7. COMMITMENTS AND CONTINGENCIES	9 Months Ended
Mar. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 7 - COMMITMENTS AND CONTINGENCIES Leases We lease approximately 12,775 square feet of office space in San Diego, California, at a monthly rent of $23,115, pursuant to a lease that expires in October 2019. In addition to monthly rent, the lease includes payment for certain common area costs. Our facility is covered by an appropriate level of insurance and we believe it to be suitable for our use and adequate for our present needs. Rent expense for this office space was $69,345 for the three months ended March 31, 2019 and 2018, and $208,035 for the nine months ended March 31, 2019 and 2018. Our Korea-based subsidiary, FTI, leases approximately 10,000 square feet of office space in Seoul, Korea, at a monthly rent of approximately $8,000. The lease expires on September 1, 2019. Beginning on June 12, 2015, FTI leased additional office space consisting of approximately 2,682 square feet, also located in Seoul, Korea, at a monthly rent of approximately $2,700, and the lease expires on September 1, 2019. In addition to monthly rent, the lease provides for periodic cost of living increases in the base rent and payment for certain common area costs. These facilities are covered by an appropriate level of insurance and we believe them to be suitable for our use and adequate for our present needs. Rent expense related to these leases was approximately $32,100 for the three months ended March 31, 2019 and 2018, and approximately $96,300 for the nine months ended March 31, 2019 and 2018. We lease one corporate housing facility primarily for our employees who travel, under a non-cancelable operating lease that expires on September 4, 2019. Rent expense related to this lease was approximately $2,535 and $2,664 for the three months ended March 31, 2019 and 2018, and approximately $7,626 and $7,158 for the nine months ended March 31, 2019 and 2018. Other Contingencies Due to a cancelled purchase commitment by a significant customer, the Company has received a request for payment from a significant vendor in the amount of $2.9M for components purchased to fulfill that customer’s order. The Company has also requested payment of $2.9M for those components from the above-mentioned customer. We intend to remit payment to the vendor once the amounts are received from the customer. We have received assurances from the customer that we will be paid for this cancelled purchase commitment and we also have in place personal guarantees from the owners/principals of this customer. The vendor may be able to repurpose certain parts purchased into other orders we have placed or will place in the future. The company has made a pre-payment of $100,000 for future orders. The Company has also agreed to a temporary price increase of $1.00 per unit for current products to apply toward future orders. These amounts will be credited back to the Company upon consuming the components. No products have been transferred to us and there have been no revenue generating events relating to this situation. All parties are working towards a resolution as soon as possible, however, at this time material unresolved contingencies remain. Since it is not known at this time the exact amount that ultimately will be collected from the customer to be remitted to the vendor, the Company has not recorded these amounts into either Accounts Payable or Accounts Receivable. Litigation We are from time to time involved in certain legal proceedings and claims arising in the ordinary course of business. Management does not believe that the outcome of these matters will have any material adverse effect on the Company. Change of Control Agreements On September 21, 2009, we entered into Change of Control Agreements with OC Kim, our President, and Yun J. (David) Lee, our Chief Operating Officer. Each Change of Control Agreement provides for a lump sum payment to the officer in case of a change of control of the Company. The term includes the acquisition of Common Stock of the Company resulting in one person or company owning more than 50% of the outstanding shares, a significant change in the composition of the Board of Directors of the Company during any 12-month period, a reorganization, merger, consolidation or similar transaction resulting in the transfer of ownership of more than fifty percent (50%) of the Company's outstanding Common Stock, or a liquidation or dissolution of the Company or sale of substantially all of the Company's assets. The Change of Control Agreement with Mr. Kim calls for a payment of $5 million upon a change of control, and the agreement with Mr. Lee calls for a payment of $2 million upon a change of control. The Board of Directors has approved extension of the Change of Control Agreements with Mr. Kim and Mr. Lee through September 30, 2021.

7. COMMITMENTS AND CONTINGENCIES

9 Months Ended

Mar. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

NOTE 7 - COMMITMENTS AND CONTINGENCIES

Leases

We lease approximately 12,775 square feet of office space in San Diego, California, at a monthly rent of $23,115, pursuant to a lease that expires in October 2019. In addition to monthly rent, the lease includes payment for certain common area costs. Our facility is covered by an appropriate level of insurance and we believe it to be suitable for our use and adequate for our present needs. Rent expense for this office space was $69,345 for the three months ended March 31, 2019 and 2018, and $208,035 for the nine months ended March 31, 2019 and 2018.

Our Korea-based subsidiary, FTI, leases approximately 10,000 square feet of office space in Seoul, Korea, at a monthly rent of approximately $8,000. The lease expires on September 1, 2019. Beginning on June 12, 2015, FTI leased additional office space consisting of approximately 2,682 square feet, also located in Seoul, Korea, at a monthly rent of approximately $2,700, and the lease expires on September 1, 2019. In addition to monthly rent, the lease provides for periodic cost of living increases in the base rent and payment for certain common area costs. These facilities are covered by an appropriate level of insurance and we believe them to be suitable for our use and adequate for our present needs. Rent expense related to these leases was approximately $32,100 for the three months ended March 31, 2019 and 2018, and approximately $96,300 for the nine months ended March 31, 2019 and 2018.

We lease one corporate housing facility primarily for our employees who travel, under a non-cancelable operating lease that expires on September 4, 2019. Rent expense related to this lease was approximately $2,535 and $2,664 for the three months ended March 31, 2019 and 2018, and approximately $7,626 and $7,158 for the nine months ended March 31, 2019 and 2018.

Other Contingencies

Due to a cancelled purchase commitment by a significant customer, the Company has received a request for payment from a significant vendor in the amount of $2.9M for components purchased to fulfill that customer’s order. The Company has also requested payment of $2.9M for those components from the above-mentioned customer. We intend to remit payment to the vendor once the amounts are received from the customer. We have received assurances from the customer that we will be paid for this cancelled purchase commitment and we also have in place personal guarantees from the owners/principals of this customer. The vendor may be able to repurpose certain parts purchased into other orders we have placed or will place in the future. The company has made a pre-payment of $100,000 for future orders. The Company has also agreed to a temporary price increase of $1.00 per unit for current products to apply toward future orders. These amounts will be credited back to the Company upon consuming the components. No products have been transferred to us and there have been no revenue generating events relating to this situation. All parties are working towards a resolution as soon as possible, however, at this time material unresolved contingencies remain. Since it is not known at this time the exact amount that ultimately will be collected from the customer to be remitted to the vendor, the Company has not recorded these amounts into either Accounts Payable or Accounts Receivable.

Litigation

We are from time to time involved in certain legal proceedings and claims arising in the ordinary course of business. Management does not believe that the outcome of these matters will have any material adverse effect on the Company.

Change of Control Agreements

On September 21, 2009, we entered into Change of Control Agreements with OC Kim, our President, and Yun J. (David) Lee, our Chief Operating Officer. Each Change of Control Agreement provides for a lump sum payment to the officer in case of a change of control of the Company. The term includes the acquisition of Common Stock of the Company resulting in one person or company owning more than 50% of the outstanding shares, a significant change in the composition of the Board of Directors of the Company during any 12-month period, a reorganization, merger, consolidation or similar transaction resulting in the transfer of ownership of more than fifty percent (50%) of the Company's outstanding Common Stock, or a liquidation or dissolution of the Company or sale of substantially all of the Company's assets.

The Change of Control Agreement with Mr. Kim calls for a payment of $5 million upon a change of control, and the agreement with Mr. Lee calls for a payment of $2 million upon a change of control.

The Board of Directors has approved extension of the Change of Control Agreements with Mr. Kim and Mr. Lee through September 30, 2021.