| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary
of significant accounting policies of the Company is presented to assist in understanding the Company’s consolidated financial statements.
The consolidated financial statements and notes are representations of the Company’s management, which is responsible for their
integrity and objectivity. These accounting policies conform to GAAP and have been consistently applied in the preparation of the consolidated
financial statements. Principles of Consolidation The consolidated financial statements
include the accounts of the Company and its subsidiary with a majority voting interest of approximately 66.3 33.7 Reclassifications Certain amounts on the prior
period’s consolidated financial statements were regrouped and reclassified to conform to current-year presentation, with no effect
on total stockholders’ equity. Non-controlling Interest in a Consolidated Subsidiary Noncontrolling interests
represent approximately 33.7 1,228,944 259,023 1,487,967 259,023 202,655 602,110 56,368 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 shall generate revenues from
three geographic areas, consisting of North 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:
Schedule of financial information by geographic
area
Fiscal Years Ended June 30,
Net sales: 2024 2023
North America $ 30,699,727 $ 45,782,084
Asia 96,963 166,432
Totals $ 30,796,690 $ 45,948,516
Schedule of long-lived assets, net
Long-lived assets, net (property and equipment and intangible assets): June 30, 2024 June 30, 2023
North America $ 1,218,139 $ 2,083,902
Asia 206,426 198,070
Totals $ 1,424,565 $ 2,281,972 Fair Value of Financial Instruments Fair value accounting is applied
for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the
consolidated financial statements on a recurring basis (at least annually). Assets and liabilities recorded at fair value in the financial
statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical
levels, which are directly related to the amount of subjectivity, associated with the inputs to the valuation of these assets or liabilities
are as follows:
· Level 1 – Observable inputs, such as unadjusted quoted prices in active markets for identical
assets or liabilities accessible to the reporting entity at the measurement date.
· Level 2 – Observable inputs other than Level 1 quoted 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 for substantially the full term of the assets or liabilities.
· Level 3 – Unobservable inputs that cannot be directly corroborated by observable market data
and that typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. The carrying amounts of financial
instruments such as cash equivalents, short-term investments, accounts receivable, other current assets, accounts payable, and accrued
liabilities approximate the related fair values due to the short-term nature 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 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. Allowance for Doubtful Accounts On July 1, 2023, we adopted ASU
2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred
loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology.
The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including
loan receivables and held to maturity debt securities. It also applies to Off-Balance Sheet (“OBS”) credit exposures not accounted
for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments
and leases recognized by a lessor in accordance with Topic 842 on leases. Upon adoption of ASC 326 and based upon our review of our collection
history as well as the current balances associated with all significant customers and associated invoices, as of June 30, 2024, and 2023,
we did no Cash Flows Reporting We follow ASC 230, Statements
of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing,
or financing activities and provides definitions of each category. We use the indirect or reconciliation method (“Indirect method”)
as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net income to reconcile
it to net cash flow from operating activities by removing the effects of all deferrals of past operating cash receipts and payments and
all accruals of expected future operating cash receipts and payments and all items that are included in net (loss) income that do not
affect operating cash receipts and payments. Related Parties We follow ASC 850, “Related
Party Disclosures,” for the identification of related parties and disclosure of related party transactions. Related parties are
any entities or individuals that, through employment, ownership or other means, possess the ability to direct or cause the direction of
our management and policies of the Company. (Refer to NOTE 11–RELATED PARTY TRANSACTIONS) Foreign Currency Translations We have a majority-owned
subsidiary in foreign country, South Korea. Fluctuations in foreign currency impact the amount of total assets, liabilities, earnings
and cash flows that we report for our foreign subsidiary upon the translation of these amounts into U.S. Dollars for, and as of the end
of, each reporting period. In particular, the strengthening of the U.S. Dollar generally will reduce the reported amount of our foreign-denominated
cash, cash equivalents, total revenues and total expense that we translate into U.S. Dollars and report in our consolidated financial
statements for, and as of the end of, each reporting period. However, a majority of our consolidated revenue is denominated in U.S. Dollars,
and therefore, our revenue is not directly subject to foreign currency risk. In
accordance with ASC 830, when an operation has transactions denominated in a currency other than its functional currency, they are measured
in the functional currency. Changes in the expected functional currency cash flows caused by changes in exchange rates are included in
net income (loss) for the period. Leases In accordance with ASC 842,
we determine whether an arrangement contains a lease at inception. A lease is a contract that provides the right to control an identified
asset for a period of time in exchange for consideration. For identified leases, we determine whether it should be classified as an operating
or finance lease. Operating leases are recorded in the balance sheet as right-of-use assets (“ROU assets”) and operating lease
obligation. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent
our obligation to make lease payment arising from the lease ROU assets and operating lease liabilities are recognized at the commencement
date of the lease and measure based on the present value of lease payment over the lease term. The ROU assets also includes deferred rent
liabilities. Our lease arrangement generally does not provide an implicit interest rate. As a result, in such situations, we use its incremental
borrowing rate based on the information available at commencement date in determining the present value of lease payments. We include
options to extend or terminate the lease when it is reasonably certain that it will exercise that option in the measurement of its ROU
assets and liabilities. Lease expense for operating
lease is recognized on a straight-line basis over the lease term. We are also electing not to apply the recognition requirements to short-term
leases of twelve months or less and instead will recognize lease payments as expense on a straight-line basis over the lease term. Revenue Recognition The Company accounts for its revenue
according to ASC 606, “Revenue from Contracts with Customers”, pursuant to which, revenue is recognized when the control of
the promised goods or services is transferred to the customers, and the performance obligations under the contract have been satisfied,
in an amount that reflects the consideration expected to be entitled to in exchange for those goods or services. The Company determines revenue
recognition through the following steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations
in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the
contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation. Contracts with Customers Revenue from sales of products
and services is derived from contracts with customers. The products and services covered by contracts primarily consist of hot spot 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 provisions for the years ended
June 30, 2024, and 2023, were 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 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. The balances of our trade receivables are as follows:
Schedule of trade receivables
June 30, 2024 June 30, 2023
Accounts Receivable, net $ 1,155,060 $ 8,949,802 The balance of contract assets
was immaterial as we did not have a significant amount of un-invoiced receivables in the periods ended June 30, 2024, and June 30, 2023. Our contract liabilities and
advance from customers are as follows:
Schedule of contract liabilities and advance
from customers
June 30, 2024 June 30, 2023
Undelivered products $ 158,771 $ 146,488 Performance Obligations A performance obligation is a
promise in a contract to transfer a distinct good and/or service to the customer and is the unit of measurement in Topic 606. At contract
inception, we assess the products and/or services promised in our contracts with customers. We then identify performance obligations to
transfer distinct products and/or services to the customer. 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
satisfied at a point in time. Revenue from products transferred to customers at a single point in time accounted for over 99 1 As of June 30, 2024 and 2023,
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 $ 970,000 800,000 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 shall be 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 2 to Notes to Consolidated Financial Statements) include certifications, licenses, 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 straight-line amortization. The amortization begins when the products are available for general release
to our customers. As of June 30, 2024, and 2023,
capitalized product development costs in progress were $ 0 203,838 123,359 1,631,376 Research and Development Costs Costs associated with research and development
are expensed as incurred. Research and development costs were $ 3,406,750 3,918,664 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 statements of comprehensive income, were $ 163,138 234,681 Cash and Cash Equivalents For the 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 and have a $1.00 net asset value. Short Term Investments We have invested excess funds
in short-term liquid assets, such as certificates of deposit or money market funds. Inventories, Net 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 June 30, 2024, and 2023, we have recorded inventory reserves in the amount of $ 91,482 585,274 Property and Equipment, Net Property and equipment are recorded
at cost. Significant additions or improvements extending the useful lives of assets are capitalized. Maintenance and repairs of expense
nature are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives as
follows:
Schedule of estimated useful lives
Machinery 6 years
Office equipment 5 years
Molds 3~6 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 were 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 Intangible Assets, Net The definite lived intangible
assets consisted of the following as of June 30, 2024:
Schedule of definite lived intangible
assets
Definite lived intangible assets: Expected Life
Average Remaining life
Gross Intangible Assets
Less Accumulated Amortization
Net Intangible Assets
Complete technology 3 – 18,397 18,397 –
Technology in progress Not Applicable – – – –
Software 5 1.6 489,992 365,526 124,466
Patents 10 6.7 67,373 27,345 40,028
Certifications & licenses 3 1.4 3,924,007 2,778,875 1,145,132
Total as of June 30, 2024 $ 4,499,769 3,190,143 1,309,626 The definite lived intangible
assets consisted of the following as of June 30, 2023:
Definite lived intangible assets: Expected Life
Average Remaining life
Gross Intangible Assets
Less Accumulated Amortization
Net Intangible Assets
Complete technology 3 – 18,397 18,397 –
Technology in progress Not Applicable – 203,838 – 203,838
Software 5 1.6 423,762 347,228 76,534
Patents 10 7.0 59,975 21,108 38,867
Certifications & licenses 3 2.0 3,759,240 1,897,595 1,861,645
Total as of June 30, 2023 $ 4,465,212 2,284,328 2,180,884 Amortization expense recognized
during the years ended June 30, 2024, and 2023 were $ 992,699 839,595 86,884 $9,404 no The amortization expenses of the
definite lived intangible assets for the next five years and thereafter are as follows:
Schedule of amortization expenses of the
definite lived intangible assets
FY2025 FY2026 FY2027 FY2028 FY2029 Thereafter
Total $ 853,077 $ 385,150 $ 45,234 $ 17,913 $ 7,688 $ 564 Impairment
of Long-lived Assets In accordance with ASC 360, “Property,
Plant, and Equipment,” 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 assets; 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. We are not aware of any events
or changes in circumstances during the year ended June 30, 2024, that would indicate that the long-lived assets are impaired. Stock-based Compensation The Company accounts for stock
options and other equity-based compensation issued in accordance with ASC 718 “Stock Compensation”, which requires the measurement
and recognition of compensation expense related to the fair value of equity-based compensation awards that are ultimately expected to
vest. Stock-based compensation expense recognized includes the compensation cost for all share-based compensation payments granted to
employees and non-employees, net of estimated forfeitures, over the employees’ requisite service period or the non-employees’
performance period based on the grant date fair value estimated in accordance with the provision of ASC 718. ASC 718 is also applied to
awards modified, repurchased, or cancelled during the periods reported. Income Taxes The Company uses 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. The Company assesses its income
tax positions and records 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, the Company records
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. The Company classifies interest and penalties associated
with such uncertain tax positions as a component of income tax expense. (Loss) Earnings per Share Attributable to Common
Stockholders In accordance with ASC 260. Basic
(loss) earnings per share are calculated by dividing the net (loss) income by the weighted-average number of common shares that were outstanding
for the period, without consideration for potential common shares. Diluted (loss) earnings per share is calculated by dividing the net
(loss) 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. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive. Concentrations of Credit Risk 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 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 year ended June 30, 2024, net sales to our two largest customers represented approximately
68 22 0 85 61 31 27 69 For the year ended June 30, 2024,
we purchased the majority of our wireless data products from two manufacturing companies located in Asia. If they were to experience delays,
capacity constraints or quality control problems, product shipments to our customers could be delayed, or our customers could consequently
elect to cancel the underlying product purchase order, which would negatively impact our revenue. For the year ended June 30, 2024, we
purchased wireless data products from two suppliers in the amount of $ 23,581,572 98.9 6,263,385 37,505,858 99.6 12,598,741 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 September 2022, the
FASB issued ASU No. 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50) In November
2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07,
Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures
of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and
included within each reported measure of a segment’s profit or loss. This ASU also requires disclosure of the title and position of the
individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in
assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December
15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively
to all prior periods presented in the financial statements. Early adoption is also permitted. This ASU will likely result in the required
additional disclosures being included in our consolidated financial statements, once adopted. In December 2023, the
FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting
entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective
basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have
not yet been issued or made available for issuance. This ASU will likely result in the required additional disclosures being included
in our consolidated financial statements, once adopted. |
