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Note 5 - Segment Information and Concentrations

9 Months Ended

Sep. 30, 2019

NOTE 5 — 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 nine months ended September 30, 2019 and 2018 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Revenues:
Americas	$	3,283,745	$	3,256,758	$	10,937,316	$	9,573,354
Europe		817,420		533,414		1,915,343		1,816,803
Asia Pacific		878,895		346,421		1,816,098		919,822
Total revenues	$	4,980,060	$	4,136,593	$	14,668,757	$	12,309,979

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 nine-month periods ended September 30, 2019 and 2018 were:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Ingram Micro Inc.		34	%		30	%		39	%		32	%
BlueStar, Inc.		16	%		25	%		18	%		23	%
Nippon Primex, Inc.		12	%		*			*			*
Ingram Micro Pan Europe GmbH		10	%		*			*			*
ScanSource, Inc.		*			11	%		*			10	%

_____________

* 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 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 September 30, 2019 and December 31, 2018 were as follows:

	September 30,			December 31,
	2019			2018
Ingram Micro Inc.		37	%		41	%
Ingram Micro Pan Europe GmbH		17	%		*
BlueStar, Inc.		14	%		19	%

_____________

* Customer accounted for less than 10% of total accounts receivable balances 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 September 30, 2019, 36% of the Company’s accounts payable balances were concentrated in the top three suppliers. For the three months ended September 30, 2019, top three suppliers accounted for 53% of the inventory purchases.