NOTE 7 - CONCENTRATIONS

Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and unsecured trade accounts receivable. The Company maintains its cash in checking and savings accounts at federally insured financial institutions in excess of federally insured limits. As of December 31, 2020, the Company’s cash balance was approximately $4,653,000. 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, 2020, the Company had four (4) major customers that each represented more than 10% of its revenues, on an individual basis, and together represented approximately $4,817,000 or 74% of its total revenues. During the six months ended December 31, 2020, the Company had three (3) major customers that each represented more than 10% of its revenues on an individual basis, and together represented approximately $6,496,000 or 59% of its total revenues.

During the three months ended December 31, 2019, the Company had two (2) 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 (3) 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.

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, 2020, the Company had one (1) supplier who accounted for more than 10% of its total purchases and represented approximately $1,489,000 or 20% of its total purchases. During the six months ended December 31, 2020 the Company had one (1) supplier that represented more than 10% of its total purchases and represented approximately $2,648,000 or 19% of its total purchases.

During the three months ended December 31, 2019, the Company had two (2) suppliers who accounted for more than 10% of its total purchases, on an individual basis, and together represented approximately $1,175,000 or 29% of its total purchases. During the six months ended December 31, 2019 the Company had two (2) suppliers that each represented more than 10% of its total purchases, on an individual basis, and together represented approximately $2,208,000 or 34% of its total purchases.