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Segment Information and Concentrations

9 Months Ended

Sep. 30, 2011

NOTE 7 — Segment Information and Concentrations

Segment Information

The Company operates in one segment—mobile systems solutions for businesses. Mobile systems solutions typically consist of a handheld computer, data collection and connectivity peripherals, and third-party applications software. The Company markets its products in the United States and foreign countries through its sales personnel and distributors. Revenues for the geographic areas were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Revenues:
United States	$	2,933,846	$	2,505,229	$	8,760,905	$	8,185,737
Europe		1,077,564		742,570		3,056,444		2,286,143
Asia and rest of world		669,966		166,264		1,256,080		403,440
Total revenues	$	4,681,376	$	3,414,063	$	13,073,429	$	10,875,320

Export revenues are attributable to countries based on the location of the Company’s customers. The Company does not hold long-lived assets in foreign locations.

Major Customers

Customers who accounted for at least 10% of the Company’s total revenues in the three and nine months ended September 30, 2011 and 2010 were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
Tech Data Corporation		*			11	%		*			13	%
Ingram Micro Inc.		12	%		14	%		14	%		15	%
Epocal Inc.		10	%		10	%		13	%		*
BlueStar		*			*			*			12	%
ScanSource, Inc.		16	%		*			14	%		*

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* Customer accounted for less than 10% of total revenues for the period

Concentration of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash, cash equivalents and accounts receivable. The Company invests its cash in demand and money market deposit accounts in banks. To date, the Company has not experienced losses on these investments. The Company’s trade accounts receivables are primarily with distributors and OEMs. The Company performs ongoing credit evaluations of its customers’ financial conditions but the Company generally requires no collateral. Reserves are maintained for potential credit losses, and such losses have been within management’s expectations. At September 30, 2011, 53% of the Company’s accounts receivable balances were concentrated with four customers, which individually comprised more than 10% of the Company’s accounts receivable balance. At December 31, 2010, 62% of the Company’s accounts receivable balances were with five customers, which individually comprised more than 10% of the Company’s accounts receivable balance.

Concentration of Suppliers

Several of the Company’s component parts are produced by a sole or limited number of suppliers. Shortages could occur in these essential materials due to an interruption of supply or increased demand in the industry, such as the Company experienced in the fourth quarter 2010 and to a progressively lesser extent over the first, second, and third quarters of 2011 with the delays in availability of LCD touch screens used in the manufacture of the Company’s mobile handheld computer. If the Company were unable to procure certain of such materials, it would be required to reduce its operations, which could have a material adverse effect upon its results. At September 30, 2011 and December 31, 2010, 42% and 32%, respectively, of the Company’s accounts payable balances were concentrated in a single supplier. For the three and nine months ended September 30, 2011, this same supplier accounted for 57% and 52%, respectively, of the inventory purchases.