Note

– Revenue Recognition

October 1, 2018,

the Company adopted ASU

2014

09,

Revenue from Contracts with Customers (Topic

606

), using the modified retrospective transition method. Management determined that there was

cumulative effect adjustment to the consolidated financial statements and the adoption of the standard did

not

require any adjustments to the consolidated financial statements for prior periods. Under the guidance of the standard, revenue is recognized at the time a good or service is transferred to a customer and the customer obtains control of that good or receives the service performed. Most of the Company’s sales arrangements with customers are short-term in nature involving single performance obligations related to the delivery of goods or repair of equipment and generally provide for transfer of control at the time of shipment to the customer. The Company generally permits returns of product or repaired equipment due to defects; however, returns are historically insignificant.

The Company acquired the net assets of Fulton Technologies, Inc. (“Fulton”) and Mill City Communications, Inc. (“Mill City”), wireless infrastructure services businesses, on

January 4, 2019 (

See Note

– Acquisition). These companies’ services primarily consist of installing and decommissioning equipment on cell towers and small cell sites. The purchase orders for wireless infrastructure services are primarily completed over

three

seven

business days. Under the guidance of the standard, revenue is recognized over time.

The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for its products, repair services or wireless infrastructure services. The following steps are applied in determining the amount and timing of revenue recognition:

Identification of a contract with a customer is a sales arrangement involving a purchase order issued by the customer stating the goods or services to be transferred. Payment terms are generally due in net

days. Discounts on sales arrangements are generally

not

provided. Credit worthiness is determined by the Company based on payment experience and financial information available on the customer.

Identification of performance obligations in the sales arrangement which is predominantly the promise to transfer goods, repair services, recycled items or wireless infrastructure services to the customer.

Determination of the transaction price which is specified in the purchase order based on product or services pricing negotiated between the Company and the customer. Wireless infrastructure services transaction prices are based on the Master Service Agreement contracts between the Company and the wireless customers.

Allocation of the transaction price to performance obligations. Substantially all the contracts are single performance obligations and the allocated purchase price is the transaction price.

Recognition of revenue occurs upon the satisfaction of the performance obligation and transfer of control. Transfer of control by the Telco and Cable TV segments generally occurs at the point the Company ships the sold or repaired product from its warehouse locations. Transfer of control for the Wireless segment generally occurs over time as the Company installs or decommissions the equipment on the cell towers or performs other services. To measure progress towards completion on performance obligations for which revenue is recognized over time the Company utilizes an input method based upon a ratio of direct labor costs incurred to date to management’s estimate of the total labor costs to be incurred on each contract. The Company has established the systems and procedures to develop the estimates required to account for performance obligations over time. These procedures include monthly review by management of costs incurred, progress towards completion, changes in estimates of costs yet to be incurred and execution by subcontractors.

The Company’s principal revenues are from Wireless services, sales of Telco and Cable TV equipment, Telco recycled equipment, and Cable TV repair services. Sales are primarily to customers in the United States. International sales are made by the Telco and Cable TV segments to customers in Central America, South America and, to a substantially lesser extent, other international regions that utilize the same technology which totaled approximately

$1.8

million and

$3.7

million in the

six

months ended

March 31, 2019

and

2018,

respectively.

The Company’s customers include wireless carriers, wireless equipment providers, multiple system operators, resellers and direct sales to end-user customers. Sales to the Company’s largest customer totaled approximately

of consolidated revenues.

Our revenues by type were as follows:

	Three Months Ended March 31,						Six Months Ended March 31,
	2019			2018			2019			2018


Wireless services revenue	$	4,217,924		$	‒		$	4,217,924		$	‒
Equipment sales:
Wireless		‒			‒			‒			‒
Telco		8,282,486			6,845,571			14,892,128			12,536,891
Cable TV		3,949,929			4,130,486			8,002,068			9,244,777
Intersegment		(3,905	)		(2,130	)		(44,147	)		(2,310	)
Telco recycle revenue		393,434			160,989			634,131			928,210
Cable TV repair revenue		433,235			514,612			843,285			1,226,725
Total revenues	$	17,273,103		$	11,649,528		$	28,545,389		$	23,934,293

With the acquisition of Fulton, the timing of revenue recognition results in contract assets and contract liabilities. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. However, we sometimes receive advances or deposits from our customers before revenue is recognized, resulting in contract liabilities. Contract assets and contract liabilities are included in Unbilled revenue and Accrued expenses, respectively, in the Consolidated Condensed Balance Sheets. At

March 31, 2019

contract assets were

$1.4

million.