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Note 6 - Segment Information and Concentrations

9 Months Ended

Sep. 30, 2018

Note 6 - Segment Information and Concentrations

NOTE 6 — Segment Information and Concentrations

Segment Information

The Company operates in the mobile data capture market. Mobile data capture typically consists of mobile devices such as smartphones or tablets, with the Company’s mobile scanning and RFID/NFC 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 for the geographic areas for three and nine-month periods ended September 30, 2018 and 2017 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Revenues:
United States	$	3,256,758	$	4,430,409	$	9,573,354	$	13,438,873
Europe		533,414		711,057		1,816,803		2,642,265
Asia and rest of world		346,421		334,009		919,822		822,035
Total revenues	$	4,136,593	$	5,475,475	$	12,309,979	$	16,903,173

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-month periods ended September 30, 2018 and 2017 were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Ingram Micro Inc.		30	%		40	%		32	%		39	%
BlueStar, Inc.		25	%		20	%		23	%		17	%
ScanSource, Inc.		11	%		10	%		10	%		17	%

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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 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 net accounts receivable balances at September 30, 2018 and December 31, 2017 were as follows:

	September 30,			December 31,
	2018			2017
Ingram Micro Inc.		40	%		37	%
BlueStar, Inc.		26	%		23	%
ScanSource, Inc.		*			10	%
Ingram Micro Pan Europe GmbH		*			10	%

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* 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 September 30, 2018 and December 31, 2017, 32% and 22%, respectively, of the Company’s accounts payable balances were concentrated with two suppliers. During the nine-month periods ended September 30, 2018 and 2017, the top two suppliers accounted for 49% and 53%, respectively, of the inventory purchases.