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Note 7 - Segment Information and Concentrations

9 Months Ended

Sep. 30, 2020

NOTE 7 — 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 mobile devices such as smartphones or tablets, with mobile scanning or 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, resellers, and online. 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 months ended September 30, 2020 and 2019 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Revenues:
Americas	$	3,290,992	$	3,283,745	$	8,676,626	$	10,937,316
Europe		567,977		817,420		1,383,518		1,915,343
Asia Pacific		249,769		878,895		984,304		1,816,098
Total revenues	$	4,108,738	$	4,980,060	$	11,044,448	$	14,668,757

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 months ended September 30, 2020 and 2019 were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Ingram Micro Inc.		30	%		34	%		32	%		39	%
BlueStar, Inc.		29	%		16	%		23	%		18	%
Nippon Primex, Inc.		*			12	%		*			*
Ingram Micro Pan Europe GmBH		*			10	%		*			*

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, 2020 and December 31, 2019 were as follows:

	September 30,			December 31,
	2020			2019
Ingram Micro Inc.		35	%		45	%
BlueStar, Inc.		33	%		32	%
ScanSource, Inc.		11	%		*
Ingram Micro Pan Europe GmbH		10	%		*

*Customer accounted for less than 10% of the Company’s 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, 2020, 38% of the Company’s accounts payable balances was concentrated in the top three suppliers. For the three months ended September 30, 2020, the top three suppliers accounted for 64% of the inventory purchases.