Note 6 - Customer and Supplier Concentrations

3 Months Ended

Apr. 30, 2014

Customer And Supplier Concentrations [Abstract]

Customer And Supplier Concentrations [Text Block]

6.	Customer and Supplier Concentrations

Substantially all of the Company’s revenue was derived from a single customer, Lenovo, in fiscal 2014. As discussed in Note 2 above, Lenovo notified us of their intention to cease offering Comarco’s product to its customers. We shipped approximately 20,000 of our Constellation units to Lenovo and 11,000 field replacement units to Lenovo affiliates during our third quarter of fiscal 2014, and we have no further orders from Lenovo or their affiliates. The loss of Lenovo will have a material adverse impact on our future revenues and results of operations.

The customers providing 10 percent or more of the Company’s revenue for any of the periods presented below are listed here

	(in thousands, except percentages)
	Three Months Ended April 30,
	2014				2013
Total revenue	$	-	0	%	$	1,413	100	%

Customer concentration:
Lenovo Information Products Co., Ltd.	$	-	0	%		1,378	98	%
	$	-	0	%	$	1,378	98	%

The suppliers comprising 10 percent or more of the Company’s gross accounts receivable due from suppliers at either April 30, 2014 or January 31, 2014 are listed below (in thousands, except percentages).

	As of April 30,				As of January 31,
	2014				2014
Total gross accounts receivable due from suppliers	$	128	100	%	$	128	100	%
Customer concentration:
Zheng Ge Electrical Co., Ltd.	$	122	95	%	$	122	95	%
	$	122	95	%	$	122	95	%

Zheng Ge Electrical Co., Ltd. (“Zheng Ge”) was a tip supplier for the Bronx product, which was subject to a recall. We previously sourced some of the component parts that Zheng Ge used in the manufacture of the tips. We ceased paying Zheng Ge during the course of the product recall while we investigated the manufacturing defect which ultimately caused the recall and, likewise, Zheng Ge ceased paying us.

The companies comprising 10 percent or more of our gross accounts payable at either April 30, 2014 or January 31, 2014 are listed below (in thousands, except percentages).

	As of April 30,				As of January 31,
	2014				2014
Total gross accounts payable	$	4,310	100	%	$	4,363	100	%
Supplier concentration:
Chicony Power Technology, Co. Ltd.	$	1,100	26	%	$	1,100	25	%
Pillsbury Winthrop Shaw Pittman, LLP		1,953	45	%		1,953	45	%
	$	3,053	71	%	$	3,053	70	%

Chicony Power Technology, Co. Ltd., (“Chicony”) was the manufacturer of the Bronx product, which was subject to a recall. We had been in litigation with Chicony (see Note 10). We made no payments to this supplier during either three months ended April 30, 2014 and during fiscal 2014. Effective May 15, 2014, Chicony entered into a settlement agreement with us that dismissed all claims between the two parties arising from the litigation. Pursuant to the terms of the settlement agreement, Chicony agreed to pay us $7.6 million in lieu of the previous jury net award of $9.7 million or any other related costs or fees. $4.0 million of the settlement amount was paid on May 16, 2014, with the balance of $3.6 million paid May 30, 2014. As a result of the settlement agreement, the $1.1 million obligation to Chicony referenced above has been legally dismissed and will be reversed during the second quarter of fiscal 2015.

Pillsbury Winthrop Shaw Pittman, LLP (“Pillsbury”) was our former legal counsel for the Kensington litigation as well as other patent and intellectual property matters (See Note 10). We have made no payments to Pillsbury during fiscal 2015. On May 28, 2014, we entered into an agreement with Pillsbury that settled the liabilities referenced above.