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16. SEGMENT AND GEOGRAPHIC INFORMATION | 12 Months Ended
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Sep. 30, 2020
Segment Reporting [Abstract] |
SEGMENT AND GEOGRAPHIC INFORMATION | NOTE 16 SEGMENT AND GEOGRAPHIC INFORMATION The Company has two reportable segments: distribution and design. See Note 1 for more information on the composition of our reportable segments. The distribution segment sources and distributes carrying cases and other accessories for medical monitoring and diagnostic kits and a variety of other portable electronic and non-electronic devices. This segment operates in the EMEA Region, the Americas and the APAC Region. Geographic regions are defined by reference primarily to the location of the customer or its contract manufacturer. The design segment provides a full spectrum of hardware and software product design and engineering services. This segment operates predominantly in the Americas region. Segment operating loss and net loss before income taxes are shown in table below:
|  | Fiscal 2020 |  |  | Fiscal 2019 |
Revenues, net |  |  |  |  |  |  |  |
Distribution |  | $ | 20,752,000 |  |  | $ | 21,988,000 |
Design |  |  | 13,726,000 |  |  |  | 15,421,000 |
Total revenues, net |  | $ | 34,478,000 |  |  | $ | 37,409,000 |
Cost of sales |  |  |  |  |  |  |  |
Distribution |  | $ | 17,978,000 |  |  | $ | 18,613,000 |
Design |  |  | 9,862,000 |  |  |  | 12,215,000 |
Total cost of sales |  | $ | 27,840,000 |  |  | $ | 30,828,000 |
Loss from operations |  |  |  |  |  |  |  |
Distribution |  | $ | (1,604,000 | ) |  | $ | (1,377,000 | )
Design |  |  | (378,000 | ) |  |  | (1,720,000 | )
Total loss from operations |  | $ | (1,982,000 | ) |  | $ | (3,097,000 | )
Other (income)/expense, net |  |  |  |  |  |  |  |
Distribution |  | $ | (202,000 | ) |  | $ | 438,000 |
Design |  |  | (14,000 | ) |  |  | 73,000 |
Total other (income)/expense, net |  | $ | (216,000 | ) |  | $ | 511,000 |
Loss before income taxes |  |  |  |  |  |  |  |
Distribution |  | $ | (1,402,000 | ) |  | $ | (1,815,000 | )
Design |  |  | (364,000 | ) |  |  | (1,793,000 | )
Total loss before income taxes |  | $ | (1,766,000 | ) |  | $ | (3,608,000 | )
Segment assets are shown in the table below:
|  | September 30, |
|  | 2020 |  |  | 2019 |
Distribution |  | $ | 8,289,000 |  |  | $ | 9,554,000 |
Design |  |  | 11,067,000 |  |  |  | 6,540,000 |
Total |  | $ | 19,356,000 |  |  | $ | 16,094,000 |
Revenues from External Customers Consolidated The following table sets forth our consolidated net revenues by geographic region for Fiscal 2020 and Fiscal 2019. All of the design segment customer revenues are classified under the United States within the Americas region:
|  | Fiscal 2020 |  |  | Fiscal 2019 |
EMEA Region: |  |  |  |  |  |  |  |
Germany |  | $ | 3,375,000 |  |  | $ | 3,875,000 |
Poland |  |  | 2,675,000 |  |  |  | 3,355,000 |
Great Britain |  |  | 267,000 |  |  |  | – |
Switzerland |  |  | – |  |  |  | 297,000 |
Austria |  |  | 406,000 |  |  |  | 186,000 |
Other |  |  | 362,000 |  |  |  | 166,000 |
Total EMEA Region |  |  | 7,085,000 |  |  |  | 7,879,000 |
Americas: |  |  |  |  |  |  |  |
United States [1] |  |  | 21,017,000 |  |  |  | 21,730,000 |
Other |  |  | 44,000 |  |  |  | 4,000 |
Total Americas |  |  | 21,061,000 |  |  |  | 21,734,000 |
APAC Region: |  |  |  |  |  |  |  |
Hong Kong |  |  | 4,876,000 |  |  |  | 6,017,000 |
Malaysia |  |  | 200,000 |  |  |  | 153,000 |
China |  |  | 217,000 |  |  |  | 318,000 |
Singapore |  |  | 228,000 |  |  |  | 564,000 |
Taiwan |  |  | 162,000 |  |  |  | 164,000 |
Other |  |  | 649,000 |  |  |  | 580,000 |
Total APAC Region |  |  | 6,332,000 |  |  |  | 7,796,000 |
Total Net Revenues |  | $ | 34,478,000 |  |  | $ | 37,409,000 |
[1] | Includes $13,726,000 and $15,421,000 of revenue in Fiscal 2020 and Fiscal 2019, respectively, attributed to the design segment whose customers reside in the United States.
Major Customers and Concentrations by Geographic Region In Fiscal 2020 and Fiscal 2019, the Company had significant customers whose individual percentage of the Company’s total revenues was 10% or greater. The risk of collecting accounts receivable from all customers is enhanced as a result of the economic impact of the COVID-19 pandemic. The concentrations of revenues and accounts receivable for each operating segment are detailed below. Distribution Segment Revenues Concentration The following customers or their affiliates or contract manufacturers accounted for more than 10% of the distribution segment’s net revenues, by geographic region, and in segment total for Fiscal 2020 and Fiscal 2019:
|  | Fiscal 2020 |
|  | EMEA |  |  | Americas |  |  | APAC |  |  | Total |
Customer A |  |  | 46% |  |  |  | 39% |  |  |  | 1% |  |  |  | 29% |
Customer B |  |  | 24% |  |  |  | 16% |  |  |  | 9% |  |  |  | 17% |
Customer C |  |  | – |  |  |  | 1% |  |  |  | 76% |  |  |  | 24% |
Customer D |  |  | 14% |  |  |  | 11% |  |  |  | 2% |  |  |  | 9% |
Totals |  |  | 84% |  |  |  | 67% |  |  |  | 88% |  |  |  | 79% |
|  | Fiscal 2019 |
|  | EMEA |  |  | Americas |  |  | APAC |  |  | Total |
Customer A |  |  | 42% |  |  |  | 42% |  |  |  | – |  |  |  | 30% |
Customer B |  |  | 29% |  |  |  | 22% |  |  |  | 6% |  |  |  | 19% |
Customer C |  |  | – |  |  |  | 3% |  |  |  | 76% |  |  |  | 28% |
Customer D |  |  | 13% |  |  |  | 15% |  |  |  | 3% |  |  |  | 10% |
Totals |  |  | 84% |  |  |  | 82% |  |  |  | 85% |  |  |  | 87% |
Design Segment Revenues Concentration All of our design segment customers operate in the United States. The following customers accounted for more than 10% of the design segment’s net revenues for Fiscal 2020 and Fiscal 2019:
|  | Fiscal 2020 |  |  | Fiscal 2019 |
Customer 1 |  |  | 19% |  |  |  | 1% |
Customer 2 |  |  | 13% |  |  |  | 9% |
Customer 3 |  |  | 14% |  |  |  | 19% |
Customer 4 |  |  | – |  |  |  | 17% |
Total |  |  | 46% |  |  |  | 46% |
Distribution Segment Accounts Receivable Concentration At September 30, 2020 and 2019, concentrations of accounts receivable with significant customers representing 10% or more of distribution segment accounts receivable were as follows:
|  | September 30, |
|  | 2020 |  |  | 2019 |
Customer A |  |  | 23% |  |  |  | 29% |
Customer B |  |  | 22% |  |  |  | 21% |
Customer C |  |  | 20% |  |  |  | 16% |
Customer D |  |  | 17% |  |  |  | 24% |
Totals |  |  | 82% |  |  |  | 90% |
Design Segment Accounts Receivable Concentration At September 30, 2020 and 2019, concentrations of accounts receivable with significant customers representing 10% or greater of design segment accounts receivable were as follows:
|  | September 30, |
|  | 2020 |  |  | 2019 |
Customer 1 |  |  | 24% |  |  |  | 3% |
Customer 3 |  |  | 5% |  |  |  | 19% |
Customer 4 |  |  | – |  |  |  | 44% |
Customer 5 |  |  | 14% |  |  |  | 5% |
Customer 6 |  |  | 10% |  |  |  | 3% |
Totals |  |  | 53% |  |  |  | 74% |
Long-Lived Assets Identifiable long-lived assets, consisting predominantly of property, plant and equipment, by operating segment are presented net of accumulated depreciation and amortization. All of the Company’s long-lived assets are geographically located in the Americas region. See table below:
|  | September 30, |
|  | 2020 |  |  | 2019 |
|  | Consolidated |  |  | Distribution |  |  | Design |  |  | Consolidated |  |  | Distribution |  |  | Design |
Americas |  | $ | 215,000 |  |  | $ | 23,000 |  |  | $ | 192,000 |  |  | $ | 243,000 |  |  | $ | 18,000 |  |  | $ | 225,000 |
APAC |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
EMEA |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
Total long-lived assets (net) |  | $ | 215,000 |  |  | $ | 23,000 |  |  | $ | 192,000 |  |  | $ | 243,000 |  |  | $ | 18,000 |  |  | $ | 225,000 |
Total Liabilities The following table presents total liabilities by operating segment for the years ended September 30, 2019 and 2018:
|  | September 30, |
|  | 2020 |  |  | 2019 |
Distribution |  | $ | 5,780,000 |  |  | $ | 6,061,000 |
Design |  |  | 6,993,000 |  |  |  | 2,322,000 |
Total |  | $ | 12,773,000 |  |  | $ | 8,383,000 |
Supplier Concentration The Company procures all its supply of carrying solutions products for the distribution segment from independent suppliers in China through Forward China. Depending on the product, Forward China may require several different suppliers to furnish component parts or pieces. The Company purchased 100% of its OEM products from Forward China in Fiscal 2020 and 2019. The Company procures materials and supplies used to build prototypes and “mock-ups” for design service projects. Vendors are from the United States.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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