NOTE 9 – COMMITMENT AND CONTINGENCIES

Legal Proceedings

From time to time, the Company may be involved in general commercial disputes arising in the ordinary course of our business. The Company is not currently involved in legal proceedings that could reasonably be expected to have material adverse effect on its business, prospects, financial condition or results of operations.

Sales Backlog

As of June 30, 2017, the Company had a backlog of $1,685,114. The amount of backlog represents revenue that the Company anticipates recognizing in the future, as evidenced by purchase orders and other purchase commitments received from customers, but on which work has not yet been initiated or with respect to which work is currently in progress. Product delivery to fulfill a customer’s purchase order depends on the customer’s requested ship date, which may require the Company to hold on to finished goods for weeks or months. A customer could have delays in preparing the site where our product will be installed, causing the Company to delay product delivery. Finished product tied to a purchase order, but which has not been delivered to the customer is counted as part of the Company’s backlog.

The Company’s backlog consists of 68% in purchases of its DC power systems by telecommunications customers, of which 67% is from the Company’s single largest telecommunications customer. In addition, the Company’s backlog includes 25% in purchases from military contractors, and 7% from miscellaneous customers. The Company believes the majority of its backlog will be shipped within the next six months. However, there can be no assurance that the Company will be successful in fulfilling such orders and commitments in a timely manner or that the Company will ultimately recognize as revenue the amounts reflected in its backlog.