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Segment Information and Concentrations

3 Months Ended

Mar. 31, 2012

NOTE 5 — 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 or other mobile device such as a smartphone or tablet, some with data collection peripherals, and third-party vertical 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 March 31,
Revenues:	2012		2011
United States	$	2,223,059	$	2,924,445
Europe		1,229,495		874,169
Asia and rest of world		501,205		240,828
Total Revenues	$	3,953,759	$	4,039,442

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 quarters ended March 31, 2012 and 2011 were as follows:

	Three Months Ended March 31,
	2012		2011
Ingram Micro Inc.		16%		17%
Scansource, Inc.		22%		*
Epocal, Inc.		*		20%

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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 the extent of the amounts recorded on the balance sheet, cash is concentrated at the Company’s bank to the extent needed to comply with the minimum liquidity ratio of the bank line agreement. 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 March 31, 2012, 60% of the Company’s accounts receivable balances were with three customers (28%, 18%, and 14%). At December 31, 2011, 54% of the Company’s accounts receivable balances were with three customers (33%, 11%, and 10%).

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 March 31, 2012 and December 31, 2011, 50% and 56%, respectively, of the Company’s accounts payable balances were concentrated in a single supplier. For the quarter ended March 31, 2012, this and another supplier accounted for 65% of the inventory purchases.