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Note 6 - Segment Information and Concentrations

6 Months Ended

Jun. 30, 2018

NOTE 6 — Segment Information and Concentrations

Segment Information

The Company operates in the mobile barcode scanning and RFID/NFC data capture market. Mobile scanning typically consists of using mobile devices such as smartphones or tablets, with mobile scanning peripherals for data collection, and third-party vertical applications software. The Company distributes its products in the United States and foreign countries primarily through distributors and resellers. The Company markets its products primarily through application developers whose applications are designed to work with Company’s products. Revenues by geographic area for three and six months ended June 30, 2018 and 2017 were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Revenues:
United States	$	3,311,626	$	4,666,816	$	6,316,596	$	9,008,465
Europe		639,640		831,526		1,283,389		1,931,208
Asia and rest of world		241,065		307,263		573,401		488,026
Total revenues	$	4,192,331	$	5,805,605	$	8,173,386	$	11,427,699

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 and six-month periods ended June 30, 2018 and 2017 were:

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Ingram Micro Inc.		33	%		33	%		32	%		39	%
BlueStar, Inc.		22	%		17	%		22	%		16	%
ScanSource, Inc.		10	%		26	%		10	%		20	%

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 receivables 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 June 30, 2018 and December 31, 2017 were as follows:

	June 30,			December 31,
	2018			2017
Ingram Micro Inc.		38	%		37	%
BlueStar, Inc.		32	%		23	%
ScanSource, Inc.		*			10	%
Ingram Micro Pan Europe GmbH.		*			10	%

_____________

* Customer accounted for less than 10% of total 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 June 30, 2018, 27% of the Company’s accounts payable balances was concentrated in the top two suppliers. For the three months ended June 30, 2018, the top two suppliers accounted for 46% of the inventory purchases.