What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-09-30 compared with 2023-09-28 · 202 added, 220 removed, 154 unchanged (73% of the section changed)

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CONDITION AND RESULTS OF OPERATIONS.

The following discussion and

analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related

notes included elsewhere in this report.

This report contains certain forward-looking statements relating to future events or our future

financial performance.

These statements are subject to risks and uncertainties which could cause actual results to differ materially from

those discussed in this report.

You are cautioned not to place undue reliance on this information which speaks only as of the date of

We are not obligated to publicly update this information, whether as a result of new information, future events or otherwise,

except to the extent we are required to do so in connection with our obligation to file reports with the SEC.

For a discussion of the

important risks to our business and future operating performance, see the discussion under the caption “Item 1A.

Risk Factors”

and under the caption “Factors That May Influence Future Results of Operations” below.

In light of these risks, uncertainties

and assumptions, the forward-looking events discussed in this report might not occur.

The following discussion and analysis

of our financial condition and results of operations should be read in conjunction with our financial statements and related notes included

elsewhere in this report.

This report contains certain forward-looking statements relating to future events or our future financial performance.

These statements are subject to risks and uncertainties which could cause actual results to differ materially from those discussed in

You are cautioned not to place undue reliance on this information which speaks only as of the date of this report.

not obligated to publicly update this information, whether as a result of new information, future events or otherwise, except to the extent

we are required to do so in connection with our obligation to file reports with the SEC.

For a discussion of the important risks to our

business and future operating performance, see the discussion under the caption “Item 1A.

Risk Factors” and under the caption

“Factors That May Influence Future Results of Operations” below.

In light of these risks, uncertainties and assumptions, the

forward-looking events discussed in this report might not occur.

BUSINESS OVERVIEW

We are a leading provider

of integrated wireless solutions utilizing the latest in 4G LTE (fourth generation long-term evolution) and 5G (fifth generation) technologies

including mobile hotspots, routers, CPEs (Customer Premise Equipment), and various trackers.

Our integrated software subscription services

provide users remote capabilities including mobile device management (MDM) and software defined wide area networking (SD-WAN).

We have majority ownership

of Franklin Technology Inc.

Doing business

as “FranklinAccess”, we are a leading global provider of integrated wireless solutions utilizing the latest 5G (fifth generation)

and 4G LTE (fourth generation long-term evolution) technologies including mobile hotspots, fixed wireless routers, and mobile device management

(MDM) solutions.

We are a leading enabler of the Digital Divide initiative, and our expertise extends to innovation in Internet of Things

(IOT) and machine-to-machine (M2M) applications, driving forward seamless communication and connectivity for both individuals and enterprises.

majority ownership of Franklin Technology Inc.

(FTI), a research and development company based in Seoul, South Korea.

FTI primarily provides design and development

services for our wireless products.

FTI primarily provides

design and development services for our wireless products.

Our products are generally

marketed and sold directly to wireless operators and indirectly through strategic partners and distributors.

Our global customer base

primarily extends from North America, the Caribbean and South America to countries in the Asia.

FACTORS THAT MAY INFLUENCE FUTURE RESULTS OF

Our primary markets are in

North America and Asia.

FACTORS THAT MAY INFLUENCE FUTURE RESULTS OF OPERATIONS

We believe that our revenue

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defect rates experienced by end users of our hardware and software products.

We have entered into and expect

to continue to enter into new customer relationships and contracts for the supply of our products, and this may require significant demands

on our resources, resulting in increased operating, selling, and marketing expenses associated with such new customers.

We continuously evaluate the

performance of our hardware and software products to discover defects that can adversely affect our revenue, income, and the price of

We have entered into and

expect to continue to enter into new customer relationships and contracts for the supply of our products, and this may require significant

demands on our resources, resulting in increased operating, selling, and marketing expenses associated with such new customers.

We continuously evaluate

the performance of our hardware and software products to discover defects that can adversely affect our revenue, income, and the price

of our stock.

If defects occur that customers believe are either severe in nature or excessively frequent in occurrence, customers could

stop buying our products and services and the value of our stock may decrease.

We are also seeing that demand

from end-users has been shifting in the post-pandemic economy as remote education and work from home trends are declining.

Current demand

for mobile device management (MDM) services has been declining.

We are working to improve and further enhance our software service offerings

to address this change in the market.

We are also seeing that

demand from end-users has been shifting in the post-pandemic economy as remote education and work from home trends are declining.

demand for mobile device management (MDM) services has been declining.

We are working to improve and further enhance our software service

offerings to address this change in the market.

CRITICAL ACCOUNTING POLICIES

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

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Contract Balances

We perform our obligations

under a contract with a customer by transferring products in exchange for consideration from the customer.

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:

However, we recognize contract liability when a customer

prepays for goods and/or services, or when 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:

June 30, 2024

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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.

in the Accounts Receivable balance as of June 30, 2022, is a passthrough amount of $837,000.

These transactions were a direct result of

an agreement between our vendor and our customer.

There is a corresponding balance of $837,000 in our Accounts Payable account as of June

30, 2022, to offset.

These balances are removed as of June 30, 2023, since these pass-through charges are unlikely to ever be collected

due to the customer's refusal to pay.

There were no such balances as of June 30, 2023.

Our contract liabilities,

which are included in accrued liabilities on our consolidated balance sheets, are as follows:

Our contract liabilities and advance

from customers are as follows:

June 30, 2024

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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.

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.

inception, we assess the products and/or services promised in our contracts with customers.

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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% of net

sales for the year ended June 30, 2023 and 2022.

Revenue for non-recurring engineering projects is based on the percentage completion

of a project and accounted for under 1% of net sales for the years ended June 30, 2023 and 2022.

Most of our revenue that is recognized

at a point in time is for the sale of hot-spot router products.

Revenue from these contracts is recognized when the customer can 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.

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% of net sales

for the year ended June 30, 2024 and 2023.

Revenue for non-recurring engineering projects is based on the percentage completion of a project

and accounted for under 1% of net sales for the years ended June 30, 2024 and 2023.

Most of our revenue that is recognized at a point

in time is for the sale of hot-spot router products.

Revenue from these contracts is recognized when the customer can 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

As of June 30, 2024 and 2023,

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As of June 30, 2024, and June

30, 2022, capitalized product development costs in progress were $203,838 and $187,343, respectively, and these amounts are included in

intangible assets in our consolidated balance sheets.

During the years ended June 30, 2023 and 2022, we incurred $1,631,376 and $658,544,

respectively in capitalized product development costs, and all costs incurred before technological feasibility is reached are expensed

and included in our consolidated statements of comprehensive income (loss).

Deferred income tax assets

and liabilities are recorded for differences between the financial statement and tax basis of the assets and liabilities that will result

30, 2023, capitalized product development costs in progress were $0 and $203,838, respectively, and these amounts are included in intangible

assets in our consolidated balance sheets.

For the years ended June 30, 2024 and 2023, we incurred $123,359 and $1,631,376, respectively

in capitalized product development costs, and all costs incurred before technological feasibility is reached are expensed and included

in our consolidated statements of comprehensive income (loss).

Deferred income tax assets and

liabilities are recorded for differences between the financial statement and tax basis of the assets and liabilities that will result

in taxable or deductible amounts in the future based on enacted laws and rates applicable to the periods in which the differences are

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As of June 30, 2023, we have federal and state net operating loss carryforwards of approximately $2.5 million and

$40,000, respectively.

Under the Tax Cuts and Jobs

Act (the “Act”), which was signed into law on December 22, 2017, the federal net operating loss of approximately $2.5 million,

$0.5 million, respectively.

Under the Tax Cuts and Jobs Act

(the “Act”), which was signed into law on December 22, 2017, the federal net operating loss of approximately $2.5 million,

which was recognized on or after January 1, 2018, will carry forward indefinitely.

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RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Refer to NOTE 2 - SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES in the Consolidated Financial Statements.

Refer to NOTE 2 - SUMMARY OF SIGNIFICANT

ACCOUNTING POLICIES in the Consolidated Financial Statements.

RESULTS OF OPERATIONS

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Net loss before income taxes

Income tax (benefit) provision

non-controlling interest in net income (loss) of subsidiary

Income tax benefit

non-controlling interest in net (loss) income of subsidiary

Net loss attributable to Parent Company stockholders

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NET SALES - Net sales

decreased by $15,151,826, or 33.0%, to $30,796,690 for the year ended June 30, 2024 from $45,948,516 for the corresponding period of 2023.

For the year ended June 30, 2024, net sales by geographic regions, consisting of North America and Asia, were $30,699,727 (99.7% of net

sales) and $96,963 (0.3% of net sales), respectively.

For the year ended June 30, 2023, net sales by geographic regions, consisting of

North America and Asia, were $45,782,084 (99.6% of net sales) and $166,432 (0.4% of net sales), respectively.

Net sales in North America decreased

by $15,082,357, or 32.9%, to $30,699,727 for the year ended June 30, 2024, from $45,782,084 for the corresponding period of 2023.

decrease in net sales in North America was primarily due to the reduced demand from two major carriers by approximately 50% and 26%, compared

to the corresponding period of 2023.

Net sales in Asia decreased by $69,469, or 41.7%, to $96,963 for the year ended June 30, 2024, from

$166,432 for the corresponding period of 2023.

The decrease in net sales was primarily due to the reduced demand (approximately 61%) for

a newly launched wireless product from a customer of FTI.

GROSS PROFIT - Gross profit

decreased by $3,512,392, or 50.0%, to $3,508,350 for the year ended June 30, 2024, from $7,020,742 for the corresponding period of 2023.

The gross profit in terms of net sales percentage was 11.4% for the year ended June 30, 2024, compared to 15.3% for the corresponding

period of 2023.

The decrease in gross profit was primarily due to the change in net sales as described above.

The decrease in gross profit

in terms of net sales was the mixed results of competitive selling prices and the increase in production costs as well as the increased

amortization expenses associated with the completed capitalized product development costs that are included in the cost of goods sold

compared to the corresponding period of 2023.

OPERATING EXPENSES - Operating

expenses increased by $77,788, or 0.8%, to $9,448,105 for the year ended June 30, 2024, from $9,370,317 for the corresponding period of

Selling, general, and administrative

expenses increased by $589,702 to $6,041,355 for the year ended June 30, 2024, from $5,451,653 for the corresponding period of 2023.

increase in selling, general, and administrative expenses was primarily due to the increased legal expenses of approximately $540,000.

Research and development expenses decreased by $511,914 to $3,406,750 for the year ended June 30, 2024, from $3,918,664 for the corresponding

period of 2023.

The decrease in research and development expense was primarily due to the decreased research and development costs and

the related payroll expense of approximately $250,000 and $260,000, respectively, which is the mixed result of the timing of research

and development activities and the number of active projects and typically vary from period to period.

OTHER INCOME (EXPENSE), NET

- Other income (expense), net increased by $2,305,527, or 155.6%, to $823,784 for the year ended June 30, 2024, from ($1,481,743) for

the corresponding period of 2023.

The increase was primarily due to the decreased loss from the agreement in principle to settle a legal

action of $2,400,000, the increased loss from unfavorable changes in foreign currency exchange rates in FTI of approximately $360,000,

which were offset by the increased interest income earned from the money market accounts and certificates of deposit of approximately

YEAR ENDED JUNE 30, 2023, COMPARED TO YEAR ENDED JUNE 30, 2022

NET SALES - Net sales

increased by $21,950,754, or 91.5%, to $45,948,516 for the year ended June 30, 2023 from $23,997,762 for the corresponding period of 2022.

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of net sales), $2,375 (0.0% of net sales), and $690,021 (2.9% of net sales), respectively.

Net sales in North America

increased by $22,476,718, or 96.4%, to $45,782,084 for the year ended June 30, 2023, from $23,305,366 for the corresponding period of

The increase in net sales in North America was primarily due to the new demand for two newly launched wireless products from a major

carrier customer (approximately $14M newly generated revenue) which did not purchase our products during the fiscal year 2022, and the

increased demand by approximately $11M, or 66%, for our wireless products from the existing major carrier customer compared to the fiscal

year 2022, which were offset by the decreased demands from other customers.

Net sales in the Caribbean

and South America decreased by $2,375, or 100%, to $0 for the year ended June 30, 2023, from $2,375 for the corresponding period of 2022.

Net sales in North America increased

by $22,476,718, or 96.4%, to $45,782,084 for the year ended June 30, 2023, from $23,305,366 for the corresponding period of 2022.

increase in net sales in North America was primarily due to the new demand for two newly launched wireless products from a major carrier

customer (approximately $14M newly generated revenue) which did not purchase our products during the fiscal year 2022, and the increased

demand by approximately $11M, or 66%, for our wireless products from the existing major carrier customer compared to the fiscal year 2022,

which were offset by the decreased demands from other customers.

Net sales in the Caribbean and

South America decreased by $2,375, or 100%, to $0 for the year ended June 30, 2023, from $2,375 for the corresponding period of 2022.

Net sales in Asia decreased by $523,589, or 75.9%, to $166,432 for the year ended June 30, 2023, from $690,021 for the corresponding period

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$160,000) for the year ended June 30, 2023.

GROSS PROFIT - Gross

profit increased by $3,204,159, or 84.0%, to $7,020,742 for the year ended June 30, 2023, from $3,816,583 for the corresponding period

GROSS PROFIT - Gross profit

increased by $3,204,159, or 84.0%, to $7,020,742 for the year ended June 30, 2023, from $3,816,583 for the corresponding period of 2022.

The gross profit in terms of net sales percentage was 15.3% for the year ended June 30, 2023, compared to 15.9% for the corresponding

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in terms of net sales percentage was the mixed results of competitive selling prices and the increase in production costs of the launched

OPERATING EXPENSES

- Operating expenses increased by $578,842, or 6.6%, to $9,370,317 for the year ended June 30, 2023, from $8,791,475 for the corresponding

period of 2022.

OPERATING EXPENSES - Operating

expenses increased by $578,842, or 6.6%, to $9,370,317 for the year ended June 30, 2023, from $8,791,475 for the corresponding period

Selling, general, and administrative

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of approximately $89,000.

OTHER INCOME, NET -

Other income, net decreased by $1,747,162, or 658.3%, to $1,481,743 for the year ended June 30, 2023, from $265,419 for the corresponding

period of 2022.

The decrease was primarily due to the loss from the agreement in principle to settle a legal action of $2,400,000 and

the increased loss from unfavorable changes in foreign currency exchange rates in FTI of approximately $184,000, which were offset by

the increased interest income earned from the money market accounts and certificates of deposit of approximately $388,000, the increased

unrealized gain from an investment account of approximately $340,000, and the increased gain from forgiven liabilities of approximately

YEAR ENDED JUNE 30, 2022, COMPARED TO YEAR ENDED JUNE 30, 2021

NET SALES - Net sales

decreased by $160,117,583, or 87.0%, to $23,997,762 for the year ended June 30, 2022, from $184,115,345 for the corresponding period of

For the year ended June 30, 2022, net sales by geographic regions, consisting of North America, the Caribbean and South America,

and Asia were $23,305,366 (97.1% of net sales), $2,375 (0.0% of net sales), and $690,021 (2.9% of net sales), respectively.

ended June 30, 2021, net sales by geographic regions, consisting of North America, the Caribbean and South America, and Asia were $183,771,146

(99.8% of net sales), $17,500 (0.0% of net sales), and $326,699 (0.2% of net sales), respectively.

Net sales in North America

decreased by $160,465,780, or 87.3%, to $23,305,366 for the year ended June 30, 2022, from $183,771,146 for the corresponding period of

The decrease in net sales in North America was primarily due to the reduction of demand for wireless products from one major carrier

customer, resulting from the unprecedented high volume of demand for wireless products during the prior period, which coincided with the

early stages of the Covid-19 Pandemic period.

Net sales in the Caribbean and South America decreased by $15,125, or 86.4%, to $2,375 for

the year ended June 30, 2022, from $17,500 for the corresponding period of 2021.

Net sales in Asia increased by $363,322, or 111.2%, to

$690,021 for the year ended June 30, 2022, from $326,699 for the corresponding period of 2021.

The increase in net sales was primarily

due to the revenue generated from the material sales by FTI, which typically vary from period to period.

GROSS PROFIT - Gross

profit decreased by $28,647,438, or 88.2%, to $3,816,583 for the year ended June 30, 2022, from $32,464,021 for the corresponding period

The gross profit in terms of net sales percentage was 15.9% for the year ended June 30, 2022, compared to 17.6% for the corresponding

period of 2021.

The decrease in gross profit was primarily due to the change in net sales as described above.

The decrease in gross profit

in terms of net sales percentage was primarily due to variations in customer and product mix, competitive selling prices and product costs

which generally vary from period to period and region to region.

OPERATING EXPENSES

- Operating expenses decreased by $854,236, or 8.9%, to $8,791,475 for the year ended June 30, 2022, from $9,645,711 for the corresponding

period of 2021.

Selling, general, and administrative

expenses decreased by $568,504 to $4,509,344 for the year ended June 30, 2022, from $5,077,848 for the corresponding period of 2021.

decrease in selling, general, and administrative expenses was primarily due to decreased shipping and handling charges of approximately

$480,000, decreased payroll expense as well as bad debt expense of approximately $340,000, which are partially offset by the increased

compensation expense related to stock options granted for employees and amortization expense of approximately $165,000 and $141,000, respectively.

Research and development expenses

decreased by $363,467 to $3,918,664 for the year ended June 30, 2023, from $4,282,131 for the corresponding period of 2022.

The decrease in research and development expense was primarily due to the mix of the timing of research and development activities and

the number of active projects, which typically vary from period to period.

For the year ended June 30, 2023, the research and development

expenses decreased by approximately $450,000, which is partially offset by the increased payroll expenses for employees involved in research

and development of approximately $89,000.

OTHER INCOME, NET -

Other income, net decreased by $351,748, or 57.0%, to $265,419 for the year ended June 30, 2022, from $617,167 for the corresponding period

The decrease was primarily due to the forgiveness of the Payroll Protection Plan loan during the fiscal year 2021, with no similar

transaction in fiscal year 2022, as well as decreased product development funding received by FTI from a government entity.

This was partially

offset by the gain from the favorable changes in foreign currency exchange rates in FTI and the increased interest income earned from

the money market accounts and certificates of deposit.

OTHER INCOME, NET - Other

income, net decreased by $1,747,162, or 658.3%, to $1,481,743 for the year ended June 30, 2023, from $265,419 for the corresponding period

The decrease was primarily due to the loss from the agreement in principle to settle a legal action of $2,400,000 and the increased

loss from unfavorable changes in foreign currency exchange rates in FTI of approximately $184,000, which were offset by the increased

interest income earned from the money market accounts and certificates of deposit of approximately $388,000, the increased unrealized

gain from an investment account of approximately $340,000, and the increased gain from forgiven liabilities of approximately $199,000.

LIQUIDITY AND CAPITAL RESOURCES

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sources of liquidity to fund our operating activities and obligations as they become due.

Our principal source of liquidity

as of June 30, 2023, consisted of cash and cash equivalents as well as short-term investments of $38,969,599.

We believe we have

sufficient available capital to cover our existing operations and obligations through at least June 30, 2024.

Our long-term future

cash requirements will depend on numerous factors, including our revenue base, profit margins, product development activities, market

acceptance of our products, future expansion plans and ability to control costs.

If we are unable to achieve our current business

plan or secure additional funding that may be required, we would need to curtail our operations or take other similar actions outside

the ordinary course of business in order to continue to operate as a going concern.

Our principal source of

liquidity as of June 30, 2024, consisted of cash and cash equivalents as well as short-term investments of $37,457,827.

we have sufficient available capital to cover our existing operations and obligations through at least June 30, 2025.

Our long-term

future cash requirements will depend on numerous factors, including our revenue base, profit margins, product development activities,

market acceptance of our products, future expansion plans and ability to control costs.

If we are unable to achieve our current

business plan or secure additional funding that may be required, we would need to curtail our operations or take other similar actions

outside the ordinary course of business.

OPERATING ACTIVITIES –

Net cash used in operating activities for the years ended June 30, 2024 and 2023 were $773,360 and $1,882,114, respectively.

The $1,882,114 in net cash

used in operating activities for the year ended June 30, 2023 was primarily due to the increase in accounts receivable of $7,601,489 as

well as our operating results (net loss adjusted for depreciation, amortization, and other non-cash charges), which was offset by the

increase of accounts payable and accrued legal contingency expense of $4,905,499 and $2,400,000, respectively.

The $7,407,355 in net cash

used in operating activities for the year ended June 30, 2022 was primarily due to the increase in inventory and decrease in accounts

payable of $3,222,344 and $1,537,287, respectively, as well as our operating results (net loss adjusted for depreciation, amortization,

and other non-cash charges), which was offset by the decrease of accounts receivable of $1,205,938.

The $773,360 in net cash used

in operating activities for the year ended June 30, 2024 was primarily due to the decrease in accounts payable and accrued legal contingency

expense of $5,685,087 and $2,400,000, respectively, as well as our operating results (net loss adjusted for depreciation, amortization,

and other non-cash charges), which was offset by the decrease of accounts receivable and inventories of $7,722,229 and $2,290,211, respectively.

The $1,882,114 in net cash used in operating activities for the year ended June 30, 2023 was primarily due to the increase in accounts

receivable of $7,627,183 as well as our operating results (net loss adjusted for depreciation, amortization, and other non-cash charges),

which was offset by the increase of accounts payable and accrued legal contingency expense of $4,905,499 and $2,400,000, respectively.

INVESTING ACTIVITIES –

– Net cash used in investing activities for the years ended June 30, 2023, and 2022 was $12,109,183 and $11,675,028, respectively.

The $12,109,183 in net cash

used in investing activities for the year ended June 30, 2023 was primarily due to the purchases of short-term investments of $10,391,654

and capitalized product development of $1,631,376.

The $11,675,028 in net cash used in investing activities for the year ended June 30,

2022, was primarily due to the purchases of short-term investments and capitalized product development of $10,950,625 and $658,544, respectively.

Net cash provided by investing activities for the year ended June 30, 2024 was $723,858, and net cash used in investing activities for

the year ended June 30, 2023 was $12,109,183.

The $723,858 in net cash provided

by investing activities for the year ended June 30, 2024 was primarily due to the proceeds of short-term investments of $910,034, which

was offset by the purchases of capitalized product development of $123,359.

The $12,109,183 in net cash used in investing activities

for the year ended June 30, 2023 was primarily due to the purchases of short-term investments of $10,391,654 and capitalized product

development of $1,631,376.

FINANCING ACTIVITIES –

Net cash provided by financing activities for the years ended June 30, 2024 and 2023 was $91,057 and $42,943, respectively.

The $42,943 in net cash provided

by financing activities for the year ended June 30, 2023 was from the exercise of stock options of $45,000, which was offset by loan to

an employee of $2,057.

The $75,445 in net cash provided by financing activities for the year ended June 30, 2022 was from the exercise

of stock options.

The $91,057 in net cash

provided by financing activities for the year ended June 30, 2024 was repayment received from the loan to an employee of $91,057.

$42,943 in net cash provided by financing activities for the year ended June 30, 2023 was from the exercise of stock options of $45,000,

which was offset by loan to an employee of $2,057.

OFF-BALANCE SHEET ARRANGEMENTS

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flow in future periods:

Payments due by June 30,

Legal contingency expense

Operating Lease

Total Obligations

On April 16, 2021, an action

was filed in the United States District Court for the Southern District of California against the Company and two of its officers relating

to the timing of the disclosure of a recall of certain Jetpack products supplied by the Company to Verizon.

The agreement was memorialized

in a memorandum of understanding (the “Memorandum of Understanding”) which was fully executed on May 3, 2023.

The Memorandum

of Understanding was formalized in a Stipulation and Agreement of Settlement (the “Settlement Agreement”) that was executed

on May 23, 2023, and filed with the Court on May 24, 2023.

Under the terms of the Settlement Agreement, the Company will pay $2.4 million

(the “Settlement Amount”) into an escrow account maintained by Huntington National Bank subject to the approval of the Court.

The terms and conditions expressly provided within the Settlement Agreement, such Settlement fully, finally and forever settles, releases,

resolves and dismisses with prejudice all claims asserted against the Company.

This agreement is still pending final approval by the Federal

Court as of the date of this filing.

Total lease payments

Less imputed interest

Remaining lease term-operating leases

Discount rate-operating lease

Refer to ITEM 2.

WARRANTY REPAIRS

The following table sets forth the percentages

of return rates and warranty repairs for all products currently marketed, in the aggregate from the date each product was introduced through

June 30, 2024.

Current Devices

Warranty Repairs

4G Wireless Devices

5G Wireless Devices

FUTURE LIQUIDITY AND CAPITAL REQUIREMENTS

For the next twelve months,

we may require in excess of $5 million for capital expenditures, software licenses and for testing and certifying new products.

For the next twelve months, we

may require in excess of $2 million for capital expenditures, software licenses and for testing and certifying new products.

We believe we will be able

to fund our future cash requirements for operations from our cash available, operating cash flows, bank lines of credit and issuance of

equity securities.

We believe these sources of funds will be sufficient to continue our operations and planned capital expenditures.

we will be required to raise additional debt or equity capital if we are unable to generate sufficient cash flow from operations to fund

the expansion of our sales and to satisfy the related working capital requirements for the next twelve months.

Our ability to satisfy

such obligations also depends upon our future performance, which in turn is subject to general economic conditions and regional risks,

and to financial, business and other factors affecting our operations, including factors beyond our control.

See Item 1A, “Risk

Factors” included in this report.

If we are unable to generate

sufficient cash flow from operations to meet our obligations and commitments, we will be required to raise additional debt or equity capital.

Additionally, we may be required to sell material assets or operations or delay or forego expansion opportunities.

We might not be able

to effect these alternative strategies to raise funds including credit lines and loans, on satisfactory terms, if at all.

to fund our future cash requirements for operations from our cash available, operating cash flows, bank lines of credit and issuance

of equity securities.

We believe these sources of funds will be sufficient to continue our operations and planned capital

expenditures.

However, we will be required to raise additional debt or equity capital if we are unable to generate sufficient cash

flow from operations to fund the expansion of our sales and to satisfy the related working capital requirements for the next twelve

Our ability to satisfy such obligations also depends upon our future performance, which in turn is subject to general

economic conditions and regional risks, and to financial, business and other factors affecting our operations, including factors

beyond our control.

See Item 1A, “ Risk Factors ” included in this report.

If we are unable to generate sufficient

cash flow from operations to meet our obligations and commitments, we will be required to raise additional debt or equity capital.

Additionally,

we may be required to sell material assets or operations or delay or forego expansion opportunities.

We might not be able to effect these

alternative strategies to raise funds including credit lines and loans, on satisfactory terms, if at all.

QUANTITATIVE AND QUALITATIVE

1 unchanged sentence

Not applicable.

FINANCIAL STATEMENTS AND

SUPPLEMENTARY DATA

The financial statements and

the supplementary financial information required by this Item and included in this report are listed in the Index to Financial Statements

FINANCIAL STATEMENTS AND SUPPLEMENTARY

The financial statements and the

supplementary financial information required by this Item and included in this report are listed in the Index to Financial Statements

beginning on page F-1.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

ON ACCOUNTING AND FINANCIAL DISCLOSURE

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON

ACCOUNTING AND FINANCIAL DISCLOSURE.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis