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Segment Information and Concentrations

3 Months Ended

Mar. 31, 2017

NOTE 6 — Segment Information and Concentrations

Segment Information

The Company operates in one segment—mobile systems solutions for businesses. Mobile systems solutions typically consist of mobile devices such as smartphones or tablets, 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 for three months ended March 31, 2017 and 2016 were as follows:

	Three Months Ended March 31,
Revenues:	2017		2016
United States	$	4,341,648	$	4,083,412
Europe		1,099,682		729,190
Asia and rest of world		180,763		231,184
Total revenues	$	5,622,093	$	5,043,786

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 for the three months ended March 31, 2017 and 2016 were as follows:

	Three Months Ended March 31,
	2017			2016
Ingram Micro, Inc.		45	%		24	%
BlueStar, Inc.		15	%		25	%
ScanSource, Inc.		14	%		13	%
ScanSource Europe SPRL		11	%		*
Spinal Modulation, Inc.		*			13	%

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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 include cash, cash equivalents and accounts receivable. The Company invests its cash in demand deposit accounts in banks. To date, the Company has not experienced losses on the investments. The Company’s trade accounts receivable are primarily with distributors. The Company performs ongoing credit evaluations of its customers’ financial condition 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 March 31, 2017 and December 31, 2016 were as follows:

	March 31,			December 31,
	2017			2016
Ingram Micro Inc.		59	%		49	%
BlueStar, Inc.		18	%		30	%
ScanSource, Inc.		11	%		*

_____________

* Customer accounts for less than 10% of accounts receivable balances

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 March 31, 2017 and December 31, 2016, 21% and 27%, respectively, of the Company’s accounts payable balances were concentrated with the top two suppliers. For the three months ended March 31, 2017 and 2016, top two suppliers accounted for 60% and 53%, respectively, of the inventory purchases.