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Segment Information and Concentrations

3 Months Ended

Jun. 30, 2013

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 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 June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Revenues:
United States	$	3,226,442	$	2,255,519	$	5,804,072	$	4,478,578
Europe		611,185		1,160,557		1,484,332		2,390,052
Asia and rest of world		597,804		621,426		1,412,202		1,122,631
Total revenues	$	4,435,431	$	4,037,502	$	8,700,606	$	7,991,261

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 six month periods ended June 30, 2013 and 2012 were as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Ingram Micro, Inc.		19	%		19	%		18	%		17	%
ScanSource, Inc.		21	%		18	%		20	%		20	%
BlueStar, Inc.		15	%		*			12	%		*
CF Company		*			*			11	%		*

_____________

* 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. Customers who accounted for at least 10% of the Company’s accounts receivable balances at June 30, 2013 and December 31, 2012 were as follows:

	June 30,			December 31,
	2013			2012
Company A		29	%		28	%
Company B		19	%		12	%
Company C		13	%		16	%
Company D		*			11	%
Company E		*			12	%

_____________

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

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 increased demand, or to an interruption of supply. Suppliers may choose to restrict credit terms or require advance payments causing delays in the procurement of essential materials. If the Company were unable to procure certain of such materials, it could have a material adverse effect upon its results. At June 30, 2013 and December 31, 2012, 32% in each of the periods of the Company’s accounts payable balances were concentrated in a single supplier. For the three months ended June 30, 2013, this and another supplier accounted for 48% of the inventory purchases.