to reduce the carrying amount of deferred tax assets, unless it is more likely
than not such assets will be realized. Current income taxes are based on the year’s taxable income for federal and state income
tax reporting purposes and the annual change in deferred taxes. We assess our income tax positions
and record tax benefits based upon management’s evaluation of the facts, circumstances, and information available at the reporting
date. For those tax positions where it is more likely than not that a tax benefit will be sustained, we record the largest amount of tax
benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority having full knowledge of
all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no
tax benefit is recognized in the financial statements. We classify interest and penalties associated with such uncertain tax positions
as a component of income tax expense. We Earnings per Share Attributable to Common Stockholders Earnings per share is calculated
by dividing the net income by the weighted-average number of common shares that were outstanding for the period, without consideration
for potential common shares. Diluted earnings per share is calculated by dividing the net income by the sum of the weighted-average number
of dilutive potential common shares outstanding for the period determined using the treasury-stock method or the as-converted method.
Potentially dilutive shares are comprised of common stock options outstanding under our stock plan. Concentrations We extend credit to our customers
and perform ongoing credit evaluations of such customers. We evaluate our accounts receivable on a regular basis for collectability and
provide for an allowance for potential credit losses as deemed necessary. No reserve was required or recorded for any of the
periods presented. Substantially all of our revenues
are derived from sales of wireless data products. Any significant decline in market acceptance of our products or in the financial
condition of our existing customers could impair our ability to operate effectively. A significant portion of our
revenue is derived from a small number of customers. For the nine months ended March 31, 2021, sales to our two largest customers accounted
for 61% and 32% of our consolidated net sales, and 0% and 96% of our accounts receivable balance as of March 31, 2021. In the same period
in 2020, sales to our two largest customers accounted for 42% and 32% of our consolidated net sales, and 53% and 25% of our accounts receivable
balance as of March 31, 2020. No other customers accounted for more than ten percent of total net sales for the nine months ended March
31, 2021 and 2020, and no other customers accounted for more than ten percent of total accounts receivable as of March 31, 2021 and 2020. For the nine months ended
March 31, 2021, we purchased the majority of our wireless data products from two manufacturing companies located in Asia. If these manufacturing
companies were to experience delays, capacity constraints or quality control problem, product shipments to our customers could be delayed,
or our customers could consequently elect to cancel the underlying product purchase orders, which would negatively impact our revenue.
For the nine months ended March 31, 2021, we purchased wireless data products from two manufacturers in the amount of $130,256,593, or
99% of total purchases, and had related accounts payable of $27,250,783 as of March 31, 2021. For the nine months ended March 31, 2020,
we purchased wireless data products from one manufacturing company located in Asia in the amount of $23,514,179, or 77% of total purchases,
and had related accounts payable of $7,935,576 as of March 31, 2020. We maintain our cash accounts
with established commercial banks. Such cash deposits exceed the Federal Deposit Insurance Corporation insured limit of $250,000
for each financial institution. However, we do not anticipate any losses on excess deposits. Recently Issued Accounting Pronouncements In
February 2018, the FASB issued Accounting Standards Update (ASU) 2018-02, Income Statement—Reporting Comprehensive Income (Topic
220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. |
