NOTE 8 - CONCENTRATIONS

Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments and unsecured trade accounts receivable. The Company maintains cash balances at a financial institution in San Diego, California. The Company’s cash balance at this institution is secured by the Federal Deposit Insurance Corporation up to $250,000. As of December 31, 2019, cash totaled approximately $136,000, which consists of funds held in a non-interest bearing bank deposit account. The Company has not experienced any losses in such accounts. Management believes that the Company is not exposed to any significant credit risk with respect to its cash.

Customer Concentrations

During the three months ended December 31, 2019, the Company had two major customers that each represented more than 10% of its revenues on an individual basis, and together represented approximately $2,828,000 or 78% of its total revenues. During the six months ended December 31, 2019, the Company had three major customers that each represented more than 10% of its revenues on an individual basis, and together represented approximately $4,085,000 or 74% of its total revenues.

During the three months ended December 31, 2018, the Company had five major customers that each represented more than 10% of its revenues on an individual basis, and together represented approximately $2,623,000 or 95% of its total revenues. During the six months ended December 31, 2018, the Company had four major customers that each represented more than 10% of its revenues on an individual basis, and together represented approximately $3,938,000 or 86% of its total revenues.

Suppliers/Vendor Concentrations

The Company obtains a limited number of components and supplies included in its products from a small group of suppliers. During the three months ended December 31, 2019 the Company had two suppliers who accounted for more than 10% of its total purchases, on an individual basis. Purchases for these two suppliers totaled $1,175,000 or 29% of its total purchases. During the six months ended December 31, 2019 the Company had two suppliers who accounted for more than 10% of its total purchases, on an individual basis. Purchases for these two suppliers totaled $2,208,000 or 34% of its total purchases.

During the three months ended December 31, 2018, the Company had three suppliers who accounted for more than 10% of its total purchases, on an individual basis. Purchases for these three suppliers totaled $1,609,000 or 59% of its total purchases. During the six months ended December 31, 2018 the Company had two suppliers who accounted for more than 10% of its total purchases on an individual basis. Purchases for these two suppliers totaled $2,849,000 or 52% of its total purchases